Emissions Trading – Page 21

MIL-OSI: WTW Reports First Quarter 2025 Earnings

Source: GlobeNewswire (MIL-OSI)

Revenue¹decreased 5% over prior year to $2.2 billion for the quarter due to the sale of TRANZACT
Organic Revenue growth of 5% for the quarter
Diluted Earnings per Share was $2.33 for the quarter, up 27% over prior year
Adjusted Diluted Earnings per Share was $3.13 for the quarter, comparable to prior year²
Operating Margin was 19.4% for the quarter, up 740 basis points over prior year
Adjusted Operating Margin was 21.6% for the quarter, up 100 basis points from prior year²

LONDON, April 24, 2025 (GLOBE NEWSWIRE) — WTW (NASDAQ: WTW) (the “Company”), a leading global advisory, broking and solutions company, today announced financial results for the first quarter ended March 31, 2025.

“We had a solid start to the year, delivering results in line with our expectations and making strong progress on our strategy to accelerate our performance, enhance our efficiency and optimize our portfolio,” said Carl Hess, WTW’s chief executive officer. “We are well-positioned to help our clients navigate economic uncertainty and highly focused on driving continued growth and margin expansion, and we are confident in our outlook. I’m proud of our team’s dedication and look forward to achieving our strategic and financial goals together.”

Consolidated Results

As reported, USD millions, except %

Key Metrics	Q1-25	Q1-24²	Y/Y Change
Revenue¹	$2,223	$2,341	Reported (5)% \| CC (4)% \| Organic 5%
Income from Operations	$432	$280	54%
Operating Margin %	19.4%	12.0%	740 bps
Adjusted Operating Income	$480	$483	(1)%
Adjusted Operating Margin %	21.6%	20.6%	100 bps
Net Income	$239	$194	23%
Adjusted Net Income	$316	$325	(3)%
Diluted EPS	$2.33	$1.83	27%
Adjusted Diluted EPS	$3.13	$3.13	0%

¹	The revenue amounts included in this release are presented on a U.S. GAAP basis except where stated otherwise. The segment discussion is on an organic basis.
²	Refer to “WTW Non-GAAP Measures” below and the Q1-25 Supplemental Slides for recast of historical Non-GAAP measures.

Revenue was $2.22 billion for the first quarter of 2025, a decrease of 5% as compared to $2.34 billion for the same period in the prior year. Excluding the impact of foreign currency, revenue decreased 4%. On an organic basis, revenue increased 5%. See Supplemental Segment Information for additional detail on book-of-business settlements and interest income included in revenue.

Net Income for the first quarter of 2025 was $239 million compared to Net Income of $194 million in the prior-year first quarter. Adjusted EBITDA for the first quarter was $532 million, or 23.9% of revenue, a decrease of 3%, compared to Adjusted EBITDA of $546 million, or 23.3% of revenue, in the prior-year first quarter. The U.S. GAAP tax rate for the first quarter was 21.5%, and the adjusted income tax rate for the first quarter used in calculating adjusted diluted earnings per share was 22.7%.

Cash Flow and Capital Allocation

Cash flows used in operating activities were $35 million for the quarter ended March 31, 2025, compared to cash flows from operating activities of $24 million for the prior year. Free cash flow for the quarters ended March 31, 2025 and 2024 was $(86) million and $(36) million, respectively, a decrease of $50 million, primarily driven by the absence of cash collections related to TRANZACT, which the Company sold on December 31, 2024, and increased compensation payments in the current-year quarter as compared to the prior-year quarter. During the quarter ended March 31, 2025, the Company repurchased 607,221 of its outstanding shares for $200 million.

First Quarter 2025 Segment Highlights

Health, Wealth & Career (“HWC”)

As reported, USD millions, except %

Health, Wealth & Career	Q1-25	Q1-24	Y/Y Change
Total Revenue	$1,165	$1,336	Reported (13)% \| CC (12)% \| Organic 3%
Operating Income	$311	$336	(7)%
Operating Margin %	26.7%	25.1%	160 bps

The HWC segment had revenue of $1.17 billion in the first quarter of 2025, a decrease of 13% (12% decrease constant currency and organic growth of 3%) from $1.34 billion in the prior year. Health delivered organic revenue growth in all regions driven by solid client retention, new business and geographic expansion. Wealth generated organic revenue growth from higher levels of Retirement work in Europe and International, alongside growth in our Investments business due to the success of our LifeSight solution and capital market improvements. Career had modest revenue growth as increased advisory work was tempered by some postponements amid economic uncertainty. Benefits Delivery & Outsourcing revenue grew primarily from increased project and core administration work.

Operating margins in the HWC segment increased 160 basis points from the prior-year first quarter to 26.7%, primarily due to the sale of TRANZACT and savings from the Transformation program. Please refer to the Supplemental Slides for TRANZACT’s standalone historical financial results.

Risk & Broking (“R&B”)

As reported, USD millions, except %

Risk & Broking	Q1-25	Q1-24	Y/Y Change
Total Revenue	$1,027	$978	Reported 5% \| CC 7% \| Organic 7%
Operating Income	$226	$203	11%
Operating Margin %	22.0%	20.8%	120 bps

The R&B segment had revenue of $1.03 billion in the first quarter of 2025, an increase of 5% (7% increase constant currency and organic) from $978 million in the prior year. Corporate Risk & Broking (CRB) had organic revenue growth driven by higher levels of new business activity and strong client retention globally. Insurance Consulting and Technology (ICT) had organic revenue growth for the quarter driven by the Consulting and Technology practices.

Operating margins in the R&B segment increased 120 basis points from the prior-year first quarter to 22.0%, due primarily to operating leverage driven by strong organic revenue growth and savings from the Transformation program which were partially offset by headwinds from decreased interest income and foreign currency fluctuations.

Select 2025 Financial Considerations

Changes to Non-GAAP financial measures:

All reported non-GAAP metrics will exclude non-cash net periodic pension and postretirement benefits
Free cash flow and free cash flow margin will capture cash outflows for capitalized software costs
Refer to Supplemental Slides for recast of historical Non-GAAP measures

Business mix:

TRANZACT business, which contributed $1.14 to adjusted diluted earnings per share in 2024, is no longer part of the business portfolio following the completion of the TRANZACT sale in the fourth quarter of 2024
Reinsurance joint venture with Bain Capital expected to be a headwind on adjusted diluted earnings per share of approximately $0.25 to $0.35

Free cash flow:

Expect cash outflows in 2025 from the payment of accrued costs related to the Transformation program which concluded in 2024
Cash taxes related to receipt of earnout from reinsurance divestiture will be classified as Cash Flows from Operating Activities on Statement of Cash Flows

Capital allocation:

Expect share repurchases of ~$1.5 billion, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities

Foreign exchange:

Expect a foreign currency impact on adjusted diluted earnings per share to be neutral in 2025 at today’s rates

Adjusted operating margin outlook:

~100 basis points of average annual margin expansion over next 3 years in R&B
Incremental annual margin expansion at HWC and enterprise levels

The 2025 Financial Considerations above include Non-GAAP financial measures. We do not reconcile forward-looking Non-GAAP measures for reasons explained under “WTW Non-GAAP Measures” below.

Conference Call

The Company will host a live webcast and conference call to discuss the financial results for the first quarter 2025. It will be held on Thursday, April 24, 2025, beginning at 9:00 a.m. Eastern Time. A live broadcast of the conference call will be available on WTW’s website here. The conference call will include a question-and-answer session. To participate in the question-and-answer session, please register here. An online replay will be available at www.wtwco.com shortly after the call concludes.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at www.wtwco.com.

WTW Non-GAAP Measures

In order to assist readers of our consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning, we present the following non-GAAP measures: (1) Constant Currency Change, (2) Organic Change, (3) Adjusted Operating Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted Net Income, (6) Adjusted Diluted Earnings Per Share, (7) Adjusted Income Before Taxes, (8) Adjusted Income Taxes/Tax Rate, (9) Free Cash Flow and (10) Free Cash Flow Margin.

We believe that those measures are relevant and provide pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.

Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they may be part of our full-year results. Additionally, we have historically adjusted for certain items which are not described below, but for which we may adjust in a future period when applicable. Items applicable to the quarter or full year results, or the comparable periods, include the following:

Restructuring costs and transaction and transformation – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded.
Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations.
Net periodic pension and postretirement benefits – Adjustment to remove the recognition of net periodic pension and postretirement benefits (including pension settlements), other than service costs. We have included this adjustment as applicable in our prior-period disclosures in order to conform to the current-period presentation.

We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis. We believe presenting constant currency and organic information provides valuable supplemental information regarding our comparable results, consistent with how we evaluate our performance internally.

We consider Constant Currency Change, Organic Change, Adjusted Operating Income/Margin, Adjusted EBITDA/Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Income Before Taxes, Adjusted Income Taxes/Tax Rate and Free Cash Flow to be important financial measures, which are used to internally evaluate and assess our core operations and to benchmark our operating and liquidity results against our competitors. These non-GAAP measures are important in illustrating what our comparable operating and liquidity results would have been had we not incurred transaction-related and non-recurring items. Reconciliations of these measures are included in the accompanying tables with the following exception: The Company does not reconcile its forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information, such as foreign currency impacts necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, is available to the Company without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The Company provides non-GAAP financial measures that it believes will be achieved, however it cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.

Our non-GAAP measures and their accompanying definitions are presented as follows:

Constant Currency Change – Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior year local currency results are first translated using the current year monthly average exchange rates. The change is calculated by comparing the prior year revenue, translated at the current year monthly average exchange rates, to the current year as reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

Organic Change – Excludes the impact of fluctuations in foreign currency exchange rates, as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these transaction-related items can vary from period to period.

Adjusted Operating Income/Margin – Income from operations adjusted for amortization, restructuring costs, transaction and transformation and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue. We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted EBITDA/Margin – Net Income adjusted for provision for income taxes, interest expense, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA Margin is calculated by dividing adjusted EBITDA by revenue. We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.

Adjusted Net Income – Net Income Attributable to WTW adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

Adjusted Diluted Earnings Per Share – Adjusted Net Income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted Income Before Taxes – Income from operations before income taxes and interest in earnings of associates adjusted for amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

Adjusted Income Taxes/Tax Rate – Provision for income taxes adjusted for taxes on certain items of amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, net periodic pension and postretirement benefits, the tax effects of significant adjustments and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate. Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.

Free Cash Flow – Cash flows from operating activities less cash used to purchase fixed assets and software. Free Cash Flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures. Management believes that free cash flow presents the core operating performance and cash-generating capabilities of our business operations. As a result of our change in presentation, free cash flow for the prior period has been adjusted to conform to the current period, which includes the deduction of our capitalized software costs.

Free Cash Flow Margin – Free Cash Flow as a percentage of revenue, which represents how much of revenue would be realized on a cash basis. We consider this measure to be a meaningful metric for tracking cash conversion on a year-over-year basis due to the non-cash nature of our pension income, which is included in our GAAP and Non-GAAP earnings metrics presented herein.

These non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our condensed consolidated financial statements.

WTW Forward-Looking Statements

This document contains ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as: our outlook; the potential impact of natural or man-made disasters like health pandemics and other world health crises; future capital expenditures; ongoing working capital efforts; future share repurchases; financial results (including our revenue, costs or margins) and the impact of changes to tax laws on our financial results; existing and evolving business strategies including those related to acquisition and disposition; demand for our services and competitive strengths; strategic goals; the benefits of new initiatives; growth of our business and operations; the sustained health of our product, service, transaction, client, and talent assessment and management pipelines; our ability to successfully manage ongoing leadership, organizational and technology changes, including investments in improving systems and processes; our ability to implement and realize anticipated benefits of any cost-savings initiatives generated from our now-completed multi-year operational transformation program or other expense savings initiatives; our recognition of future impairment charges; and plans and references to future successes, including our future financial and operating results, short-term and long-term financial goals, plans, objectives, expectations and intentions, including with respect to free cash flow generation, adjusted net revenue, adjusted operating margin and adjusted earnings per share, are forward-looking statements. Also, when we use words such as ‘may’, ‘will’, ‘would’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘continues’, ‘seek’, ‘target’, ‘goal’, ‘focus’, ‘probably’, or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following: our ability to successfully establish, execute and achieve our global business strategy as it evolves; our ability to fully realize the anticipated benefits of our growth strategy, including inorganic growth through acquisitions; our ability to achieve our short-term and long-term financial goals, such as with respect to our cash flow generation, and the timing with respect to such achievement; the risks related to changes in general economic conditions, business and political conditions, changes in the financial markets, inflation, credit availability, increased interest rates, changes in trade policies, increased tariffs and retaliatory actions; the risks to our short-term and long-term financial goals from any of the risks or uncertainties set forth herein; the risks relating to the adverse impacts of macroeconomic trends, including those relating to changes in trade policies and tariffs, as well as political events, war, such as the Russia-Ukraine and Israel-Hamas wars, and other international disputes, terrorism, natural disasters, public health issues and other business interruptions on the global economy and capital markets, such as uncertainty in the global markets, inflation, changes in interest rates and recessionary trends, changes in spending by government agencies and contractors, which could have a material adverse effect on our business, financial condition, results of operations and long-term goals; our ability to successfully hedge against fluctuations in foreign currency rates; the risks relating to the adverse impacts of natural or man-made disasters such as health pandemics and other world health crises on the demand for our products and services, our cash flows and our business operations; material interruptions to or loss of our information processing capabilities, or failure to effectively maintain and upgrade our information technology resources and systems and related risks of cybersecurity breaches or incidents; our ability to comply with complex and evolving regulations related to data privacy, cybersecurity and artificial intelligence; the risks relating to the transitional arrangements in effect subsequent to our now-completed sale of TRANZACT; significant competition that we face and the potential for loss of market share and/or profitability; the impact of seasonality and differences in timing of renewals and non-recurring revenue increases from disposals and book-of-business sales; the insufficiency of client data protection, potential breaches of information systems or insufficient safeguards against cybersecurity breaches or incidents; the risk of increased liability or new legal claims arising from our new and existing products and services, and expectations, intentions and outcomes relating to outstanding litigation; the risk of substantial negative outcomes on existing or potential future litigation or investigation matters; changes in the regulatory environment in which we operate, including, among other risks, the impacts of pending competition law and regulatory investigations; various claims, government inquiries or investigations or the potential for regulatory action; our ability to make divestitures or acquisitions, including our ability to integrate or manage acquired businesses or carve-out businesses to be disposed, as well as our ability to identify and successfully execute on opportunities for strategic collaboration; our ability to integrate direct-to-consumer sales and marketing solutions with our existing offerings and solutions; our ability to successfully manage ongoing organizational changes, including as a result of our recently-completed multi-year operational transformation program, investments in improving systems and processes, and in connection with our acquisition and divestiture activities; disasters or business continuity problems; our ability to successfully enhance our billing, collection and other working capital efforts, and thereby increase our free cash flow; our ability to properly identify and manage conflicts of interest; reputational damage, including from association with third parties; reliance on third-party service providers and suppliers; risks relating to changes in our management structures and in senior leadership; the loss of key employees or a large number of employees and rehiring rates; our ability to maintain our corporate culture; doing business internationally, including the impact of global trade policies and retaliatory considerations as well as foreign currency exchange rates; compliance with extensive government regulation; the risk of sanctions imposed by governments, or changes to associated sanction regulations (such as sanctions imposed on Russia) and related counter-sanctions; our ability to effectively apply technology, data and analytics changes for internal operations, maintaining industry standards and meeting client preferences; changes and developments in the insurance industry or the U.S. healthcare system, including those related to Medicare, and any other changes and developments in legal, regulatory, economic, business or operational conditions that could impact our businesses; the inability to protect our intellectual property rights, or the potential infringement upon the intellectual property rights of others; fluctuations in our pension assets and liabilities and related changes in pension income, including as a result of, related to, or derived from movements in the interest rate environment, investment returns, inflation, or changes in other assumptions that are used to estimate our benefit obligations and their effect on adjusted earnings per share; our capital structure, including indebtedness amounts, the limitations imposed by the covenants in the documents governing such indebtedness and the maintenance of the financial and disclosure controls and procedures of each; our ability to obtain financing on favorable terms or at all; adverse changes in our credit ratings; the impact of recent or potential changes to U.S. or foreign laws, and the enactment of additional, or the revision of existing, state, federal, and/or foreign laws and regulations, recent judicial decisions and development of case law, other regulations and any policy changes and legislative actions, including those that may impose additional excise taxes or impact our effective tax rate; U.S. federal income tax consequences to U.S. persons owning at least 10% of our shares; changes in accounting principles, estimates or assumptions; our recognition of future impairment charges; risks relating to or arising from environmental, social and governance (‘ESG’) practices; fluctuation in revenue against our relatively fixed or higher-than-expected expenses; the risk that investment levels increase; the laws of Ireland being different from the laws of the U.S. and potentially affording less protections to the holders of our securities; and our holding company structure potentially preventing us from being able to receive dividends or other distributions in needed amounts from our subsidiaries.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see Part I, Item 1A in our Annual Report on Form 10-K, and our subsequent filings with the SEC. Copies are available online at http://www.sec.gov or www.wtwco.com.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.

Contact

INVESTORS
Claudia De La Hoz | Claudia.Delahoz@wtwco.com


	WTW Supplemental Segment Information (In millions of U.S. dollars) (Unaudited)

REVENUE
							Components of Revenue Change⁽ⁱ⁾
							Less:				Less:
	Three Months Ended March 31,				As Reported		Currency		Constant Currency		Acquisitions/		Organic
	2025		2024		% Change		Impact		Change		Divestitures		Change

Health, Wealth & Career
Revenue excluding interest income	$	1,158	$	1,327		(13)%		(1)%		(12)%		(14)%		3%
Interest income		7		9
Total		1,165		1,336		(13)%		(1)%		(12)%		(14)%		3%

Risk & Broking
Revenue excluding interest income	$	1,005	$	950		6%		(2)%		8%		0%		8%
Interest income		22		28
Total		1,027		978		5%		(2)%		7%		0%		7%

Segment Revenue	$	2,192	$	2,314		(5)%		(2)%		(4)%		(8)%		5%
Corporate, reimbursable expenses and other		21		21
Interest income		10		6
Revenue	$	2,223	$	2,341		(5)%		(1)%		(4)%		(8)%	5%⁽ⁱⁱ⁾

⁽ⁱ⁾	Components of revenue change may not add due to rounding.
⁽ⁱⁱ⁾	Interest income did not contribute to organic change for the three months ended March 31, 2025.

BOOK-OF-BUSINESS SETTLEMENTS AND INTEREST INCOME

	Three Months Ended March 31,
	HWC				R&B				Corporate				Total
	2025		2024		2025		2024		2025		2024		2025		2024
Book-of-business settlements	$	2	$	—	$	—	$	2	$	—	$	—	$	2	$	2
Interest income		7		9		22		28		10		6		39		43
Total	$	9	$	9	$	22	$	30	$	10	$	6	$	41	$	45

SEGMENT OPERATING INCOME ⁽ⁱ⁾

	Three Months Ended March 31,
	2025		2024

Health, Wealth & Career	$	311	$	336
Risk & Broking		226		203
Segment Operating Income	$	537	$	539

⁽ⁱ⁾

Segment operating income excludes certain costs, including amortization of intangibles, restructuring costs, transaction and transformation expenses, certain litigation provisions, and to the extent that the actual expense based upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally-allocated expenses and the actual expenses reported for U.S. GAAP purposes.

SEGMENT OPERATING MARGINS

	Three Months Ended March 31,
	2025		2024
Health, Wealth & Career		26.7%		25.1%
Risk & Broking		22.0%		20.8%

RECONCILIATION OF SEGMENT OPERATING INCOME TO INCOME FROM OPERATIONS BEFORE INCOME TAXES

	Three Months Ended March 31,
	2025			2024

Segment Operating Income	$	537		$	539
Amortization		(48	)		(60	)
Restructuring costs		—			(18	)
Transaction and transformation⁽ⁱ⁾		—			(125	)
Unallocated, net⁽ⁱⁱ⁾		(57	)		(56	)
Income from Operations		432			280
Interest expense		(65	)		(64	)
Other (loss)/income, net		(64	)		26
Income from operations before income taxes and interest in earnings of associates	$	303		$	242

⁽ⁱ⁾	In addition to legal fees and other transaction costs, includes primarily consulting fees and compensation costs related to the Transformation program.
⁽ⁱⁱ⁾	Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes.

WTW Reconciliations of Non-GAAP Measures (In millions of U.S. dollars, except per share data) (Unaudited)

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WTW TO ADJUSTED DILUTED EARNINGS PER SHARE

	Three Months Ended March 31,
	2025			2024

Net income attributable to WTW	$	235		$	190
Adjusted for certain items:
Amortization		48			60
Restructuring costs		—			18
Transaction and transformation		—			125
Net periodic pension and postretirement benefits		75			(22	)
Gain on disposal of operations		(14	)		—
Tax effect on certain items listed above⁽ⁱ⁾		(28	)		(46	)
Adjusted Net Income	$	316		$	325

Weighted-average ordinary shares, diluted		101			104

Diluted Earnings Per Share	$	2.33		$	1.83
Adjusted for certain items:⁽ⁱⁱ⁾
Amortization		0.48			0.58
Restructuring costs		—			0.17
Transaction and transformation		—			1.21
Net periodic pension and postretirement benefits		0.74			(0.21	)
Gain on disposal of operations		(0.14	)		—
Tax effect on certain items listed above⁽ⁱ⁾		(0.28	)		(0.44	)
Adjusted Diluted Earnings Per Share⁽ⁱⁱ⁾	$	3.13		$	3.13

⁽ⁱ⁾	The tax effect was calculated using an effective tax rate for each item.
⁽ⁱⁱ⁾	Per share values and totals may differ due to rounding.

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

	Three Months Ended March 31,
	2025				2024

Net Income	$	239		10.8%	$	194		8.3%
Provision for income taxes		65				48
Interest expense		65				64
Depreciation		54				59
Amortization		48				60
Restructuring costs		—				18
Transaction and transformation		—				125
Net periodic pension and postretirement benefits		75				(22	)
Gain on disposal of operations		(14	)			—
Adjusted EBITDA and Adjusted EBITDA Margin	$	532		23.9%	$	546		23.3%

RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME

	Three Months Ended March 31,
	2025			2024

Income from operations and Operating margin	$	432	19.4%	$	280	12.0%
Adjusted for certain items:
Amortization		48			60
Restructuring costs		—			18
Transaction and transformation		—			125
Adjusted operating income and Adjusted operating income margin	$	480	21.6%	$	483	20.6%

RECONCILIATION OF GAAP INCOME TAXES/TAX RATE TO ADJUSTED INCOME TAXES/TAX RATE

	Three Months Ended March 31,
	2025			2024

Income from operations before income taxes and interest in earnings of associates	$	303		$	242

Adjusted for certain items:
Amortization		48			60
Restructuring costs		—			18
Transaction and transformation		—			125
Net periodic pension and postretirement benefits		75			(22	)
Gain on disposal of operations		(14	)		—
Adjusted income before taxes	$	412		$	423

Provision for income taxes	$	65		$	48
Tax effect on certain items listed above⁽ⁱ⁾		28			46
Adjusted income taxes	$	93		$	94

U.S. GAAP tax rate		21.5	%		19.9	%
Adjusted income tax rate		22.7	%		22.3	%

⁽ⁱ⁾	The tax effect was calculated using an effective tax rate for each item.

RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES TO FREE CASH FLOW

	Years Ended December 31,
	2025			2024

Cash flows (used in)/from operating activities	$	(35	)	$	24
Less: Additions to fixed assets and software		(51	)		(60	)
Free Cash Flow	$	(86	)	$	(36	)

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY Condensed Consolidated Statements of Income (In millions of U.S. dollars, except per share data) (Unaudited)

	Three Months Ended March 31,
	2025			2024
Revenue	$	2,223		$	2,341

Costs of providing services
Salaries and benefits		1,324			1,342
Other operating expenses		365			457
Depreciation		54			59
Amortization		48			60
Restructuring costs		—			18
Transaction and transformation		—			125
Total costs of providing services		1,791			2,061

Income from operations		432			280

Interest expense		(65	)		(64	)
Other (loss)/income, net		(64	)		26

INCOME FROM OPERATIONS BEFORE INCOME TAXES AND INTEREST IN EARNINGS OF ASSOCIATES		303			242

Provision for income taxes		(65	)		(48	)

INCOME FROM OPERATIONS BEFORE INTEREST IN EARNINGS OF ASSOCIATES		238			194

Interest in earnings of associates, net of tax		1			—

NET INCOME		239			194

Income attributable to non-controlling interests		(4	)		(4	)

NET INCOME ATTRIBUTABLE TO WTW	$	235		$	190

EARNINGS PER SHARE
Basic earnings per share	$	2.34		$	1.84
Diluted earnings per share	$	2.33		$	1.83

Weighted-average ordinary shares, basic		100			103
Weighted-average ordinary shares, diluted		101			104

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY Condensed Consolidated Balance Sheets (In millions of U.S. dollars, except share data) (Unaudited)

	March 31,			December 31,
	2025			2024
ASSETS
Cash and cash equivalents	$	1,507		$	1,890
Fiduciary assets		10,293			9,504
Accounts receivable, net		2,366			2,494
Prepaid and other current assets		1,295			1,217
Total current assets		15,461			15,105
Fixed assets, net		667			661
Goodwill		8,841			8,799
Other intangible assets, net		1,255			1,295
Right-of-use assets		487			485
Pension benefits assets		550			530
Other non-current assets		803			806
Total non-current assets		12,603			12,576
TOTAL ASSETS	$	28,064		$	27,681
LIABILITIES AND EQUITY
Fiduciary liabilities	$	10,293		$	9,504
Deferred revenue and accrued expenses		1,499			2,211
Current debt		549			—
Current lease liabilities		120			118
Other current liabilities		923			765
Total current liabilities		13,384			12,598
Long-term debt		4,761			5,309
Liability for pension benefits		552			615
Provision for liabilities		359			341
Long-term lease liabilities		498			502
Other non-current liabilities		296			299
Total non-current liabilities		6,466			7,066
TOTAL LIABILITIES		19,850			19,664
COMMITMENTS AND CONTINGENCIES
EQUITY⁽ⁱ⁾
Additional paid-in capital		11,017			10,989
Retained earnings		51			109
Accumulated other comprehensive loss, net of tax		(2,935	)		(3,158	)
Total WTW shareholders’ equity		8,133			7,940
Non-controlling interests		81			77
Total Equity		8,214			8,017
TOTAL LIABILITIES AND EQUITY	$	28,064		$	27,681


⁽ⁱ⁾	Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 99,210,847 (2025) and 99,805,780 (2024); Outstanding 99,210,847 (2025) and 99,805,780 (2024) and (b) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2025 and 2024.

WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY Condensed Consolidated Statements of Cash Flows (In millions of U.S. dollars) (Unaudited)

	Years Ended March 31,
	2025			2024
CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
NET INCOME	$	239		$	194
Adjustments to reconcile net income to total net cash from operating activities:
Depreciation		54			59
Amortization		48			60
Non-cash restructuring charges		—			11
Non-cash lease expense		25			27
Net periodic cost/(benefit) of defined benefit pension plans		88			(4	)
Provision for doubtful receivables from clients		5			8
Benefit from deferred income taxes		(23	)		(9	)
Share-based compensation		37			24
Net gain on disposal of operations		(14	)		—
Non-cash foreign exchange loss/(gain)		9			(1	)
Other, net		9			8
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Accounts receivable		162			113
Other assets		1			(53	)
Other liabilities		(691	)		(426	)
Provisions		16			13
Net cash (used in)/from operating activities		(35	)		24

CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to fixed assets and software		(51	)		(60	)
Acquisitions of operations, net of cash acquired		(1	)		(15	)
(Purchase)/sale of investments		(32	)		1
Net cash used in investing activities		(84	)		(74	)

CASH FLOWS FROM FINANCING ACTIVITIES
Senior notes issued		—			746
Debt issuance costs		—			(7	)
Repayments of debt		(1	)		(1	)
Repurchase of shares		(200	)		(101	)
Net proceeds from fiduciary funds held for clients		315			1,011
Cash paid for employee taxes on withholding shares		(2	)		(5	)
Dividends paid		(88	)		(86	)
Acquisitions of and dividends paid to non-controlling interests		—			(1	)
Net cash from financing activities		24			1,556

(DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(95	)		1,506
Effect of exchange rate changes on cash, cash equivalents and restricted cash		80			(47	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD ⁽ⁱ⁾		4,998			3,792
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD ⁽ⁱ⁾	$	4,983		$	5,251

⁽ⁱ⁾	The amounts of cash, cash equivalents and restricted cash, their respective classification on the condensed consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented have been included in the Supplemental Disclosure of Cash Flow Information section.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

	Years Ended March 31,
	2025			2024

Supplemental disclosures of cash flow information:
Cash and cash equivalents	$	1,507		$	1,893
Fiduciary funds (included in fiduciary assets)		3,476			3,358
Total cash, cash equivalents and restricted cash	$	4,983		$	5,251

(Decrease)/increase in cash, cash equivalents and other restricted cash	$	(411	)	$	487
Increase in fiduciary funds		316			1,019
Total ⁽ⁱ⁾	$	(95	)	$	1,506

⁽ⁱ⁾	Does not include the effect of exchange rate changes on cash, cash equivalents and restricted cash.

The MIL Network –

April 24, 2025

MIL-OSI: Dassault Systèmes: Solid start to the year with strong subscription growth, EPS at the high end of guidance

Source: GlobeNewswire (MIL-OSI)

Press Release

VELIZY-VILLACOUBLAY, France — April 24, 2025

Dassault Systèmes: Solid start to the year with strong subscription growth, EPS at the high end of guidance

Dassault Systèmes (Euronext Paris: FR0014003TT8, DSY.PA) today reports its IFRS unaudited estimated financial results for the first quarter 2025 ended March 31, 2025. The Group’s Board of Directors approved these estimated results on April 23, 2025. This press release also includes financial information on a non-IFRS basis and reconciliations with IFRS figures in the Appendix.

Summary Highlights¹

(unaudited, non-IFRS unless otherwise noted,
all growth rates in constant currencies)

1Q25: Software revenue increased by 5% driven by recurring revenue up 7%;
1Q25: Strong subscription growth of 14%, bringing New business up 7%;
1Q25: 3DEXPERIENCE software revenue growth of 17%;
1Q25: Diluted EPS up 5% (6% as reported) to €0.32;
1Q25: Cash flow from operations grew 21%, as reported, to €813 million (IFRS);
FY25: Full year objectives unchanged, total revenue growth of 6-8% and diluted EPS of €1.36-€1.39.

Dassault Systèmes’ Chief Executive Officer Commentary

Pascal Daloz, Dassault Systèmes’ Chief Executive Officer, commented:

“In February this year we announced Gen 7, the new generation of representation of our customers’ virtual universes – we call it 3D UNIV+RSES. This seventh generation of MODSIM data, powered by AI and spatial computing, makes the 3DEXPERIENCE the next-generation platform for knowledge and know-how, establishing it as a global IP management platform. Early customer feedback confirms that platform-based AI leveraging virtual twins creates competitive advantage.

We’ve had a solid start to the year. In the first quarter, the Manufacturing Industries sector performed well led by Aerospace & Defense and High Tech, along with Transportation & Mobility in China, Japan and US. At the same time, we’re accelerating in Sovereign Infrastructure, where energy, security, and AI capabilities – through high-performance data centers – are becoming strategic imperatives for nations and territories.

We are committed to being the trusted partner for our customers – helping them stay ahead, while strengthening our leadership position for the long term and raising barriers to entry.”

Dassault Systèmes’ Chief Financial Officer Commentary

(revenue, operating margin and diluted EPS (‘EPS’) growth rates in constant currencies,
data on a non-IFRS basis)

Rouven Bergmann, Dassault Systèmes’ Chief Financial Officer, commented:

“In the first quarter, our revenue is driven by strong subscription growth of 14%. As a result, recurring revenue now represents 86% of software revenue, highlighting the resilience of our business model. Regarding operational efficiency, we reached the upper end of our EPS guidance and saw strong growth in operating cash flow, increasing by 21% as reported.

Entering 2025, our approach was to provide a risk-adjusted financial outlook. Since then, the introduction of new tariffs has created a more volatile market environment, which could lead to longer decision-making cycles. That said, our pipeline remains solid, and our current visibility aligns with the midpoint of our full year guidance.

Therefore, we keep our 2025 outlook of 6-8% total revenue growth and 7-10% EPS growth unchanged. In addition, we are slightly adjusting our operating margin target, expecting a year-over-year expansion of 50-70 basis points, versus 70-100 basis points prior, to gain additional flexibility and invest in Gen 7 to support our long-term growth.”

Financial Summary

In millions of Euros, except per share data and percentages	IFRS				Non-IFRS
In millions of Euros, except per share data and percentages	Q1 2025	Q1 2024	Change	Change in constant currencies	Q1 2025	Q1 2024	Change	Change in constant currencies
Total Revenue	1,573.0	1,499.7	5%	4%	1,573.0	1,499.7	5%	4%
Software Revenue	1,432.7	1,352.8	6%	5%	1,432.7	1,352.8	6%	5%
Operating Margin	19.4%	21.6%	(2.3)pts		30.9%	31.1%	(0.2)pt
Diluted EPS	0.20	0.21	(9)%		0.32	0.30	6%	5%

First Quarter 2025 Versus 2024 Financial Comparisons

(unaudited, IFRS and non-IFRS unless otherwise noted,
all revenue growth rates in constant currencies)

Total Revenue: Total revenue in the first quarter grew by 4% to €1.57 billion, and software revenue increased by 5% to €1.43 billion. Subscription & support revenue rose by 7%; recurring revenue represented 86% of software revenue, up 2 basis points versus last year. Licenses and other software revenue declined by 10% to €198 million. Services revenue was down 6% to €140 million, during the quarter.
Software Revenue by Geography: Revenue in the Americas increased by 7% to represent 43% of software revenue. This growth acceleration is driven by Aerospace & Defense, Transport & Mobility and High-Tech. Despite tariff uncertainty, Europe increased by 1%, led by good growth in Aerospace & Defense. Europe represented 36% of software revenue. In Asia, revenue increased by 5%, driven by India, Southeast Asia and Korea. Asia represented 22% of software revenue.
Software Revenue by Product Line:
- Industrial Innovation software revenue increased by 8% to €793 million. This strong broad-based performance was led by CATIA, ENOVIA, DELMIA and NETVIBES. Industrial Innovation software represented 55% of software revenue.

Life Sciences software revenue was stable at €293 million, accounting for 20% of software revenue. MEDIDATA was impacted by continued CRO² headwinds, while benefiting from the steady dynamic with Large Pharma and Mid-Market.
Mainstream Innovation software revenue increased by 2% to €347 million. SOLIDWORKS had a slow start to the year, but saw solid bookings and good momentum in 3DEXPERIENCE adoption. CENTRIC PLM was impacted by timing of renewals, after an exceptional year of growth in 2024. Mainstream Innovation represented 24% of software revenue, during the period.

Software Revenue by Industry: Aerospace & Defense, High Tech and Industrial Equipment were among the best performers during the quarter.
Key Strategic Drivers: 3DEXPERIENCE software revenue increased by 17%, driven by Aerospace & Defense, High Tech and Transportation & Mobility, along with opportunities in the sovereign infrastructure domain. 3DEXPERIENCE software revenue represented 39% of 3DEXPERIENCE eligible software revenue. Cloud software revenue grew by 7% and represented 25% of software revenue during the period. 3DEXPERIENCE Cloud software revenue increased by 41%.
Operating Income and Margin: IFRS operating income declined by 6% to €304 million, as reported. Non-IFRS operating income increased by 3% in constant currencies to €486 million (up 4% as reported). The IFRS operating margin stood at 19.4% compared to 21.6% in the first quarter of 2024. The non-IFRS operating margin totaled 30.9% versus 31.1% during the same period last year.
Earnings per Share: IFRS diluted EPS was €0.20, down 9% as reported. Non-IFRS diluted EPS grew to €0.32, up 6% as reported, or 5% in constant currencies.
Cash Flow from Operations (IFRS): Cash flow from operations totaled €813 million, an increase of 21% relative to the same period last year with strong cash collection. Cash flow from operations was principally used for the acquisition of ContentServ for €191 million (net of €11 million of cash acquired), repurchase of Treasury Shares for €80 million, repayment of debt for €59 million and €56 million for investments in CAPEX.
Balance Sheet (IFRS): Dassault Systèmes had a net cash position of €1.79 billion as of March 31, 2025, an increase of €0.33 billion, compared to €1.46 billion for the year ending December 31, 2024. Cash and cash equivalents totaled €4.24 billion at the end of March 2025.

Financial Objectives for 2025

Dassault Systèmes’ second quarter and 2025 financial objectives presented below are given on a non-IFRS basis and reflect the principal 2025 currency exchange rate assumptions for the US dollar and Japanese yen as well as the potential impact from additional non-Euro currencies:


		Q2 2025	FY 2025
Total Revenue (billion)		€1.520 – €1.580	€6.567 – €6.667
Growth		2 – 6%	6 – 7%
Growth ex FX		3 – 7%	6 – 8%

Software revenue growth *		3 – 7%	6 – 8%
	Of which licenses and other software revenue growth *	(6) – 1%	2 – 6%
	Of which recurring revenue growth *	5 – 8%	7 – 8%
Services revenue growth *		3 – 7%	4 – 6%

Operating Margin		29.8% – 29.9%	32.3% – 32.6%

EPS Diluted		€0.30 – €0.31	€1.36 – €1.39
Growth		(1) – 3%	7 – 9%
Growth ex FX		1 – 5%	7 – 10%

US dollar		$1.10 per Euro	$1.09 per Euro
Japanese yen (before hedging)		JPY 155.0 per Euro	JPY 156.4 per Euro
* Growth in Constant Currencies

These objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The 2025 non-IFRS financial objectives set forth above do not take into account the following accounting elements below and are estimated based upon the 2025 principal currency exchange rates above: no significant contract liabilities write-downs; share-based compensation expenses, including related social charges, estimated at approximately €213 million (these estimates do not include any new stock option or share grants issued after March 31, 2025); amortization of acquired intangibles and of tangibles reevaluation, estimated at approximately €353 million, largely impacted by the acquisition of MEDIDATA and lease incentives of acquired companies at approximately €1 million.

The above objectives also do not include any impact from other operating income and expenses, a net principally comprised of acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets; from one-time items included in financial revenue; from one-time tax effects; and from the income tax effects of these non-IFRS adjustments. Finally, these estimates do not include any new acquisitions or restructuring completed after March 31, 2025.

Corporate Announcements

Today’s Webcast and Conference Call Information

Today, Thursday, April 24, 2025, Dassault Systèmes will host, from Paris, a webcasted presentation at 9:00 AM London Time / 10:00 AM Paris time, and will then host a conference call at 8:30 AM New York time / 1:30 PM London time / 2:30 PM Paris time. The webcasted presentation and conference calls will be available online by accessing investor.3ds.com.

Additional investor information is available at investor.3ds.com or by calling Dassault Systèmes’ Investor Relations at +33.1.61.62.69.24.

Investor Relations Events

Capital Markets Day: June 6, 2025
Second Quarter 2025 Earnings Release: July 24, 2025
Third Quarter 2025 Earnings Release: October 23, 2025
Fourth Quarter 2025 Earnings Release: February 11, 2026

Forward-looking Information

Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding the Group’s non-IFRS financial performance objectives are forward-looking statements. Such forward-looking statements are based on Dassault Systèmes management’s current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors.

The Group’s actual results or performance may be materially negatively affected by numerous risks and uncertainties, as described in the “Risk Factors” section 1.9 of the 2024 Universal Registration Document (‘Document d’enregistrement universel’) filed with the AMF (French Financial Markets Authority) on March 18, 2025, available on the Group’s website www.3ds.com.

In particular, please refer to the risk factor “Uncertain Global Environment” in section 1.9.1.1 of the 2024 Universal Registration Document set out below for ease of reference:

“In light of the uncertainties regarding economic, business, social, health and geopolitical conditions at the global level, Dassault Systèmes’ revenue, net earnings and cash flows may grow more slowly, whether on an annual or quarterly basis, mainly due to the following factors:

the deployment of Dassault Systèmes’ solutions may represent a large portion of a customer’s investments in software technology. Decisions to make such an investment are impacted by the economic environment in which the customers operate. Uncertain global geopolitical, economic and health conditions and the lack of visibility or the lack of financial resources may cause some customers, e.g. within the automotive, aerospace, energy or natural resources industries, to reduce, postpone or cancel their investments, or to reduce or not renew ongoing paid maintenance for their installed base, which impact larger customers’ revenue with their respective sub-contractors;
the political, economic and monetary situation in certain geographic regions where Dassault Systèmes operates could become more volatile and negatively affect Dassault Systèmes’ business, and in particular its revenue, for example, due to stricter export compliance rules or the introduction of new customs barriers or controls on the exchange of goods and services;
continued pressure or volatility on raw materials and energy prices could also slow down Dassault Systèmes’ diversification efforts in new industries;
uncertainties regarding the extent and duration of costs inflation could adversely affect the financial position of Dassault Systèmes; and
the sales cycle of the Dassault Systèmes’ products – already relatively long due to the strategic nature of such investments for customers – could further lengthen.

The occurrence of crises – health and political crises in particular – could have consequences both for the health and safety of Dassault Systèmes’ employees and for the Company. It could also adversely impact the financial situation or financing and supply capabilities of Dassault Systèmes’ existing and potential customers, commercial and technology partners, some of whom may be forced to temporarily close sites or to cease operations. A deteriorating economic environment could generate increased price pressure and affect the collection of receivables, which would negatively affect Dassault Systèmes’ revenue, financial performance and market position.

Dassault Systèmes makes every effort to take into consideration this uncertain outlook. Dassault Systèmes’ business results, however, may not develop as anticipated. Furthermore, due to factors affecting sales of Dassault Systèmes’ products and services, there may be a substantial time lag between an improvement in global economic and business conditions and an upswing in the Company’s business results.

In preparing such forward-looking statements, the Group has in particular assumed an average US dollar to euro exchange rate of US$1.10 per €1.00 as well as an average Japanese yen to euro exchange rate of JPY155.0 to €1.00, before hedging for the second quarter 2025. The Group has assumed an average US dollar to euro exchange rate of US$1.09 per €1.00 as well as an average Japanese yen to euro exchange rate of JPY156.4 to €1.00, before hedging for the full year 2025. However, currency values fluctuate, and the Group’s results may be significantly affected by changes in exchange rates.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS financial information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered in isolation from or as a substitute for IFRS measurements. The supplemental non-IFRS financial information should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS. Furthermore, the Group’s supplemental non-IFRS financial information may not be comparable to similarly titled “non-IFRS” measures used by other companies. Specific limitations for individual non-IFRS measures are set forth in the Company’s 2024 Universal Registration Document filed with the AMF on March 18, 2025.

In the tables accompanying this press release the Group sets forth its supplemental non-IFRS figures for revenue, operating income, operating margin, net income and diluted earnings per share, which exclude the effect of adjusting the carrying value of acquired companies’ deferred revenue, share-based compensation expense and related social charges, the amortization of acquired intangible assets and of tangibles reevaluation, certain other operating income and expense, net, including impairment of goodwill and acquired intangibles, the effect of adjusting lease incentives of acquired companies, certain one-time items included in financial revenue and other, net, and the income tax effect of the non-IFRS adjustments and certain one-time tax effects. The tables also set forth the most comparable IFRS financial measure and reconciliations of this information with non-IFRS information.

FOR MORE INFORMATION

Dassault Systèmes’ 3DEXPERIENCE platform, 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions: http://www.3ds.com

ABOUT DASSAULT SYSTÈMES

Dassault Systèmes is a catalyst for human progress. Since 1981, the company has pioneered virtual worlds to improve real life for consumers, patients and citizens.
With Dassault Systèmes’ 3DEXPERIENCE platform, 370 000 customers of all sizes, in all industries, can collaborate, imagine and create sustainable innovations that drive meaningful impact.
For more information, visit www.3ds.com

Dassault Systèmes Investor Relations Team FTI Consulting

Beatrix Martinez: +33 1 61 62 40 73 Arnaud de Cheffontaines: +33 1 47 03 69 48

Jamie Ricketts : +44 20 3727 1600

investors@3ds.com

Dassault Systèmes Press Contacts

Corporate / France Arnaud MALHERBE

arnaud.malherbe@3ds.com

+33 (0)1 61 62 87 73

© Dassault Systèmes. All rights reserved. 3DEXPERIENCE, the 3DS logo, the Compass icon, IFWE, 3DEXCITE, 3DVIA, BIOVIA, CATIA, CENTRIC PLM, DELMIA, ENOVIA, GEOVIA, MEDIDATA, NETVIBES, OUTSCALE, SIMULIA and SOLIDWORKS are commercial trademarks or registered trademarks of Dassault Systèmes, a European company (Societas Europaea) incorporated under French law, and registered with the Versailles trade and companies registry under number 322 306 440, or its subsidiaries in the United States and/or other countries. All other trademarks are owned by their respective owners. Use of any Dassault Systèmes or its subsidiaries trademarks is subject to their express written approval.

APPENDIX TABLE OF CONTENTS

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Glossary of Definitions

Non-IFRS Financial Information

Acquisitions and Foreign Exchange Impact

Condensed consolidated statements of income

Condensed consolidated balance sheet

Condensed consolidated cash flow statement

IFRS – non-IFRS reconciliation

DASSAULT SYSTÈMES – Glossary of Definitions

Information in Constant Currencies

Dassault Systèmes has followed a long-standing policy of measuring its revenue performance and setting its revenue objectives exclusive of currency in order to measure in a transparent manner the underlying level of improvement in its total revenue and software revenue by activity, industry, geography and product lines. The Group believes it is helpful to evaluate its growth exclusive of currency impacts, particularly to help understand revenue trends in its business. Therefore, the Group provides percentage increases or decreases in its revenue and expenses (in both IFRS as well as non-IFRS) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed “in constant currencies”, the results of the “prior” period have first been recalculated using the average exchange rates of the comparable period in the current year, and then compared with the results of the comparable period in the current year.

While constant currency calculations are not considered to be an IFRS measure, the Group believes these measures are critical to understanding its global revenue results and to compare with many of its competitors who report their financial results in U.S. dollars. Therefore, Dassault Systèmes includes this calculation for comparing IFRS revenue figures as well non-IFRS revenue figures for comparable periods. All information at constant currencies is expressed as a rounded percentage and therefore may not precisely reflect the absolute figures.

Information on Growth excluding acquisitions (“organic growth”)

In addition to financial indicators on the entire Group’s scope, Dassault Systèmes provides growth excluding acquisitions effect, also named organic growth. In order to do so, the data relating to the scope is restated excluding acquisitions, from the date of the transaction, over a period of 12 months.

Information on Industrial Sectors

The Group provides broad end-to-end software solutions and services: its platform-based virtual twin experiences combine modeling, simulation, data science and collaborative innovation to support companies in the three sectors it serves, namely Manufacturing Industries, Life Sciences & Healthcare, and Infrastructure & Cities.

These three sectors comprise twelve industries:

Manufacturing Industries: Transportation & Mobility; Aerospace & Defense; Marine & Offshore; Industrial Equipment; High-Tech; Home & Lifestyle; Consumer Packaged Goods – Retail. In Manufacturing Industries, Dassault Systèmes helps customers virtualize their operations, improve data sharing and collaboration across their organization, reduce costs and time-to-market, and become more sustainable;
Life Sciences & Healthcare: Life Sciences & Healthcare. In this sector, the Group aims to address the entire cycle of the patient journey to lead the way toward precision medicine. To reach the broader healthcare ecosystem from research to commercial, the Group’s solutions connect all elements from molecule development to prevention to care, and combine new therapeutics, medical practices, and Medtech;
Infrastructure & Cities: Infrastructure, Energy & Materials; Architecture, Engineering & Construction; Business Services; Cities & Public Services. In Infrastructure & Cities, the Group supports the virtualization of the sector in making its industries more efficient and sustainable, and creating desirable living environments.

Information on Product Lines

The Group’s product lines financial reporting include the following financial information:

Industrial Innovation software revenue, which includes CATIA, ENOVIA, SIMULIA, DELMIA, GEOVIA, NETVIBES, and 3DEXCITE brands;
Life Sciences software revenue, which includes MEDIDATA and BIOVIA brands;
Mainstream Innovation software revenue which includes SOLIDWORKS, as well as its CENTRIC PLM and 3DVIA brands.

Starting from 2022, OUTSCALE became a brand of the Group, extending the portfolio of software applications. As the first sovereign and sustainable operator on the cloud, OUTSCALE enables governments and corporations from all sectors to achieve digital autonomy through a Cloud experience and with a world-class cyber governance.

GEOs

Eleven GEOs are responsible for driving the development of the Company’s business and implementing its customer‑centric engagement model. Teams leverage strong networks of local customers, users, partners, and influencers.

These GEOs are structured into three groups:

the “Americas” group, made of two GEOs;
the “Europe” group, comprising Europe, Middle East and Africa (EMEA) and made of four GEOs;
the “Asia” group, comprising Asia and Oceania and made of five GEOs.

3DEXPERIENCE Software Contribution

To measure the relative share of 3DEXPERIENCE software in its revenues, Dassault Systèmes calculates the percentage contribution by comparing total 3DEXPERIENCE software revenue to software revenue for all product lines except SOLIDWORKS, MEDIDATA, CENTRIC PLM and other acquisitions (defined as “3DEXPERIENCE Eligible software revenue”).

Cloud revenue

Cloud revenue is generated from contracts that provide access to cloud-based solutions (SaaS), infrastructure as a service (IaaS), cloud solution development and cloud managed services. These offerings are delivered by Dassault Systèmes through its own cloud infrastructure or by third-party cloud providers. They are available through different deployment methods: Dedicated cloud, Sovereign cloud and International cloud. Cloud solutions are generally offered through subscription-based models or perpetual licenses with support and hosting services.

New business

New business is the combination of subscription revenue and licenses & other software revenue.

DASSAULT SYSTÈMES

NON-IFRS FINANCIAL INFORMATION

(unaudited; in millions of Euros, except per share data, percentages, headcount and exchange rates)

Non-IFRS key figures exclude the effects of adjusting the carrying value of acquired companies’ contract liabilities (deferred revenue), share-based compensation expense, including related social charges, amortization of acquired intangible assets and of tangible assets revaluation, lease incentives of acquired companies, other operating income and expense, net, including the acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets, certain one-time items included in financial loss, net, certain one-time tax effects and the income tax effects of these non-IFRS adjustments.

Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the separate tables within this Attachment.

In millions of Euros, except per share data, percentages, headcount and exchange rates	Non-IFRS reported
	Three months ended
	March 31, 2025	March 31, 2024	Change	Change in constant currencies
Total Revenue	€ 1,573.0	€ 1,499.7	5%	4%

Revenue breakdown by activity
Software revenue	1,432.7	1,352.8	6%	5%
Of which licenses and other software revenue	198.1	218.5	(9)%	(10)%
Of which subscription and support revenue	1,234.6	1,134.3	9%	7%
Services revenue	140.2	146.8	(4)%	(6)%

Software revenue breakdown by product line
Industrial Innovation	793.1	731.4	8%	8%
Life Sciences	292.6	284.7	3%	0%
Mainstream Innovation	347.1	336.7	3%	2%

Software Revenue breakdown by geography
Americas	611.1	553.6	10%	7%
Europe	513.2	503.2	2%	1%
Asia	308.4	296.0	4%	5%

Operating income	€ 486.1	€ 466.5	4%
Operating margin	30.9%	31.1%

Net income attributable to shareholders	€ 420.1	€ 397.2	6%
Diluted earnings per share	€ 0.32	€ 0.30	6%	5%

Closing headcount	26,225	25,780	2%

Average Rate USD per Euro	1.05	1.09	(3)%
Average Rate JPY per Euro	160.45	161.15	(0)%

DASSAULT SYSTÈMES

ACQUISITIONS AND FOREIGN EXCHANGE IMPACT

(unaudited; in millions of Euros)

In millions of Euros

Non-IFRS reported

o/w growth at constant rate and scope

o/w change of scope impact at current year rate

o/w FX impact on previous year figures

March 31,

2025

March 31,

2024

Change

Revenue QTD

1,573.0

1,499.7

73.3

52.6

0.9

19.8

DASSAULT SYSTÈMES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited; in millions of Euros, except per share data and percentages)

In millions of Euros, except per share data and percentages	IFRS reported
	Three months ended
	March 31,	March 31,
	2025	2024
Licenses and other software revenue	198.1	218.5
Subscription and Support revenue	1,234.6	1,134.3
Software revenue	1,432.7	1,352.8
Services revenue	140.2	146.8
Total Revenue	€ 1,573.0	€ 1,499.7
Cost of software revenue ⁽¹⁾	(129.2)	(111.9)
Cost of services revenue	(131.1)	(131.8)
Research and development expenses	(348.6)	(311.4)
Marketing and sales expenses	(446.5)	(420.3)
General and administrative expenses	(120.4)	(105.1)
Amortization of acquired intangible assets and of tangible assets revaluation	(88.3)	(93.3)
Other operating income and expense, net	(4.4)	(1.8)
Total Operating Expenses	(1,268.5)	(1,175.6)
Operating Income	€ 304.5	€ 324.1
Financial income (loss), net	30.3	30.2
Income before income taxes	€ 334.8	€ 354.2
Income tax expense	(75.5)	(68.3)
Net Income	€ 259.4	€ 286.0
Non-controlling interest	1.2	(0.3)
Net Income attributable to equity holders of the parent	€ 260.5	€ 285.7
Basic earnings per share	0.20	0.22
Diluted earnings per share	€ 0.20	€ 0.21
Basic weighted average shares outstanding (in millions)	1,312.3	1,313.6
Diluted weighted average shares outstanding (in millions)	1,332.2	1,331.1

⁽¹⁾ Excluding amortization of acquired intangible assets and of tangible assets revaluation.

IFRS reported	Three months ended March 31, 2025
IFRS reported	Change ⁽²⁾	Change in constant currencies
Total Revenue	5%	4%
Revenue by activity
Software revenue	6%	5%
Services revenue	(4)%	(6)%
Software Revenue by product line
Industrial Innovation	8%	8%
Life Sciences	3%	0%
Mainstream Innovation	3%	2%
Software Revenue by geography
Americas	10%	7%
Europe	2%	1%
Asia	4%	5%

⁽²⁾ Variation compared to the same period in the prior year.

DASSAULT SYSTÈMES

CONDENSED CONSOLIDATED BALANCE SHEET

(unaudited; in millions of Euros)

In millions of Euros	IFRS reported
	March 31,	December 31,
	2025	2024
ASSETS
Cash and cash equivalents	4,242.9	3,952.6
Trade accounts receivable, net	1,709.5	2,120.9
Contract assets	34.3	30.1
Other current assets	464.8	464.0
Total current assets	6,451.5	6,567.6
Property and equipment, net	928.7	945.8
Goodwill and Intangible assets, net	7,597.6	7,687.1
Other non-current assets	358.9	345.5
Total non-current assets	8,885.2	8,978.3
Total Assets	€ 15,336.7	€ 15,545.9
LIABILITIES
Trade accounts payable	199.5	259.9
Contract liabilities	1,716.0	1,663.4
Borrowings, current	411.4	450.8
Other current liabilities	1,109.7	1,147.4
Total current liabilities	3,436.6	3,521.5
Borrowings, non-current	2,043.3	2,042.8
Other non-current liabilities	887.9	900.9
Total non-current liabilities	2,931.3	2,943.7
Non-controlling interests	14.3	14.1
Parent shareholders’ equity	8,954.5	9,066.6
Total Liabilities	€ 15,336.7	€ 15,545.9

DASSAULT SYSTÈMES

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(unaudited; in millions of Euros)

In millions of Euros	IFRS reported
	Three months ended
	March 31,	March 31,	Change
	2025	2024	Change
Net income attributable to equity holders of the parent	260.5	285.7	(25.2)
Non-controlling interest	(1.2)	0.3	(1.4)
Net income	259.4	286.0	(26.6)
Depreciation of property and equipment	50.5	47.6	2.8
Amortization of intangible assets	89.6	95.2	(5.6)
Adjustments for other non-cash items	16.1	37.7	(21.6)
Changes in working capital	397.4	204.4	193.0
Net Cash From Operating Activities	€ 813.0	€ 670.9	€ 142.1

Additions to property, equipment and intangibles assets	(55.9)	(57.2)	1.2
Payment for acquisition of businesses, net of cash acquired	(193.8)	(4.5)	(189.2)
Other	(37.8)	22.3	(60.1)
Net Cash Provided by (Used in) Investing Activities	€ (287.5)	€ (39.4)	€ (248.1)

Proceeds from exercise of stock options	22.2	21.3	0.8
Repurchase and sale of treasury stock	(80.1)	(131.1)	51.0
Acquisition of non-controlling interests	(0.2)	(2.6)	2.5
Repayment of borrowings	(58.9)	(0.1)	(58.8)
Repayment of lease liabilities	(22.6)	(24.0)	1.4
Net Cash Provided by (Used in) Financing Activities	€ (139.6)	€ (136.5)	€ (3.0)

Effect of exchange rate changes on cash and cash equivalents	(95.7)	32.7	(128.4)

Increase (decrease) in cash and cash equivalents	€ 290.3	€ 527.7	€ (237.4)


Cash and cash equivalents at beginning of period	€ 3,952.6	€ 3,568.3
Cash and cash equivalents at end of period	€ 4,242.9	€ 4,095.9

DASSAULT SYSTÈMES
SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS – NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data and percentages)

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Group’s supplemental non-IFRS financial information may not be comparable to similarly titled “non-IFRS” measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Group’s Document d’Enregistrement Universel for the year ended December 31, 2024 filed with the AMF on March 18, 2025. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Group’s consolidated financial statements prepared in accordance with IFRS.

In millions of Euros, except per share data and percentages	Three months ended March 31,						Change
	2025	Adjustment⁽¹⁾	2025	2024	Adjustment⁽¹⁾	2024	IFRS	Non-IFRS⁽²⁾
	IFRS	Adjustment⁽¹⁾	Non-IFRS	IFRS	Adjustment⁽¹⁾	Non-IFRS	IFRS	Non-IFRS⁽²⁾
Total Revenue	€ 1,573.0	–	€ 1,573.0	€ 1,499.7	–	€ 1,499.7	5%	5%
Revenue breakdown by activity
Software revenue	1,432.7	–	1,432.7	1,352.8	–	1,352.8	6%	6%
Licenses and other software revenue	198.1	–	198.1	218.5	–	218.5	(9)%	(9)%
Subscription and Support revenue	1,234.6	–	1,234.6	1,134.3	–	1,134.3	9%	9%
Recurring portion of Software revenue	86%		86%	84%		84%
Services revenue	140.2	–	140.2	146.8	–	146.8	(4)%	(4)%
Software Revenue breakdown by product line
Industrial Innovation	793.1	–	793.1	731.4	–	731.4	8%	8%
Life Sciences	292.6	–	292.6	284.7	–	284.7	3%	3%
Mainstream Innovation	347.1	–	347.1	336.7	–	336.7	3%	3%
Software Revenue breakdown by geography
Americas	611.1	–	611.1	553.6	–	553.6	10%	10%
Europe	513.2	–	513.2	503.2	–	503.2	2%	2%
Asia	308.4	–	308.4	296.0	–	296.0	4%	4%
Total Operating Expenses	€ (1,268.5)	€ 181.6	€ (1,086.9)	€ (1,175.6)	€ 142.4	€ (1,033.2)	8%	5%
Share-based compensation expense and related social charges	(88.5)	88.5	–	(46.7)	46.7	–
Amortization of acquired intangible assets and of tangible assets revaluation	(88.3)	88.3	–	(93.3)	93.3	–
Lease incentives of acquired companies	(0.4)	0.4	–	(0.7)	0.7	–
Other operating income and expense, net	(4.4)	4.4	–	(1.8)	1.8	–
Operating Income	€ 304.5	€ 181.6	€ 486.1	€ 324.1	€ 142.4	€ 466.5	(6)%	4%
Operating Margin	19.4%		30.9%	21.6%		31.1%
Financial income (loss), net	30.3	0.6	30.9	30.2	1.0	31.2	1%	(1)%
Income tax expense	(75.5)	(21.6)	(97.1)	(68.3)	(31.6)	(99.9)	11%	(3)%
Non-controlling interest	1.2	(0.9)	0.2	(0.3)	(0.3)	(0.5)	N/A	(141)%
Net Income attributable to shareholders	€ 260.5	€ 159.6	€ 420.1	€ 285.7	€ 111.5	€ 397.2	(9)%	6%
Diluted Earnings Per Share ⁽³⁾	€ 0.20	€ 0.12	€ 0.32	€ 0.21	€ 0.08	€ 0.30	(9)%	6%

⁽¹⁾ In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the effect of adjusting the carrying value of acquired companies’ contract liabilities (deferred revenue); (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangible assets and of tangible assets revaluation, share-based compensation expense, including related social charges, lease incentives of acquired companies, as detailed below, and other operating income and expense, net including acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets; (iii) adjustments to IFRS financial loss, net reflect the exclusion of certain one-time items included in financial loss, net, and; (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted earnings per share, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.

In millions of Euros, except percentages	Three months ended March 31,								Change
In millions of Euros, except percentages	2025 IFRS	Share-based compensation expense and related social charges	Lease incentives of acquired companies	2025 Non-IFRS	2024 IFRS	Share-based compensation expense and related social charges	Lease incentives of acquired companies	2024 Non-IFRS	IFRS	Non- IFRS
Cost of revenue	(260.3)	4.9	0.1	(255.2)	(243.8)	2.9	0.2	(240.6)	7%	6%
Research and development expenses	(348.6)	32.5	0.1	(316.0)	(311.4)	17.9	0.3	(293.2)	12%	8%
Marketing and sales expenses	(446.5)	24.5	0.1	(421.9)	(420.3)	13.7	0.1	(406.5)	6%	4%
General and administrative expenses	(120.4)	26.6	0.0	(93.8)	(105.1)	12.3	0.0	(92.7)	15%	1%
Total		€ 88.5	€ 0.4			€ 46.7	€ 0.7

⁽²⁾ The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is non-IFRS adjustment to the relevant measure for only one of the periods under comparison, the non-IFRS increase (decrease) compares the non-IFRS measure to the relevant IFRS measure.
⁽³⁾ Based on a weighted average 1,332.2 million diluted shares for Q1 2025 and 1,331.1 million diluted shares for Q1 2024, and, for IFRS only, a diluted net income attributable to the sharehorlders of € 260.5 million for Q1 2025 (€ 285.7 million for Q1 2024). The Diluted net income attributable to equity holders of the Group corresponds to the Net Income attributable to equity holders of the Group adjusted by the impact of the share-based compensation plans to be settled either in cash or in shares at the option of the Group.

1 IFRS figures for 1Q25: total revenue at €1.57 billion, operating margin of 19.4% and diluted EPS at €0.20.

2 Contract Research Organizations

Attachment

Dassault Systèmes: Solid start to the year with strong subscription growth, EPS at the high end of guidance

The MIL Network –

April 24, 2025

MIL-OSI: STMicroelectronics Reports 2025 First Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

PR No: C3332C

STMicroelectronics Reports 2025 First Quarter Financial Results

Q1 net revenues $2.52 billion; gross margin 33.4%; operating income $3 million; net income $56 million
Business outlook at mid-point: Q2 net revenues of $2.71 billion and gross margin of 33.4%
Company-wide program to reshape manufacturing footprint and resize global cost base on track; annual cost savings target in the high triple-digit million-dollar range exiting 2027 confirmed.

Geneva, April 24, 2025 – STMicroelectronics N.V. (“ST”) (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the first quarter ended March 29, 2025. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

ST reported first quarter net revenues of $2.52 billion, gross margin of 33.4%, operating income of $3 million and net income of $56 million or $0.06 diluted earnings per share.

Jean-Marc Chery, ST President & CEO, commented:

“Q1 net revenues came in line with the midpoint of our business outlook range, driven by higher revenues in Personal Electronics offset by lower-than-expected revenues in Automotive and Industrial. Gross margin was slightly below the mid-point of our business outlook range mainly due to product mix.”
“On a year-over-year basis, Q1 net revenues decreased 27.3%, operating margin decreased to 0.1% from 15.9% and net income decreased 89.1% to $56 million.”
“In the first quarter, our book-to-bill ratio improved with both Automotive and Industrial above parity.”
“Our second quarter business outlook, at the mid-point, is for net revenues of $2.71 billion, decreasing year-over-year by 16.2% and increasing sequentially by 7.7%; gross margin is expected to be about 33.4%, impacted by about 420 basis points of unused capacity charges.”
“We plan to maintain our Net Capex (non-U.S. GAAP¹) plan for 2025 between $2.0 billion and $2.3 billion mainly to execute the reshaping of our manufacturing footprint.”
“While we see Q1 2025 as the bottom, in the current uncertain environment we are focusing on what we can control: keep on innovating to continuously improve and accelerate the competitiveness of our product and technology portfolio, focus on advanced manufacturing and tightly manage our costs. In this respect our company-wide program to reshape ST manufacturing footprint and resize our global cost base is on track and we confirm the annual cost savings target in the high triple-digit million-dollar range exiting 2027.”

Quarterly Financial Summary

U.S. GAAP (US$ m, except per share data)	Q1 2025	Q4 2024	Q1 2024	Q/Q	Y/Y
Net Revenues	$2,517	$3,321	$3,465	-24.2%	-27.3%
Gross Profit	$841	$1,253	$1,444	-32.9%	-41.7%
Gross Margin	33.4%	37.7%	41.7%	-430 bps	-830 bps
Operating Income	$3	$369	$551	-99.2%	-99.5%
Operating Margin	0.1%	11.1%	15.9%	-1,100 bps	-1,580 bps
Net Income	$56	$341	$513	-83.6%	-89.1%
Diluted Earnings Per Share	$0.06	$0.37	$0.54	-83.8%	-88.9%

First Quarter 2025 Summary Review
ST made some adjustments to its segment reporting effective starting January 1, 2025. Prior year comparative periods have been adjusted accordingly. See Appendix for more detail.

Net Revenues by Reportable Segment² (US$ m)	Q1 2025	Q4 2024	Q1 2024	Q/Q	Y/Y
Analog products, MEMS and Sensors (AM&S) segment	1,069	1,348	1,406	-20.7%	-23.9%
Power and discrete products (P&D) segment	397	602	631	-34.1%	-37.1%
Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group	1,466	1,950	2,037	-24.8%	-28.0%
Embedded Processing (EMP) segment	742	1,002	1,047	-26.0%	-29.1%
RF & Optical Communications (RF&OC) segment	306	366	378	-16.5%	-19.2%
Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group	1,048	1,368	1,425	-23.4%	-26.5%
Others	3	3	3	–	–
Total Net Revenues	$2,517	$3,321	$3,465	-24.2%	-27.3%

Net revenues totaled $2.52 billion, representing a year-over-year decrease of 27.3%. Year-over-year net sales to OEMs and Distribution decreased 25.7% and 31.2%, respectively. On a sequential basis, net revenues decreased 24.2%, 20 basis points better than the mid-point of ST’s guidance.

Gross profit totaled $841 million, representing a year-over-year decrease of 41.7%. Gross margin of 33.4%, 40 basis points below the mid-point of ST’s guidance, decreased 830 basis points year-over-year, mainly due to product mix and, to a lesser extent, higher unused capacity charges and lower sales price.

Operating income decreased 99.5% to $3 million, compared to $551 million in the year-ago quarter. ST’s operating margin decreased 1,580 basis points on a year-over-year basis to 0.1% of net revenues, compared to 15.9% in the first quarter of 2024. Excluding Impairment, restructuring charges and other related phase-out costs³, operating income stood at $11 million in the first quarter.

By reportable segment, compared with the year-ago quarter:

In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:

Analog products, MEMS and Sensors (AM&S) segment:

Revenue decreased 23.9% mainly due to a decrease in Analog.
Operating profit decreased by 66.7% to $82 million. Operating margin was 7.7% compared to 17.5%.

Power and Discrete products (P&D) segment:

Revenue decreased 37.1%.
Operating profit decreased from a positive $77 million to a negative $28 million. Operating margin was -6.9% compared to 12.1%.

In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:

Embedded Processing (EMP) segment:

Revenue decreased 29.1% mainly due to a decrease in GPAM.
Operating profit decreased by 71.5% to $66 million. Operating margin was 8.9% compared to 22.2%.

RF & Optical Communications (RF&OC) segment:

Revenue decreased 19.2%.
Operating profit decreased by 59.0% to $43 million. Operating margin was 13.9% compared to 27.4%.

Net income and diluted Earnings Per Share decreased to $56 million and $0.06 respectively compared to $513 million and $0.54 respectively in the year-ago quarter. Excluding Impairment, restructuring charges and other related phase-out costs net of the relevant tax impact, Net income and diluted Earnings Per Share² stood at $63 million and $0.07 respectively in the first quarter of 2025.

Cash Flow and Balance Sheet Highlights

				Trailing 12 Months
(US$ m)	Q1 2025	Q4 2024	Q1 2024	Q1 2025	Q1 2024	TTM Change
Net cash from operating activities	574	681	859	2,680	5,531	– 51.5%
Free cash flow (non-U.S. GAAP¹)	30	128	(134)	453	1,434	– 68.4%

Net cash from operating activities was $574 million in the first quarter compared to $859 million in the year-ago quarter.

Net Capex (non-U.S. GAAP), was $530 million in the first quarter compared to $967 million in the year-ago quarter.

Free cash flow (non-U.S. GAAP) was positive at $30 million in the first quarter, compared to negative $134 million in the year-ago quarter.

Inventory at the end of the first quarter was $3.01 billion, compared to $2.79 billion in the previous quarter and $2.69 billion in the year-ago quarter. Days sales of inventory at quarter-end was 167 days, compared to 122 days for both the previous quarter and the year-ago quarter.

In the first quarter, ST paid cash dividends to its stockholders totaling $72 million and executed a $92 million share buy-back, as part of its current share repurchase program.

ST’s net financial position (non-U.S. GAAP⁴) remained strong at $3.08 billion as of March 29, 2025, compared to $3.23 billion as of December 31, 2024 and reflected total liquidity of $5.96 billion and total financial debt of $2.88 billion. Adjusted net financial position (non-U.S. GAAP¹), taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2.71 billion as of March 29, 2025.

Corporate developments

On April 10, 2025, ST detailed its company-wide program to reshape manufacturing footprint and resize global cost base and confirmed the annual cost savings target in the high triple-digit million-dollar range exiting 2027. Specifically, ST disclosed further elements of its program to reshape its global manufacturing footprint.

Business Outlook

ST’s guidance, at the mid-point, for the 2025 second quarter is:

Net revenues are expected to be $2.71 billion, an increase of 7.7% sequentially, plus or minus 350 basis points.
Gross margin of 33.4%, plus or minus 200 basis points.
This outlook is based on an assumed effective currency exchange rate of approximately $1.08 = €1.00 for the 2025 second quarter and includes the impact of existing hedging contracts.
The second quarter will close on June 28, 2025.

This business outlook does not include any impact for potential further changes to global trade tariffs compared to the current situation.

Conference Call and Webcast Information

ST will conduct a conference call with analysts, investors and reporters to discuss its first quarter 2025 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, https://investors.st.com, and will be available for replay until May 9, 2025.

Use of Supplemental Non-U.S. GAAP Financial Information

This press release contains supplemental non-U.S. GAAP financial information.

Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with ST’s consolidated financial statements prepared in accordance with U.S. GAAP.

See the Appendix of this press release for a reconciliation of ST’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.

Forward-looking Information

Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:

changes in global trade policies, including the adoption and expansion of tariffs and trade barriers, that could affect the macro-economic environment and adversely impact the demand for our products;
uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which may impact production capacity and end-market demand for our products;
customer demand that differs from projections which may require us to undertake transformation measures that may not be successful in realizing the expected benefits in full or at all;
the ability to design, manufacture and sell innovative products in a rapidly changing technological environment;
changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macro-economic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities;
unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our R&D and manufacturing programs, which benefit from public funding;
financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;
the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers;
availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation);
the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology;
theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation;
the impact of IP claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;
variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;
the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;
product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts;
natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate;
increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027;
epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results;
industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers;
the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third-party components and performance of subcontractors in line with our expectations; and
individual customer use of certain products, which may differ from the anticipated uses of such products and result in differences in performance, including energy consumption, may lead to a failure to achieve our disclosed emission-reduction goals, adverse legal action or additional research costs.

Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2025. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors” from time to time in our Securities and Exchange Commission (“SEC”) filings, could have a material adverse effect on our business and/or financial condition.

About STMicroelectronics

At ST, we are 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are on track to be carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027. Further information can be found at www.st.com.

For further information, please contact:

INVESTOR RELATIONS:
Jérôme Ramel
EVP Corporate Development & Integrated External Communication
Tel: +41 22 929 59 20
jerome.ramel@st.com

MEDIA RELATIONS:
Alexis Breton
Group VP Corporate External Communications
Tel: + 33 6 59 16 79 08
alexis.breton@st.com

STMicroelectronics N.V.
CONSOLIDATED STATEMENTS OF INCOME
(in millions of U.S. dollars, except per share data ($))

	Three months ended
	March 29,	March 30,
	2025	2024
	(Unaudited)	(Unaudited)

Net sales	2,513	3,444
Other revenues	4	21
NET REVENUES	2,517	3,465
Cost of sales	(1,676)	(2,021)
GROSS PROFIT	841	1,444
Selling, general and administrative expenses	(390)	(425)
Research and development expenses	(489)	(528)
Other income and expenses, net	49	60
Impairment, restructuring charges and other related phase-out costs	(8)	–
Total operating expenses	(838)	(893)
OPERATING INCOME	3	551
Interest income, net	48	59
Other components of pension benefit costs	(4)	(4)
Gain (loss) on financial instruments, net	25	–
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST	72	606
Income tax expense	(13)	(92)
NET INCOME	59	514
Net income attributable to noncontrolling interest	(3)	(1)
NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS	56	513

EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS	0.06	0.57
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS	0.06	0.54

NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS	933.6	942.3


STMicroelectronics N.V.
CONSOLIDATED BALANCE SHEETS
As at	March 29,	December 31,	March 30,
In millions of U.S. dollars	2025	2024	2024
	(Unaudited)	(Audited)	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	1,781	2,282	3,133
Short-term deposits	1,650	1,450	1,226
Marketable securities	2,528	2,452	1,880
Trade accounts receivable, net	1,385	1,749	1,787
Inventories	3,014	2,794	2,685
Other current assets	1,050	1,007	1,183
Total current assets	11,408	11,734	11,894
Goodwill	299	290	298
Other intangible assets, net	338	346	366
Property, plant and equipment, net	11,178	10,877	10,866
Non-current deferred tax assets	490	464	585
Long-term investments	96	71	22
Other non-current assets	1,114	961	942
	13,515	13,009	13,079
Total assets	24,923	24,743	24,973

LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	988	990	238
Trade accounts payable	1,373	1,323	1,642
Other payables and accrued liabilities	1,290	1,306	1,547
Dividends payable to stockholders	16	88	6
Accrued income tax	72	66	133
Total current liabilities	3,739	3,773	3,566
Long-term debt	1,889	1,963	2,875
Post-employment benefit obligations	392	377	372
Long-term deferred tax liabilities	48	47	49
Other long-term liabilities	896	904	912
	3,225	3,291	4,208
Total liabilities	6,964	7,064	7,774
Commitment and contingencies
Equity
Parent company stockholders’ equity
Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 par value, 1,200,000,000 shares authorized, 911,281,920 shares issued, 894,410,472 shares outstanding as of March 29, 2025)	1,157	1,157	1,157
Additional Paid-in Capital	3,142	3,088	2,931
Retained earnings	13,514	13,459	12,982
Accumulated other comprehensive income	495	236	468
Treasury stock	(582)	(491)	(463)
Total parent company stockholders’ equity	17,726	17,449	17,075
Noncontrolling interest	233	230	124
Total equity	17,959	17,679	17,199
Total liabilities and equity	24,923	24,743	24,973


STMicroelectronics N.V.

SELECTED CASH FLOW DATA

Cash Flow Data (in US$ millions)	Q1 2025	Q4 2024	Q1 2024

Net Cash from operating activities	574	681	859
Net Cash used in investing activities	(796)	(1,259)	(1,254)
Net Cash from (used in) financing activities	(282)	(209)	308
Net Cash decrease	(501)	(795)	(89)

Selected Cash Flow Data (in US$ millions)	Q1 2025	Q4 2024	Q1 2024

Depreciation & amortization	428	451	430
Net payment for Capital expenditures	(538)	(501)	(994)
Dividends paid to stockholders	(72)	(88)	(48)
Change in inventories, net	(172)	(2)	(12)

Appendix
ST
Changes to reportable segments

Following ST’s reorganization announced in January 2024 into two Product Groups and four reportable segments, we have made further progress in analyzing our global product portfolio, resulting in the following adjustments to our segments, effective starting January 1, 2025, without modifying subtotals at Product Group level:

In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:
- The transfer of VIPower products from Power and Discrete products (“P&D”) reportable segment to Analog products, MEMS and Sensors (“AM&S”) reportable segment.
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
- the newly created ‘Embedded Processing’ (“EMP”) reportable segment includes the former ‘MCU’ segment (excluding the RF ASICs mentioned below) as well as Custom Processing products (Automotive ADAS products).
- the newly created ‘RF & Optical Communications’ (“RF&OC”) reportable segment includes the former ‘D&RF’ segment (excluding Automotive ADAS products) as well as some RF ASICs which were previously part of the former ‘MCU’ segment.

We believe these adjustments are critical for implementing synergies and optimizing resources, which are necessary to fully deliver the benefits expected from our new organization.

Our four reportable segments – within each Product Group – are now as follows:

In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:
- Analog products, MEMS and Sensors (“AM&S”) reportable segment, comprised of ST analog products (now including VIPower products), MEMS sensors and actuators, and optical sensing solutions.
- Power and Discrete products (“P&D”) reportable segment, comprised of discrete and power transistor products (now excluding VIPower products).

In this Press Release, “Analog” refers to analog products, “MEMS” to MEMS sensors and actuators and “Imaging” to optical sensing solutions.

In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
- Embedded Processing (“EMP”) reportable segment, comprised of general-purpose and automotive microcontrollers, connected security products and Custom Processing Products (Automotive ADAS)
- RF & Optical Communications (“RF&OC”) reportable segment, comprised of Space, Ranging & Connectivity products, Digital Audio & Signaling Solutions and Optical & RF COT.

In this Press release, “GPAM” refers to General purpose & automotive microcontrollers, “Connected Security” to connected security products, “Custom Processing” to automotive ADAS products.

Prior year comparative periods have been adjusted accordingly.

(Appendix – continued)
ST Supplemental Financial Information

	Q1 2025	Q4 2024	Q3 2024	Q2 2024	Q1 2024
Net Revenues By Market Channel (%)
Total OEM	71%	73%	76%	73%	70%
Distribution	29%	27%	24%	27%	30%

€/$ Effective Rate	1.06	1.09	1.08	1.08	1.09

Reportable Segment Data (US$ m)
Analog products, MEMS and Sensors (AM&S) segment
– Net Revenues	1,069	1,348	1,340	1,336	1,406
– Operating Income	82	220	216	193	246
Power and Discrete products (P&D) segment
– Net Revenues	397	602	652	576	631
– Operating Income	(28)	45	80	61	77
Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group
– Net Revenues	1,466	1,950	1,992	1,912	2,037
– Operating Income	54	265	296	254	323
Embedded Processing (EMP) segment
– Net Revenues	742	1,002	898	906	1,047
– Operating Income	66	181	146	126	232
RF & Optical Communications (RF&OC) segment
– Net Revenues	306	366	357	410	378
– Operating Income	43	95	84	96	103
Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group
– Net Revenues	1,048	1,368	1,255	1,316	1,425
– Operating Income	109	276	230	222	335
Others ^(a)
– Net Revenues	3	3	4	4	3
– Operating Income (Loss)	(160)	(172)	(145)	(101)	(107)
Total
– Net Revenues	2,517	3,321	3,251	3,232	3,465
– Operating Income	3	369	381	375	551

(a) Net revenues of Others include revenues from sales assembly services and other revenues. Operating income (loss) of Others include items such as unused capacity charges, including incidents leading to power outage, impairment and restructuring charges, management reorganization costs, start-up and phase out costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, as well as operating earnings of other products. Others includes:

(US$ m)	Q1 2025	Q4 2024	Q3 2024	Q2 2024	Q1 2024
*Unused capacity charges*	*123*	*118*	*104*	84	63

(Appendix – continued)
ST Supplemental Non-U.S. GAAP Financial Information
U.S. GAAP – Non-U.S. GAAP Reconciliation

The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

ST believes that these non-U.S. GAAP financial measures provide useful information for investors and management because they offer, when read in conjunction with ST’s U.S. GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of ST’s on-going operating results, (ii) the ability to better identify trends in ST’s business and perform related trend analysis, and (iii) to facilitate a comparison of ST’s results of operations against investor and analyst financial models and valuations, which may exclude these items.

Non-U.S. GAAP Net Earnings and Non-U.S. GAAP Earnings Per Share (non-U.S. GAAP measures)

Operating income before impairment and restructuring charges and one-time items is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related phase-out costs. Adjusted net earnings and earnings per share (EPS) are used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items like impairment, restructuring charges and other related phase-out costs attributable to ST and other one-time items, net of the relevant tax impact.

Q1 2025 (US$ m, except per share data)	Gross Profit	Operating Income	Net Earnings	Corresponding Diluted EPS
U.S. GAAP	841	3	56	0.06
Impairment, restructuring charges and other related phase-out costs	–	8	8	0.01
Estimated income tax effect	–	–	(1)	–
Non-U.S. GAAP	841	11	63	0.07

(Appendix – continued)

Net Financial Position and Adjusted Net Financial Position (non-U.S. GAAP measures)

Net Financial Position, a non-U.S. GAAP measure, represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, if any, short-term deposits, and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our Consolidated Balance Sheets. ST also presents adjusted net financial position as a non-U.S. GAAP measure, to take into consideration the effect on total liquidity of advances received on capital grants for which capital expenditures have not been incurred yet.

ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited.

(US$ m)	Mar 29 2025	Dec 31 2024	Sep 28 2024	June 29 2024	Mar 30 2024
Cash and cash equivalents	1,781	2,282	3,077	3,092	3,133
Short term deposits	1,650	1,450	977	975	1,226
Marketable securities	2,528	2,452	2,242	2,218	1,880
Total liquidity	5,959	6,184	6,296	6,285	6,239
Short-term debt	(988)	(990)	(1,003)	(236)	(238)
Long-term debt ^(a)	(1,889)	(1,963)	(2,112)	(2,850)	(2,875)
Total financial debt	(2,877)	(2,953)	(3,115)	(3,086)	(3,113)
Net Financial Position (non-U.S. GAAP)	3,082	3,231	3,181	3,199	3,126
Advances received on capital grants	(377)	(385)	(366)	(402)	(351)
Adjusted Net Financial Position (non-U.S. GAAP)	2,705	2,846	2,815	2,797	2,775

^(a)Long-term debt contains standard conditions but does not impose minimum financial ratios. Committed credit facilities for $618 million equivalent, are currently undrawn.

(Appendix – continued)

Net Capex and Free Cash Flow (non-U.S. GAAP measures)

ST presents Net Capex as a non-U.S. GAAP measure, which is reported as part of our Free Cash Flow (non-U.S. GAAP measure), to take into consideration the effect of advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period.

Net Capex, a non-U.S. GAAP measure, is defined as (i) Payment for purchase of tangible assets, as reported plus (ii) Proceeds from sale of tangible assets, as reported plus (iii) Proceeds from capital grants and other contributions, as reported plus (iv) Advances from capital grants allocated to property, plant and equipment in the reporting period.

ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies.

(US$ m)	Q1 2025	Q4 2024	Q3 2024	Q2 2024	Q1 2024
Payment for purchase of tangible assets, as reported	(587)	(584)	(669)	(690)	(1,145)
Proceeds from sale of tangible assets, as reported	2	–	2	1	2
Proceeds from capital grants and other contributions, as reported	47	83	66	143	149
Advances from capital grants allocated to property, plant and equipment	8	31	36	18	27
Net Capex (non-U.S. GAAP)	(530)	(470)	(565)	(528)	(967)

Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) Net Capex plus (iii) payment for purchase (and proceeds from sale) of intangible and financial assets and (iv) net cash paid for business acquisitions, if any.

ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations.

Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates, and by excluding the advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Our definition of Free Cash Flow may differ from definitions used by other companies.

(US$ m)	Q1 2025	Q4 2024	Q3 2024	Q2 2024	Q1 2024
Net cash from operating activities	574	681	723	702	859
Net Capex	(530)	(470)	(565)	(528)	(967)
Payment for purchase of intangible assets, net of proceeds from sale	(14)	(32)	(20)	(15)	(26)
Payment for purchase of financial assets, net of proceeds from sale	–	(51)	(2)	–	–
Free Cash Flow (non-U.S. GAAP)	30	128	136	159	(134)

(Appendix – continued)
Financial Calendar

The financial calendar for 2025 is as follows:

March 16, 2025 – April 24,2025:

Quiet period

April 24,2025:

Q1 2025 Financial Results

June 16, 2025 – July 24,2025:

Quiet period

July 24,2025:

Q2 2025 Financial Results

September 16, 2025 – October 23,2025:

Quiet period

October 23,2025:

Q3 2025 Financial Results

These dates are preliminary and are subject to final confirmation.

¹Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why the Company believes these measures are important.
²See Appendix for the definition of reportable segments.
³Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why the Company believes these measures are important.
⁴Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why the Company believes these measures are important.

Attachment

C3332C -Q125 Earnings PR – April 24 2025

The MIL Network –

April 24, 2025

MIL-OSI: Euronet Worldwide Reports First Quarter 2025 Financial Results – Highlighted by 18% Operating Income Growth

Source: GlobeNewswire (MIL-OSI)

Record first quarter results – revenue, operating income and adjusted EBITDA
Operating margin expansion of 80 basis points
Continued expansion of its leading cross-border payments network

LEAWOOD, Kan., April 23, 2025 (GLOBE NEWSWIRE) — Euronet Worldwide, Inc. (“Euronet” or the “Company”) (NASDAQ: EEFT), a leading global financial technology solutions and payments provider, reports first quarter 2025 financial results.

Euronet reports the following consolidated results for the first quarter 2025 compared with the same period of 2024:

Revenues of $915.5 million, a 7% increase from $857.0 million (9% increase on a constant currency¹ basis).
Operating income of $75.2 million, an 18% increase from $64.0 million (22% increase on a constant currency basis).
Adjusted operating income² of $75.2 million, an 18% increase from $63.6 million (23% increase on a constant currency basis).
Adjusted EBITDA³ of $118.7 million, a 9% increase from $108.8 million (12% increase on a constant currency basis).
Net income attributable to Euronet of $38.4 million, or $0.85 diluted earnings per share, compared with $26.2 million, or $0.55 diluted earnings per share.
Adjusted earnings per share⁴ of $1.13 ($1.33 excluding a one-time operating tax charge of $0.20 per share) compared to $1.28 ($1.13 excluding a one-time operating tax benefit of $0.15 per share).

See the reconciliation of non-GAAP items in the attached financial schedules.

“I am pleased that we achieved double-digit constant currency growth in adjusted operating income and adjusted EBITDA, highlighted by an 18% increase in adjusted operating income over the prior year. All segments contributed to the strong earnings. Moreover, the contribution of double-digit earnings growth reflects the strength of our strategic focus on our global payment network which concentrates on high value, digital payments complemented by cross-border transactions. On an apples-to-apples basis our adjusted EPS of $1.33 increased 18% from $1.13 in the first quarter of 2024,” stated Michael J. Brown, Euronet’s Chairman and Chief Executive Officer.

“I would offer that we do not see any direct impacts on our business as a result of the recent United States’ tariff actions. With a good start to the year together with our diversified global business, we are reaffirming our expectation to produce 12% to 16% earnings growth for the year,” continued Mr. Brown.

Segment and Other Results

The EFT Processing Segment reports the following results for the first quarter 2025 compared with the same period or date in 2024:

Revenues of $232.5 million, a 7% increase from $217.2 million (10% increase on a constant currency basis).
Operating income of $23.3 million, an 8% increase from $21.5 million (13% increase on a constant currency basis).
Adjusted Operating income of $23.3 million, a 10% increase from $21.1 million (15% increase on a constant currency basis).
Adjusted EBITDA of $47.6 million, a 6% increase from $44.7 million (10% increase on a constant currency basis).
Transactions of 3,463 million, a 38% increase from 2,502 million.
Total of 55,512 installed ATMs as of March 31, 2025, a 5% increase from 53,029. We operated 51,875 active ATMs as of March 31, 2025, a 5% increase from 49,290 as of March 31, 2024.

Constant currency revenue, operating income, and adjusted EBITDA growth in the first quarter 2025 was driven by market expansion, growth across most existing markets and the addition of access fees and interchange fees in certain markets.

Moreover, the EFT Processing Segment launched operations in two additional countries — Dominican Republic and Peru.

Transaction growth outpaced revenue growth due to continued growth in high-volume low-value transactions in India.

The epay Segment reports the following results for the first quarter 2025 compared with the same period or date in 2024:

Revenues of $267.4 million, a 4% increase from $257.1 million (8% increase on a constant currency basis).
Operating income of $26.8 million, a 1% increase from $26.6 million (5% increase on a constant currency basis).
Adjusted EBITDA of $28.4 million, consistent with prior year (5% increase on a constant currency basis).
Transactions of 1,134 million, a 19% increase from 953 million.
POS terminals of approximately 735,000 as of March 31, 2025, consistent with prior year.
Retailer locations of approximately 358,000 as of March 31, 2025, a 4% from 345,000.

Constant currency revenue growth was driven by continued payments, digital media and mobile growth. Operating income and adjusted EBITDA growth did not keep pace with revenue growth due to the payment of $4.5 million to resolve a non-recurring, multi-year operating tax matter during the quarter. Excluding this item, adjusted operating income would have grown 22% over the first quarter 2024 – reflecting the benefit of revenue growth and effective expense management.

epay’s transactions benefited as well from the continuation of strong growth in high-volume low-value transactions in India.

The Money Transfer Segment reports the following results for the first quarter 2025 compared with the same period or date in 2024:

Revenues of $417.7 million, a 9% increase from $384.6 million (10% increase on a constant currency basis).
Operating income of $45.1 million, a 21% increase from $37.2 million (23% increase on a constant currency basis).
Adjusted EBITDA of $51.3 million, a 15% increase from $44.5 million (17% increase on a constant currency basis).
Total transactions of 44.6 million, a 10% increase from 40.6 million.
Network locations of approximately 624,000 as of March 31, 2025, a 7% increase from approximately 583,000.

Constant currency revenue growth was primarily driven by double-digit growth in cross-border transactions, partially offset by a decrease in intra-US transactions. Direct-to-consumer digital transactions grew by 31%, reflecting strong consumer demand for digital products. Operating income and Adjusted EBITDA growth outpaced revenue growth due to gross margin expansion, leverage of scale and effective expense management.

Additionally, the Money Transfer segment continued to expand its industry leading global payments network to now reach 4.0 billion bank accounts, 3.2 billion wallet accounts and 624,000 payment locations.

Corporate and Other reports $20.0 million of expense for the first quarter 2025 compared with $21.3 million for the first quarter 2024. The decrease in corporate expenses is largely from the decrease in long-term share-based compensation.

Balance Sheet and Financial Position
Unrestricted cash and cash equivalents on hand was $1,393.6 million as of March 31, 2025, compared to $1,278.8 million as of December 31, 2024. Total indebtedness was $2,202.5 million as of March 31, 2025, compared to $1,949.8 million as of December 31, 2024. Availability under the Company’s revolving credit facilities was approximately $623.1 million as of March 31, 2025. The change in net debt is the result of share repurchases, the repurchase of the convertible notes, and working capital fluctuations, partially offset by cash generated from operations.

The Company repurchased 0.6 million shares for $59.6 million during the First quarter, which will improve earnings per share by 1% for future periods.

During the quarter, Euronet repurchased $492 million of convertible notes.

Non-GAAP Measures
In addition to the results presented in accordance with U.S. GAAP, the Company presents non-GAAP financial measures, such as constant currency financial measures, operating income, adjusted EBITDA, and adjusted earnings per share. These measures should be used in addition to, and not a substitute for, revenues, operating income, net income and earnings per share computed in accordance with U.S. GAAP. We believe that these non-GAAP measures provide useful information to investors regarding the Company’s performance and overall results of operations. These non-GAAP measures are also an integral part of the Company’s internal reporting and performance assessment for executives and senior management. The non-GAAP measures used by the Company may not be comparable to similarly titled non-GAAP measures used by other companies. The attached schedules provide a full reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure.

The Company does not provide a reconciliation of its forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for GAAP and the related GAAP and non-GAAP reconciliation, including adjustments that would be necessary for foreign currency exchange rate fluctuations and other charges reflected in the Company’s reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

⁽¹⁾ Constant currency financial measures are computed as if foreign currency exchange rates did not change from the prior period. This information is provided to illustrate the impact of changes in foreign currency exchange rates on the Company’s results when compared to the prior period.

⁽²⁾ Adjusted operating income is defined as operating income excluding non-cash purchase accounting adjustments. Adjusted operating income represents a performance measure and is not intended to represent a liquidity measure.

⁽³⁾ Adjusted EBITDA is defined as net income excluding, to the extent incurred in the period, interest expense, income tax expense, depreciation, amortization, share-based compensation and other non-cash purchase accounting adjustment, non-operating or non-recurring items that are considered expenses or income under U.S. GAAP. Adjusted EBITDA represents a performance measure and is not intended to represent a liquidity measure.

⁽⁴⁾ Adjusted earnings per share is defined as diluted U.S. GAAP earnings per share excluding, to the extent incurred in the period, the tax-effected impacts of: a) foreign currency exchange gains or losses, b) share-based compensation, c) acquired intangible asset amortization, d) non-cash income tax expense, e) non-cash purchase accounting adjustment f) non-cash investment gain g) other non-operating or non-recurring items and h) dilutive shares relate to the Company’s convertible bonds. Adjusted earnings per share represents a performance measure and is not intended to represent a liquidity measure.

Conference Call and Slide Presentation
Euronet Worldwide will host an analyst conference call on April 24, 2025, at 9:00 a.m. Eastern Time to discuss these results. The call may also include discussion of Company developments on the Company’s operations, forward-looking information, and other material information about business and financial matters. To listen to the call via telephone please register at Euronet Worldwide First Quarter 2025 Earnings Call. The conference call will also be available via webcast at http://ir.euronetworldwide.com. Participants should register at least five minutes prior to the scheduled start time of the event. A slideshow will be included in the webcast. A webcast replay will be available beginning approximately one hour after the event at http://ir.euronetworldwide.com and will remain available for one year.

About Euronet Worldwide, Inc.
Starting in Central Europe in 1994 and growing to a global real-time digital and cash payments network with millions of touchpoints today, Euronet now moves money in all the ways consumers and businesses depend upon. This includes money transfers, credit/debit card processing, ATMs, POS services, branded payments, foreign currency exchange and more. With products and services in more than 200 countries and territories provided through its own brand and branded business segments, Euronet and its financial technologies and networks make participation in the global economy easier, faster and more secure for everyone.

A leading global financial technology solutions and payments provider, Euronet has developed an extensive global payments network that includes 55,512 installed ATMs, approximately 1,214,000 EFT POS terminals and a growing portfolio of outsourced debit and credit card services which are under management in 69 countries; card software solutions; a prepaid processing network of approximately 735,000 POS terminals at approximately 358,000 retailer locations in 64 countries; and a global money transfer network of approximately 624,000 locations serving – countries and territories. Euronet serves clients from its corporate headquarters in Leawood, Kansas, USA, and 67 worldwide offices. For more information, please visit the Company’s website at www.euronetworldwide.com.

Statements contained in this news release that concern Euronet’s or its management’s intentions, expectations, or predictions of future performance, are forward-looking statements. Euronet’s actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including: conditions in world financial markets and general economic conditions, including impacts from pandemics; inflation; the war in the Ukraine and the related economic sanctions and tariffs; military conflicts in the Middle East; our ability to successfully integrate any acquired operations; economic conditions in specific countries and regions; technological developments affecting the market for our products and services; our ability to successfully introduce new products and services; foreign currency exchange rate fluctuations; the effects of any breach of our computer systems or those of our customers or vendors, including our financial processing networks or those of other third parties; interruptions in any of our systems or those of our vendors or other third parties; our ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; our ability to comply with increasingly stringent regulatory requirements, including anti-money laundering, anti-terrorism, anti-bribery, consumer and data protection and privacy; changes in laws and regulations affecting our business, including tax and immigration laws and any laws regulating payments, including dynamic currency conversion transactions; changes in our relationships with, or in fees charged by, our business partners; competition; the outcome of claims and other loss contingencies affecting Euronet; the cost of borrowing (including fluctuations in interest rates), availability of credit and terms of and compliance with debt covenants; and renewal of sources of funding as they expire and the availability of replacement funding. These risks and other risks are described in the Company’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of these filings may be obtained via the SEC’s Edgar website or by contacting the Company. Any forward-looking statements made in this release speak only as of the date of this release. Except as may be required by law, Euronet does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. The Company regularly posts important information to the investor relations section of its website.


EURONET WORLDWIDE, INC.
Condensed Consolidated Balance Sheets
(in millions)

	As of
	March 31,		As of
	2025		December 31,
	(unaudited)		2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,393.6	$	1,278.8
ATM cash	700.3		643.8
Restricted cash	10.8		9.2
Settlement assets	1,418.6		1,522.7
Trade accounts receivable, net	330.5		284.9
Prepaid expenses and other current assets	319.9		297.1
Total current assets	4,173.7		4,036.5

Property and equipment, net	337.4		329.7
Right of use lease asset, net	146.1		132.1
Goodwill and acquired intangible assets, net	1,070.9		1,048.1
Other assets, net	325.4		288.1
Total assets	$	6,053.5	$	5,834.5

LIABILITIES AND EQUITY
Current liabilities:
Settlement obligations	$	1,418.6	$	1,522.7
Accounts payable and other current liabilities	843.6		841.0
Current portion of operating lease liabilities	50.8		48.3
Short-term debt obligations	295.4		814.0
Total current liabilities	2,608.4		3,226.0

Debt obligations, net of current portion	1,906.0		1,134.4
Operating lease liabilities, net of current portion	97.8		87.4
Capital lease obligations, net of current portion	1.1		1.4
Deferred income taxes	57.3		71.8
Other long-term liabilities	81.2		84.3
Total liabilities	4,751.8		4,605.3
Equity	1,301.7		1,229.2
Total liabilities and equity	$	6,053.5	$	5,834.5

EURONET WORLDWIDE, INC.
Consolidated Statements of Operations
(unaudited – in millions, except share and per share data)

	Three Months Ended
	March 31,
	2025			2024

Revenues	$	915.5		$	857.0

Operating expenses:
Direct operating costs	561.0			533.7
Salaries and benefits	164.1			154.7
Selling, general and administrative	83.0			71.9
Depreciation and amortization	32.2			32.7
Total operating expenses	840.3			793.0
Operating income	75.2			64.0

Other income (expense):
Interest income	5.3			5.7
Interest expense	(19.4		)	(14.9		)
Foreign currency exchange (loss)	(18.1		)	(12.5		)
Other income (expense)	2.5			(0.1		)
Total other income (expense), net	(29.7		)	(21.8		)
Income before income taxes	45.5			42.2

Income tax expense	(7.1		)	(16.0		)

Net income	38.4			26.2
Net loss attributable to non-controlling interests	—			—
Net income attributable to Euronet Worldwide, Inc.	$	38.4		$	26.2
Add: Interest expense from assumed conversion of convertible notes, net of tax		1.0			0.9
Net income for diluted earnings per share calculation	$	39.4		$	27.1
Earnings per share attributable to Euronet
Worldwide, Inc. stockholders – diluted	$	0.85		$	0.55

Diluted weighted average shares outstanding	46,239,523			48,962,583

EURONET WORLDWIDE, INC.
Reconciliation of Net Income to Operating Income (Expense) to Adjusted Operating Income (Expense) and Adjusted EBITDA
(unaudited – in millions)

	Three months ended March 31, 2025

	EFT Processing			epay		Money Transfer		Corporate Services			Consolidated

Net income											$	38.4

Add: Income tax expense											7.1
Add: Total other expense, net											29.7

Operating income (expense)	$	23.3		$	26.8	$	45.1	$	(20.0	)	$	75.2
Add: Depreciation and amortization	24.3			1.6		6.1		0.2			32.2
Add: Share-based compensation	—			—		0.1		11.2			11.3
Earnings before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA)	$	47.6		$	28.4	$	51.3	$	(8.6	)	$	118.7

	Three months ended March 31, 2024

	EFT Processing			epay		Money Transfer		Corporate Services			Consolidated

Net income											$	26.2

Add: Income tax expense											16.0
Add: Total other expense, net											21.8

Operating income (expense)	$	21.5		$	26.6	$	37.2	$	(21.3	)	$	64.0
Less: Non-cash purchase accounting adjustment	(0.4		)	—		—		—			(0.4		)
Adjusted operating income ⁽¹⁾	21.1			26.6		37.2		(21.3		)	63.6
Add: Depreciation and amortization	23.6			1.7		7.3		0.1			32.7
Add: Share-based compensation	—			—		—		12.5			12.5
Earnings before interest, taxes, depreciation, amortization and share-based compensation, non-cash purchase accounting adjustment (Adjusted EBITDA)	$	44.7		$	28.3	$	44.5	$	(8.7	)	$	108.8

⁽¹⁾ Adjusted operating income and Adjusted EBITDA are non-GAAP measures that should be considered in addition to, and not a substitute for, net income computed in accordance with U.S. GAAP.


EURONET WORLDWIDE, INC.
Reconciliation of Adjusted Earnings per Share
(unaudited – in millions, except share and per share data)

	Three Months Ended
	March 31,
	2025			2024

Net income attributable to Euronet Worldwide, Inc.	$	38.4		$	26.2

Foreign currency exchange loss	18.1			12.5
Intangible asset amortization⁽¹⁾	4.5			5.5
Non-cash purchase accounting adjustment⁽²⁾	—			(0.4		)
Share-based compensation⁽³⁾	11.3			12.5
Income tax effect of above adjustments⁽⁴⁾	—			0.6
Non-cash investment gain⁽⁵⁾	(3.0		)	—
Non-cash GAAP tax expense (benefit)⁽⁶⁾	(19.3		)	2.5

Adjusted earnings⁽⁷⁾	$	50.0		$	59.4

Adjusted earnings per share – diluted⁽⁷⁾	$	1.13		$	1.28

Diluted weighted average shares outstanding (GAAP)		46,239,523		48,962,583
Effect of adjusted EPS dilution of convertible notes		(2,347,536	)		(2,781,818	)
Effect of unrecognized share-based compensation on diluted shares outstanding		371,757		355,219
Adjusted diluted weighted average shares outstanding		44,263,744		46,535,984

(1) Intangible asset amortization of $4.5 million and $5.5 million are included in depreciation and amortization expense of $32.2 million and $32.7 million for both the three months ended March 31, 2025 and March 31, 2024, in the consolidated statements of operations.

(2) Non-cash purchase accounting expense adjustment of $0.4 million is included in operating income for the three months ended March 31, 2024, in the consolidated statement of operations.

(3) Share-based compensation of $11.3 million and $12.5 million are included in salaries and benefits expense of $164.1 million and $154.7 million for the three months ended March 31, 2025 and March 31, 2024, respectively, in the consolidated statements of operations.

(4) Adjustment is the aggregate U.S. GAAP income tax effect on the preceding adjustments determined by applying the applicable statutory U.S. federal, state and/or foreign income tax rates.

(5) Non-cash investment gain of $3.0 million is included in other income in the consolidated statement of operations.

(6) Adjustment is the non-cash GAAP tax impact recognized on certain items such as the utilization of certain material net deferred tax assets and amortization of indefinite-lived intangible assets.

(7) Adjusted earnings and adjusted earnings per share are non-GAAP measures that should be considered in addition to, and not as a substitute for, net income and earnings per share computed in accordance with U.S. GAAP.

The MIL Network –

April 24, 2025

MIL-OSI: Precision Drilling Announces 2025 First Quarter Unaudited Financial Results

Source: GlobeNewswire (MIL-OSI)

CALGARY, Alberta, April 23, 2025 (GLOBE NEWSWIRE) — This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, gain on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending, Working Capital and Total Long-term Financial Liabilities. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) Accounting Standards and may not be comparable to similar measures used by other companies. See “Financial Measures and Ratios” later in this news release.

Precision Drilling Corporation (“Precision” or the “Company”) (TSX:PD; NYSE:PDS) announces 2025 first quarter results, confirms shareholder return targets, and lowers 2025 capital budget.

Financial Highlights

Revenue in the first quarter was $496 million compared to $528 million realized in the same period last year as strong drilling activity in Canada was offset by lower U.S. drilling activity.
Adjusted EBITDA⁽¹⁾ was $137 million and included $3 million of restructuring costs and $3 million of share-based compensation expense. In 2024, first quarter Adjusted EBITDA⁽¹⁾ was $143 million and included share-based compensation expense of $23 million.
First quarter net earnings attributable to shareholders was $35 million or $2.52 per share and comparable to $37 million or $2.53 per share in 2024. Precision has consistently delivered positive net earnings since mid-2022.
Cash provided by operations during the quarter was $63 million, allowing the Company to repurchase $31 million of common shares and repay $17 million of debt.
Capital expenditures were $60 million and the Company has lowered its 2025 capital budget to $200 million versus the $225 million previously announced.
Precision remains committed to repaying at least $100 million of debt in 2025 and allocating 35% to 45% of free cash flow, before debt repayments, to share buybacks.

Operational Highlights

Canada’s activity averaged 74 drilling rigs in the first quarter and surpassed the 73 active rigs in the same period last year.
Canadian revenue per utilization day was $35,601 and comparable to the $35,596 in the first quarter of 2024.
U.S. activity averaged 30 drilling rigs compared to 38 in the same period last year.
U.S. revenue per utilization day was US$33,157, which included US$1,263 per utilization day for idle but contracted rig revenue, versus US$32,867 in the first quarter of last year.
Internationally, we had eight rigs active in the first quarter, consistent with the first quarter of 2024, and realized revenue of US$36 million compared to US$38 million in 2024.
Service rig operating hours decreased 10% compared to the same quarter last year due to customer project deferrals and impacts of an earlier spring break up in Canada, plus lower U.S. activity.
(1) See “FINANCIAL MEASURES AND RATIOS.”

MANAGEMENT COMMENTARY

“I am pleased with Precision’s first quarter financial and operational results, and particularly with the efforts of the Precision team as we manage our way through a period of unusual volatility and market uncertainty. In the first quarter, our net earnings attributable to shareholders was $35 million, marking 11 consecutive quarters of positive earnings, and we are well on our way to meeting our capital allocation targets. During the quarter, we generated $63 million of cash provided by operations, allowing us to repay $17 million of debt and purchase $31 million of shares. Over the last four quarters, Precision has reduced its outstanding shares by nearly one million shares, representing 7% of our outstanding balance.

“During the first quarter our Canadian drilling activity remained slightly higher than last year, averaging 74 active rigs compared to 73 in 2024 and we expect this trend to continue through the first half of this year. In the U.S., we have modestly increased our activity levels from the fourth quarter, currently operating 34 rigs, primarily by capitalizing on the emerging opportunities in natural gas plays. With initial Liquefied Natural Gas (LNG) exports beginning shortly in Canada and significant LNG export capacity expansion underway in the U.S., we believe our market positioning for these increasing LNG opportunities is constructive.

“Second-half industry activity in North America will depend largely on customer realized cash flows and their capital allocation priorities. We believe industry capital discipline will remain a stabilizing market feature muting our customers’ short-term response to volatile commodity prices. However, global events and conflicts, including unexpected OPEC+ production increases, trade and tariff uncertainty, and geopolitical conflicts have the potential to impact global economic growth and access to commodity supplies, creating a range of commodity price scenarios which are difficult to predict.

“Tightly controlling all aspects of our business, adjusting spending and specifically managing Precision’s cash inflows and outflows at a pace that matches the cyclicality of our industry is a cornerstone of Precision’s business model. We are reducing our 2025 capital spending by $25 million to $200 million to mitigate increased market uncertainty and a potential reduction in customer demand. This includes trimming our expected upgrade spending by approximately $8 million and maintenance capital by $17 million. We remain poised to further adjust capital spending in response to actual customer demand.

“We have also reduced our fixed costs by approximately $10 million annually by streamlining our internal structure and focusing more directly on customer needs and aligning with current activity levels. These changes included flattening our operations leadership structure, exiting our North Dakota well-servicing business and reducing the related staffing levels.

“Our International drilling operations and Completion and Production business both contributed meaningful free cash flow for the quarter, and this is expected to continue for the rest of the year.

“With a predominantly variable cost business and low debt levels, a highly experienced team committed to serving our customers, and a high-performance rig fleet, Precision is better positioned than any time in the past decade to navigate uncertainty while simultaneously creating shareholder value,” concluded Mr. Neveu.

SELECT FINANCIAL AND OPERATING INFORMATION

Financial Highlights

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)		2025		2024		% Change
Revenue		496,331		527,788			(6.0	)
Adjusted EBITDA⁽¹⁾		137,497		143,149			(3.9	)
Net earnings		34,947		36,516			(4.3	)
Net earnings attributable to shareholders		34,511		36,516			(5.5	)
Cash provided by operations		63,419		65,543			(3.2	)
Funds provided by operations⁽¹⁾		109,842		117,765			(6.7	)

Cash used in investing activities		57,202		75,237			(24.0	)
Capital spending by spend category⁽¹⁾
Expansion and upgrade		19,546		14,370			36.0
Maintenance and infrastructure		40,419		41,157			(1.8	)
Proceeds on sale		(3,765	)	(5,186	)		(27.4	)
Net capital spending⁽¹⁾		56,200		50,341			11.6

Net earnings attributable to shareholders per share :
Basic		2.52		2.53			(0.4	)
Diluted		2.20		2.53			(13.0	)
Weighted average shares outstanding:
Basic		13,683		14,407			(5.0	)
Diluted		14,287		14,410			(0.9	)

(1) See “FINANCIAL MEASURES AND RATIOS.”

Operating Highlights

	For the three months ended March 31,
	2025		2024		% Change
Contract drilling rig fleet		215		214		0.5
Drilling rig utilization days:
Canada		6,680		6,617		1.0
U.S.		2,691		3,453		(22.1	)
International		720		728		(1.1	)
Revenue per utilization day:
Canada (Cdn$)		35,601		35,596		0.0
U.S. (US$)		33,157		32,867		0.9
International (US$)		49,419		52,808		(6.4	)
Operating costs per utilization day:
Canada (Cdn$)		20,822		19,959		4.3
U.S. (US$)		23,568		21,719		8.5

Service rig fleet		153		183		(16.4	)
Service rig operating hours		66,986		74,505		(10.1	)

Drilling Activity

	Average for the quarter ended 2024								Average for the quarter ended 2025
	Mar. 31		June 30		Sept. 30		Dec. 31			Mar. 31
Average Precision active rig count⁽¹⁾:
Canada		73		49		72		65			74
U.S.		38		36		35		34			30
International		8		8		8		8			8
Total		119		93		115		107			112

(1) Average number of drilling rigs working or moving.

Financial Position

(Stated in thousands of Canadian dollars, except ratios)	March 31, 2025			December 31, 2024
Working capital⁽¹⁾		(45,033	)		162,592
Cash		28,245			73,771
Long-term debt		567,824			812,469
Total long-term financial liabilities⁽¹⁾		632,369			888,173
Total assets		2,915,984			2,956,315
Long-term debt to long-term debt plus equity ratio⁽¹⁾		0.25			0.33

(1) See “FINANCIAL MEASURES AND RATIOS.”

Summary for the three months ended March 31, 2025:

Revenue was $496 million compared to $528 million in the first quarter of 2024 as strong drilling activity in Canada was offset by lower U.S. drilling activity.
Adjusted EBITDA decreased to $137 million from $143 million, primarily due to lower drilling activity in the U.S. and restructuring costs of $3 million that were partially offset by lower share-based compensation expense. Please refer to “Other Items” later in this news release for additional information on share-based compensation.
Adjusted EBITDA as a percentage of revenue was relatively stable at 28% compared to 27% in 2024.
Net earnings attributable to shareholders was $35 million or $2.52 per share and comparable with $37 million or $2.53 per share for the same period last year. On a diluted basis, net earnings attributable to shareholders was $2.20 versus $2.53 in 2024.
Cash provided by operations was $63 million, allowing the Company to repurchase 408,973 shares for $31 million, reduce debt by $17 million by repaying the outstanding balance on the Senior Credit Facility, and end the quarter with $28 million of cash and almost $550 million of available liquidity.
In Canada, revenue per utilization day was $35,601, consistent with the first quarter of 2024. Canadian operating costs per utilization day increased 4% to $20,822, mainly due to wage increases and Super Single rig reactivations. First quarter revenue and operating costs per utilization day were consistent with the fourth quarter of 2024.
In the U.S. revenue per utilization day, excluding idle but contracted rig revenue of US$1,263, was US$31,894 compared with US$32,867 in the first quarter of last year. First quarter revenue per utilization day, excluding idle but contracted rig revenue, increased by 4% from the fourth quarter of 2024.
U.S. operating costs per utilization day increased 9% to US$23,568 compared to the same quarter last year due to higher mobilization costs, additional rig reactivations, and fixed costs being spread over fewer activity days. These same factors caused operating costs per utilization per day in the first quarter to rise 9% compared to the fourth quarter of 2024.
Internationally, we realized revenue of US$36 million from eight active drilling rigs, which is similar to the US$38 million generated in the first quarter of 2024.
Completion and Production Services revenue was $79 million, a decrease of $8 million from 2024, as service rig operating hours decreased 10% due to a number of customer project deferrals and an earlier spring break up in Canada, plus less activity in the U.S. Adjusted EBITDA was $18 million, representing 22% of revenue compared to 21% in the first quarter of 2024.
General and administrative expenses were $30 million compared with $45 million in the first quarter of 2024 primarily due to lower share-based compensation expense.
Capital expenditures increased slightly to $60 million versus $56 million in 2024 and by spend category included $40 million for the maintenance of existing assets, infrastructure, and intangible assets and $20 million for expansion and upgrades. Precision has lowered its 2025 capital budget to $200 million.

STRATEGY

Precision’s vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities that we establish at the beginning of every year.

Precision’s 2025 strategic priorities and the progress made during the first quarter are as follows:

Maximize free cash flow through disciplined capital deployment and strict cost management.
- Generated cash from operations of $63 million, allowing the Company to reduce debt and buy back shares.
- Proactively reduced fixed cost structure to address market uncertainty and expect to realize approximately $10 million in annual savings.
- Reduced our 2025 capital budget to $200 million versus the $225 million previously announced.
Enhance shareholder returns through debt reduction and share repurchases. Plan to reduce debt by at least $100 million and allocate 35% to 45% of free cash flow before debt repayments for share repurchases.
- Returned $31 million of capital to shareholders by repurchasing 408,973 shares during the quarter.
- Reduced debt by $17 million and ended the quarter with almost $550 million of available liquidity.
- Remain committed to reducing debt by at least $100 million in 2025 and allocating 35% to 45% of free cash flow, before debt repayments, directly to shareholders.
Grow revenue in existing service lines through contracted upgrades, optimized pricing and utilization, and opportunistic consolidating tuck-in acquisitions.
- Increased Canadian rig utilization, averaging 74 active rigs for the first quarter versus 73 in 2024.
- Maintained strong pricing in Canada with revenue per utilization per day of $35,601, aligning with an average day rate of $35,596 in the first quarter of 2024.
- Invested $20 million in expansion and upgrade capital to enhance our drilling rigs.
- Current market conditions and commodity price volatility make acquisitions less likely in the near term.

OUTLOOK

Near-term expectations for global energy demand growth have been tempered by several geopolitical events including OPEC+ easing of curtailments, trade policy uncertainty, and international conflicts. However, we believe the long-term fundamentals for energy demand are positive, driven by economic growth, increasing demand from emerging economies, and new energy sources of power demand.

In Canada, the Trans Mountain pipeline expansion, which became operational in May of 2024, combined with the imminent startup of LNG Canada will provide significant tidewater access for Canadian crude oil and natural gas, supporting Canadian drilling activity. In the U.S., the next wave of LNG export terminals is expected to add approximately 13 bcf/d of export capacity over the next five years, supporting U.S. natural gas drilling activity beyond domestic demand growth and further supporting natural gas drilling.

Our Canadian drilling activity peaked at 82 rigs in the first quarter with our Super Triple and Super Single rigs near full utilization. We expect the traditional spring breakup period this year to have a historically small impact on our activity, as strong demand for our growing fleet of pad-capable rigs should allow 45 to 48 rigs to continue operating during this period versus 43 last year. Despite trade and tariff uncertainty and oil prices falling to approximately US$60 per barrel, we have not experienced any meaningful change in customer demand or their longer-term plans. Overall, we expect our Canadian drilling activity to be up for the first half of the year compared to the first six months of 2024.

In the U.S., we have modestly increased our activity levels from the fourth quarter, currently operating 34 rigs, primarily by capitalizing on the emerging opportunities in natural gas plays. With significant LNG export capacity expansion underway in the U.S., we believe our market positioning for these increasing LNG opportunities is constructive.

North American industry activity in the second half of this year will depend largely on customer realized cash flows and their capital allocation priorities. We believe industry capital discipline will remain a stabilizing market feature muting our customers’ short-term response to volatile commodity prices. However, global events and conflicts, including unexpected OPEC+ production increases, trade and tariff uncertainty, and geopolitical conflicts have the potential to impact global economic growth and access to commodity supplies, creating a range of commodity price scenarios which are difficult to predict.

Internationally, we have eight rigs on term contracts, five in Kuwait and three in the Kingdom of Saudi Arabia. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028, providing predictable cash flow for the next few years. In May and for the remainder of the year, we expect seven active rigs compared to eight for the first four months of the year but with no material impact on our 2025 cash flow. We continue to look for opportunities to leverage our international expertise.

As the premier well service provider in Canada, the outlook for this business remains strong, driven by increased takeaway capacity from Trans Mountain pipeline expansion and LNG Canada, and increased regulatory spending requirements for abandonment work. With continued labour constraints, we expect firm pricing into the foreseeable future.

Contracts

The following chart outlines the average number of drilling rigs under term contract by quarter as at April 23, 2025. For those quarters ending after March 31, 2025, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.

As at April 23, 2025	Average for the quarter ended 2024								Average		Average for the quarter ended 2025								Average
	Mar. 31		June 30		Sept. 30		Dec. 31		2024		Mar. 31		June 30		Sept. 30		Dec. 31		2025
Average rigs under term contract:
Canada		24		22		23		23		23		20		19		18		14		18
U.S.		20		17		17		16		18		16		15		11		8		13
International		8		8		8		8		8		8		7		7		7		7
Total		52		47		48		47		49		44		41		36		29		38

SEGMENTED FINANCIAL RESULTS

Precision’s operations are reported in two segments: Contract Drilling Services, which includes our drilling rig, oilfield supply and manufacturing divisions; and Completion and Production Services, which includes our service rig, rental and camp and catering divisions.

SEGMENT REVIEW OF CONTRACT DRILLING SERVICES

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)		2025		2024		% Change
Revenue		419,457		443,367			(5.4	)
Expenses:
Operating		272,412		276,692			(1.5	)
General and administrative		11,029		13,002			(15.2	)
Adjusted EBITDA⁽¹⁾		136,016		153,673			(11.5	)
Adjusted EBITDA as a percentage of revenue⁽¹⁾		32.4	%	34.7	%

(1) See “FINANCIAL MEASURES AND RATIOS.”

Canadian onshore drilling statistics:⁽¹⁾

2025

2024

Precision

Industry⁽²⁾

Precision

Industry⁽²⁾

Average number of active land rigs for quarters ended:

March 31

74

214

73

208

(1) Canadian operations only.
(2) Baker Hughes rig counts.

United States onshore drilling statistics:⁽¹⁾

2025

2024

Precision

Industry⁽²⁾

Precision

Industry⁽²⁾

Average number of active land rigs for quarters ended:

March 31

30

572

38

602

(1) United States lower 48 operations only.
(2) Baker Hughes rig counts.

SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES

	For the three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)		2025		2024		% Change
Revenue		79,330		87,087			(8.9	)
Expenses:
Operating		59,112		65,480			(9.7	)
General and administrative		2,672		3,002			(11.0	)
Adjusted EBITDA⁽¹⁾		17,546		18,605			(5.7	)
Adjusted EBITDA as a percentage of revenue⁽¹⁾		22.1	%	21.4	%
Well servicing statistics:
Number of service rigs (end of period)		153		183			(16.4	)
Service rig operating hours		66,986		74,505			(10.1	)

(1) See “FINANCIAL MEASURES AND RATIOS.”

OTHER ITEMS

Share-based Incentive Compensation Plans

We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2024 Annual Report.

A summary of expense amounts under these plans during the reporting periods are as follows:

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)	2025		2024
Cash settled share-based incentive plans		403		21,759
Equity settled share-based incentive plans		2,427		875
Total share-based incentive compensation plan expense		2,830		22,634

Allocated:
Operating		1,128		5,252
General and Administrative		1,702		17,382
		2,830		22,634

FINANCIAL MEASURES AND RATIOS

Non-GAAP Financial Measures

We reference certain additional Non-Generally Accepted Accounting Principles (Non-GAAP) measures that are not defined terms under IFRS Accounting Standards to assess performance because we believe they provide useful supplemental information to investors.

Adjusted EBITDA

We believe Adjusted EBITDA (earnings before income taxes, gain on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), as reported in our Condensed Interim Consolidated Statements of Net Earnings and our reportable operating segment disclosures, is a useful measure because it gives an indication of the results from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.

The most directly comparable financial measure is net earnings.

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)		2025		2024
Adjusted EBITDA by segment:
Contract Drilling Services		136,016		153,673
Completion and Production Services		17,546		18,605
Corporate and Other		(16,065	)	(29,129	)
Adjusted EBITDA		137,497		143,149
Depreciation and amortization		75,036		78,213
Gain on asset disposals		(2,872	)	(3,237	)
Foreign exchange		367		394
Finance charges		15,760		18,369
Gain on investments and other assets		(49	)	(228	)
Income taxes		14,308		13,122
Net earnings		34,947		36,516
Non-controlling interests		436		—
Net earnings attributable to shareholders		34,511		36,516

Funds Provided by (Used in) Operations

We believe funds provided by (used in) operations, as reported in our Condensed Interim Consolidated Statements of Cash Flows, is a useful measure because it provides an indication of the funds our principal business activities generate prior to consideration of working capital changes, which is primarily made up of highly liquid balances.

The most directly comparable financial measure is cash provided by (used in) operations.

Net Capital Spending

We believe net capital spending is a useful measure as it provides an indication of our primary investment activities.

The most directly comparable financial measure is cash provided by (used in) investing activities.

Net capital spending is calculated as follows:

	For the three months ended March 31,
(Stated in thousands of Canadian dollars)		2025		2024
Capital spending by spend category
Expansion and upgrade		19,546		14,370
Maintenance, infrastructure and intangibles		40,419		41,157
		59,965		55,527
Proceeds on sale of property, plant and equipment		(3,765	)	(5,186	)
Net capital spending		56,200		50,341
Purchase of investments and other assets		11		—
Receipt of finance lease payments		(208	)	(191	)
Changes in non-cash working capital balances		1,199		25,087
Cash used in investing activities		57,202		75,237

Working Capital

We define working capital as current assets less current liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position.

Working capital is calculated as follows:

	March 31,			December 31,
(Stated in thousands of Canadian dollars)		2025			2024
Current assets		481,111			501,284
Current liabilities		(526,144	)		(338,692	)
Working capital		(45,033	)		162,592

Total Long-term Financial Liabilities

We define total long-term financial liabilities as total non-current liabilities less deferred tax liabilities, as reported in our Condensed Interim Consolidated Statements of Financial Position.

Total long-term financial liabilities is calculated as follows:

	March 31,			December 31,
(Stated in thousands of Canadian dollars)		2025			2024
Total non-current liabilities		688,940			935,624
Deferred tax liabilities		(56,571	)		(47,451	)
Total long-term financial liabilities		632,369			888,173

Non-GAAP Ratios
We reference certain additional Non-GAAP ratios that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
*Adjusted EBITDA % of Revenue*	We believe Adjusted EBITDA as a percentage of consolidated revenue, as reported in our Condensed Interim Consolidated Statements of Net Earnings, provides an indication of our profitability from our principal business activities prior to consideration of how our activities are financed and the impact of foreign exchange, taxation and depreciation and amortization charges.
*Long-term debt to long-term debt plus equity*	We believe that long-term debt (as reported in our Condensed Interim Consolidated Statements of Financial Position) to long-term debt plus equity (total equity as reported in our Condensed Interim Consolidated Statements of Financial Position) provides an indication of our debt leverage. For the period ended March 31, 2025 long-term debt includes long-term debt plus current portion of long-term debt as reported in our Consolidated Interim Consolidated Statements of Financial Position.
*Net Debt to Adjusted EBITDA*	We believe that the Net Debt (long-term debt plus current portion of long-term debt less cash, as reported in our Condensed Interim Consolidated Statements of Financial Position) to Adjusted EBITDA ratio provides an indication of the number of years it would take for us to repay our debt obligations. For the period ended March 31, 2025 long-term debt includes long-term debt plus current portion of long-term debt as reported in our Consolidated Interim Consolidated Statements of Financial Position.
Supplementary Financial Measures
We reference certain supplementary financial measures that are not defined terms under IFRS to assess performance because we believe they provide useful supplemental information to investors.
*Capital Spending by Spend Category*	We provide additional disclosure to better depict the nature of our capital spending. Our capital spending is categorized as expansion and upgrade, maintenance and infrastructure, or intangibles.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this release, including statements that contain words such as “could”, “should”, “can”, “anticipate”, “estimate”, “intend”, “plan”, “expect”, “believe”, “will”, “may”, “continue”, “project”, “potential” and similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information and statements”).

In particular, forward-looking information and statements include, but are not limited to, the following:

our strategic priorities for 2025;
our capital expenditures, free cash flow allocation and debt reduction plans for 2025 and beyond;
anticipated activity levels, demand for our drilling rigs, day rates and daily operating margins in 2025;
the average number of term contracts in place for 2025;
customer adoption of Alpha™ technologies and EverGreen™ suite of environmental solutions;
potential commercial opportunities and rig contract renewals; and
our future debt reduction plans.

These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:

our ability to react to customer spending plans as a result of changes in oil and natural gas prices;
the status of current negotiations with our customers and vendors;
customer focus on safety performance;
existing term contracts are neither renewed nor terminated prematurely;
our ability to deliver rigs to customers on a timely basis;
the impact of an increase/decrease in capital spending; and
the general stability of the economic and political environments in the jurisdictions where we operate.

Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:

volatility in the price and demand for oil and natural gas;
fluctuations in the level of oil and natural gas exploration and development activities;
fluctuations in the demand for contract drilling, well servicing and ancillary oilfield services;
our customers’ inability to obtain adequate credit or financing to support their drilling and production activity;
changes in drilling and well servicing technology, which could reduce demand for certain rigs or put us at a competitive advantage;
shortages, delays and interruptions in the delivery of equipment supplies and other key inputs;
liquidity of the capital markets to fund customer drilling programs;
availability of cash flow, debt and equity sources to fund our capital and operating requirements, as needed;
the impact of weather and seasonal conditions on operations and facilities;
the impact of tariffs and trade disputes;
competitive operating risks inherent in contract drilling, well servicing and ancillary oilfield services;
ability to improve our rig technology to improve drilling efficiency;
general economic, market or business conditions;
the availability of qualified personnel and management;
a decline in our safety performance which could result in lower demand for our services;
changes in laws or regulations, including changes in environmental laws and regulations such as increased regulation of hydraulic fracturing or restrictions on the burning of fossil fuels and greenhouse gas emissions, which could have an adverse impact on the demand for oil and natural gas;
terrorism, social, civil and political unrest in the foreign jurisdictions where we operate;
fluctuations in foreign exchange, interest rates and tax rates; and
other unforeseen conditions which could impact the use of services supplied by Precision and Precision’s ability to respond to such conditions.

Readers are cautioned that the forgoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results are included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2024, which may be accessed on Precision’s SEDAR+ profile at www.sedarplus.ca or under Precision’s EDGAR profile at www.sec.gov. The forward-looking information and statements contained in this release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)	March 31, 2025			December 31, 2024
ASSETS
Current assets:
Cash	$	28,245		$	73,771
Accounts receivable		397,684			378,712
Inventory		49,176			43,300
Assets held for sale		6,006			5,501
Total current assets		481,111			501,284
Non-current assets:
Deferred tax assets		2,437			6,559
Property, plant and equipment		2,342,482			2,356,173
Intangibles		13,537			12,997
Right-of-use assets		63,223			66,032
Finance lease receivables		4,670			4,806
Investments and other assets		8,524			8,464
Total non-current assets		2,434,873			2,455,031
Total assets	$	2,915,984		$	2,956,315

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	271,696		$	314,355
Income taxes payable		4,526			3,778
Current portion of lease obligations		19,703			20,559
Current portion of long-term debt		230,219			—
Total current liabilities		526,144			338,692

Non-current liabilities:
Share-based compensation		5,391			13,666
Provisions and other		7,478			7,472
Lease obligations		51,676			54,566
Long-term debt		567,824			812,469
Deferred tax liabilities		56,571			47,451
Total non-current liabilities		688,940			935,624
Equity:
Shareholders’ capital		2,287,422			2,301,729
Contributed surplus		77,011			77,557
Accumulated other comprehensive income		197,827			199,020
Deficit		(866,323	)		(900,834	)
Total equity attributable to shareholders		1,695,937			1,677,472
Non-controlling interest		4,963			4,527
Total equity		1,700,900			1,681,999
Total liabilities and equity	$	2,915,984		$	2,956,315

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)

	Three Months Ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)	2025			2024


Revenue	$	496,331		$	527,788
Expenses:
Operating		329,068			339,506
General and administrative		29,766			45,133
Earnings before income taxes, gain on investments and other assets, finance charges, foreign exchange, gain on asset disposals, and depreciation and amortization		137,497			143,149
Depreciation and amortization		75,036			78,213
Gain on asset disposals		(2,872	)		(3,237	)
Foreign exchange		367			394
Finance charges		15,760			18,369
Gain on investments and other assets		(49	)		(228	)
Earnings before income taxes		49,255			49,638
Income taxes:
Current		1,106			1,017
Deferred		13,202			12,105
		14,308			13,122
Net earnings	$	34,947		$	36,516
Attributable to:
Shareholders of Precision Drilling Corporation	$	34,511		$	36,516
Non-controlling interests	$	436		$	—
Net earnings per share attributable to shareholders of Precision Drilling Corporation:
Basic	$	2.52		$	2.53
Diluted	$	2.20		$	2.53

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended March 31,
(Stated in thousands of Canadian dollars)	2025			2024
Net earnings	$	34,947		$	36,516
Unrealized gain (loss) on translation of assets and liabilities of operations denominated in foreign currency		(658	)		32,253
Foreign exchange loss on net investment hedge with U.S. denominated debt		(535	)		(20,159	)
Comprehensive income	$	33,754		$	48,610
Attributable to:
Shareholders of Precision Drilling Corporation	$	33,318		$	48,610
Non-controlling interests	$	436		$	—

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
(Stated in thousands of Canadian dollars)	2025			2024
Cash provided by (used in):
Operations:
Net earnings	$	34,947		$	36,516
Adjustments for:
Long-term compensation plans		3,016			7,451
Depreciation and amortization		75,036			78,213
Gain on asset disposals		(2,872	)		(3,237	)
Foreign exchange		(783	)		728
Finance charges		15,760			18,369
Income taxes		14,308			13,122
Gain on investments and other assets		(49	)		(228	)
Income taxes paid		(321	)		(234	)
Interest paid		(29,637	)		(33,430	)
Interest received		437			495
Funds provided by operations		109,842			117,765
Changes in non-cash working capital balances		(46,423	)		(52,222	)
Cash provided by operations		63,419			65,543

Investments:
Purchase of property, plant and equipment		(59,965	)		(55,527	)
Proceeds on sale of property, plant and equipment		3,765			5,186
Purchase of investments and other assets		(11	)		—
Receipt of finance lease payments		208			191
Changes in non-cash working capital balances		(1,199	)		(25,087	)
Cash used in investing activities		(57,202	)		(75,237	)

Financing:
Repayment of long-term debt		(17,110	)		(716	)
Repurchase of share capital		(30,766	)		(10,081	)
Lease payments		(3,587	)		(3,200	)
Cash used in financing activities		(51,463	)		(13,997	)
Effect of exchange rate changes on cash		(280	)		457
Increase (decrease) in cash		(45,526	)		(23,234	)
Cash, beginning of period		73,771			54,182
Cash, end of period	$	28,245		$	30,948

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

	Attributable to shareholders of the Corporation
(Stated in thousands of Canadian dollars)	Shareholders’ Capital			Contributed Surplus			Accumulated Other Comprehensive Income			Deficit			Total			Non- controlling interest		Total Equity
Balance at January 1, 2025	$	2,301,729		$	77,557		$	199,020		$	(900,834	)	$	1,677,472		$	4,527	$	1,681,999
Net earnings for the period		—			—			—			34,511			34,511			436		34,947
Other comprehensive income for the period		—			—			(1,193	)		—			(1,193	)		—		(1,193	)
Settlement of Executive Performance and Restricted Share Units		11,651			(2,790	)		—			—			8,861			—		8,861
Share repurchases		(26,141	)		—			—			—			(26,141	)		—		(26,141	)
Redemption of non-management directors share units		183			(183	)		—			—			—			—		—
Share-based compensation expense		—			2,427			—			—			2,427			—		2,427
Balance at March 31, 2025	$	2,287,422		$	77,011		$	197,827		$	(866,323	)	$	1,695,937		$	4,963	$	1,700,900

	Attributable to shareholders of the Corporation
(Stated in thousands of Canadian dollars)	Shareholders’ Capital			Contributed Surplus			Accumulated Other Comprehensive Income		Deficit			Total			Non- controlling interest		Total Equity
Balance at January 1, 2024	$	2,365,129		$	75,086		$	147,476	$	(1,012,029	)	$	1,575,662		$	—	$	1,575,662
Net earnings for the period		—			—			—		36,516			36,516			—		36,516
Other comprehensive income for the period		—			—			12,094		—			12,094			—		12,094
Settlement of Executive Performance and Restricted Share Units		21,846			(1,479	)		—		—			20,367			—		20,367
Share repurchases		(10,081	)		—			—		—			(10,081	)		—		(10,081	)
Share-based compensation expense		—			875			—		—			875			—		875
Balance at March 31, 2024	$	2,376,894		$	74,482		$	159,570	$	(975,513	)	$	1,635,433		$	—	$	1,635,433

2025 FIRST QUARTER RESULTS CONFERENCE CALL AND WEBCAST

Precision Drilling Corporation has scheduled a conference call and webcast to begin promptly at 11:00 a.m. MT (1:00 p.m. ET) on Thursday, April 24, 2025.

To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.

https://register-conf.media-server.com/register/BIfac587dca2994a30be564b41d99b43ac

The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision’s website for 12 months.

https://edge.media-server.com/mmc/p/gifawh57

About Precision

Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment all backed by a comprehensive mix of technical support services and skilled, experienced personnel.

Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange under the trading symbol “PDS”.

Additional Information

For further information, please contact:

Lavonne Zdunich, CPA, CA
Vice President, Investor Relations
403.716.4500

800, 525 – 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com

The MIL Network –

April 24, 2025

MIL-OSI: Northfield Bancorp, Inc. Announces First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

NOTABLE ITEMS FOR THE QUARTER INCLUDE:

DILUTED EARNINGS PER SHARE WERE $0.19 FOR THE CURRENT QUARTER COMPARED TO $0.27 FOR THE TRAILING QUARTER, AND $0.15 FOR THE FIRST QUARTER OF 2024.
- Fourth Quarter 2024 earnings included a gain of $3.4 million, or $0.06 per share, on the sale and consolidation of a branch in December 2024.
NET INTEREST MARGIN INCREASED TO 2.38% FOR THE CURRENT QUARTER AS COMPARED TO 2.18% FOR THE TRAILING QUARTER AND 2.03% FOR THE FIRST QUARTER OF 2024, REFLECTING LOWER FUNDING COSTS AND HIGHER YIELDS ON INTEREST-EARNING ASSETS.
DEPOSITS (EXCLUDING BROKERED) INCREASED $133.6 MILLION, OR 13.8% ANNUALIZED, FROM DECEMBER 31, 2024. COST OF DEPOSITS AT MARCH 31, 2025 WAS 1.94% AS COMPARED TO 1.95% AT DECEMBER 31, 2024.
LOANS DECLINED BY $30.7 MILLION, OR 3.0% ANNUALIZED, FROM DECEMBER 31, 2024, PRIMARILY DUE TO A DECREASE IN MULTIFAMILY LOANS, PARTIALLY OFFSET BY INCREASES IN HOME EQUITY AND CONSTRUCTION AND LAND LOANS.
ASSET QUALITY REMAINS STRONG WITH NON-PERFORMING LOANS TO TOTAL LOANS AT 0.48% AT MARCH 31, 2025 AND 0.51% AT DECEMBER 31, 2024.
THE COMPANY MAINTAINED STRONG LIQUIDITY WITH APPROXIMATELY $1.12 BILLION IN UNPLEDGED AVAILABLE-FOR-SALE SECURITIES AND LOANS READILY AVAILABLE-FOR-PLEDGE OF APPROXIMATELY $547 MILLION.
THE BOARD OF DIRECTORS APPROVED A $10.0 MILLION REPURCHASE PLAN ON APRIL 23, 2025. THE PREVIOUSLY APPROVED $5.0 MILLION PLAN WAS COMPLETED DURING THE CURRENT QUARTER AND THE COMPANY REPURCHASED 440,150 SHARES.
CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE ON MAY 21, 2025, TO STOCKHOLDERS OF RECORD AS OF MAY 7, 2025.

WOODBRIDGE, N.J., April 23, 2025 (GLOBE NEWSWIRE) — NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the “Company”), the holding company for Northfield Bank, reported net income of $7.9 million, or $0.19 per diluted share, for the three months ended March 31, 2025, compared to $11.3 million, or $0.27 per diluted share, for the three months ended December 31, 2024, and $6.2 million, or $0.15 per diluted share, for the three months ended March 31, 2024. The decrease in net income for the three months ended March 31, 2025, compared to the trailing quarter was primarily due to a $3.4 million, or $0.06 per share, gain on sale of property in the trailing quarter. The increase in net income in the current quarter as compared to the first quarter of 2024 was primarily the result of an increase in net interest income, attributable to lower funding costs and higher yields on interest-earning assets, partially offset by an increase in the provision for credit losses on loans.

Commenting on the quarter, Steven M. Klein, the Company’s Chairman and Chief Executive Officer stated, “The Northfield team continued to focus on growing our franchise, deploying our strong capital base, and delivering solid financial performance for the quarter.” Mr. Klein commented further, “We remained focused on serving our communities, and the fundamentals of reducing our funding costs and increasing the yield on our interest-earning assets resulting in higher net interest income and net interest margin.” Mr. Klein further stated, “We remain committed to prudently managing our operating expenses, maintaining strong asset quality, and managing our strong capital levels through dividends and stock repurchases.”

Mr. Klein concluded, “I am pleased to announce that the Board of Directors has declared a cash dividend of $0.13 per common share, payable on May 21, 2025 to stockholders of record on May 7, 2025.”

Results of Operations

Comparison of Operating Results for the Three Months Ended March 31, 2025 and 2024

Net income was $7.9 million and $6.2 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Significant variances from the comparable prior year period are as follows: a $3.9 million increase in net interest income, a $2.2 million increase in the provision for credit losses on loans, a $359,000 decrease in non-interest income, an $897,000 decrease in non-interest expense, and a $616,000 increase in income tax expense.

Net interest income for the three months ended March 31, 2025, increased $3.9 million, or 14.0%, to $31.8 million, from $27.9 million for the three months ended March 31, 2024, due to a $2.5 million decrease in interest expense and a $1.4 million increase in interest income. The decrease in interest expense was primarily due to a decrease in the cost of interest-bearing liabilities which decreased by 15 basis points to 2.74% for the three months ended March 31, 2025, from 2.89% for the three months ended March 31, 2024, driven by a 20 basis point decrease in the cost of borrowed funds to 3.67% from 3.87%, partially offset by a two basis point increase in the cost of interest-bearing deposits to 2.51% from 2.49%, due to a higher concentration of certificates of deposit. The decrease in the average balance of interest-bearing liabilities was primarily due to a $413.6 million, or 37.3% decrease in the average balance of borrowed funds, partially offset by a $307.8 million, or 9.9%, increase in the average balance of interest-bearing deposits. The increase in interest income was primarily due to a 23 basis point increase in the yield on interest-earning assets, specifically higher yields on mortgage-backed securities, partially offset by a $104.0 million, or 1.9%, decrease in the average balance of interest earning assets. The decrease in the average balance of interest-earning assets was primarily due to decreases in the average balance of other securities of $273.9 million, the average balance of loans of $167.4 million and the average balance of interest-earning deposits in financial institutions of $143.9 million, partially offset by an increase in the average balance of mortgage-backed securities of $483.9 million.

Net interest margin increased by 35 basis points to 2.38% for the three months ended March 31, 2025, from 2.03% for the three months ended March 31, 2024. The increase in net interest margin was primarily due to higher yields on mortgage-backed securities, coupled with a decrease in the cost of borrowed funds. The Company accreted interest income related to purchased credit-deteriorated (“PCD”) loans of $223,000 for the three months ended March 31, 2025, as compared to $426,000 for the three months ended March 31, 2024. Net interest income for the three months ended March 31, 2025, included loan prepayment income of $245,000 as compared to $351,000 for the three months ended March 31, 2024.

The provision for credit losses on loans increased by $2.2 million to $2.6 million for the three months ended March 31, 2025, compared to $415,000 for the three months ended March 31, 2024, primarily due to higher net charge-offs, changes in model assumptions, including a reduction in prepayment speeds and an increase in loss given defaults in the multifamily loans related to risk rating downgrades of certain loans in the portfolio. Net charge-offs were $2.8 million for the three months ended March 31, 2025, primarily due to $2.4 million in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $911,000 for the three months ended March 31, 2024. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio, which totaled $25.5 million at March 31, 2025.

Non-interest income decreased by $359,000, or 10.6%, to $3.0 million for the three months ended March 31, 2025, compared to $3.4 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease of $998,000 in gains on sales of trading securities, partially offset by an increase in income on bank-owned life insurance of $675,000, primarily related to the exchange of certain policies late in the fourth quarter of 2024 which have higher yields. Losses on trading securities in the three months ended March 31, 2025, were $299,000, as compared to gains of $699,000 in the three months ended March 31, 2024. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the plan. The participants of this plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the plan.

Non-interest expense decreased $897,000, or 4.0%, to $21.4 million for the three months ended March 31, 2025, compared to $22.3 million for the three months ended March 31, 2024. The decrease was primarily due to a $990,000 decrease in employee compensation and benefits, primarily attributable to a decrease in deferred compensation expense, which is described above, and had no effect on net income. Additionally, there was a $268,000 decrease in advertising expense. Partially offsetting the decreases were increases of $263,000 in professional fees related to outsourced audit services and recruitment fees and $164,000 in other expense.

The Company recorded income tax expense of $2.9 million for the three months ended March 31, 2025, compared to $2.3 million for the three months ended March 31, 2024. The effective tax rate for both the three months ended March 31, 2025, and March 31, 2024, was 27.0%. The effective tax rate for three months ending March 31, 2025, and March 31, 2024, were negatively impacted by increased tax expense of $79,000 and $18,000, respectively, as a result of vesting of stock awards.

Comparison of Operating Results for the Three Months Ended March 31, 2025 and December 31, 2024

Net income was $7.9 million and $11.3 million for the quarters ended March 31, 2025, and December 31, 2024, respectively. Significant variances from the prior quarter are as follows: a $2.1 million increase in net interest income, a $640,000 increase in the provision for credit losses on loans, a $4.0 million decrease in non-interest income, a $613,000 increase in non-interest expense, and a $246,000 increase in income tax expense.

Net interest income for the quarter ended March 31, 2025, increased by $2.1 million, or 7.1%, primarily due to a $1.7 million decrease in interest expense and a $370,000 increase in interest income. The decrease in interest expense was primarily due to an 11 basis point decrease in the cost of interest-bearing liabilities to 2.74% for the quarter ended March 31, 2025, from 2.85% for the quarter ended December 31, 2024, and a $7.0 million, or 0.2%, decrease in the average balance of interest-bearing liabilities attributable to an $80.4 million decrease in the average balance of borrowed funds, partially offset by a $73.3 million increase in the average balance of interest-bearing deposits. The increase in interest income was primarily due to an 11 basis point increase in the yield on interest-earning assets and a $206,000 increase in the average balance of interest-earning assets primarily due to an increase in the average balance of mortgage-backed securities of $182.4 million, partially offset by decreases in the average balance of interest-earning deposits in financial institutions of $85.2 million, the average balance of other securities of $59.4 million, and the average balance of loans of $37.5 million.

Net interest margin increased by 20 basis points to 2.38% for the quarter ended March 31, 2025, from 2.18% for the quarter ended December 31, 2024, primarily due to higher yields on loans and mortgage-backed securities coupled with a decrease in the cost of funds. Net interest income for the quarter ended March 31, 2025, included loan prepayment income of $245,000 as compared to $215,000 for the quarter ended December 31, 2024. The Company accreted interest income related to PCD loans of $223,000 for the quarter ended March 31, 2025, as compared to $568,000 for the quarter ended December 31, 2024.

The provision for credit losses on loans increased by $640,000 to $2.6 million for the quarter ended March 31, 2025, from $1.9 million for the quarter ended December 31, 2024. The increase in the provision for the current quarter was primarily due to an increase in reserves in the commercial and industrial and in multifamily loans related to risk rating downgrades of certain loans in the portfolio, and higher net charge-offs. Net charge-offs were $2.8 million for the quarter ended March 31, 2025, as compared to net charge-offs of $2.0 million for the quarter ended December 31, 2024.

Non-interest income decreased by $4.0 million, or 56.9%, to $3.0 million for the quarter ended March 31, 2025, from $7.0 million for the quarter ended December 31, 2024. The decrease was primarily due to a $3.4 million gain on sale of property in the quarter ended December 31, 2024. Additionally, there was a $367,000 decrease in gains on sales of trading securities, net, and a $561,000 decrease in other income, primarily due to lower swap fee income. For the quarter ended March 31, 2025, losses on trading securities, net, were $299,000, compared to gains of $68,000 for the quarter ended December 31, 2024. Partially offsetting the decreases was a $362,000 increase in income on bank owned life insurance, primarily related to the exchange of certain policies late in the fourth quarter of 2024 which have higher yields.

Non-interest expense increased by $613,000, or 2.9%, to $21.4 million for the quarter ended March 31, 2025, from $20.8 million for the quarter ended December 31, 2024. The increase was primarily due to increases of $280,000 in occupancy expense, related to higher repairs and maintenance costs, $201,000 in data processing costs due to an increase in core system expenses, $310,000 in professional fees primarily due to an increase in outsourced audit services and recruitment fees, and a $158,000 increase in credit loss expense/(benefit) for off-balance sheet exposure. The increase in credit loss/(benefit) for off-balance sheet exposure was due to a provision of $103,000 recorded during the quarter ended March 31, 2025, as compared to a benefit of $55,000 recorded during the quarter ended December 31, 2024. Partially offsetting the decreases was a $283,000 decrease in other expense.

The Company recorded income tax expense of $2.9 million for the quarter ended March 31, 2025, compared to $2.7 million for the quarter ended December 31, 2024. The effective tax rate for the quarter ended March 31, 2025 was 27.0%, compared to 19.2% for the quarter ended December 31, 2024. The effective tax rate for the quarter ending December 31, 2024, was positively impacted by the revaluation of certain state deferred tax assets.

Financial Condition

Total assets increased by $43.6 million, or 0.8%, to $5.71 billion at March 31, 2025, from $5.67 billion at December 31, 2024. The increase was primarily due to an increase in available-for-sale debt securities of $145.7 million, or 13.2%, partially offset by decreases in cash and cash equivalents of $66.1 million, or 39.4%, loans receivable of $30.7 million, or 0.8% and other assets of $4.5 million, or 9.6%.

Cash and cash equivalents decreased by $66.1 million, or 39.4%, to $101.7 million at March 31, 2025, from $167.7 million at December 31, 2024, as excess liquidity was deployed into purchasing higher-yielding mortgage-backed securities. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.

Loans held-for-investment, net, decreased by $30.7 million, or 0.8%, to $3.99 billion at March 31, 2025 from $4.02 billion at December 31, 2024, primarily due to decreases in multifamily real estate loans, partially offset by increases in home equity and lines of credit and construction and land loans. The decrease in loan balances reflects the Company’s continued strategic focus on managing concentration risk within its commercial and multifamily real estate loan portfolios, while maintaining disciplined loan pricing. Multifamily loans decreased $29.6 million, or 1.1%, to $2.57 billion at March 31, 2025 from $2.60 billion at December 31, 2024, commercial real estate loans decreased $7.2 million, or 0.8%, to $882.6 million at March 31, 2025 from $889.8 million at December 31, 2024, one-to-four family residential loans decreased $3.4 million, or 2.3%, to $146.8 million at March 31, 2025 from $150.2 million at December 31, 2024, and commercial and industrial loans decreased $1.3 million, or 0.8%, to $162.1 million at March 31, 2025 from $163.4 million at December 31, 2024, and other loans decreased $754,000, or 34.8%, to $1.4 million at March 31, 2025 from $2.2 million at December 31, 2024. Partially offsetting these decreases were increases in home equity and lines of credit of $7.3 million, or 4.2%, to $181.4 million at March 31, 2025 from $174.1 million at December 31, 2024, and construction and land loans of $4.4 million, or 12.2%, to $40.3 million at March 31, 2025 from $35.9 million at December 31, 2024.

As of March 31, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 424%. Management believes that Northfield Bank (the “Bank”) maintains appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which includes monitoring Bank portfolio performance, performing market analysis (economic and real estate), and stressing of the Bank’s commercial real estate portfolio under severe, adverse economic conditions. Although management believes the Bank has implemented appropriate policies and procedures to manage its commercial real estate concentration risk, the Bank’s regulators could require it to implement additional policies and procedures or could require it to maintain higher levels of regulatory capital, which might adversely affect its loan originations, the Company’s ability to pay dividends, and overall profitability.

Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York State subject to some form of rent regulation limiting rent increases for rent stabilized multifamily properties. At March 31, 2025, office-related loans represented $182.4 million, or 4.6% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 59%. Approximately 39% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are: 50.0% in New York, 48.5% in New Jersey and 1.5% in Pennsylvania. At March 31, 2025, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $29.5 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms. At March 31, 2025, multifamily loans that have some form of rent stabilization or rent control totaled approximately $435.8 million, or approximately 11% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 51%. At March 31, 2025, our largest rent-regulated loan had a principal balance of $16.7 million, was secured by an apartment building located in Staten Island, New York, and was performing in accordance with its original contractual terms. Management continues to closely monitor its office and rent-regulated portfolios. For further details on our rent-regulated multifamily portfolio see “Asset Quality”.

PCD loans totaled $9.0 million and $9.2 million at March 31, 2025 and December 31, 2024, respectively. The majority of the remaining PCD loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $223,000 attributable to PCD loans for three months ended March 31, 2025, compared to $426,000 for three months ended March 31, 2024. PCD loans had an allowance for credit losses of approximately $2.7 million at March 31, 2025.

Loan balances are summarized as follows (dollars in thousands):

	March 31, 2025		December 31, 2024
Real estate loans:
Multifamily	$	2,567,913	$	2,597,484
Commercial mortgage		882,600		889,801
One-to-four family residential mortgage		146,791		150,217
Home equity and lines of credit		181,354		174,062
Construction and land		40,284		35,897
Total real estate loans		3,818,942		3,847,461
Commercial and industrial loans		162,133		163,425
Other loans		1,411		2,165
Total commercial and industrial and other loans		163,544		165,590
Loans held-for-investment, net (excluding PCD)		3,982,486		4,013,051
PCD loans		9,043		9,173
Total loans held-for-investment, net	$	3,991,529	$	4,022,224

The Company’s available-for-sale debt securities portfolio increased by $145.7 million, or 13.2%, to $1.25 billion at March 31, 2025, from $1.10 billion at December 31, 2024. The increase was primarily attributable to purchases of securities, partially offset by paydowns and maturities. At March 31, 2025, $1.21 billion of the portfolio consisted of residential mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company held $33.4 million in corporate bonds, substantially all of which were investment grade, $683,000 in municipal bonds and $608,000 in U.S. Government agency securities at March 31, 2025. Unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $16.7 million and $307,000, respectively, at March 31, 2025, and $21.8 million and $400,000, respectively, at December 31, 2024.

Equity securities were $10.9 million at March 31, 2025 and $14.3 million at December 31, 2024. Equity securities are primarily comprised of an investment in a Small Business Administration Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program. The decrease in equity securities was primarily due to a decrease in money market mutual funds.

Total liabilities increased $37.2 million, or 0.7%, to $5.00 billion at March 31, 2025, from $4.96 billion at December 31, 2024. The increase was primarily attributable to an increase in borrowings of $42.8 million, partially offset by a decrease in total deposits of $6.5 million. The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity.

Deposits decreased $6.5 million, or 0.2%, to $4.13 billion at March 31, 2025 as compared to $4.14 billion at December 31, 2024. Brokered deposits decreased by $140.1 million, or 53.2%, as the Company placed less reliance on brokered deposits which were used as a lower-cost alternative to borrowings in the trailing quarter. Deposits, excluding brokered deposits, increased $133.6 million, or 3.4%. The increase in deposits, excluding brokered deposits, was primarily attributable to increases of $97.1 million in transaction accounts and $41.6 million in time deposits, partially offset by decreases of $4.5 million in savings accounts, and $579,000 in money market accounts. Growth in transaction accounts and time deposits was primarily due to new municipal relationships and new commercial customer relationships.

Estimated gross uninsured deposits at March 31, 2025 were $1.95 billion. This total includes fully collateralized uninsured governmental deposits and intercompany deposits of $1.01 billion, leaving estimated uninsured deposits of approximately $934.7 million, or 22.6%, of total deposits. At December 31, 2024, estimated uninsured deposits totaled $896.5 million, or 21.7% of total deposits.

Deposit account balances are summarized as follows (dollars in thousands):

	March 31, 2025		December 31, 2024
Transaction:
Non-interest bearing checking	$	722,994	$	706,976
Negotiable orders of withdrawal and interest-bearing checking		1,367,219		1,286,154
Total transaction		2,090,213		1,993,130
Savings and money market:
Savings		899,674		904,163
Money market		271,566		272,145
Total savings		1,171,240		1,176,308
Certificates of deposit:
$250,000 and under		602,959		580,940
Over $250,000		144,255		124,681
Brokered deposits		123,289		263,418
Total certificates of deposit		870,503		969,039
Total deposits	$	4,131,956	$	4,138,477

Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):

	March 31, 2025		December 31, 2024

Business customers	$	891,545	$	885,769
Municipal (governmental) customers	$	929,611	$	859,319

Borrowed funds increased to $770.7 million at March 31, 2025, from $727.8 million at December 31, 2024. The increase in borrowings for the period was primarily due to a $67.0 million increase in borrowings under an overnight line of credit, partially offset by a decrease of $24.2 million in other borrowings due to maturities. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent from time to time, as part of leverage strategies.

The following table sets forth borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at March 31, 2025 (dollars in thousands):

Year	Amount	Weighted Average Rate
2025	$160,684	3.89%
2026	148,000	4.36%
2027	173,000	3.19%
2028	154,288	3.96%
	$635,972	3.83%

Total stockholders’ equity increased by $6.5 million to $711.1 million at March 31, 2025, from $704.7 million at December 31, 2024. The increase was attributable to net income of $7.9 million for the three months ended March 31, 2025, an $8.1 million increase in accumulated other comprehensive income, associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio, and a $900,000 increase in equity award activity, partially offset by $5.0 million in stock repurchases and $5.4 million in dividend payments. On February 26, 2025, the Board of Directors of the Company approved a $5.0 million stock repurchase program. During the three months ended March 31, 2025, the Company repurchased 440,150 of its common stock outstanding at an average price of $11.36 for a total of $5.0 million pursuant to approved stock repurchase plan. As of March 31, 2025, the Company has no outstanding repurchase program.

The Company’s most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the Federal Home Loan Bank and Federal Reserve Bank of New York utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. The Company’s on-hand liquidity ratio as of March 31, 2025 was 24.3%.

The Company had the following primary sources of liquidity at March 31, 2025 (dollars in thousands):

Cash and cash equivalents⁽¹⁾	$	89,139
Corporate bonds⁽²⁾	$	19,323
Multifamily loans⁽²⁾	$	547,043
Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)⁽²⁾	$	1,102,759

(1) Excludes $12.5 million of cash at Northfield Bank.
(2) Represents estimated remaining borrowing potential.

The Company and the Bank utilize the Community Bank Leverage Ratio (“CBLR”) framework. At March 31, 2025, the Company and the Bank’s estimated CBLR ratios were 12.08% and 12.62%, respectively, which exceeded the minimum requirement to be considered well-capitalized of 9%.

Asset Quality

The following table details total non-accrual loans (excluding PCD), non-performing assets, loans over 90 days delinquent on which interest is accruing, and accruing loans 30 to 89 days delinquent at March 31, 2025 and December 31, 2024 (dollars in thousands):

	March 31, 2025			December 31, 2024
Non-accrual loans:
Held-for-investment
Real estate loans:
Multifamily	$	2,565		$	2,609
Commercial mortgage		4,565			4,578
Home equity and lines of credit		1,267			1,270
Commercial and industrial		4,972			5,807
Total non-accrual loans		13,369			14,264
Loans delinquent 90 days or more and still accruing:
Held-for-investment
Real estate loans:
Multifamily		—			164
One-to-four family residential		878			882
Home equity and lines of credit		140			140
Total loans held-for-investment delinquent 90 days or more and still accruing		1,018			1,186
Non-performing loans held-for-sale
Commercial mortgage		4,397			4,397
Commercial and industrial		500			500
Total non-performing loans held-for-sale		4,897			4,897
Total non-performing loans		19,284			20,347
Total non-performing assets	$	19,284		$	20,347
Non-performing loans to total loans		0.48	%		0.51	%
Non-performing assets to total assets		0.34	%		0.36	%
Accruing loans 30 to 89 days delinquent	$	6,845		$	9,336

Accruing Loans 30 to 89 Days Delinquent

Loans 30 to 89 days delinquent and on accrual status totaled $6.8 million and $9.3 million at March 31, 2025 and December 31, 2024, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at March 31, 2025 and December 31, 2024 (dollars in thousands):

	March 31, 2025		December 31, 2024
Held-for-investment
Real estate loans:
Multifamily	$	1,296	$	2,831
Commercial mortgage		147		78
One-to-four family residential		2,584		2,407
Home equity and lines of credit		1,141		1,472
Commercial and industrial loans		1,674		2,545
Other loans		3		3
Total delinquent accruing loans held-for-investment	$	6,845	$	9,336

The decrease in delinquent multifamily loans was primarily due to one relationship totaling $2.1 million that became current during the quarter ended March 31, 2025. The decrease in delinquent commercial and industrial loans was primarily due to five unsecured small business loans that were charged off totaling $797,000. Management continues to monitor the unsecured small business commercial and industrial loan portfolio which represents the majority of the commercial and industrial delinquencies in the table above.

PCD Loans (Held-for-Investment)

The Company accounts for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its detailed review of PCD loans and experience in loan workouts, management believes it has a reasonable expectation about the amount and timing of future cash flows and accordingly has classified PCD loans ($9.0 million at March 31, 2025 and $9.2 million at December 31, 2024, respectively) as accruing, even though they may be contractually past due. At March 31, 2025, 2.1% of PCD loans were past due 30 to 89 days, and 25.2% were past due 90 days or more, as compared to 2.9% and 27.1%, respectively, at December 31, 2024.

Our multifamily loan portfolio at March 31, 2025 totaled $2.57 billion, or 64% of our total loan portfolio, of which $435.8 million, or 11%, included loans collateralized by properties in New York with units subject to some percentage of rent regulation. The table below sets forth details about our multifamily loan portfolio in New York (dollars in thousands).

% Rent Regulated	Balance		% Portfolio Total NY Multifamily Portfolio		Average Balance		Largest Loan		LTV^*		Debt Service Coverage Ratio (DSCR)^*	30-89 Days Delinquent		Non-Accrual		Special Mention		Substandard
0	$	279,630	39.1	%	$	1,175	$	16,441	50.6	%	1.48x	$	580	$	499	$	—	$	1,800
>0-10		4,696	0.6			1,565		2,107	50.9		1.33		—		—		—		—
>10-20		18,397	2.6			1,415		2,834	48.7		1.40		—		—		—		—
>20-30		19,268	2.7			2,141		5,449	53.2		1.65		—		—		—		—
>30-40		14,958	2.1			1,247		3,037	47.8		1.59		—		—		—		—
>40-50		21,558	3.0			1,268		2,710	46.9		1.77		—		—		—		—
>50-60		9,298	1.3			1,550		2,313	39.4		1.80		—		—		—		—
>60-70		20,765	2.9			2,966		11,181	53.4		1.51		—		—		—		—
>70-80		22,158	3.1			2,462		4,874	47.5		1.43		—		—		—		—
>80-90		20,516	2.9			1,140		3,124	46.1		1.64		—		—		1,124		—
>90-100		284,164	39.7			1,733		16,698	51.6		1.60		665		2,067		3,630		4,389
Total	$	715,408	100.0	%	$	1,442	$	16,698	50.6	%	1.55x	$	1,245	$	2,566	$	4,754	$	6,189

The table below sets forth our New York rent-regulated loans by county (dollars in thousands).

County	Balance		LTV^*		DSCR^*
Bronx	$	116,944	51.2	%	1.60x
Kings		184,545	50.5	%	1.57
Nassau		2,155	35.8	%	1.88
New York		48,838	46.3	%	1.61
Queens		37,633	44.3	%	1.69
Richmond		32,258	60.1	%	1.41
Westchester		13,405	58.7	%	1.78
Total	$	435,778	50.6	%	1.59x

* Weighted Average

None of the loans that are rent-regulated in New York are interest only. During the remainder of 2025, 27 loans with an aggregate principal balance of $46.0 million will re-price.

About Northfield Bank

Northfield Bank, founded in 1887, operates 37 full-service banking offices in Staten Island and Brooklyn, New York, and Hunterdon, Middlesex, Mercer, and Union counties, New Jersey. For more information about Northfield Bank, please visit www.eNorthfield.com.

Forward-Looking Statements: This release may contain certain “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Northfield Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Northfield Bancorp, Inc. may turn out to be wrong. They can be affected by inaccurate assumptions Northfield Bancorp, Inc. might make or by known or unknown risks and uncertainties as described in our SEC filings, including, but not limited to, those related to general economic conditions, particularly in the market areas in which the Company operates, competition and demand for financial services in our market area, fluctuations in real estate values and both residential and commercial real estate market conditions, changes in liquidity, the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, competition among depository and other financial institutions, including with respect to fees and interest rates, changes in laws or government regulations or policies affecting financial institutions, including changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the imposition of tariffs or other domestic or international governmental policies, changes in the quality and/or composition of our loan and securities portfolios, prepayment speeds, charge-offs and/or credit loss provisions, our ability to access cost-effective funding, changes in the value of our goodwill or other intangible assets, changes in regulatory fees, assessments and capital requirements, inflation and changes in the interest rate environment that reduce our margins, reduce the fair value of financial instruments or reduce our ability to originate loans, the failure to maintain current technologies and to successfully implement future information technology enhancements, cyber security and fraud risks against our information technology and those of our third-party providers, the ability of third-party providers to perform their obligations to us, the effects of war, conflict, and acts of terrorism, our ability to successfully integrate acquired entities, and adverse changes in the securities markets. Consequently, no forward-looking statement can be guaranteed. Northfield Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release, or conform these statements to actual events.

Company Contact:
William R. Jacobs
Chief Financial Officer
Tel: (732) 499-7200 ext. 2519

(Tables follow)

NORTHFIELD BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in thousands, except per share amounts) (unaudited)

	At or For the Three Months Ended
	March 31,				December 31
	2025		2024		2024
Selected Financial Ratios:
Performance Ratios ⁽¹⁾
Return on assets (ratio of net income to average total assets)	0.56	%	0.43	%	0.79	%
Return on equity (ratio of net income to average equity)	4.52		3.59		6.40
Average equity to average total assets	12.43		12.04		12.28
Interest rate spread	1.76		1.39		1.54
Net interest margin	2.38		2.03		2.18
Efficiency ratio ⁽²⁾	61.57		71.43		56.75
Non-interest expense to average total assets	1.53		1.55		1.46
Non-interest expense to average total interest-earning assets	1.61		1.63		1.53
Average interest-earning assets to average interest-bearing liabilities	129.42		128.66		129.20
Asset Quality Ratios:
Non-performing assets to total assets	0.34		0.29		0.36
Non-performing loans ⁽³⁾to total loans ⁽⁴⁾	0.48		0.41		0.51
Allowance for credit losses to non-performing loans ⁽⁵⁾	242.73		214.83		227.72
Allowance for credit losses to total loans held-for-investment, net ⁽⁶⁾	0.87		0.89		0.87

(1) Annualized where appropriate.
(2) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
(3) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), and are included in total loans held-for-investment, net.
(4) Includes originated loans held-for-investment, PCD loans, acquired loans and loans held-for-sale.
(5) Excludes loans held-for-sale.
(6) Includes originated loans held-for-investment, PCD loans, and acquired loans.

NORTHFIELD BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts) (unaudited)

	March 31, 2025			December 31, 2024
ASSETS:
Cash and due from banks	$	12,523		$	13,043
Interest-bearing deposits in other financial institutions		89,139			154,701
Total cash and cash equivalents		101,662			167,744
Trading securities		13,003			13,884
Debt securities available-for-sale, at estimated fair value		1,246,473			1,100,817
Debt securities held-to-maturity, at amortized cost		8,883			9,303
Equity securities		10,855			14,261
Loans held-for-sale		4,897			4,897
Loans held-for-investment, net		3,991,529			4,022,224
Allowance for credit losses		(34,921	)		(35,183	)
Net loans held-for-investment		3,956,608			3,987,041
Accrued interest receivable		19,648			19,078
Bank-owned life insurance		177,398			175,759
Federal Home Loan Bank of New York stock, at cost		38,350			35,894
Operating lease right-of-use assets		27,345			27,771
Premises and equipment, net		21,431			21,985
Goodwill		41,012			41,012
Other assets		42,435			46,932
Total assets	$	5,710,000		$	5,666,378

LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits	$	4,131,956		$	4,138,477
Federal Home Loan Bank advances and other borrowings		709,159			666,402
Subordinated debentures, net of issuance costs		61,498			61,442
Lease liabilities		31,630			32,209
Advance payments by borrowers for taxes and insurance		29,270			24,057
Accrued expenses and other liabilities		35,338			39,095
Total liabilities		4,998,851			4,961,682

STOCKHOLDERS’ EQUITY:
Total stockholders’ equity		711,149			704,696
Total liabilities and stockholders’ equity	$	5,710,000		$	5,666,378

Total shares outstanding		42,676,274			42,903,598
Tangible book value per share⁽¹⁾	$	15.70		$	15.46

(1) Tangible book value per share is calculated based on total stockholders’ equity, excluding intangible assets (goodwill and core deposit intangibles), divided by total shares outstanding as of the balance sheet date. Core deposit intangibles were $57 and $69 at March 31, 2025 and December 31, 2024, respectively, and are included in other assets.

NORTHFIELD BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share and per share amounts) (unaudited)

	For the Three Months Ended
	March 31,					December 31,
		2025			2024		2024
Interest income:
Loans	$	45,283		$	46,047	$	45,902
Mortgage-backed securities		12,009			4,398		9,160
Other securities		797			3,841		1,428
Federal Home Loan Bank of New York dividends		862			970		885
Deposits in other financial institutions		1,141			3,392		2,347
Total interest income		60,092			58,648		59,722
Interest expense:
Deposits		21,191			19,273		22,031
Borrowings		6,291			10,663		7,169
Subordinated debt		819			828		837
Total interest expense		28,301			30,764		30,037
Net interest income		31,791			27,884		29,685
Provision for credit losses		2,582			415		1,942
Net interest income after provision for credit losses		29,209			27,469		27,743
Non-interest income:
Fees and service charges for customer services		1,620			1,615		1,634
Income on bank-owned life insurance		1,639			964		1,277
(Losses)/gains on trading securities, net		(299	)		699		68
Gain on sale of property		—			—		3,402
Other		62			103		623
Total non-interest income		3,022			3,381		7,004
Non-interest expense:
Compensation and employee benefits		11,775			12,765		11,761
Occupancy		3,533			3,553		3,253
Furniture and equipment		414			484		436
Data processing		2,122			2,147		1,921
Professional fees		1,072			809		762
Advertising		250			518		287
Federal Deposit Insurance Corporation insurance		617			588		625
Credit loss expense/(benefit) for off-balance sheet exposures		103			83		(55	)
Other		1,549			1,385		1,832
Total non-interest expense		21,435			22,332		20,822
Income before income tax expense		10,796			8,518		13,925
Income tax expense		2,920			2,304		2,674
Net income	$	7,876		$	6,214	$	11,251
Net income per common share:
Basic	$	0.19		$	0.15	$	0.28
Diluted	$	0.19		$	0.15	$	0.27
Basic average shares outstanding		40,864,529			42,367,243		40,889,355
Diluted average shares outstanding		40,922,829			42,408,953		41,029,275

NORTHFIELD BANCORP, INC.
ANALYSIS OF NET INTEREST INCOME
(Dollars in thousands) (unaudited)

	For the Three Months Ended
	March 31, 2025						December 31, 2024						March 31, 2024
	Average Outstanding Balance		Interest		Average Yield/ Rate⁽¹⁾		Average Outstanding Balance		Interest		Average Yield/ Rate⁽¹⁾		Average Outstanding Balance		Interest		Average Yield/ Rate⁽¹⁾
Interest-earning assets:
Loans⁽²⁾	$	4,007,266	$	45,283	4.58	%	$	4,044,787	$	45,902	4.51	%	$	4,174,668	$	46,047	4.44	%
Mortgage-backed securities⁽³⁾		1,132,715		12,009	4.30			950,309		9,160	3.83			648,811		4,398	2.73
Other securities⁽³⁾		118,082		797	2.74			177,462		1,428	3.20			391,980		3,841	3.94
Federal Home Loan Bank of New York stock		36,929		862	9.47			37,065		885	9.50			39,599		970	9.85
Interest-earning deposits in financial institutions		118,983		1,141	3.89			204,146		2,347	4.57			262,884		3,392	5.19
Total interest-earning assets		5,413,975		60,092	4.50			5,413,769		59,722	4.39			5,517,942		58,648	4.27
Non-interest-earning assets		277,586						277,067						266,428
Total assets	$	5,691,561					$	5,690,836					$	5,784,370

Interest-bearing liabilities:
Savings, NOW, and money market accounts	$	2,502,664	$	12,148	1.97	%	$	2,424,370	$	11,997	1.97	%	$	2,464,297	$	12,331	2.01	%
Certificates of deposit		923,713		9,043	3.97			928,658		10,034	4.30			654,328		6,942	4.27
Total interest-bearing deposits		3,426,377		21,191	2.51			3,353,028		22,031	2.61			3,118,625		19,273	2.49
Borrowed funds		695,281		6,291	3.67			775,722		7,169	3.68			1,108,880		10,663	3.87
Subordinated debt		61,461		819	5.40			61,406		837	5.42			61,239		828	5.44
Total interest-bearing liabilities		4,183,119		28,301	2.74			4,190,156		30,037	2.85			4,288,744		30,764	2.89
Non-interest bearing deposits		706,217						703,886						699,640
Accrued expenses and other liabilities		94,819						97,918						99,594
Total liabilities		4,984,155						4,991,960						5,087,978
Stockholders’ equity		707,406						698,876						696,392
Total liabilities and stockholders’ equity	$	5,691,561					$	5,690,836					$	5,784,370

Net interest income			$	31,791					$	29,685					$	27,884
Net interest rate spread⁽⁴⁾					1.76	%					1.54	%					1.39	%
Net interest-earning assets⁽⁵⁾	$	1,230,856					$	1,223,613					$	1,229,198
Net interest margin⁽⁶⁾					2.38	%					2.18	%					2.03	%
Average interest-earning assets to interest-bearing liabilities					129.42	%					129.20	%					128.66	%

(1) Average yields and rates are annualized.
(2) Includes non-accruing loans.
(3) Securities available-for-sale and other securities are reported at amortized cost.
(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average total interest-earning assets.

The MIL Network –

April 24, 2025

MIL-OSI: CVB Financial Corp. Reports Earnings for the First Quarter 2025

Source: GlobeNewswire (MIL-OSI)

First Quarter 2025

Net Earnings of $51.1 million, or $0.36 per share
Return on Average Assets of 1.37%
Return on Average Tangible Common Equity of 14.51%
Net Interest Margin of 3.31%

ONTARIO, CA, April 23, 2025 (GLOBE NEWSWIRE) — CVB Financial Corp. (NASDAQ:CVBF) and its subsidiary, Citizens Business Bank (the “Company”), announced earnings for the quarter ended March 31, 2025.

CVB Financial Corp. reported net income of $51.1 million for the quarter ended March 31, 2025, compared with $50.9 million for the fourth quarter of 2024 and $48.6 million for the first quarter of 2024. Diluted earnings per share were $0.36 for the first quarter, compared to $0.36 for the prior quarter and $0.35 for the same period last year.

For the first quarter of 2025, annualized return on average equity (“ROAE”) was 9.31%, annualized return on average tangible common equity (“ROATCE”) was 14.51%, and an annualized return on average assets (“ROAA”) was 1.37%.

David Brager, President and Chief Executive Officer of Citizens Business Bank, commented, “Citizens Business Bank’s performance in the first quarter demonstrates our continued financial strength and focus on our vision of serving the comprehensive financial needs of small to medium sized businesses and their owners. Our consistent financial performance is highlighted by our 192 consecutive quarters, or 48 years, of profitability, and our 142 consecutive quarters of paying cash dividends. I would like to thank our customers and associates for their continuing commitment and loyalty.”

Highlights for the First Quarter of 2025

Pretax income was $69.5 million, up $1.5 million or 2%, from the prior quarter
Efficiency ratio of 46.7%
Net gain of $2.2 million on sale of $19.3 million of OREO assets
Net interest margin of 3.31%, increased by 13 basis points compared to the fourth quarter of 2024
Cost of funds decreased to 1.04% from 1.13% in the fourth quarter of 2024
Noninterest bearing deposits grew by $147 million from the end of 2024
Dairy and Livestock loans decreased by $168 million or 44% from the end of 2024
Net Recoveries of $130,000 and $2 million recapture of credit losses
TCE Ratio of 10.0% & CET1 Ratio of 16.5%

INCOME STATEMENT HIGHLIGHTS

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
	(Dollars in thousands, except per share amounts)
Net interest income	$	110,444		$	110,418		$	112,461
Recapure of (provision for) credit losses		2,000			3,000			–
Noninterest income		16,229			13,103			14,113
Noninterest expense		(59,144	)		(58,480	)		(59,771	)
Income taxes		(18,425	)		(17,183	)		(18,204	)
Net earnings	$	51,104		$	50,858		$	48,599
Earnings per common share:
Basic	$	0.37		$	0.36		$	0.35
Diluted	$	0.36		$	0.36		$	0.35

NIM		3.31	%		3.18	%		3.10	%
ROAA		1.37	%		1.30	%		1.21	%
ROAE		9.31	%		9.14	%		9.31	%
ROATCE		14.51	%		14.31	%		15.13	%
Efficiency ratio		46.69	%		47.34	%		47.22	%

Net Interest Income
Net interest income was $110.4 million for the first quarter of 2025, essentially equal to the fourth quarter of 2024, and a $2.02 million, or 1.79%, decrease from the first quarter of 2024. Compared to the prior quarter, net interest income in the first quarter of 2025 was impacted by a 13-basis point increase in net interest margin that was offset by a $405.6 million decline in earning assets.

The decline in net interest income of $2 million compared to the first quarter of 2024 was the net result of a $1.09 billion decline in earning assets partially offset by a 21-basis point increase in net interest margin. The decrease in earning assets was primarily due to the deleveraging strategy deployed in the second half of 2024, which resulted in the Company’s borrowings declining by $1.48 billion.

Net Interest Margin
Our tax equivalent net interest margin was 3.31% for the first quarter of 2025, compared to 3.18% for the fourth quarter of 2024 and 3.10% for the first quarter of 2024. The 13 basis points increase in our net interest margin compared to the fourth quarter of 2024, was the combined result of a four-basis point increase in our interest-earning assets and a nine-basis point decrease in our cost of funds, including a seven-basis point decrease in cost of deposits. The four-basis point increase in our interest-earning asset yield was primarily due to a seven-basis point increase in loan yields and a five-basis points increase in investment securities yields. We experienced an increase in yields on investments in the first quarter of 2025, as a result of the sale of lower-yielding available-for-sale (“AFS”) securities and the purchase of higher-yielding AFS securities during the fourth quarter of 2024. However, this increase in investment yields was partially offset by a decrease during the first quarter of 2025 in the positive carry on our fair value hedging instruments that pay a fixed interest rate while receiving daily SOFR.

Net interest margin for the first quarter of 2025 increased by 21-basis points compared to the first quarter of 2024, primarily as a result of 27-basis point decrease in cost of funds from 1.31% for the first quarter of 2024 to 1.04% for the first quarter of 2025. The decrease in cost of funds was primarily due to a $1.48 billion decline in borrowings, which had an average cost of 4.76% in the first quarter of 2024. For the first quarter of 2025, the Company had average borrowings of $513 million at a cost of 4.61% and average deposits and customer repos of $12.19 billion at a cost of .87%, which compares to the first quarter of 2024 in which borrowings averaged $2 billion at a cost of 4.76% and average deposits and customer repos of $11.95 billion at a cost of .73%. The decrease in cost of funds was offset by lower interest earning asset yields that declined by 6 basis points from 4.34% in the first quarter of 2024 to 4.28% in the first quarter of 2025. The lower earning asset yields included lower loan yields, which declined from 5.30% for the first quarter of 2024 to 5.22% for the first quarter of 2025.

Earning Assets and Deposits
On average, earning assets decreased by $405.6 million compared to the fourth quarter of 2024 and declined by $1.09 billion when compared to the first quarter of 2024. The decline in earning assets from the fourth quarter of 2024 was primarily a $323 million decrease in funds held at the Federal Reserve, as well as a $55 million average decline in outstanding loans. Compared to the first quarter of 2024, the average balance of outstanding loans was $357 million lower, investment securities decreased by $449.0 million and the average amount of funds held at the Federal Reserve decreased by $272.0 million. Noninterest-bearing deposits declined on average by $109.7 million, or 1.54%, from the fourth quarter of 2024 and interest-bearing deposits and customer repurchase agreements declined on average by $270.9 million. Compared to the first quarter of 2024, total deposits and customer repurchase agreements increased on average by $243.9 million, or 2.04%, including an increase of $420.2 million in interest-bearing deposits and customer repurchase agreements. On average, noninterest-bearing deposits were 59.01% of total deposits during the most recent quarter, compared to 58.74% for the fourth quarter of 2024 and 61.72% for the first quarter of 2024.

		Three Months Ended
SELECTED FINANCIAL HIGHLIGHTS		March 31, 2025				December 31, 2024				March 31, 2024
		(Dollars in thousands)
Yield on average investment securities (TE)			2.63%				2.58%				2.64%
Yield on average loans			5.22%				5.15%				5.30%
Yield on average earning assets (TE)			4.28%				4.24%				4.34%
Cost of deposits			0.86%				0.93%				0.74%
Cost of funds			1.04%				1.13%				1.31%
Net interest margin (TE)			3.31%				3.18%				3.10%

Average Earning Asset Mix		Avg		% of Total		Avg		% of Total		Avg		% of Total
	Total investment securities	$	4,908,718	36.21	%	$	4,936,514	35.36	%	$	5,357,708	36.59	%
	Interest-earning deposits with other institutions		162,389	1.20	%		485,103	3.47	%		444,101	3.03	%
	Loans		8,467,465	62.46	%		8,522,587	61.04	%		8,824,579	60.26	%
	Total interest-earning assets		13,556,584				13,962,216				14,644,400

Provision for Credit Losses
There was a $2.0 million recapture of provision for credit losses in the first quarter of 2025, compared to a $3.0 million recapture of provision for credit losses in the fourth quarter of 2024 and no provision in the first quarter of 2024. Net recoveries for the first quarter of 2025 were $130,000 compared to net recoveries of $180,000 in the prior quarter. Allowance for credit losses represented 0.94% of gross loans at March 31, 2025 and December 31, 2024.

Noninterest Income
Noninterest income was $16.2 million for the first quarter of 2025, compared with $13.1 million for the fourth quarter of 2024 and $14.1 million for the first quarter of 2024. During the first quarter of 2025, the Bank sold four OREO properties resulting in a gain of $2.2 million. Income from Bank Owned Life Insurance (“BOLI”) increased in the first quarter of 2025 by $445,000 from the fourth quarter of 2024 and decreased by $762,000 compared to the first quarter of 2024. Compared to the fourth quarter of 2024 and the first quarter of 2024, income from various equity investments increased by $750,000 and $450,000, respectively.

Noninterest Expense
Noninterest expense for the first quarter of 2025 was $59.1 million, compared to $58.5 million for the fourth quarter of 2024 and $59.8 million for the first quarter of 2024. The $664,000 quarter-over-quarter increase includes a $500,000 provision for unfunded loan commitments in the first quarter of 2025, compared to no provision or recapture of provision in the first and fourth quarter of 2024. Salaries and employee benefit costs increased $479,000, as the first quarter of each calendar year reflects higher payroll taxes than the fourth quarter of the prior year. Offsetting those quarter-over-quarter increases was a decline in legal expenses of $326,000.

The year-over-year decrease in noninterest expense of $627,000 was impacted by the higher level of assessment expense in the first quarter of 2024, in which we had an additional accrual of $2.3 million associated with the 2023 FDIC special assessment. The decline in assessment expense was offset by increases in software expenses of $696,000 and occupancy expenses of $433,000, as well as the $500,000 recapture of provision for unfunded loan commitments in the first quarter of 2025. As a percentage of average assets, noninterest expense was 1.58% for the first quarter of 2025, compared to 1.49% for the fourth quarter of 2024 and 1.48% for the first quarter of 2024. The efficiency ratio for the first quarter of 2025 was 46.69%, compared to 47.34% for the fourth quarter of 2024 and 47.22% for the first quarter of 2024.

Income Taxes
Our effective tax rate for the quarter ended March 31, 2025 was 26.50%, compared with 25.25% for the fourth quarter of 2024, and 27.25% for the same period of 2024. Our estimated annual effective tax rate can vary depending upon the level of tax-advantaged income from municipal securities and BOLI, as well as available tax credits.

BALANCE SHEET HIGHLIGHTS

Assets
The Company reported total assets of $15.26 billion at March 31, 2025. This represented an increase of $102.9 million, or 0.68%, from total assets of $15.15 billion at December 31, 2024. The increase in assets included a $290.3 million increase in interest-earning balances due from the Federal Reserve, offset by a $27.6 million decrease in investment securities, and a $170.9 million decrease in net loans.

Total assets at March 31, 2025 decreased by $1.2 billion, or 7.36%, from total assets of $16.47 billion at March 31, 2024. The decrease in assets was primarily due to a decrease of $476.5 million in interest-earning balances due from the Federal Reserve, a decrease of $397.5 million in investment securities and a $402.5 million decrease in net loans.

Investment Securities
Total investment securities were $4.89 billion at March 31, 2025, a decrease of $27.6 million, or 0.56% from December 31, 2024, and a decrease of $397.5 million, or 7.51%, from $5.29 billion at March 31, 2024.

At March 31, 2025, investment securities held-to-maturity (“HTM”) totaled $2.36 billion, a decrease of $20.5 million, or 0.86% from December 31, 2024, and a decrease of $95.4 million, or 3.89%, from March 31, 2024.

At March 31, 2025, investment securities available-for-sale (“AFS”) totaled $2.54 billion, inclusive of a pre-tax net unrealized loss of $338.4 million. AFS securities decreased by $7.0 million, or 0.28% from December 31, 2024 and decreased by $302.0 million, or 10.65%, from $2.84 billion at March 31, 2024. The pre-tax unrealized loss decreased by $58.9 million from December 31, 2024 and decreased by $97.2 million from March 31, 2024.

Loans
Total loans and leases, at amortized cost, of $8.36 billion at March 31, 2025 decreased by $172.8 million, or 2.02%, from December 31, 2024. The quarter-over quarter decrease in loans included decreases of $16.8 million in commercial real estate loans and $167.8 million in dairy & livestock loans, partially offset by an increase of $17.1 million in commercial and industrial loans.

Total loans and leases, at amortized cost, decreased by $407.1 million, or 4.64%, from March 31, 2024. The $407.1 million decrease included decreases of $229.9 million in commercial real estate loans, $43.1 million in construction loans, $20.8 million in commercial and industrial loans, $99.1 million in dairy & livestock and agribusiness loans, $6.8 million in municipal lease financings, and $7.0 million in SFR mortgage loans.

Asset Quality
During the first quarter of 2025, we experienced credit charge-offs of $40,000 and total recoveries of $170,000, resulting in net recoveries of $130,000. The allowance for credit losses (“ACL”) totaled $78.3 million at March 31, 2025, compared to $80.1 million at December 31, 2024 and $82.8 million at March 31, 2024. At March 31, 2025, ACL as a percentage of total loans and leases outstanding was 0.94%. This compares to 0.94% and 0.94% at December 31, 2024 and March 31, 2024, respectively.

Nonperforming loans, defined as nonaccrual loans, including modified loans on nonaccrual, plus loans 90 days past due and accruing interest, and nonperforming assets, defined as nonperforming plus OREO, are highlighted below.

Nonperforming Assets and Delinquency Trends	March 31, 2025			December 31, 2024			March 31, 2024
Nonperforming loans	(Dollars in thousands)
Commercial real estate	$	24,379		$	25,866		$	10,661
SBA		1,024			1,529			54
Commercial and industrial		173			340			2,727
Dairy & livestock and agribusiness		60			60			60
SFR mortgage		–			–			308
Consumer and other loans		–			–			–
Total	$	25,636		$	27,795		$	13,810
% of Total loans		0.31	%		0.33	%		0.16	%
OREO
Commercial real estate	$	495		$	18,656		$	–
Commercial and industrial		–			–			647
SFR mortgage		–			647			–
Total	$	495		$	19,303		$	647

Total nonperforming assets	$	26,131		$	47,098		$	14,457
% of Nonperforming assets to total assets		0.17	%		0.31	%		0.09	%

Past due 30-89 days (accruing)
Commercial real estate	$	–		$	–		$	19,781
SBA		718			88			408
Commercial and industrial		–			399			6
Dairy & livestock and agribusiness		–			–			–
SFR mortgage		–			–			–
Consumer and other loans		–			–			–
Total	$	718		$	487		$	20,195
% of Total loans		0.01	%		0.01	%		0.23	%
Total nonperforming, OREO, and past due	$	26,849		$	47,585		$	34,652

Classified Loans	$	94,169		$	89,549		$	103,080

The $21.0 million decrease in nonperforming assets from December 31, 2024 was primarily due to the sale of $19.3 million of OREO at a net gain of $2.2 million during the first quarter of 2025. Classified loans are loans that are graded “substandard” or worse. Classified loans increased $4.6 million quarter-over-quarter, primarily due to increases of $6.5 million in classified dairy and livestock loans.

Deposits & Customer Repurchase Agreements
Deposits of $12.0 billion and customer repurchase agreements of $276.2 million totaled $12.27 billion at March 31, 2025. This represented a net increase of $55.8 million compared to December 31, 2024. Total deposits and customer repurchase agreements increased $95.4 million, or .78% when compared to $12.17 billion at March 31, 2024.

Noninterest-bearing deposits were $7.18 billion at March 31, 2025, an increase of $147.2 million, or 2.09%, when compared to $7.04 billion at December 31, 2024. Noninterest-bearing deposits increased by $71.5 million, or 1.00% when compared to $7.11 billion at March 31, 2024. At March 31, 2025, noninterest-bearing deposits were 59.92% of total deposits, compared to 58.90% at December 31, 2024 and 59.80% at
March 31, 2024.

Borrowings
As of March 31, 2025, total borrowings consisted of $500 million of FHLB advances. The FHLB advances include maturities of $300 million, at an average cost of approximately 4.73%, maturing in May of 2026, and $200 million, at a cost of 4.27% maturing in May of 2027. Total borrowings decreased by $1.5 billion from March 31, 2024. The $2.0 billion of borrowings at March 31, 2024 consisted of one-year advances from the Federal Reserve’s Bank Term Funding Program, at an average cost of approximately 4.75%, all of which were redeemed before the end of 2024.

Capital
The Company’s total equity was $2.23 billion at March 31, 2025. This represented an overall increase of $42.1 million from total equity of $2.19 billion at December 31, 2024. Increases to equity included $51.1 million in net earnings and a $34.8 million increase in other comprehensive income that were partially offset by $27.9 million in cash dividends. During the first quarter of 2025, we repurchased, under our stock repurchase plan, 782,063 shares of common stock, at an average repurchase price of $19.55, totaling $15.3 million. Our tangible book value per share at March 31, 2025 was $10.45.

Our capital ratios under the revised capital framework referred to as Basel III remain well-above regulatory standards.

		CVB Financial Corp. Consolidated
Capital Ratios	Minimum Required Plus Capital Conservation Buffer	March 31, 2025	December 31, 2024	March 31, 2024

Tier 1 leverage capital ratio	4.0%	11.8%	11.5%	10.5%
Common equity Tier 1 capital ratio	7.0%	16.5%	16.2%	14.9%
Tier 1 risk-based capital ratio	8.5%	16.5%	16.2%	14.9%
Total risk-based capital ratio	10.5%	17.3%	17.1%	15.8%

Tangible common equity ratio		10.0%	9.8%	8.3%

CitizensTrust
As of March 31, 2025 CitizensTrust had approximately $4.7 billion in assets under management and administration, including $3.38 billion in assets under management. Revenues were $3.4 million for the first quarter of 2025, compared to $3.5 million in the fourth quarter of 2024 and $3.2 million for the first quarter of 2024. CitizensTrust provides trust, investment and brokerage related services, as well as financial, estate and business succession planning.

Corporate Overview
CVB Financial Corp. (“CVBF”) is the holding company for Citizens Business Bank. CVBF is one of the 10 largest bank holding companies headquartered in California with more than $15 billion in total assets. Citizens Business Bank is consistently recognized as one of the top performing banks in the nation and offers a wide array of banking, lending and investing services with more than 60 banking centers and three trust office locations serving California.

Shares of CVB Financial Corp. common stock are listed on the NASDAQ under the ticker symbol “CVBF”. For investor information on CVB Financial Corp., visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab.

Conference Call

Management will hold a conference call at 7:30 a.m. PDT/10:30 a.m. EDT on Thursday, April 24, 2025, to discuss the Company’s first quarter 2025 financial results. The conference call can be accessed live by registering at: https://register-conf.media-server.com/register/BI643a97d119af4b899539fee84f093408

The conference call will also be simultaneously webcast over the Internet; please visit our Citizens Business Bank website at www.cbbank.com and click on the “Investors” tab to access the call from the site. Please access the website 15 minutes prior to the call to download any necessary audio software. This webcast will be recorded and available for replay on the Company’s website approximately two hours after the conclusion of the conference call and will be available on the website for approximately 12 months.

Safe Harbor
Certain statements set forth herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will likely result”, “aims”, “anticipates”, “believes”, “could”, “estimates”, “expects”, “hopes”, “intends”, “may”, “plans”, “projects”, “seeks”, “should”, “will,” “strategy”, “possibility”, and variations of these words and similar expressions help to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results or performance to differ materially from those projected. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies, goals and statements about the Company’s outlook regarding revenue and asset growth, financial performance and profitability, capital and liquidity levels, loan and deposit levels, growth and retention, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, the impact of economic developments, the impact of monetary, fiscal and trade policies, and the impact of acquisitions we have made or may make. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company, and there can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors, in addition to those set forth below, could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements.

General risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct business; the effects of, and changes in, immigration, trade, tariff, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market and monetary fluctuations; the effect of acquisitions we have made or may make, including, without limitation, the failure to obtain the necessary regulatory approvals, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target and key personnel into our operations; the timely development of competitive products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws, and regulations, including those concerning banking, taxes, securities, and insurance, and the application thereof by regulatory agencies; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the transition away from USD LIBOR and uncertainties regarding potential alternative reference rates, including SOFR; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible credit related impairments or declines in the fair value of loans and securities held by us; possible impairment charges to goodwill on our balance sheet; changes in customer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; periodic fluctuations in commercial or residential real estate prices or values; our ability to attract or retain deposits or to access government or private lending facilities and other sources of liquidity; the possibility that we may reduce or discontinue the payment of dividends on our common stock; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; technological changes in banking and financial services; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, which could impact business and economic conditions in the United States and abroad; catastrophic events or natural disasters, including earthquakes, drought, climate change or extreme weather events that may affect our assets, communications or computer services, customers, employees or third party vendors; public health crises and pandemics, and their effects on the economic and business environments in which we operate, including on our asset credit quality, business operations, and employees, as well as the impact on general economic and financial market conditions; cybersecurity threats and fraud and the costs of defending against them, including the costs of compliance with legislation or regulations to combat fraud and cybersecurity threats; our ability to recruit and retain key executives, board members and other employees, and our ability to comply with federal and state in employment laws and regulations; ongoing or unanticipated regulatory or legal proceedings or outcomes; and our ability to manage the risks involved in the foregoing.

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s 2024 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

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, except as required by law. Any statements about future operating results, such as those concerning accretion and dilution to the Company’s earnings or shareholders, are for illustrative purposes only, are not forecasts, and actual results may differ.

Non-GAAP Financial Measures — Certain financial information provided in this earnings release has not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and is presented on a non-GAAP basis. Investors and analysts should refer to the reconciliations included in this earnings release and should consider the Company’s non-GAAP measures in addition to, not as a substitute for or as superior to, measures prepared in accordance with GAAP. These measures may or may not be comparable to similarly titled measures used by other companies.

Contact:
David A. Brager
President and Chief Executive Officer
(909) 980-4030

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)


	March 31, 2025			December 31, 2024			March 31, 2024
Assets
Cash and due from banks	$	187,981		$	153,875		$	131,955
Interest-earning balances due from Federal Reserve		341,108			50,823			817,634
Total cash and cash equivalents		529,089			204,698			949,589
Interest-earning balances due from depository institutions		3,451			480			12,632
Investment securities available-for-sale		2,535,066			2,542,115			2,837,100
Investment securities held-to-maturity		2,359,141			2,379,668			2,454,586
Total investment securities		4,894,207			4,921,783			5,291,686
Investment in stock of Federal Home Loan Bank (FHLB)		18,012			18,012			18,012
Loans and lease finance receivables		8,363,632			8,536,432			8,770,713
Allowance for credit losses		(78,252	)		(80,122	)		(82,817	)
Net loans and lease finance receivables		8,285,380			8,456,310			8,687,896
Premises and equipment, net		26,772			27,543			43,448
Bank owned life insurance (BOLI)		318,301			316,248			310,744
Intangibles		8,812			9,967			13,853
Goodwill		765,822			765,822			765,822
Other assets		406,745			432,792			374,464
Total assets	$	15,256,591		$	15,153,655		$	16,468,146
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	7,184,267		$	7,037,096		$	7,112,789
Investment checking		533,220			551,305			545,066
Savings and money market		3,710,612			3,786,387			3,561,512
Time deposits		561,822			573,593			675,554
Total deposits		11,989,921			11,948,381			11,894,921
Customer repurchase agreements		276,163			261,887			275,720
Other borrowings		500,000			500,000			1,995,000
Other liabilities		262,088			257,071			215,680
Total liabilities		13,028,172			12,967,339			14,381,321
Stockholders’ Equity
Stockholders’ equity		2,505,719			2,498,380			2,422,110
Accumulated other comprehensive loss, net of tax		(277,300	)		(312,064	)		(335,285	)
Total stockholders’ equity		2,228,419			2,186,316			2,086,825
Total liabilities and stockholders’ equity	$	15,256,591		$	15,153,655		$	16,468,146

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)


	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Assets
Cash and due from banks	$	154,328		$	152,966		$	162,049
Interest-earning balances due from Federal Reserve		161,432			484,038			433,421
Total cash and cash equivalents		315,760			637,004			595,470
Interest-earning balances due from depository institutions		957			1,065			10,680
Investment securities available-for-sale		2,539,211			2,542,649			2,900,097
Investment securities held-to-maturity		2,369,507			2,393,865			2,457,611
Total investment securities		4,908,718			4,936,514			5,357,708
Investment in stock of FHLB		18,012			18,012			18,012
Loans and lease finance receivables		8,467,465			8,522,587			8,824,579
Allowance for credit losses		(80,113	)		(82,960	)		(85,751	)
Net loans and lease finance receivables		8,387,352			8,439,627			8,738,828
Premises and equipment, net		27,408			29,959			44,380
Bank owned life insurance (BOLI)		316,643			316,938			309,609
Intangibles		9,518			10,650			14,585
Goodwill		765,822			765,822			765,822
Other assets		419,116			406,898			350,319
Total assets	$	15,169,306		$	15,562,489		$	16,205,413
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	7,006,357		$	7,116,050		$	7,182,718
Interest-bearing		4,866,318			4,998,424			4,454,135
Total deposits		11,872,675			12,114,474			11,636,853
Customer repurchase agreements		317,322			456,145			309,272
Other borrowings		513,078			500,000			1,991,978
Other liabilities		239,283			278,314			168,442
Total liabilities		12,942,358			13,348,933			14,106,545
Stockholders’ Equity
Stockholders’ equity		2,523,923			2,507,060			2,432,075
Accumulated other comprehensive loss, net of tax		(296,975	)		(293,504	)		(333,207	)
Total stockholders’ equity		2,226,948			2,213,556			2,098,868
Total liabilities and stockholders’ equity	$	15,169,306		$	15,562,489		$	16,205,413

CVB FINANCIAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Dollars in thousands, except per share amounts)


	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Interest income:
Loans and leases, including fees	$	109,071		$	110,277		$	116,349
Investment securities:
Investment securities available-for-sale		18,734			18,041			21,446
Investment securities held-to-maturity		13,021			13,020			13,402
Total investment income		31,755			31,061			34,848
Dividends from FHLB stock		379			380			419
Interest-earning deposits with other institutions		1,797			5,881			6,073
Total interest income		143,002			147,599			157,689
Interest expense:
Deposits		25,322			28,317			21,366
Borrowings and customer repurchase agreements		6,800			8,291			23,862
Other		436			573			–
Total interest expense		32,558			37,181			45,228
Net interest income before (recapture of) provision for credit losses		110,444			110,418			112,461
(Recapture of) provision for credit losses		(2,000	)		(3,000	)		–
Net interest income after (recapture of) provision for credit losses		112,444			113,418			112,461
Noninterest income:
Service charges on deposit accounts		4,908			5,097			5,036
Trust and investment services		3,411			3,512			3,224
Loss on sale of AFS investment securities		–			(16,735	)		–
Gain on OREO, net		2,183			–			–
Gain on sale leaseback transactions		–			16,794			–
Other		5,727			4,435			5,853
Total noninterest income		16,229			13,103			14,113
Noninterest expense:							.
Salaries and employee benefits		36,477			35,998			36,401
Occupancy and equipment		5,998			5,866			5,565
Professional services		2,081			2,646			2,255
Computer software expense		4,221			3,921			3,525
Marketing and promotion		1,988			1,757			1,630
Amortization of intangible assets		1,155			1,163			1,438
Provision for unfunded loan commitments		500			–			–
Other		6,724			7,129			8,957
Total noninterest expense		59,144			58,480			59,771
Earnings before income taxes		69,529			68,041			66,803
Income taxes		18,425			17,183			18,204
Net earnings	$	51,104		$	50,858		$	48,599

Basic earnings per common share	$	0.37		$	0.36		$	0.35
Diluted earnings per common share	$	0.36		$	0.36		$	0.35
Cash dividends declared per common share	$	0.20		$	0.20		$	0.20

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Interest income – tax equivalent (TE)	$	143,525		$	148,128		$	158,228
Interest expense		32,558			37,181			45,228
Net interest income – (TE)	$	110,967		$	110,947		$	113,000

Return on average assets, annualized		1.37	%		1.30	%		1.21	%
Return on average equity, annualized		9.31	%		9.14	%		9.31	%
Efficiency ratio [1]		46.69	%		47.34	%		47.22	%
Noninterest expense to average assets, annualized		1.58	%		1.49	%		1.48	%
Yield on average loans		5.22	%		5.15	%		5.30	%
Yield on average earning assets (TE)		4.28	%		4.24	%		4.34	%
Cost of deposits		0.86	%		0.93	%		0.74	%
Cost of deposits and customer repurchase agreements		0.87	%		0.97	%		0.73	%
Cost of funds		1.04	%		1.13	%		1.31	%
Net interest margin (TE)		3.31	%		3.18	%		3.10	%
[1] Noninterest expense divided by net interest income before provision for credit losses plus noninterest income.

Tangible Common Equity Ratio (TCE) [2]
CVB Financial Corp. Consolidated		10.04	%		9.81	%		8.33	%
Citizens Business Bank		9.92	%		9.64	%		8.23	%
[2] (Capital – [GW+Intangibles])/(Total Assets – [GW+Intangibles])

Weighted average shares outstanding
Basic		138,973,996			138,661,665			138,428,596
Diluted		139,294,401			139,102,524			138,603,324
Dividends declared	$	27,853		$	27,978		$	27,886
Dividend payout ratio [3]		54.50	%		55.01	%		57.38	%
[3] Dividends declared on common stock divided by net earnings.

Number of shares outstanding – (end of period)		139,089,612			139,689,686			139,641,884
Book value per share	$	16.02		$	15.65		$	14.94
Tangible book value per share	$	10.45		$	10.10		$	9.36

	March 31, 2025			December 31, 2024			March 31, 2024
	March 31, 2025			December 31, 2024			March 31, 2024
Nonperforming assets:
Nonaccrual loans	$	25,636		$	27,795		$	13,810
Other real estate owned (OREO), net		495			19,303			647
Total nonperforming assets	$	26,131		$	47,098		$	14,457
Modified loans/performing troubled debt restructured loans (TDR) [4]	$	11,949		$	6,467		$	10,765

[4] Effective January 1, 2023, performing and nonperforming TDRs are reflected as Loan Modifications to borrowers experiencing financial difficulty.

Percentage of nonperforming assets to total loans outstanding and OREO		0.31	%		0.55	%		0.16	%
Percentage of nonperforming assets to total assets		0.17	%		0.31	%		0.09	%
Allowance for credit losses to nonperforming assets		299.46	%		170.12	%		572.85	%

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Allowance for credit losses:
Beginning balance	$	80,122		$	82,942		$	86,842
Total charge-offs		(40	)		(64	)		(4,267	)
Total recoveries on loans previously charged-off		170			244			242
Net recoveries (charge-offs)		130			180			(4,025	)
(Recapture of) provision for credit losses		(2,000	)		(3,000	)		–
Allowance for credit losses at end of period	$	78,252		$	80,122		$	82,817

Net recoveries (charge-offs) to average loans		0.002	%		0.002	%		-0.046	%

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in millions)

Allowance for Credit Losses by Loan Type

	March 31, 2025					December 31, 2024					March 31, 2024
	Allowance For Credit Losses		Allowance as a % of Total Loans by Respective Loan Type			Allowance For Credit Losses		Allowance as a % of Total Loans by Respective Loan Type			Allowance For Credit Losses		Allowance as a % of Total Loans by Respective Loan Type

Commercial real estate	$	65.3		1.01	%	$	66.2		1.02	%	$	69.4		1.03	%
Construction		0.2		1.52	%		0.3		1.94	%		1.3		2.20	%
SBA		2.6		0.96	%		2.6		0.96	%		2.5		0.94	%
Commercial and industrial		6.1		0.65	%		6.1		0.66	%		5.1		0.53	%
Dairy & livestock and agribusiness		2.8		1.12	%		3.6		0.86	%		3.3		0.92	%
Municipal lease finance receivables		0.2		0.32	%		0.2		0.31	%		0.2		0.27	%
SFR mortgage		0.5		0.16	%		0.5		0.16	%		0.5		0.17	%
Consumer and other loans		0.6		0.94	%		0.6		1.04	%		0.5		0.97	%

Total	$	78.3		0.94	%	$	80.1		0.94	%	$	82.8		0.94	%

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)

Quarterly Common Stock Price

		2025					2024						2023
Quarter End	High		Low			High			Low			High			Low
March 31,	$	21.71	$	18.22		$	20.45		$	15.95		$	25.98		$	16.34
June 30,	$	–	$	–		$	17.91		$	15.71		$	16.89		$	10.66
September 30,	$	–	$	–		$	20.29		$	16.08		$	19.66		$	12.89
December 31,	$	–	$	–		$	24.58		$	17.20		$	21.77		$	14.62

Quarterly Consolidated Statements of Earnings

			Q1			Q4			Q3			Q2			Q1
				2025			2024			2024			2024			2024
Interest income
Loans and leases, including fees			$	109,071		$	110,277		$	114,929		$	114,200		$	116,349
Investment securities and other				33,931			37,322			50,823			44,872			41,340
Total interest income				143,002			147,599			165,752			159,072			157,689
Interest expense
Deposits				25,322			28,317			29,821			25,979			21,366
Borrowings and customer repurchase agreements				6,800			8,291			22,312			22,244			23,862
Other				436			573			–			–			–
Total interest expense				32,558			37,181			52,133			48,223			45,228
Net interest income before (recapture of)
provision for credit losses				110,444			110,418			113,619			110,849			112,461
(Recapture of) provision for credit losses				(2,000	)		(3,000	)		–			–			–
Net interest income after (recapture of)
provision for credit losses				112,444			113,418			113,619			110,849			112,461

Noninterest income				16,229			13,103			12,834			14,424			14,113
Noninterest expense				59,144			58,480			58,835			56,497			59,771
Earnings before income taxes				69,529			68,041			67,618			68,776			66,803
Income taxes				18,425			17,183			16,394			18,741			18,204
Net earnings			$	51,104		$	50,858		$	51,224		$	50,035		$	48,599

Effective tax rate				26.50	%		25.25	%		24.25	%		27.25	%		27.25	%

Basic earnings per common share			$	0.37		$	0.36		$	0.37		$	0.36		$	0.35
Diluted earnings per common share			$	0.36		$	0.36		$	0.37		$	0.36		$	0.35

Cash dividends declared per common share			$	0.20		$	0.20		$	0.20		$	0.20		$	0.20

Cash dividends declared			$	27,853		$	27,978		$	27,977		$	28,018		$	27,886

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands)

Loan Portfolio by Type
	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024

Commercial real estate	$	6,490,604		$	6,507,452		$	6,618,637		$	6,664,925		$	6,720,538
Construction		15,706			16,082			14,755			52,227			58,806
SBA		271,844			273,013			272,001			267,938			268,320
SBA – PPP		179			774			1,255			1,757			2,249
Commercial and industrial		942,301			925,178			936,489			956,184			963,120
Dairy & livestock and agribusiness		252,532			419,904			342,445			350,562			351,624
Municipal lease finance receivables		65,203			66,114			67,585			70,889			72,032
SFR mortgage		269,493			269,172			267,181			267,593			276,475
Consumer and other loans		55,770			58,743			52,217			49,771			57,549
Gross loans, at amortized cost		8,363,632			8,536,432			8,572,565			8,681,846			8,770,713
Allowance for credit losses		(78,252	)		(80,122	)		(82,942	)		(82,786	)		(82,817	)
Net loans	$	8,285,380		$	8,456,310		$	8,489,623		$	8,599,060		$	8,687,896



Deposit Composition by Type and Customer Repurchase Agreements

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

Noninterest-bearing	$	7,184,267		$	7,037,096		$	7,136,824		$	7,090,095		$	7,112,789
Investment checking		533,220			551,305			504,028			515,930			545,066
Savings and money market		3,710,612			3,786,387			3,745,707			3,409,320			3,561,512
Time deposits		561,822			573,593			685,930			774,980			675,554
Total deposits		11,989,921			11,948,381			12,072,489			11,790,325			11,894,921

Customer repurchase agreements		276,163			261,887			394,515			268,826			275,720
Total deposits and customer repurchase agreements	$	12,266,084		$	12,210,268		$	12,467,004		$	12,059,151		$	12,170,641

CVB FINANCIAL CORP. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands)

Nonperforming Assets and Delinquency Trends

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Nonperforming loans:

Commercial real estate

$

24,379

$

25,866

$

18,794

$

21,908

$

10,661

Construction

–

SBA

1,024

1,529

151

337

54

Commercial and industrial

173

340

2,825

2,712

2,727

Dairy & livestock and agribusiness

60

143

–

60

SFR mortgage

–

308

Consumer and other loans

–

Total

$

25,636

$

27,795

$

21,913

$

24,957

$

13,810

% of Total loans

0.31

%

0.33

%

0.26

%

0.29

%

0.16

%

Past due 30-89 days (accruing):

Commercial real estate

$

–

$

–

$

30,701

$

43

$

19,781

Construction

–

SBA

718

88

–

408

Commercial and industrial

–

399

64

103

6

Dairy & livestock and agribusiness

–

SFR mortgage

–

Consumer and other loans

–

Total

$

718

$

487

$

30,765

$

146

$

20,195

% of Total loans

0.01

%

0.01

%

0.36

%

0.00

%

0.23

%

OREO:

Commercial real estate

$

495

$

18,656

$

–

$

–

$

–

SBA

–

Commercial and industrial

–

SFR mortgage

–

647

Total

$

495

$

19,303

$

647

$

647

$

647

Total nonperforming, past due, and OREO

$

26,849

$

47,585

$

53,325

$

25,750

$

34,652

% of Total loans

0.32

%

0.56

%

0.62

%

0.30

%

0.40

%

CVB FINANCIAL CORP. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)

Regulatory Capital Ratios



				CVB Financial Corp. Consolidated
Capital Ratios	Minimum Required Plus Capital Conservation Buffer			March 31, 2025			December 31, 2024			March 31, 2024

Tier 1 leverage capital ratio		4.0	%		11.8	%		11.5	%		10.5	%
Common equity Tier 1 capital ratio		7.0	%		16.5	%		16.2	%		14.9	%
Tier 1 risk-based capital ratio		8.5	%		16.5	%		16.2	%		14.9	%
Total risk-based capital ratio		10.5	%		17.3	%		17.1	%		15.8	%

Tangible common equity ratio					10.0	%		9.8	%		8.3	%

Tangible Book Value Reconciliations (Non-GAAP)

The tangible book value per share is a Non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a reconciliation of tangible book value to the Company stockholders’ equity computed in accordance with GAAP, as well as a calculation of tangible book value per share as of March 31, 2025, December 31, 2024 and March 31, 2024.


		March 31, 2025			December 31, 2024			March 31, 2024
		(Dollars in thousands, except per share amounts)

Stockholders’ equity	$	2,228,419		$	2,186,316		$	2,086,825
Less: Goodwill		(765,822	)		(765,822	)		(765,822	)
Less: Intangible assets		(8,812	)		(9,967	)		(13,853	)
Tangible book value	$	1,453,785		$	1,410,527		$	1,307,150
Common shares issued and outstanding		139,089,612			139,689,686			139,641,884
Tangible book value per share	$	10.45		$	10.10		$	9.36

Return on Average Tangible Common Equity Reconciliations (Non-GAAP)

The return on average tangible common equity is a non-GAAP disclosure. The Company uses certain non-GAAP financial measures to provide supplemental information regarding the Company’s performance. The following is a reconciliation of net income, adjusted for tax-effected amortization of intangibles, to net income computed in accordance with GAAP; a reconciliation of average tangible common equity to the Company’s average stockholders’ equity computed in accordance with GAAP; as well as a calculation of return on average tangible common equity.


	Three Months Ended
		March 31,			December 31,			March 31,
		2025			2024			2024
	(Dollars in thousands)

Net Income	$	51,104		$	50,858		$	48,599
Add: Amortization of intangible assets		1,155			1,163			1,438
Less: Tax effect of amortization of intangible assets (1)		(341	)		(344	)		(425	)
Tangible net income	$	51,918		$	51,677		$	49,612

Average stockholders’ equity	$	2,226,948		$	2,213,556		$	2,098,868
Less: Average goodwill		(765,822	)		(765,822	)		(765,822	)
Less: Average intangible assets		(9,518	)		(10,650	)		(14,585	)
Average tangible common equity	$	1,451,608		$	1,437,084		$	1,318,461

Return on average equity, annualized (2)		9.31	%		9.14	%		9.31	%
Return on average tangible common equity, annualized (2)		14.51	%		14.31	%		15.13	%


(1) Tax effected at respective statutory rates.
(2) Annualized where applicable.

The MIL Network –

April 24, 2025

MIL-OSI: TowneBank Reports First Quarter 2025 Earnings

Source: GlobeNewswire (MIL-OSI)

SUFFOLK, Va., April 23, 2025 (GLOBE NEWSWIRE) — TowneBank (the “Company” or “Towne”) (NASDAQ: TOWN) today reported earnings for the quarter ended March 31, 2025 of $50.59 million, or $0.67 per diluted share, compared to $34.69 million, or $0.46 per diluted share, for the quarter ended March 31, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $50.98 million, or $0.68 per diluted share, in the current quarter compared to $36.27 million, or $0.48 per diluted share, for the quarter ended March 31, 2024.

“Our Company had a very strong start to the year earning $0.67 per share and delivering nearly 7% annualized loan growth. Our continued focus on measured growth aligned with a deliberate strategy to maintain healthy liquidity and capital levels should position our Company well during periods of economic uncertainty. While growth could be challenged in the short run, we believe our conservative Main Street approach to relationship banking coupled with our diversified fee income businesses can serve as a pillar of strength for our members, shareholders and the communities we serve,” said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2025:

Total revenues were $192.04 million, an increase of $24.94 million, or 14.93%, compared to first quarter 2024. Net interest income increased $17.26 million, driven primarily by lower deposit costs, while noninterest income increased $7.68 million.
Total deposits were $14.61 billion, an increase of $482.47 million, or 3.42%, compared to first quarter 2024. Total deposits increased 1.19%, or $171.25 million, in comparison to December 31, 2024, 4.81% on an annualized basis.
Noninterest-bearing deposits increased 2.85%, to $4.31 billion, compared to first quarter 2024 and represented 29.53% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 1.42%.
Loans held for investment were $11.65 billion, an increase of $200.40 million, or 1.75%, compared to March 31, 2024, and $193.69 million, 1.69%, or 6.86% on an annualized basis, compared to December 31, 2024.
Annualized return on common shareholders’ equity was 9.57% compared to 6.89% in first quarter 2024. Annualized return on average tangible common shareholders’ equity (non-GAAP) was 13.21% compared to 9.98% in first quarter 2024.
Net interest margin was 3.14% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.17%, including purchase accounting accretion of 3 basis points, compared to the prior year quarter net interest margin of 2.72% and tax-equivalent net interest margin (non-GAAP) of 2.75%, including purchase accounting accretion of 4 basis points.
Compared to the linked quarter, net interest margin increased 15 basis points and spread increased 26 basis points.
The effective tax rate was 13.95% in the quarter compared to 17.31% in first quarter 2024 and 13.92% in the linked quarter. The lower effective tax rate in the current quarter as compared to first quarter 2024 was primarily due to the impact on state and federal taxes from the increase in credits and losses related to tax advantaged investment properties placed in service over the past 12 months and purchase accounting adjustments for a prior partnership acquisition.

“We were pleased to close our partnership with Village Bank and Trust Financial Corp. on April 1, 2025 followed by our latest announcement of the signing of a definitive agreement with Old Point Financial Corporation. Both transactions are strategically important for our Company and follow our disciplined model of targeting partnerships that enhance shareholder returns with low execution risk,” stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

Net interest income was $120.48 million compared to $103.22 million for the quarter ended March 31, 2024.
On an average basis, loans held for investment, with a yield of 5.38%, represented 74.15% of earning assets at March 31, 2025 compared to a yield of 5.37% and 74.54% of earning assets at March 31, 2024.
The cost of interest-bearing deposits was 2.69% for the quarter ended March 31, 2025, compared to 3.24% in first quarter 2024. Interest expense on deposits decreased $11.26 million, or 14.36%, from the prior year quarter driven by decreases in rate.
Our total cost of deposits decreased to 1.89% from 2.26% for the quarter ended March 31, 2024 due to lower interest-bearing deposit rates. The Federal Reserve Open Market Committee lowered the overnight funds rate a total of 100 basis points in the last four months of 2024.
Average interest-earning assets totaled $15.55 billion at March 31, 2025 compared to $15.27 billion at March 31, 2024, an increase of 1.84%. The Company anticipates approximately $760 million of cash flows from its securities portfolio to be available for reinvestment in the next 24 months.
Average interest-bearing liabilities totaled $10.42 billion, an increase of $212.32 million, or 2.08%, from prior year, driven by demand and money market deposit growth. Borrowings have declined between periods. There were no short term FHLB borrowings in first quarter 2025, compared to an average of $174.73 million in the prior year quarter.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $2.42 million compared to a benefit of $0.88 million in the prior year quarter and an expense of $1.61 million in the linked quarter.
The allowance for credit losses on loans increased $2.21 million in first quarter 2025, compared to the linked quarter. The increase in the allowance was driven by increases in the loan portfolio combined with a continuation of our use of higher weightings of more adverse macroeconomic forecast scenarios utilized in our model.
Net loan charge-offs were $626 thousand in the quarter compared to $520 thousand in the prior year quarter and $382 thousand in the linked quarter.
The ratio of net charge-offs to average loans on an annualized basis was 0.02% in first quarter 2025, compared to 0.02% in first quarter 2024 and 0.01% in the linked quarter.
The allowance for credit losses on loans represented 1.08% of total loans at March 31, 2025, compared to 1.10% at March 31, 2024, and 1.08% at December 31, 2024. The allowance for credit losses on loans was 19.15 times nonperforming loans compared to 18.01 times at March 31, 2024 and 16.69 times at December 31, 2024.

Quarterly Noninterest Income:

Total noninterest income was $71.57 million compared to $63.88 million in 2024, an increase of $7.68 million, or 12.02%.
Total net insurance commissions increased $0.89 million, or 3.47%, to $26.42 million in first quarter 2025 compared to 2024. This increase was primarily attributable to increases in property and casualty commissions, which were driven by organic growth.
Property management fee revenue increased 16.26%, or $2.73 million, to $19.50 million in first quarter 2025 compared to 2024. Future reservations increased compared to the prior year, primarily driven by an acquisition in 2024.
Residential mortgage banking income was $10.36 million compared to $10.48 million in first quarter 2024. Loan volume increased to $445.19 million in first quarter 2025 from $424.39 million in first quarter 2024. Residential purchase activity was 89.94% of production volume in the first quarter of 2025 compared to 95.66% in first quarter 2024.
At 3.18% gross margins on residential mortgage sales decreased 7 basis points from the linked quarter and 16 basis points from 3.34% in first quarter 2024.

Quarterly Noninterest Expense:

Total noninterest expense was $130.54 million compared to $125.59 million in 2024, an increase of $4.95 million, or 3.94%. This increase was primarily attributable to growth in salaries and employee benefits of $3.70 million.
Salaries and benefits expense increases were driven by annual base salary adjustments that went into effect October 2024, an increase in banking personnel, and production incentives.

Consolidated Balance Sheet Highlights:

Total assets were $17.51 billion for the quarter ended March 31, 2025, a $264.99 million increase compared to $17.25 billion at December 31, 2024. Total assets increased $627.64 million, or 3.72%, from $16.88 billion at March 31, 2024.
Loans held for investment increased $193.69 million, or 1.69%, compared to the linked quarter and $200.40 million, or 1.75%, compared to prior year. Real estate construction and development loans declined, but were offset by growth in non owner occupied and multifamily commercial real estate. The Company continues to maintain a strong credit discipline.
Mortgage loans held for sale increased $17.78 million, or 11.80%, compared to prior year but decreased $31.95 million, or 15.94%, compared to the linked quarter, driven by production levels.
Total deposits increased $482.47 million, or 3.42%, driven by interest-bearing demand deposits, compared to prior year. In the linked quarter comparison, total deposits increased $171.25 million, or 4.81% on an annualized basis.
Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to prior year and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter.
Total borrowings decreased $6.88 million, or 2.37%, compared to first quarter 2024 and $12.80 million, or 4.31%, compared to the linked quarter, due to declines in repurchase agreements and other borrowings.

Investment Securities:

Total investment securities were $2.70 billion compared to $2.59 billion at December 31, 2024 and $2.54 billion at March 31, 2024. The weighted average duration of the portfolio at March 31, 2025 was 3.3 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $119.25 million at March 31, 2025, compared to $155.28 million at December 31, 2024 and $170.84 million at March 31, 2024, with the changes in fair value due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $11.65 billion at March 31, 2025, $11.46 billion at December 31, 2024, and $11.45 billion at March 31, 2024.
Nonperforming assets were $7.37 million, or 0.04% of total assets, compared to $7.77 million, or 0.05%, at March 31, 2024, and $7.87 million, or 0.05%, in the linked quarter end.
Nonperforming loans were 0.06% of period end loans at March 31, 2025, March 31, 2024, and the linked quarter end.
Foreclosed property consisted of $235 thousand in other real estate owned and $551 thousand in repossessed autos, for a total of $786 thousand in foreclosed property at March 31, 2025, compared to $175 thousand in other real estate owned and $605 thousand in repossessed autos, for a total of $780 thousand in foreclosed property at March 31, 2024.

Deposits and Borrowings:

Total deposits were $14.61 billion compared to $14.44 billion at December 31, 2024 and $14.13 billion at March 31, 2024.
The ratio of period end loans held for investment to deposits was 79.77% compared to 79.37% at December 31, 2024 and 81.07% at March 31, 2024.
Noninterest-bearing deposits were 29.53% of total deposits at March 31, 2025 compared to 29.46% at December 31, 2024 and 29.69% at March 31, 2024. Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to March 31, 2024, and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter.
Total borrowings were $284.10 million compared to $296.90 million at December 31, 2024 and $290.98 million at March 31, 2024.

Capital:

Common equity tier 1 capital ratio of 12.75%⁽¹⁾.
Tier 1 leverage capital ratio of 10.61%⁽¹⁾.
Tier 1 risk-based capital ratio of 12.87%⁽¹⁾.
Total risk-based capital ratio of 15.65% ⁽¹⁾ .
Book value per common share was $29.19 compared to $28.43 at December 31, 2024 and $27.33 at March 31, 2024.
Tangible book value per common share (non-GAAP) was $22.36 compared to $21.55 at December 31, 2024 and $20.31 at March 31, 2024.

⁽¹⁾ Preliminary.

About TowneBank:
Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

Today, TowneBank operates over 55 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $17.51 billion as of March 31, 2025, TowneBank is one of the largest banks headquartered in Virginia.

Non-GAAP Financial Measures:
This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such non-GAAP financial measures include the following: fully tax-equivalent net interest margin, core operating earnings, core net income, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio. Management uses these non-GAAP financial measures to assess the performance of TowneBank’s core business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.

Forward-Looking Statements:
This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional terms, such as “will,” “would,” “should,” “could,” “may,” “likely,” “probably,” or “possibly.” These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the 2023 bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, trade restrictions and tariffs, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; our ability to successfully integrate the businesses of Old Point Financial Corporation (“Old Point”), a pending merger, and Village Bank and Trust Financial Corp. (“Village”), a recently completed merger, to the extent that it may take longer or be more difficult, time-consuming, or costly to accomplish than expected, our ability to close the transaction with Old Point when expected or at all because required approvals and other conditions to closing are not received or satisfied on the proposed terms or on the anticipated schedule; deposit attrition, operating costs, customer losses, and business disruption associated with pending or recently completed acquisitions, including reputational risk and adverse effects on relationships with employees, customers or other business partners, that may be greater than expected; costs or difficulties related to the integration of the businesses we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; the diversion of management’s attention and time from ongoing business operations and opportunities on merger related matters; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area, including any adverse impact of actual and proposed cuts to federal spending, including defense, security and military spending, on the Greater Hampton Roads economy. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the “Risk Factors” in TowneBank’s Annual Report on Form 10-K for the year ended December 31, 2024 and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
William I. Foster III, President and Chief Executive Officer, 757-417-6482

Investor contact:
William B. Littreal, Chief Financial Officer, 757-638-6813


TOWNEBANK
Selected Financial Highlights (unaudited)
(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
Income and Performance Ratios:
	Total revenue	$	192,044		$	177,160		$	174,518		$	174,970		$	167,102
	Net income		50,887			41,441			43,126			43,039			35,127
	Net income available to common shareholders		50,592			41,265			42,949			42,856			34,687
	Net income per common share – diluted		0.67			0.55			0.57			0.57			0.46
	Book value per common share		29.19			28.43			28.59			27.62			27.33
	Book value per common share – tangible ^(non-GAAP)		22.36			21.55			21.65			20.65			20.31
	Return on average assets		1.19	%		0.95	%		1.00	%		1.01	%		0.83	%
	Return on average assets – tangible ^(non-GAAP)		1.29	%		1.03	%		1.09	%		1.11	%		0.92	%
	Return on average equity		9.50	%		7.64	%		8.12	%		8.43	%		6.84	%
	Return on average equity – tangible ^(non-GAAP)		13.08	%		10.68	%		11.42	%		12.03	%		9.87	%
	Return on average common equity		9.57	%		7.70	%		8.18	%		8.49	%		6.89	%
	Return on average common equity – tangible ^(non-GAAP)		13.21	%		10.79	%		11.54	%		12.16	%		9.98	%
	Noninterest income as a percentage of total revenue		37.27	%		33.36	%		35.66	%		37.68	%		38.23	%
Regulatory Capital Ratios (1):
	Common equity tier 1		12.75	%		12.77	%		12.63	%		12.43	%		12.20	%
	Tier 1		12.87	%		12.89	%		12.76	%		12.55	%		12.32	%
	Total		15.65	%		15.68	%		15.54	%		15.34	%		15.10	%
	Tier 1 leverage ratio		10.61	%		10.36	%		10.38	%		10.25	%		10.15	%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans	19.15x			16.69x			18.70x			19.08x			18.01x
	Allowance for credit losses on loans to period end loans		1.08	%		1.08	%		1.08	%		1.10	%		1.10	%
	Nonperforming loans to period end loans		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
	Nonperforming assets to period end assets		0.04	%		0.05	%		0.04	%		0.04	%		0.05	%
	Net charge-offs (recoveries) to average loans (annualized)		0.02	%		0.01	%		0.02	%		—	%		0.02	%
	Net charge-offs (recoveries)	$	626		$	382		$	677		$	(19	)	$	520

	Nonperforming loans	$	6,586		$	7,424		$	6,588		$	6,582		$	6,987
	Foreclosed property		786			443			884			581			780
	Total nonperforming assets	$	7,372		$	7,867		$	7,472		$	7,163		$	7,767
	Loans past due 90 days and still accruing interest	$	15		$	1,264		$	510		$	368		$	323
	Allowance for credit losses on loans	$	126,131		$	123,923		$	123,191		$	125,552		$	125,835
Mortgage Banking:
	Loans originated, mortgage	$	300,699		$	385,238		$	421,571		$	430,398		$	289,191
	Loans originated, joint venture		144,495			180,188			176,612			196,583			135,197
	Total loans originated	$	445,194		$	565,426		$	598,183		$	626,981		$	424,388
	Number of loans originated		1,181			1,489			1,637			1,700			1,247
	Number of originators		161			160			159			169			176
	Purchase %		89.94	%		89.46	%		91.49	%		94.85	%		95.66	%
	Loans sold	$	475,518		$	629,120		$	526,998		$	605,134		$	410,895
	Rate lock asset	$	1,880		$	1,150		$	1,548		$	1,930		$	1,681
	Gross realized gain on sales and fees as a % of loans originated		3.18	%		3.25	%		3.28	%		3.28	%		3.34	%
Other Ratios:
	Net interest margin		3.14	%		2.99	%		2.90	%		2.86	%		2.72	%
	Net interest margin-fully tax-equivalent ^(non-GAAP)		3.17	%		3.02	%		2.93	%		2.89	%		2.75	%
	Average earning assets/total average assets		90.32	%		90.57	%		90.43	%		90.36	%		90.52	%
	Average loans/average deposits		80.01	%		78.71	%		80.07	%		80.80	%		81.48	%
	Average noninterest deposits/total average deposits		29.68	%		30.14	%		30.19	%		30.06	%		30.25	%
	Period end equity/period end total assets		12.66	%		12.50	%		12.58	%		12.24	%		12.24	%
	Efficiency ratio ^(non-GAAP)		67.10	%		70.28	%		70.93	%		68.98	%		73.25	%
	(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
*Available-for-sale securities, at fair value*		2025			2024			2024		Q1 24		Q4 24
U.S. agency securities	$	320,190		$	294,723		$	293,917		8.64	%	8.94	%
U.S. Treasury notes		78,184			27,534			28,429		183.95	%	175.01	%
Municipal securities		439,379			447,323			439,115		(1.78	)%	0.06	%
Trust preferred and other corporate securities		98,463			87,983			95,279		11.91	%	3.34	%
Mortgage-backed securities issued by GSEs and GNMA		1,535,217			1,347,920			1,497,951		13.90	%	2.49	%
Allowance for credit losses		(1,262	)		(1,382	)		(1,326	)	(8.68	)%	(4.83	)%
Total	$	2,470,171		$	2,204,101		$	2,353,365		12.07	%	4.96	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	5,909		$	1,868		$	2,572		216.33	%	129.74	%
Total gross unrealized losses		(125,156	)		(172,708	)		(157,851	)	(27.53	)%	(20.71	)%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(119,247	)	$	(170,840	)	$	(155,279	)	(30.20	)%	(23.20	)%
*Held-to-maturity securities, at amortized cost*
U.S. agency securities	$	92,805		$	102,042		$	102,622		(9.05	)%	(9.57	)%
U.S. Treasury notes		96,481			197,356			96,710		(51.11	)%	(0.24	)%
Municipal securities		5,390			5,294			5,366		1.81	%	0.45	%
Trust preferred corporate securities		2,107			2,159			2,121		(2.41	)%	(0.66	)%
Mortgage-backed securities issued by GSEs		5,235			5,659			5,533		(7.49	)%	(5.39	)%
Allowance for credit losses		(68	)		(82	)		(77	)	(17.07	)%	(11.69	)%
Total	$	201,950		$	312,428		$	212,275		(35.36	)%	(4.86	)%

Total gross unrealized gains	$	176		$	265		$	178		(33.58	)%	(1.12	)%
Total gross unrealized losses		(6,563	)		(14,262	)		(8,647	)	(53.98	)%	(24.10	)%
Net unrealized gains (losses) in HTM securities	$	(6,387	)	$	(13,997	)	$	(8,469	)	(54.37	)%	(24.58	)%
Total unrealized gains (losses) on AFS and HTM securities	$	(125,634	)	$	(184,837	)	$	(163,748	)	(32.03	)%	(23.28	)%
										% Change
Loans Held For Investment	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
		2025			2024			2024		Q1 24		Q4 24
Real estate – construction and development	$	1,006,086		$	1,255,741		$	1,082,161		(19.88	)%	(7.03	)%
Commercial real estate – owner occupied		1,654,401			1,700,753			1,628,731		(2.73	)%	1.58	%
Commercial real estate – non owner occupied		3,329,728			3,178,947			3,196,665		4.74	%	4.16	%
Real estate – multifamily		841,330			595,075			801,079		41.38	%	5.02	%
Residential 1-4 family		1,886,107			1,882,296			1,891,470		0.20	%	(0.28	)%
HELOC		429,152			386,361			410,594		11.08	%	4.52	%
Commercial and industrial business (C&I)		1,337,254			1,288,550			1,280,394		3.78	%	4.44	%
Government		511,676			528,341			513,039		(3.15	)%	(0.27	)%
Indirect		570,795			555,482			567,245		2.76	%	0.63	%
Consumer loans and other		86,217			80,797			87,677		6.71	%	(1.67	)%
Total	$	11,652,746		$	11,452,343		$	11,459,055		1.75	%	1.69	%

										% Change
Deposits	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
		2025			2024			2024		Q1 24		Q4 24
Noninterest-bearing demand	$	4,313,553		$	4,194,132		$	4,253,053		2.85	%	1.42	%
Interest-bearing:
Demand and money market accounts		7,463,355			6,916,701			7,329,669		7.90	%	1.82	%
Savings		312,151			326,179			311,841		(4.30	)%	0.10	%
Certificates of deposits		2,519,489			2,689,062			2,542,735		(6.31	)%	(0.91	)%
Total		14,608,548			14,126,074			14,437,298		3.42	%	1.19	%

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)

	Three Months Ended								Three Months Ended								Three Months Ended
	March 31, 2025								December 31, 2024								March 31, 2024
				Interest			Average					Interest			Average					Interest			Average
	Average			Income/			Yield/		Average			Income/			Yield/		Average			Income/			Yield/
	Balance			Expense			Rate (1)		Balance			Expense			Rate (1)		Balance			Expense			Rate (1)
Assets:
Loans (net of unearned income and deferred costs)	$	11,527,915		$	153,068		5.38	%	$	11,455,253		$	155,710		5.41	%	$	11,379,323		$	151,811		5.37	%
Taxable investment securities		2,478,048			21,301		3.44	%		2,421,253			20,722		3.42	%		2,440,652			18,716		3.07	%
Tax-exempt investment securities		176,081			1,860		4.23	%		176,266			1,832		4.16	%		161,538			1,549		3.84	%
Total securities		2,654,129			23,161		3.49	%		2,597,519			22,554		3.47	%		2,602,190			20,265		3.12	%
Interest-bearing deposits		1,199,650			11,801		3.99	%		1,451,121			15,796		4.33	%		1,167,322			14,234		4.90	%
Mortgage loans held for sale		164,358			2,653		6.46	%		209,315			3,088		5.90	%		116,868			1,716		5.87	%
Total earning assets		15,546,052			190,683		4.97	%		15,713,208			197,148		4.99	%		15,265,703			188,026		4.95	%
Less: allowance for loan losses		(124,265	)							(123,068	)							(127,413	)
Total nonearning assets		1,790,075								1,758,988								1,725,945
Total assets	$	17,211,862							$	17,349,128							$	16,864,235
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,279,365		$	40,606		2.26	%	$	7,157,076		$	43,894		2.44	%	$	6,828,053		$	47,985		2.83	%
Savings		312,118			714		0.93	%		315,414			777		0.98	%		329,036			881		1.08	%
Certificates of deposit		2,540,438			25,813		4.12	%		2,694,236			31,214		4.61	%		2,583,938			29,522		4.60	%
Total interest-bearing deposits		10,131,921			67,133		2.69	%		10,166,726			75,885		2.97	%		9,741,027			78,388		3.24	%
Borrowings		29,606			(300	)	(4.05	)%		36,708			(151	)	(1.61	)%		212,375			3,078		5.73	%
Subordinated debt, net		260,070			2,304		3.54	%		257,667			2,261		3.51	%		255,878			2,236		3.50	%
Total interest-bearing liabilities		10,421,597			69,137		2.69	%		10,461,101			77,995		2.97	%		10,209,280			83,702		3.30	%
Demand deposits		4,276,586								4,386,911								4,224,104
Other noninterest-bearing liabilities		353,665								353,005								390,576
Total liabilities		15,051,848								15,201,017								14,823,960
Shareholders’ equity		2,160,014								2,148,111								2,040,275
Total liabilities and equity	$	17,211,862							$	17,349,128							$	16,864,235
Net interest income (tax-equivalent basis) (4)				$	121,546							$	119,153							$	104,324
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment					(1,068	)							(1,096	)							(1,106	)
Net interest income (GAAP)				$	120,478							$	118,057							$	103,218

Interest rate spread (2)(4)							2.28	%							2.02	%							1.65	%
Interest expense as a percent of average earning assets							1.80	%							1.97	%							2.21	%
Net interest margin (tax-equivalent basis) (3)(4)							3.17	%							3.02	%							2.75	%
Total cost of deposits							1.89	%							2.07	%							2.26	%

(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%.
(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent.
(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent.
(4) Non-GAAP.

TOWNEBANK
Consolidated Balance Sheets
(dollars in thousands, except share data)


	March 31,			December 31,
		2025			2024
	(unaudited)			(audited)
ASSETS
Cash and due from banks	$	126,526		$	108,750
Interest-bearing deposits at FRB		1,090,555			1,127,878
Interest-bearing deposits in financial institutions		100,249			102,847
Total Cash and Cash Equivalents		1,317,330			1,339,475
Securities available for sale, at fair value (amortized cost of $2,590,680 and $2,509,970, and allowance for credit losses of $1,262 and $1,326 at March 31, 2025 and December 31, 2024, respectively)		2,470,171			2,353,365
Securities held to maturity, at amortized cost (fair value of $195,631 and $203,883 at March 31, 2025 and December 31, 2024, respectively)		202,018			212,352
Less: allowance for credit losses		(68	)		(77	)
Securities held to maturity, net of allowance for credit losses		201,950			212,275
Other equity securities		12,223			12,100
FHLB stock		12,425			12,136
Total Securities		2,696,769			2,589,876
Mortgage loans held for sale		168,510			200,460
Loans, net of unearned income and deferred costs		11,652,746			11,459,055
Less: allowance for credit losses		(126,131	)		(123,923	)
Net Loans		11,526,615			11,335,132
Premises and equipment, net		373,111			368,876
Goodwill		457,619			457,619
Other intangible assets, net		57,145			60,171
BOLI		280,344			279,802
Other assets		634,437			615,479
TOTAL ASSETS	$	17,511,880		$	17,246,890

LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,313,553		$	4,253,053
Interest-bearing:
Demand and money market accounts		7,463,355			7,329,669
Savings		312,151			311,841
Certificates of deposit		2,519,489			2,542,735
Total Deposits		14,608,548			14,437,298
Advances from the FHLB		3,029			3,218
Subordinated debt, net		260,198			260,001
Repurchase agreements and other borrowings		20,875			33,683
Total Borrowings		284,102			296,902
Other liabilities		402,252			357,063
TOTAL LIABILITIES		15,294,902			15,091,263
Preferred stock, authorized and unissued shares – 2,000,000		—			—
Common stock, $1.667 par value: 150,000,000 shares authorized;
75,392,225 and 75,255,205 shares issued at
March 31, 2025 and December 31, 2024, respectively		125,679			125,455
Capital surplus		1,123,330			1,122,147
Retained earnings		1,039,518			1,007,775
Common stock issued to deferred compensation trust, at cost:
1,049,002 and 1,046,121 shares at March 31, 2025 and December 31, 2024, respectively		(21,969	)		(21,868	)
Deferred compensation trust		21,969			21,868
Accumulated other comprehensive income (loss)		(87,869	)		(116,045	)
TOTAL SHAREHOLDERS’ EQUITY		2,200,658			2,139,332
Noncontrolling interest		16,320			16,295
TOTAL EQUITY		2,216,978			2,155,627
TOTAL LIABILITIES AND EQUITY	$	17,511,880		$	17,246,890

TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)


	Three Months Ended
	March 31,
		2025			2024
INTEREST INCOME:
Loans, including fees	$	152,322		$	150,974
Investment securities		22,839			19,996
Interest-bearing deposits in financial institutions and federal funds sold		11,801			14,234
Mortgage loans held for sale		2,653			1,716
Total interest income		189,615			186,920
INTEREST EXPENSE:
Deposits		67,133			78,388
Advances from the FHLB		25			2,438
Subordinated debt, net		2,304			2,236
Repurchase agreements and other borrowings		(325	)		640
Total interest expense		69,137			83,702
Net interest income		120,478			103,218
PROVISION FOR CREDIT LOSSES		2,420			(877	)
Net interest income after provision for credit losses		118,058			104,095
NONINTEREST INCOME:
Residential mortgage banking income, net		10,361			10,477
Insurance commissions and related income, net		26,424			25,539
Property management income, net		19,500			16,773
Service charges on deposit accounts		3,327			3,079
Credit card merchant fees, net		1,697			1,551
Investment commissions, net		3,075			2,343
BOLI		1,872			1,842
Gain on sale of equity investment		2,000			—
Other income		3,310			2,206
Net gain on investment securities		—			74
Total noninterest income		71,566			63,884
NONINTEREST EXPENSE:
Salaries and employee benefits		75,078			71,377
Occupancy		9,333			9,422
Furniture and equipment		4,621			4,478
Amortization – intangibles		3,026			3,246
Software		6,293			6,100
Data processing		3,835			3,916
Professional fees		2,653			3,180
Advertising and marketing		4,472			4,582
FDIC and other insurance		2,860			4,358
Acquisition related expenses		420			595
Other expenses		17,945			14,337
Total noninterest expense		130,536			125,591
Income before income tax expense and noncontrolling interest		59,088			42,388
Provision for income tax expense		8,201			7,261
Net income	$	50,887		$	35,127
Net income attributable to noncontrolling interest		(295	)		(440	)
Net income attributable to TowneBank	$	50,592		$	34,687
Per common share information
Basic earnings	$	0.67		$	0.46
Diluted earnings	$	0.67		$	0.46
Cash dividends declared	$	0.25		$	0.25

TOWNEBANK
Consolidated Balance Sheets – Five Quarter Trend
(dollars in thousands, except share data)


	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
	(unaudited)			(audited)			(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	126,526		$	108,750		$	131,068		$	140,028		$	75,802
Interest-bearing deposits at FRB		1,090,555			1,127,878			1,061,596			1,062,115			926,635
Interest-bearing deposits in financial institutions		100,249			102,847			103,400			99,303			98,673
Total Cash and Cash Equivalents		1,317,330			1,339,475			1,296,064			1,301,446			1,101,110
Securities available for sale		2,470,171			2,353,365			2,363,176			2,250,679			2,204,101
Securities held to maturity		202,018			212,352			212,422			212,488			312,510
Less: allowance for credit losses		(68	)		(77	)		(77	)		(79	)		(82	)
Securities held to maturity, net of allowance for credit losses		201,950			212,275			212,345			212,409			312,428
Other equity securities		12,223			12,100			12,681			13,566			13,661
FHLB stock		12,425			12,136			12,134			12,134			12,139
Total Securities		2,696,769			2,589,876			2,600,336			2,488,788			2,542,329
Mortgage loans held for sale		168,510			200,460			264,320			200,762			150,727
Loans, net of unearned income and deferred costs		11,652,746			11,459,055			11,412,518			11,451,747			11,452,343
Less: allowance for credit losses		(126,131	)		(123,923	)		(123,191	)		(125,552	)		(125,835	)
Net Loans		11,526,615			11,335,132			11,289,327			11,326,195			11,326,508
Premises and equipment, net		373,111			368,876			365,764			340,348			342,569
Goodwill		457,619			457,619			457,619			457,619			457,619
Other intangible assets, net		57,145			60,171			63,265			65,460			68,758
BOLI		280,344			279,802			279,325			277,434			279,293
Other assets		634,437			615,479			572,000			610,791			615,324
TOTAL ASSETS	$	17,511,880		$	17,246,890		$	17,188,020		$	17,068,843		$	16,884,237
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,313,553		$	4,253,053		$	4,267,628		$	4,303,773		$	4,194,132
Interest-bearing:
Demand and money market accounts		7,463,355			7,329,669			6,990,103			6,940,086			6,916,701
Savings		312,151			311,841			319,970			312,881			326,179
Certificates of deposit		2,519,489			2,542,735			2,785,469			2,715,848			2,689,062
Total Deposits		14,608,548			14,437,298			14,363,170			14,272,588			14,126,074
Advances from the FHLB		3,029			3,218			3,405			3,591			3,775
Subordinated debt, net		260,198			260,001			256,444			256,227			256,011
Repurchase agreements and other borrowings		20,875			33,683			30,970			35,351			31,198
Total Borrowings		284,102			296,902			290,819			295,169			290,984
Other liabilities		402,252			357,063			371,316			411,770			401,307
TOTAL LIABILITIES		15,294,902			15,091,263			15,025,305			14,979,527			14,818,365

Preferred stock		—			—			—			—			—
Common stock, $1.667 par value		125,679			125,455			125,139			125,090			125,009
Capital surplus		1,123,330			1,122,147			1,117,279			1,115,759			1,114,038
Retained earnings		1,039,518			1,007,775			985,343			961,162			937,065
Common stock issued to deferred compensation
trust, at cost		(21,969	)		(21,868	)		(22,224	)		(22,756	)		(20,915	)
Deferred compensation trust		21,969			21,868			22,224			22,756			20,915
Accumulated other comprehensive income (loss)		(87,869	)		(116,045	)		(81,482	)		(129,224	)		(126,586	)
TOTAL SHAREHOLDERS’ EQUITY		2,200,658			2,139,332			2,146,279			2,072,787			2,049,526
Noncontrolling interest		16,320			16,295			16,436			16,529			16,346
TOTAL EQUITY		2,216,978			2,155,627			2,162,715			2,089,316			2,065,872
TOTAL LIABILITIES AND EQUITY	$	17,511,880		$	17,246,890		$	17,188,020		$	17,068,843		$	16,884,237

TOWNEBANK
Consolidated Statements of Income – Five Quarter Trend (unaudited)
(dollars in thousands, except share data)


	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
INTEREST INCOME:
Loans, including fees	$	152,322		$	154,933		$	155,792		$	154,549		$	150,974
Investment securities		22,839			22,236			22,334			22,928			19,996
Interest-bearing deposits in financial institutions and federal funds sold		11,801			15,796			15,249			14,512			14,234
Mortgage loans held for sale		2,653			3,087			3,247			2,945			1,716
Total interest income		189,615			196,052			196,622			194,934			186,920
INTEREST EXPENSE:
Deposits		67,133			75,885			82,128			82,023			78,388
Advances from the FHLB		25			26			29			942			2,438
Subordinated debt, net		2,304			2,261			2,237			2,236			2,236
Repurchase agreements and other borrowings		(325	)		(177	)		(54	)		685			640
Total interest expense		69,137			77,995			84,340			85,886			83,702
Net interest income		120,478			118,057			112,282			109,048			103,218
PROVISION FOR CREDIT LOSSES		2,420			1,606			(1,100	)		(177	)		(877	)
Net interest income after provision for credit losses		118,058			116,451			113,382			109,225			104,095
NONINTEREST INCOME:
Residential mortgage banking income, net		10,361			11,272			11,786			13,422			10,477
Insurance commissions and related income, net		26,424			23,265			25,727			24,031			25,539
Property management income, net		19,500			8,186			11,221			14,312			16,773
Service charges on deposit accounts		3,327			3,289			3,117			3,353			3,079
Credit card merchant fees, net		1,697			1,486			1,830			1,662			1,551
Investment commissions, net		3,075			3,195			2,835			2,580			2,343
BOLI		1,872			4,478			1,886			3,238			1,842
Other income		5,310			3,932			3,834			3,324			2,206
Net gain on investment securities		—			—			—			—			74
Total noninterest income		71,566			59,103			62,236			65,922			63,884
NONINTEREST EXPENSE:
Salaries and employee benefits		75,078			74,399			72,123			71,349			71,377
Occupancy		9,333			9,819			9,351			9,717			9,422
Furniture and equipment		4,621			4,850			4,657			4,634			4,478
Amortization – intangibles		3,026			3,095			3,130			3,298			3,246
Software		6,293			6,870			6,790			7,056			6,100
Data processing		3,835			3,788			4,701			4,606			3,916
Professional fees		2,653			3,446			4,720			3,788			3,180
Advertising and marketing		4,472			3,359			4,162			3,524			4,582
Other expenses		21,225			17,815			17,266			16,012			19,290
Total noninterest expense		130,536			127,441			126,900			123,984			125,591
Income before income tax expense and noncontrolling interest		59,088			48,113			48,718			51,163			42,388
Provision for income tax expense		8,201			6,672			5,592			8,124			7,261
Net income		50,887			41,441			43,126			43,039			35,127
Net income attributable to noncontrolling interest		(295	)		(176	)		(177	)		(183	)		(440	)
Net income attributable to TowneBank	$	50,592		$	41,265		$	42,949		$	42,856		$	34,687
Per common share information
Basic earnings	$	0.67		$	0.55		$	0.57		$	0.57		$	0.46
Diluted earnings	$	0.67		$	0.55		$	0.57		$	0.57		$	0.46
Basic weighted average shares outstanding		75,149,668			75,034,688			74,940,827			74,925,877			74,816,420
Diluted weighted average shares outstanding		75,527,713			75,309,989			75,141,661			75,037,955			74,979,501
Cash dividends declared	$	0.25		$	0.25		$	0.25		$	0.25		$	0.25

TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			YTD 2025 over 2024
		2025			2024			2024		Amount			Percent
Revenue
Net interest income	$	119,584		$	102,682		$	117,137		$	16,902		16.46	%
Service charges on deposit accounts		3,327			3,079			3,289			248		8.05	%
Credit card merchant fees		1,697			1,551			1,486			146		9.41	%
Investment commissions, net		3,075			2,343			3,195			732		31.24	%
Other income		6,495			3,429			6,456			3,066		89.41	%
Subtotal		14,594			10,402			14,426			4,192		40.30	%
Net gain/(loss) on investment securities		—			74			—			(74	)	N/M
Total noninterest income		14,594			10,476			14,426			4,118		39.31	%
Total revenue		134,178			113,158			131,563			21,020		18.58	%

Provision for credit losses		2,367			(976	)		1,525			3,343		(342.52	)%

Expenses
Salaries and employee benefits		49,684			46,474			50,130			3,210		6.91	%
Occupancy		6,979			7,061			7,362			(82	)	(1.16	)%
Furniture and equipment		3,808			3,648			4,087			160		4.39	%
Amortization of intangible assets		981			1,162			1,027			(181	)	(15.58	)%
Software		4,022			4,054			4,548			(32	)	(0.79	)%
Data processing		2,609			2,548			2,581			61		2.39	%
Accounting and professional fees		2,010			2,659			2,649			(649	)	(24.41	)%
Advertising and marketing		2,897			3,008			1,985			(111	)	(3.69	)%
FDIC and other insurance		2,590			4,122			2,244			(1,532	)	(37.17	)%
Acquisition related		420			147			268			273		185.71	%
Other expenses		11,971			10,415			11,315			1,556		14.94	%
Total expenses		87,971			85,298			88,196			2,673		3.13	%
Income before income tax, corporate allocation and noncontrolling interest		43,840			28,836			41,842			15,004		52.03	%
Corporate allocation		1,396			1,069			1,172			327		30.59	%
Income before income tax provision and noncontrolling interest		45,236			29,905			43,014			15,331		51.27	%
Provision for income tax expense		4,681			4,105			5,275			576		14.03	%
Net income		40,555			25,800			37,739			14,755		57.19	%
Noncontrolling interest		42			120			(63	)		(78	)	(65.00	)%
Net income attributable to TowneBank	$	40,597		$	25,920		$	37,676		$	14,677		56.62	%

Efficiency ratio ^(non-GAAP)		64.83	%		74.40	%		66.26	%	(9.57		)%	(12.86	)%

TOWNEBANK
Mortgage Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			YTD 2025 over 2024
		2025			2024			2024		Amount			Percent
Revenue
Residential mortgage brokerage income, net	$	10,580		$	10,798		$	11,580		$	(218	)	(2.02	)%
Income (loss) from unconsolidated subsidiary		42			30			68			12		40.00	%
Net interest and other income		1,110			768			1,661			342		44.53	%
Total revenue		11,732			11,596			13,309			136		1.17	%

Provision for credit losses		53			99			81			(46	)	(46.46	)%

Expenses
Salaries and employee benefits		7,031			6,656			6,712			375		5.63	%
Occupancy		939			1,061			981			(122	)	(11.50	)%
Furniture and equipment		195			178			158			17		9.55	%
Amortization of intangible assets		—			144			—			(144	)	(100.00	)%
Software		727			787			719			(60	)	(7.62	)%
Data processing		163			148			194			15		10.14	%
Accounting and professional fees		226			234			252			(8	)	(3.42	)%
Advertising and marketing		389			382			406			7		1.83	%
FDIC and other insurance		96			102			112			(6	)	(5.88	)%
Acquisition related		—			—			—			—		N/M
Other expenses		2,461			2,222			2,652			239		10.76	%
Total expenses		12,227			11,914			12,186			313		2.63	%

Income before income tax, corporate allocation and noncontrolling interest		(548	)		(417	)		1,042			(131	)	31.41	%
Corporate allocation		(350	)		(348	)		(437	)		(2	)	0.57	%
Income before income tax provision and noncontrolling interest		(898	)		(765	)		605			(133	)	17.39	%
Provision for income tax expense		(240	)		(202	)		121			(38	)	18.81	%
Net income		(658	)		(563	)		484			(95	)	16.87	%
Noncontrolling interest		(117	)		(115	)		(156	)		(2	)	1.74	%
Net income attributable to TowneBank	$	(775	)	$	(678	)	$	328		$	(97	)	14.31	%

Efficiency ratio excluding gain on equity investment ^(non-GAAP)		104.22	%		101.50	%		91.56	%		2.72	%	2.68	%

TOWNEBANK
Resort Property Management Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			YTD 2025 over 2024
		2025			2024			2024		Amount			Percent
Revenue
Property management fees, net	$	19,500		$	16,773		$	8,186		$	2,727		16.26	%
Net interest and other income		13			16			3			(3	)	(18.75	)%
Total revenue		19,513			16,789			8,189			2,724		16.22	%

Expenses
Salaries and employee benefits		5,448			5,532			4,796			(84	)	(1.52	)%
Occupancy		614			508			640			106		20.87	%
Furniture and equipment		405			416			435			(11	)	(2.64	)%
Amortization of intangible assets		637			533			637			104		19.51	%
Software		859			608			939			251		41.28	%
Data processing		944			1,102			896			(158	)	(14.34	)%
Accounting and professional fees		126			152			304			(26	)	(17.11	)%
Advertising and marketing		892			1,038			807			(146	)	(14.07	)%
FDIC and other insurance		67			35			70			32		91.43	%
Acquisition related		—			447			—			(447	)	(100.00	)%
Other expenses		2,613			942			466			1,671		177.39	%
Total expenses		12,605			11,313			9,990			1,292		11.42	%

Income before income tax, corporate allocation and noncontrolling interest		6,908			5,476			(1,801	)		1,432		26.15	%
Corporate allocation		(320	)		—			—			(320	)	N/M
Income before income tax provision and noncontrolling interest		6,588			5,476			(1,801	)		1,112		20.31	%
Provision for income tax expense		1,629			1,358			(337	)		271		19.96	%
Net income		4,959			4,118			(1,464	)		841		20.42	%
Noncontrolling interest		(220	)		(445	)		43			225		(50.56	)%
Net income attributable to TowneBank	$	4,739		$	3,673		$	(1,421	)	$	1,066		29.02	%

Efficiency ratio excluding gain on equity investment ^(non-GAAP)		61.33	%		64.21	%		114.21	%	(2.88		)%	(4.49	)%

TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			YTD 2025 over 2024
		2025			2024			2024		Amount			Percent
Commission and fee income
Property and casualty	$	23,322		$	20,722		$	20,576		$	2,600		12.55	%
Employee benefits		4,725			4,826			4,335			(101	)	(2.09	)%
Specialized benefit services		—			9			1			(9	)	(100.00	)%
Total commissions and fees		28,047			25,557			24,912			2,490		9.74	%

Contingency and bonus revenue		3,620			4,503			2,924			(883	)	(19.61	)%
Other income		4			11			221			(7	)	(63.64	)%
Total revenue		31,671			30,071			28,057			1,600		5.32	%

Employee commission expense		5,050			4,512			3,958			538		11.92	%
Revenue, net of commission expense		26,621			25,559			24,099			1,062		4.16	%

Salaries and employee benefits		12,915			12,715			12,761			200		1.57	%
Occupancy		801			792			836			9		1.14	%
Furniture and equipment		213			236			170			(23	)	(9.75	)%
Amortization of intangible assets		1,408			1,407			1,431			1		0.07	%
Software		685			651			664			34		5.22	%
Data processing		119			118			117			1		0.85	%
Accounting and professional fees		291			135			241			156		115.56	%
Advertising and marketing		294			154			161			140		90.91	%
FDIC and other insurance		107			99			108			8		8.08	%
Acquisition related		—			1			—			(1	)	(100.00	)%
Other expenses		900			758			580			142		18.73	%
Total operating expenses		17,733			17,066			17,069			667		3.91	%
Income before income tax, corporate allocation and noncontrolling interest		8,888			8,493			7,030			395		4.65	%
Corporate allocation		(726	)		(721	)		(735	)		(5	)	0.69	%
Income before income tax provision and noncontrolling interest		8,162			7,772			6,295			390		5.02	%
Provision for income tax expense		2,131			2,000			1,613			131		6.55	%
Net income		6,031			5,772			4,682			259		4.49	%
Noncontrolling interest		—			—			—			—		N/M
Net income attributable to TowneBank	$	6,031		$	5,772		$	4,682		$	259		4.49	%
											0
Provision for income taxes		2,131			2,000			1,613			131		6.55	%
Depreciation, amortization and interest expense		1,527			1,553			1,550			(26	)	(1.67	)%
EBITDA ^(non-GAAP)	$	9,689		$	9,325		$	7,845		$	364		3.90	%

Efficiency ratio ^(non-GAAP)		61.32	%		61.27	%		65.48	%		0.05	%	0.08	%

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)

	Three Months Ended
	March 31,			March 31,			December 31,
		2025			2024			2024

Return on average assets (GAAP)		1.19	%		0.83	%		0.95	%
Impact of excluding average goodwill and other intangibles and amortization		0.10	%		0.09	%		0.08	%
Return on average tangible assets (non-GAAP)		1.29	%		0.92	%		1.03	%

Return on average equity (GAAP)		9.50	%		6.84	%		7.64	%
Impact of excluding average goodwill and other intangibles and amortization		3.58	%		3.03	%		3.04	%
Return on average tangible equity (non-GAAP)		13.08	%		9.87	%		10.68	%

Return on average common equity (GAAP)		9.57	%		6.89	%		7.70	%
Impact of excluding average goodwill and other intangibles and amortization		3.64	%		3.09	%		3.09	%
Return on average tangible common equity (non-GAAP)		13.21	%		9.98	%		10.79	%

Book value (GAAP)	$	29.19		$	27.33		$	28.43
Impact of excluding average goodwill and other intangibles and amortization		(6.83	)		(7.02	)		(6.88	)
Tangible book value (non-GAAP)	$	22.36		$	20.31		$	21.55

Efficiency ratio (GAAP)		67.97	%		75.16	%		71.94	%
Impact of exclusions	(0.87		)%	(1.91		)%	(1.66		)%
Efficiency ratio (non-GAAP)		67.10	%		73.25	%		70.28	%

Average assets (GAAP)	$	17,211,862		$	16,864,235		$	17,349,128
Less: average goodwill and intangible assets		516,661			522,675			519,691
Average tangible assets (non-GAAP)	$	16,695,201		$	16,341,560		$	16,829,437

Average equity (GAAP)	$	2,160,014		$	2,040,275		$	2,148,111
Less: average goodwill and intangible assets		516,661			522,675			519,691
Average tangible equity (non-GAAP)	$	1,643,353		$	1,517,600		$	1,628,420

Average common equity (GAAP)	$	2,143,806		$	2,024,169		$	2,131,778
Less: average goodwill and intangible assets		516,661			522,675			519,691
Average tangible common equity (non-GAAP)	$	1,627,145		$	1,501,494		$	1,612,087

Net income (GAAP)	$	50,592		$	34,687		$	41,265
Amortization of intangibles, net of tax		2,391			2,564			2,445
Tangible net income (non-GAAP)	$	52,983		$	37,251		$	43,710

Total revenue (GAAP)	$	192,044		$	167,102		$	177,160
Net (gain)/loss on investment securities/equity investments		(2,000	)		(74	)		(218	)
Total revenue for efficiency calculation (non-GAAP)	$	190,044		$	167,028		$	176,942

Noninterest expense (GAAP)	$	130,536		$	125,591		$	127,441
Less: amortization of intangibles		3,026			3,246			3,095
Noninterest expense net of amortization (non-GAAP)	$	127,510		$	122,345		$	124,346

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)


Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
Net income available to common shareholders (GAAP)	$	50,592		$	41,265		$	42,949		$	42,856		$	34,687

Adjustments
Plus: Acquisition-related expenses, net of tax		389			250			460			18			564
Plus: Initial provision for acquired loans, net of tax		—			—			—			—			—
Plus: FDIC special assessment, net of tax		—			—			—			(310	)		1,021
Less: Gain on sale of equity investments, net of noncontrolling interest		—			(99	)		(16	)		—			—
Core operating earnings, excluding certain items affecting comparability (non-GAAP)	$	50,981		$	41,416		$	43,393		$	42,564		$	36,272
Annualized interest impact of Series IV Notes, net of tax		42			—			—			—			—
Core net income for diluted earnings (non-GAAP)	$	51,023		$	41,416		$	43,393		$	42,564		$	36,272

Weighted average diluted shares		75,527,713			75,309,989			75,141,661			75,037,955			74,979,501
Diluted EPS (GAAP)	$	0.67		$	0.55		$	0.57		$	0.57		$	0.46
Diluted EPS, excluding certain items affecting comparability (non-GAAP)	$	0.68		$	0.55		$	0.58		$	0.57		$	0.48
Average assets	$	17,211,862		$	17,349,128		$	17,028,141		$	16,982,482		$	16,864,235
Average tangible equity	$	1,643,353		$	1,628,420		$	1,582,830		$	1,520,500		$	1,517,600
Average common tangible equity	$	1,627,145		$	1,612,087		$	1,566,455		$	1,504,028		$	1,501,494
Return on average assets, excluding certain items affecting comparability (non-GAAP)		1.20	%		0.95	%		1.01	%		1.01	%		0.87	%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)		13.17	%		10.72	%		11.53	%		11.95	%		10.29	%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)		13.30	%		10.82	%		11.65	%		12.08	%		10.40	%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)		66.87	%		70.12	%		70.67	%		68.96	%		72.89	%

The MIL Network –

April 24, 2025

MIL-OSI: Brookline Bancorp Announces First Quarter Results

Source: GlobeNewswire (MIL-OSI)

Net Income of $19.1 million, EPS of $0.21

Operating Earnings of $20.0 million, Operating EPS of $0.22

Quarterly Dividend of $0.135

BOSTON, April 23, 2025 (GLOBE NEWSWIRE) — Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $19.1 million, or $0.21 per basic and diluted share, for the first quarter of 2025, compared to net income of $17.5 million, or $0.20 per basic and diluted share, for the fourth quarter of 2024, and $14.7 million, or $0.16 per basic and diluted share, for the first quarter of 2024. The Company reported operating earnings after tax (non-GAAP) of $20.0 million, or $0.22 per basic and diluted share, for the first quarter of 2025, compared to operating earnings after tax (non-GAAP) of $20.7 million, or $0.23 per basic and diluted share, for the fourth quarter of 2024, and $14.7 million, or $0.16 per basic and diluted share, for the first quarter of 2024.

Commenting on the first quarter’s performance, Mr. Perrault stated, “We are pleased to report solid earnings for the first quarter of the year. Despite external economic headwinds, our bankers continue to perform well and grow deposits. The contraction in our loan portfolios is intentional as we reduce our commercial real estate exposure while increasing our participation in the C&I markets.”

BALANCE SHEET

Total assets at March 31, 2025 were $11.5 billion, representing a decrease of $385.5 million from $11.9 billion at December 31, 2024, primarily driven by a reduction of cash and cash equivalents and loans and leases. Total assets decreased $22.9 million from March 31, 2024.

At March 31, 2025, total loans and leases were $9.6 billion, representing a decrease of $136.6 million from December 31, 2024, and a decrease of $12.4 million from March 31, 2024.

Total investment securities at March 31, 2025 decreased $12.7 million to $882.4 million from $895.0 million at December 31, 2024, and increased $16.6 million from $865.8 million at March 31, 2024. Total cash and cash equivalents at March 31, 2025 decreased $186.1 million to $357.5 million from $543.7 million at December 31, 2024, and increased $55.7 million from $301.9 million at March 31, 2024. As of March 31, 2025, total investment securities and total cash and cash equivalents represented 10.8 percent of total assets, compared to 12.1 percent and 10.1 percent as of December 31, 2024 and March 31, 2024, respectively.

Total deposits at March 31, 2025 increased $9.8 million to $8.9 billion from December 31, 2024, primarily driven by an increase of $113.8 million in customer deposits partially offset by a decline of $104.0 million in brokered deposits. Total deposits increased $192.8 million from $8.7 billion at March 31, 2024, primarily driven by an increase of $398.8 million in customer deposits partially offset by a decline of $206.0 million in brokered deposits.

Total borrowed funds at March 31, 2025 decreased $364.0 million to $1.2 billion from December 31, 2024, and decreased $206.1 million from $1.4 billion at March 31, 2024.

The ratio of stockholders’ equity to total assets was 10.77 percent at March 31, 2025, as compared to 10.26 percent at December 31, 2024, and 10.35 percent at March 31, 2024. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.73 percent at March 31, 2025, as compared to 8.27 percent at December 31, 2024, and 8.25 percent at March 31, 2024. Tangible book value per common share (non-GAAP) increased $0.22 from $10.81 at December 31, 2024 to $11.03 at March 31, 2025, and increased $0.56 from $10.47 at March 31, 2024.

NET INTEREST INCOME

Net interest income increased $0.8 million to $85.8 million during the first quarter of 2025 from $85.0 million for the quarter ended December 31, 2024. The net interest margin increased 10 basis points to 3.22 percent for the three months ended March 31, 2025 from 3.12 percent for the three months ended December 31, 2024, primarily driven by lower funding costs partially offset by lower yields on loans and leases.

NON-INTEREST INCOME

Total non-interest income for the quarter ended March 31, 2025 decreased $0.9 million to $5.7 million from $6.6 million for the quarter ended December 31, 2024. The decrease was primarily driven by a decline of $1.0 million in loan level derivative income, net.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $6.0 million for the quarter ended March 31, 2025, compared to $4.1 million for the quarter ended December 31, 2024. The increase in provision was largely driven by deterioration in a single commercial credit that required a specific reserve.

Total net charge-offs for the first quarter of 2025 were $7.6 million, compared to $7.3 million in the fourth quarter of 2024. The $7.6 million in net charge-offs was driven by one large $7.1 million charge-off in commercial loans, the majority of which was previously reserved for. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 31 basis points for the first quarter of 2025 from 30 basis points for the fourth quarter of 2024.

The allowance for loan and lease losses represented 1.29 percent of total loans and leases at March 31, 2025, compared to 1.28 percent at December 31, 2024, and 1.24 percent at March 31, 2024.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.65 percent at March 31, 2025, a decrease from 0.71 percent at December 31, 2024. Total nonaccrual loans and leases decreased $6.2 million to $63.1 million at March 31, 2025 from $69.3 million at December 31, 2024. The ratio of nonperforming assets to total assets was 0.56 percent at March 31, 2025, a decrease from 0.59 percent at December 31, 2024. Total nonperforming assets decreased $6.4 million to $64.0 million at March 31, 2025 from $70.5 million at December 31, 2024.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended March 31, 2025 decreased $3.7 million to $60.0 million from $63.7 million for the quarter ended December 31, 2024. The decrease was primarily driven by a decrease of $2.4 million in merger and acquisition expense related to the previously announced proposed merger of the Company with Berkshire Hills Bancorp, Inc. (“Berkshire”), and a decrease of $1.3 million in compensation and employee benefits expense.

PROVISION FOR INCOME TAXES

The effective tax rate was 25.0 percent for the three months ended March 31, 2025 compared to 26.4 percent for the three months ended December 31, 2024 and 24.7 percent for the three months ended March 31, 2024.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The annualized return on average assets increased to 0.66 percent during the first quarter 2025 from 0.61 percent for the fourth quarter of 2024.

The annualized return on average stockholders’ equity increased to 6.19 percent during the first quarter of 2025 from 5.69 percent for the fourth quarter of 2024. The annualized return on average tangible stockholders’ equity (non-GAAP) increased to 7.82 percent for the first quarter of 2025 from 7.21 percent for the fourth quarter of 2024.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended March 31, 2025. The dividend will be paid on May 23, 2025 to stockholders of record on May 9, 2025.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, April 24, 2025 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://events.q4inc.com/attendee/955891780. To listen to the call without access to the slides, interested parties may dial 833-470-1428 (United States) or 404-975-4839 (internationally) and ask for the Brookline Bancorp, Inc. conference call (Access Code 941481). A recorded playback of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 866-813-9403 (United States) or 929-458-6194 (internationally) and entering the passcode:324302.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $11.5 billion in assets and branch locations in Massachusetts, Rhode Island, and the Lower Hudson Valley of New York State, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and PCSB Bank (the “banks”). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England and the Lower Hudson Valley of New York State. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com and www.pcsb.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute 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, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“SEC”), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regarding the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of the Company or Berkshire to terminate the merger agreement; the outcome of any legal proceedings that may be instituted against Berkshire or Company; delays in completing the proposed transaction with Berkshire; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction) or stockholder approvals, or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of Berkshire and the Company to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the impact of certain restrictions during the pendency of the proposed transaction on the parties’ ability to pursue certain business opportunities and strategic transactions; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; changes in interest rates; general economic conditions (including the impact of recently imposed tariffs by the U.S. Administration and foreign governments, inflation, and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ongoing turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company’s consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period’s presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as operating earnings after tax, operating earnings per common share, operating return on average assets, operating return on average tangible assets, operating return on average stockholders’ equity, operating return on average tangible stockholders’ equity, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets (annualized) and return on average tangible stockholders’ equity (annualized). These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company’s GAAP to the non-GAAP measures is attached.

INVESTOR RELATIONS:
Contact:	Carl M. Carlson Brookline Bancorp, Inc. Co-President and Chief Financial and Strategy Officer (617) 425-5331 carl.carlson@brkl.com


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)

	At and for the Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
	(Dollars In Thousands Except per Share Data)
Earnings Data:
Net interest income	$	85,830		$	84,988		$	83,008		$	80,001		$	81,588
Provision for credit losses on loans	5,974			4,141			4,832			5,607			7,423
Provision (recovery) of credit losses on investments	12			(104		)	(172		)	(39		)	(44		)
Non-interest income	5,660			6,587			6,348			6,396			6,284
Non-interest expense	60,022			63,719			57,948			59,184			61,014
Income before provision for income taxes	25,482			23,819			26,748			21,645			19,479
Net income	19,100			17,536			20,142			16,372			14,665

Performance Ratios:
Net interest margin (1)	3.22		%	3.12		%	3.07		%	3.00		%	3.06		%
Interest-rate spread (1)	2.38		%	2.35		%	2.26		%	2.14		%	2.21		%
Return on average assets (annualized)	0.66		%	0.61		%	0.70		%	0.57		%	0.51		%
Return on average tangible assets (annualized) (non-GAAP)	0.68		%	0.62		%	0.72		%	0.59		%	0.53		%
Return on average stockholders’ equity (annualized)	6.19		%	5.69		%	6.63		%	5.49		%	4.88		%
Return on average tangible stockholders’ equity (annualized) (non-GAAP)	7.82		%	7.21		%	8.44		%	7.04		%	6.26		%
Efficiency ratio (2)	65.60		%	69.58		%	64.85		%	68.50		%	69.44		%

Per Common Share Data:
Net income — Basic	$	0.21		$	0.20		$	0.23		$	0.18		$	0.16
Net income — Diluted	0.21			0.20			0.23			0.18			0.16
Cash dividends declared	0.135			0.135			0.135			0.135			0.135
Book value per share (end of period)	13.92			13.71			13.81			13.48			13.43
Tangible book value per share (end of period) (non-GAAP)	11.03			10.81			10.89			10.53			10.47
Stock price (end of period)	10.90			11.80			10.09			8.35			9.96

Balance Sheet:
Total assets	$	11,519,869		$	11,905,326		$	11,676,721		$	11,635,292		$	11,542,731
Total loans and leases	9,642,722			9,779,288			9,755,236			9,721,137			9,655,086
Total deposits	8,911,452			8,901,644			8,732,271			8,737,036			8,718,653
Total stockholders’ equity	1,240,182			1,221,939			1,230,362			1,198,480			1,194,231

Asset Quality:
Nonperforming assets	$	64,021		$	70,452		$	72,821		$	62,683		$	42,489
Nonperforming assets as a percentage of total assets	0.56		%	0.59		%	0.62		%	0.54		%	0.37		%
Allowance for loan and lease losses	$	124,145		$	125,083		$	127,316		$	121,750		$	120,124
Allowance for loan and lease losses as a percentage of total loans and leases	1.29		%	1.28		%	1.31		%	1.25		%	1.24		%
Net loan and lease charge-offs	$	7,597		$	7,252		$	3,808		$	8,387		$	8,781
Net loan and lease charge-offs as a percentage of average loans and leases (annualized)	0.31		%	0.30		%	0.16		%	0.35		%	0.36		%

Capital Ratios:
Stockholders’ equity to total assets	10.77		%	10.26		%	10.54		%	10.30		%	10.35		%
Tangible stockholders’ equity to tangible assets (non-GAAP)	8.73		%	8.27		%	8.50		%	8.23		%	8.25		%

(1) Calculated on a fully tax-equivalent basis.
(2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)

	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
ASSETS	(In Thousands Except Share Data)
Cash and due from banks	$	78,741		$	64,673		$	82,168		$	60,067		$	45,708
Short-term investments		278,805			478,997			325,721			283,017			256,178
Total cash and cash equivalents		357,546			543,670			407,889			343,084			301,886
Investment securities available-for-sale		882,353			895,034			855,391			856,439			865,798
Total investment securities		882,353			895,034			855,391			856,439			865,798
Allowance for investment security losses		(94	)		(82	)		(186	)		(359	)		(398	)
Net investment securities		882,259			894,952			855,205			856,080			865,400
Loans and leases held-for-sale		—			—			—			—			6,717
Loans and leases:
Commercial real estate loans		5,580,982			5,716,114			5,779,290			5,782,111			5,755,239
Commercial loans and leases		2,512,912			2,506,664			2,453,038			2,443,530			2,416,904
Consumer loans		1,548,828			1,556,510			1,522,908			1,495,496			1,482,943
Total loans and leases		9,642,722			9,779,288			9,755,236			9,721,137			9,655,086
Allowance for loan and lease losses		(124,145	)		(125,083	)		(127,316	)		(121,750	)		(120,124	)
Net loans and leases		9,518,577			9,654,205			9,627,920			9,599,387			9,534,962
Restricted equity securities		67,537			83,155			82,675			78,963			74,709
Premises and equipment, net of accumulated depreciation		84,439			86,781			86,925			88,378			89,707
Right-of-use asset operating leases		44,144			43,527			41,934			35,691			33,133
Deferred tax asset		52,176			56,620			50,827			60,032			60,484
Goodwill		241,222			241,222			241,222			241,222			241,222
Identified intangible assets, net of accumulated amortization		16,030			17,461			19,162			20,830			22,499
Other real estate owned and repossessed assets		917			1,103			1,579			1,974			1,817
Other assets		255,022			282,630			261,383			309,651			310,195
Total assets	$	11,519,869		$	11,905,326		$	11,676,721		$	11,635,292		$	11,542,731
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand checking accounts	$	1,664,629		$	1,692,394		$	1,681,858		$	1,638,378		$	1,629,371
NOW accounts		625,492			617,246			637,374			647,370			654,748
Savings accounts		1,793,852			1,721,247			1,736,989			1,735,857			1,727,893
Money market accounts		2,183,855			2,116,360			2,041,185			2,073,557			2,065,569
Certificate of deposit accounts		1,878,665			1,885,444			1,819,353			1,718,414			1,670,147
Brokered deposit accounts		764,959			868,953			815,512			923,460			970,925
Total deposits		8,911,452			8,901,644			8,732,271			8,737,036			8,718,653
Borrowed funds:
Advances from the FHLB		957,848			1,355,926			1,345,003			1,265,079			1,150,153
Subordinated debentures and notes		84,362			84,328			84,293			84,258			84,223
Other borrowed funds		113,617			79,592			68,251			80,125			127,505
Total borrowed funds		1,155,827			1,519,846			1,497,547			1,429,462			1,361,881
Operating lease liabilities		45,330			44,785			43,266			37,102			34,235
Mortgagors’ escrow accounts		15,264			15,875			14,456			17,117			16,245
Reserve for unfunded credits		5,296			5,981			6,859			11,400			15,807
Accrued expenses and other liabilities		146,518			195,256			151,960			204,695			201,679
Total liabilities		10,279,687			10,683,387			10,446,359			10,436,812			10,348,500
Stockholders’ equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, and 96,998,075 shares issued, respectively		970			970			970			970			970
Additional paid-in capital		903,696			902,584			901,562			904,775			903,726
Retained earnings		465,898			458,943			453,555			445,560			441,285
Accumulated other comprehensive income		(42,498	)		(52,882	)		(38,081	)		(61,693	)		(60,841	)
Treasury stock, at cost;
7,037,610, 7,019,384, 7,015,843, 7,373,009, and 7,354,399 shares, respectively		(87,884	)		(87,676	)		(87,644	)		(91,132	)		(90,909	)
Total stockholders’ equity		1,240,182			1,221,939			1,230,362			1,198,480			1,194,231
Total liabilities and stockholders’ equity	$	11,519,869		$	11,905,326		$	11,676,721		$	11,635,292		$	11,542,731

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)

	Three Months Ended
	March 31, 2025		December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
	(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases	$	143,309	$	147,436		$	149,643		$	145,585		$	145,265
Debt securities		6,765		6,421			6,473			6,480			6,878
Restricted equity securities		1,203		1,460			1,458			1,376			1,492
Short-term investments		2,451		2,830			1,986			1,914			1,824
Total interest and dividend income		153,728		158,147			159,560			155,355			155,459
Interest expense:
Deposits		53,478		56,562			59,796			59,721			56,884
Borrowed funds		14,420		16,597			16,756			15,633			16,987
Total interest expense		67,898		73,159			76,552			75,354			73,871
Net interest income		85,830		84,988			83,008			80,001			81,588
Provision for credit losses on loans		5,974		4,141			4,832			5,607			7,423
Provision (recovery) of credit losses on investments		12		(104	)		(172	)		(39	)		(44	)
Net interest income after provision for credit losses		79,844		80,951			78,348			74,433			74,209
Non-interest income:
Deposit fees		2,361		2,297			2,353			3,001			2,897
Loan fees		393		439			464			702			789
Loan level derivative income, net		70		1,115			—			106			437
Gain on sales of loans and leases held-for-sale		24		406			415			130			—
Other		2,812		2,330			3,116			2,457			2,161
Total non-interest income		5,660		6,587			6,348			6,396			6,284
Non-interest expense:
Compensation and employee benefits		35,853		37,202			35,130			34,762			36,629
Occupancy		5,721		5,393			5,343			5,551			5,769
Equipment and data processing		7,012		6,780			6,831			6,732			7,031
Professional services		1,726		1,345			2,143			1,745			1,900
FDIC insurance		2,037		2,017			2,118			2,025			1,884
Advertising and marketing		868		1,303			859			1,504			1,574
Amortization of identified intangible assets		1,430		1,701			1,668			1,669			1,708
Merger and restructuring expense		971		3,378			—			823			—
Other		4,404		4,600			3,856			4,373			4,519
Total non-interest expense		60,022		63,719			57,948			59,184			61,014
Income before provision for income taxes		25,482		23,819			26,748			21,645			19,479
Provision for income taxes		6,382		6,283			6,606			5,273			4,814
Net income	$	19,100	$	17,536		$	20,142		$	16,372		$	14,665
Earnings per common share:
Basic	$	0.21	$	0.20		$	0.23		$	0.18		$	0.16
Diluted	$	0.21	$	0.20		$	0.23		$	0.18		$	0.16
Weighted average common shares outstanding during the period:
Basic		89,103,510		89,098,443			89,033,463			88,904,692			88,894,577
Diluted		89,567,747		89,483,964			89,319,611			89,222,315			89,181,508
Dividends paid per common share	$	0.135	$	0.135		$	0.135		$	0.135		$	0.135


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Asset Quality Analysis (Unaudited)

	At and for the Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
	(Dollars in Thousands)
NONPERFORMING ASSETS:
Loans and leases accounted for on a nonaccrual basis:
Commercial real estate mortgage	$	10,842		$	11,525		$	11,595		$	11,659		$	18,394
Multi-family mortgage		6,576			6,596			1,751			—			—
Total commercial real estate loans		17,418			18,121			13,346			11,659			18,394

Commercial		7,415			14,676			15,734			16,636			3,096
Equipment financing		32,975			31,509			37,223			27,128			13,668
Total commercial loans and leases		40,390			46,185			52,957			43,764			16,764

Residential mortgage		3,962			3,999			3,862			4,495			4,563
Home equity		1,333			1,043			1,076			790			950
Other consumer		1			1			1			1			1
Total consumer loans		5,296			5,043			4,939			5,286			5,514

Total nonaccrual loans and leases		63,104			69,349			71,242			60,709			40,672

Other real estate owned		700			700			780			780			780
Other repossessed assets		217			403			799			1,194			1,037
Total nonperforming assets	$	64,021		$	70,452		$	72,821		$	62,683		$	42,489

Loans and leases past due greater than 90 days and still accruing	$	3,009		$	811		$	16,091		$	4,994		$	363

Nonperforming loans and leases as a percentage of total loans and leases		0.65	%		0.71	%		0.73	%		0.62	%		0.42	%
Nonperforming assets as a percentage of total assets		0.56	%		0.59	%		0.62	%		0.54	%		0.37	%

PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:
Allowance for loan and lease losses at beginning of period	$	125,083		$	127,316		$	121,750		$	120,124		$	117,522
Charge-offs		(9,073	)		(8,414	)		(4,183	)		(8,823	)		(5,390	)
Recoveries		1,476			1,162			375			436			309
Net charge-offs		(7,597	)		(7,252	)		(3,808	)		(8,387	)		(5,081	)
Provision for loan and lease losses excluding unfunded commitments *		6,659			5,019			9,374			10,013			7,683
Allowance for loan and lease losses at end of period	$	124,145		$	125,083		$	127,316		$	121,750		$	120,124

Allowance for loan and lease losses as a percentage of total loans and leases		1.29	%		1.28	%		1.31	%		1.25	%		1.24	%

NET CHARGE-OFFS:
Commercial real estate loans	$	—		$	—		$	—		$	3,819		$	606
Commercial loans and leases **		7,647			7,257			3,797			4,571			8,179
Consumer loans		(50	)		(5	)		11			(3	)		(4	)
Total net charge-offs	$	7,597		$	7,252		$	3,808		$	8,387		$	8,781

Net loan and lease charge-offs as a percentage of average loans and leases (annualized)		0.31	%		0.30	%		0.16	%		0.35	%		0.36	%

*Provision for loan and lease losses does not include (credit) provision of $(0.7 million), $(0.9 million), $(4.5 million), $(4.4 million), and $(0.3 million) for credit losses on unfunded commitments during the three months ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively.
** The balance at March 31, 2024 includes a $3.7 million charge-off on a letter of credit which impacted the provision.


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Average Yields / Costs (Unaudited)

	Three Months Ended
	March 31, 2025						December 31, 2024						March 31, 2024
	Average Balance		Interest (1)		Average Yield/ Cost		Average Balance		Interest (1)		Average Yield/ Cost		Average Balance		Interest (1)		Average Yield/ Cost
	(Dollars in Thousands)
Assets:
Interest-earning assets:
Investments:
Debt securities (2)	$	888,913	$	6,814	3.07	%	$	856,065	$	6,463	3.02	%	$	893,228	$	6,927	3.10	%
Restricted equity securities (2)		69,784		1,204	6.90	%		75,879		1,459	7.69	%		76,335		1,493	7.82	%
Short-term investments		202,953		2,451	4.83	%		236,784		2,830	4.78	%		130,768		1,824	5.58	%
Total investments		1,161,650		10,469	3.60	%		1,168,728		10,752	3.68	%		1,100,331		10,244	3.72	%
Loans and Leases:
Commercial real estate loans (3)		5,651,390		77,243	5.47	%		5,752,591		81,195	5.52	%		5,761,735		81,049	5.56	%
Commercial loans (3)		1,237,078		19,698	6.37	%		1,170,295		19,750	6.61	%		1,026,467		17,507	6.75	%
Equipment financing (3)		1,281,425		25,965	8.11	%		1,310,143		26,295	8.03	%		1,374,426		26,895	7.83	%
Consumer loans (3)		1,548,973		20,861	5.41	%		1,529,654		20,881	5.44	%		1,482,819		19,978	5.40	%
Total loans and leases		9,718,866		143,767	5.92	%		9,762,683		148,121	6.07	%		9,645,447		145,429	6.03	%
Total interest-earning assets		10,880,516		154,236	5.67	%		10,931,411		158,873	5.81	%		10,745,778		155,673	5.79	%
Non-interest-earning assets		662,814						649,161						671,407
Total assets	$	11,543,330					$	11,580,572					$	11,417,185

Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Deposits:
NOW accounts	$	628,346		1,005	0.65	%	$	630,408		1,056	0.67	%	$	671,914		1,261	0.75	%
Savings accounts		1,743,688		10,173	2.37	%		1,741,355		10,896	2.49	%		1,694,220		11,352	2.69	%
Money market accounts		2,187,581		13,587	2.52	%		2,083,033		13,856	2.65	%		2,076,303		15,954	3.09	%
Certificates of deposit		1,886,386		19,593	4.21	%		1,857,483		20,691	4.43	%		1,624,118		16,672	4.13	%
Brokered deposit accounts		767,275		9,120	4.82	%		797,910		10,063	5.02	%		896,784		11,645	5.22	%
Total interest-bearing deposits		7,213,276		53,478	3.01	%		7,110,189		56,562	3.16	%		6,963,339		56,884	3.29	%
Borrowings
Advances from the FHLB		1,007,508		11,847	4.70	%		1,144,157		13,958	4.77	%		1,164,534		14,633	4.97	%
Subordinated debentures and notes		84,345		1,701	8.07	%		84,311		1,944	9.22	%		84,206		1,377	6.54	%
Other borrowed funds		71,462		872	4.95	%		65,947		695	4.20	%		93,060		977	4.22	%
Total borrowings		1,163,315		14,420	4.96	%		1,294,415		16,597	5.02	%		1,341,800		16,987	5.01	%
Total interest-bearing liabilities		8,376,591		67,898	3.29	%		8,404,604		73,159	3.46	%		8,305,139		73,871	3.58	%
Non-interest-bearing liabilities:
Demand checking accounts		1,680,527						1,693,138						1,631,472
Other non-interest-bearing liabilities		251,011						250,303						278,670
Total liabilities		10,308,129						10,348,045						10,215,281
Stockholders’ equity		1,235,201						1,232,527						1,201,904
Total liabilities and equity	$	11,543,330					$	11,580,572					$	11,417,185
Net interest income (tax-equivalent basis) /Interest-rate spread (4)				86,338	2.38	%				85,714	2.35	%				81,802	2.21	%
Less adjustment of tax-exempt income				508						726						214
Net interest income			$	85,830					$	84,988					$	81,588
Net interest margin (5)					3.22	%					3.12	%					3.06	%

(1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
(2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
(3) Loans on nonaccrual status are included in the average balances.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets on an actual/actual basis.


BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Information (Unaudited)

										At and for the Three Months Ended March 31,
											2025			2024
Reconciliation Table – Non-GAAP Financial Information										(Dollars in Thousands Except Share Data)

Reported Pretax Income										$	25,482		$	19,479
Add:
Merger and restructuring expense											971			—
Operating Pretax Income										$	26,453		$	19,479
Effective tax rate											24.3	%		24.7	%
Provision for income taxes											6,416			4,814
Operating earnings after tax										$	20,037		$	14,665

Operating earnings per common share:
Basic										$	0.22		$	0.16
Diluted										$	0.22		$	0.16

Weighted average common shares outstanding during the period:
Basic											89,103,510			88,894,577
Diluted											89,567,747			89,181,508

Return on average assets *											0.66	%		0.51	%
Add:
Merger and restructuring expense (after-tax) *											0.03	%		—	%
Operating return on average assets *											0.69	%		0.51	%

Return on average tangible assets *											0.68	%		0.53	%
Add:
Merger and restructuring expense (after-tax) *											0.03	%		—	%
Operating return on average tangible assets *											0.71	%		0.53	%


Return on average stockholders’ equity *											6.19	%		4.88	%
Add:
Merger and restructuring expense (after-tax) *											0.24	%		—	%
Operating return on average stockholders’ equity *											6.43	%		4.88	%


Return on average tangible stockholders’ equity *											7.82	%		6.26	%
Add:
Merger and restructuring expense (after-tax) *											0.30	%		—	%
Operating return on average tangible stockholders’ equity *											8.12	%		6.26	%

* Ratios at and for the three months ended are annualized.

	At and for the Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
	(Dollars in Thousands)

Net income, as reported	$	19,100		$	17,536		$	20,142		$	16,372		$	14,665

Average total assets	$	11,543,330		$	11,580,572		$	11,451,338		$	11,453,394		$	11,417,185
Less: Average goodwill and average identified intangible assets, net		257,941			259,496			261,188			262,859			264,536
Average tangible assets	$	11,285,389		$	11,321,076		$	11,190,150		$	11,190,535		$	11,152,649

Return on average tangible assets (annualized)		0.68	%		0.62	%		0.72	%		0.59	%		0.53	%

Average total stockholders’ equity	$	1,235,201		$	1,232,527		$	1,216,037		$	1,193,385		$	1,201,904
Less: Average goodwill and average identified intangible assets, net		257,941			259,496			261,188			262,859			264,536
Average tangible stockholders’ equity	$	977,260		$	973,031		$	954,849		$	930,526		$	937,368

Return on average tangible stockholders’ equity (annualized)		7.82	%		7.21	%		8.44	%		7.04	%		6.26	%

Total stockholders’ equity	$	1,240,182		$	1,221,939		$	1,230,362		$	1,198,480		$	1,194,231
Less:
Goodwill		241,222			241,222			241,222			241,222			241,222
Identified intangible assets, net		16,030			17,461			19,162			20,830			22,499
Tangible stockholders’ equity	$	982,930		$	963,256		$	969,978		$	936,428		$	930,510

Total assets	$	11,519,869		$	11,905,326		$	11,676,721		$	11,635,292		$	11,542,731
Less:
Goodwill		241,222			241,222			241,222			241,222			241,222
Identified intangible assets, net		16,030			17,461			19,162			20,830			22,499
Tangible assets	$	11,262,617		$	11,646,643		$	11,416,337		$	11,373,240		$	11,279,010

Tangible stockholders’ equity to tangible assets		8.73	%		8.27	%		8.50	%		8.23	%		8.25	%

Tangible stockholders’ equity	$	982,930		$	963,256		$	969,978		$	936,428		$	930,510

Number of common shares issued		96,998,075			96,998,075			96,998,075			96,998,075			96,998,075
Less:
Treasury shares		7,037,610			7,019,384			7,015,843			7,373,009			7,354,399
Unvested restricted shares		855,860			880,248			883,789			713,443			749,099
Number of common shares outstanding		89,104,605			89,098,443			89,098,443			88,911,623			88,894,577

Tangible book value per common share	$	11.03		$	10.81		$	10.89		$	10.53		$	10.47

PDF available: http://ml.globenewswire.com/Resource/Download/e23d70f5-f96e-4a22-ac83-0bee735aa434

The MIL Network –

April 24, 2025

MIL-OSI: Univest Financial Corporation Reports First Quarter Results

Source: GlobeNewswire (MIL-OSI)

SOUDERTON, Pa., April 23, 2025 (GLOBE NEWSWIRE) — Univest Financial Corporation (“Univest” or the “Corporation”) (NASDAQ: UVSP), parent company of Univest Bank and Trust Co. (the “Bank”) and its insurance, investments and equipment financing subsidiaries, announced net income for the quarter ended March 31, 2025 of $22.4 million, or $0.77 diluted earnings per share, compared to net income of $20.3 million, or $0.69 diluted earnings per share, for the quarter ended March 31, 2024.

Dividend
On April 23, 2025, Univest declared a quarterly cash dividend of $0.22 per share to be paid on May 21, 2025 to shareholders of record as of May 7, 2025, which represents an increase of $0.01 per share, or 4.8%. Univest had last increased its dividend by $0.01 per share in May 2022.

One-Time Items
The financial results for the quarter included tax-free bank owned life insurance (“BOLI”) death benefits claims of $1.0 million, which represented $0.04 diluted earnings per share.

Loans
Gross loans and leases increased $6.5 million, or 0.1% (0.4% annualized), from December 31, 2024. Gross loans and leases increased $254.0 million, or 3.9%, from March 31, 2024, primarily due to increases in commercial, commercial real estate, residential mortgage loans and home equity loans, partially offset by decreases in construction loans and lease financings.

Deposits, Borrowings and Liquidity
Total deposits decreased $100.8 million, or 1.5% (6.0% annualized), from December 31, 2024, primarily due to seasonal declines in public funds deposits and decreases in commercial and consumer deposits, partially offset by an increase in brokered deposits. Total deposits increased $253.1 million, or 4.0%, from March 31, 2024, due to increases in consumer, commercial, and public funds deposits, partially offset by a decrease in brokered deposits. Noninterest-bearing deposits totaled $1.4 billion and represented 21.5% of total deposits at March 31, 2025, compared to $1.4 billion representing 20.9% of total deposits at December 31, 2024. Unprotected deposits, which excludes insured, internal, and collateralized deposit accounts, totaled $1.5 billion at March 31, 2025 and December 31, 2024. This represented 21.9% of total deposits at March 31, 2025, compared to 22.0% at December 31, 2024.

Total borrowings decreased $57.0 million, or 14.8%, from December 31, 2024, primarily due to maturities of long-term FHLB advances totaling $50.0 million. These borrowings were replaced with brokered deposits during the quarter.

As of March 31, 2025, the Corporation and its subsidiaries reported cash and cash equivalents totaling $169.1 million and had committed borrowing capacity of $3.7 billion, of which $2.3 billion was available. The Corporation and its subsidiaries also maintained uncommitted funding sources from correspondent banks of $468.0 million at March 31, 2025. Future availability under these uncommitted funding sources is subject to the prerogatives of the granting banks and may be withdrawn at will.

Net Interest Income and Margin
Net interest income of $56.8 million for the first quarter of 2025 increased $5.3 million, or 10.3%, from the first quarter of 2024 and $1.3 million, or 2.4%, from the fourth quarter of 2024. The increase in net interest income for the first quarter of 2025 compared to the first quarter of 2024 was driven by higher average balances of loans and increased yields on interest earning assets, as well as a reduction in our overall cost of funds. The increase in net interest income for the first quarter of 2025 compared to the fourth quarter of 2024 was primarily driven by lower average balances of interest-bearing liabilities and related costs outpacing decreases in income from interest-earning deposits with other banks.

Net interest margin, on a tax-equivalent basis, was 3.09% for the first quarter of 2025, compared to 2.88% for the first and fourth quarters of 2024. Excess liquidity reduced net interest margin by approximately three basis points for the quarter ended March 31, 2025 compared to approximately 14 basis points for the quarter ended December 31, 2024 and approximately three basis points for the quarter ended March 31, 2024. Excluding the impact of excess liquidity, the net interest margin, on a tax-equivalent basis, would have been 3.12% for the quarter ended March 31, 2025 compared to 3.02% for the quarter ended December 31, 2024 and 2.91% for the quarter ended March 31, 2024.

Noninterest Income
Noninterest income for the quarter ended March 31, 2025 was $22.4 million, a decrease of $3.2 million, or 12.4%, from the comparable period in the prior year.

Other service fee income decreased $3.7 million, or 57.8%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to a $3.4 million net gain from the sale of mortgage servicing rights associated with $591.1 million of serviced loans in the first quarter of 2024. Additionally, net servicing fees on sold mortgage loans decreased by $177 thousand, primarily attributable to the previously mentioned sale of mortgage servicing rights.

Other income decreased $780 thousand, or 76.1%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to decreases in other real estate owned income, fees on risk participation agreements for interest rate swaps and gains on sale of Small Business Administration loans.

Net gain on mortgage banking activities decreased $292 thousand, or 31.1%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to decreased salable volume.

Insurance commission and fee income decreased $312 thousand, or 4.3%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to a decrease in contingent income of $700 thousand, which was $1.6 million and $2.3 million, for the three months ended March 31, 2025 and 2024, respectively. Contingent income is largely recognized in the first quarter of the year. The decrease was partially offset by an increase of $404 thousand in revenue for commercial lines.

BOLI income increased $1.1 million, or 132.7%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to the previously discussed death benefits claims.

Investment advisory commission and fee income increased $419 thousand, or 8.1%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to new customer relationships and appreciation of assets under management and supervision.

Service charges on deposit accounts increased $323 thousand, or 17.3%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to an increase in treasury management income.

Noninterest Expense
Noninterest expense for the quarter ended March 31, 2025 was $49.3 million, a decrease of $746 thousand, or 1.5%, from the comparable period in the prior year.

Salaries, benefits and commissions decreased $512 thousand, or 1.6%, for the quarter ended March 31, 2025 compared to the comparable period in the prior year, primarily due to an increase in compensation capitalized and a decrease in medical claims expense, partially offset by an increase in incentive compensation due to increased profitability.

Tax Provision
The effective income tax rate was 18.7% and 20.5% for the quarters ended March 31, 2025 and March 31, 2024, respectively. The discrete tax effect of vested equity compensation awards favorably impacted the first quarter of 2025 by 71 basis points and unfavorably impacted the first quarter of 2024 by 74 basis points. Additionally, the effective tax rate for the three months ended March 31, 2025 was favorably impacted by 76 basis points from the proceeds of BOLI death benefits. Excluding the discrete impact of vested equity compensation awards and BOLI death benefits, the effective tax rate was 20.2% for the three months ended March 31, 2025 compared to 19.8% for the three months ended March 31, 2024.

Asset Quality and Provision for Credit Losses
Nonperforming assets totaled $34.0 million at March 31, 2025, $33.2 million at December 31, 2024, and $40.0 million at March 31, 2024.

Net loan and lease charge-offs were $1.7 million for the three months ended March 31, 2025 compared to $767 thousand and $1.4 million for the three months ended December 31, 2024 and March 31, 2024, respectively.

The provision for credit losses was $2.3 million for the three months ended March 31, 2025 compared to $2.4 million and $1.4 million for the three months ended December 31, 2024 and March 31, 2024, respectively. The allowance for credit losses on loans and leases as a percentage of loans and leases held for investment was 1.28% at March 31, 2025 and December 31, 2024, and 1.30% at March 31, 2024.

Share Repurchases
During the quarter ended March 31, 2025, the Corporation repurchased 221,760 shares of common stock at an average price of $29.22 per share. Including brokerage fees and excise tax, the average price per share was $29.54. As of March 31, 2025, 1,178,394 shares are available for repurchase under the Share Repurchase Plan.

Conference Call
Univest will host a conference call to discuss first quarter 2025 results on Thursday, April 24, 2025 at 9:00 a.m. EST. Participants may preregister at https://www.netroadshow.com/events/login?show=175e015e&confId=80607. The general public can access the call by dialing 1-833-470-1428; using Access Code 021974. A replay of the conference call will be available through May 1, 2025 by dialing 1-866-813-9403; using Access Code 718470.

About Univest Financial Corporation
Univest Financial Corporation (UVSP), including its wholly-owned subsidiary Univest Bank and Trust Co., Member FDIC, has approximately $8.0 billion in assets and $5.2 billion in assets under management and supervision through its Wealth Management lines of business at March 31, 2025. Headquartered in Souderton, Pa. and founded in 1876, the Corporation and its subsidiaries provide a full range of financial solutions for individuals, businesses, municipalities and nonprofit organizations primarily in the Mid-Atlantic Region. Univest delivers these services through a network of more than 50 offices and online at www.univest.net.

This press release and the reports Univest files with the Securities and Exchange Commission often contain “forward-looking statements” relating to trends or factors affecting the financial services industry and, specifically, the financial condition and results of operations, business, prospects and strategies of Univest. These forward-looking statements involve certain risks and uncertainties in that there are a number of important factors that could cause Univest’s future financial condition, results of operations, business, prospects or strategies to differ materially from those expressed or implied by the forward-looking statements. These factors include, but are not limited to: (1) competition and demand for financial services in our market area; (2) inflation and/or changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and/or lead to higher operating costs and higher costs we pay to retain and attract deposits; (3) changes in asset quality, prepayment speeds, loan sale volumes, charge-offs and/or credit loss provisions; (4) fluctuations in real estate values and both residential and commercial real estate market conditions; (5) changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; (6) our ability to access cost-effective funding; (7) changes in economic conditions nationally and in our market, including potential recessionary conditions and the levels of unemployment in our market area; (8) changes in the economic assumptions or methodology used to calculate our allowance for credit losses; (9) legislative, regulatory, accounting or tax changes; (10) monetary and fiscal policies of the U.S. government, including the policies of the Board of Governors of the Federal Reserve System; (11) the imposition of tariffs or other domestic or international governmental policies; (12) the failure to maintain current technologies and to successfully implement future information technology enhancements; (13) technological issues that may adversely affect our operations or those of our customers; (14) a failure or breach in our operational or security systems or infrastructure, including cyberattacks; (15) changes in the securities markets; (16) the current or anticipated impact of military conflict, terrorism or other geopolitical events; (17) our ability to enter into new markets successfully and capitalize on growth opportunities and/or (18) risk factors mentioned in the reports and registration statements Univest files with the Securities and Exchange Commission.

(UVSP – ER)


Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2025
(Dollars in thousands)

Balance Sheet (Period End)	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
ASSETS
Cash and due from banks	$	73,319		$	75,998		$	78,346		$	66,808		$	49,318
Interest-earning deposits with other banks		95,815			252,846			426,354			124,103			152,288
Cash and cash equivalents		169,134			328,844			504,700			190,911			201,606
Investment securities held-to-maturity		130,889			134,111			137,681			140,112			143,474
Investment securities available for sale, net of allowance for credit losses		364,503			357,361			354,100			342,776			350,819
Investments in equity securities		1,667			2,506			2,406			2,995			3,355
Federal Home Loan Bank, Federal Reserve Bank and other stock, at cost		35,732			38,980			40,235			37,438			37,394
Loans held for sale		13,150			16,653			17,131			28,176			13,188
Loans and leases held for investment		6,833,037			6,826,583			6,730,734			6,684,837			6,579,086
Less: Allowance for credit losses, loans and leases		(87,790	)		(87,091	)		(86,041	)		(85,745	)		(85,632	)
Net loans and leases held for investment		6,745,247			6,739,492			6,644,693			6,599,092			6,493,454
Premises and equipment, net		47,175			46,671			47,411			48,174			48,739
Operating lease right-of-use assets		27,182			28,531			29,260			29,985			30,702
Goodwill		175,510			175,510			175,510			175,510			175,510
Other intangibles, net of accumulated amortization		8,061			8,309			7,158			7,701			7,473
Bank owned life insurance		139,482			139,351			138,744			137,823			137,896
Accrued interest and other assets		117,435			112,098			106,708			114,753			102,958
Total assets	$	7,975,167		$	8,128,417		$	8,205,737		$	7,855,446		$	7,746,568

LIABILITIES
Noninterest-bearing deposits	$	1,433,995		$	1,414,635		$	1,323,953		$	1,397,308		$	1,401,806
Interest-bearing deposits:		5,224,503			5,344,624			5,530,195			5,098,014			5,003,552
Total deposits		6,658,498			6,759,259			6,854,148			6,495,322			6,405,358
Short-term borrowings		4,031			11,181			8,256			11,781			4,816
Long-term debt		175,000			225,000			225,000			250,000			250,000
Subordinated notes		149,386			149,261			149,136			149,011			148,886
Operating lease liabilities		30,062			31,485			32,246			33,015			33,744
Accrued expenses and other liabilities		54,718			64,930			59,880			62,180			60,095
Total liabilities		7,071,695			7,241,116			7,328,666			7,001,309			6,902,899

SHAREHOLDERS’ EQUITY
Common stock, $5 par value: 48,000,000 shares authorized and 31,556,799 shares issued		157,784			157,784			157,784			157,784			157,784
Additional paid-in capital		300,634			302,829			301,262			300,166			298,914
Retained earnings		541,776			525,780			512,938			500,482			488,790
Accumulated other comprehensive loss, net of tax benefit		(37,922	)		(43,992	)		(41,623	)		(54,124	)		(54,740	)
Treasury stock, at cost		(58,800	)		(55,100	)		(53,290	)		(50,171	)		(47,079	)
Total shareholders’ equity		903,472			887,301			877,071			854,137			843,669
Total liabilities and shareholders’ equity	$	7,975,167		$	8,128,417		$	8,205,737		$	7,855,446		$	7,746,568


	For the three months ended,
Balance Sheet (Average)	03/31/25			12/31/24			06/30/24			03/31/24			12/31/23
Assets	$	7,981,043		$	8,163,347		$	8,005,265		$	7,721,540		$	7,696,575
Investment securities, net of allowance for credit losses		500,078			500,748			493,334			493,140			500,983
Loans and leases, gross		6,856,503			6,758,649			6,730,791			6,640,536			6,577,365
Deposits		6,617,653			6,804,483			6,641,324			6,353,752			6,303,854
Shareholders’ equity		896,811			880,237			864,406			844,572			842,546

Univest Financial Corporation
Consolidated Summary of Loans by Type and Asset Quality Data (Unaudited)
March 31, 2025
(Dollars in thousands)

Summary of Major Loan and Lease Categories (Period End)	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
Commercial, financial and agricultural	$	1,034,361		$	1,037,835		$	1,044,043		$	1,055,332		$	1,014,568
Real estate-commercial		3,546,402			3,530,451			3,442,083			3,373,889			3,283,729
Real estate-construction		281,785			274,483			285,616			313,229			379,995
Real estate-residential secured for business purpose		536,082			536,095			530,674			532,628			524,196
Real estate-residential secured for personal purpose		992,767			994,972			969,562			952,665			922,412
Real estate-home equity secured for personal purpose		189,119			186,836			182,901			179,150			177,446
Loans to individuals		16,930			21,250			26,794			26,430			27,200
Lease financings		235,591			244,661			249,061			251,514			249,540
Total loans and leases held for investment, net of deferred income		6,833,037			6,826,583			6,730,734			6,684,837			6,579,086
Less: Allowance for credit losses, loans and leases		(87,790	)		(87,091	)		(86,041	)		(85,745	)		(85,632	)
Net loans and leases held for investment	$	6,745,247		$	6,739,492		$	6,644,693		$	6,599,092		$	6,493,454


Asset Quality Data (Period End)	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
Nonaccrual loans and leases, including nonaccrual loans held for sale	$	11,126		$	12,667		$	15,319		$	16,200		$	20,363
Accruing loans and leases 90 days or more past due		322			321			310			205			268
Total nonperforming loans and leases		11,448			12,988			15,629			16,405			20,631
Other real estate owned		22,433			20,141			20,915			20,007			19,220
Repossessed assets		79			76			79			149			167
Total nonperforming assets	$	33,960		$	33,205		$	36,623		$	36,561		$	40,018
Nonaccrual loans and leases / Loans and leases held for investment		0.16	%		0.19	%		0.23	%		0.24	%		0.31	%
Nonperforming loans and leases / Loans and leases held for investment		0.17	%		0.19	%		0.23	%		0.25	%		0.31	%
Nonperforming assets / Total assets		0.43	%		0.41	%		0.45	%		0.47	%		0.52	%

Allowance for credit losses, loans and leases	$	87,790		$	87,091		$	86,041		$	85,745		$	85,632
Allowance for credit losses, loans and leases / Loans and leases held for investment		1.28	%		1.28	%		1.28	%		1.28	%		1.30	%
Allowance for credit losses, loans and leases / Nonaccrual loans and leases		789.05	%		687.54	%		561.66	%		529.29	%		420.53	%
Allowance for credit losses, loans and leases / Nonperforming loans and leases		766.86	%		670.55	%		550.52	%		522.68	%		415.06	%


	For the three months ended,
	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
Net loan and lease charge-offs	$	1,686		$	767		$	820		$	809		$	1,406
Net loan and lease charge-offs (annualized)/Average loans and leases		0.10	%		0.05	%		0.05	%		0.05	%		0.09	%

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2025
(Dollars in thousands, except per share data)
	For the three months ended,
For the period:	03/31/25		12/31/24		09/30/24		06/30/24		03/31/24
Interest income	$	103,416	$	107,476	$	106,438	$	99,832	$	98,609
Interest expense		46,635		52,004		53,234		48,805		47,142
Net interest income		56,781		55,472		53,204		51,027		51,467
Provision for credit losses		2,311		2,380		1,414		707		1,432
Net interest income after provision for credit losses		54,470		53,092		51,790		50,320		50,035
Noninterest income:
Trust fee income		2,161		2,265		2,110		2,008		2,108
Service charges on deposit accounts		2,194		2,192		2,037		1,982		1,871
Investment advisory commission and fee income		5,613		5,457		5,319		5,238		5,194
Insurance commission and fee income		6,889		4,743		5,238		5,167		7,201
Other service fee income		2,707		3,473		1,815		3,044		6,415
Bank owned life insurance income		1,959		1,012		921		1,086		842
Net gain on sales of investment securities		–		–		18		–		–
Net gain on mortgage banking activities		647		1,320		1,296		1,710		939
Other income		245		868		1,396		745		1,025
Total noninterest income		22,415		21,330		20,150		20,980		25,595
Noninterest expense:
Salaries, benefits and commissions		30,826		31,518		30,702		30,187		31,338
Net occupancy		2,853		2,751		2,723		2,679		2,872
Equipment		1,122		1,147		1,107		1,088		1,111
Data processing		4,364		4,146		4,154		4,161		4,495
Professional fees		1,797		1,669		1,579		1,466		1,688
Marketing and advertising		353		552		490		715		416
Deposit insurance premiums		1,151		1,102		1,097		1,098		1,135
Intangible expenses		130		155		164		188		187
Other expense		6,732		7,618		6,536		7,126		6,832
Total noninterest expense		49,328		50,658		48,552		48,708		50,074
Income before taxes		27,557		23,764		23,388		22,592		25,556
Income tax expense		5,162		4,823		4,810		4,485		5,251
Net income	$	22,395	$	18,941	$	18,578	$	18,107	$	20,305
Net income per share:
Basic	$	0.77	$	0.65	$	0.64	$	0.62	$	0.69
Diluted	$	0.77	$	0.65	$	0.63	$	0.62	$	0.69
Dividends declared per share	$	0.21	$	0.21	$	0.21	$	0.21	$	0.21
Weighted average shares outstanding		29,000,567		29,070,039		29,132,948		29,246,977		29,413,999
Period end shares outstanding		28,962,648		29,045,877		29,081,108		29,190,640		29,337,919

Univest Financial Corporation
Consolidated Selected Financial Data (Unaudited)
March 31, 2025



	For the three months ended,
Profitability Ratios (annualized)	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24

Return on average assets		1.14	%		0.92	%		0.92	%		0.94	%		1.06	%
Return on average shareholders’ equity		10.13	%		8.56	%		8.55	%		8.62	%		9.69	%
Return on average tangible common equity (1)(3)		12.69	%		10.79	%		10.84	%		11.01	%		12.38	%
Net interest margin (FTE)		3.09	%		2.88	%		2.82	%		2.84	%		2.88	%
Efficiency ratio (2)		61.6	%		65.5	%		65.7	%		67.1	%		64.6	%

Capitalization Ratios

Dividends declared to net income		27.2	%		32.2	%		33.0	%		33.9	%		30.5	%
Shareholders’ equity to assets (Period End)		11.33	%		10.92	%		10.69	%		10.87	%		10.89	%
Tangible common equity to tangible assets (1)		9.31	%		8.92	%		8.71	%		8.81	%		8.80	%
Common equity book value per share	$	31.19		$	30.55		$	30.16		$	29.26		$	28.76
Tangible common equity book value per share (1)	$	25.06		$	24.43		$	24.05		$	23.17		$	22.70

Regulatory Capital Ratios (Period End)
Tier 1 leverage ratio		9.80	%		9.51	%		9.53	%		9.74	%		9.65	%
Common equity tier 1 risk-based capital ratio		10.97	%		10.85	%		10.88	%		10.72	%		10.71	%
Tier 1 risk-based capital ratio		10.97	%		10.85	%		10.88	%		10.72	%		10.71	%
Total risk-based capital ratio		14.35	%		14.19	%		14.27	%		14.09	%		14.11	%

(1) Non-GAAP metric. A reconciliation of this and other non-GAAP to GAAP performance measures is included below.
(2) Noninterest expense to net interest income before loan loss provision plus noninterest income adjusted for tax equivalent income.
(3) Net income before amortization of intangibles to average tangible common equity.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
				For the Three Months Ended,
Tax Equivalent Basis	March 31, 2025							December 31, 2024
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	119,997		$	1,360	4.60	%	$	402,753		$	4,852	4.79	%
Obligations of state and political subdivisions*		879			4	1.85			1,290			7	2.16
Other debt and equity securities		499,199			4,019	3.27			499,458			3,815	3.04
Federal Home Loan Bank, Federal Reserve Bank and other stock		37,561			687	7.42			39,407			746	7.53
Total interest-earning deposits, investments and other interest-earning assets		657,636			6,070	3.74			942,908			9,420	3.97

Commercial, financial, and agricultural loans		990,860			17,020	6.97			972,840			17,492	7.15
Real estate—commercial and construction loans		3,704,232			52,676	5.77			3,631,142			53,163	5.82
Real estate—residential loans		1,729,146			21,542	5.05			1,708,795			21,249	4.95
Loans to individuals		19,438			393	8.20			25,803			522	8.05
Tax-exempt loans and leases		230,133			2,861	5.04			233,036			2,652	4.53
Lease financings		182,694			3,240	7.19			187,033			3,296	7.01
Gross loans and leases		6,856,503			97,732	5.78			6,758,649			98,374	5.79
Total interest-earning assets		7,514,139			103,802	5.60			7,701,557			107,794	5.57
Cash and due from banks		56,690							56,989
Allowance for credit losses, loans and leases		(87,822	)						(86,812	)
Premises and equipment, net		46,852							47,155
Operating lease right-of-use assets		27,761							28,891
Other assets		423,423							415,567
Total assets	$	7,981,043						$	8,163,347

Liabilities:
Interest-bearing checking deposits	$	1,222,012		$	7,075	2.35	%	$	1,275,348		$	8,504	2.65	%
Money market savings		1,840,194			18,035	3.97			1,954,246			20,653	4.20
Regular savings		702,543			763	0.44			705,222			817	0.46
Time deposits		1,476,495			16,106	4.42			1,499,998			17,247	4.57
Total time and interest-bearing deposits		5,241,244			41,979	3.25			5,434,814			47,221	3.46

Short-term borrowings		6,909			14	0.82			7,102			1	0.06
Long-term debt		217,500			2,361	4.40			225,000			2,501	4.42
Subordinated notes		149,319			2,281	6.20			149,194			2,281	6.08
Total borrowings		373,728			4,656	5.05			381,296			4,783	4.99
Total interest-bearing liabilities		5,614,972			46,635	3.37			5,816,110			52,004	3.56
Noninterest-bearing deposits		1,376,409							1,369,669
Operating lease liabilities		30,675							31,864
Accrued expenses and other liabilities		62,176							65,467
Total liabilities		7,084,232							7,283,110
Total interest-bearing liabilities and noninterest-bearing deposits (“Cost of Funds”)		6,991,381				2.71			7,185,779				2.88

Shareholders’ Equity:
Common stock		157,784							157,784
Additional paid-in capital		302,653							301,895
Retained earnings and other equity		436,374							420,558
Total shareholders’ equity		896,811							880,237
Total liabilities and shareholders’ equity	$	7,981,043						$	8,163,347
Net interest income				$	57,167						$	55,790

Net interest spread						2.23							2.01
Effect of net interest-free funding sources						0.86							0.87
Net interest margin						3.09	%						2.88	%
Ratio of average interest-earning assets to average interest-bearing liabilities		133.82	%						132.42	%

* Obligations of states and political subdivisions are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $554 thousand and $676 thousand for the three months ended March 31,
2025 and December 31, 2024, respectively.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included
in the average loan balances. Tax-equivalent amounts for the three months ended March 31, 2025 and December 31, 2024 have
been calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Average Balances and Interest Rates (Unaudited)
	For the Three Months Ended March 31,
Tax Equivalent Basis	2025							2024
	Average			Income/		Average		Average			Income/		Average
(Dollars in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets:
Interest-earning deposits with other banks	$	119,997		$	1,360	4.60	%	$	120,845		$	1,609	5.36	%
Obligations of state and political subdivisions*		879			4	1.85			1,951			12	2.47
Other debt and equity securities		499,199			4,019	3.27			499,032			3,647	2.94
Federal Home Loan Bank, Federal Reserve Bank and other stock		37,561			687	7.42			39,115			724	7.44
Total interest-earning deposits, investments and other interest-earning assets		657,636			6,070	3.74			660,943			5,992	3.65

Commercial, financial, and agricultural loans		990,860			17,020	6.97			934,649			16,523	7.11
Real estate—commercial and construction loans		3,704,232			52,676	5.77			3,575,142			50,641	5.70
Real estate—residential loans		1,729,146			21,542	5.05			1,618,188			19,555	4.86
Loans to individuals		19,438			393	8.20			27,315			548	8.07
Tax-exempt loans and leases		230,133			2,861	5.04			232,380			2,464	4.26
Lease financings		182,694			3,240	7.19			189,691			3,169	6.72
Gross loans and leases		6,856,503			97,732	5.78			6,577,365			92,900	5.68
Total interest-earning assets		7,514,139			103,802	5.60			7,238,308			98,892	5.49
Cash and due from banks		56,690							54,870
Allowance for credit losses, loans and leases		(87,822	)						(86,495	)
Premises and equipment, net		46,852							50,592
Operating lease right-of-use assets		27,761							31,121
Other assets		423,423							408,179
Total assets	$	7,981,043						$	7,696,575

Liabilities:
Interest-bearing checking deposits	$	1,222,012		$	7,075	2.35	%	$	1,180,696		$	8,218	2.80	%
Money market savings		1,840,194			18,035	3.97			1,705,291			19,220	4.53
Regular savings		702,543			763	0.44			769,926			905	0.47
Time deposits		1,476,495			16,106	4.42			1,238,878			13,630	4.42
Total time and interest-bearing deposits		5,241,244			41,979	3.25			4,894,791			41,973	3.45

Short-term borrowings		6,909			14	0.82			10,127			5	0.20
Long-term debt		217,500			2,361	4.40			292,486			2,883	3.96
Subordinated notes		149,319			2,281	6.20			148,818			2,281	6.16
Total borrowings		373,728			4,656	5.05			451,431			5,169	4.61
Total interest-bearing liabilities		5,614,972			46,635	3.37			5,346,222			47,142	3.55
Noninterest-bearing deposits		1,376,409							1,409,063
Operating lease liabilities		30,675							34,166
Accrued expenses and other liabilities		62,176							64,578
Total liabilities		7,084,232							6,854,029
Total interest-bearing liabilities and noninterest-bearing deposits (“Cost of Funds”)		6,991,381				2.71			6,755,285				2.81

Shareholders’ Equity:
Common stock		157,784							157,784
Additional paid-in capital		302,653							300,679
Retained earnings and other equity		436,374							384,083
Total shareholders’ equity		896,811							842,546
Total liabilities and shareholders’ equity	$	7,981,043						$	7,696,575
Net interest income				$	57,167						$	51,750

Net interest spread						2.23							1.94
Effect of net interest-free funding sources						0.86							0.94
Net interest margin						3.09	%						2.88	%
Ratio of average interest-earning assets to average interest-bearing liabilities		133.82	%						135.39	%

* Obligations of states and political subdivisions are tax-exempt earning assets.
Notes: For rate calculation purposes, average loan and lease categories include deferred fees and costs and purchase accounting adjustments.
Net interest income includes net deferred costs amortization of $554 thousand and $453 thousand for the three months ended
March 31, 2025 and 2024, respectively.
Nonaccrual loans and leases have been included in the average loan and lease balances. Loans held for sale have been included
in the average loan balances. Tax-equivalent amounts for the three months ended March 31, 2025 and 2024 have been
calculated using the Corporation’s federal applicable rate of 21.0%.

Univest Financial Corporation
Loan Portfolio Overview (Unaudited)
March 31, 2025

(Dollars in thousands)
Industry Description	Total Outstanding Balance		% of Commercial Loan Portfolio
CRE – Retail	$	469,397	8.7	%
Animal Production		394,279	7.3
CRE – Multi-family		360,743	6.7
CRE – Office		299,751	5.6
CRE – 1-4 Family Residential Investment		278,386	5.2
CRE – Industrial / Warehouse		253,136	4.7
Hotels & Motels (Accommodation)		207,710	3.8
Specialty Trade Contractors		189,427	3.5
Nursing and Residential Care Facilities		177,053	3.3
Motor Vehicle and Parts Dealers		146,911	2.7
Merchant Wholesalers, Durable Goods		146,037	2.7
Homebuilding (tract developers, remodelers)		140,612	2.6
Repair and Maintenance		134,183	2.5
Crop Production		110,882	2.1
CRE – Mixed-Use – Residential		109,872	2.0
Wood Product Manufacturing		101,606	1.9
Professional, Scientific, and Technical Services		95,730	1.8
Food Services and Drinking Places		86,916	1.6
Administrative and Support Services		83,145	1.5
Merchant Wholesalers, Nondurable Goods		83,088	1.5
Fabricated Metal Product Manufacturing		78,181	1.4
Real Estate Lenders, Secondary Market Financing		75,461	1.4
Religious Organizations, Advocacy Groups		65,857	1.2
CRE – Mixed-Use – Commercial		64,683	1.2
Miniwarehouse / Self-Storage		64,553	1.2
Personal and Laundry Services		64,508	1.2
Education		62,362	1.2
Amusement, Gambling, and Recreation Industries		61,437	1.1
Food Manufacturing		56,400	1.0
Industries with >$50 million in outstandings	$	4,462,306	82.7	%
Industries with <$50 million in outstandings	$	936,324	17.3	%
Total Commercial Loans	$	5,398,630	100.0	%


Consumer Loans and Lease Financings	Total Outstanding Balance
Real Estate-Residential Secured for Personal Purpose		992,767
Real Estate-Home Equity Secured for Personal Purpose		189,119
Loans to Individuals		16,930
Lease Financings		235,591
Total – Consumer Loans and Lease Financings	$	1,434,407
Total	$	6,833,037

Univest Financial Corporation
Non-GAAP Reconciliation
March 31, 2025



Non-GAAP to GAAP Reconciliation
Management uses non-GAAP measures in its analysis of the Corporation’s performance. These measures should not be considered a substitute for GAAP basis measures nor should they be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of the non-GAAP financial measures, which exclude the impact of the specified items, provides useful supplemental information that is essential to a proper understanding of the financial results of the Corporation. See the table below for additional information on non-GAAP measures used throughout this earnings release.

	As of or for the three months ended,
(Dollars in thousands)	03/31/25			12/31/24			09/30/24			06/30/24			03/31/24
Net income	$	22,395		$	18,941		$	18,578		$	18,107		$	20,305
Amortization of intangibles, net of tax		103			122			130			149			148
Net income before amortization of intangibles	$	22,498		$	19,063		$	18,708		$	18,256		$	20,453

Shareholders’ equity	$	903,472		$	887,301		$	877,071		$	854,137		$	843,669
Goodwill		(175,510	)		(175,510	)		(175,510	)		(175,510	)		(175,510	)
Other intangibles (a)		(2,104	)		(2,263	)		(2,147	)		(2,157	)		(2,273	)
Tangible common equity	$	725,858		$	709,528		$	699,414		$	676,470		$	665,886

Total assets	$	7,975,167		$	8,128,417		$	8,205,737		$	7,855,446		$	7,746,568
Goodwill		(175,510	)		(175,510	)		(175,510	)		(175,510	)		(175,510	)
Other intangibles (a)		(2,104	)		(2,263	)		(2,147	)		(2,157	)		(2,273	)
Tangible assets	$	7,797,553		$	7,950,644		$	8,028,080		$	7,677,779		$	7,568,785

Average shareholders’ equity	$	896,811		$	880,237		$	864,406		$	844,572		$	842,546
Average goodwill		(175,510	)		(175,510	)		(175,510	)		(175,510	)		(175,510	)
Average other intangibles (a)		(2,162	)		(2,146	)		(2,086	)		(2,222	)		(2,318	)
Average tangible common equity	$	719,139		$	702,581		$	686,810		$	666,840		$	664,718

(a) Amount does not include mortgage servicing rights

The MIL Network –

April 24, 2025

MIL-OSI: Eagle Bancorp, Inc. Announces First Quarter 2025 Results and Cash Dividend

Source: GlobeNewswire (MIL-OSI)

BETHESDA, Md., April 23, 2025 (GLOBE NEWSWIRE) — Eagle Bancorp, Inc. (“Eagle”, the “Company”) (NASDAQ: EGBN), the Bethesda-based holding company for EagleBank, one of the largest community banks in the Washington D.C. area, reported its unaudited results for the first quarter ended March 31, 2025.

Eagle reported net income of $1.7 million or $0.06 per diluted share for the first quarter 2025, compared to net income of $15.3 million or $0.50 per diluted share during the fourth quarter. Pre-provision net revenue (“PPNR”)¹ in the first quarter was $28.4 million compared to $30.3 million for the prior quarter.

The $13.6 million decrease in net income from the prior quarter is primarily due to a $14.1 million increase in provision expense, a $5.1 million decline in net interest income, and a $0.9 million increase in noninterest expenses. These factors were partially offset by a $4.1 million increase in noninterest income.

Additionally, the Company is announcing today a cash dividend in the amount of $0.165 per share. The cash dividend will be payable on May 16, 2025 to shareholders of record on May 5, 2025.

“In the first quarter, we began to see tangible results from our strategic focus,” said Susan G. Riel, Chair, President, and Chief Executive Officer of the Company. “We achieved solid period-end growth in our C&I portfolio, which increased by $109 million, or 4.3%, and total deposits grew by $146.2 million, or 1.6%. Both increases reflect the continued emphasis we’ve placed on these core areas of our business. We are encouraged by this early progress, and we remain focused on executing our strategy and positioning the Company to return to sustained profitability as we navigate this environment.”

Eric R. Newell, Chief Financial Officer of the Company said, “We grew deposits across both digital and branch channels in the first quarter, though a continued shift from noninterest bearing to interest bearing accounts pressured net interest margin. Valuation risk in our office portfolio remains a concern and was the primary driver of the provision for credit losses. The credit loss reserve coverage rose to 1.63% of total loans, up 19 basis points from last quarter. Our capital position remains strong, with common equity tier one capital at 14.6% and our tangible common equity¹ ratio exceeding 10%. We will continue to evaluate capital allocation decisions, in alignment with long-term franchise value and our objective of capital accretion.”

Ms. Riel added, “I want to thank all our employees for their continued dedication and for helping to cultivate a culture grounded in respect, collaboration, and service — both within our organization and across the communities we serve.”

First Quarter 2025 Key Elements

The Company announces today the declaration of a common stock dividend of $0.165 per share.
The ACL as a percentage of total loans was 1.63% at quarter-end; up from 1.44% at the prior quarter-end. Performing office coverage² was 5.78% at quarter-end; as compared to 3.81% at the prior quarter-end.
Nonperforming assets decreased $8.5 million to $202.9 million as of March 31, 2025 and were 1.79% of total assets compared to 1.90% as of December 31, 2024. Inflows to non-performing loans in the quarter totaled $4.6 million offset by a reduction of $12.9 million. The reduction was predominantly associated with the $11.2 million nonperforming loans that were charged off during the quarter.
Substandard loans increased $75.2 million to $501.6 million primarily reflecting continued stress within the office loan portfolio. Special mention loans increased $28.6 million to $273.4 million at March 31, 2025 as we proactively identified credits showing signs of potential weakness. These increases reflect our conservative credit risk management approach and the ongoing impact of the uncertain operating environment in the Washington DC metro area.
Annualized quarterly net charge-offs for the first quarter were 0.57% compared to 0.48% for the fourth quarter 2024.
The net interest margin (“NIM”) decreased to 2.28% for the first quarter 2025, compared to 2.29% for the prior quarter, primarily due to an increase in the average mix of interest-bearing deposits versus noninterest bearing deposits in the first quarter versus the fourth quarter.
At quarter-end, the common equity ratio, tangible common equity ratio¹, and common equity tier 1 capital (to risk-weighted assets) ratio were 11.00%, 11.00%, and 14.61%, respectively.
Total estimated insured deposits decreased at quarter-end to $6.9 billion, or 74.7% of deposits, compared to $7.0 billion, or 76.4% of deposits from the fourth quarter.
Total on-balance sheet liquidity and available capacity was $4.8 billion, up $244.9 million from the prior quarter.

Income Statement

Net interest income was $65.6 million for the first quarter 2025, compared to $70.8 million for the prior quarter. The decrease in net interest income was primarily driven by two fewer days in the quarter, lower average interest bearing cash balances, lower rates on loans, and a higher average mix of interest bearing deposits. Both interest income and interest expense declined due to lower rates.
Provision for credit losses was $26.3 million for the first quarter 2025, compared to $12.1 million for the prior quarter. The increase in the provision for the quarter is attributed predominately to the replenishment of the reserve following net charge-offs of $11.2 million and an increase in the qualitative overlay. The increase in the overlay relates to updated assumptions associated with the probability of default and probability of loss associated with commercial real estate office loans. Reserve for unfunded commitments was a reversal of $0.3 million due primarily to lower unfunded commitments in our construction portfolio. This compared to a reversal for unfunded commitments in the prior quarter of $1.6 million.
Noninterest income was $8.2 million for the first quarter 2025, compared to $4.1 million for the prior quarter. The primary driver for the increase was an increase in income associated with a $200 million separate account BOLI transaction that was entered into in the first quarter.
Noninterest expense was $45.5 million for the first quarter 2025, compared to $44.5 million for the prior quarter. The increase over the comparative quarters was primarily due to increased legal, accounting, and professional fees.

Loans and Funding

Total loans were $7.9 billion at March 31, 2025, up 0.1% from the prior quarter-end. The increase in total loans was driven by an increase in owner occupied commercial real estate loans from the prior quarter-end, offset by a decrease in income producing commercial real estate loans.
Total deposits at quarter-end were $9.3 billion, up $146.2 million, or 1.6%, from the prior quarter-end. The increase was primarily attributable to an increase in time deposit accounts. Period end deposits have increased $775.8 million when compared to prior year comparable period end of March 31, 2024.
Other short-term borrowings were $0.5 billion at March 31, 2025, consistent with the prior quarter-end.

Asset Quality

Allowance for credit losses was 1.63% of total loans held for investment at March 31, 2025, compared to 1.44% at the prior quarter-end. Performing office coverage was 5.78% at quarter-end; as compared to 3.81% at the prior quarter-end.
Net charge-offs were $11.2 million for the quarter compared to $9.5 million in the fourth quarter of 2024.
Nonperforming assets were $202.9 million at March 31, 2025.
- NPAs as a percentage of assets were 1.79% at March 31, 2025, compared to 1.90% at the prior quarter-end. At March 31, 2025, other real estate owned consisted of four properties with an aggregate carrying value of $2.5 million. The decrease in NPAs was predominantly associated with charge-offs as previously noted.
- Loans 30-89 days past due were $83.0 million at March 31, 2025, compared to $26.8 million at the prior quarter-end.

Capital

Total shareholders’ equity was $1.2 billion at March 31, 2025, up 1.5% from the prior quarter-end. The increase in shareholders’ equity of $18.8 million was due to an increase in valuations of available-for-sale securities.
Book value per share and tangible book value per share³ was $40.99 and $40.99, up 1.0% from the prior quarter-end.

Additional financial information: The financial information that follows provides more detail on the Company’s financial performance for the three months ended March 31, 2025 as compared to the three months ended December 31, 2024 and March 31, 2024, as well as eight quarters of trend data. Persons wishing additional information should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and other reports filed with the SEC.

About Eagle Bancorp: The Company is the holding company for EagleBank, which commenced operations in 1998. The Bank is headquartered in Bethesda, Maryland, and operates through twelve banking offices and four lending offices located in Suburban Maryland, Washington, D.C. and Northern Virginia. The Company focuses on building relationships with businesses, professionals and individuals in its marketplace, and is committed to a culture of respect, diversity, equity and inclusion in both its workplace and the communities in which it operates.

Conference call: Eagle Bancorp will host a conference call to discuss its first quarter 2025 financial results on Thursday, April 24, 2025 at 10:00 a.m. Eastern Time.

The listen-only webcast can be accessed at:

Forward-looking statements: This press release contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “can,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” “could,” “strive,” “feel” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market (including reductions in the size of the federal government workforce; changes in government spending; the proposal, announcement or imposition of tariffs; volatility in interest rates and interest rate policy; inflation levels; competitive factors) and other conditions (such as 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 regarding the stability and liquidity of banks), which by their nature are not susceptible to accurate forecast and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and in other periodic and current reports filed with the SEC. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance, and nothing contained herein is meant to or should be considered and treated as earnings guidance of future quarters’ performance projections. All information is as of the date of this press release. Any forward-looking statements made by or on behalf of the Company speak only as to the date they are made. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.


Eagle Bancorp, Inc.
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Interest Income
Interest and fees on loans	$	126,136		$	132,943		$	137,994
Interest and dividends on investment securities		11,912			12,307			12,680
Interest on balances with other banks and short-term investments		15,803			23,045			24,862
Interest on federal funds sold		27			122			66
Total interest income		153,878			168,417			175,602
Interest Expense
Interest on deposits		77,211			83,002			79,383
Interest on customer repurchase agreements		260			294			315
Interest on other short-term borrowings		8,733			9,530			21,206
Interest on long-term borrowings		2,025			4,797			—
Total interest expense		88,229			97,623			100,904
Net Interest Income		65,649			70,794			74,698
Provision for Credit Losses		26,255			12,132			35,175
Provision (Reversal) for Credit Losses for Unfunded Commitments		(297	)		(1,598	)		456
Net Interest Income After Provision for Credit Losses		39,691			60,260			39,067

Noninterest Income
Service charges on deposits		1,743			1,744			1,699
Gain on sale of loans		—			—			—
Net gain on sale of investment securities		4			4			4
Increase in cash surrender value of bank-owned life insurance		4,282			742			703
Other income		2,178			1,577			1,183
Total noninterest income		8,207			4,067			3,589
Noninterest Expense
Salaries and employee benefits		21,968			22,597			21,726
Premises and equipment expenses		3,203			2,635			3,059
Marketing and advertising		1,371			1,340			859
Data processing		3,978			3,870			3,293
Legal, accounting and professional fees		3,122			641			2,507
FDIC insurance		8,962			9,281			6,412
Other expenses		2,847			4,168			2,141
Total noninterest expense		45,451			44,532			39,997
Income Before Income Tax Expense		2,447			19,795			2,659
Income Tax Expense		772			4,505			2,997
Net (Loss) Income	$	1,675		$	15,290		$	(338	)

(Loss) Earnings Per Common Share
Basic	$	0.06		$	0.51		$	(0.01	)
Diluted	$	0.06		$	0.50		$	(0.01	)


Eagle Bancorp, Inc.
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
	March 31,			December 31,			March 31,
	2025			2024			2024
Assets
Cash and due from banks	$	12,516		$	11,882		$	10,076
Federal funds sold		2,968			2,581			11,343
Interest-bearing deposits with banks and other short-term investments		661,173			619,017			696,453
Investment securities available-for-sale at fair value (amortized cost of $1,330,077, $1,408,935, and $1,613,659 respectively, and allowance for credit losses of $0, $22, and $17, respectively)		1,214,237			1,267,404			1,445,034
Investment securities held-to-maturity at amortized cost, net of allowance for credit losses of $1,275, $1,306, and $1,957 respectively (fair value of $820,530, $820,381, and $878,159 respectively)		924,473			938,647			1,000,732
Federal Reserve and Federal Home Loan Bank stock		51,467			51,763			54,678
Loans held for sale		15,251			—			—
Loans		7,943,306			7,934,888			7,982,702
Less: allowance for credit losses		(129,469	)		(114,390	)		(99,684	)
Loans, net		7,813,837			7,820,498			7,883,018
Premises and equipment, net		7,079			7,694			9,504
Operating lease right-of-use assets		32,769			18,494			17,679
Deferred income taxes		84,798			91,472			87,813
Bank-owned life insurance		320,055			115,806			113,624
Goodwill and intangible assets, net		11			16			104,611
Other real estate owned		2,459			2,743			773
Other assets		174,268			181,491			177,310
Total Assets		11,317,361			11,129,508			11,612,648
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing demand		1,607,826			1,544,403			1,835,524
Interest-bearing transaction		926,722			1,211,791			1,207,566
Savings and money market		3,558,919			3,599,221			3,235,391
Time deposits		3,183,801			2,775,663			2,222,958
Total deposits		9,277,268			9,131,078			8,501,439
Customer repurchase agreements		32,357			33,157			37,059
Other short-term borrowings		490,000			490,000			1,669,948
Long-term borrowings		76,181			76,108			—
Operating lease liabilities		38,484			23,815			21,611
Reserve for unfunded commitments		3,166			3,463			6,045
Other liabilities		155,014			145,826			117,133
Total Liabilities		10,072,470			9,903,447			10,353,235
Shareholders’ Equity
Common stock, par value $0.01 per share; shares authorized 100,000,000, shares issued and outstanding 30,368,843, 30,202,003, and 30,185,732 respectively		300			298			297
Additional paid-in capital		386,535			384,932			377,334
Retained earnings		978,995			982,304			1,047,550
Accumulated other comprehensive loss		(120,939	)		(141,473	)		(165,768	)
Total Shareholders’ Equity		1,244,891			1,226,061			1,259,413
Total Liabilities and Shareholders’ Equity	$	11,317,361		$	11,129,508		$	11,612,648


Loan Mix and Asset Quality (Dollars in thousands)

	March 31,				December 31,				March 31,
	2025				2024				2024
	Amount		%		Amount		%		Amount		%
Loan Balances – Period End:
Commercial	$	1,178,343	15	%	$	1,183,341	15	%	$	1,408,767	18	%
PPP loans		226	—	%		287	—	%	$	467	—	%
Income producing – commercial real estate		3,967,124	49	%		4,064,846	51	%	$	4,040,655	50	%
Owner occupied – commercial real estate		1,403,668	18	%		1,269,669	16	%	$	1,185,582	15	%
Real estate mortgage – residential		48,821	1	%		50,535	1	%	$	72,087	1	%
Construction – commercial and residential		1,210,788	15	%		1,210,763	15	%	$	1,082,556	13	%
Construction – C&I (owner occupied)		83,417	1	%		103,259	1	%	$	138,379	2	%
Home equity		50,121	1	%		51,130	1	%	$	53,251	1	%
Other consumer		798	—	%		1,058	—	%	$	958	—	%
Total loans	$	7,943,306	100	%	$	7,934,888	100	%	$	7,982,702	100	%

	Three Months Ended or As Of
	March 31,		December 31,		March 31,
	2025		2024		2024
Asset Quality:
Nonperforming loans	$	200,447	$	208,707	$	91,491
Other real estate owned		2,459		2,743		773
Nonperforming assets	$	202,906	$	211,450	$	92,264
Net charge-offs	$	11,230	$	9,535	$	21,430
Special mention	$	273,380	$	244,807	$	265,348
Substandard	$	501,565	$	426,366	$	361,776


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Prior Quarter (Unaudited)
(Dollars in thousands)

	Three Months Ended
	March 31, 2025							December 31, 2024
	Average Balance			Interest		Average Yield/Rate		Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest-bearing deposits with other banks and other short-term investments	$	1,445,054		$	15,803	4.44	%	$	1,948,436		$	23,045	4.71	%
Loans held for sale⁽¹⁾		169			—	—	%		—			—	—	%
Loans^{(1) (2)}		7,933,695			126,136	6.45	%		7,971,907			132,943	6.63	%
Investment securities available-for-sale⁽²⁾		1,321,954			6,858	2.10	%		1,417,958			7,142	2.00	%
Investment securities held-to-maturity⁽²⁾		933,880			5,055	2.20	%		952,800			5,165	2.16	%
Federal funds sold		5,410			27	2.02	%		12,839			122	3.78	%
Total interest earning assets		11,640,162			153,879	5.36	%		12,303,940			168,417	5.45	%
Total noninterest earning assets		596,585							386,014
Less: allowance for credit losses		(118,557	)						(114,232	)
Total noninterest earning assets		478,028							271,782
TOTAL ASSETS	$	12,118,190						$	12,575,722

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Interest-bearing transaction	$	1,368,609		$	9,908	2.94	%	$	1,674,997		$	13,048	3.10	%
Savings and money market		3,682,217			32,389	3.57	%		3,648,502			35,262	3.84	%
Time deposits		2,951,111			34,914	4.80	%		2,804,870			34,692	4.92	%
Total interest bearing deposits		8,001,937			77,211	3.91	%		8,128,369			83,002	4.06	%
Customer repurchase agreements		36,572			260	2.88	%		38,750			294	3.02	%
Other short-term borrowings		682,222			8,733	5.19	%		1,003,587			12,296	4.87	%
Long-term borrowings		76,146			2,025	10.79	%		75,939			2,031	10.64	%
Total interest bearing liabilities		8,796,877			88,229	4.07	%		9,246,645			97,623	4.20	%
Noninterest bearing liabilities:
Noninterest bearing demand		1,881,296							1,928,094
Other liabilities		197,212							170,411
Total noninterest bearing liabilities		2,078,508							2,098,505
Shareholders’ equity		1,242,805							1,230,573
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,118,190						$	12,575,723
Net interest income				$	65,650						$	70,794
Net interest spread						1.29	%						1.25	%
Net interest margin						2.28	%						2.29	%
Cost of funds						3.35	%						3.48	%

(1)		Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.8 million and $4.3 million for the three months ended March 31, 2025 and December 31, 2024, respectively.
(2)		Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Consolidated Average Balances, Interest Yields And Rates vs. Year Ago Quarter (Unaudited)
(Dollars in thousands)

	Three Months Ended March 31,
	2025							2024
	Average Balance			Interest		Average Yield/Rate		Average Balance			Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest-bearing deposits with other banks and other short-term investments	$	1,445,054		$	15,803	4.44	%	$	1,841,771		$	24,862	5.43	%
Loans held for sale⁽¹⁾		169			—	—	%		—			—	—	%
Loans^{(1) (2)}		7,933,695			126,136	6.45	%		7,988,941			137,994	6.95	%
Investment securities available-for-sale⁽²⁾		1,321,954			6,858	2.10	%		1,516,503			7,247	1.92	%
Investment securities held-to-maturity⁽²⁾		933,880			5,055	2.20	%		1,011,231			5,433	2.16	%
Federal funds sold		5,410			27	2.02	%		7,051			66	3.76	%
Total interest earning assets		11,640,162			153,879	5.36	%		12,365,497			175,602	5.71	%
Total noninterest earning assets		596,585							508,987
Less: allowance for credit losses		(118,557	)						(90,014	)
Total noninterest earning assets		478,028							418,973
TOTAL ASSETS	$	12,118,190						$	12,784,470

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Interest-bearing transaction	$	1,368,609		$	9,908	2.94	%	$	1,833,493		$	16,830	3.69	%
Savings and money market		3,682,217			32,389	3.57	%		3,423,388			35,930	4.22	%
Time deposits		2,951,111			34,914	4.80	%		2,187,320			26,623	4.90	%
Total interest bearing deposits		8,001,937			77,211	3.91	%		—			—	4.29	%
Customer repurchase agreements		36,572			260	2.88	%		36,084			315	3.51	%
Other short-term borrowings		682,222			8,733	5.19	%		1,796,863			21,206	4.75	%
Long-term borrowings		76,146			2,025	10.79	%		—			—	—	%
Total interest bearing liabilities		8,796,877			88,229	4.07	%		9,277,148			100,904	4.37	%
Noninterest bearing liabilities:
Noninterest bearing demand		1,881,296							2,057,460
Other liabilities		197,212							160,206
Total noninterest bearing liabilities		2,078,508							2,217,666
Shareholders’ equity		1,242,805							1,289,656
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,118,190						$	12,784,470
Net interest income				$	65,650						$	74,698
Net interest spread						1.29	%						1.34	%
Net interest margin						2.28	%						2.43	%
Cost of funds						3.35	%						3.58	%

(1)		Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.8 million and $5.1 million for the three months ended March 31, 2025 and 2024, respectively.
(2)		Interest and fees on loans and investments exclude tax equivalent adjustments.


Eagle Bancorp, Inc.
Statements of Operations and Highlights Quarterly Trends (Unaudited)
(Dollars in thousands, except per share data)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,
Income Statements:	2025			2024			2024			2024			2024			2023			2023			2023
Total interest income	$	153,878		$	168,417		$	173,813		$	169,731		$	175,602		$	167,421		$	161,149		$	156,510
Total interest expense		88,229			97,623			101,970			98,378			100,904			94,429			90,430			84,699
Net interest income		65,649			70,794			71,843			71,353			74,698			72,992			70,719			71,811
Provision for credit losses		26,255			12,132			10,094			8,959			35,175			14,490			5,644			5,238
Provision (reversal) for credit losses for unfunded commitments		(297	)		(1,598	)		(1,593	)		608			456			(594	)		(839	)		318
Net interest income after provision for credit losses		39,691			60,260			63,342			61,786			39,067			59,096			65,914			66,255
Noninterest income before investment gain		8,203			4,063			6,948			5,329			3,585			2,891			6,342			8,593
Net gain on sale of investment securities		4			4			3			3			4			3			5			2
Total noninterest income		8,207			4,067			6,951			5,332			3,589			2,894			6,347			8,595
Salaries and employee benefits		21,968			22,597			21,675			21,770			21,726			18,416			21,549			21,957
Premises and equipment expenses		3,203			2,635			2,794			2,894			3,059			2,967			3,095			3,227
Marketing and advertising		1,371			1,340			1,588			1,662			859			1,071			768			884
Goodwill impairment		—			—			—			104,168			—			—			—			—
Other expenses		18,909			17,960			17,557			15,997			14,353			14,644			12,221			11,910
Total noninterest expense		45,451			44,532			43,614			146,491			39,997			37,098			37,633			37,978
(Loss) income before income tax expense		2,447			19,795			26,679			(79,373	)		2,659			24,892			34,628			36,872
Income tax expense		772			4,505			4,864			4,429			2,997			4,667			7,245			8,180
Net (loss) income		1,675			15,290			21,815			(83,802	)		(338	)		20,225			27,383			28,692
Per Share Data:
(Loss) earnings per weighted average common share, basic	$	0.06		$	0.51		$	0.72		$	(2.78	)	$	(0.01	)	$	0.68		$	0.91		$	0.94
(Loss) earnings per weighted average common share, diluted	$	0.06		$	0.50		$	0.72		$	(2.78	)	$	(0.01	)	$	0.67		$	0.91		$	0.94
Weighted average common shares outstanding, basic		30,275,001			30,199,433			30,173,852			30,185,609			30,068,173			29,925,557			29,910,218			30,454,766
Weighted average common shares outstanding, diluted		30,404,262			30,321,644			30,241,699			30,185,609			30,068,173			29,966,962			29,944,692			30,505,468
Actual shares outstanding at period end		30,368,843			30,202,003			30,173,200			30,180,482			30,185,732			29,925,612			29,917,982			29,912,082
Book value per common share at period end	$	40.99		$	40.60		$	40.61		$	38.75		$	41.72		$	42.58		$	40.64		$	40.78
Tangible book value per common share at period end⁽¹⁾	$	40.99		$	40.59		$	40.61		$	38.74		$	38.26		$	39.08		$	37.12		$	37.29
Dividend per common share	$	0.17		$	—		$	0.17		$	0.45		$	0.45		$	0.45		$	0.45		$	0.45
Performance Ratios (annualized):
Return on average assets		0.06	%		0.48	%		0.70	%	(2.73		)%	(0.01		)%		0.65	%		0.91	%		0.96	%
Return on average common equity		0.55	%		4.94	%		7.22	%	(26.67		)%	(0.11		)%		6.48	%		8.80	%		9.24	%
Return on average tangible common equity⁽¹⁾		0.55	%		4.94	%		7.22	%	(28.96		)%	(0.11		)%		7.08	%		9.61	%		10.08	%
Net interest margin		2.28	%		2.29	%		2.37	%		2.40	%		2.43	%		2.45	%		2.43	%		2.49	%
Efficiency ratio⁽¹⁾⁽²⁾		61.50	%		59.50	%		55.40	%		191.00	%		51.10	%		48.90	%		48.83	%		47.20	%
Other Ratios:
Allowance for credit losses to total loans⁽³⁾		1.63	%		1.44	%		1.40	%		1.33	%		1.25	%		1.08	%		1.05	%		1.00	%
Allowance for credit losses to total nonperforming loans		64.59	%		54.81	%		83.25	%		110.06	%		108.76	%		131.16	%		118.78	%		267.50	%
Nonperforming assets to total assets		1.79	%		1.90	%		1.22	%		0.88	%		0.79	%		0.57	%		0.64	%		0.28	%
Net charge-offs (recoveries) (annualized) to average total loans⁽³⁾		0.57	%		0.48	%		0.26	%		0.11	%		1.07	%		0.60	%		0.02	%		0.29	%
Tier 1 capital (to average assets)		11.11	%		10.74	%		10.77	%		10.58	%		10.26	%		10.73	%		10.96	%		10.84	%
Total capital (to risk weighted assets)		15.86	%		15.86	%		15.51	%		15.07	%		14.87	%		14.79	%		14.54	%		14.51	%
Common equity tier 1 capital (to risk weighted assets)		14.61	%		14.63	%		14.30	%		13.92	%		13.80	%		13.90	%		13.68	%		13.55	%
Tangible common equity ratio⁽¹⁾		11.00	%		11.02	%		10.86	%		10.35	%		10.03	%		10.12	%		10.04	%		10.21	%
Average Balances (in thousands):
Total assets	$	12,118,190		$	12,575,722		$	12,360,899		$	12,361,500		$	12,784,470		$	12,283,303		$	11,942,905		$	11,960,111
Total earning assets	$	11,640,162		$	12,303,940		$	12,072,891		$	11,953,446		$	12,365,497		$	11,837,722		$	11,532,186		$	11,546,050
Total loans⁽²⁾	$	7,933,695		$	7,971,907		$	8,026,524		$	8,003,206		$	7,988,941		$	7,963,074		$	7,795,144		$	7,790,555
Total deposits	$	9,883,233		$	10,056,463		$	9,344,414		$	9,225,266		$	9,501,661		$	9,471,369		$	8,946,641		$	8,514,938
Total borrowings	$	794,940		$	1,118,276		$	1,654,736		$	1,721,283		$	1,832,947		$	1,401,917		$	1,646,179		$	2,102,507
Total shareholders’ equity	$	1,242,805		$	1,230,573		$	1,201,477		$	1,263,627		$	1,289,656		$	1,238,763		$	1,235,162		$	1,245,647

(1)		A reconciliation of non-GAAP financial measures to the nearest GAAP measure is provided in the tables that accompany this document.
(2)		Computed by dividing noninterest expense by the sum of net interest income and noninterest income.
(3)		Excludes loans held for sale.


GAAP Reconciliation to Non-GAAP Financial Measures (unaudited)
(dollars in thousands, except per share data)

	March 31,			December 31,			March 31,
	2025			2024			2024
Tangible common equity
Common shareholders’ equity	$	1,244,891		$	1,226,061		$	1,259,413
Less: Intangible assets		(11	)		(16	)		(104,611	)
Tangible common equity	$	1,244,880		$	1,226,045		$	1,154,802

Tangible common equity ratio
Total assets	$	11,317,361		$	11,129,508		$	11,612,648
Less: Intangible assets		(11	)		(16	)		(104,611	)
Tangible assets	$	11,317,350		$	11,129,492		$	11,508,037

Tangible common equity ratio		11.00	%		11.02	%		10.03	%

Per share calculations
Book value per common share	$	40.99		$	40.60		$	41.72
Less: Intangible book value per common share	$	—		$	(0.01	)	$	(3.46	)
Tangible book value per common share	$	40.99		$	40.59		$	38.26

Shares outstanding at period end		30,368,843			30,202,003			30,185,732

	Three Months Ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Average tangible common equity
Average common shareholders’ equity	$	1,242,805		$	1,230,573		$	1,289,656
Less: Average intangible assets		(14	)		(19	)		(104,718	)
Average tangible common equity	$	1,242,791		$	1,230,554		$	1,184,938

Return on average tangible common equity
Net (loss) income	$	1,675		$	15,290		$	(338	)
Return on average tangible common equity		0.55	%		4.94	%	(0.11		)%

Efficiency ratio
Net interest income	$	65,649		$	70,794		$	74,698
Noninterest income		8,207			4,067			3,589
Operating revenue	$	73,856		$	74,861		$	78,287
Noninterest expense	$	45,451		$	44,532		$	39,997

Efficiency ratio		61.54	%		59.49	%		51.09	%

Pre-provision net revenue
Net interest income	$	65,649		$	70,794		$	74,698
Noninterest income		8,207			4,067			3,589
Less: Noninterest expense		(45,451	)		(44,532	)		(39,997	)
Pre-provision net revenue	$	28,405		$	30,329		$	38,290

Tangible common equity, tangible common equity to tangible assets (the “tangible common equity ratio”), tangible book value per common share, average tangible common equity, and annualized return on average tangible common equity are non-GAAP financial measures derived from GAAP based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders’ equity, or tangible common equity, and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders’ equity by common shares outstanding. The Company calculates the annualized return on average tangible common equity ratio by dividing net income available to common shareholders by average tangible common equity, which is calculated by excluding the average balance of intangible assets from the average common shareholders’ equity. Tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios, and as such tangible equity and related measures are useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions.

The efficiency ratio is a non-GAAP measure calculated by dividing GAAP noninterest expense by the sum of GAAP net interest income and GAAP noninterest income. The efficiency ratio measures a bank’s overhead as a percentage of its revenue. The Company believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling operational activities.

Pre-provision net revenue is a non-GAAP financial measure calculated by subtracting noninterest expenses from the sum of net interest income and noninterest income. The Company considers this information important to shareholders because it illustrates revenue excluding the impact of provisions and reversals to the allowance for credit losses on loans.

____________________________¹ A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measures tables that accompany this document.
² Calculated as the ACL attributable to loans collateralized by performing office properties as a percentage of total loans.
³ A reconciliation of non-GAAP financial measures and the nearest GAAP measures is provided in the GAAP Reconciliation to Non-GAAP Financial Measures tables that accompany this document.

EAGLE BANCORP, INC.
CONTACT:
Eric R. Newell
240.497.1796

For the March 31, 2025 Earnings Presentation, click http://ml.globenewswire.com/Resource/Download/f1f31917-6800-4f81-8c02-417b49f279cc

The MIL Network –

April 24, 2025

MIL-OSI: FlexShopper, Inc. Reports 2024 Fourth-Quarter and Year-End Financial Results

Source: GlobeNewswire (MIL-OSI)

Ongoing DTC and B2B growth strategies drove a 19.5% year-over-year increase in annual revenue

Operating income for 2024 increased 66% to $22.8 million, and adjusted EBITDA increased 43.1% to $33.3 million, as a result of higher revenue, controlled expenses and favorable asset quality

BOCA RATON, Fla., April 23, 2025 (GLOBE NEWSWIRE) — FlexShopper, Inc. (Nasdaq: FPAY) (“FlexShopper”), a leading national online lease-to-own (“LTO”) retailer and payment solution provider for underserved consumers, today announced its unaudited financial results for the quarter and full year ended December 31, 2024.

Russ Heiser, Jr, Chief Executive Officer, stated, “As expected, 2024 was a transformative year for FlexShopper highlighting the successful technology investments we made over the past two years and the progress of our DTC and B2B growth strategies. During 2024, we grew our market share and expanded FlexShopper’s LTO offerings to 7,900 locations, a ~250% increase. In addition, 2024 was the first year of our retail revenue strategy on our flexshopper.com marketplace, which added incremental revenues and profits to our model. The success of our growth strategies generated $22.8 million of operating income, a 66% year-over-year increase.

“We pursued opportunities that leverage our expanding financial performance to improve our balance sheet. This included raising $12.2 million in proceeds since the beginning of November 2024 through the beginning of 2025 through our previously mentioned rights offering. We continue to look for strategic opportunities to repurchase 91% of our series 2 convertible preferred stock at a 50+% discount to its liquidation preference, which we believe will be highly accretive to FlexShopper’s common shareholders,” Mr. Heiser continued.

“We expect our growth strategies to continue to drive positive momentum in 2025, and for the first quarter of 2025, lease originations increased 49.7%, relative to the same period in 2024. In addition, we believe profitability will improve further in 2025 as we benefit from higher sales on flexshopper.com, stable operating expenses and credit quality, and the contribution of payments on leases that were originated in 2024,” concluded Mr. Heiser.

Results for the Fourth Quarter Ended December 31, 2024⁽¹⁾vs. the Fourth Quarter Ended December 31, 2023 (unaudited):

Total lease funding approvals increased 65.6% to $142.4 million from $86 million
Total revenues increased 17.3% to $35.5 million from $30.3 million
Gross profit increased 29.8% to $20.4 million from $15.7 million
Gross profit margin increased from 52% to 58%
Operating income of $5.8 million, compared with operating income of $5.6 million
Adjusted EBITDA⁽²⁾ increased by 5.7% to $8.6 million from $8.2 million
Net loss attributable to common stockholders of ($1.9) million, or ($0.09) per diluted share, compared to net loss attributable to common stockholders of ($715) thousand or ($0.03) per diluted share

Results for the Twelve Months Ended December 31, 2024⁽¹⁾vs. the Twelve Months Ended December 31, 2023 (unaudited):

Total lease funding approvals increased 79.3 % to $382.8 million from $213.5 million
Total revenues increased 19.5% to $139.8 million from $117.0 million
Gross profit increased 40.3% to $76.7 million from $54.7 million
Gross profit margin increased from 47% to 55%
Operating income of $22.8 million, compared with operating income of $13.7 million
Adjusted EBITDA⁽²⁾ increased 43.1% to $33.3 million, compared to $23.2 million
Net loss attributable to common stockholders of ($4.7) million, or ($0.22) per diluted share, compared to net loss attributable to common stockholders of ($8.3) million, or ($0.38) per diluted share

⁽¹⁾ FlexShopper’s independent auditor, Grant Thornton LLP, is still in the process of finalizing the review of management’s position on the lease classification of the lease portfolio and whether it meets the definition of an operating lease. Management believes that, regardless of Grant Thorton LLP’s determination regarding this classification, there will be no material impact to FlexShopper’s gross profit or net loss.

⁽²⁾Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Non-GAAP Measures”.

2025 Forward Guidance
FlexShopper remains committed to executing its strategic plan, which centers on scaling its lease and loan business while maintaining strong asset performance and capitalizing on the growing opportunity within the online retail space. This strategy has already begun to deliver meaningful results.

Throughout 2024, FlexShopper achieved consistent year-over-year revenue growth, driven by improving asset quality and a reduction in bad debt. Additionally, FlexShopper enhanced product margins, which has had a material positive impact on its income statement. FlexShopper is also realizing operating leverage across both marketing and general expenses, contributing to improved overall efficiency.

As a result of these disciplined efforts, the company generated significant year-over-year EBITDA growth in 2024. Building on this momentum, FlexShopper anticipates continued progress in 2025, with the following performance expectations:

2025 full year gross profit between $90 million and $100 million which is a 17% to 30% increase from 2024
2025 full year adjusted EBITDA of $40 million to $45 million which is a 20% to 35% increase from 2024

10-K Filing and Nasdaq Compliance
FlexShopper plans to issue audited financial results as soon as it receives approval from Grant Thorton LLP. As a result of the delay in the audit, the Company received a notification from Nasdaq on April 17, 2025 that it is no longer in compliance with Nasdaq’s listing rules. The Company intends to file the Form 10-K as soon as practicable and, if necessary, to submit a plan with Nasdaq to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may, at its discretion, grant the Company up to 180 days from the prescribed due date for filing the Form 10-K, or until October 13, 2025, to regain compliance. This notification has no immediate effect on the listing of the Company’s common stock on Nasdaq.

About FlexShopper
FlexShopper, Inc. is a leading national financial technology company that offers innovative payment options to consumers. FlexShopper provides a variety of flexible funding options for underserved consumers through its direct-to-consumer online marketplace at Flexshopper.com and in partnership with merchants both online and at brick-and-mortar locations. FlexShopper’s solutions are crafted to meet the needs of a wide range of consumer segments through lease-to-own and lending products.

Forward-Looking Statements

The consolidated financial statements and related information contained in this press release for the year ended December 31, 2023, are audited. For the year ended December 31, 2024, they are unaudited and, although we believe they accurately reflect the values of each item, no assurance thereof can be given, or that our independent auditor may not adjust one or more of such values to be set forth in our completed 2024 audited consolidated financial statements. Grant Thornton LLP has not audited or reviewed, in accordance with standards established by the American Institute of Certified Public Accountants, any of the 2024 financial or other information contained in this press release.

All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate,” or other comparable terms. Examples of forward-looking statements include, among others, statements we make regarding expectations of lease originations, the expansion of our lease-to-own program; expectations concerning our partnerships with retail partners; investments in, and the success of, our underwriting technology and risk analytics platform; our ability to collect payments due from customers; expected future operating results and expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: our ability to obtain adequate financing to fund our business operations in the future; the failure to successfully manage and grow our FlexShopper.com e-commerce platform; our ability to maintain compliance with financial covenants under our credit agreement; our dependence on the success of our third-party retail partners and our continued relationships with them; our compliance with various federal, state and local laws and regulations, including those related to consumer protection; the failure to protect the integrity and security of customer and employee information; and the other risks and uncertainties described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. The forward-looking statements made in this release speak only as of the date of this release, and FlexShopper assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.

FLEXSHOPPER, INC. CONSOLIDATED BALANCE SHEETS (unaudited)
	December 31, 2024			December 31, 2023

ASSETS
CURRENT ASSETS:
Cash	$	10,402,637		$	4,413,130
Lease receivables, net		72,191,028			44,795,090
Loan receivables at fair value		54,330,006			35,794,290
Prepaid expenses and other assets		4,433,570			3,300,677
Lease merchandise, net		29,358,305			29,131,440
Total current assets		170,715,546			117,434,627

Property and equipment, net		9,692,396			9,308,859
Right of use asset, net		1,042,954			1,237,010
Intangible assets, net		12,259,413			13,391,305
Other assets, net		2,589,533			2,175,215
Deferred tax asset, net		13,208,652			12,943,361
Total assets	$	209,508,494		$	156,490,377

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	5,589,866		$	7,139,848
Accrued payroll and related taxes		467,596			578,197
Promissory notes to related parties, including accrued interest, and net of unamortized issuance costs of $191,163 at December 31, 2024		10,730,853			198,624
Accrued expenses		6,955,810			3,972,397
Lease liability – current portion		287,412			245,052
Total current liabilities		24,031,537			12,134,118
Loan payable under credit agreement to beneficial shareholder, net of unamortized issuance costs of $1,007,182 at December 31, 2024 and $70,780 at December 31, 2023		143,934,508			96,384,220
Promissory notes to related parties, net of unamortized issuance costs of $649,953 at December 31, 2023 and net of current portion		—			10,100,047
Loan payable under Basepoint credit agreement, net of unamortized issuance costs of $54,496 at December 31, 2024 and $92,963 at December 31, 2023		7,358,109			7,319,641
Lease liabilities, net of current portion		1,034,166			1,321,578
Total liabilities		176,358,320			127,259,604

STOCKHOLDERS’ EQUITY
Series 1 Convertible Preferred Stock, $0.001 par value – authorized 250,000 shares, issued and outstanding 170,332 shares at $5.00 stated value		851,660			851,660
Series 2 Convertible Preferred Stock, $0.001 par value – authorized 25,000 shares, issued and outstanding 21,952 shares at $1,000 stated value		21,952,000			21,952,000
Common stock, $0.0001 par value – authorized 100,000,000 shares at December 31, 2024 and 40,000,000 shares at December 31, 2023, issued 25,138,251 shares at December 31, 2024 and 21,752,304 shares at December 31, 2023		2,515			2,176
Treasury shares, at cost- 527,222 shares at December 31, 2024 and 164,029 shares at December 31, 2023		(563,991	)		(166,757	)
Additional paid in capital		46,911,459			42,415,894
Accumulated deficit		(36,003,469	)		(35,824,200	)
Total stockholders’ equity		33,150,174			29,230,773
	$	209,508,494		$	156,490,377

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	For the year ended December 31,
		2024			2023
Revenues:
Lease revenues and fees, net	$	106,959,906		$	91,943,729
Loan revenues and fees, net of changes in fair value		28,539,495			25,031,278
Retail revenue		4,301,331			–
Total revenues		139,800,732			116,975,007

Costs and expenses:
Depreciation and impairment of lease merchandise		56,634,623			56,288,128
Loan origination costs and fees		3,063,012			6,007,598
Cost of retail revenue		3,383,704			–
Marketing		8,571,696			7,620,795
Salaries and benefits		16,977,744			12,499,099
Operating expenses		28,391,424			24,547,729
Net change in fair value of promissory note related to acquisition		–			(3,678,689	)
Total costs and expenses		117,022,203			103,284,660
Operating income		22,778,529			13,690,347
Interest expense including amortization of debt issuance costs		(22,136,448	)		(18,913,773	)
Income/ (loss) before income taxes		642,081			(5,223,426	)
Income taxes (expense)/ benefit		(821,350	)		989,809
Net loss		(179,269	)		(4,233,617	)

Dividends on Series 2 Convertible Preferred Shares		(4,514,001	)		(4,103,638	)
Net loss attributable to common and Series 1 Convertible Preferred shareholders	$	(4,693,270	)	$	(8,337,255	)

Basic and diluted loss per common share:
Basic	$	(0.22	)	$	(0.38	)
Diluted	$	(0.22	)	$	(0.38	)

WEIGHTED AVERAGE COMMON SHARES:
Basic		21,534,674			21,705,406
Diluted		21,534,674			21,705,406

FLEXSHOPPER, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 and 2023 (unaudited)


		2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(179,269	)	$	(4,233,617	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and impairment of lease merchandise		56,634,623			56,288,128
Other depreciation and amortization		9,607,044			7,881,110
Amortization of debt issuance costs		1,166,302			571,538
Amortization of discount on the promissory note related to acquisition		–			236,952
Compensation expense related to stock-based compensation		888,380			1,677,708
Provision for doubtful accounts		34,333,462			42,505,647
Deferred income tax		(265,291	)		(929,533	)
Net change in fair value of promissory note related to acquisition		–			(3,678,689	)
Net changes in the fair value of loans receivables at fair value		(17,046,488	)		(10,217,854	)
Changes in operating assets and liabilities:
Lease receivables		(61,729,400	)		(51,760,694	)
Loans receivables at fair value		(1,489,228	)		7,356,068
Prepaid expenses and other assets		(1,254,627	)		177,169
Lease merchandise		(56,861,488	)		(53,869,127	)
Purchase consideration payable related to acquisition		–			208,921
Promissory note related to acquisition		–			283,266
Lease liabilities		(46,395	)		(30,268	)
Accounts payable		(1,549,982	)		627,905
Accrued payroll and related taxes		(110,601	)		267,377
Accrued expenses		2,956,805			(26,527	)
Net cash used in operating activities		(34,946,153	)		(6,664,520	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, including capitalized software costs		(6,728,218	)		(6,335,276	)
Additions of intangible assets		(643,080	)		–
Purchases of data costs		(1,779,976	)		(1,225,983	)
Net cash used in investing activities		(9,151,274	)		(7,561,259	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan payable under credit agreement		48,486,690			18,050,000
Repayment of loan payable under credit agreement		–			(2,795,000	)
Repayment of promissory notes to related parties		–			(1,000,000	)
Repayment of loan payable under Basepoint credit agreement		–			(1,500,000	)
Debt issuance related costs		(1,605,446	)		(115,403	)
Proceeds from exercise of stock options		–			1,185
Principal payment under finance lease obligation		(4,601	)		(8,465	)
Tax payments associated with equity-based compensation transactions		(103,487	)		–
Proceeds from rights offering, net of transaction costs		3,711,012			–
Purchase of treasury stock		(397,234	)		(166,757	)
Net cash provided by financing activities		50,086,934			12,465,560

INCREASE/ (DECREASE) IN CASH		5,989,507			(1,760,219	)

CASH, beginning of period		4,413,130			6,173,349

CASH, end of period	$	10,402,637		$	4,413,130

Supplemental cash flow information:
Interest paid	$	20,252,454		$	17,337,292
Noncash investing and financing activities
Due date extension of warrants	$	–		$	917,581

Non-GAAP Financial Measures
We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

Adjusted EBITDA represents net income before interest, stock-based compensation, taxes, depreciation (other than depreciation of leased merchandise), amortization, and one-time or non-recurring items. We believe that Adjusted EBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes.

Key performance metrics for the years ended December 31, 2024 and 2023 are as follows:

		2024			2023		$ Change			% Change
Gross Profit:
Gross lease billings and fees	$	140,887,693		$	131,634,768		$	9,252,925		7.0
Provision for doubtful accounts		(34,333,462	)		(42,505,647	)		8,172,185		(19.2	)
Gain on sale of lease receivables		98,179			2,814,608			(2,716,429	)	(96.5	)
Lease placement collections		307,496			–			307,496		–
Net lease billing and fees	$	106,959,906		$	91,943,729		$	15,016,177		16.3
Loan revenues and fees		11,493,007			14,813,424			(3,320,417	)	(22.4	)
Net changes in the fair value of loans receivable		17,046,488			10,217,854			6,828,634		66.8
Net loan revenues	$	28,539,495		$	25,031,278		$	3,508,217		14.0
Retail revenue		4,301,331			–			4,301,331		–
Total revenues	$	139,800,732		$	116,975,007		$	22,825,725		19.5
Depreciation and impairment of lease merchandise		(56,634,623	)		(56,288,128	)		(346,495	)	0.6
Loans origination costs and fees		(3,063,012	)		(6,007,598	)		2,944,586		(49.0	)
Cost of retail revenue		(3,383,704	)		–			(3,383,704	)	–
Gross profit	$	76,719,393		$	54,679,281		$	22,423,816		40.3
Gross profit margin		55%			47%

		2024			2023		$ Change			% Change
Adjusted EBITDA:
Net loss	$	(179,269	)	$	(4,233,617	)	$	4,054,348		(95.8	)
Income taxes expense/ (benefit)		821,350			(989,809	)		1,811,159		(183.0	)
Amortization of debt issuance costs		1,166,302			571,538			594,764		104.1
Amortization of discount on the promissory note related to acquisition		–			236,952			(236,952	)	(100.0	)
Other amortization and depreciation		9,607,044			7,881,110			1,725,934		21.9
Interest expense		20,970,146			18,105,282			2,864,864		15.8
Stock-based compensation		888,380			1,677,708			(789,328	)	(47.0	)
Adjusted EBITDA	$	33,273,953		$	23,249,164		$	10,024,789		43.1

Key performance metrics for the three months ended December 31, 2024 and 2023 are as follows:

	Three Months Ended December 31,
		2024			2023		$ Change			% Change
Gross Profit:
Gross lease billings and fees	$	34,534,844		$	33,611,362		$	923,482		2.7
Provision for doubtful accounts		(8,959,977	)		(10,381,697	)		1,421,720		(13.7	)
Gain on sale of lease receivables		20,954			10,863			10,091		92.9
Lease placement collections		92,112			–			92,112		–
Net lease billing and fees	$	25,687,933		$	23,240,528		$	2,447,405		10.5
Loan revenues and fees		2,965,564			3,070,646			(105,082	)	(3.4	)
Net changes in the fair value of loans receivable		5,881,114			3,959,575			1,921,359		48.5
Net loan revenues	$	8,846,678		$	7,030,221		$	1,816,457		25.8
Retail revenue		973,683			–			973,863		–
Total revenues	$	35,508,474		$	30,270,749		$	5,237,725		17.3
Depreciation and impairment of lease merchandise		(13,613,272	)		(13,394,865	)		(218,307	)	1.6
Loans origination costs and fees		(667,232	)		(1,129,440	)		462,208		(40.9	)
Cost of retail revenue		(790,199	)		–			(790,199	)	–
Gross profit	$	20,437,771		$	15,746,344		$	4,691,427		29.8
Gross profit margin		58%			52%

	Three Months Ended December 31,
		2024			2023	$ Change			% Change
Adjusted EBITDA:
Net loss	$	(728,416	)	$	354,152	($1,082,568		)	(305.7	)
Income taxes expense/ (benefit)		605,800			195,438		410,362		210.0
Amortization of debt issuance costs		341,803			194,681		147,122		75.6
Amortization of discount on the promissory note related to acquisition		–			59,238		(59,238	)	(100.0	)
Other amortization and depreciation		2,472,471			2,206,179		266,292		12.1
Interest expense		5,580,802			4,813,168		767,634		15.9
Stock-based compensation		359,460			341,341		18,119		5.3
Adjusted EBITDA	$	8,631,920		$	8,164,197	$	467,723		5.7

The Company refers to Adjusted EBITDA in the above tables as the Company uses this measure to evaluate operating performance and to make strategic decisions about the Company. Management believes that Adjusted EBITDA provides relevant and useful information which is widely used by analysts, investors and competitors in its industry in assessing performance.

The MIL Network –

April 24, 2025

MIL-OSI: Morris State Bancshares Announces Quarterly Earnings and Declares Second Quarter Dividend

Source: GlobeNewswire (MIL-OSI)

DUBLIN, Ga., April 23, 2025 (GLOBE NEWSWIRE) — Morris State Bancshares, Inc. (OTCQX: MBLU) (the “Company”), the parent of Morris Bank, today announced net income of $4.9 million for the quarter ending March 31, 2025, representing an increase of $22 thousand, or 0.45%, compared to net income of $4.9 million for the quarter ended March 31, 2024. In the linked quarter comparison, net income decreased $1.2 million, or 20.04%, compared to net income of $6.1 million for the quarter ending December 31, 2024. Net interest income before provision for credit losses increased from the linked and prior year quarters by $980 thousand and $2.5 million, respectively. The decline in linked quarterly net earnings was primarily driven by higher income tax provisioning, increased CECL-related reserves for unfunded loan commitments, and an increase in salary and benefits costs related to the payment of first quarter bonuses for the prior year.

“We are very pleased with our first-quarter performance, highlighted by strong growth in core net interest income. This was driven by a 12 basis-point expansion in our net interest margin compared to the fourth quarter of last year. Despite significant loan payoffs during the quarter, we achieved loan growth of over $23 million, or 2.12%, representing an annualized growth rate of 8.48%. Our asset quality remains strong, and we’ve seen a slight reduction in our adversely classified ratio from the same time last year,” said Spence Mullis, Chairman and CEO.

The net interest margin was 4.29% for the first quarter of 2025 compared to 4.17% for the fourth quarter of 2024 and 3.99% for the first quarter of 2024. The average yield on earning assets grew 6 basis points from 6.01%, as of December 31, 2024, to 6.07%, while the Bank’s cost of funds decreased 9 basis points from 2.06% to 1.97% during the same period.

Provision for credit losses increased $549 thousand and provisioning for unfunded loan commitments increased $521 thousand during the quarter as a result of loan growth. The Company’s asset quality improved during the quarter, as reflected by a decline in the Bank’s adversely classified asset index from 4.96% as of December 31, 2024, to 4.66% as of March 31, 2025. The Bank’s reserve as a percentage of total loans was 1.30% for March 31, 2025, as compared to 1.30% for December 31, 2024, and 1.34% for March 31, 2024. Noninterest expense increased $621 thousand, or 6.95%, compared to the prior quarter ended December 31, 2024, due mainly to higher salary and benefits expenses. With the expiration of solar project tax credits used by the Company each of the last three years, income tax provision increased by $1.0 million, or 217.28%, during the quarter.

After paying a regular quarterly dividend of $0.12 per share and a one-time special dividend of $0.15 per share, the Company’s total shareholders’ equity increased 1.18% during the quarter to $198 million as of March 31, 2025, and up 8.75%, or $15.9 million, from March 31, 2024. The tangible book value of the company grew to $17.66 on March 31, 2025, from $17.45 on December 31, 2024, and was up 9.21% from $16.17¹ as of March 31, 2024. On April 16, 2025, the board of directors approved a second quarter dividend of $0.12 per share payable on or about June 15, 2025, to all shareholders of record as of May 15, 2025.

Forward-looking Statements

Certain statements contained in this release may not be based on historical facts and are forward-looking statements. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “may,” “might,” “will,” “would,” “could” or “intend.” We caution you not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors, including, among others, the business and economic conditions; risks related to the integration of acquired businesses and any future acquisitions; changes in management personnel; interest rate risk; ability to execute on planned expansion and organic growth; credit risk and concentrations associated with the Company’s loan portfolio; asset quality and loan charge-offs; inaccuracy of the assumptions and estimates management of the Company makes in establishing reserves for probable loan losses and other estimates; lack of liquidity; impairment of investment securities, goodwill or other intangible assets; the Company’s risk management strategies; increased competition; system failures or failures to prevent breaches of our network security; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes; and increases in capital requirements. We undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release.

¹^{Common stock}^{, tangible book value}^{and p}^{er share amounts for March 31, 2024 and previous quarters have been adjusted to reflect the April 22, 2024 4-for}^–^{1 stock dividend.}


MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Consolidating Balance Sheet


	March 31,			December 31,								March 31,
	2025			2024			Change			% Change		2024			Change			% Change
	(Unaudited)											(Unaudited)
ASSETS

Cash and due from banks	$	92,342,678		$	53,898,138		$	38,444,540		71.33	%	$	67,354,916		$	24,987,762		37.10	%
Federal funds sold		15,606,716			42,064,131			(26,457,415	)	-62.90	%		3,746,408			11,860,308		316.58	%
Total cash and cash equivalents		107,949,394			95,962,269			11,987,125		12.49	%		71,101,324			36,848,070		51.82	%

Interest-bearing time deposits in other banks		100,000			100,000			—		0.00	%		100,000			—		0.00	%
Securities available for sale, at fair value		9,414,147			9,726,716			(312,569	)	-3.21	%		7,845,095			1,569,052		0.00	%
Securities held to maturity, at cost (net of CECL Reserve)		208,561,077			215,836,502			(7,275,425	)	-3.37	%		231,758,455			(23,197,378	)	-10.01	%
Federal Home Loan Bank stock, restricted, at cost		1,084,200			1,032,800			51,400		4.98	%		1,029,600			54,600		5.30	%
Loans, net of unearned income		1,139,719,828			1,116,074,659			23,645,169		2.12	%		1,060,755,992			78,963,836		7.44	%
Less-allowance for credit losses		(14,829,709	)		(14,488,525	)		(341,184	)	2.35	%		(14,236,149	)		(593,560	)	4.17	%
Loans, net		1,124,890,119			1,101,586,134			23,303,985		2.12	%		1,046,519,843			78,370,276		7.49	%

Bank premises and equipment, net		14,844,597			12,780,014			2,064,583		16.15	%		13,112,437			1,732,160		13.21	%
ROU assets for operating lease, net		692,339			776,979			(84,640	)	-10.89	%		1,035,712			(343,373	)	-33.15	%
Goodwill		9,361,704			9,361,704			—		0.00	%		9,361,704			—		0.00	%
Intangible assets, net		1,253,288			1,338,964			(85,676	)	-6.40	%		1,594,101			(340,813	)	-21.38	%
Other real estate and foreclosed assets		15,503			21,898			(6,395	)	-29.20	%		38,558			(23,055	)	-59.79	%
Accrued interest receivable		6,369,932			7,278,258			(908,326	)	-12.48	%		5,964,911			405,021		6.79	%
Cash surrender value of life insurance		15,233,512			15,128,762			104,750		0.69	%		14,813,139			420,373		2.84	%
Other assets		21,726,495			22,674,658			(948,163	)	-4.18	%		25,151,653			(3,425,158	)	-13.62	%
Total Assets	$	1,521,496,307		$	1,493,605,658		$	27,890,649		1.87	%	$	1,429,426,532			92,069,775		6.44	%


LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits:
Non-interest bearing	$	330,414,834		$	325,534,335		$	4,880,499		1.50	%	$	302,810,356			27,604,478		9.12	%
Interest bearing		963,948,287			939,354,005			24,594,282		2.62	%		904,181,606			59,766,681		6.61	%
		1,294,363,121			1,264,888,340			29,474,781		2.33	%		1,206,991,962			87,371,159		7.24	%

Other borrowed funds		19,029,606			19,019,372			10,234		0.05	%		27,169,934			(8,140,328	)	-29.96	%
Lease liability for operating lease		692,339			776,979			(84,640	)	-10.89	%		1,035,712			(343,373	)	-33.15	%
Accrued interest payable		2,778,669			2,111,093			667,576		31.62	%		1,419,439			1,359,230		95.76	%
Accrued expenses and other liabilities		6,726,119			11,206,717			(4,480,598	)	-39.98	%		10,830,616			(4,104,497	)	-37.90	%

Total liabilities		1,323,589,854			1,298,002,501			25,587,353		1.97	%		1,247,447,663			76,142,191		6.10	%

Shareholders’ Equity:
Common stock		10,701,756			10,688,723			13,033		0.12	%		10,645,509			56,247		0.53	%
Paid in capital surplus		35,307,009			34,936,059			370,950		1.06	%		34,349,749			957,260		2.79	%
Retained earnings		149,055,224			130,111,050			18,944,174		14.56	%		133,038,717			16,016,507		12.04	%
Current year earnings		4,913,056			21,804,345			(16,891,289	)	-77.47	%		4,890,818			22,238		0.45	%
Accumulated other comprehensive income (loss)		1,289,137			1,422,709			(133,572	)	-9.39	%		1,811,160			(522,023	)	-28.82	%
Treasury Stock, at cost 95,498		(3,359,729	)		(3,359,729	)		—		0.00	%		(2,757,084	)		(602,645	)	21.86	%
Total shareholders’ equity		197,906,453			195,603,157			2,303,296		1.18	%		181,978,869			15,927,584		8.75	%

Total Liabilities and Shareholders’ Equity	$	1,521,496,307		$	1,493,605,658			27,890,649		1.87	%	$	1,429,426,532			92,069,775		6.44	%


MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

Consolidating Statement of Income
for the Three Months Ended


	March 31,		December 31,							March 31,
	2025		2024		Change			% Change		2024		Change			% Change
	(Unaudited)		(Unaudited)							(Unaudited)
Interest and Dividend Income:
Interest and fees on loans	$	19,338,360	$	18,818,919	$	519,441		2.76	%	$	17,124,889	$	2,213,471		12.93	%
Interest income on securities		1,671,657		1,735,131		(63,474	)	-3.66	%		1,970,394		(298,737	)	-15.16	%
Income on federal funds sold		534,479		363,781		170,698		46.92	%		168,129		366,350		217.90	%
Income on time deposits held in other banks		605,454		362,174		243,280		67.17	%		408,412		197,042		48.25	%
Other interest and dividend income		25,413		22,116		3,297		14.91	%		75,848		(50,435	)	-66.49	%
Total interest and dividend income		22,175,363		21,302,121		873,242		4.10	%		19,747,672		2,427,691		12.29	%

Interest Expense:
Deposits		6,413,065		6,401,228		11,837		0.18	%		6,339,843		73,222		1.15	%
Interest on other borrowed funds		286,480		404,974		(118,494	)	-29.26	%		445,278		(158,798	)	-35.66	%
Interest on federal funds purchased		—		129		(129	)	-100.00	%		—		—		0.00	%
Total interest expense		6,699,545		6,806,331		(106,786	)	-1.57	%		6,785,121		(85,576	)	-1.26	%

Net interest income before provision for loan losses		15,475,818		14,495,790		980,028		6.76	%		12,962,551		2,513,267		19.39	%
Less-provision for credit losses		577,123		27,972		549,151		1963.22	%		4,501		572,622		12722.11	%
Net interest income after provision for credit losses		14,898,695		14,467,818		430,877		2.98	%		12,958,050		1,940,645		14.98	%

Noninterest Income:
Service charges on deposit accounts		540,600		560,822		(20,222	)	-3.61	%		491,568		49,032		9.97	%
Other service charges, commissions and fees		380,482		393,175		(12,693	)	-3.23	%		362,692		17,790		4.90	%
Gain on sales of foreclosed assets		—		—		—		—			700		(700	)	-100.00	%
Gain on sale of securities available for sale		—		447		(447	)	-100.00	%		—		—		447
Increase in CSV of life insurance		104,750		106,388		(1,638	)	-1.54	%		101,516		3,234		3.19	%
Other income		20,407		15,349		5,058		32.95	%		251,361		(230,954	)	-91.88	%
Total noninterest income		1,046,239		1,076,181		(29,942	)	-2.78	%		1,207,837		(161,598	)	-13.38	%

Noninterest Expense:
Salaries and employee benefits		5,122,152		4,743,238		378,914		7.99	%		4,861,534		260,618		5.36	%
Occupancy and equipment expenses, net		527,532		550,212		(22,680	)	-4.12	%		545,126		(17,594	)	-3.23	%
Loss on sales of foreclosed assets		—		8,457		(8,457	)	-100.00	%		—		—		—
Other expenses		3,905,857		3,632,476		273,381		7.53	%		3,716,219		189,638		5.10	%
Total noninterest expense		9,555,541		8,934,383		621,158		6.95	%		9,122,879		432,662		4.74	%

Income Before Income Taxes		6,389,393		6,609,616		(220,223	)	-3.33	%		5,043,008		1,346,385		26.70	%
Provision for income taxes		1,476,337		465,314		1,011,023		217.28	%		152,190		1,324,147		870.06	%
													–
Net Income	$	4,913,056	$	6,144,302		(1,231,246	)	-20.04	%	$	4,890,818		22,238		0.45	%


Earnings per common share:
Basic	$	0.46	$	0.58		(0.12	)	-20.69	%	$	0.46		–		0.00	%
Diluted	$	0.46	$	0.58		(0.12	)	-20.69	%	$	0.46		–		0.00	%
	.


MORRIS STATE BANCSHARES, INC.
AND SUBSIDIARIES

	Quarter Ending

	March 31,			December 31,			March 31,
	2025			2024			2024
Dollars in thousand, except per share data	(Unaudited)			(Unaudited)			(Unaudited)


Per Share Data
Basic Earnings per Common Share	$	0.46		$	0.58		$	0.46
Diluted Earnings per Common Share		0.46			0.58			0.46
Dividends per Common Share		0.27			0.092			0.092
Book Value per Common Share		18.66			18.46			17.20
Tangible Book Value per Common Share		17.66			17.45			16.17

Average Diluted Shared Outstanding		10,593,370			10,596,432			10,602,289
End of Period Common Shares Outstanding		10,606,258			10,593,225			10,624,932


Annualized Performance Ratios (Bank Only)
Return on Average Assets		1.41	%		1.79	%		1.55	%
Return on Average Equity		11.12	%		13.69	%		11.74	%
Equity/Assets		12.75	%		12.84	%		13.09	%
Yield on Earning Assets		6.07	%		6.01	%		5.87	%
Cost of Funds		1.97	%		2.06	%		2.09	%
Net Interest Margin		4.29	%		4.17	%		3.99	%
Efficiency Ratio		57.90	%		54.21	%		61.48	%

Credit Metrics
Allowance for Credit Losses to Total Loans		1.30	%		1.30	%		1.34	%
Adversely Classified Assets to Tier 1 Capital
plus Allowance for Credit Losses		4.66	%		4.96	%		5.22	%

The MIL Network –

April 24, 2025

MIL-OSI: Hanover Bancorp, Inc. Reports First Quarter 2025 Results Highlighted by Accelerated Margin Expansion, Improved Credit Quality Metrics & Successful Core Banking System Conversion

Source: GlobeNewswire (MIL-OSI)

First Quarter Performance Highlights

Net Income: Net income for the quarter ended March 31, 2025 totaled $1.5 million or $0.20 per diluted share (including Series A preferred shares). Adjusted (non-GAAP) net income (excluding core system conversion expenses of $2.6 million, net of tax) increased to $4.1 million or $0.55 per diluted share for the quarter ended March 31, 2025.
Net Interest Income: Net interest income was $14.6 million for the quarter ended March 31, 2025, an increase of $0.8 million or 5.95% from the quarter ended December 31, 2024 and $1.7 million, or 13.10% from the quarter ended March 31, 2024.
Net Interest Margin Expansion: The Company’s net interest margin during the quarter ended March 31, 2025 increased to 2.68% from 2.53% in the quarter ended December 31, 2024 and 2.41% in the quarter ended March 31, 2024.
Strong Liquidity Position: At March 31, 2025, undrawn liquidity sources, which include cash and unencumbered securities and secured and unsecured funding capacity, totaled $679.0 million, or approximately 322% of uninsured deposit balances. Insured and collateralized deposits, which include municipal deposits, accounted for approximately 89% of total deposits at March 31, 2025.
Demand Deposits: Demand deposits increased $12.6 million or 6.23% from March 31, 2024 and $3.9 million or 1.85% from December 31, 2024.
Loan Diversification Strategy: The Company continues to actively manage its Multi-Family and Commercial Real Estate portfolios which resulted in a reduction in the commercial real estate concentration ratio to 369% of capital at March 31, 2025 from 385% at December 31, 2024 and 416% at March 31, 2024. The Company continues to focus loan growth primarily in residential loan products originated for sale to specific buyers in the secondary market, C&I and SBA loans. The Company will selectively explore Commercial Real Estate opportunities with an emphasis on relationship based Commercial Real Estate lending.
Asset Quality: At March 31, 2025, the Bank’s asset quality improved with non-performing loans decreasing 28.5% to $11.7 million, representing 0.60% of the total loan portfolio, while the allowance for credit losses increased to 1.17% of total loans.
Tangible Book Value Per Share: Tangible book value per share (including Series A preferred shares) was $23.62 at March 31, 2025 (inclusive of one-time core system conversion expenses of $2.6 million, net of tax, or $0.34 per share) compared to $23.86 at December 31, 2024.
Technology & Rebranding: The Company completed its core processing system conversion to FIS Horizon in February 2025. This conversion, coupled with our recently revealed refreshed corporate logo, exemplifies our momentum towards a more technologically advanced, modern and digitally forward-thinking bank.
Quarterly Cash Dividend: The Company’s Board of Directors approved a $0.10 per share cash dividend on both common and Series A preferred shares payable on May 14, 2025 to stockholders of record on May 7, 2025.

MINEOLA, N.Y., April 23, 2025 (GLOBE NEWSWIRE) — Hanover Bancorp, Inc. (“Hanover” or “the Company” – NASDAQ: HNVR), the holding company for Hanover Community Bank (“the Bank”), today reported results for the quarter ended March 31, 2025 and the declaration of a $0.10 per share cash dividend on both common and Series A preferred shares payable on May 14, 2025 to stockholders of record on May 7, 2025.

Earnings Summary for the Quarter Ended March 31, 2025

The Company reported net income for the quarter ended March 31, 2025 of $1.5 million or $0.20 per diluted share (including Series A preferred shares), versus $4.1 million or $0.55 per diluted share (including Series A preferred shares) in the quarter ended March 31, 2024. The Company recorded adjusted (non-GAAP) net income (excluding core system conversion expenses of $2.6 million, net of tax) of $4.1 million or $0.55 per diluted share in the quarter ended March 31, 2025, versus net income of $4.1 million or $0.55 per diluted share in the comparable 2024 quarter (which included no adjustments). Returns on average assets, average stockholders’ equity and average tangible equity were 0.27%, 3.11% and 3.45%, respectively, for the quarter ended March 31, 2025, versus 0.74%, 8.70% and 9.71%, respectively, for the comparable quarter of 2024. Adjusted (non-GAAP) returns, exclusive of core system conversion expenses on average assets, average stockholders’ equity and average tangible equity were 0.73%, 8.36% and 9.27%, respectively, in the quarter ended March 31, 2025, versus 0.74%, 8.70% and 9.71%, respectively, in the comparable quarter of 2024.

While net interest income and non-interest income increased during the quarter ended March 31, 2025 compared to the quarter ended March 31, 2024, these were partially offset by increases in provision for credit losses and non-interest expenses, particularly compensation and benefits and the one-time core system conversion expenses. The increase in compensation and benefits expense in the first quarter of 2025 versus the comparable 2024 quarter was primarily related to lower deferred loan origination costs partially offset by lower incentive compensation expense resulting from reduced lending activity. The Company’s effective tax rate decreased to 13.8% in the first quarter of 2025 from 24.9% both in the linked quarter and the comparable 2024 quarter due to the tax impact of the windfall benefit from expiring stock options that were exercised and vested restricted stock. We expect a normalized run rate of 25.0% for the remainder of the year.

Net interest income was $14.6 million for the quarter ended March 31, 2025, an increase of $1.7 million, or 13.10% from the comparable 2024 quarter due to improvement of the Company’s net interest margin to 2.68% in the 2025 quarter from 2.41% in the comparable 2024 quarter. The yield on interest earning assets decreased to 6.01% in the 2025 quarter from 6.03% in the comparable 2024 quarter, a decrease of 2 basis points that was partially offset by a 32 basis point decrease in the cost of interest-bearing liabilities to 4.01% in 2025 from 4.33% in the first quarter of 2024. Net interest income on a linked quarter basis increased $0.8 million or 5.95%, due to a 15 basis point increase in net interest margin resulting from a 23 basis point decrease in cost of interest-bearing liabilities, partially offset by a 5 basis point decrease on yield on interest earning assets. The increase in the net interest margin was a result of the late 2024 reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank’s balance sheet.

Michael P. Puorro, Chairman and Chief Executive Officer, commented on the Company’s quarterly results: “We are pleased with our first quarter performance which reflected sizable improvements in Net Interest Income and Net Interest Margin that drove stronger adjusted ROTE and ROA for the period. Specifically, NII increased from $13.8 million to $14.6 million and NIM from 2.53% to 2.68%, resulting in adjusted ROTE of 9.27% and ROA of 0.73%, confirming a trend away from the restrictive environment of the last couple of years. Building on this positive momentum were improved credit metrics and the completion of our core banking system conversion, a significant achievement that is expected to deliver tangible operational efficiencies and customer benefits while enhancing our commitment to digital banking. In addition to the core banking system conversion, we recently announced our new logo which is representative of our focus on innovation and a digital forward strategy. Moving forward, we remain committed to disciplined development of our core business verticals which include niche residential, SBA and C&I lending. Further, we look forward to a more favorable banking environment and the upcoming potential qualification for the Russell 2000, which should increase institutional ownership and enhance the liquidity of our stock.”

Balance Sheet Highlights

Total assets at March 31, 2025 were $2.29 billion versus $2.31 billion at December 31, 2024. Total securities available for sale at March 31, 2025 were $93.2 million, an increase of $9.4 million from December 31, 2024, primarily driven by growth in collateralized mortgage obligations, collateralized loan obligations and corporate bonds.

Total deposits at March 31, 2025 were $1.94 billion, a decrease of $17.8 million or 0.91%, compared to $1.95 billion at December 31, 2024. Total deposits increased $19.2 million or 1.00% from March 31, 2024. Demand deposits increased $12.6 million or 6.23% from March 31, 2024. Our loan to deposit ratio improved to 101% at March 31, 2025 from 102% at December 31, 2024.

The Company had $517.1 million in total municipal deposits at March 31, 2025, at a weighted average rate of 3.71% versus $509.3 million at a weighted average rate of 3.72% at December 31, 2024 and $576.3 million at a weighted average rate of 4.65% at March 31, 2024. The Company’s municipal deposit program is built on long-standing relationships developed in the local marketplace. This core deposit business will continue to provide a stable source of funding for the Company’s lending products at costs lower than those of consumer deposits and market-based borrowings. The Company continues to broaden its municipal deposit base and currently services 40 customer relationships.

Total borrowings at March 31, 2025 were $107.8 million, with a weighted average rate and term of 4.11% and 20 months, respectively. At March 31, 2025 and December 31, 2024, the Company had $107.8 million of term FHLB advances outstanding. The Company had no FHLB overnight borrowings outstanding at March 31, 2025 and December 31, 2024. The Company had no borrowings outstanding under lines of credit with correspondent banks at March 31, 2025 and December 31, 2024.

Stockholders’ equity was $196.6 million at both March 31, 2025 and December 31, 2024. Retained earnings increased by $0.8 million due primarily to net income of $1.5 million for the quarter ended March 31, 2025, which was offset by $0.7 million of dividends declared. The accumulated other comprehensive loss at March 31, 2025 was 0.71% of total equity and was comprised of a $0.9 million after tax net unrealized loss on the investment portfolio and a $0.5 million after tax net unrealized loss on derivatives. Tangible book value per share (including Series A preferred shares) was $23.62 at March 31, 2025 (inclusive of one-time core system conversion expenses of $2.6 million, net of tax, or $0.34 per share) compared to $23.86 at December 31, 2024.

Loan Portfolio

For the three months ended March 31, 2025, the Bank’s loan portfolio decreased $24.9 million to $1.96 billion from December 31, 2024. The decrease resulted primarily from the ongoing management of our commercial real estate and multifamily loan concentrations. At March 31, 2025, the Company’s residential loan portfolio (including home equity) amounted to $733.6 million, with an average loan balance of $486 thousand and a weighted average loan-to-value ratio of 57%. Commercial real estate (including construction) and multifamily loans totaled $1.06 billion at March 31, 2025, with an average loan balance of $1.5 million and a weighted average loan-to-value ratio of 59%. As will be discussed below, approximately 37% of the multifamily portfolio is subject to rent regulation. The Company’s commercial real estate concentration ratio continues to improve, decreasing to 369% of capital at March 31, 2025 from 385% at December 31, 2024 and 416% at March 31, 2024, with loans secured by office space accounting for 2.23% of the total loan portfolio and totaling $43.8 million at March 31, 2025. The Company’s loan pipeline with executed term sheets at March 31, 2025 is approximately $255.0 million, with approximately 92% being niche-residential, conventional C&I and SBA lending opportunities.

The Bank remains focused on expanding its core verticals and continues to originate loans for its portfolio and for sale in the secondary market under its residential flow origination program. Of the $48.8 million in closed residential loans originated in the quarter ended March 31, 2025, $27.6 million were originated for the Bank’s portfolio and reflected a weighted average yield of 6.64% before origination and other fees, which average 50-100 bps per loan, and a weighted average LTV of 58%. The remaining $21.2 million of closed loans were originated for sale in the secondary market. During the quarter ended March 31, 2025, the Company sold $18.3 million of residential loans under its flow origination program and recorded gains on sale of loans held-for-sale of $0.4 million with a premium of 2.38%.

During the quarters ended March 31, 2025 and 2024, the Company sold approximately $23.4 million and $26.7 million, respectively, in government guaranteed SBA loans and recorded gains on sale of loans held-for-sale of $1.9 million and $2.5 million, respectively. SBA loan originations and gains on sale were lower due to a combination of factors, including: lower than expected loan sale premiums due, we believe, to first quarter market turmoil; delays in loan closings resulting from the impact of administrative changes to SBA Standard Operating Procedures; and the inability of certain loans to close because of delays by state regulatory agencies in issuing permit approvals to certain borrowers. As we enter the second quarter of 2025, we expect to navigate these factors and to increase the volume of origination and loan sale activity throughout the year. The Bank concluded the first quarter of 2025 with C&I loan originations of approximately $16.8 million. Based on its existing pipeline, the Bank expects C&I lending and deposit activity to grow as the year progresses.

Commercial Real Estate Statistics

A significant portion of the Bank’s commercial real estate portfolio consists of loans secured by Multi-Family and CRE-Investor owned real estate that are predominantly subject to fixed interest rates for an initial period of 5 years. The Bank’s exposure to Land/Construction loans is minor at $8.0 million, all at floating interest rates. As shown below, 31% of the loan balances in these combined portfolios will either have a rate reset or mature in 2025 and 2026, with another 56% with rate resets or maturing in 2027.

Multi-Family Market Rent Portfolio Fixed Rate Reset/Maturity Schedule								Multi-Family Stabilized Rent Portfolio Fixed Rate Reset/Maturity Schedule
Calendar Period	# Loans	Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate		Calendar Period	# Loans	Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate

2025	10	$	16,321	$	1,632	4.45	%	2025	10	$	17,025	$	1,703	5.03	%
2026	36		117,886		3,275	3.66	%	2026	20		42,549		2,127	3.67	%
2027	70		174,601		2,494	4.29	%	2027	53		123,668		2,333	4.22	%
2028	16		21,382		1,336	6.20	%	2028	13		10,914		839	7.17	%
2029	6		4,929		821	7.70	%	2029	4		4,328		1,082	6.38	%
2030+	2		171		85	6.00	%	2030+	4		1,129		282	6.02	%
Fixed Rate	140		335,290		2,395	4.61	%	Fixed Rate	104		199,613		1,919	4.39	%
Floating Rate	2		749		375	9.50	%	Floating Rate	—		—		—	—	%
Total	142	$	336,039	$	2,366	4.26	%	Total	104	$	199,613	$	1,919	4.39	%

CRE Investor Portfolio Fixed Rate Reset/Maturity Schedule
Calendar Period	# Loans	Total O/S ($000’s omitted)		Avg O/S ($000’s omitted)		Avg Interest Rate

2025	29	$	23,092	$	796	6.13	%
2026	33		41,668		1,263	4.84	%
2027	90		162,557		1,806	5.03	%
2028	30		31,763		1,059	6.64	%
2029	4		2,353		588	7.03	%
2030+	13		7,967		613	6.49	%
Fixed Rate	199		269,400		1,354	5.35	%
Floating Rate	5		19,074		3,815	8.73	%
Total CRE-Inv.	204	$	288,474	$	1,414	5.57	%

Rental breakdown of Multi-Family portfolio

The table below segments our portfolio of loans secured by Multi-Family properties based on rental terms and location. As shown below, 63% of the combined portfolio is secured by properties subject to free market rental terms, which is the dominant tenant type. Both the Market Rent and Stabilized Rent segments of our portfolio present very similar average borrower profiles. The portfolio is primarily located in the New York City boroughs of Brooklyn, the Bronx and Queens.

Multi-Family Loan Portfolio – Loans by Rent Type
Rent Type	# of Notes	Outstanding Loan Balance		% of Total Multi-Family		Avg Loan Size		LTV		Current DSCR	Avg # of Units
		($000’s omitted)				($000’s omitted)

Market	142	$	336,039	63	%	$	2,366	61.5	%	1.41	11
Location
Manhattan	7	$	10,299	2	%	$	1,471	49.6	%	1.88	14
Other NYC	93	$	244,552	46	%	$	2,630	61.2	%	1.40	9
Outside NYC	42	$	81,188	15	%	$	1,933	64.2	%	1.36	13

Stabilized	104	$	199,613	37	%	$	1,919	62.1	%	1.42	12
Location
Manhattan	6	$	8,843	2	%	$	1,474	44.2	%	1.58	17
Other NYC	86	$	171,852	32	%	$	1,998	62.8	%	1.41	11
Outside NYC	12	$	18,918	3	%	$	1,576	64.1	%	1.49	16

Office Property Exposure

The Bank’s exposure to the Office market is minor. Loans secured by office space accounted for 2.23% of the total loan portfolio with a total balance of $43.8 million, of which less than 1% is located in Manhattan. The pool has a 2.32x weighted average DSCR, a 53% weighted average LTV and less than $353,000 of exposure in Manhattan.

Asset Quality and Allowance for Credit Losses

At March 31, 2025, the Bank’s asset quality metrics improved with non-performing loans totaling $11.7 million compared to non-performing loans of $16.4 million at December 31, 2024, a decrease of $4.7 million. This decrease resulted primarily from the contracted sale of non-performing loans totaling $5.0 million, net of a $0.3 million charge-off, during the quarter. At March 31, 2025 non-performing loans were 0.60% of total loans outstanding versus 0.82% at December 31, 2024.

During the first quarter of 2025, the Bank recorded a provision for credit losses expense of $0.6 million. The March 31, 2025 allowance for credit losses was $22.9 million versus $22.8 million at December 31, 2024. The allowance for credit losses as a percentage of total loans was 1.17% at March 31, 2025 and 1.15% at December 31, 2024.

Net Interest Margin

The Bank’s net interest margin increased to 2.68% for the quarter ended March 31, 2025 compared to 2.53% in the quarter ended December 31, 2024 and 2.41% in the quarter ended March 31, 2024 due to the recent reductions in the Fed Funds effective rate and the liability sensitive nature of the Bank’s balance sheet.

About Hanover Community Bank and Hanover Bancorp, Inc.

Hanover Bancorp, Inc. (NASDAQ: HNVR), is the bank holding company for Hanover Community Bank, a community commercial bank focusing on highly personalized and efficient services and products responsive to client needs. Management and the Board of Directors are comprised of a select group of successful local businesspeople who are committed to the success of the Bank by knowing and understanding the metro-New York area’s financial needs and opportunities. Backed by state-of-the-art technology, Hanover offers a full range of financial services. Hanover offers a complete suite of consumer, commercial, and municipal banking products and services, including multi-family and commercial mortgages, residential loans, business loans and lines of credit. Hanover also offers its customers access to 24-hour ATM service with no fees attached, free checking with interest, telephone banking, advanced technologies in mobile and internet banking for our consumer and business customers, safe deposit boxes and much more. The Company’s corporate administrative office is located in Mineola, New York where it also operates a full-service branch office along with additional branch locations in Garden City Park, Hauppauge, Forest Hills, Flushing, Sunset Park, Rockefeller Center and Chinatown, New York, and Freehold, New Jersey, with a new branch opening in Port Jefferson, New York in mid 2025.

Hanover Community Bank is a member of the Federal Deposit Insurance Corporation and is an Equal Housing/Equal Opportunity Lender. For further information, call (516) 548-8500 or visit the Bank’s website at www.hanoverbank.com.

Non-GAAP Disclosure

This discussion, including the financial statements attached thereto, includes non-GAAP financial measures which include the Company’s adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, tangible common equity (“TCE”) ratio, TCE, tangible assets, tangible book value per share, return on average tangible equity and efficiency ratio. A non-GAAP financial measure is a numerical measure of historical or future performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes that the presentation of non-GAAP financial measures provides both management and investors with a greater understanding of the Company’s operating results and trends in addition to the results measured in accordance with GAAP, and provides greater comparability across time periods. While management uses non-GAAP financial measures in its analysis of the Company’s performance, this information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures used by other financial institutions.

With respect to the calculations of and reconciliations of adjusted net income, TCE, tangible assets, TCE ratio and tangible book value per share, reconciliations to the most comparable U.S. GAAP measures are provided in the tables that follow.

Forward-Looking Statements

This release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Hanover Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Hanover Bancorp, Inc. may turn out to be incorrect. They can be affected by inaccurate assumptions that Hanover Bancorp, Inc. might make or by known or unknown risks and uncertainties, including those discussed in our Annual Report on Form 10-K under Item 1A – Risk Factors, as updated by our subsequent filings with the Securities and Exchange Commission. Further, the adverse effect of health emergencies or natural disasters on the Company, its customers, and the communities where it operates may adversely affect the Company’s business, results of operations and financial condition for an indefinite period of time. Consequently, no forward-looking statement can be guaranteed. Hanover Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release or to conform these statements to actual events.

Investor and Press Contact:
Lance P. Burke
Chief Financial Officer
(516) 548-8500


HANOVER BANCORP, INC.
STATEMENTS OF CONDITION (unaudited)
(dollars in thousands)


		March 31,			December 31,			March 31,
			2025			2024			2024
Assets
Cash and cash equivalents		$	160,234		$	162,857		$	136,481
Securities-available for sale, at fair value			93,197			83,755			92,709
Investments-held to maturity			3,671			3,758			3,973
Loans held for sale			16,306			12,404			7,641

Loans, net of deferred loan fees and costs			1,960,674			1,985,524			2,005,515
Less: allowance for credit losses			(22,925	)		(22,779	)		(19,873	)
Loans, net			1,937,749			1,962,745			1,985,642

Goodwill			19,168			19,168			19,168
Premises & fixed assets			14,511			15,337			15,648
Operating lease assets			8,484			8,337			9,336
Other assets			38,207			43,749			36,910
	Assets	$	2,291,527		$	2,312,110		$	2,307,508

Liabilities and stockholders’ equity
Core deposits		$	1,418,209		$	1,456,513		$	1,453,035
Time deposits			518,229			497,770			464,227
Total deposits			1,936,438			1,954,283			1,917,262

Borrowings			107,805			107,805			148,953
Subordinated debentures			24,702			24,689			24,648
Operating lease liabilities			9,144			9,025			10,039
Other liabilities			16,795			19,670			17,063
	Liabilities		2,094,884			2,115,472			2,117,965

Stockholders’ equity			196,643			196,638			189,543
	Liabilities and stockholders’ equity	$	2,291,527		$	2,312,110		$	2,307,508


HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(dollars in thousands, except per share data)

	Three Months Ended
	3/31/2025		3/31/2024

Interest income	$	32,837	$	32,432
Interest expense		18,208		19,497
Net interest income		14,629		12,935
Provision for credit losses		600		300
Net interest income after provision for credit losses		14,029		12,635

Loan servicing and fee income		1,081		913
Service charges on deposit accounts		117		96
Gain on sale of loans held-for-sale		2,352		2,506
Other operating income		182		61
Non-interest income		3,732		3,576

Compensation and benefits		7,232		5,562
Conversion expenses		3,180		–
Occupancy and equipment		1,836		1,770
Data processing		593		518
Professional fees		787		818
Federal deposit insurance premiums		337		318
Other operating expenses		2,031		1,818
Non-interest expense		15,996		10,804

Income before income taxes		1,765		5,407
Income tax expense		244		1,346

Net income	$	1,521	$	4,061

Earnings per share (“EPS”):⁽¹⁾
Basic	$	0.20	$	0.55
Diluted	$	0.20	$	0.55

Average shares outstanding for basic EPS ⁽¹⁾⁽²⁾		7,463,537		7,376,227
Average shares outstanding for diluted EPS ⁽¹⁾⁽²⁾		7,469,489		7,420,926

⁽¹⁾ Calculation includes common stock and Series A preferred stock.
⁽²⁾ Average shares outstanding before subtracting participating securities.


HANOVER BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
QUARTERLY TREND
(dollars in thousands, except per share data)

	Three Months Ended
	3/31/2025		12/31/2024		9/30/2024		6/30/2024		3/31/2024

Interest income	$	32,837	$	33,057	$	34,113	$	33,420	$	32,432
Interest expense		18,208		19,249		21,011		20,173		19,497
Net interest income		14,629		13,808		13,102		13,247		12,935
Provision for credit losses		600		400		200		4,040		300
Net interest income after provision for credit losses		14,029		13,408		12,902		9,207		12,635

Loan servicing and fee income		1,081		981		960		836		913
Service charges on deposit accounts		117		136		123		114		96
Gain on sale of loans held-for-sale		2,352		3,014		2,834		2,586		2,506
Gain on sale of investments		–		27		–		4		–
Other operating income		182		29		37		82		61
Non-interest income		3,732		4,187		3,954		3,622		3,576

Compensation and benefits		7,232		6,699		6,840		6,499		5,562
Conversion expenses		3,180		–		–		–		–
Occupancy and equipment		1,836		1,810		1,799		1,843		1,770
Data processing		593		536		547		495		518
Professional fees		787		782		762		717		818
Federal deposit insurance premiums		337		375		360		365		318
Other operating expenses		2,031		2,198		1,930		1,751		1,818
Non-interest expense		15,996		12,400		12,238		11,670		10,804

Income before income taxes		1,765		5,195		4,618		1,159		5,407
Income tax expense		244		1,293		1,079		315		1,346

Net income	$	1,521	$	3,902	$	3,539	$	844	$	4,061

Earnings per share (“EPS”):⁽¹⁾
Basic	$	0.20	$	0.53	$	0.48	$	0.11	$	0.55
Diluted	$	0.20	$	0.52	$	0.48	$	0.11	$	0.55

Average shares outstanding for basic EPS ⁽¹⁾⁽²⁾		7,463,537		7,427,583		7,411,064		7,399,816		7,376,227
Average shares outstanding for diluted EPS ⁽¹⁾⁽²⁾		7,469,489		7,456,471		7,436,068		7,449,110		7,420,926

⁽¹⁾ Calculation includes common stock and Series A preferred stock.
⁽²⁾ Average shares outstanding before subtracting participating securities.


HANOVER BANCORP, INC.
CONSOLIDATED NON-GAAP FINANCIAL INFORMATION ⁽¹⁾(unaudited)
(dollars in thousands, except per share data)

	Three Months Ended
	3/31/2025			3/31/2024

ADJUSTED NET INCOME:
Net income, as reported	$	1,521		$	4,061
Adjustments:
Conversion expenses		3,180			–
Total adjustments, before income taxes		3,180			–
Adjustment for reported effective income tax rate		608			–
Total adjustments, after income taxes		2,572			–
Adjusted net income	$	4,093		$	4,061
Basic earnings per share – adjusted	$	0.55		$	0.55
Diluted earnings per share – adjusted	$	0.55		$	0.55

ADJUSTED OPERATING EFFICIENCY RATIO:
Operating efficiency ratio, as reported		87.12	%		65.44	%
Adjustments:
Conversion expenses		-17.32	%		0.00	%
Adjusted operating efficiency ratio		69.80	%		65.44	%

ADJUSTED RETURN ON AVERAGE ASSETS		0.73	%		0.74	%
ADJUSTED RETURN ON AVERAGE EQUITY		8.36	%		8.70	%
ADJUSTED RETURN ON AVERAGE TANGIBLE EQUITY		9.27	%		9.71	%

⁽¹⁾ 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 that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.


HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands)


	Three Months Ended
	3/31/2025			3/31/2024
Profitability:
Return on average assets		0.27	%		0.74	%
Return on average equity ⁽¹⁾		3.11	%		8.70	%
Return on average tangible equity ⁽¹⁾		3.45	%		9.71	%
Pre-provision net revenue to average assets		0.42	%		1.03	%
Yield on average interest-earning assets		6.01	%		6.03	%
Cost of average interest-bearing liabilities		4.01	%		4.33	%
Net interest rate spread ⁽²⁾		2.00	%		1.70	%
Net interest margin ⁽³⁾		2.68	%		2.41	%
Non-interest expense to average assets		2.85	%		1.96	%
Operating efficiency ratio ⁽⁴⁾		87.12	%		65.44	%

Average balances:
Interest-earning assets	$	2,217,107		$	2,162,835
Interest-bearing liabilities		1,842,073			1,810,397
Loans		1,989,796			1,984,075
Deposits		1,919,436			1,842,642
Borrowings		133,665			162,427


⁽¹⁾ Includes common stock and Series A preferred stock.
⁽²⁾ Represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
⁽³⁾ Represents net interest income divided by average interest-earning assets.
⁽⁴⁾ Represents non-interest expense divided by the sum of net interest income and non-interest income.

HANOVER BANCORP, INC.
SELECTED FINANCIAL DATA (unaudited)
(dollars in thousands, except share and per share data)

	At or For the Three Months Ended
	3/31/2025				12/31/2024				9/30/2024				6/30/2024
Asset quality:
Provision for credit losses – loans ⁽¹⁾	$	600			$	400			$	200			$	3,850
Net (charge-offs)/recoveries		(454		)		(1,027		)		(438		)		(79		)
Allowance for credit losses		22,925				22,779				23,406				23,644
Allowance for credit losses to total loans ⁽²⁾		1.17	%			1.15	%			1.17	%			1.17	%
Non-performing loans	$	11,697			$	16,368			$	15,365			$	15,828
Non-performing loans/total loans		0.60	%			0.82	%			0.77	%			0.79	%
Non-performing loans/total assets		0.51	%			0.71	%			0.66	%			0.68	%
Allowance for credit losses/non-performing loans		195.99	%			139.17	%			152.33	%			149.38	%

Capital (Bank only):
Tier 1 Capital	$	201,925			$	201,744			$	198,196			$	195,703
Tier 1 leverage ratio		8.95	%			9.13	%			8.85	%			8.89	%
Common equity tier 1 capital ratio		13.37	%			13.32	%			12.99	%			12.78	%
Tier 1 risk based capital ratio		13.37	%			13.32	%			12.99	%			12.78	%
Total risk based capital ratio		14.62	%			14.58	%			14.24	%			14.21	%

Equity data:
Shares outstanding ⁽³⁾		7,503,731				7,427,127				7,428,366				7,402,163
Stockholders’ equity	$	196,643			$	196,638			$	192,339			$	190,072
Book value per share ⁽³⁾		26.21				26.48				25.89				25.68
Tangible common equity ⁽³⁾		177,239				177,220				172,906				170,625
Tangible book value per share ⁽³⁾		23.62				23.86				23.28				23.05
Tangible common equity (“TCE”) ratio ⁽³⁾		7.80	%			7.73	%			7.49	%			7.38	%

(1) Excludes $0, $0, $0 and $190 thousand provision for credit losses on unfunded commitments for the quarters ended 3/31/25, 12/31/24, 9/30/24 and 6/30/24, respectively.
(2) Calculation excludes loans held for sale.
(3) Includes common stock and Series A preferred stock.


HANOVER BANCORP, INC.
STATISTICAL SUMMARY
QUARTERLY TREND
(unaudited, dollars in thousands, except share data)

	3/31/2025			12/31/2024			9/30/2024			6/30/2024

Loan distribution ⁽¹⁾:
Residential mortgages	$	708,649		$	702,832		$	719,037		$	733,040
Multifamily		535,429			550,570			557,634			562,503
Commercial real estate		520,808			536,288			529,948			549,725
Commercial & industrial		170,442			168,909			171,899			139,209
Home equity		24,914			26,422			26,825			27,992
Consumer		432			503			470			485

Total loans	$	1,960,674		$	1,985,524		$	2,005,813		$	2,012,954

Sequential quarter growth rate		-1.25	%		-1.01	%		-0.35	%		0.37	%

CRE concentration ratio		369	%		385	%		397	%		403	%

Loans sold during the quarter	$	46,649		$	53,499		$	43,537		$	35,302

Funding distribution:
Demand	$	215,569		$	211,656		$	206,327		$	199,835
N.O.W.		698,297			692,890			621,880			661,998
Savings		46,275			48,885			53,024			44,821
Money market		458,068			503,082			572,213			571,170
Total core deposits		1,418,209			1,456,513			1,453,444			1,477,824
Time		518,229			497,770			504,100			464,105
Total deposits		1,936,438			1,954,283			1,957,544			1,941,929
Borrowings		107,805			107,805			125,805			148,953
Subordinated debentures		24,702			24,689			24,675			24,662

Total funding sources	$	2,068,945		$	2,086,777		$	2,108,024		$	2,115,544

Sequential quarter growth rate – total deposits		-0.91	%		-0.17	%		0.80	%		1.29	%

Period-end core deposits/total deposits ratio		73.24	%		74.53	%		74.25	%		76.10	%

Period-end demand deposits/total deposits ratio		11.13	%		10.83	%		10.54	%		10.29	%

⁽¹⁾ Excluding loans held for sale


HANOVER BANCORP, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ⁽¹⁾(unaudited)
(dollars in thousands, except share and per share amounts)


	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
Tangible common equity
Total equity ⁽²⁾	$	196,643		$	196,638		$	192,339		$	190,072		$	189,543
Less: goodwill		(19,168	)		(19,168	)		(19,168	)		(19,168	)		(19,168	)
Less: core deposit intangible		(236	)		(250	)		(265	)		(279	)		(295	)
Tangible common equity ⁽²⁾	$	177,239		$	177,220		$	172,906		$	170,625		$	170,080

Tangible common equity (“TCE”) ratio
Tangible common equity ⁽²⁾	$	177,239		$	177,220		$	172,906		$	170,625		$	170,080
Total assets		2,291,527			2,312,110			2,327,814			2,331,098			2,307,508
Less: goodwill		(19,168	)		(19,168	)		(19,168	)		(19,168	)		(19,168	)
Less: core deposit intangible		(236	)		(250	)		(265	)		(279	)		(295	)
Tangible assets	$	2,272,123		$	2,292,692		$	2,308,381		$	2,311,651		$	2,288,045
TCE ratio ⁽²⁾		7.80	%		7.73	%		7.49	%		7.38	%		7.43	%

Tangible book value per share
Tangible equity ⁽²⁾	$	177,239		$	177,220		$	172,906		$	170,625		$	170,080
Shares outstanding ⁽²⁾		7,503,731			7,427,127			7,428,366			7,402,163			7,392,412
Tangible book value per share ⁽²⁾	$	23.62		$	23.86		$	23.28		$	23.05		$	23.01

⁽¹⁾ 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 that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with U.S. GAAP. While management uses non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with U.S. GAAP or considered to be more important than financial results determined in accordance with U.S. GAAP.

⁽²⁾ Includes common stock and Series A preferred stock.


HANOVER BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Three Months Ended March 31, 2025 and 2024
(unaudited, dollars in thousands)


		2025						2024
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost

Assets:
Interest-earning assets:
Loans	$	1,989,796	$	29,984	6.11	%	$	1,984,075	$	29,737	6.03	%
Investment securities		85,839		1,186	5.60	%		94,845		1,457	6.18	%
Interest-earning cash		133,458		1,482	4.50	%		74,672		1,014	5.46	%
FHLB stock and other investments		8,014		185	9.36	%		9,243		224	9.75	%
Total interest-earning assets		2,217,107		32,837	6.01	%		2,162,835		32,432	6.03	%
Non interest-earning assets:
Cash and due from banks		9,504						7,945
Other assets		49,695						49,941
Total assets	$	2,276,306					$	2,220,721

Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings, N.O.W. and money market deposits	$	1,217,429	$	11,455	3.82	%	$	1,161,191	$	12,933	4.48	%
Time deposits		490,979		5,320	4.39	%		486,779		4,962	4.10	%
Total savings and time deposits		1,708,408		16,775	3.98	%		1,647,970		17,895	4.37	%
Borrowings		108,972		1,107	4.12	%		137,788		1,276	3.72	%
Subordinated debentures		24,693		326	5.35	%		24,639		326	5.32	%
Total interest-bearing liabilities		1,842,073		18,208	4.01	%		1,810,397		19,497	4.33	%
Demand deposits		211,028						194,672
Other liabilities		24,726						27,959
Total liabilities		2,077,827						2,033,028
Stockholders’ equity		198,479						187,693
Total liabilities & stockholders’ equity	$	2,276,306					$	2,220,721
Net interest rate spread					2.00	%					1.70	%
Net interest income/margin			$	14,629	2.68	%			$	12,935	2.41	%

The MIL Network –

April 24, 2025

MIL-OSI: Check Point Software Reports 2025 First Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

TEL AVIV, Israel, April 23, 2025 (GLOBE NEWSWIRE) — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the quarter ended March 31^st, 2025.

First Quarter 2025 Financial Highlights:

Cash Flow from Operations: $421 million, a 17 percent increase year over year

Calculated Billings* reached $553 million, a 7 percent increase year over year

Remaining Performance Obligation (RPO)**: $2.4 billion, an 11 percent increase year over year

Total Revenues: $638 million, a 7 percent increase year over year

Products & Licenses Revenues: $114 million, a 14 percent increase year over year

Security Subscriptions Revenues: $291 million, a 10 percent increase year over year

GAAP Operating Income: $196 million, representing 31 percent of total revenues

Non-GAAP Operating Income: $259 million, representing 41 percent of total revenues

GAAP EPS: $1.71, a 7 percent increase year over year

Non-GAAP EPS: $2.21, a 9 percent increase year over year

“The first quarter results have provided a solid foundation to expand upon as we progress through the year. Strong demand for our Quantum Force appliances, fueled by refresh cycles and new projects delivered double-digit year-over-year growth in products and licenses revenues,” stated CEO Nadav Zafrir. “The AI-driven Infinity Platform, featuring a Hybrid Mesh Architecture, continues to resonate with customers and delivered another quarter of impressive double-digit year-over-year growth.”

For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see below “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

Conference Call & Video Cast Information
Check Point will host a conference call with the investment community on April 23, 2025, at 8:30 AM ET/5:30 AM PT. To listen to the live videocast or replay, please visit the website www.checkpoint.com/ir.

Second Quarter 2025 Investor Conference Participation Schedule

Barclays Americas Select Franchise Conference 2025
May 6, 2025, London, UK – Fireside Chat & 1×1’s

J.P. Morgan 53^rd Annual Technology, Media, and Telecom Conference
May 13-15, 2025, Boston, MA – Fireside Chat & 1×1’s

Oppenheimer 26^th Annual Israeli Conference
May 18, 2025, Tel Aviv, Israel – Fireside Chat & 1×1’s

TD Cowen 53^rd Annual TMT Conference
May 28, 2025, NY, NY – Fireside Chat & 1×1’s

Jefferies Software Summit
May 29, 2025, Newport Coast, CA – Fireside Chat &1×1’s

Stifel 2025 Cross Sector 1×1 Conference
June 3, 2025, Boston, MA – 1×1’s

Baird 2025 Global Consumer, Technology & Services Conference
June 4, 2025, SF, CA – 1×1’s

Bank of America Merrill Lynch 2025 Global Technology Conference
June 5, 2025, SF, CA – Fireside Chat & 1×1’s

TD Cowen 2^nd Annual Corporate Access Day
June 17, 2025, Toronto, Canada – 1×1’s

Members of Check Point’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company’s web site. To hear these presentations and access the most updated information please visit the company’s web site at www.checkpoint.com/ir. The schedule is subject to change.

Follow Check Point via:
Twitter: http://www.twitter.com/checkpointsw
Facebook: https://www.facebook.com/checkpointsoftware
Blog: http://blog.checkpoint.com
YouTube: http://www.youtube.com/user/CPGlobal
LinkedIn: https://www.linkedin.com/company/check-point-software-technologies

About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (http://www.checkpoint.com) is a leading AI-powered, cloud-delivered cyber security platform provider protecting over 100,000 organizations worldwide. Check Point leverages the power of AI everywhere to enhance cyber security efficiency and accuracy through its Infinity Platform, with industry-leading catch rates enabling proactive threat anticipation and smarter, faster response times. The comprehensive platform includes cloud-delivered technologies consisting of Check Point Harmony to secure the workspace, Check Point CloudGuard to secure the cloud, Check Point Quantum to secure the network, and Check Point Infinity Core Services for collaborative security operations and services.

Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, expectations regarding our products and solutions, and our participation in investor conferences and other events during the second quarter of 2025. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; appointments and departures of our executive officers; and general market, political, economic, and business conditions, including acts of terrorism or war. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 17, 2025. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of operating income, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets and acquisition related expenses and the related tax affects. Check Point’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures to assist the investment community to see the company “through the eyes of management,” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.

* Calculated Billings is a measure that we defined as total revenues recognized in accordance with GAAP plus the change in Total Deferred Revenues during the period.

** Remaining Performance Obligation (RPO) is a measure that represents the total value of non-cancellable contracted products and/or services that are yet to be recognized as Revenue as of March 31, 2025.

CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF INCOME

(Unaudited, in millions, except per share amounts)

	Three Months Ended
	March 31,
	2025		2024
Revenues:
Products and licenses	$	114.1	$	100.3
Security subscriptions		290.6		263.4
Total revenues from products and security subscriptions		404.7		363.7
Software updates, maintenance and services		233.1		235.1
Total revenues		637.8		598.8

Operating expenses:
Cost of products and licenses		23.0		19.9
Cost of security subscriptions		21.4		16.5
Total cost of products and security subscriptions		44.4		36.4
Cost of Software updates and maintenance		32.1		28.7
Amortization of technology		7.6		5.8
Total cost of revenues		84.1		70.9

Research and development		102.1		99.2
Selling and marketing		225.4		206.2
General and administrative		30.7		28.6
Total operating expenses		442.3		404.9

Operating income		195.5		193.9
Financial income, net		27.3		22.6
Income before taxes on income		222.8		216.5
Taxes on income		31.9		32.6
Net income	$	190.9	$	183.9
Basic earnings per share	$	1.77	$	1.64
Number of shares used in computing basic earnings per share		107.9		112.3
Diluted earnings per share	$	1.71	$	1.60
Number of shares used in computing diluted earnings per share		111.4		115.2

CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED FINANCIAL METRICS

(Unaudited, in millions, except per share amounts)

	Three Months Ended
	March 31,
	2025		2024

Revenues	$	637.8	$	598.8
Non-GAAP operating income		258.6		252.0
Non-GAAP net income		246.2		234.5
Non-GAAP diluted earnings per share	$	2.21	$	2.04
Number of shares used in computing diluted Non-GAAP earnings per share		111.4		115.2

CHECK POINT SOFTWARE TECHNOLOGIES LTD. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(Unaudited, in millions, except per share amounts)

	Three Months Ended
	March 31,
		2025			2024

GAAP operating income	$	195.5		$	193.9
Stock-based compensation (1)		41.2			41.6
Amortization of intangible assets and acquisition related expenses (2) (*)		21.9			16.5
Non-GAAP operating income	$	258.6		$	252.0

GAAP net income	$	190.9		$	183.9
Stock-based compensation (1)		41.2			41.6
Amortization of intangible assets and acquisition related expenses (2) (*)		21.9			16.5
Taxes on the above items (3)		(7.8	)		(7.5	)
Non-GAAP net income	$	246.2		$	234.5

GAAP diluted earnings per share	$	1.71		$	1.60
Stock-based compensation (1)		0.37			0.36
Amortization of intangible assets and acquisition related expenses (2) (*)		0.2			0.15
Taxes on the above items (3)		(0.07	)		(0.07	)
Non-GAAP diluted earnings per share	$	2.21		$	2.04

Number of shares used in computing diluted Non-GAAP earnings per share		111.4			115.2

(1) Stock-based compensation:
Cost of products and licenses	$	0.1		$	0.1
Cost of software updates and maintenance		2.1			2.2
Research and development		14.7			14.7
Selling and marketing		14.6			15.9
General and administrative		9.7			8.7
		41.2			41.6

(2) Amortization of intangible assets and acquisition related expenses (*):
Amortization of technology-cost of revenues		7.6			5.8
Research and development		1.5			1.6
Selling and marketing		12.8			9.1
		21.9			16.5
(3) Taxes on the above items		(7.8	)		(7.5	)
Total, net	$	55.3		$	50.6

(*) While amortization of acquired intangible assets is excluded from the measures, the revenue of the acquired companies is reflected in the measures and the acquired assets contribute to revenue generation.

CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONDENSED CONSOLIDATED BALANCE SHEET DATA (In millions) ASSETS

	March 31,		December 31,
	2025 (Unaudited)		2024 (Audited)
Current assets:
Cash and cash equivalents	$	450.2	$	506.2
Marketable securities and short-term deposits		1,012.0		865.7
Trade receivables, net		399.7		728.8
Prepaid expenses and other current assets		94.5		92.7
Total current assets		1,956.4		2,193.4

Long-term assets:
Marketable securities		1,469.8		1,411.9
Property and equipment, net		83.0		80.8
Deferred tax asset, net		80.6		74.7
Goodwill and other intangible assets, net		1,877.9		1,897.1
Other assets		90.2		96.6
Total long-term assets		3,601.5		3,561.1

Total assets	$	5,557.9	$	5,754.5

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
Deferred revenues	$	1,389.8		$	1,471.3
Trade payables and other accrued liabilities		394.8			472.9
Total current liabilities		1,784.6			1,944.2

Long-term liabilities:
Long-term deferred revenues		525.6			529.0
Income tax accrual		467.4			459.6
Other long-term liabilities		31.8			32.3
Total long-term liabilities		1,024.8			1,020.9

Total liabilities		2,809.4			2,965.1

Shareholders’ equity:
Share capital		0.8			0.8
Additional paid-in capital		3,125.5			3,049.5
Treasury shares at cost		(14,579.6	)		(14,264.4	)
Accumulated other comprehensive gain		(2.9	)		(10.3	)
Retained earnings		14,204.7			14,013.8
Total shareholders’ equity		2,748.5			2,789.4
Total liabilities and shareholders’ equity	$	5,557.9		$	5,754.5
Total cash and cash equivalents, marketable securities, and short-term deposits	$	2,932.0		$	2,783.8

CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED CONSOLIDATED CASH FLOW DATA

(Unaudited, in millions)

	Three Months Ended
	March 31,
		2025			2024
Cash flow from operating activities:
Net income	$	190.9		$	183.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		5.2			7.3
Amortization of intangible assets		19.2			13.5
Stock-based compensation		41.2			41.6
Realized loss on marketable securities		0.1			–
Decrease in trade and other receivables, net		329.4			265.4
Decrease in deferred revenues, trade payables and other accrued liabilities		(142.1	)		(140.6	)
Deferred income taxes, net		(22.8	)		(10.1	)
Net cash provided by operating activities		421.1			361.0

Cash flow from investing activities:
Investment in property and equipment		(7.4	)		(6.5	)
Net cash used in investing activities		(7.4	)		(6.5	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		46.0			45.6
Purchase of treasury shares		(325.0	)		(325.0	)
Payments related to shares withheld for taxes		(1.5	)		(1.1	)
Net cash used in financing activities		(280.5	)		(280.5	)

Unrealized gain on marketable securities, net		15.0			1.6

Increase in cash and cash equivalents, marketable securities, and short-term deposits		148.2			75.6

Cash and cash equivalents, marketable securities, and short-term deposits at the beginning of the period		2,783.8			2,959.7

Cash and cash equivalents, marketable securities, and short-term deposits at the end of the period	$	2,932.0		$	3,035.3

The MIL Network –

April 23, 2025

MIL-OSI Australia: New QWildlife marine stranding app launched

Source: Tasmania Police

Issued: 23 Apr 2025

The Queensland Government has added a new function to the QWildlife app, allowing marine strandings across the state to be reported in real time to the Department of the Environment, Tourism, Science and Innovation (DETSI).

Launched in 2020, the highly popular and successful QWildlife app that allows people to report crocodile sightings and koala sightings to DETSI has been expanded to include marine strandings.

People can now report stranding incidents along Queensland’s vast coastline and include the time and date along with photographs of stranded marine animals, such as turtles, sharks and marine mammals.

This citizen science information will help DETSI to better understand marine strandings across the state and will ensure the Queensland Parks and Wildlife Service (QPWS) and local wildlife carer groups can be activated quickly to respond to stranded marine life.

QPWS Assistant Director-General Andrew Buckley said marine animals strand for several reasons, including illness or disease, predation and human intervention such as boat strike or entanglement in fishing equipment.

“This new function of the QWildlife app demonstrates the Queensland Government’s commitment to protecting and conserving our extraordinary marine animals,” he said.

“I encourage all residents and visitors to our coastal areas to download and use the QWildlife app to report sightings of stranded marine animals.

“Your contributions are essential in understanding and enhancing the conservation and welfare of marine life across our coastline.

“The Marine Stranding functionality of the QWildlife app promotes community involvement and also represents a crucial step in marine conservation.

“Its ability to collect real-time data will be invaluable in guiding our conservation strategies, marine life rescues and to mitigate human intervention.”

Chief Technology Officer Peter Reyne from software development firm GP One said the new function would add a vital element to the QWildlife app.

“The crocodile and koala functions of the QWildlife app have provided critical information about those species and extending that for marine life conservation was the next step,” Mr Reyne said.

“We anticipate that the addition of Marine Strandings to the QWildlife app will significantly improve the Queensland Government’s ability to respond to our treasured sea creatures when they strand.”

The QWildlife app can be downloaded by visiting the app store or Google Play.

View more information on downloading the QWildlife app to report a marine animal stranding, Marine wildlife strandings including strandings data.

MIL OSI News –

April 23, 2025

MIL-OSI: BE Semiconductor Industries N.V. Announces Q1-25 Results

Source: GlobeNewswire (MIL-OSI)

Q1-25 Revenue of € 144.1 Million and Net Income of € 31.5 Million
Orders of € 131.9 Million Up 8.2% vs. Q4-24

DUIVEN, The Netherlands, April 23, 2025 (GLOBE NEWSWIRE) — BE Semiconductor Industries N.V. (the “Company” or “Besi”) (Euronext Amsterdam: BESI; OTC markets: BESIY), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the first quarter ended March 31, 2025.

Key Highlights

Revenue of € 144.1 million, down 6.1% vs. Q4-24 due primarily to lower shipments for high-end mobile applications. Vs. Q1-24, down 1.5% due to lower shipments for mobile and automotive applications partially offset by strong growth in hybrid bonding and other AI related computing applications
Orders of € 131.9 million up 8.2% vs. Q4-24 primarily due to increased bookings by Asian subcontractors for AI related data center applications. Up 3.3% vs. Q1-24 due to higher bookings for hybrid bonding and other advanced computing applications
Gross margin of 63.6% decreased by 0.4 points vs. Q4-24 and 3.6 points vs. Q1-24 due primarily to a less favorable product mix and, to a lesser extent, adverse net forex influences
Net income of € 31.5 million decreased 46.9% vs. Q4-24 primarily due to the absence of an € 18.2 million net tax benefit recognized in Q4-24, lower revenue and higher consulting costs. Down 7.4% vs. Q1-24 primarily due to lower revenue and gross margins partially offset by an 8.9% decrease in operating expenses. Similarly, Besi’s net margin declined to 21.9% vs. 38.6% in Q4-24 and 23.2% in Q1-24
Ex share-based incentive compensation and tax benefits, Besi’s adjusted net income (net margin) was € 35.9 million (24.9%) in Q1-25 vs. € 43.2 million (28.2%) in Q4-24 and € 49.5 million (33.8%) in Q1-24
Net cash of € 159.4 million increased € 15.6 million, or 10.8%, vs. Q4-24

Outlook

Revenue expected to be flat (plus or minus 10%) vs. € 144.1 million reported in Q1-25
Gross margin expected to range between 62-64% vs. 63.6% realized in Q1-25
Operating expenses expected to decrease 0-10% vs. € 52.5 million in Q1-25

(€ millions, except EPS)	Q1-2025	Q4-2024	Δ	Q1-2024	Δ
Revenue	144.1	153.4	-6.1%	146.3	-1.5%
Orders	131.9	121.9	+8.2%	127.7	+3.3%
Gross Margin	63.6%	64.0%	-0.4	67.2%	-3.6
Operating Income	39.3	50.6	-22.3%	40.7	-3.4%
EBITDA	46.6	58.0	-19.7%	47.5	-1.9%
Net Income*	31.5	59.3	-46.9%	34.0	-7.4%
Net Margin*	21.9	38.6%	-16.7	23.2%	-1.3
EPS (basic)	0.40	0.75	-46.7%	0.44	-9.1%
EPS (diluted)	0.40	0.74	-45.9%	0.44	-9.1%
Net Cash and Deposits	159.4	143.8	+10.8%	180.9	-11.9%

* Excluding share-based compensation expense and an € 18.2 million net tax benefit recognized in Q4-24, Besi’s adjusted net income (net margin) would have been € 35.9 million (24.9%), € 43.2 million (28.2%) and € 49.5 million (33.8%) in Q1-25, Q4-24 and Q1-24, respectively.

Richard W. Blickman, President and Chief Executive Officer of Besi, commented:
“Besi reported solid first quarter results and important new advanced packaging orders in a challenging market environment. Revenue of € 144.1 million was down 1.5% versus Q1-24 due to ongoing weakness in mobile and automotive end user markets partially offset by strong revenue growth from hybrid bonding and other AI related computing applications. In contrast, orders increased 3.3% versus Q1-24 and 8.2% versus Q4-24 due primarily to increased bookings by Asian subcontractors for AI related data center applications which more than offset weakness in mobile, automotive and Chinese end user markets.

Of note, significant progress was made on Besi’s wafer level assembly agenda this quarter as we received hybrid bonding orders from two leading memory producers for HBM 4 applications as well as follow-on orders from a leading Asian foundry for logic applications. Further, important announcements were made by two leading semiconductor producers with respect to future hybrid bonding applications such as ASICs and co packaged optics. In addition, a leading US logic manufacturer successfully began production of AI related logic devices utilizing Besi’s hybrid bonders in integrated production lines.

Besi’s profitability in Q1-25 remained at attractive levels despite ongoing weakness in mainstream assembly markets and expanded R&D investment in next generation assembly solutions for AI applications. Net income of € 31.5 million decreased 7.4% vs. Q1-24 primarily due to lower revenue and gross margins realized partially offset by an 8.9% decrease in operating expenses. Our gross margin has trended toward the lower end of our target range over the past three quarters due primarily to a less favorable product mix, particularly with respect to high-end smartphones, and net forex headwinds beginning in the second half of 2024 from adverse movements in some of our principal transaction currencies versus the euro. In addition, cash flow generation remains very positive with net cash at quarter end increasing 10.8% vs. Q4-24 to reach € 159.4 million.

On April 14, Applied Materials announced a 9% ownership position in Besi. Besi and Applied Materials have been successfully collaborating since 2020 to co-develop the industry’s first fully integrated equipment solution for die-based hybrid bonding. The collaboration brings together Applied’s expertise in front-end wafer and chip processing with Besi’s leadership position in bonding accuracy and speed. We view their shareholding as a strategic, long-term investment and a further validation of our wafer level assembly technology and strategy.

Our business development this year reflects the contrasting growth trends seen in the assembly equipment market between AI and mainstream applications. The timing and trajectory of a mainstream assembly upturn is more difficult to predict now given new tariff uncertainties. However, demand for advanced packaging for AI applications remains strong given upcoming new device introductions and use cases planned in the 2026-2028 time period. We continue to assess the potential impact of tariffs on Besi’s customers, supply chain and end user markets. For Q2-25, we forecast that revenue will be flat plus or minus 10% versus Q1-25 with gross margins in a range of 62%-64%. In addition, aggregate operating expenses are forecast to decrease 0-10% versus Q1-25 primarily due to a reduction in strategic consulting costs.”

Share Repurchase Activity
During the quarter, Besi repurchased approximately 187,000 of its ordinary shares at an average price of € 117.95 per share for a total of € 22.1 million. Cumulatively, as of March 31, 2025, a total of € 51.4 million has been purchased under the current € 100 million share repurchase plan at an average price of € 114.64 per share. As of March 31, 2025, Besi held approximately 2.0 million shares in treasury equal to 2.5% of its shares outstanding.

Investor and media conference call
A conference call and webcast for investors and media will be held today at 4:00 pm CET (10:00 am EDT). To register for the conference call and/or to access the audio webcast and webinar slides, please visit www.besi.com.

Important Dates
• Annual General Meeting of Shareholders	April 23, 2025
• Investor Day/Amsterdam	June 12, 2025
• Publication Q2/semi-annual results	July 24, 2025
• Publication Q3/nine-month results	October 23, 2025
• Publication Q4/full year results	February 2026

Dividend Information*
• Proposed ex-dividend date	April 25, 2025
• Proposed record date	April 28, 2025
• Proposed payment of 2024 dividend	Starting May 2, 2025

* Subject to approval at Besi’s AGM on April 23, 2025

Basis of Presentation
The accompanying Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Reference is made to the Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements as included in our 2024 Annual Report, which is available on www.besi.com.

Contacts:
Richard W. Blickman, President & CEO
Andrea Kopp-Battaglia, Senior Vice President Finance
Claudia Vissers, Executive Secretary/IR coordinator
Edmond Franco, VP Corporate Development/US IR coordinator
Michael Sullivan, Investor Relations
Tel. (31) 26 319 4500
investor.relations@besi.com

About Besi
Besi is a leading manufacturer of assembly equipment supplying a broad portfolio of advanced packaging solutions to the semiconductor and electronics industries. We offer customers high levels of accuracy, reliability and throughput at a lower cost of ownership with a principal focus on wafer level and substrate assembly solutions. Customers are primarily leading semiconductor manufacturers, foundries, assembly subcontractors and electronics and industrial companies. Besi’s ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at www.besi.com.

Caution Concerning Forward Looking Statements
This press release contains statements about management’s future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to expectations of orders, net sales, product shipments, expenses, timing of purchases of assembly equipment by customers, gross margins, operating results and capital expenditures. The use of words such as “anticipate”, “estimate”, “expect”, “can”, “intend”, “believes”, “may”, “plan”, “predict”, “project”, “forecast”, “will”, “would”, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The financial guidance set forth under the heading “Outlook” contains such forward-looking statements. While these forward-looking statements represent our judgments and expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from those contained in forward-looking statements, including any inability to maintain continued demand for our products; failure of anticipated orders to materialize or postponement or cancellation of orders, generally without charges; the volatility in the demand for semiconductors and our products and services; the extent and duration of the COVID-19 and other global pandemics and the associated adverse impacts on the global economy, financial markets, global supply chains and our operations as well as those of our customers and suppliers; failure to develop new and enhanced products and introduce them at competitive price levels; failure to adequately decrease costs and expenses as revenues decline; loss of significant customers, including through industry consolidation or the emergence of industry alliances; lengthening of the sales cycle; acts of terrorism and violence; disruption or failure of our information technology systems; consolidation activity and industry alliances in the semiconductor industry that may result in further increased customer concentration, inability to forecast demand and inventory levels for our products; the integrity of product pricing and protection of our intellectual property in foreign jurisdictions; risks, such as changes in trade regulations, conflict minerals regulations, currency fluctuations, political instability and war, associated with substantial foreign customers, suppliers and foreign manufacturing operations, particularly to the extent occurring in the Asia Pacific region where we have a substantial portion of our production facilities; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled personnel, including as a result of restrictions on immigration, travel or the availability of visas for skilled technology workers.

In addition, the United States and other countries have recently levied tariffs and taxes on certain goods and could significantly increase or impose new tariffs on a broad array of goods. They have imposed, and may continue to impose, new trade restrictions and export regulations. Increased or new tariffs and additional taxes, including any retaliatory measures, trade restrictions and export regulations, could negatively impact end-user demand and customer investment in semiconductor equipment, increase Besi’s supply chain complexity and manufacturing costs, decrease margins, reduce the competitiveness of our products or restrict our ability to sell products, provide services or purchase necessary equipment and supplies. Any or all of the foregoing factor could have a material and adverse effect on our business, results of operations or financial condition. In addition, investors should consider those additional risk factors set forth in Besi’s annual report for the year ended December 31, 2024 and other key factors that could adversely affect our businesses and financial performance contained in our filings and reports, including our statutory consolidated statements. We expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

Consolidated Statements of Operations

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

Revenue	144,145	146,314
Cost of sales	52,423	48,043

Gross profit	91,722	98,271

Selling, general and administrative expenses	32,958	39,641
Research and development expenses	19,502	17,919

Total operating expenses	52,460	57,560

Operating income	39,262	40,711

Financial expense, net	2,959	589

Income before taxes	36,303	40,122

Income tax expense	4,797	6,143

Net income	31,506	33,979

Net income per share – basic	0.40	0.44
Net income per share – diluted	0.40	0.44

Number of shares used in computing per share amounts:
– basic	79,228,071	77,181,326
– diluted ¹	81,522,177	82,106,146

_____________________________
¹⁾ The calculation of diluted income per share assumes the exercise of equity settled share based payments and the conversion of all Convertible Notes outstanding

Consolidated Balance Sheets

(€ thousands)	March 31, 2025 (unaudited)	December 31, 2024 (audited)
ASSETS

Cash and cash equivalents	405,736	342,319
Deposits	280,000	330,000
Trade receivables	170,440	181,862
Inventories	103,836	103,285
Other current assets	46,099	40,927

Total current assets	1,006,111	998,393

Property, plant and equipment	42,868	44,773
Right of use assets	15,161	15,726
Goodwill	45,610	46,010
Other intangible assets	98,622	96,677
Deferred tax assets	29,240	31,567
Other non-current assets	1,347	1,330

Total non-current assets	232,848	236,083

Total assets	1,238,959	1,234,476



Bank overdraft	840	776
Current portion of long-term debt	–	2,042
Trade payables	46,598	52,630
Other current liabilities	111,170	111,531

Total current liabilities	158,608	166,979

Long-term debt	525,493	525,653
Lease liabilities	11,770	12,350
Deferred tax liabilities	10,416	10,320
Other non-current liabilities	19,328	17,910

Total non-current liabilities	567,007	566,233

Total equity	513,344	501,264

Total liabilities and equity	1,238,959	1,234,476

Consolidated Cash Flow Statements

(€ thousands)	Three Months Ended March 31, (unaudited)
	2025		2024

Cash flows from operating activities:

Income before income tax	36,303		40,122

Depreciation and amortization	7,307		6,813
Share based payment expense	4,441		16,900
Financial expense, net	2,959		589

Changes in working capital	(2,113	)	(3,251	)
Interest (paid) received	(2,887	)	1,169
Income tax (paid) received	(1,575	)	(2,089	)

Net cash provided by operating activities	44,435		60,253

Cash flows from investing activities:
Capital expenditures	(1,733	)	(5,650	)
Capitalized development expenses	(6,737	)	(4,663	)
Repayments of (investments in) deposits	50,000		10,000

Net cash provided by (used in) investing activities	41,530		(313	)

Cash flows from financing activities:
Proceeds from bank lines of credit	64		–
Payments of lease liabilities	(1,114	)	(1,043	)
Purchase of treasury shares	(22,064	)	(14,779	)

Net cash provided by (used in) financing activities	(23,114	)	(15,822	)

Net increase (decrease) in cash and cash equivalents	62,851		44,118
Effect of changes in exchange rates on cash and cash equivalents	566		(542	)
Cash and cash equivalents at beginning of the period	342,319		188,477

Cash and cash equivalents at end of the period	405,736		232,053

Supplemental Information (unaudited)
(€ millions, unless stated otherwise)

REVENUE	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Per geography:
China	40.5		28	%	42.8		28	%	45.5		29	%	57.5		38	%	58.5		40	%
Asia Pacific (excl. China)	56.3		39	%	53.5		35	%	51.6		33	%	54.1		36	%	43.6		30	%
EU / USA / Other	47.3		33	%	57.1		37	%	59.5		38	%	39.6		26	%	44.2		30	%

Total	144.1		100	%	153.4		100	%	156.6		100	%	151.2		100	%	146.3		100	%

ORDERS	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Per geography:
China	39.7		30	%	40.4		33	%	45.4		30	%	43.3		23	%	51.1		40	%
Asia Pacific (excl. China)	51.7		39	%	38.8		32	%	69.3		46	%	72.0		39	%	45.0		35	%
EU / USA / Other	40.5		31	%	42.7		35	%	37.1		24	%	69.9		38	%	31.6		25	%

Total	131.9		100	%	121.9		100	%	151.8		100	%	185.2		100	%	127.7		100	%

Per customer type:
IDM	48.1		36	%	61.2		50	%	84.5		56	%	122.4		66	%	53.5		42	%
Foundries/Subcontractors	83.8		64	%	60.7		50	%	67.3		44	%	62.8		34	%	74.2		58	%

Total	131.9		100	%	121.9		100	%	151.8		100	%	185.2		100	%	127.7		100	%

HEADCOUNT	Mar 31, 2025				Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024

Fixed staff (FTE)	1,820		88	%	1,812		93	%	1,807		87	%	1,783		86	%	1,760		88	%
Temporary staff (FTE)	251		12	%	134		7	%	271		13	%	279		14	%	236		12	%

Total	2,071		100	%	1,946		100	%	2,078		100	%	2,062		100	%	1,996		100	%

OTHER FINANCIAL DATA	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Gross profit	91.7		63.6	%	98.2		64.0	%	101.2		64.7	%	98.3		65.0	%	98.3		67.2	%


Selling, general and admin expenses:
As reported	33.0		22.9	%	28.6		18.6	%	27.3		17.4	%	30.5		20.2	%	39.6		27.1	%
Share-based compensation expense	(4.4	)	-3.1	%	(2.9	)	-1.8	%	(3.4	)	-2.1	%	(6.9	)	-4.6	%	(16.9	)	-11.6	%

SG&A expenses as adjusted	28.6		19.8	%	25.7		16.8	%	23.9		15.3	%	23.6		15.6	%	22.7		15.5	%


Research and development expenses:
As reported	19.5		13.5	%	19.0		12.4	%	18.9		12.1	%	18.5		12.2	%	17.9		12.2	%
Capitalization of R&D charges	6.7		4.6	%	5.4		3.5	%	4.4		2.8	%	4.9		3.2	%	4.7		3.2	%
Amortization of intangibles	(3.7	)	-2.5	%	(3.9	)	-2.5	%	(3.9	)	-2.5	%	(3.6	)	-2.3	%	(3.6	)	-2.4	%

R&D expenses as adjusted	22.5		15.6	%	20.5		13.4	%	19.4		12.4	%	19.8		13.1	%	19.0		13.0	%


Financial expense (income), net:
Interest income	(5.0	)			(5.1	)			(5.2	)			(3.0	)			(4.0	)
Interest expense	6.3				6.1				5.7				2.1				2.8
Net cost of hedging	1.8				2.0				1.9				1.4				1.6
Foreign exchange effects, net	(0.1	)			0.9				(0.8	)			0.5				0.2

Total	3.0				3.9				1.6				1.0				0.6


Operating income (as % of net sales)	39.3		27.2	%	50.6		33.0	%	55.1		35.2	%	49.3		32.6	%	40.7		27.8	%

EBITDA (as % of net sales)	46.6		32.3	%	58.0		37.8	%	62.4		39.8	%	56.2		37.2	%	47.5		32.5	%

Net income (as % of net sales)	31.5		21.9	%	59.3		38.6	%	46.8		29.9	%	41.9		27.7	%	34.0		23.2	%

Effective tax rate	13.2	%			-27.0	%			12.6	%			13.0	%			15.3	%


Income per share
Basic	0.40				0.75				0.59				0.53				0.44
Diluted	0.40				0.74				0.59				0.53				0.44

Average shares outstanding (basic)	79,228,071				79,402,192				79,630,787				79,281,533				77,181,326

Shares repurchased
Amount	22.1				22.4				27.8				14.8				14.8
Number of shares	186,869				198,450				230,807				105,042				101,049


Gross cash	685.7				672.3				637.4				257.2				447.1

Net cash	159.4				143.8				110.7				74.4				180.9

The MIL Network –

April 23, 2025

MIL-OSI: Timberland Bancorp Reports Second Fiscal Quarter Net Income of $6.76 Million

Source: GlobeNewswire (MIL-OSI)

Quarterly EPS Increases 21% to $0.85 from $0.70 One Year Ago
Quarterly Net Interest Margin Increases to 3.79%
Quarterly Return on Average Assets of 1.43%
Quarterly Return on Average Equity of 10.95%
Announces a 4% Increase in the Quarterly Cash Dividend

HOQUIAM, Wash., April 22, 2025 (GLOBE NEWSWIRE) — Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”), the holding company for Timberland Bank (the “Bank”), today reported net income of $6.76 million, or $0.85 per diluted common share for the quarter ended March 31, 2025. This compares to net income of $6.86 million, or $0.86 per diluted common share for the preceding quarter and $5.71 million, or $0.70 per diluted common share, for the comparable quarter one year ago.

For the first six months of fiscal 2025, Timberland’s net income increased 13% to $13.62 million, or $1.71 per diluted common share, from $12.00 million, or $1.47 per diluted common share for the first six months of fiscal 2024.

“Our second fiscal quarter operating results were strong, highlighted by net interest margin expansion and modest balance sheet growth,” stated Dean Brydon, Chief Executive Officer. “Second fiscal quarter net income and earnings per share increased 18% and 21%, respectively, compared to the second fiscal quarter a year ago, reflecting an improvement in our net interest margin. Compared to the prior quarter, net income and earnings per share decreased 2% and 1%, respectively, as the increase in net interest income was offset by a higher provision for credit losses and a modest increase in expenses. All profitability metrics improved compared to the year ago quarter, and tangible book value per share (non-GAAP) continued to trend upward.”

“As a result of Timberland’s solid earnings and strong capital position, our Board of Directors announced a 4% increase to the quarterly cash dividend to shareholders to $0.26 per share, payable on May 23, 2025, to shareholders of record on May 9, 2025,” stated Jonathan Fischer, President and Chief Operating Officer. “This represents the 50th consecutive quarter Timberland will have paid a cash dividend.”

“During the second fiscal quarter our net interest margin continued to improve, expanding 15 basis points to 3.79%, compared to the preceding quarter,” said Marci Basich, Chief Financial Officer. “The improvement was primarily driven by a reduction in funding costs as the weighted average cost of interest-bearing liabilities decreased by 15 basis points during the quarter. Total deposits increased $20 million, or 1% during the quarter, due to increases in checking and certificates of deposit account balances.”

“The loan portfolio continues to grow at a moderate pace, increasing 1% from the prior quarter and 4% year-over year,” Brydon continued. “We continue to monitor credit quality closely and saw improvements in several metrics during the quarter. The non-performing asset ratio improved to just 13 basis points, non-accrual loans decreased by 15%, and net charge-offs were less than $1,000 during the quarter. However, we experienced an increase in loans graded “Substandard”, as two loans related to one borrowing relationship were downgraded. Both of the loans are performing and Timberland remains well collateralized based on recent appraisals, but the loans were downgraded primarily because the borrower is experiencing a legal issue stemming from an unrelated project. We view this as an isolated event, and remain encouraged by the overall strength of our loan portfolio.”

Earnings and Balance Sheet Highlights (at or for the periods ended March 31, 2025, compared to March 31, 2024, or December 31, 2024):

Earnings Highlights:

Earnings per diluted common share (“EPS”) decreased 1% to $0.85 for the current quarter from $0.86 for the preceding quarter and increased 21% from $0.70 for the comparable quarter one year ago; EPS increased 16% to $1.71 for the first six months of fiscal 2025 from $1.47 for the first six months of fiscal 2024;
Net income decreased 2% to $6.76 million for the current quarter from $6.86 million for the preceding quarter and increased 18% from $5.71 million for the comparable quarter one year ago; Net income increased 13% to $13.62 million for the first six months of fiscal 2025 from $12.00 million for the first six months of fiscal 2024;
Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were 10.95% and 1.43%, respectively;
Net interest margin (“NIM”) for the current quarter expanded to 3.79% from 3.64% for the preceding quarter and 3.48% for the comparable quarter one year ago; and
The efficiency ratio for the current quarter improved to 56.25% from 56.27% for the preceding quarter and 60.22% for the comparable quarter one year ago.

Balance Sheet Highlights:

Total assets increased 1% from the prior quarter and increased 1% year-over-year;
Net loans receivable increased 1% from the prior quarter and increased 4% year-over-year;
Total deposits increased 1% from the prior quarter and increased 1% year-over-year;
Total shareholders’ equity increased 1% from the prior quarter and increased 6% year-over-year; 61,764 shares of common stock were repurchased during the current quarter for $1.91 million;
Non-performing assets to total assets ratio improved to 0.13% at March 31, 2025 compared to 0.16% at December 31, 2024 and 0.19% at March 31, 2024;
Book and tangible book (non-GAAP) values per common share increased to $31.95 and $29.99, respectively, at March 31, 2025; and
Liquidity (both on-balance sheet and off-balance sheet) remained strong at March 31, 2025 with only $20 million in borrowings and additional secured borrowing line capacity of $675 million available through the Federal Home Loan Bank (“FHLB”) and the Federal Reserve.

Operating Results

Operating revenue (net interest income before the provision for credit losses plus non-interest income) for the current quarter increased 1% to $19.90 million from $19.67 million for the preceding quarter and increased 9% from $18.25 million for the comparable quarter one year ago. The increase in operating revenue compared to the preceding quarter was primarily due to a decrease in funding costs, which was partially offset by a decrease in total interest and dividend income. Operating revenue increased 7%, to $39.57 million for the first six months of fiscal 2025 from $37.05 million for the first six months of fiscal 2024, primarily due to increases in interest income from loans and interest-bearing deposits in banks, which was partially offset by an increase in funding costs and a decrease in interest income on investment securities.

Net interest income increased $243,000, or 1%, to $17.21 million for the current quarter from $16.97 million for the preceding quarter and increased $1.58 million, or 10%, from $15.64 million for the comparable quarter one year ago. The increase in net interest income compared to the preceding quarter was primarily due to a 15 basis point decrease in the weighted average cost of total interest-bearing liabilities to 2.47% from 2.62% and a six basis point increase in the weighted average yield on total interest-earning assets to 5.48% from 5.42%. These increases to net interest income were partially offset by an $11.44 million decrease in the average balance of total interest-earning assets. Timberland’s NIM for the current quarter expanded to 3.79% from 3.64% for the preceding quarter and 3.48% for the comparable quarter one year ago. The NIM for the current quarter was increased by approximately five basis points due to the collection of $201,000 in pre-payment penalties, non-accrual interest, and late fees and the accretion of $17,000 of the fair value discount on acquired loans. The NIM for the preceding quarter was increased by approximately three basis points due to the collection of $115,000 in pre-payment penalties, non-accrual interest, and late fees, and the accretion of $8,000 of the fair value discount on acquired loans. The NIM for the comparable quarter one year ago was increased by approximately three basis points due to the collection of $90,000 in pre-payment penalties, non-accrual interest, and late fees, and the accretion of $10,000 of the fair value discount on acquired loans. Net interest income for the first six months of fiscal 2025 increased $2.54 million, or 8%, to $34.18 million from $31.64 million for the first six months of fiscal 2024, primarily due to a $55.11 million increase in the average balance of total interest-earning assets and a 34 basis point increase in the weighted average yield of total interest-earning assets to 5.44% from 5.10%. These increases to net interest income were partially offset by an 18 basis point increase in the weighted average cost of interest-bearing liabilities to 2.55% from 2.37%. Timberland’s NIM expanded to 3.71% for the first six months of fiscal 2025 from 3.53% for the first six months of fiscal 2024.

A $237,000 provision for credit losses on loans was recorded for the quarter ended March 31, 2025. The provision was primarily due to loan portfolio growth and changes in the composition of the loan portfolio. This compares to a $52,000 provision for credit losses on loans for the preceding quarter and a $166,000 provision for credit losses on loans for the comparable quarter one year ago. In addition, a $14,000 provision for credit losses on unfunded commitments and a $5,000 recapture of credit losses on investment securities were recorded for the current quarter.

Non-interest income decreased $10,000, (less than 1%) to $2.69 million for the current quarter from $2.70 million for the preceding quarter and increased $72,000, or 3%, from $2.62 million for the comparable quarter one year ago. The decrease in non-interest income compared to the preceding quarter was primarily due to a decrease in ATM and debit card interchange transaction fees and smaller changes in several other categories, which was partially offset by an increase in gain on sales of loans and smaller changes in several other categories. Fiscal year-to-date non-interest income decreased by 1%, to $5.38 million from $5.41 million for the first six months of fiscal 2024.

Total operating (non-interest) expenses for the current quarter increased $127,000, or 1%, to $11.19 million from $11.07 million for the preceding quarter and increased $203,000, or 2%, from $10.99 million for the comparable quarter one year ago. The increase in operating expenses compared to the preceding quarter was primarily due to increases in premises and equipment expenses, professional fees and smaller increases in several other expense categories. These increases were partially offset by decreases in salaries and employee benefits and smaller decreases in several other expense categories. The efficiency ratio for the current quarter was 56.25% compared to 56.27% for the preceding quarter and 60.22% for the comparable quarter one year ago. Fiscal year-to-date operating expenses increased 3% to $22.26 million from $21.62 million for the first six months of fiscal 2024.

The provision for income taxes for the current quarter decreased $8,000, or less than 1%, to $1.71 million from $1.71 million for the preceding quarter, primarily due to lower taxable income. Timberland’s effective income tax rate was 20.2% for the quarter ended March 31, 2025, compared to 20.0% for the quarter ended December 31, 2024 and 20.5% for the quarter ended March 31, 2024. Timberland’s effective income tax rate was 20.1% for the first six months of fiscal 2025 and fiscal 2024.

Balance Sheet Management

Total assets increased $23.25 million, or 1%, during the quarter to $1.93 billion at March 31, 2025 from $1.91 billion at December 31, 2024 and increased $25.50 million, or 1%, from $1.91 billion one year ago. The increase during the current quarter was primarily due to a $27.14 million increase in total cash and cash equivalents, an $8.26 million increase in net loans receivable and smaller increases in several other categories. These increases were partially offset by a $7.42 million decrease in investment securities and smaller decreases in several other categories.

Liquidity

Timberland has continued to maintain a strong liquidity position, both on-balance sheet and off-balance sheet. Liquidity, as measured by the sum of cash and cash equivalents, CDs held for investment, and available for sale investment securities, was 16.9% of total liabilities at March 31, 2025, compared to 15.0% at December 31, 2024, and 15.2% one year ago. Timberland had secured borrowing line capacity of $675 million available through the FHLB and the Federal Reserve at March 31, 2025. With a strong and diversified deposit base, only 18% of Timberland’s deposits were uninsured or uncollateralized at March 31, 2025. (Note: This calculation excludes public deposits that are fully collateralized.)

Loans

Net loans receivable increased $8.26 million, or 1%, during the quarter to $1.42 billion at March 31, 2025 from $1.41 billion at December 31, 2024. This increase was primarily due to a $10.31 million decrease in the undisbursed portion of construction loans in process, an $8.98 million increase in one- to four-family loans and a $5.19 million increase in commercial real estate loans. These increases were partially offset by a $12.57 million decrease in construction loans and smaller decreases in several other loan categories.

Loan Portfolio
($ in thousands)

	March 31, 2025				December 31, 2024					March 31, 2024
	Amount			Percent	Amount			Percent		Amount			Percent
Mortgage loans:
One- to four-family (a)	$	315,421		21%	$	306,443		20%		$	276,433		19%
Multi-family		178,590		12		177,861		12			167,275		12
Commercial		602,248		40		597,054		39			577,373		40
Construction – custom and
owner/builder		114,401		7		124,104			8		122,988		8
Construction – speculative one-to four-family		9,791		1		8,887		1			16,407		1
Construction – commercial		22,352		1		22,841		2			32,318		2
Construction – multi-family		46,602		3		48,940		3			36,795		3
Construction – land
development		15,032		1		15,977		1			16,051		1
Land		32,301		2		30,538		2			31,821		2
Total mortgage loans		1,336,738		88		1,332,645		88			1,277,461		88

Consumer loans:
Home equity and second
mortgage		47,458		3		48,851		3			42,357		3
Other		2,375		—		2,889		—			2,925		—
Total consumer loans		49,833		3		51,740		3			45,282		3

Commercial loans:
Commercial business loans		131,243		9		135,312		9			135,505		9
SBA PPP loans		156		—		204		—			367		—
Total commercial loans		131,399		9		135,516		9			135,872		9
Total loans		1,517,970		100%		1,519,901		100%			1,458,615		100%
Less:
Undisbursed portion of
construction loans in
process		(75,042	)			(85,350	)				(77,502	)
Deferred loan origination
fees		(5,329	)			(5,444	)				(5,179	)
Allowance for credit losses		(17,525	)			(17,288	)				(16,818	)
Total loans receivable, net	$	1,420,074			$	1,411,819				$	1,359,116

_______________________
(a) Does not include one- to four-family loans held for sale totaling $1,151, $411, and $1,311 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

The following table provides a breakdown of commercial real estate (“CRE”) mortgage loans by collateral type as of March 31, 2025:

CRE Loan Portfolio Breakdown by Collateral
($ in thousands)

Collateral Type	Balance		Percent of CRE Portfolio	Percent of Total Loan Portfolio	Average Balance Per Loan		Non- Accrual
Industrial warehouse	$	127,898	21%	8%	$	1,255	$	163
Medical/dental offices		84,013	14	5		1,254		—
Office buildings		68,239	11	5		784		—
Other retail buildings		53,121	9	3		553		—
Mini-storage		32,596	5	2		1,358		—
Hotel/motel		31,967	5	2		2,664		—
Restaurants		27,374	5	2		582		161
Gas stations/conv. stores		24,622	4	2		1,026		—
Churches		14,823	3	1		988		—
Nursing homes		13,606	2	1		2,268		—
Shopping centers		10,578	2	1		1,762		—
Mobile home parks		8,968	2	1		448		—
Additional CRE		104,443	17	7		762		—
Total CRE	$	602,248	100%	40%	$	938	$	324

Timberland originated $56.76 million in loans during the quarter ended March 31, 2025, compared to $72.07 million for the preceding quarter and $39.37 million for the comparable quarter one year ago. Timberland continues to originate fixed-rate one- to four-family mortgage loans, a portion of which are sold into the secondary market for asset-liability management purposes and to generate non-interest income. During the current quarter, fixed-rate one- to four-family mortgage loans totaling $5.17 million were sold compared to $2.31 million for the preceding quarter and $2.28 million for the comparable quarter one year ago.

Investment Securities

Timberland’s investment securities and CDs held for investment decreased $6.17 million, or 3%, to $235.33 million at March 31, 2025, from $241.50 million at December 31, 2024. The decrease was primarily due to maturities of U.S. Treasury investment securities (classified as held to maturity) and scheduled amortization. Partially offsetting these decreases, was the purchase of additional U.S. government agency mortgage-backed investment securities and U.S. Treasury investment securities, all of which were classified as available for sale.

Deposits

Total deposits increased $20.41 million, or 1%, during the quarter to $1.65 billion at March 31, 2025, from $1.63 billion at December 31, 2024. The quarter’s increase consisted of a $15.45 million increase in certificates of deposit account balances, a $9.91 million increase in NOW checking account balances, a $4.90 million increase in non-interest bearing account balances, and a $1.01 million increase in savings account balances. These decreases were partially offset by a $10.86 million decrease in money market account balances.

Deposit Breakdown ($ in thousands)

	March 31, 2025			December 31, 2024			March 31, 2024
	Amount		Percent	Amount		Percent	Amount		Percent
Non-interest-bearing demand	$	407,811	25%	$	402,911	25%	$	424,906	26%
NOW checking		333,325	20		323,412	20		336,621	20
Savings		207,857	13		206,845	13		211,085	13
Money market		300,552	18		311,413	19		311,994	19
Certificates of deposit under $250		227,137	14		212,764	13		190,762	12
Certificates of deposit $250 and over		124,009	7		122,997	7		118,698	7
Certificates of deposit – brokered		50,139	3		50,074	3		44,488	3
Total deposits	$	1,650,830	100%	$	1,630,416	100%	$	1,638,554	100%

Borrowings

Total borrowings were $20.00 million at both March 31, 2025 and December 31, 2024. At March 31, 2025, the weighted average rate on the borrowings was 3.97%.

Shareholders’ Equity and Capital Ratios

Total shareholders’ equity increased $3.32 million, or 1%, to $252.52 million at March 31, 2025, from $249.20 million at December 31, 2024, and increased $13.84 million, or 6%, from $238.68 million at March 31, 2024. The quarter’s increase in shareholders’ equity was primarily due to net income of $6.76 million, which was partially offset by the payment of $1.99 million in dividends to shareholders and the repurchase of 61,764 shares of common stock for $1.91 million (an average price of $30.85 per share). There were 65,995 shares available to be repurchased in accordance with the terms of its existing stock repurchase plan at March 31, 2025.

Timberland remains well capitalized with a total risk-based capital ratio of 20.29%, a Tier 1 leverage capital ratio of 12.55%, a tangible common equity to tangible assets ratio (non-GAAP) of 12.36%, and a shareholders’ equity to total assets ratio of 13.07% at March 31, 2025. Timberland’s held to maturity investment securities were $140.95 million at March 31, 2025, with a net unrealized loss of $6.62 million (pre-tax). Although not permitted by U.S. Generally Accepted Accounting Principles (“GAAP”), including these unrealized losses in accumulated other comprehensive income (loss) (“AOCI”) would result in a ratio of shareholders’ equity to total assets of 12.83%, compared to 13.07%, as reported.

Asset Quality

Timberland’s non-performing assets to total assets ratio improved to 0.13% at March 31, 2025, compared to 0.16% at December 31, 2024 and 0.19% at March 31, 2024. Net charge-offs totaled less than $1,000 for the current quarter compared to net charge-offs of $242,000 for the preceding quarter and net charge-offs of $3,000 for the comparable quarter one year ago. During the current quarter, provisions for credit losses of $237,000 on loans and $14,000 unfunded commitments were made, which was partially offset by a $5,000 recapture of credit losses on investment securities. The allowance for credit losses (“ACL”) for loans as a percentage of loans receivable was 1.22% at March 31, 2025, compared to 1.21% at December 31, 2024 and 1.22% one year ago.

Total delinquent loans (past due 30 days or more) and non-accrual loans decreased $697,000 or 17%, to $3.32 million at March 31, 2025, from $4.02 million at December 31, 2024 and decreased $879,000, or 21%, from $4.20 million at March 31, 2024. Non-accrual loans decreased $406,000, or 15%, to $2.33 million at March 31, 2025 from $2.73 million at December 31, 2024 and decreased $1.28 million, or 35%, from $3.61 million at March 31, 2024. The quarterly decrease in non-accrual loans was primarily due to decreases in commercial business loans and commercial real estate loans on non-accrual status. Loans graded “Substandard”, however, increased to $23.51 million at March 31, 2025 from $2.12 million at December 31, 2024 and $8.42 million at March 31, 2024. The increase in loans graded “Substandard” was primarily a result of two loans (totaling $21.30 million) to one borrowing relationship being downgraded during the March 31, 2025 quarter. Both of these loans are performing and Timberland remains well collateralized (based on recent appraisals), but the loans were downgraded primarily because the borrower is experiencing a legal issue stemming from an unrelated project.

Non-Accrual Loans
($ in thousands)

	March 31, 2025			December 31, 2024			March 31, 2024
	Amount		Quantity	Amount		Quantity	Amount		Quantity
Mortgage loans:
One- to four-family	$	47	1	$	47	1	$	380	3
Commercial		324	3		698	5		1,149	3
Construction – custom and
owner/builder		—	—		—	—		152	1
Total mortgage loans		371	4		745	6		1,681	7

Consumer loans:
Home equity and second
mortgage		575	3		587	3		165	1
Other		—	—		—	—		—	—
Total consumer loans		575	3		587	3		165	1

Commercial business loans		1,381	11		1,401	11		1,759	6
Total loans	$	2,327	18	$	2,733	20	$	3,605	14

Timberland had two properties classified as other real estate owned (“OREO”) at March 31, 2025:

	March 31, 2025			December 31, 2024			March 31, 2024
	Amount		Quantity	Amount		Quantity	Amount		Quantity
Other real estate owned:
Commercial	$	221	1	$	221	1	$	—	—
Land		—	1		—	1		—	1
Total mortgage loans	$	221	2	$	221	2	$	—	1

About Timberland Bancorp, Inc.
Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank. The Bank opened for business in 1915 and primarily serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 23 branches (including its main office in Hoquiam).

Disclaimer

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 statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; continuing elevated levels of inflation and the impact of current and future monetary policies of the Board of Governors of the Federal Reserve System (“Federal Reserve”) in response thereto; the effects of any federal government shutdown; credit risks of lending activities, including any deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing loans in our loan portfolio resulting in our ACL not being adequate to cover actual losses and thus requiring us to materially increase our ACL through the provision for credit losses; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long-term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Federal Reserve and of our bank subsidiary by the Federal Deposit Insurance Corporation (“FDIC”), the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including 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; 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; legislative or regulatory changes that adversely affect our business including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; our ability to attract and retain deposits; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans in our consolidated balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common stock; the quality and composition of our securities portfolio and the impact if any adverse changes in the securities markets, including on market liquidity; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board (“FASB”), including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks described elsewhere in this press release and in the Company’s other reports filed with or furnished to the Securities and Exchange Commission.

Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management’s beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this press release to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. 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 the Company’s consolidated financial condition and results of operations as well as its stock price performance.

TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME			Three Months Ended
($ in thousands, except per share amounts) (unaudited)			March 31,					Dec. 31						March 31,
			2025					2024						2024
	Interest and dividend income
	Loans receivable		$	20,896				$	21,032					$	18,909
	Investment securities			2,003					2,138						2,246
	Dividends from mutual funds, FHLB stock and other investments			82					86						82
	Interest bearing deposits in banks			1,884					2,001						1,919
	Total interest and dividend income			24,865					25,257						23,156

	Interest expense
	Deposits			7,454					8,084						7,301
	Borrowings			198					203						220
	Total interest expense			7,652					8,287						7,521
	Net interest income			17,213					16,970						15,635
	Provision for credit losses – loans			237					52						166
	Prov. for (recapture of) credit losses – investment securities			(5			)		(5		)				3
	Prov. for (recapture of ) credit losses – unfunded commitments			14					(20		)				(88	)
	Net int. income after provision for (recapture of) credit losses			16,967					16,943						15,554

	Non-interest income
	Service charges on deposits			959					999						988
	ATM and debit card interchange transaction fees			1,176					1,267						1,212
	Gain on sales of loans, net			122					43						41
	Bank owned life insurance (“BOLI”) net earnings			165					167						156
	Recoveries on investment securities, net			4					3						2
	Other			261					218						216
	Total non-interest income, net			2,687					2,697						2,615

	Non-interest expense
	Salaries and employee benefits			5,977					6,092						6,024
	Premises and equipment			1,075					950						1,081
	Advertising			189					181						159
	OREO and other repossessed assets, net			9					—						—
	ATM and debit card processing			521					521						601
	Postage and courier			142					121						145
	State and local taxes			335					346						325
	Professional fees			431					346						319
	FDIC insurance			219					210						206
	Loan administration and foreclosure			155					128						134
	Technology and communications			1,121					1,140						1,040
	Deposit operations			319					332						324
	Amortization of core deposit intangible (“CDI”)			45					45						57
	Other, net			656					655						576
	Total non-interest expense, net			11,194					11,067						10,991

	Income before income taxes			8,460					8,573						7,178
	Provision for income taxes			1,705					1,713						1,470
	Net income		$	6,755				$	6,860					$	5,708

	Net income per common share:
	Basic		$	0.85				$	0.86					$	0.71
	Diluted			0.85					0.86						0.70

	Weighted average common shares outstanding:
	Basic			7,937,063					7,958,275						8,081,924
	Diluted			7,968,632					7,999,504						8,121,109

TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME			Six Months Ended
($ in thousands, except per share amounts) (unaudited)			March 31,											March 31,
			2025											2024
	Interest and dividend income
	Loans receivable		$	41,928										$	37,304
	Investment securities			4,141											4,556
	Dividends from mutual funds, FHLB stock and other investments			168											173
	Interest bearing deposits in banks			3,885											3,618
	Total interest and dividend income			50,122											45,651

	Interest expense
	Deposits			15,538											13,444
	Borrowings			402											568
	Total interest expense			15,940											14,012
	Net interest income			34,182											31,639
	Provision for credit losses – loans			289											545
	Recapture of credit losses – investment securities			(10			)								(7	)
	Recapture of credit losses – unfunded commitments			(7			)								(121	)
	Net int. income after provision for (recapture of) credit losses			33,910											31,222

	Non-interest income
	Service charges on deposits			1,958											2,011
	ATM and debit card interchange transaction fees			2,443											2,476
	Gain on sales of loans, net			165											120
	Bank owned life insurance (“BOLI”) net earnings			331											312
	Recoveries on investment securities, net			7											7
	Other			480											487
	Total non-interest income, net			5,384											5,413

	Non-interest expense
	Salaries and employee benefits			12,068											11,936
	Premises and equipment			2,025											2,054
	Advertising			370											345
	OREO and other repossessed assets, net			9											—
	ATM and debit card processing			1,043											1,216
	Postage and courier			264											271
	State and local taxes			680											644
	Professional fees			777											572
	FDIC insurance			429											416
	Loan administration and foreclosure			283											239
	Technology and communications			2,261											2,014
	Deposit operations			652											644
	Amortization of core deposit intangible (“CDI”)			90											113
	Other, net			1,309											1,151
	Total non-interest expense, net			22,260											21,615

	Income before income taxes			17,034											15,020
	Provision for income taxes			3,419											3,016
	Net income		$	13,615										$	12,004

	Net income per common share:
	Basic		$	1.71										$	1.48
	Diluted			1.71											1.47

	Weighted average common shares outstanding:
	Basic			7,947,786											8,098,155
	Diluted			7,984,238											8,143,701

TIMBERLAND BANCORP INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share amounts) (unaudited)			March 31,					Dec. 31,				March 31,
			2025					2024				2024
Assets
Cash and due from financial institutions			$		26,010			$	24,538			$	22,310
Interest-bearing deposits in banks					165,201				139,533				158,039
		Total cash and cash equivalents			191,211				164,071				180,349

Certificates of deposit (“CDs”) held for investment, at cost					8,711				7,470				11,204
Investment securities:
		Held to maturity, at amortized cost (net of ACL – investment securities)			140,954				156,105				211,818
		Available for sale, at fair value			84,807				77,080				61,746
Investments in equity securities, at fair value					853				840				839
FHLB stock					2,045				2,037				2,037
Other investments, at cost					3,000				3,000				3,000
Loans held for sale					1,151				411				1,311

Loans receivable					1,437,599				1,429,107				1,375,934
Less: ACL – loans					(17,525	)			(17,288	)			(16,818			)
		Net loans receivable			1,420,074				1,411,819				1,359,116

Premises and equipment, net					21,436				21,617				21,718
OREO and other repossessed assets, net					221				221				—
BOLI					23,942				23,777				23,278
Accrued interest receivable					7,127				7,095				7,108
Goodwill					15,131				15,131				15,131
CDI					361				406				564
Loan servicing rights, net					1,051				1,195				1,717
Operating lease right-of-use assets					1,324				1,400				1,624
Other assets					9,331				15,805				4,674
		Total assets	$		1,932,730				1,909,480			$	1,907,234

Liabilities and shareholders’ equity
Deposits: Non-interest-bearing demand			$		407,811				402,911			$	424,906
Deposits: Interest-bearing					1,243,019				1,227,505				1,213,648
		Total deposits			1,650,830				1,630,416				1,638,554

Operating lease liabilities					1,426				1,501				1,723
FHLB borrowings					20,000				20,000				20,000
Other liabilities and accrued expenses					7,950				8,364				8,278
		Total liabilities			1,680,206				1,660,281				1,668,555

Shareholders’ equity
Common stock, $.01 par value; 50,000,000 shares authorized;
7,903,489 shares issued and outstanding – March 31, 2025
7,954,673 shares issued and outstanding – December 31, 2024
8,023,121shares issued and outstanding – March 31, 2024					28,028				29,593				32,338
Retained earnings					225,166				220,398				207,086
Accumulated other comprehensive loss					(670	)			(792	)			(745			)
		Total shareholders’ equity			252,524				249,199				238,679
		Total liabilities and shareholders’ equity	$		1,932,730				1,909,480			$	1,907,234

	Three Months Ended
PERFORMANCE RATIOS:	March 31, 2025			Dec. 31, 2024			March 31, 2024
Return on average assets (a)		1.43	%		1.41	%		1.22	%
Return on average equity (a)		10.95	%		11.03	%		9.67	%
Net interest margin (a)		3.79	%		3.64	%		3.48	%
Efficiency ratio		56.25	%		56.27	%		60.22	%

	Six Months Ended
	March 31, 2025						March 31, 2024
Return on average assets (a)		1.42	%					1.28	%
Return on average equity (a)		10.99	%					10.18	%
Net interest margin (a)		3.71	%					3.53	%
Efficiency ratio		56.26	%					58.34	%

	Three Months Ended
ASSET QUALITY RATIOS AND DATA: ($ in thousands)	March 31, 2025			Dec. 31, 2024			March 31, 2024
Non-accrual loans	$	2,327		$	2,733		$	3,605
Loans past due 90 days and still accruing		—			—			—
Non-performing investment securities		41			45			79
OREO and other repossessed assets		221			221			—
Total non-performing assets (b)	$	2,589		$	2,999		$	3,684

Non-performing assets to total assets (b)		0.13	%		0.16	%		0.19	%
Net charge-offs during quarter	$	—		$	242		$	3
Allowance for credit losses – loans to non-accrual loans		753	%		633	%		467	%
Allowance for credit losses – loans to loans receivable (c)		1.22	%		1.21	%		1.22	%


CAPITAL RATIOS:
Tier 1 leverage capital		12.55	%		12.32	%		12.01	%
Tier 1 risk-based capital		19.04	%		18.69	%		18.08	%
Common equity Tier 1 risk-based capital		19.04	%		18.69	%		18.08	%
Total risk-based capital		20.29	%		19.95	%		19.33	%
Tangible common equity to tangible assets (non-GAAP)		12.36	%		12.34	%		11.79	%

BOOK VALUES:
Book value per common share	$	31.95		$	31.33		$	29.75
Tangible book value per common share (d)		29.99			29.37			27.79

________________________________________________

(a) Annualized
(b) Non-performing assets include non-accrual loans, loans past due 90 days and still accruing, non-performing investment securities and OREO and other repossessed assets.
(c) Does not include loans held for sale and is before the allowance for credit losses.
(d) Tangible common equity divided by common shares outstanding (non-GAAP).

AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
($ in thousands)
(unaudited)

	For the Three Months Ended
	March 31, 2025					December 31, 2024					March 31, 2024
	Amount			Rate		Amount			Rate		Amount			Rate

Assets
Loans receivable and loans held for sale	$	1,435,999		5.90	%	$	1,438,144		5.80	%	$	1,365,417		5.57	%
Investment securities and FHLB stock (1)		232,532		3.64			247,236		3.57			298,003		3.14

Interest-earning deposits in banks and CDs		172,175		4.44			166,764		4.76			143,121		5.39
Total interest-earning assets		1,840,706		5.48			1,852,144		5.42			1,806,541		5.16
Other assets		77,563					75,534					81,337
Total assets	$	1,918,269				$	1,927,678				$	1,887,878

Liabilities and Shareholders’ Equity
NOW checking accounts	$	328,115		1.32	%	$	328,455		1.38	%	$	367,924		1.61	%
Money market accounts		306,137		3.18			324,424		3.42			270,623		3.14
Savings accounts		206,054		0.28			205,650		0.28			214,233		0.23
Certificates of deposit accounts		343,945		3.82			331,785		4.09			295,202		4.16
Brokered CDs		50,104		4.85			46,414		4.98			40,402		5.40
Total interest-bearing deposits		1,234,355		2.45			1,236,728		2.59			1,188,384		2.47
Borrowings		20,000		4.04			20,000		4.03			20,001		4.42
Total interest-bearing liabilities		1,254,355		2.47			1,256,728		2.62			1,208,385		2.50

Non-interest-bearing demand deposits		403,738					414,149					431,826
Other liabilities		10,064					10,146					10,182
Shareholders’ equity		250,112					246,655					237,485
Total liabilities and shareholders’ equity	$	1,918,269				$	1,927,678				$	1,887,878

Interest rate spread				3.01	%				2.80	%				2.66	%
Net interest margin (2)				3.79	%				3.64	%				3.48	%
Average interest-earning assets to
average interest-bearing liabilities		146.75	%				147.38	%				149.50	%

_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets

AVERAGE BALANCES, YIELDS, AND RATES
($ in thousands)
(unaudited)

	For the Six Months Ended
	March 31, 2025					March 31, 2024
	Amount			Rate		Amount			Rate

Assets
Loans receivable and loans held for sale	$	1,437,081		5.85	%	$	1,349,105		5.53	%
Investment securities and FHLB stock (1)		239,966		3.60			307,636		3.08
Interest-earning deposits in banks and CDs		169,444		4.60			134,643		5.37
Total interest-earning assets		1,846,491		5.44			1,791,384		5.10
Other assets		76,535					81,473
Total assets	$	1,923,026				$	1,872,857

Liabilities and Shareholders’ Equity
NOW checking accounts	$	328,287		1.35	%	$	372,327		1.56	%
Money market accounts		315,381		3.31			247,656		2.78
Savings accounts		205,849		0.28			217,153		0.23
Certificates of deposit accounts		337,798		3.95			281,842		4.07
Brokered CDs		48,239		4.91			41,570		5.39
Total interest-bearing deposits		1,235,554		2.52			1,160,548		2.32
Borrowings		20,000		4.02			24,427		4.65
Total interest-bearing liabilities		1,255,554		2.55			1,184,975		2.37

Non-interest-bearing demand deposits		409,000					440,976
Other liabilities		10,107					11,035
Shareholders’ equity		248,365					235,871
Total liabilities and shareholders’ equity	$	1,923,026				$	1,872,857

Interest rate spread				2.89	%				2.73	%
Net interest margin (2)				3.71	%				3.53	%
Average interest-earning assets to
average interest-bearing liabilities		147.07	%				151.17	%

_____________________________________
(1) Includes other investments
(2) Net interest margin = annualized net interest income / average interest-earning assets

Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. Timberland believes that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.

Financial measures that exclude intangible assets are non-GAAP measures. To provide investors with a broader understanding of capital adequacy, Timberland provides non-GAAP financial measures for tangible common equity, along with the GAAP measure. Tangible common equity is calculated as shareholders’ equity less goodwill and CDI. In addition, tangible assets equal total assets less goodwill and CDI.

The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP) and ending total assets (GAAP) to ending tangible assets (non-GAAP).

($ in thousands)	March 31, 2025			December 31, 2024			March 31, 2024

Shareholders’ equity	$	252,524		$	249,199		$	238,679
Less goodwill and CDI		(15,492	)		(15,537	)		(15,695	)
Tangible common equity	$	237,032		$	233,662		$	222,984

Total assets	$	1,932,730		$	1,909,480		$	1,907,234
Less goodwill and CDI		(15,492	)		(15,537	)		(15,695	)
Tangible assets	$	1,917,238		$	1,893,943		$	1,891,539

Contact:	Dean J. Brydon, CEO
	Jonathan A. Fischer, President & COO
	Marci A. Basich, CFO
	(360) 533-4747
	www.timberlandbank.com

The MIL Network –

April 23, 2025

MIL-OSI: First Busey Corporation Announces 2025 First Quarter Results

Source: GlobeNewswire (MIL-OSI)

LEAWOOD, Kan., April 22, 2025 (GLOBE NEWSWIRE) — First Busey Corporation (Nasdaq: BUSE) reports first quarter results.

Busey completed the transformative acquisition of CrossFirst Bankshares, Inc. on March 1, 2025, significantly impacting first quarter results and resetting the baseline for financial performance for future quarters in a multitude of positive ways.

Net Income (Loss)	Diluted EPS	Net Interest Margin¹	ROAA¹	ROATCE¹
$(30.0) million	$(0.44)	3.16%	(0.82)%	(7.99)%
$39.9 million (adj)²	$0.57 (adj)²	3.08% (adj)²	1.09% (adj)²	10.64% (adj)²

MESSAGE FROM OUR CHAIRMAN & CEO

The transformative partnership between Busey and CrossFirst takes our organization to new heights, combining our growing commercial bank with the power of Busey’s core deposit franchise, wealth management platform, and payment technology solutions at FirsTech, Inc. As we build upon Busey’s forward momentum, we are grateful for the opportunities to consistently earn the business of our customers, based on the contributions of our talented associates and the continued support of our loyal shareholders.

Van A. Dukeman
Chairman and Chief Executive Officer

PARTNERSHIP WITH CROSSFIRST

Effective March 1, 2025, First Busey Corporation (“Busey,” “Company,” “we,” “us,” or “our”), the holding company for Busey Bank, completed its previously announced acquisition (the “Merger”) of CrossFirst Bankshares, Inc. (“CrossFirst”) (NASDAQ: CFB), the holding company for CrossFirst Bank, pursuant to an Agreement and Plan of Merger, dated August 26, 2024, by and between Busey and CrossFirst (the “Merger Agreement”). This partnership creates a premier commercial bank in the Midwest, Southwest, and Florida, with 78 full-service locations across 10 states—Arizona, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, New Mexico, Oklahoma, and Texas. The combined holding company will continue to operate under the First Busey Corporation name. Busey common stock will continue to trade on the Nasdaq under the “BUSE” stock ticker symbol.

Upon completion of the acquisition, each share of CrossFirst common stock converted to the right to receive 0.6675 of a share of Busey’s common stock, with the result that holders of Busey’s common stock owned approximately 63.5% of the combined company and holders of CrossFirst’s common stock owned approximately 36.5% of the combined company, on a fully-diluted basis. Further, upon completion of the acquisition, each share of CrossFirst preferred stock converted to the right to receive one share of Busey preferred stock.

CrossFirst Bank’s results of operations were included in Busey’s consolidated results of operations beginning March 1, 2025. Busey will operate CrossFirst Bank as a separate banking subsidiary until it is merged with and into Busey Bank, which is expected to occur on June 20, 2025. At the time of the bank merger, CrossFirst Bank locations will become banking centers of Busey Bank.

The acquisition was accretive to tangible book value, exceeding initial projections of a six-month earn back period.

Further details are included with Busey’s Current Report on Form 8‑K announcing completion of the acquisition, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 3, 2025.

FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME *(unaudited)*

	Three Months Ended
(dollars in thousands, except per share amounts)	March 31, 2025			December 31, 2024			March 31, 2024
Net interest income	$	103,731		$	81,578		$	75,854
Provision for credit losses		42,452			1,273			5,038
Total noninterest income		21,223			35,221			34,913
Total noninterest expense		115,171			78,167			70,769
Income (loss) before income taxes		(32,669	)		37,359			34,960
Income taxes		(2,679	)		9,254			8,735
Net income (loss)	$	(29,990	)	$	28,105		$	26,225

Basic earnings (loss) per common share	$	(0.44	)	$	0.49		$	0.47
Diluted earnings (loss) per common share	$	(0.44	)	$	0.49		$	0.46
Effective income tax rate		8.20	%		24.77	%		24.99	%

Busey’s results of operations for the first quarter of 2025 was a net loss of $(30.0) million, or $(0.44) per diluted common share, compared to net income of $28.1 million, or $0.49 per diluted common share, for the fourth quarter of 2024, and $26.2 million, or $0.46 per diluted common share, for the first quarter of 2024. Annualized return on average assets and annualized return on average tangible common equity² were (0.82)% and (7.99)%, respectively, for the first quarter of 2025.

Busey views certain non-operating items, including acquisition-related expenses, restructuring charges, and one-time strategic events, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). We also adjust for net securities gains and losses to align with industry and research analyst reporting. The objective of our presentation of adjusted earnings and adjusted earnings metrics is to allow investors and analysts to more clearly identify quarterly trends in core earnings performance. Non-operating pre-tax adjustments for acquisition and restructuring expenses² in the first quarter of 2025 were $26.0 million. Further, $3.1 million other noninterest expense was recorded to establish an initial allowance for Unfunded Commitments² and $42.4 million provision expense was recorded to establish an initial Allowance for Credit Losses for loans purchased without credit deterioration (“non-PCD” loans) immediately following the close of the acquisition in accordance with Accounting Standards Codification 326-20-30-15. Additionally, net securities losses were $15.8 million, primarily related to the execution of a strategic balance sheet repositioning. Lastly, $4.6 million in one-time deferred tax valuation expense² was recorded in connection with the CrossFirst acquisition, which is expected to lower our effective blended state tax rate in future periods but created a negative adjustment to the carrying value of our deferred tax asset in the current period. For more information and a reconciliation of these non-GAAP measures (which are identified with the endnote labeled as 2) in tabular form, see “Non-GAAP Financial Information.”

Adjusted net income², which excludes the impact of non-GAAP adjustments, was $39.9 million, or $0.57 per diluted common share, for the first quarter of 2025, compared to $30.9 million, or $0.53 per diluted common share, for the fourth quarter of 2024 and $25.7 million or $0.46 per diluted common share for the first quarter of 2024. Annualized adjusted return on average assets² and annualized adjusted return on average tangible common equity² were 1.09% and 10.64%, respectively, for the first quarter of 2025.

Pre-Provision Net Revenue²

Pre-provision net revenue² was $25.6 million for the first quarter of 2025, compared to $38.8 million for the fourth quarter of 2024 and $46.4 million for the first quarter of 2024. Pre-provision net revenue to average assets² was 0.70% for the first quarter of 2025, compared to 1.28% for the fourth quarter of 2024, and 1.55% for the first quarter of 2024.

Adjusted pre-provision net revenue² was $54.7 million for the first quarter of 2025, compared to $42.0 million for the fourth quarter of 2024 and $38.6 million for the first quarter of 2024. Adjusted pre-provision net revenue to average assets² was 1.50% for the first quarter of 2025, compared to 1.38% for the fourth quarter of 2024 and 1.29% for the first quarter of 2024.

Net Interest Income and Net Interest Margin²

Net interest income was $103.7 million in the first quarter of 2025, compared to $81.6 million in the fourth quarter of 2024 and $75.9 million in the first quarter of 2024.

Net interest margin² was 3.16% for the first quarter of 2025, compared to 2.95% for the fourth quarter of 2024 and 2.79% for the first quarter of 2024. Excluding purchase accounting accretion, adjusted net interest margin² was 3.08% for the first quarter of 2025, compared to 2.92% in the fourth quarter of 2024 and 2.78% in the first quarter of 2024.

Components of the 21 basis point increase in net interest margin² during the first quarter of 2025, which includes approximately +12 basis points contributed by CrossFirst Bank, are as follows:

Increased loan portfolio and held for sale loan yields contributed +36 basis points
Increased purchase accounting accretion contributed +5 basis points
Decreased borrowing expense contributed +3 basis points
Decreased expense on rate swaps contributed +2 basis points
Increased non-maturity deposit funding costs contributed -17 basis points
Decreased cash and securities portfolio yield contributed -8 basis points

Based on our most recent Asset Liability Management Committee (“ALCO”) model, a +100 basis point parallel rate shock is expected to increase net interest income by 1.8% over the subsequent twelve-month period. Busey continues to evaluate and execute off-balance sheet hedging and balance sheet repositioning strategies as well as embedding rate protection in our asset originations to provide stabilization to net interest income in lower rate environments. Time deposit and savings specials have provided funding flows, and we had excess earning cash during the first quarter of 2025. A portion of the acquired CrossFirst Bank securities portfolio was liquidated when the acquisition was finalized, providing additional excess cash that will allow us to unwind non-core funding. As brokered CDs mature, Busey will continue to deploy excess cash to reduce wholesale funding levels during subsequent quarters. Total deposit cost of funds increased from 1.75% during the fourth quarter of 2024 to 1.91% during the first quarter of 2025. Deposit betas increased with the higher mix of acquired indexed and wholesale deposits and a full quarter of the consolidated Company’s funding base is projected to increase total deposit cost of funds during the second quarter of 2025. With the expectation of Busey paying down non-core funding, the deposit beta will lessen during the year and is expected to normalize in the 45% to 50% beta range. Growth in higher yielding earning assets is expected to offset the increased cost of funds pressure and we project further net interest margin expansion during the second quarter of 2025.

Noninterest Income

	Three Months Ended
(dollars in thousands)	March 31, 2025			December 31, 2024			March 31, 2024
NONINTEREST INCOME
Wealth management fees	$	17,364		$	16,786		$	15,549
Fees for customer services		8,128			7,911			7,056
Payment technology solutions		5,073			5,094			5,709
Mortgage revenue		329			496			746
Income on bank owned life insurance		1,446			1,080			1,419
Realized net gains (losses) on the sale of mortgage servicing rights		—			—			7,465
Net securities gains (losses)		(15,768	)		(196	)		(6,375	)
Other noninterest income		4,651			4,050			3,344
Total noninterest income	$	21,223		$	35,221		$	34,913

Total noninterest income decreased by 39.7% compared to the fourth quarter of 2024 and decreased by 39.2% compared to the first quarter of 2024, primarily due to net securities losses that were recorded in connection with a strategic balance sheet repositioning.

Excluding the impact of net securities gains and losses and the gains on the sale of mortgage servicing rights, adjusted noninterest income² increased by 4.4% to $37.0 million, or 26.3% of operating revenue², during the first quarter of 2025, compared to $35.4 million, or 30.3% of operating revenue², for the fourth quarter of 2024. Compared to the first quarter of 2024, adjusted noninterest income² increased by 9.4% from $33.8 million, or 30.8% of operating revenue².

Our fee-based businesses continue to add revenue diversification. Wealth management fees, wealth management referral fees included in other noninterest income, and payment technology solutions contributed 61.1% of adjusted noninterest income² for the first quarter of 2025.

Noteworthy components of noninterest income are as follows:

Wealth management fees increased by 3.4% compared to the fourth quarter of 2024. Compared to the first quarter of 2024 wealth management fees increased by 11.7%. Busey’s Wealth Management division ended the first quarter of 2025 with $13.68 billion in assets under care, compared to $13.83 billion at the end of the fourth quarter of 2024 and $12.76 billion at the end of the first quarter of 2024. Our portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets and has outperformed its blended benchmark³ over the last three and five years. The Wealth Management segment reported another quarter of record high revenue for the first quarter of 2025.
Payment technology solutions revenue decreased slightly compared the fourth quarter of 2024. Compared to the first quarter of 2024, payment technology solutions revenue decreased by 11.1% primarily due to decreases in income from electronic, online, and interactive voice response payments, partially offset by increases in lockbox and merchant services income.
Fees for customer services increased by 2.7% compared to the fourth quarter of 2024 primarily due to increases in income from analysis charges and interchange fees, offset by lower non-sufficient funds charges. Compared to the first quarter of 2024, fees for customer services increased by 15.2% primarily due to increases in analysis charges, automated teller machine fees, and interchange fees, offset by lower non-sufficient funds charges. Increases in fees for customer services are primarily attributable to the inclusion of one month of CrossFirst’s income in our first quarter results.
Other noninterest income increased by 14.8% compared to the fourth quarter of 2024 and by 39.1% compared to the first quarter of 2024. The increase for both periods was driven by increases in swap origination fee income, commercial loan sales gains, letter of credit fee income, and other real estate owned income, offset by decreases in venture capital income.

Operating Efficiency

	Three Months Ended
(dollars in thousands)	March 31, 2025		December 31, 2024		March 31, 2024
NONINTEREST EXPENSE
Salaries, wages, and employee benefits	$	67,563	$	45,458	$	42,090
Data processing expense		9,575		6,564		6,550
Net occupancy expense of premises		5,799		4,794		4,720
Furniture and equipment expense		1,744		1,650		1,813
Professional fees		9,511		4,938		2,253
Amortization of intangible assets		3,083		2,471		2,409
Interchange expense		1,343		1,305		1,611
FDIC insurance		2,167		1,330		1,400
Other noninterest expense		14,386		9,657		7,923
Total noninterest expense	$	115,171	$	78,167	$	70,769

Total noninterest expense increased by 47.3% compared to the fourth quarter of 2024 and increased by 62.7% compared to the first quarter of 2024. Growth in noninterest expense was primarily attributable to one-time acquisition expenses related to the CrossFirst acquisition as well as added costs for operating expenses for two banks during one month of the quarter. Annual pre-tax expense synergy estimates resulting from the CrossFirst acquisition remain on track at $25.0 million. Busey anticipates a 50% rate of synergy realization in 2025 and 100% in 2026.

Adjusted noninterest expense², which excludes acquisition and restructuring expenses, amortization of intangible assets, and the provision for unfunded commitments, was $82.9 million in the first quarter of 2025, compared to $72.6 million in the fourth quarter of 2024 and $68.6 million in the first quarter of 2024. As our business grows, Busey remains focused on prudently managing our expense base and operating efficiency.

Noteworthy components of noninterest expense are as follows:

Salaries, wages, and employee benefits expenses increased by $22.1 million compared to the fourth quarter of 2024, and by $25.5 million compared to the first quarter of 2024, of which $15.6 million and $15.8 million, respectively, was attributable to increases in non-operating expenses, with additional severance, retention, and stock-based compensation. Busey has added 501 full time equivalent associates (“FTEs”) over the past year, mostly as a result of acquisitions, including 437 CrossFirst Bank FTEs added in March 2025 and 46 Merchants & Manufacturers Bank FTEs added in April 2024.
Data processing expense increased by $3.0 million compared to both the fourth quarter of 2024 and the first quarter of 2024, of which $2.3 million and $2.2 million, respectively, was attributable to increases in non-operating expenses. Busey has continued to make investments in technology enhancements and has also experienced inflation-driven price increases.
Professional fees increased by $4.6 million compared to the fourth quarter of 2024, of which $4.3 million was attributable to increases in non-operating expenses. Compared to the first quarter of 2024, professional fees increased by $7.3 million, of which $7.2 million was attributable to increases in non-operating expenses.
Amortization of intangible assets increased by $0.6 million compared to the fourth quarter of 2024, and by $0.7 million compared to the first quarter of 2024. The CrossFirst acquisition added an estimated $81.8 million of finite-lived intangible assets, which will be amortized using an accelerated amortization methodology.
Other noninterest expense increased by $4.7 million compared to the fourth quarter of 2024, and increased by $6.5 million compared to the first quarter of 2024, of which $0.3 million and $0.5 million, respectively, resulted from increases in non-operating expenses related to acquisition and restructuring expenses. Further, $3.1 million of non-operating expenses was recorded for the Day 2 provision for unfunded commitments. Multiple expense items contributed to the remaining fluctuations in this expense category, including marketing, business development, regulatory expenses, mortgage servicing rights valuation expenses, and other real estate owned.

Busey’s efficiency ratio² was 79.3% for the first quarter of 2025, compared to 64.5% for the fourth quarter of 2024 and 58.1% for the first quarter of 2024. Our adjusted efficiency² ratio was 58.7% for the first quarter of 2025, compared to 61.8% for the fourth quarter of 2024, and 62.3% for the first quarter of 2024.

Busey’s annualized ratio of adjusted noninterest expense to average assets was 2.27% for the first quarter of 2025, compared to 2.39% for the fourth quarter of 2024 and 2.30% for the first quarter of 2024.

BALANCE SHEET STRENGTH

CONDENSED CONSOLIDATED BALANCE SHEETS *(unaudited)*

	As of
*(dollars in thousands, except per share amounts)*	March 31, 2025			December 31, 2024			March 31, 2024
ASSETS
Cash and cash equivalents	$	1,200,292		$	697,659		$	591,071
Debt securities available for sale		2,273,874			1,810,221			1,898,072
Debt securities held to maturity		815,402			826,630			862,218
Equity securities		10,828			15,862			9,790
Loans held for sale		7,270			3,657			6,827
Portfolio loans		13,868,357			7,697,087			7,588,077
Allowance for credit losses		(195,210	)		(83,404	)		(91,562	)
Restricted bank stock		53,518			49,930			6,000
Premises and equipment, net		182,003			118,820			121,506
Right of use assets		40,594			10,608			10,590
Goodwill and other intangible assets, net		496,118			365,975			351,455
Other assets		711,206			533,677			533,414
Total assets	$	19,464,252		$	12,046,722		$	11,887,458

LIABILITIES & STOCKHOLDERS’ EQUITY
Liabilities
Total deposits	$	16,459,470		$	9,982,490		$	9,960,191
Securities sold under agreements to repurchase		137,340			155,610			147,175
Short-term borrowings		11,209			—			—
Long-term debt		306,509			227,723			223,100
Junior subordinated debt owed to unconsolidated trusts		77,117			74,815			72,040
Lease liabilities		41,111			11,040			10,896
Other liabilities		251,890			211,775			191,405
Total liabilities		17,284,646			10,663,453			10,604,807

Stockholders’ equity
Retained earnings		249,484			294,054			248,412
Accumulated other comprehensive income (loss)		(172,810	)		(207,039	)		(222,190	)
Other stockholders’ equity¹		2,102,932			1,296,254			1,256,429
Total stockholders’ equity		2,179,606			1,383,269			1,282,651
Total liabilities & stockholders’ equity	$	19,464,252		$	12,046,722		$	11,887,458

SHARE AND PER SHARE AMOUNTS
Book value per common share²	$	24.13		$	24.31		$	23.19
Tangible book value per common share²	$	18.62		$	17.88		$	16.84
Ending number of common shares outstanding		90,008,178			56,895,981			55,300,008

___________________________________________
1. Net balance of preferred stock ($0.001 par value), common stock ($0.001 par value), additional paid-in capital, and treasury stock.
2. See “Non-GAAP Financial Information” for reconciliation.

AVERAGE BALANCES *(unaudited)*

	Three Months Ended
*(dollars in thousands)*	March 31, 2025		December 31, 2024		March 31, 2024
ASSETS
Cash and cash equivalents	$	861,021	$	776,572	$	594,193
Investment securities		2,782,435		2,597,309		2,907,144
Loans held for sale		3,443		6,306		4,833
Portfolio loans		9,838,337		7,738,772		7,599,316
Interest-earning assets		13,363,594		11,048,350		11,005,903
Total assets		14,831,298		12,085,993		12,024,208

LIABILITIES & STOCKHOLDERS’ EQUITY
Noninterest-bearing deposits		3,036,127		2,724,344		2,708,586
Interest-bearing deposits		9,142,781		7,325,662		7,330,105
Total deposits		12,178,908		10,050,006		10,038,691
Federal funds purchased and securities sold under agreements to repurchase		144,838		135,728		178,659
Interest-bearing liabilities		9,627,841		7,763,729		7,831,655
Total liabilities		12,896,222		10,689,054		10,748,484
Stockholders’ equity – preferred		2,669		—		—
Stockholders’ equity – common		1,932,407		1,396,939		1,275,724
Tangible common equity¹		1,521,387		1,029,539		922,710

___________________________________________
1. See “Non-GAAP Financial Information” for reconciliation.

Busey’s financial strength is built on a long-term conservative operating approach. That focus will not change now or in the future.

Total assets were $19.46 billion as of March 31, 2025, compared to $12.05 billion as of December 31, 2024, and $11.89 billion as of March 31, 2024. Average interest-earning assets were $13.36 billion for the first quarter of 2025, compared to $11.05 billion for the fourth quarter of 2024, and $11.01 billion for the first quarter of 2024.

Portfolio Loans

We remain steadfast in our conservative approach to underwriting and our disciplined approach to pricing, particularly given our outlook for the economy in the coming quarters. Portfolio loans totaled $13.87 billion at March 31, 2025, compared to $7.70 billion at December 31, 2024, and $7.59 billion at March 31, 2024. Busey Bank’s portfolio loans grew by $133.6 million during the first quarter of 2025, with growth centered in the commercial category. In addition, as of March 31, 2024, CrossFirst Bank added $6.04 billion in loans to Busey’s loan portfolio.

Average portfolio loans were $9.84 billion for the first quarter of 2025, compared to $7.74 billion for the fourth quarter of 2024 and $7.60 billion for the first quarter of 2024.

Asset Quality

Asset quality continues to be strong. Busey Bank maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment. CrossFirst Bank’s policies are similar in nature to Busey Bank’s policies and Busey is in the process of migrating the legacy CrossFirst portfolio toward Busey Bank’s policies.

ASSET QUALITY *(unaudited)*

	As of
(dollars in thousands)	March 31, 2025			December 31, 2024			March 31, 2024
Total assets	$	19,464,252		$	12,046,722		$	11,887,458
Portfolio loans		13,868,357			7,697,087			7,588,077
Loans 30 – 89 days past due		18,554			8,124			7,441
Non-performing loans:
Non-accrual loans		48,647			22,088			17,465
Loans 90+ days past due and still accruing		6,077			1,149			88
Non-performing loans		54,724			23,237			17,553
Other non-performing assets		4,757			63			65
Non-performing assets		59,481			23,300			17,618
Substandard (excludes 90+ days past due)		131,078			62,023			87,830
Classified assets	$	190,559		$	85,323		$	105,448

Allowance for credit losses	$	195,210		$	83,404		$	91,562

RATIOS
Non-performing loans to portfolio loans		0.39	%		0.30	%		0.23	%
Non-performing assets to total assets		0.31	%		0.19	%		0.15	%
Non-performing assets to portfolio loans and other non-performing assets		0.43	%		0.30	%		0.23	%
Allowance for credit losses to portfolio loans		1.41	%		1.08	%		1.21	%
Coverage ratio of the allowance for credit losses to non-performing loans	3.57 x			3.59 x			5.22 x
Classified assets to Bank Tier 1 capital¹and reserves		8.40	%		5.61	%		7.24	%

___________________________________________
1. Capital amounts for the first quarter of 2025 are not yet finalized and are subject to change.

Loans 30-89 days past due increased by $10.4 million compared to December 31, 2024, and increased by $11.1 million compared to March 31, 2024. Busey Bank’s loans 30-89 days past due were $6.1 million, a decrease of $2.0 million compared to December 31, 2024. CrossFirst Bank’s loans 30-89 days past due were $12.5 million as of March 31, 2025.

Non-performing loans increased by $31.5 million compared to December 31, 2024, and increased by $37.2 million compared to March 31, 2024. Busey Bank’s non-performing loans were $6.8 million, a decrease of $16.4 million compared to December 31, 2024. CrossFirst Bank’s non-performing loans were $47.9 million as of March 31, 2025. Continued disciplined credit management resulted in non-performing loans as a percentage of portfolio loans of 0.39% as of March 31, 2025, a 9 basis point increase from December 31, 2024, and a 16 basis point increase from March 31, 2024.

Non-performing assets increased by $36.2 million compared to December 31, 2024, and increased by $41.9 million compared to March 31, 2024. Busey Bank’s non-performing assets were $7.1 million, a decrease of $16.2 million compared to December 31, 2024. CrossFirst Bank’s non-performing assets were $52.4 million as of March 31, 2025. Non-performing assets represented 0.31% of total assets as of March 31, 2025, a 12 basis point increase from December 31, 2024, and a 16 basis point increase from March 31, 2024.

Classified assets increased by $105.2 million compared to December 31, 2024, and increased by $85.1 million compared to March 31, 2024. Busey Bank’s classified assets were $81.3 million, a decrease of $4.0 million compared to December 31, 2024. CrossFirst Bank’s classified assets were $109.3 million as of March 31, 2025.

The allowance for credit losses was $195.2 million as of March 31, 2025, representing 1.41% of total portfolio loans outstanding, and providing coverage of 3.57 times our non-performing loans balance. In connection with the CrossFirst acquisition, the Day 1 allowance recorded for loans that were purchased with credit deterioration (“PCD” loans) was $100.8 million. The Day 1 PCD allowance was recorded as an adjustment to the fair value of the PCD loans.

NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE) *(unaudited)*

	Three Months Ended
(dollars in thousands)	March 31, 2025		December 31, 2024		March 31, 2024
Net charge-offs (recoveries)	$	31,429	$	2,850	$	5,216
Provision expense (release)		42,452		1,273		5,038

Net charge-offs increased by $28.6 million when compared to the fourth quarter of 2024, and by $26.2 million when compared with the first quarter of 2024. Net charge-offs include $29.6 million related to PCD loans acquired from CrossFirst Bank, which were fully reserved at acquisition and did not require recording additional provision expense.

Busey’s results for the first quarter of 2025 include $42.5 million provision expense for credit losses, which includes $42.4 million that was recorded to establish an initial allowance for credit losses on non-PCD acquired loans.

Deposits

Total deposits were $16.46 billion at March 31, 2025, compared to $9.98 billion at December 31, 2024, and $9.96 billion at March 31, 2024. Average deposits were $12.18 billion for the first quarter of 2025, compared to $10.05 billion for the fourth quarter of 2024 and $10.04 billion for the first quarter of 2024.

Core deposits² accounted for 89.7% of total deposits as of March 31, 2025. The quality of our core deposit franchise is a critical value driver of our institution. We estimated that 32% of our deposits were uninsured and uncollateralized⁴ as of March 31, 2025, and we have sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of our customers.

We have executed various deposit campaigns to attract term funding and savings accounts at a lower rate than our marginal cost of funds. New certificate of deposit production in the first quarter of 2025 had a weighted average term of 7.8 months at a rate of 3.58%, which was 96 basis points below our average marginal wholesale equivalent-term funding cost during the quarter.

Borrowings

As of March 31, 2025, Busey Bank held $16.7 million of long-term Federal Home Loan Bank (“FHLB”) borrowings. In comparison, Busey Bank had no short-term or long-term FHLB borrowings as of December 31, 2024, or March 31, 2024. As of March 31, 2025, CrossFirst Bank held $11.2 million of short-term FHLB borrowings and $61.9 million of long-term FHLB borrowings.

In addition, associated with the CrossFirst acquisition, Busey assumed trust preferred securities with a recorded balance of $2.2 million as of March 31, 2025.

Liquidity

As of March 31, 2025, our available sources of on- and off-balance sheet liquidity⁵ totaled $8.55 billion. Furthermore, our balance sheet liquidity profile continues to be aided by the cash flows we expect from our relatively short-duration securities portfolio. Those cash flows were approximately $119.7 million in the first quarter of 2025. Cash flows from maturing securities within our portfolio are expected to be approximately $302.3 million for the remainder of 2025, with a current book yield of 2.55%, and approximately $308.1 million for 2026, with a current book yield of 2.59%.

Capital Strength

The strength of our balance sheet is also reflected in our capital foundation. Although impacted by the strategic deployment of capital for the CrossFirst acquisition, our capital ratios remain strong, and as of March 31, 2025, our regulatory capital ratios continued to provide a buffer of more than $630 million above levels required to be designated well-capitalized. Busey’s Common Equity Tier 1 ratio is estimated⁶ to be 11.99% at March 31, 2025, compared to 14.10% at December 31, 2024, and 13.45% at March 31, 2024. Our Total Capital to Risk Weighted Assets ratio is estimated⁶ to be 14.87% at March 31, 2025, compared to 18.53% at December 31, 2024, and 17.95% at March 31, 2024.

Busey’s tangible common equity² was $1.68 billion at March 31, 2025, compared to $1.02 billion at December 31, 2024, and $931.2 million at March 31, 2024. Tangible common equity² represented 8.83% of tangible assets at March 31, 2025, compared to 8.71% at December 31, 2024, and 8.07% at March 31, 2024.

Busey’s tangible book value per common share² was $18.62 at March 31, 2025, compared to $17.88 at December 31, 2024, and $16.84 at March 31, 2024, reflecting a 10.6% year-over-year increase. The ratios of tangible common equity to tangible assets² and tangible book value per common share have been impacted by the fair market valuation adjustment of Busey’s securities portfolio as a result of the current rate environment, which is reflected in the accumulated other comprehensive income (loss) component of shareholder’s equity.

Busey’s strong capital levels, coupled with its earnings, have allowed the Company to provide a steady return to its stockholders through dividends. During the first quarter of 2025, we paid a dividend of $0.25 per share on Busey’s common stock, which represents a 4.2% increase from the previous quarterly dividend of $0.24 per share. Busey has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

During the first quarter of 2025, Busey resumed making stock repurchases under its stock repurchase plan, purchasing 220,000 shares of its common stock at a weighted average price of $21.98 per share for a total of $4.8 million. As of March 31, 2025, Busey had 1,699,275 shares remaining on its stock repurchase plan available for repurchase.

FIRST QUARTER EARNINGS INVESTOR PRESENTATION

For additional information on Busey’s financial condition and operating results, please refer to our Q1 2025 Earnings Investor Presentation furnished via Form 8‑K on April 22, 2025, in connection with this earnings release.

CORPORATE PROFILE

As of March 31, 2025, First Busey Corporation (Nasdaq: BUSE) was a $19.46 billion financial holding company headquartered in Leawood, Kansas.

Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation headquartered in Champaign, Illinois, had total assets of $11.98 billion as of March 31, 2025. Busey Bank currently has 62 banking centers, with 21 in Central Illinois markets, 17 in suburban Chicago markets, 20 in the St. Louis Metropolitan Statistical Area, three in Southwest Florida, and one in Indianapolis. More information about Busey Bank can be found at busey.com.

CrossFirst Bank, a wholly-owned bank subsidiary of First Busey Corporation headquartered in Leawood, Kansas, had total assets of $7.45 billion as of March 31, 2025. CrossFirst Bank currently has 16 banking centers located across Arizona, Colorado, Kansas, Missouri, New Mexico, Oklahoma, and Texas. More information about CrossFirst Bank can be found at crossfirstbank.com. It is anticipated that CrossFirst Bank will be merged with and into Busey Bank on June 20, 2025.

Through Busey’s Wealth Management division, the Company provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Assets under care totaled $13.68 billion as of March 31, 2025. More information about Busey’s Wealth Management services can be found at busey.com/wealth-management.

Busey Bank’s wholly-owned subsidiary, FirsTech, specializes in the evolving financial technology needs of small and medium-sized businesses, highly regulated enterprise industries, and financial institutions. FirsTech provides comprehensive and innovative payment technology solutions, including online, mobile, and voice-recognition bill payments; money and data movement; merchant services; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments at retail agents. Additionally, FirsTech simplifies client workflows through integrations enabling support with billing, reconciliation, bill reminders, and treasury services. More information about FirsTech can be found at firstechpayments.com.

For the fourth consecutive year, Busey was named among 2025’s America’s Best Banks by Forbes. Ranked 88th overall, Busey was one of seven banks headquartered in Illinois included on this year’s list. Busey was also named among the 2024 Best Banks to Work For by American Banker, the 2024 Best Places to Work in Money Management by Pensions and Investments, the 2024 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2025 Best Places to Work in Indiana by the Indiana Chamber of Commerce, and the 2024 Best Companies to Work For in Florida by Florida Trend magazine. We are honored to be consistently recognized globally, nationally and locally for our engaged culture of integrity and commitment to community development.

NON-GAAP FINANCIAL INFORMATION

This earnings release contains certain financial information determined by methods other than GAAP. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to Busey’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring items and provide additional perspective on Busey’s performance over time.

The following tables present reconciliations between these non-GAAP measures and what management believes to be the most directly comparable GAAP financial measures.

These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for operating results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates, estimated federal income tax rates, or effective tax rates, as noted with the tables below.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Pre-Provision Net Revenue and Related Measures

		Three Months Ended
(dollars in thousands)		March 31, 2025			December 31, 2024			March 31, 2024
Net interest income (GAAP)		$	103,731		$	81,578		$	75,854
Total noninterest income (GAAP)			21,223			35,221			34,913
Net security (gains) losses (GAAP)			15,768			196			6,375
Total noninterest expense (GAAP)			(115,171	)		(78,167	)		(70,769	)
Pre-provision net revenue (Non-GAAP)	[a]		25,551			38,828			46,373
Acquisition and restructuring expenses			26,026			3,585			408
Provision for unfunded commitments¹			3,141			(455	)		(678	)
Realized (gain) loss on the sale of mortgage service rights			—			—			(7,465	)
Adjusted pre-provision net revenue (Non-GAAP)	[b]	$	54,718		$	41,958		$	38,638

Average total assets	[c]		14,831,298			12,085,993			12,024,208

Pre-provision net revenue to average total assets (Non-GAAP)²	[a÷c]		0.70	%		1.28	%		1.55	%
Adjusted pre-provision net revenue to average total assets (Non-GAAP)²	[b÷c]		1.50	%		1.38	%		1.29	%

___________________________________________

For the three months ended March 31, 2025, the provision for unfunded commitments included Day 2 provision expense of $3.139 million recorded in connection with the CrossFirst acquisition.
Annualized measure.

Adjusted Net Income, Average Tangible Common Equity, and Related Ratios

		Three Months Ended
(dollars in thousands, except per share amounts)		March 31, 2025			December 31, 2024			March 31, 2024
Net income (loss) (GAAP)	[a]	$	(29,990	)	$	28,105		$	26,225
Acquisition expenses			26,026			2,469			285
Restructuring expenses			—			1,116			123
Day 2 provision for credit losses¹			42,433			—			—
Day 2 provision for unfunded commitments²			3,139			—			—
Net securities (gains) losses			15,768			196			6,375
Realized net (gains) losses on the sale of mortgage servicing rights			—			—			(7,465	)
Related tax (benefit) expense³			(22,069	)		(1,014	)		170
One-time deferred tax valuation adjustment⁴			4,591			—			—
Adjusted net income (Non-GAAP)⁵	[b]	$	39,898		$	30,872		$	25,713

Weighted average number of common shares outstanding, diluted (GAAP)	[c]		68,517,647			57,934,812			56,406,500
Diluted earnings (loss) per common share (GAAP)	[a÷c]	$	(0.44	)	$	0.49		$	0.46

Weighted average number of common shares outstanding, diluted (Non-GAAP)⁶	[d]		69,502,717			57,934,812			56,406,500
Adjusted diluted earnings per common share (Non-GAAP)⁵^,6	[b÷d]	$	0.57		$	0.53		$	0.46

Average total assets	[e]	$	14,831,298		$	12,085,993		$	12,024,208
Return on average assets (Non-GAAP)⁷	[a÷e]	(0.82		)%		0.93	%		0.88	%
Adjusted return on average assets (Non-GAAP)^5,⁷	[b÷e]		1.09	%		1.02	%		0.86	%

Average common equity		$	1,932,407		$	1,396,939		$	1,275,724
Average goodwill and other intangible assets, net			(411,020	)		(367,400	)		(353,014	)
Average tangible common equity (Non-GAAP)	[f]	$	1,521,387		$	1,029,539		$	922,710

Return on average tangible common equity (Non-GAAP)⁷	[a÷f]	(7.99		)%		10.86	%		11.43	%
Adjusted return on average tangible common equity (Non-GAAP)^5,⁷	[b÷f]		10.64	%		11.93	%		11.21	%

___________________________________________

The Day 2 allowance for credit losses was recorded in connection with the CrossFirst acquisition to establish an allowance on non-PCD loans and is reflected within the provision for credit losses line on the Statement of Income.
The Day 2 provision for unfunded commitments was recorded in connection with the CrossFirst acquisition and is reflected within the other noninterest expense line, as a component of total noninterest expense, on the Statement of Income.
Tax benefits were calculated using tax rates of 25.3%, 26.8%, and 24.9% for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
The deferred tax valuation adjustment was recorded in connection with the CrossFirst acquisition and relates to the expansion of Busey’s footprint into new states. The deferred tax valuation adjustment is reflected within the income taxes line on the Statement of Income.
Beginning in 2025, Busey revised its calculation of adjusted net income for all periods presented to include, as applicable, adjustments for net securities gains and losses, realized net gains and losses on the sale of mortgage servicing rights, and one-time deferred tax valuation adjustments. In 2024, these adjusting items were previously presented as further adjustments to adjusted net income.
Dilution includes shares that would have been dilutive if there had been net income during the period.
Annualized measure.

Tax-Equivalent Net Interest Income, Adjusted Net Interest Income, Net Interest Margin, and Adjusted Net Interest Margin

		Three Months Ended
(dollars in thousands)		March 31, 2025			December 31, 2024			March 31, 2024
Net interest income (GAAP)		$	103,731		$	81,578		$	75,854
Tax-equivalent adjustment¹			537			446			449
Tax-equivalent net interest income (Non-GAAP)	[a]		104,268			82,024			76,303
Purchase accounting accretion related to business combinations			(2,728	)		(812	)		(204	)
Adjusted net interest income (Non-GAAP)	[b]	$	101,540		$	81,212		$	76,099

Average interest-earning assets (Non-GAAP)	[c]	$	13,363,594		$	11,048,350		$	11,005,903

Net interest margin (Non-GAAP)²	[a÷c]		3.16	%		2.95	%		2.79	%
Adjusted net interest margin (Non-GAAP)²	[b÷c]		3.08	%		2.92	%		2.78	%

___________________________________________

Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
Annualized measure.

Adjusted Noninterest Income, Revenue Measures, Adjusted Noninterest Expense, Efficiency Ratios, and Adjusted Noninterest Expense to Average Assets

		Three Months Ended
(dollars in thousands)		March 31, 2025			December 31, 2024			March 31, 2024
Net interest income (GAAP)	[a]	$	103,731		$	81,578		$	75,854
Tax-equivalent adjustment¹			537			446			449
Tax-equivalent net interest income (Non-GAAP)	[b]		104,268			82,024			76,303

Total noninterest income (GAAP)			21,223			35,221			34,913
Net security (gains) losses			15,768			196			6,375
Noninterest income excluding net securities gains and losses (Non-GAAP)	[c]		36,991			35,417			41,288
Realized net (gains) losses on the sale of mortgage servicing rights			—			—			(7,465	)
Adjusted noninterest income (Non-GAAP)	[d]	$	36,991		$	35,417		$	33,823

Tax-equivalent revenue (Non-GAAP)	[e = b+c]	$	141,259		$	117,441		$	117,591
Adjusted tax-equivalent revenue (Non-GAAP)	[f = b+d]	$	141,259		$	117,441		$	110,126
Operating revenue (Non-GAAP)	[g = a+d]	$	140,722		$	116,995		$	109,677

Adjusted noninterest income to operating revenue (Non-GAAP)	[d÷g]		26.29	%		30.27	%		30.84	%

Total noninterest expense (GAAP)		$	115,171		$	78,167		$	70,769
Amortization of intangible assets			(3,083	)		(2,471	)		(2,409	)
Noninterest expense excluding amortization of intangible assets (Non-GAAP)	[h]		112,088			75,696			68,360
Acquisition and restructuring expenses			(26,026	)		(3,585	)		(408	)
Provision for unfunded commitments²			(3,141	)		455			678
Adjusted noninterest expense (Non-GAAP)³	[i]	$	82,921		$	72,566		$	68,630

Efficiency ratio (Non-GAAP)	[h÷e]		79.35	%		64.45	%		58.13	%
Adjusted efficiency ratio (Non-GAAP)³	[i÷f]		58.70	%		61.79	%		62.32	%

Average total assets	[j]	$	14,831,298		$	12,085,993		$	12,024,208
Adjusted noninterest expense to average assets (Non-GAAP)⁴	[i÷j]		2.27	%		2.39	%		2.30	%

___________________________________________

Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
For the three months ended March 31, 2025, the provision for unfunded commitments included Day 2 provision expense of $3.139 million recorded in connection with the CrossFirst acquisition.
Beginning in 2025, Busey revised its calculation of adjusted noninterest expense and the adjusted efficiency ratio for all periods presented to include, as applicable, adjustments for the provision for unfunded commitments. In 2024, these adjustments were previously presented as adjustments for adjusted core expense and the adjusted core efficiency ratio.
Annualized measure.

Tangible Assets, Tangible Common Equity, and Related Measures and Ratio

		As of
(dollars in thousands, except per share amounts)		March 31, 2025			December 31, 2024			March 31, 2024
Total assets (GAAP)		$	19,464,252		$	12,046,722		$	11,887,458
Goodwill and other intangible assets, net			(496,118	)		(365,975	)		(351,455	)
Tangible assets (Non-GAAP)¹	[a]	$	18,968,134		$	11,680,747		$	11,536,003

Total stockholders’ equity (GAAP)		$	2,179,606		$	1,383,269		$	1,282,651
Preferred stock and additional paid in capital on preferred stock			(7,750	)		—			—
Common equity	[b]		2,171,856			1,383,269			1,282,651
Goodwill and other intangible assets, net			(496,118	)		(365,975	)		(351,455	)
Tangible common equity (Non-GAAP)¹	[c]	$	1,675,738		$	1,017,294		$	931,196

Tangible common equity to tangible assets (Non-GAAP)¹	[c÷a]		8.83	%		8.71	%		8.07	%

Ending number of common shares outstanding (GAAP)	[d]		90,008,178			56,895,981			55,300,008
Book value per common share (Non-GAAP)	[b÷d]	$	24.13		$	24.31		$	23.19
Tangible book value per common share (Non-GAAP)	[c÷d]	$	18.62		$	17.88		$	16.84

___________________________________________

Beginning in 2025, Busey revised its calculation of tangible assets and tangible common equity for all periods presented to exclude any tax adjustment.

Core Deposits and Related Ratio

		As of
(dollars in thousands)		March 31, 2025			December 31, 2024			March 31, 2024
Total deposits (GAAP)	[a]	$	16,459,470		$	9,982,490		$	9,960,191
Brokered deposits, excluding brokered time deposits of $250,000 or more			(722,309	)		(13,090	)		(6,001	)
Time deposits of $250,000 or more			(967,262	)		(334,503	)		(326,795	)
Core deposits (Non-GAAP)	[b]	$	14,769,899		$	9,634,897		$	9,627,395

Core deposits to total deposits (Non-GAAP)	[b÷a]		89.73	%		96.52	%		96.66	%

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Busey’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” “position,” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and Busey undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) the strength of the local, state, national, and international economies and financial markets (including effects of inflationary pressures and supply chain constraints); (2) changes in, and the interpretation and prioritization of, local, state, and federal laws, regulations, and governmental policies (including those concerning Busey’s general business); (3) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics, or other adverse external events that could cause economic deterioration or instability in credit markets (including Russia’s invasion of Ukraine and the conflict in the Middle East); (4) unexpected results of acquisitions, including the acquisition of CrossFirst, which may include the failure to realize the anticipated benefits of the acquisitions and the possibility that the transaction and integration costs may be greater than anticipated; (5) the imposition of tariffs or other governmental policies impacting the value of products produced by Busey’s commercial borrowers; (6) new or revised accounting policies and practices as may be adopted by state and federal regulatory banking agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission, or the Public Company Accounting Oversight Board; (7) changes in interest rates and prepayment rates of Busey’s assets (including the impact of sustained elevated interest rates); (8) increased competition in the financial services sector (including from non-bank competitors such as credit unions and fintech companies) and the inability to attract new customers; (9) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (10) the loss of key executives or associates, talent shortages, and employee turnover; (11) unexpected outcomes and costs of existing or new litigation, investigations, or other legal proceedings, inquiries, and regulatory actions involving Busey (including with respect to Busey’s Illinois franchise taxes); (12) fluctuations in the value of securities held in Busey’s securities portfolio, including as a result of changes in interest rates; (13) credit risk and risk from concentrations (by type of borrower, geographic area, collateral, and industry), within Busey’s loan portfolio and large loans to certain borrowers (including commercial real estate loans); (14) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversify their exposure; (15) the level of non-performing assets on Busey’s balance sheets; (16) interruptions involving information technology and communications systems or third-party servicers; (17) breaches or failures of information security controls or cybersecurity-related incidents; (18) the economic impact on Busey and its customers of climate change, natural disasters, and exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts; (19) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact Busey’s cost of funds; (20) the ability to maintain an adequate level of allowance for credit losses on loans; (21) the effectiveness of Busey’s risk management framework; and (22) the ability of Busey to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Additional information concerning Busey and its business, including additional factors that could materially affect Busey’s financial results, is included in Busey’s filings with the Securities and Exchange Commission.

END NOTES

1	Annualized measure.
2	Represents a non-GAAP financial measure. For a reconciliation to the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”), see “Non-GAAP Financial Information.”
3	The blended benchmark consists of 60% MSCI All Country World Index and 40% Bloomberg Intermediate US Government/Credit Total Return Index.
4	Estimated uninsured and uncollateralized deposits consist of account balances in excess of the $250 thousand Federal Deposit Insurance Corporation insurance limit, less intercompany accounts, fully collateralized accounts (including preferred deposits), and pass-through accounts where clients have deposit insurance at the correspondent financial institution.
5	On- and off-balance sheet liquidity is comprised of cash and cash equivalents, debt securities excluding those pledged as collateral, brokered deposits, and Busey’s borrowing capacity through its revolving credit facility, the FHLB, the Federal Reserve Bank, and federal funds purchased lines.
6	Capital amounts and ratios for the first quarter of 2025 are not yet finalized and are subject to change.

INVESTOR CONTACT: Scott A. Phillips, Interim Chief Financial Officer | 239-689-7167

The MIL Network –

April 23, 2025

MIL-OSI: Baker Hughes Company Announces First-Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

First-quarter highlights

Orders of $6.5 billion, including $3.2 billion of IET orders.
RPO of $33.2 billion, including record IET RPO of $30.4 billion.
Revenue of $6.4 billion, consistent year-over-year.
Attributable net income of $402 million.
GAAP diluted EPS of $0.40 and adjusted diluted EPS* of $0.51.
Adjusted EBITDA* of $1,037 million, up 10% year-over-year.
Cash flows from operating activities of $709 million and free cash flow* of $454 million.
Returns to shareholders of $417 million, including $188 million of share repurchases.

HOUSTON and LONDON, April 22, 2025 (GLOBE NEWSWIRE) — Baker Hughes Company (Nasdaq: BKR) (“Baker Hughes” or the “Company”) announced results today for the first quarter of 2025.

“Baker Hughes started the year strong, building on the positive momentum from 2024 and setting multiple first-quarter records. Our continued transformation initiatives and strong execution continue to drive structural margin improvement across both segments. The operational transformation and streamlining efforts have created a solid foundation to optimize margins and enhance returns, even in a challenging environment,” said Lorenzo Simonelli, Baker Hughes chairman and chief executive officer.

“In our IET segment, we booked $3.2 billion of orders, including our first data center awards, totaling more than 350 MW of power solutions for this rapidly evolving market. In addition to expanding opportunities for data centers, we have a strong pipeline of LNG, FPSO and gas infrastructure projects that support our order outlook for this year.”

“In OFSE, EBITDA remained resilient as our margins saw noticeable improvement compared to last year even while segment revenue fell. This is a testament to the team’s hard work in changing the way the business operates.”

“Although our outlook is tempered by broader macro and trade policy uncertainty, we remain confident in our strategy and the resilience of our portfolio. We believe Baker Hughes is well positioned to navigate near-term challenges and deliver sustainable growth in shareholder value.”

“I want to thank our employees, whose hard work, dedication and focus have been instrumental to the continued success of Baker Hughes. As we continue to execute our strategy amidst an uncertain macro backdrop, we remain committed to our customers, shareholders and employees,” concluded Simonelli.

* Non-GAAP measure. See reconciliations in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.”

	Three Months Ended						Variance
(in millions except per share amounts)	March 31, 2025		December 31, 2024		March 31, 2024		Sequential		Year-over- year
Orders	$	6,459	$	7,496	$	6,542	(14	%)	(1	%)
Revenue		6,427		7,364		6,418	(13	%)	—	%
Net income attributable to Baker Hughes		402		1,179		455	(66	%)	(12	%)
Adjusted net income attributable to Baker Hughes*		509		694		429	(27	%)	19	%
Adjusted EBITDA*		1,037		1,310		943	(21	%)	10	%
Diluted earnings per share (EPS)		0.40		1.18		0.45	(66	%)	(11	%)
Adjusted diluted EPS*		0.51		0.70		0.43	(27	%)	19	%
Cash flow from operating activities		709		1,189		784	(40	%)	(10	%)
Free cash flow*		454		894		502	(49	%)	(10	%)

* Non-GAAP measure. See reconciliations in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.”

Certain columns and rows in our tables and financial statements may not sum up due to the use of rounded numbers.

Quarter Highlights

Baker Hughes expanded its leadership position in liquefied natural gas (“LNG”) in the first quarter, including a liquefaction train award from Bechtel for a project in North America, where the Company will provide four main refrigerant compressors driven by LM6000+ gas turbines and four expander-compressors. This award builds on the previously announced December 2024 award and further demonstrates the strength of the Company’s collaboration with Bechtel to support North America LNG development.

During the quarter, Industrial & Energy Technology (“IET”) signed key strategic framework agreements with LNG operators. The Company agreed to provide gas turbines and refrigerant compressor technology, along with maintenance services, for Trains 4 to 8 of NextDecade’s Rio Grande LNG Facility. Baker Hughes also reached an agreement with Argent LNG to provide liquefaction and power solutions and related aftermarket services for its proposed 24 MTPA LNG export facility in Louisiana. The project will employ Baker Hughes’ NMBL™ modularized LNG solution, driven by the LM9000 gas turbine, while also utilizing the Company’s iCenter™ and Cordant™ digital solution, to enhance the plant’s operational efficiency.

Baker Hughes also demonstrated its continuous commitment to critical gas infrastructure projects with a strategic win in the North America pipeline compression market. The award includes the provision of two gas compression stations for a total of 10 Frame 5/2E gas turbines and 10 centrifugal compressors, anti-surge valves and critical spare parts.

In the first quarter, Baker Hughes made significant progress in reliable and sustainable power solutions deployment for data centers. In addition to being awarded over 350 MW of NovaLT™ turbines to power data centers with various other customers, the Company partnered with Frontier Infrastructure to accelerate the development of large-scale carbon capture and storage (“CCS”) and power solutions for data centers and industrial customers in the U.S. This partnership will leverage technologies and services across the Baker Hughes enterprise by providing CO₂ compression, NovaLT™ gas turbines, digital monitoring solutions, well construction and completion services.

In continued demonstration of Gas Technology’s lifecycle offerings in IET, the Company received several aftermarket service awards during the quarter. In Algeria, the Gas Technology Services (“GTS”) team is partnering with SONATRACH to deliver an upgrade solution for the modernization of a key compressor station. In the Middle East, Gas Technology received multiple equipment and services awards to support one of the world’s largest gas processing plants. The scope includes rejuvenation of two existing gas turbines to drive new compressors and the supply of a third compression train to support production expansion.

IET’s Industrial Solutions gained momentum with its Cordant™ Asset Performance Management (“APM”) solution, securing several contracts with customers across multiple regions. ADNOC Offshore will deploy the full APM suite to enhance production availability and efficiency. In the Americas, a large international oil company will conduct a proof of concept across multiple equipment trains, to support a shift from proactive to predictive maintenance. In Australia, the Company signed agreements to develop asset maintenance strategies for new mine sites supporting truck fleet maintenance.

Oilfield Services & Equipment (“OFSE”) received a significant award from ExxonMobil Guyana to provide specialty chemicals and related services for its Uaru and Whiptail offshore greenfield developments in the country’s prolific Stabroek Block, highlighting the differentiated capabilities of our Production Solutions offering. For this multi-year contract, the scope will cover topsides, subsea, water injection and utility chemicals to help ExxonMobil Guyana achieve optimal production.

OFSE continues to leverage the Company’s innovative solutions to help Petrobras unlock Brazil’s vast energy supply. In the quarter and following an open tender, Baker Hughes received a significant, multi-year fully integrated completions systems contract from Petrobras across multiple deepwater fields. A range of Baker Hughes’ technologies, including the new SureCONTROL^TM Premium interval control valve, has been specifically tailored to meet the needs of the country’s offshore developments.

OFSE secured a multi-year contract with Dubai Petroleum Establishment, for and on behalf of Dubai Supply Authority, to provide integrated coiled-tubing drilling services for the Company’s Margham Gas storage project. This follows a third-quarter 2024 IET award for integrated compressor line units for the same project, demonstrating growing commercial synergies across Baker Hughes’ diverse portfolio.

The Company drove growth in Mature Assets Solutions, signing a multi-year framework agreement with Equinor to help establish a new Center of Excellence for Plug & Abandonment work in the North Sea. Based within OFSE’s operations in Bergen and Stavanger, Norway, this hub will ensure economical, reliable solutions are implemented to responsibly abandon each well, allowing Equinor to maximize value of their assets and allocate more resources to exploration and discovery.

On the digital front, OFSE received an award from the State Oil Company of Azerbaijan Republic (“SOCAR”) to expand deployment of Leucipa™ automated field production solution for all its wells, including those with non-Baker Hughes electric submersible pumps, in the Absheron and Gunseli fields. Leucipa also marked its first deployment in Sub-Saharan Africa through an agreement with the NNPC/FIRST E&P joint venture, which will utilize the platform across its offshore wells in the Niger Delta.

Consolidated Financial Results

Revenue for the quarter was $6,427 million, a decrease of 13% sequentially and up $9 million year-over-year. The increase in revenue year-over-year was driven by an increase in IET and partially offset by a decrease in OFSE.

The Company’s total book-to-bill ratio in the first quarter of 2025 was 1.0; the IET book-to-bill ratio was 1.1.

Net income as determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), for the first quarter of 2025 was $402 million. Net income decreased $777 million sequentially and decreased $53 million year-over-year.

Adjusted net income (a non-GAAP financial measure) for the first quarter of 2025 was $509 million, which excludes adjustments totaling $108 million. A list of the adjusting items and associated reconciliation from GAAP has been provided in Table 1b in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.” Adjusted net income for the first quarter of 2025 was down 27% sequentially and up 19% year-over-year.

Depreciation and amortization for the first quarter of 2025 was $285 million.

Adjusted EBITDA (a non-GAAP financial measure) for the first quarter of 2025 was $1,037 million, which excludes adjustments totaling $140 million. See Table 1a in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.” Adjusted EBITDA for the first quarter was down 21% sequentially and up 10% year-over-year.

The sequential decrease in adjusted net income and adjusted EBITDA was primarily driven by lower volume in both segments, partially offset by productivity and structural cost-out initiatives. The year-over-year increase in adjusted net income and adjusted EBITDA was driven by increased volume in IET including higher proportionate growth in Gas Technology Equipment (“GTE”) and productivity, structural cost-out initiatives and higher pricing in both segments, partially offset by decreased volume and business mix in OFSE and cost inflation in both segments.

Other Financial Items

Remaining Performance Obligations (“RPO”) in the first quarter of 2025 ended at $33.2 billion, a decrease of $0.1 billion from the fourth quarter of 2024. OFSE RPO was $2.8 billion, down 7% sequentially, while IET RPO was $30.4 billion, up $300 million sequentially. Within IET RPO, GTE RPO was $11.9 billion and GTS RPO was $15.1 billion.

Income tax expense in the first quarter of 2025 was $152 million.

Other (income) expense, net in the first quarter of 2025 was $140 million, primarily related to changes in fair value for equity securities of $140 million.

GAAP diluted earnings per share was $0.40. Adjusted diluted earnings per share (a non-GAAP financial measure) was $0.51. Excluded from adjusted diluted earnings per share were all items listed in Table 1b in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.”

Cash flow from operating activities was $709 million for the first quarter of 2025. Free cash flow (a non-GAAP financial measure) for the quarter was $454 million. A reconciliation from GAAP has been provided in Table 1c in the section titled “Reconciliation of GAAP to non-GAAP Financial Measures.”

Capital expenditures, net of proceeds from disposal of assets, were $255 million for the first quarter of 2025, of which $158 million was for OFSE and $83 million was for IET.

Results by Reporting Segment

The following segment discussions and variance explanations are intended to reflect management’s view of the relevant comparisons of financial results on a sequential or year-over-year basis, depending on the business dynamics of the reporting segments.

Oilfield Services & Equipment

(in millions)	Three Months Ended									Variance
Segment results	March 31, 2025			December 31, 2024			March 31, 2024			Sequential		Year-over- year
Orders	$	3,281		$	3,740		$	3,624		(12	%)	(9	%)
Revenue	$	3,499		$	3,871		$	3,783		(10	%)	(8	%)
EBITDA	$	623		$	755		$	644		(18	%)	(3	%)
EBITDA margin		17.8	%		19.5	%		17.0	%	-1.7pts		0.8pts

(in millions)	Three Months Ended						Variance
Revenue by Product Line	March 31, 2025		December 31, 2024		March 31, 2024		Sequential		Year-over- year
Well Construction	$	892	$	943	$	1,061	(5	%)	(16	%)
Completions, Intervention, and Measurements		925		1,022		1,006	(9	%)	(8	%)
Production Solutions		899		974		945	(8	%)	(5	%)
Subsea & Surface Pressure Systems		782		932		771	(16	%)	1	%
Total Revenue	$	3,499	$	3,871	$	3,783	(10	%)	(8	%)

(in millions)	Three Months Ended						Variance
Revenue by Geographic Region	March 31, 2025		December 31, 2024		March 31, 2024		Sequential		Year-over- year
North America	$	922	$	971	$	990	(5	%)	(7	%)
Latin America		568		661		637	(14	%)	(11	%)
Europe/CIS/Sub-Saharan Africa		580		740		750	(22	%)	(23	%)
Middle East/Asia		1,429		1,499		1,405	(5	%)	2	%
Total Revenue	$	3,499	$	3,871	$	3,783	(10	%)	(8	%)

North America	$	922	$	971	$	990	(5	%)	(7	%)
International	$	2,577	$	2,900	$	2,793	(11	%)	(8	%)

EBITDA excludes depreciation and amortization of $226 million, $229 million, and $222 million for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. EBITDA margin is defined as EBITDA divided by revenue.

OFSE orders of $3,281 million for the first quarter of 2025 decreased by 12% sequentially. Subsea and Surface Pressure Systems orders were $532 million, down 34% sequentially, and down 16% year-over-year.

OFSE revenue of $3,499 million for the first quarter of 2025 was down 10% sequentially, and down 8% year-over-year.

North America revenue was $922 million, down 5% sequentially. International revenue was $2,577 million, down 11% sequentially, with declines across all regions.

Segment EBITDA for the first quarter of 2025 was $623 million, a decrease of $132 million, or 18% sequentially. The sequential decrease in EBITDA was primarily driven by lower volume, partially mitigated by productivity from structural cost-out initiatives.

Industrial & Energy Technology

(in millions)	Three Months Ended									Variance
Segment results	March 31, 2025			December 31, 2024			March 31, 2024			Sequential		Year-over- year
Orders	$	3,178		$	3,756		$	2,918		(15	%)	9	%
Revenue	$	2,928		$	3,492		$	2,634		(16	%)	11	%
EBITDA	$	501		$	639		$	386		(22	%)	30	%
EBITDA margin		17.1	%		18.3	%		14.7	%	-1.2pts		2.4pts

(in millions)	Three Months Ended						Variance
Orders by Product Line	March 31, 2025		December 31, 2024		March 31, 2024		Sequential		Year-over- year
Gas Technology Equipment	$	1,335	$	1,865	$	1,230	(28	%)	9	%
Gas Technology Services		913		902		692	1	%	32	%
Total Gas Technology		2,248		2,767		1,922	(19	%)	17	%
Industrial Products		501		515		546	(3	%)	(8	%)
Industrial Solutions		281		320		257	(12	%)	10	%
Total Industrial Technology		782		835		803	(6	%)	(3	%)
Climate Technology Solutions		148		154		193	(4	%)	(23	%)
Total Orders	$	3,178	$	3,756	$	2,918	(15	%)	9	%

(in millions)	Three Months Ended						Variance
Revenue by Product Line	March 31, 2025		December 31, 2024		March 31, 2024		Sequential		Year-over- year
Gas Technology Equipment	$	1,456	$	1,663	$	1,210	(12	%)	20	%
Gas Technology Services		592		796		614	(26	%)	(4	%)
Total Gas Technology		2,047		2,459		1,824	(17	%)	12	%
Industrial Products		445		548		462	(19	%)	(4	%)
Industrial Solutions		258		282		265	(8	%)	(2	%)
Total Industrial Technology		703		830		727	(15	%)	(3	%)
Climate Technology Solutions		178		204		83	(13	%)	114	%
Total Revenue	$	2,928	$	3,492	$	2,634	(16	%)	11	%

EBITDA excludes depreciation and amortization of $53 million, $56 million, and $56 million for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. EBITDA margin is defined as EBITDA divided by revenue.

IET orders of $3,178 million for the first quarter of 2025 increased by $260 million, or 9% year-over-year. The increase was driven primarily by Gas Technology, up $326 million or 17% year-over-year.

IET revenue of $2,928 million for the first quarter of 2025 increased $294 million, or 11% year-over-year. The increase was driven by Gas Technology Equipment, up $246 million or 20% year-over-year, and Climate Technology Solutions, up $95 million or 114% year-over-year.

Segment EBITDA for the quarter was $501 million, an increase of $114 million, or 30% year-over-year. The year-over-year increase in segment EBITDA was driven by productivity, positive pricing and increased volume including higher proportionate growth in GTE, partially offset by cost inflation.

Reconciliation of GAAP to non-GAAP Financial Measures

Management provides non-GAAP financial measures because it believes such measures are widely accepted financial indicators used by investors and analysts to analyze and compare companies on the basis of operating performance (including adjusted EBITDA; adjusted net income attributable to Baker Hughes; and adjusted diluted earnings per share) and liquidity (free cash flow) and that these measures may be used by investors to make informed investment decisions. Management believes that the exclusion of certain identified items from several key operating performance measures enables us to evaluate our operations more effectively, to identify underlying trends in the business, and to establish operational goals for certain management compensation purposes. Management also believes that free cash flow is an important supplemental measure of our cash performance but should not be considered as a measure of residual cash flow available for discretionary purposes, or as an alternative to cash flow from operating activities presented in accordance with GAAP.

Table 1a. Reconciliation of Net Income Attributable to Baker Hughes to Adjusted EBITDA and Segment EBITDA

	Three Months Ended
(in millions)	March 31, 2025		December 31, 2024			March 31, 2024
Net income attributable to Baker Hughes (GAAP)	$	402	$	1,179		$	455
Net income attributable to noncontrolling interests		7		11			8
Provision (benefit) for income taxes		152		(398	)		178
Interest expense, net		51		54			41
Depreciation & amortization		285		291			283
Restructuring		—		258			—
Inventory impairment⁽¹⁾		—		73			—
Change in fair value of equity securities⁽²⁾		140		(196	)		(52	)
Other charges and credits⁽²⁾		—		38			30
Adjusted EBITDA (non-GAAP)		1,037		1,310			943
Corporate costs		85		84			88
Other income / (expense) not allocated to segments		1		—			—
Total Segment EBITDA (non-GAAP)	$	1,124	$	1,394		$	1,030
OFSE		623		755			644
IET		501		639			386

⁽¹⁾ Charges for inventory impairments are reported in “Cost of goods sold” in the condensed consolidated statements of income (loss).

⁽²⁾ Change in fair value of equity securities and other charges and credits are reported in “Other (income) expense, net” on the condensed consolidated statements of income (loss).

Table 1a reconciles net income attributable to Baker Hughes, which is the directly comparable financial result determined in accordance with GAAP, to adjusted EBITDA and Segment EBITDA. Adjusted EBITDA and Segment EBITDA exclude the impact of certain identified items.

Table 1b. Reconciliation of Net Income Attributable to Baker Hughes to Adjusted Net Income Attributable to Baker Hughes

	Three Months Ended
(in millions, except per share amounts)	March 31, 2025			December 31, 2024			March 31, 2024
Net income attributable to Baker Hughes (GAAP)	$	402		$	1,179		$	455
Restructuring		—			258			—
Inventory impairment		—			73			—
Change in fair value of equity securities		140			(196	)		(52	)
Other adjustments		—			30			32
Tax adjustments⁽¹⁾		(32	)		(650	)		(6	)
Total adjustments, net of income tax		108			(485	)		(26	)
Less: adjustments attributable to noncontrolling interests		—			—			—
Adjustments attributable to Baker Hughes		108			(485	)		(26	)
Adjusted net income attributable to Baker Hughes (non-GAAP)	$	509		$	694		$	429

Denominator:
Weighted-average shares of Class A common stock outstanding diluted		999			999			1,004
Adjusted earnings per share – diluted (non-GAAP)	$	0.51		$	0.70		$	0.43

⁽¹⁾All periods reflect the tax associated with the other (income) loss adjustments.

Table 1b reconciles net income attributable to Baker Hughes, which is the directly comparable financial result determined in accordance with GAAP, to adjusted net income attributable to Baker Hughes. Adjusted net income attributable to Baker Hughes excludes the impact of certain identified items.

Table 1c. Reconciliation of Net Cash Flows From Operating Activities to Free Cash Flow

	Three Months Ended
(in millions)	March 31, 2025			December 31, 2024			March 31, 2024
Net cash flows from operating activities (GAAP)	$	709		$	1,189		$	784
Add: cash used for capital expenditures, net of proceeds from disposal of assets		(255	)		(295	)		(282	)
Free cash flow (non-GAAP)	$	454		$	894		$	502

Table 1c reconciles net cash flows from operating activities, which is the directly comparable financial result determined in accordance with GAAP, to free cash flow. Free cash flow is defined as net cash flows from operating activities less expenditures for capital assets plus proceeds from disposal of assets.


Financial Tables (GAAP)

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

	Three Months Ended March 31,
(In millions, except per share amounts)		2025			2024
Revenue	$	6,427		$	6,418
Costs and expenses:
Cost of revenue		4,952			4,976
Selling, general and administrative		577			618
Research and development costs		146			164
Other (income) expense, net		140			(22	)
Interest expense, net		51			41
Income before income taxes		561			641
Provision for income taxes		(152	)		(178	)
Net income		409			463
Less: Net income attributable to noncontrolling interests		7			8
Net income attributable to Baker Hughes Company	$	402		$	455

Per share amounts:
Basic income per Class A common stock	$	0.41		$	0.46
Diluted income per Class A common stock	$	0.40		$	0.45

Weighted average shares:
Class A basic		992			998
Class A diluted		999			1,004

Cash dividend per Class A common stock	$	0.23		$	0.21

Condensed Consolidated Statements of Financial Position

(Unaudited)

(In millions)	March 31, 2025		December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	3,277	$	3,364
Current receivables, net		6,710		7,122
Inventories, net		5,161		4,954
All other current assets		1,693		1,771
Total current assets		16,841		17,211
Property, plant and equipment, less accumulated depreciation		5,168		5,127
Goodwill		6,126		6,078
Other intangible assets, net		3,927		3,951
Contract and other deferred assets		1,680		1,730
All other assets		4,368		4,266
Total assets	$	38,110	$	38,363
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	4,465	$	4,542
Short-term debt		55		53
Progress collections and deferred income		5,589		5,672
All other current liabilities		2,485		2,724
Total current liabilities		12,594		12,991
Long-term debt		5,969		5,970
Liabilities for pensions and other postretirement benefits		985		988
All other liabilities		1,356		1,359
Equity		17,206		17,055
Total liabilities and equity	$	38,110	$	38,363

Outstanding Baker Hughes Company shares:
Class A common stock		990		990

Condensed Consolidated Statements of Cash Flows

(Unaudited)
	Three Months Ended March 31,
(In millions)		2025			2024
Cash flows from operating activities:
Net income	$	409		$	463
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		285			283
Stock-based compensation cost		50			51
Change in fair value of equity securities		140			(52	)
Benefit for deferred income taxes		(53	)		(24	)
Working capital		218			209
Other operating items, net		(340	)		(146	)
Net cash flows provided by operating activities		709			784
Cash flows from investing activities:
Expenditures for capital assets		(300	)		(333	)
Proceeds from disposal of assets		45			51
Other investing items, net		(55	)		13
Net cash flows used in investing activities		(310	)		(269	)
Cash flows from financing activities:
Dividends paid		(229	)		(210	)
Repurchase of Class A common stock		(188	)		(158	)
Other financing items, net		(85	)		(59	)
Net cash flows used in financing activities		(502	)		(427	)
Effect of currency exchange rate changes on cash and cash equivalents		16			(17	)
Increase (decrease) in cash and cash equivalents		(87	)		71
Cash and cash equivalents, beginning of period		3,364			2,646
Cash and cash equivalents, end of period	$	3,277		$	2,717
Supplemental cash flows disclosures:
Income taxes paid, net of refunds	$	207		$	108
Interest paid	$	50		$	48

Supplemental Financial Information

Supplemental financial information can be found on the Company’s website at: investors.bakerhughes.com in the Financial Information section under Quarterly Results.

Conference Call and Webcast

The Company has scheduled an investor conference call to discuss management’s outlook and the results reported in today’s earnings announcement. The call will begin at 9:30 a.m. Eastern time, 8:30 a.m. Central time on Wednesday, April 23, 2025, the content of which is not part of this earnings release. The conference call will be broadcast live via a webcast and can be accessed by visiting the Events and Presentations page on the Company’s website at: investors.bakerhughes.com. An archived version of the webcast will be available on the website for one month following the webcast.

Forward-Looking Statements

This news release (and oral statements made regarding the subjects of this release) may contain 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, (each a “forward-looking statement”). Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “would,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target,” “goal” or other similar words or expressions. There are many risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These forward-looking statements are also affected by the risk factors described in the Company’s annual report on Form 10-K for the annual period ended December 31, 2024 and those set forth from time to time in other filings with the Securities and Exchange Commission (“SEC”). The documents are available through the Company’s website at: www.investors.bakerhughes.com or through the SEC’s Electronic Data Gathering and Analysis Retrieval system at: www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

Our expectations regarding our business outlook and business plans; the business plans of our customers; oil and natural gas market conditions; cost and availability of resources; economic, legal and regulatory conditions, and other matters are only our forecasts regarding these matters.

These forward-looking statements, including forecasts, may be substantially different from actual results, which are affected by many risks, along with the following risk factors and the timing of any of these risk factors:

Economic and political conditions – the impact of worldwide economic conditions and rising inflation; the impact of tariffs and the potential for significant increases thereto; the impact of global trade policy and the potential for significant changes thereto; the effect that declines in credit availability may have on worldwide economic growth and demand for hydrocarbons; foreign currency exchange fluctuations and changes in the capital markets in locations where we operate; and the impact of government disruptions and sanctions.
Orders and RPO – our ability to execute on orders and RPO in accordance with agreed specifications, terms and conditions and convert those orders and RPO to revenue and cash.
Oil and gas market conditions – the level of petroleum industry exploration, development and production expenditures; the price of, volatility in pricing of, and the demand for crude oil and natural gas; drilling activity; drilling permits for and regulation of the shelf and the deepwater drilling; excess productive capacity; crude and product inventories; liquefied natural gas supply and demand; seasonal and other adverse weather conditions that affect the demand for energy; severe weather conditions, such as tornadoes and hurricanes, that affect exploration and production activities; Organization of Petroleum Exporting Countries (“OPEC”) policy and the adherence by OPEC nations to their OPEC production quotas.
Terrorism and geopolitical risks – war, military action, terrorist activities or extended periods of international conflict, particularly involving any petroleum-producing or consuming regions, including Russia and Ukraine; and the recent conflict in the Middle East; labor disruptions, civil unrest or security conditions where we operate; potentially burdensome taxation, expropriation of assets by governmental action; cybersecurity risks and cyber incidents or attacks; epidemic outbreaks.

About Baker Hughes:

Baker Hughes (Nasdaq: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com.

For more information, please contact:

Investor Relations

Chase Mulvehill
+1 346-297-2561
investor.relations@bakerhughes.com

Media Relations

Adrienne Lynch
+1 713-906-8407
adrienne.lynch@bakerhughes.com

The MIL Network –

April 23, 2025

MIL-OSI: QCR Holdings, Inc. Announces Net Income of $25.8 Million for the First Quarter of 2025

Source: GlobeNewswire (MIL-OSI)

First Quarter 2025 Highlights

Net income of $25.8 million, or $1.52 per diluted share
Adjusted net income (non-GAAP) of $26.0 million, or $1.53 per diluted share
Adjusted NIM (TEY) (non-GAAP) expanded to 3.41%
Robust core deposit growth of 20% annualized
Wealth management revenue growth of 14% annualized
Tangible book value per share (non-GAAP) grew $1.43, or 11% annualized
TCE/TA ratio (non-GAAP) improved 15 basis points to 9.70%

MOLINE, Ill., April 22, 2025 (GLOBE NEWSWIRE) — QCR Holdings, Inc. (NASDAQ: QCRH) (the “Company”) today announced quarterly net income of $25.8 million and diluted earnings per share (“EPS”) of $1.52 for the first quarter of 2025, compared to net income of $30.2 million and diluted EPS of $1.77 for the fourth quarter of 2024.

Adjusted net income (non-GAAP) and adjusted diluted EPS for the first quarter of 2025 were $26.0 million and $1.53, respectively. For the fourth quarter of 2024, adjusted net income (non-GAAP) was $32.8 million and adjusted diluted EPS was $1.93. For the first quarter of 2024, adjusted net income (non-GAAP) was $26.9 million, and adjusted diluted EPS was $1.59.

	For the Quarter Ended
	March 31,		December 31,		March 31,
$ in millions (except per share data)	2025		2024		2024
Net Income	$	25.8	$	30.2	$	26.7
Diluted EPS	$	1.52	$	1.77	$	1.58
Adjusted Net Income (non-GAAP)*	$	26.0	$	32.8	$	26.9
Adjusted Diluted EPS (non-GAAP)*	$	1.53	$	1.93	$	1.59

*Adjusted non-GAAP measurements of financial performance exclude non-core and/or nonrecurring income and expense items that management believes are not reflective of the anticipated future operation of the Company’s business. The Company believes these adjusted measurements provide a better comparison for analysis and may provide a better indicator of future performance. See GAAP to non-GAAP reconciliations.

“Our first quarter results were highlighted by margin expansion, robust deposit growth, and disciplined expense management. We also had another quarter of strong wealth management revenue growth,” said Larry J. Helling, Chief Executive Officer. “Our performance was further bolstered by continued loan growth while maintaining our excellent asset quality, further strengthening our capital levels, and significantly increasing our tangible book value per share.”

Margin Performance Continues

Net interest income for the first quarter of 2025 totaled $60.0 million, a decrease of $1.2 million from the fourth quarter of 2024, but increased slightly when adjusted for fewer days in the first quarter.

Net interest margin (“NIM”) was 2.95% and NIM on a tax-equivalent yield (“TEY”) basis (non-GAAP) was 3.42% for the first quarter, as compared to 2.95% and 3.43% for the prior quarter, respectively. Adjusted NIM TEY (non-GAAP) of 3.41% for the first quarter of 2025 increased one basis point compared to the fourth quarter of 2024.

“Our adjusted NIM, on a tax equivalent yield basis, increased one basis point from the fourth quarter of 2024 and was within our guidance range, overpowering the dilution from the impact of expired interest rate caps,” said Todd A. Gipple, President and Chief Financial Officer. “Absent the impact from the interest rate caps, our adjusted NIM TEY expanded by five basis points. Looking ahead, we anticipate continued margin expansion and are guiding to second quarter adjusted NIM TEY in the range from static to an increase of four basis points, assuming no Federal Reserve rate cuts,” added Mr. Gipple.

Noninterest Income Driven by Capital Markets and Wealth Management Revenue

Noninterest income for the first quarter of 2025 was influenced by macroeconomic factors, particularly affecting our low-income housing tax credit (“LIHTC”) lending business and its associated capital markets revenue. Noninterest income for the quarter totaled $16.9 million, down from $30.6 million in the fourth quarter of 2024. The Company generated $6.5 million of capital markets revenue during the first quarter, compared to $20.6 million in the prior quarter.

“Our capital markets business was affected by macroeconomic uncertainty. Despite this, demand for affordable housing remains significant. The lower first quarter results in this sector should lead to a larger pipeline for future transactions. Our capital markets activity for the second quarter is normalizing as clients adjust to the current environment,” said Mr. Helling. “As a result, we continue to expect our capital markets revenue to be in a range of $50 to $60 million over the next four quarters. We believe the long-term demand and our growing backlog for new deals will support the sustainability of our LIHTC lending program,” added Mr. Helling.

“Additionally, our wealth management business remained strong in the first quarter of 2025, generating annualized revenue growth of 14% for the quarter driven by growth in new client accounts and assets under management. We expect continued strong growth in this business to be fueled by the strategic investments we made in our Southwest Missouri and Central Iowa markets,” said Mr. Gipple.

Significant Noninterest Expense Reduction

Noninterest expense for the first quarter of 2025 totaled $46.5 million, a decrease compared to $53.5 million for the fourth quarter and $50.7 million for the first quarter of 2024. The $7.0 million linked-quarter decrease was primarily due to lower salary and employee benefits expenses associated with reduced variable compensation.

“Our noninterest expense decreased by 13% during the quarter, primarily due to lower capital markets revenue and its impact on our variable compensation. As a result, expenses were well below the guided range of $52 to $55 million highlighting our expense flexibility,” said Mr. Gipple. “The Company’s efficiency ratio was 60.54% in the first quarter. For the second quarter of 2025 we expect noninterest expense to be in the range of $50 to $53 million which assumes both capital markets revenue and loan growth are within our guidance range,” added Mr. Gipple.

Exceptionally Low Effective Tax Rate

The effective tax rate for the first quarter of 2025 was 1%, down from 9% in the prior quarter. The linked quarter decline is primarily due to a combination of the tax benefits from equity compensation in the first quarter, new state tax credit investments, and lower pre-tax income from lower capital markets revenue. “These factors decreased the mix of our taxable income relative to our tax-exempt income. Our tax-exempt loan and bond portfolios have consistently helped us maintain our low tax liability benefiting our shareholders,” said Mr. Gipple. “Given a more normalized mix of revenue, we expect our effective tax rate to be in the range of 6% to 8% for the second quarter of 2025,” added Mr. Gipple.

Robust Deposit Growth

During the first quarter of 2025, core deposits increased by $332.2 million, or 20% annualized, which allowed the Company to decrease brokered deposits by $56.0 million, and overnight FHLB advances by $140 million. Gross loans and leases held for investment as a percentage of total deposits ratio improved to 92.96% from 96.05% from the prior quarter. “Our deposit growth this quarter reflects our strong execution in expanding market share and deepening relationships with both new and existing clients in our core markets,” added Mr. Helling.

Continued Loan Growth

In the first quarter of 2025, the Company’s total loans and leases held for investment grew by $38.9 million to $6.8 billion. “Loan growth was 4% annualized when adding back the impact from the runoff of m2 Equipment Finance loans. First quarter loan activity was influenced by heightened macroeconomic uncertainty and elevated payoffs. We anticipate that the slowdown in our LIHTC business during this period should lead to a larger pipeline of future activity driven by the ongoing significant demand for low-income housing,” stated Mr. Helling.

“Due to heightened uncertainty, we are suspending our full-year loan growth guidance. Instead, we are providing guidance for the second quarter of 2025, projecting an annualized growth rate of 4% to 6%,” added Mr. Helling.

Asset Quality Remains Excellent

The Company’s nonperforming assets (“NPAs”) to total assets ratio was 0.53% on March 31, 2025, up three basis points from the prior quarter. NPAs totaled $48.1 million at the end of the first quarter of 2025, a $2.6 million increase from the prior quarter. The increase in NPAs during the first quarter was primarily due to the addition of three specific loans, partially offset by the payoff of our largest NPA in January.

The Company’s total criticized loans, a leading indicator of asset quality, declined by $18.2 million on a linked-quarter basis, and the ratio of criticized loans to total loans and leases as of March 31, 2025, improved to 2.06%, as compared to 2.34% as of December 31, 2024. This $18.2 million reduction marks the Company’s lowest criticized loan ratio in five years.

The Company recorded a total provision for credit losses of $4.2 million during the quarter, representing a decline of $0.9 million from the prior quarter. The reduction in the provision for credit losses during the quarter was primarily due to lower loan growth and a decrease in total criticized balances. Net charge-offs were also $4.2 million during the first quarter of 2025, an increase of $0.8 million from the prior quarter. The allowance for credit losses to total loans held for investment was unchanged from the prior quarter at 1.32%.

Strong Tangible Book Value and Regulatory Capital Growth

The Company’s tangible book value per share (non-GAAP) increased by $1.43, or 11% annualized, during the first quarter of 2025 due to the combination of strong earnings, a modest dividend, and negligible changes in accumulated other comprehensive income (“AOCI”).

As of March 31, 2025, the Company’s tangible common equity to tangible assets ratio (“TCE”) (non-GAAP) increased 15 basis points to 9.70%. The improvement in TCE (non-GAAP) was driven by strong earnings as AOCI remained consistent during the quarter. The total risk-based capital ratio increased to 14.16% and the common equity tier 1 ratio increased to 10.26% due to solid earnings growth and modest loan growth during the quarter. By comparison, these ratios were 9.55%, 14.10%, and 10.03%, respectively, as of December 31, 2024. The Company remains focused on maintaining strong regulatory capital and targeting TCE (non-GAAP) in the top quartile of its peer group.

Conference Call Details
The Company will host an earnings call/webcast tomorrow, April 23, 2025, at Central Time. Dial-in information for the call is toll-free: 888-346-9286 (international 412-317-5253). Participants should request to join the QCR Holdings, Inc. call. The event will be available for replay through April 30, 2025. The replay access information is 877-344-7529 (international 412-317-0088); access code 7198237. A webcast of the teleconference can be accessed on the Company’s News and Events page at www.qcrh.com. An archived version of the webcast will be available at the same location shortly after the live event has ended.

About Us
QCR Holdings, Inc., headquartered in Moline, Illinois, is a relationship-driven, multi-bank holding company serving the Quad Cities, Cedar Rapids, Cedar Valley, Des Moines/Ankeny and Springfield communities through its wholly owned subsidiary banks. The banks provide full-service commercial and consumer banking and trust and wealth management services. Quad City Bank & Trust Company, based in Bettendorf, Iowa, commenced operations in 1994, Cedar Rapids Bank & Trust Company, based in Cedar Rapids, Iowa, commenced operations in 2001, Community State Bank, based in Ankeny, Iowa, was acquired by the Company in 2016, and Guaranty Bank, based in Springfield, Missouri, was acquired by the Company in 2018. Additionally, the Company serves the Waterloo/Cedar Falls, Iowa community through Community Bank & Trust, a division of Cedar Rapids Bank & Trust Company. The Company has 36 locations in Iowa, Missouri, and Illinois. As of March 31, 2025, the Company had $9.2 billion in assets, $6.8 billion in loans and $7.3 billion in deposits. For additional information, please visit the Company’s website at www.qcrh.com.

Special Note Concerning Forward-Looking Statements. 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,” “bode”, “predict,” “suggest,” “project”, “appear,” “plan,” “intend,” “estimate,” ”annualize,” “may,” “will,” “would,” “could,” “should,” “likely,” “might,” “potential,” “continue,” “annualized,” “target,” “outlook,” as well as the negative forms of those words, or other similar expressions. 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.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, but are not limited to: (i) the strength of the local, state, national and international economies and financial markets, including effects of inflationary pressures, the threat or implementation of tariffs, trade wars and changes to immigration policy; (ii) changes in, and the interpretation and prioritization of, local, state and federal laws, regulations and governmental policies (including those concerning the Company’s general business); (iii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or threats thereof (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East), or other adverse events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iv) new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB, the Securities and Exchange Commission (the “SEC”) or the PCAOB; (v) the imposition of tariffs or other governmental policies impacting the value of products produced by the Company’s commercial borrowers; (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and fintech companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, including failure to realize the anticipated benefits of the acquisitions and the possibility that transaction and integration costs may be greater than anticipated; (ix) the loss of key executives and employees, talent shortages and employee turnover; (x) changes in consumer spending; (xi) unexpected outcomes and costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company; (xii) the economic impact on the Company and its customers of climate change, natural disasters and exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates; (xiv) credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio and large loans to certain borrowers (including CRE loans); (xv) the overall health of the local and national real estate market; (xvi) the ability to maintain an adequate level of allowance for credit losses on loans; (xvii) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure; (xviii) 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; (xix) the level of non-performing assets on our balance sheet; (xx) interruptions involving our information technology and communications systems or third-party servicers; (xxi) the occurrence of fraudulent activity, breaches or failures of our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (xxii) changes in the interest rates and repayment rates of the Company’s assets; (xxiii) the effectiveness of the Company’s risk management framework, and (xxiv) the ability of the Company to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the SEC.

Contact:
Todd A. Gipple
President
Chief Financial Officer
(309) 743-7745
tgipple@qcrh.com

		QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)

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

			(dollars in thousands)

		CONDENSED BALANCE SHEET

		Cash and due from banks	$	98,994		$	91,732		$	103,840		$	92,173		$	80,988
		Federal funds sold and interest-bearing deposits		225,716			170,592			159,159			102,262			77,020
		Securities, net of allowance for credit losses		1,220,717			1,200,435			1,146,046			1,033,199			1,031,861
		Loans receivable held for sale (1)		2,025			2,143			167,047			246,124			275,344
		Loans/leases receivable held for investment		6,821,142			6,782,261			6,661,755			6,608,262			6,372,992
		Allowance for credit losses		(90,354	)		(89,841	)		(86,321	)		(87,706	)		(84,470	)
		Intangibles		10,400			11,061			11,751			12,441			13,131
		Goodwill		138,595			138,595			138,596			139,027			139,027
		Derivatives		180,997			186,781			261,913			194,354			183,888
		Other assets		544,547			532,271			524,779			531,855			509,768
		Total assets	$	9,152,779		$	9,026,030		$	9,088,565		$	8,871,991		$	8,599,549

		Total deposits	$	7,337,390		$	7,061,187		$	6,984,633		$	6,764,667		$	6,806,775
		Total borrowings		429,921			569,532			660,344			768,671			489,633
		Derivatives		206,925			214,823			285,769			221,798			211,677
		Other liabilities		155,796			183,101			181,199			180,536			184,122
		Total stockholders’ equity		1,022,747			997,387			976,620			936,319			907,342
		Total liabilities and stockholders’ equity	$	9,152,779		$	9,026,030		$	9,088,565		$	8,871,991		$	8,599,549

		ANALYSIS OF LOAN PORTFOLIO
		Loan/lease mix: (2)
		Commercial and industrial – revolving	$	388,479		$	387,991		$	387,409		$	362,115		$	326,129
		Commercial and industrial – other		1,231,198			1,295,961			1,321,053			1,370,561			1,374,333
		Commercial and industrial – other – LIHTC		212,921			218,971			89,028			92,637			96,276
		Total commercial and industrial		1,832,598			1,902,923			1,797,490			1,825,313			1,796,738
		Commercial real estate, owner occupied		599,488			605,993			622,072			633,596			621,069
		Commercial real estate, non-owner occupied		1,040,281			1,077,852			1,103,694			1,082,457			1,055,089
		Construction and land development		403,001			395,557			342,335			331,454			410,918
		Construction and land development – LIHTC		1,016,207			917,986			913,841			750,894			738,609
		Multi-family		289,782			303,662			324,090			329,239			296,245
		Multi-family – LIHTC		888,517			828,448			973,682			1,148,244			1,007,321
		Direct financing leases		14,773			17,076			19,241			25,808			28,089
		1-4 family real estate		592,127			588,179			587,512			583,542			563,358
		Consumer		146,393			146,728			144,845			143,839			130,900
		Total loans/leases	$	6,823,167		$	6,784,404		$	6,828,802		$	6,854,386		$	6,648,336
		Less allowance for credit losses		90,354			89,841			86,321			87,706			84,470
		Net loans/leases	$	6,732,813		$	6,694,563		$	6,742,481		$	6,766,680		$	6,563,866


		ANALYSIS OF SECURITIES PORTFOLIO
		Securities mix:
		U.S. government sponsored agency securities	$	17,487		$	20,591		$	18,621		$	20,101		$	14,442
		Municipal securities		1,003,985			971,567			965,810			885,046			884,469
		Residential mortgage-backed and related securities		43,194			50,042			53,488			54,708			56,071
		Asset backed securities		7,764			9,224			10,455			12,721			14,285
		Other securities		66,105			65,745			39,190			38,464			40,539
		Trading securities (3)		82,445			83,529			58,685			22,362			22,258
		Total securities	$	1,220,980		$	1,200,698		$	1,146,249		$	1,033,402		$	1,032,064
		Less allowance for credit losses		263			263			203			203			203
		Net securities	$	1,220,717		$	1,200,435		$	1,146,046		$	1,033,199		$	1,031,861

		ANALYSIS OF DEPOSITS
		Deposit mix:
		Noninterest-bearing demand deposits	$	963,851		$	921,160		$	969,348		$	956,445		$	955,167
		Interest-bearing demand deposits		5,119,601			4,828,216			4,715,087			4,644,918			4,714,555
		Time deposits		951,606			953,496			942,847			859,593			875,491
		Brokered deposits		302,332			358,315			357,351			303,711			261,562
		Total deposits	$	7,337,390		$	7,061,187		$	6,984,633		$	6,764,667		$	6,806,775

		ANALYSIS OF BORROWINGS
		Borrowings mix:
		Term FHLB advances	$	145,383		$	145,383		$	145,383		$	135,000		$	135,000
		Overnight FHLB advances		–			140,000			230,000			350,000			70,000
		Other short-term borrowings		2,050			1,800			2,750			1,600			2,700
		Subordinated notes		233,595			233,489			233,383			233,276			233,170
		Junior subordinated debentures		48,893			48,860			48,828			48,795			48,763
		Total borrowings	$	429,921		$	569,532		$	660,344		$	768,671		$	489,633

(1	)	Loans with a fair value of $0 million, $0 million, $165.9 million, $243.2 million and $274.8 million have been identified for securitization and are included in LHFS at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, respectively.
(2	)	Loan categories with significant LIHTC loan balances have been broken out separately. Total LIHTC balances within the loan/lease portfolio were $2.2 billion at March 31, 2025.
(3	)	Trading securities consisted of retained beneficial interests acquired in conjunction with Freddie Mac securitizations completed by the Company.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)

	For the Quarter Ended
	March 31,			December 31,			September 30,			June 30,		March 31,
	2025			2024			2024			2024		2024

	(dollars in thousands, except per share data)

INCOME STATEMENT
Interest income	$	116,673		$	121,642		$	125,420		$	119,746	$	115,049
Interest expense		56,687			60,438			65,698			63,583		60,350
Net interest income		59,986			61,204			59,722			56,163		54,699
Provision for credit losses		4,234			5,149			3,484			5,496		2,969
Net interest income after provision for credit losses	$	55,752		$	56,055		$	56,238		$	50,667	$	51,730


Trust fees (1)	$	3,686		$	3,456		$	3,270		$	3,103	$	3,199
Investment advisory and management fees (1)		1,254			1,320			1,229			1,214		1,101
Deposit service fees		2,183			2,228			2,294			1,986		2,022
Gains on sales of residential real estate loans, net		297			734			385			540		382
Gains on sales of government guaranteed portions of loans, net		61			49			–			12		24
Capital markets revenue		6,516			20,552			16,290			17,758		16,457
Earnings on bank-owned life insurance		524			797			814			2,964		868
Debit card fees		1,488			1,555			1,575			1,571		1,466
Correspondent banking fees		614			560			507			510		512
Loan related fee income		898			950			949			962		836
Fair value gain (loss) on derivatives and trading securities		(1,007	)		(1,781	)		(886	)		51		(163	)
Other		378			205			730			218		154
Total noninterest income	$	16,892		$	30,625		$	27,157		$	30,889	$	26,858


Salaries and employee benefits	$	27,364		$	33,610		$	31,637		$	31,079	$	31,860
Occupancy and equipment expense		6,455			6,354			6,168			6,377		6,514
Professional and data processing fees		5,144			5,480			4,457			4,823		4,613
Restructuring expense		–			–			1,954			–		–
FDIC insurance, other insurance and regulatory fees		1,970			1,934			1,711			1,854		1,945
Loan/lease expense		381			513			587			151		378
Net cost of (income from) and gains/losses on operations of other real estate		(9	)		23			(42	)		28		(30	)
Advertising and marketing		1,613			1,886			2,124			1,565		1,483
Communication and data connectivity		290			345			333			318		401
Supplies		207			252			278			259		275
Bank service charges		596			635			603			622		568
Correspondent banking expense		329			328			325			363		305
Intangibles amortization		661			691			690			690		690
Goodwill impairment		–			–			431			–		–
Payment card processing		594			516			785			706		646
Trust expense		357			381			395			379		425
Other		587			551			1,129			674		617
Total noninterest expense	$	46,539		$	53,499		$	53,565		$	49,888	$	50,690

Net income before income taxes	$	26,105		$	33,181		$	29,830		$	31,668	$	27,898
Federal and state income tax expense		308			2,956			2,045			2,554		1,172
Net income	$	25,797		$	30,225		$	27,785		$	29,114	$	26,726

Basic EPS	$	1.53		$	1.80		$	1.65		$	1.73	$	1.59
Diluted EPS	$	1.52		$	1.77		$	1.64		$	1.72	$	1.58


Weighted average common shares outstanding		16,900,785			16,871,652			16,846,200			16,814,814		16,783,348
Weighted average common and common equivalent shares outstanding		17,013,992			17,024,481			16,982,400			16,921,854		16,910,675

(1) Trust fees and investment advisory and management fees when combined are referred to as wealth management revenue.

		QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)

			As of and for the Quarter Ended
			March 31,			December 31,			September 30,			June 30,			March 31,
			2025			2024			2024			2024			2024

			(dollars in thousands, except per share data)

		COMMON SHARE DATA
		Common shares outstanding		16,920,363			16,882,045			16,861,108			16,824,985			16,807,056
		Book value per common share (1)	$	60.44		$	59.08		$	57.92		$	55.65		$	53.99
		Tangible book value per common share (Non-GAAP) (2)	$	51.64		$	50.21		$	49.00		$	46.65		$	44.93
		Closing stock price	$	71.32		$	80.64		$	74.03		$	60.00		$	60.74
		Market capitalization	$	1,206,760		$	1,361,368		$	1,248,228		$	1,009,499		$	1,020,861
		Market price / book value		117.99	%		136.49	%		127.81	%		107.82	%		112.51	%
		Market price / tangible book value		138.11	%		160.59	%		151.07	%		128.62	%		135.18	%
		Earnings per common share (basic) LTM (3)	$	6.71		$	6.77		$	6.93		$	6.78		$	6.75
		Price earnings ratio LTM (3)	10.63 x			11.91 x			10.68 x			8.85 x			9.00 x
		TCE / TA (Non-GAAP) (4)		9.70	%		9.55	%		9.24	%		9.00	%		8.94	%


		CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
		Beginning balance	$	997,387		$	976,620		$	936,319		$	907,342		$	886,596
		Net income		25,797			30,225			27,785			29,114			26,726
		Other comprehensive income (loss), net of tax		404			(9,628	)		12,057			(368	)		(5,373	)
		Common stock cash dividends declared		(1,015	)		(1,013	)		(1,012	)		(1,008	)		(1,008	)
		Other (5)		174			1,183			1,471			1,239			401
		Ending balance	$	1,022,747		$	997,387		$	976,620		$	936,319		$	907,342


		REGULATORY CAPITAL RATIOS (6):
		Total risk-based capital ratio		14.16	%		14.10	%		13.87	%		14.21	%		14.30	%
		Tier 1 risk-based capital ratio		10.79	%		10.57	%		10.33	%		10.49	%		10.50	%
		Tier 1 leverage capital ratio		11.06	%		10.73	%		10.50	%		10.40	%		10.33	%
		Common equity tier 1 ratio		10.26	%		10.03	%		9.79	%		9.92	%		9.91	%


		KEY PERFORMANCE RATIOS AND OTHER METRICS
		Return on average assets (annualized)		1.14	%		1.34	%		1.24	%		1.33	%		1.25	%
		Return on average total equity (annualized)		10.14	%		12.15	%		11.55	%		12.63	%		11.83	%
		Net interest margin		2.95	%		2.95	%		2.90	%		2.82	%		2.82	%
		Net interest margin (TEY) (Non-GAAP)(7)		3.42	%		3.43	%		3.37	%		3.27	%		3.25	%
		Efficiency ratio (Non-GAAP) (8)		60.54	%		58.26	%		61.65	%		57.31	%		62.15	%
		Gross loans/leases held for investment / total assets		74.53	%		75.14	%		73.30	%		74.48	%		74.11	%
		Gross loans/leases held for investment / total deposits		92.96	%		96.05	%		95.38	%		97.69	%		93.63	%
		Effective tax rate		1.18	%		8.91	%		6.86	%		8.06	%		4.20	%
		Full-time equivalent employees		972			980			976			988			986


		AVERAGE BALANCES
		Assets	$	9,015,439		$	9,050,280		$	8,968,653		$	8,776,002		$	8,550,855
		Loans/leases		6,790,312			6,839,153			6,840,527			6,779,075			6,598,614
		Deposits		7,146,286			7,109,567			6,858,196			6,687,188			6,595,453
		Total stockholders’ equity		1,017,487			995,012			962,302			921,986			903,371


(1	)	Includes accumulated other comprehensive income (loss).
(2	)	Includes accumulated other comprehensive income (loss) and excludes intangible assets. See GAAP to Non-GAAP reconciliations.
(3	)	LTM : Last twelve months.
(4	)	TCE / TCA : tangible common equity / total tangible assets. See GAAP to non-GAAP reconciliations.
(5	)	Includes mostly common stock issued for options exercised and the employee stock purchase plan, as well as stock-based compensation.
(6	)	Ratios for the current quarter are subject to change upon final calculation for regulatory filings due after earnings release.
(7	)	TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(8	)	See GAAP to Non-GAAP reconciliations.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)


		ANALYSIS OF NET INTEREST INCOME AND MARGIN

			For the Quarter Ended
			March 31, 2025						December 31, 2024						March 31, 2024
			Average Balance		Interest Earned or Paid		Average Yield or Cost		Average Balance		Interest Earned or Paid		Average Yield or Cost		Average Balance		Interest Earned or Paid		Average Yield or Cost

			(dollars in thousands)

		Fed funds sold	$	9,009	$	99	4.40	%	$	5,617	$	67	4.68	%	$	19,955	$	269	5.42	%
		Interest-bearing deposits at financial institutions		166,897		1,804	4.38	%		158,151		1,823	4.59	%		91,557		1,200	5.27	%
		Investment securities – taxable		400,779		4,588	4.59	%		375,552		4,230	4.49	%		373,540		4,261	4.55	%
		Investment securities – nontaxable (1)		843,476		11,722	5.57	%		829,544		12,286	5.92	%		685,969		9,349	5.45	%
		Restricted investment securities		30,562		534	6.99	%		33,173		608	7.17	%		38,085		674	7.00	%
		Loans (1)		6,790,312		107,439	6.42	%		6,839,153		112,325	6.53	%		6,598,614		107,673	6.56	%
		Total earning assets (1)	$	8,241,035	$	126,186	6.20	%	$	8,241,190	$	131,339	6.34	%	$	7,807,720	$	123,426	6.35	%

		Interest-bearing deposits	$	5,005,853	$	37,698	3.05	%	$	4,881,914	$	39,408	3.21	%	$	4,529,325	$	39,072	3.47	%
		Time deposits		1,204,593		12,690	4.27	%		1,248,412		13,868	4.42	%		1,107,622		12,345	4.48	%
		Short-term borrowings		1,839		18	3.97	%		1,862		22	4.67	%		1,763		23	5.16	%
		Federal Home Loan Bank advances		177,883		1,996	4.49	%		236,525		2,802	4.64	%		355,220		4,738	5.28	%
		Subordinated debentures		233,525		3,601	6.17	%		233,419		3,636	6.23	%		233,101		3,480	5.97	%
		Junior subordinated debentures		48,871		684	5.60	%		48,839		701	5.62	%		48,742		692	5.62	%
		Total interest-bearing liabilities	$	6,672,564	$	56,687	3.44	%	$	6,650,971	$	60,437	3.61	%	$	6,275,773	$	60,350	3.86	%

		Net interest income (1)			$	69,499					$	70,902					$	63,076
		Net interest margin (2)					2.95	%					2.95	%					2.82	%
		Net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.42	%					3.43	%					3.25	%
		Adjusted net interest margin (TEY) (Non-GAAP) (1) (2) (3)					3.41	%					3.40	%					3.24	%
		Cost of funds (4)					3.02	%					3.15	%					3.35	%


(1	)	Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(2	)	See “Select Financial Data – Subsidiaries” for a breakdown of amortization/accretion included in net interest margin for each period presented.
(3	)	TEY : Tax equivalent yield. See GAAP to Non-GAAP reconciliations.
(4	)	Cost of funds includes the effect of noninterest-bearing deposits.

		QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)

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

			(dollars in thousands, except per share data)

		ROLLFORWARD OF ALLOWANCE FOR CREDIT LOSSES ON LOANS/LEASES
		Beginning balance	$	89,841		$	86,321		$	87,706		$	84,470		$	87,200
		Change in ACL for transfer of loans to LHFS		–			93			(1,812	)		498			(3,377	)
		Credit loss expense		4,743			6,832			3,828			4,343			3,736
		Loans/leases charged off		(4,944	)		(4,787	)		(3,871	)		(1,751	)		(3,560	)
		Recoveries on loans/leases previously charged off		714			1,382			470			146			471
		Ending balance	$	90,354		$	89,841		$	86,321		$	87,706		$	84,470


		NONPERFORMING ASSETS
		Nonaccrual loans/leases	$	47,259		$	40,080		$	33,480		$	33,546		$	29,439
		Accruing loans/leases past due 90 days or more		356			4,270			1,298			87			142
		Total nonperforming loans/leases		47,615			44,350			34,778			33,633			29,581
		Other real estate owned		402			661			369			369			784
		Other repossessed assets		122			543			542			512			962
		Total nonperforming assets	$	48,139		$	45,554		$	35,689		$	34,514		$	31,327


		ASSET QUALITY RATIOS
		Nonperforming assets / total assets		0.53	%		0.50	%		0.39	%		0.39	%		0.36	%
		ACL for loans and leases / total loans/leases held for investment		1.32	%		1.32	%		1.30	%		1.33	%		1.33	%
		ACL for loans and leases / nonperforming loans/leases		189.76	%		202.57	%		248.21	%		260.77	%		285.55	%
		Net charge-offs as a % of average loans/leases		0.06	%		0.05	%		0.05	%		0.02	%		0.05	%



		INTERNALLY ASSIGNED RISK RATING (1)
		Special mention	$	55,327		$	73,636		$	80,121		$	85,096		$	111,729
		Substandard (2)		85,033			84,930			70,022			80,345			70,841
		Doubtful (2)		–			–			–			–			–
		Total Criticized loans (3)	$	140,360		$	158,566		$	150,143		$	165,441		$	182,570

		Classified loans as a % of total loans/leases (2)		1.25	%		1.25	%		1.03	%		1.17	%		1.07	%
		Total Criticized loans as a % of total loans/leases (3)		2.06	%		2.34	%		2.20	%		2.41	%		2.75	%

(1	)	Amounts exclude the government guaranteed portion, if any. The Company assigns internal risk ratings of Pass for the government guaranteed portion.
(2	)	Classified loans are defined as loans with internally assigned risk ratings of 10 or 11, regardless of performance, and include loans identified as Substandard or Doubtful.
(3	)	Total Criticized loans are defined as loans with internally assigned risk ratings of 9, 10, or 11 , regardless of performance, and include loans identified as Special Mention, Substandard, or Doubtful.

QCR Holding, Inc.
Consolidated Financial Highlights
(Unaudited)


			For the Quarter Ended
			March 31,			December 31,			March 31,
		SELECT FINANCIAL DATA – SUBSIDIARIES	2025			2024			2024
			(dollars in thousands)

		TOTAL ASSETS
		Quad City Bank and Trust (1)	$	2,777,634		$	2,588,587		$	2,618,727
		m2 Equipment Finance, LLC		276,096			310,915			350,801
		Cedar Rapids Bank and Trust		2,617,143			2,614,570			2,423,936
		Community State Bank		1,583,646			1,531,559			1,445,230
		Guaranty Bank		2,331,944			2,342,958			2,327,985

		TOTAL DEPOSITS
		Quad City Bank and Trust (1)	$	2,397,047		$	2,126,566		$	2,161,515
		Cedar Rapids Bank and Trust		1,883,952			1,882,487			1,757,353
		Community State Bank		1,238,307			1,256,938			1,187,926
		Guaranty Bank		1,840,774			1,824,139			1,743,514

		TOTAL LOANS & LEASES
		Quad City Bank and Trust (1)	$	2,041,181		$	2,048,926		$	2,046,038
		m2 Equipment Finance, LLC		284,983			320,237			354,815
		Cedar Rapids Bank and Trust		1,790,065			1,761,467			1,680,127
		Community State Bank		1,197,005			1,159,389			1,113,070
		Guaranty Bank		1,794,915			1,814,622			1,809,101

		TOTAL LOANS & LEASES / TOTAL DEPOSITS
		Quad City Bank and Trust (1)		85	%		96	%		95	%
		Cedar Rapids Bank and Trust		95	%		94	%		96	%
		Community State Bank		97	%		92	%		94	%
		Guaranty Bank		98	%		99	%		104	%


		TOTAL LOANS & LEASES / TOTAL ASSETS
		Quad City Bank and Trust (1)		73	%		79	%		78	%
		Cedar Rapids Bank and Trust		68	%		67	%		69	%
		Community State Bank		76	%		76	%		77	%
		Guaranty Bank		77	%		77	%		78	%

		ACL ON LOANS/LEASES HELD FOR INVESTMENT AS A PERCENTAGE OF LOANS/LEASES HELD FOR INVESTMENT
		Quad City Bank and Trust (1)		1.44	%		1.49	%		1.40	%
		m2 Equipment Finance, LLC		4.37	%		4.22	%		3.75	%
		Cedar Rapids Bank and Trust		1.38	%		1.44	%		1.34	%
		Community State Bank		1.08	%		0.98	%		1.12	%
		Guaranty Bank		1.30	%		1.25	%		1.15	%

		RETURN ON AVERAGE ASSETS (ANNUALIZED)
		Quad City Bank and Trust (1)		1.31	%		1.09	%		0.79	%
		Cedar Rapids Bank and Trust		2.14	%		3.12	%		3.09	%
		Community State Bank		1.07	%		1.30	%		1.25	%
		Guaranty Bank		0.72	%		0.91	%		0.88	%

		NET INTEREST MARGIN PERCENTAGE (2)
		Quad City Bank and Trust (1)		3.45	%		3.53	%		3.31	%
		Cedar Rapids Bank and Trust		4.00	%		3.95	%		3.77	%
		Community State Bank		3.78	%		3.77	%		3.75	%
		Guaranty Bank (3)		3.05	%		3.18	%		2.98	%

		ACQUISITION-RELATED AMORTIZATION/ACCRETION INCLUDED IN NET
		INTEREST MARGIN, NET
		Cedar Rapids Bank and Trust	$	–		$	–		$	–
		Community State Bank		(1	)		(1	)		(1	)
		Guaranty Bank		218			504			396
		QCR Holdings, Inc. (4)		(33	)		(32	)		(32	)

(1	)	Quad City Bank and Trust amounts include m2 Equipment Finance, LLC, as this entity is wholly-owned and consolidated with the Bank. m2 Equipment Finance, LLC is also presented separately for certain (applicable) measurements.
(2	)	Includes nontaxable securities and loans. Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(3	)	Guaranty Bank’s net interest margin percentage includes various purchase accounting adjustments. Excluding those adjustments, net interest margin (Non-GAAP) would have been 2.91% for the quarter ended March 31, 2025, 2.97% for the quarter ended December 31, 2024 and 2.91% for the quarter ended March 31, 2024.
(4	)	Relates to the trust preferred securities acquired as part of the Guaranty Bank acquisition in 2017 and the Community National Bank acquisition in 2013.

		QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)

			As of
			March 31,			December 31,			September 30,			June 30,			March 31,
		GAAP TO NON-GAAP RECONCILIATIONS	2025			2024			2024			2024			2024
			(dollars in thousands, except per share data)
		TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS RATIO (1)

		Stockholders’ equity (GAAP)	$	1,022,747		$	997,387		$	976,620		$	936,319		$	907,342
		Less: Intangible assets		148,995			149,657			150,347			151,468			152,158
		Tangible common equity (non-GAAP)	$	873,752		$	847,730		$	826,273		$	784,851		$	755,184

		Total assets (GAAP)	$	9,152,779		$	9,026,030		$	9,088,565		$	8,871,991		$	8,599,549
		Less: Intangible assets		148,995			149,657			150,347			151,468			152,158
		Tangible assets (non-GAAP)	$	9,003,784		$	8,876,373		$	8,938,218		$	8,720,523		$	8,447,391

		Tangible common equity to tangible assets ratio (non-GAAP)		9.70	%		9.55	%		9.24	%		9.00	%		8.94	%


(1	)	This ratio is a non-GAAP financial measure. The Company’s management believes that this measurement is important to many investors in the marketplace who are interested in changes period-to-period in common equity. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to stockholders’ equity and total assets, which are the most directly comparable GAAP financial measures.

		QCR Holding, Inc. Consolidated Financial Highlights (Unaudited)

		GAAP TO NON-GAAP RECONCILIATIONS	For the Quarter Ended
			March 31,			December 31,			September 30,			June 30,			March 31,
		ADJUSTED NET INCOME (1)	2025			2024			2024			2024			2024
			(dollars in thousands, except per share data)

		Net income (GAAP)	$	25,797		$	30,225		$	27,785		$	29,114		$	26,726

		Less non-core items (post-tax) (2):
		Income:
		Fair value loss on derivatives, net		(156	)		(2,594	)		(542	)		(145	)		(144	)
		Total non-core income (non-GAAP)	$	(156	)	$	(2,594	)	$	(542	)	$	(145	)	$	(144	)

		Expense:
		Goodwill impairment		–			–			431			–			–
		Restructuring expense		–			–			1,544			–			–
		Total non-core expense (non-GAAP)	$	–		$	–		$	1,975		$	–		$	–


		Adjusted net income (non-GAAP) (1)	$	25,953		$	32,819		$	30,302		$	29,259		$	26,870

		ADJUSTED EARNINGS PER COMMON SHARE (1)

		Adjusted net income (non-GAAP) (from above)	$	25,953		$	32,819		$	30,302		$	29,259		$	26,870

		Weighted average common shares outstanding		16,900,785			16,871,652			16,846,200			16,814,814			16,783,348
		Weighted average common and common equivalent shares outstanding		17,013,992			17,024,481			16,982,400			16,921,854			16,910,675

		Adjusted earnings per common share (non-GAAP):
		Basic	$	1.54		$	1.95		$	1.80		$	1.74		$	1.60
		Diluted	$	1.53		$	1.93		$	1.78		$	1.73		$	1.59

		ADJUSTED RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY (1)

		Adjusted net income (non-GAAP) (from above)	$	25,953		$	32,819		$	30,302		$	29,259		$	26,870

		Average Assets	$	9,015,439		$	9,050,280		$	8,968,653		$	8,776,002		$	8,550,855

		Adjusted return on average assets (annualized) (non-GAAP)		1.15	%		1.45	%		1.35	%		1.33	%		1.26	%
		Adjusted return on average equity (annualized) (non-GAAP)		10.20	%		13.19	%		12.60	%		12.69	%		11.90	%

		NET INTEREST MARGIN (TEY) (3)

		Net interest income (GAAP)	$	59,986		$	61,204		$	59,722		$	56,163		$	54,699
		Plus: Tax equivalent adjustment (4)		9,513			9,698			9,544			8,914			8,377
		Net interest income – tax equivalent (Non-GAAP)	$	69,499		$	70,902		$	69,266		$	65,077		$	63,076
		Less: Acquisition accounting net accretion		184			471			463			268			363
		Adjusted net interest income	$	69,315		$	70,431		$	68,803		$	64,809		$	62,713

		Average earning assets	$	8,241,035		$	8,241,190		$	8,183,196		$	7,999,044		$	7,807,720

		Net interest margin (GAAP)		2.95	%		2.95	%		2.90	%		2.82	%		2.82	%
		Net interest margin (TEY) (Non-GAAP)		3.42	%		3.43	%		3.37	%		3.27	%		3.25	%
		Adjusted net interest margin (TEY) (Non-GAAP)		3.41	%		3.40	%		3.34	%		3.26	%		3.24	%

		EFFICIENCY RATIO (5)

		Noninterest expense (GAAP)	$	46,539		$	53,499		$	53,565		$	49,888		$	50,690

		Net interest income (GAAP)	$	59,986		$	61,204		$	59,722		$	56,163		$	54,699
		Noninterest income (GAAP)		16,892			30,625			27,157			30,889			26,858
		Total income	$	76,878		$	91,829		$	86,879		$	87,052		$	81,557

		Efficiency ratio (noninterest expense/total income) (Non-GAAP)		60.54	%		58.26	%		61.65	%		57.31	%		62.15	%
		Adjusted efficiency ratio (core noninterest expense/core total income) (Non-GAAP)		60.38	%		56.25	%		58.45	%		57.19	%		62.01	%

(1	)	Adjusted net income, adjusted earnings per common share, adjusted return on average assets and average equity are non-GAAP financial measures. The Company’s management believes that these measurements are important to investors as they exclude non-core or non-recurring income and expense items, therefore, they provide a more realistic run-rate for future periods. In compliance with applicable rules of the SEC, these non-GAAP measures are reconciled to net income, which is the most directly comparable GAAP financial measure.
(2	)	Non-core or non-recurring items (post-tax) are calculated using an estimated effective federal tax rate of 21% with the exception of goodwill impairment which is not deductible for tax.
(3	)	Interest earned and yields on nontaxable securities and loans are determined on a tax equivalent basis using a 21% effective federal tax rate.
(4	)	Net interest margin (TEY) is a non-GAAP financial measure. The Company’s management utilizes this measurement to take into account the tax benefit associated with certain loans and securities. It is also standard industry practice to measure net interest margin using tax-equivalent measures. In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to net interest income, which is the most directly comparable GAAP financial measure. In addition, the Company calculates net interest margin without the impact of acquisition accounting net accretion as this can fluctuate and it’s difficult to provide a more realistic run-rate for future periods.
(5	)	Efficiency ratio is a non-GAAP measure. The Company’s management utilizes this ratio to compare to industry peers. The ratio is used to calculate overhead as a percentage of revenue. In compliance with the applicable rules of the SEC, this non-GAAP measure is reconciled to noninterest expense, net interest income and noninterest income, which are the most directly comparable GAAP financial measures.

The MIL Network –

April 23, 2025

MIL-OSI: Veritex Holdings, Inc. Reports First Quarter 2025 Operating Results

Source: GlobeNewswire (MIL-OSI)

DALLAS, April 22, 2025 (GLOBE NEWSWIRE) — Veritex Holdings, Inc. (“Veritex”, the “Company”, “we” or “our”) (Nasdaq: VBTX), the holding company for Veritex Community Bank, today announced the results for the quarter ended March 31, 2025.

“We continue to strengthen our balance sheet in support of our clients during a time of change and uncertainty,” said C. Malcolm Holland, III, the Company’s Chairman and Chief Executive Officer. “Key operating financial and credit performance metrics continue to improve and we remain focused on producing previously communicated 2025 goals, including a ROAA that exceeds 1%. Our focus also remains on disciplined loan growth, which is an industry wide challenge in the current environment.”

	Quarter to Date
*Financial Highlights*	Q1 2025			Q4 2024			Q1 2024
	(Dollars in thousands, except per share data) (unaudited)
GAAP
Net income	$	29,070		$	24,882		$	24,156
Diluted EPS		0.53			0.45			0.44
Book value per common share		30.08			29.37			28.23
Return on average assets¹		0.94	%		0.78	%		0.79	%
Return on average equity¹		7.27			6.17			6.33
Net interest margin		3.31			3.20			3.24
Efficiency ratio		60.91			67.04			62.45
Non-GAAP²
Operating earnings	$	29,707		$	29,769		$	29,137
Diluted operating EPS		0.54			0.54			0.53
Tangible book value per common share		22.33			21.61			20.33
Pre-tax, pre-provision operating earnings		43,413			40,945			43,656
Pre-tax, pre-provision operating return on average assets¹		1.41	%		1.28	%		1.42	%
Pre-tax, pre-provision operating return on average loans¹		1.89			1.72			1.84
Operating return on average assets¹		0.96			0.93			0.95
Return on average tangible common equity¹		10.49			9.04			9.52
Operating return on average tangible common equity¹		10.70			10.69			11.34
Operating efficiency ratio		60.62			62.98			58.73

¹ Annualized ratio.
² Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of these non-generally accepted accounting principles (“GAAP”) financial measures to their most directly comparable GAAP measures.

Other First Quarter Financial, Credit and Company Highlights

Net interest margin (“NIM”) increased by 11 bps to 3.31%;
Criticized assets decreased approximately $17.7 million during the quarter;
Redeemed $75.0 million in subordinated notes on February 18, 2025, the associated rate of which switched from fixed to floating, SOFR + 347 bps, on November 15, 2024;
Total loan to deposit ratio declined to 88.9% as of March 31, 2025, compared to 89.3% as of December 31, 2024 and 91.7% as of March 31, 2024;
Repurchased 377,346 shares of our common stock, for approximately $9.5 million, during the quarter, which amounts to 555,016 total shares repurchased, for approximately $13.1 million, under the current Stock Buyback Program;
Announced the extension of the Stock Buyback Program through March 31, 2026;
Book value per share increased $0.71 to $30.08 and tangible book value (non-GAAP) per share increased $0.72 to $22.33;
Allowance for credit losses (“ACL”) to total loans held for investment (“LHI”) increased to 1.19%, compared to 1.18% as of December 31, 2024 and 1.15% as of March 31, 2024; and
Declared and increased our quarterly cash dividend to $0.22 per share of outstanding common stock payable on May 22, 2025.

Results of Operations for the Three Months Ended March 31, 2025

Net Interest Income

For the three months ended March 31, 2025, net interest income before provision for credit losses was $95.4 million and NIM was 3.31% compared to $96.1 million and 3.20%, respectively, for the three months ended December 31, 2024. The approximately $700 thousand decrease, or 0.7%, in net interest income before provision for credit losses was primarily due to a $8.5 million decrease in interest income on loans and a $2.6 million decrease in interest income on deposits in financial institutions and fed funds sold partially offset by a $10.0 million decrease in interest expense on certificates and other time deposits during the three months ended March 31, 2025, compared to the three months ended December 31, 2024. NIM increased 11 bps compared to the three months ended December 31, 2024, primarily due to a decrease in funding costs on deposits and the redemption of $75.0 million of subordinated notes during the three months ended March 31, 2025, partially offset by a decrease in loan yields and average balances.

Compared to the three months ended March 31, 2024, net interest income before provision for credit losses for the three months ended March 31, 2025 increased by $2.6 million, or 2.8%. The increase was primarily due to decreases in interest expense including $10.2 million on certificates and other time deposits, $1.6 million on transaction and savings deposits and $1.4 million on advances from the Federal Home Loan Bank (“FHLB”), as well as increases in interest income of $1.2 million on deposits in financial institutions and fed funds sold and $3.4 million on debt securities. The increase was partially offset by a $15.4 million decrease in interest income on loans. NIM increased 7 bps from 3.24% for the three months ended March 31, 2024 to 3.31% for the three months ended March 31, 2025. The increase was primarily due to decreased funding costs on deposits and advances resulting from interest rate cuts for the year over year period, partially offset by the related declines in rates earned on interest-earnings assets, primarily loans and interest-bearing deposits in other banks.

Noninterest Income

Noninterest income for the three months ended March 31, 2025 was $14.3 million, an increase of $4.2 million, or 42.1%, compared to the three months ended December 31, 2024. The change was primarily due to the $4.4 million loss on sales of debt securities recognized in the three months ended December 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025. In addition, there was a $1.5 million increase in other noninterest income, driven by a $1.2 million increase in loan servicing income and a $492 thousand increase in equity securities income recognized during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The increase was partially offset by a $2.1 million decrease in government guaranteed loan income, net, as well as lower BOLI income during the period due to $517 thousand in charges on BOLI policies exchanged under a 1035 exchange which is tax-free under the Internal Revenue Code.

Compared to the three months ended March 31, 2024, noninterest income for the three months ended March 31, 2025 increased by $7.6 million, or 114.5%. The increase was primarily due to a $6.3 million loss on sales of debt securities recognized in the three months ended March 31, 2024 with no corresponding loss recorded in the three months ended March 31, 2025. In addition, there was a $715 thousand increase in service charge and fee income and a $687 thousand increase in government guaranteed loan income for the year over year period.

Noninterest Expense

Noninterest expense was $66.8 million for the three months ended March 31, 2025, compared to $71.2 million for the three months ended December 31, 2024, a decrease of $4.4 million, or 6.1%. The decrease was primarily due to an $822 thousand decrease in salaries and employee benefits primarily due to lower severance costs, offset by an increase in payroll taxes, which are historically higher in the first quarter, a $1.7 million decrease in other noninterest expense primarily driven by lower earnings credit rebates, a $864 thousand decrease in marketing expenses, a $633 thousand decrease in professional and regulatory fees and a $338 thousand decrease in data processing and software costs compared to the three months ended December 31, 2024.

Compared to the three months ended March 31, 2024, noninterest expense for the three months ended March 31, 2025 increased by $4.7 million, or 7.6%. The increase was primarily due to a $3.3 million increase in salaries and employee benefits primarily due a $4.1 million increase in salaries expense and incentives accruals, offset by $1.4 million in higher deferred loan origination costs, which reduce salaries and employee benefit expenses. In addition, there was a $1.5 million increase in other noninterest expense, driven primarily by higher OREO expenses, a $547 thousand increase in data processing and software expense and a $486 thousand increase in marketing expenses. The increase was partially offset by a $1.1 million decrease in professional and regulatory fees compared to the three months ended March 31, 2024.

Income Tax

Income tax expense for the three months ended March 31, 2025 totaled $8.5 million, an increase of $304 thousand, or 3.7%, compared to the three months ended December 31, 2024. The Company’s effective tax rate was approximately 22.7% for the three months ended March 31, 2025 and was due to the recognition of an excess tax expense realized on share-based payment awards.

Financial Condition

Total LHI was $8.83 billion at March 31, 2025, a decrease of $70.5 million compared to December 31, 2024.

Total deposits were $10.67 billion at March 31, 2025, a decrease of $87.5 million, or 3.3% linked quarter annualized. The decrease was primarily the result of decreases of $279.6 million in certificates and other time deposits and $54.4 million in correspondent money market accounts, partially offset by increases of $127.2 million in noninterest bearing deposits and $119.3 million in interest-bearing transaction and savings deposits.

Credit Quality

Nonperforming assets (“NPAs”) totaled $96.9 million, or 0.77% of total assets, of which $72.6 million represents LHI and $24.3 million represents OREO at March 31, 2025, compared to $79.2 million, or 0.62% of total assets, at December 31, 2024. The Company had net charge-offs of $4.0 million for the three months ended March 31, 2025. Annualized net charge-offs to average loans outstanding were 17 bps for the three months ended March 31, 2025, compared to 32 bps and 22 bps for the three months ended December 31, 2024 and March 31, 2024, respectively.

ACL as a percentage of LHI was 1.19%, 1.18% and 1.15% at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The Company recorded a provision for credit losses on loans of $4.0 million, $2.3 million and $7.5 million for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The recorded provision for credit losses for the three months ended March 31, 2025, compared to the three months ended December 31, 2024, was primarily attributable to an increase in general reserves as a result of changes in economic factors which now represents 95% of the total ACL. The balance for unfunded commitments increased to $7.4 million as of March 31, 2025, compared to $6.1 million at December 31, 2024 and we recorded a $1.3 million provision for unfunded commitments for the three months ended March 31, 2025, compared to a $401 thousand benefit for unfunded commitments for the three months ended December 31, 2024 and a $1.5 million benefit for unfunded commitments for the three months ended March 31, 2024.

Dividend Information

After the close of the market on Tuesday, April 22, 2025, Veritex’s Board of Directors declared a quarterly cash dividend of $0.22 per share on its outstanding shares of common stock. The dividend will be paid on or after May 22, 2025 to stockholders of record as of the close of business on May 8, 2025.

Non-GAAP Financial Measures

Veritex’s management uses certain non-GAAP (U.S. generally accepted accounting principles) financial measures to evaluate its operating performance and provide information that is important to investors. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Veritex’s reported results prepared in accordance with GAAP. Specifically, Veritex reviews and reports tangible book value per common share of the Company; operating earnings; tangible common equity to tangible assets; return on average tangible common equity; pre-tax, pre-provision operating earnings; pre-tax, pre-provision operating return on average assets; pre-tax, pre-provision operating return on average loans; diluted operating earnings per share; operating return on average assets; operating return on average tangible common equity; and operating efficiency ratio. Veritex has included in this earnings release information related to these non-GAAP financial measures for the applicable periods presented. Please refer to “Reconciliation of Non-GAAP Financial Measures” after the financial highlights at the end of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

The Company will host an investor conference call and webcast to review the results on Wednesday, April 23, 2025, at 8:30 a.m. Central Time. Participants may pre-register for the call by visiting https://edge.media-server.com/mmc/p/7qpcarsr/ and will receive a unique PIN, which can be used when dialing in for the call.

Participants may also register via teleconference: https://register-conf.media-server.com/register/BIcb9226ec9df94b1bbbc063029950af5d. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time.

A replay will be available within approximately two hours after the completion of the call, and made accessible for one week thereafter. You may access the replay via webcast through the investor relations section of Veritex’s website.

About Veritex Holdings, Inc.

Headquartered in Dallas, Texas, Veritex is a bank holding company that conducts banking activities through its wholly owned subsidiary, Veritex Community Bank, with locations throughout the Dallas-Fort Worth metroplex and in the Houston metropolitan area. Veritex Community Bank is a Texas state chartered bank regulated by the Texas Department of Banking and the Board of Governors of the Federal Reserve System. For more information, visit www.veritexbank.com.

Forward-Looking Statements

This earnings release includes “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on various facts and derived utilizing assumptions, current expectations, estimates and projections and are subject to known and unknown risks, uncertainties and other factors, which change over time and are beyond our control, that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements relating to the expected payment of Veritex Holdings, Inc.’s (“Veritex”) quarterly cash dividend; the impact of certain changes in Veritex’s accounting policies, standards and interpretations; turmoil in the banking industry, responsive measures to mitigate and manage such turmoil and related supervisory and regulatory actions and costs; and Veritex’s future financial performance, business and growth strategy, projected plans and objectives, as well as other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “seeks,” “targets,” “outlooks,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Veritex’s Annual Report on Form 10-K for the year ended December 31, 2024, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. If one or more events related to these or other risks or uncertainties materialize, or if Veritex’s underlying assumptions prove to be incorrect, actual results may differ materially from what Veritex anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Veritex does not undertake any obligation, and specifically declines any obligation, to supplement, update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, expressed or implied, included in this earnings release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Veritex or persons acting on Veritex’s behalf may issue.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars and shares in thousands, except per share data)
Per Share Data (Common Stock):
Basic EPS	$	0.53		$	0.46		$	0.57		$	0.50		$	0.44
Diluted EPS		0.53			0.45			0.56			0.50			0.44
Book value per common share		30.08			29.37			29.53			28.49			28.23
Tangible book value per common share¹		22.33			21.61			21.72			20.62			20.33
Dividends paid per common share outstanding²		0.22			0.20			0.20			0.20			0.20

Common Stock Data:
Shares outstanding at period end		54,297			54,517			54,446			54,350			54,496
Weighted average basic shares outstanding for the period		54,486			54,489			54,409			54,457			54,444
Weighted average diluted shares outstanding for the period		55,123			55,237			54,932			54,823			54,842

Summary of Credit Ratios:
ACL to total LHI		1.19	%		1.18	%		1.21	%		1.16	%		1.15	%
NPAs to total assets		0.77			0.62			0.52			0.65			0.82
NPAs to total loans and OREO		1.03			0.83			0.70			0.85			1.06
Net charge-offs to average loans outstanding³		0.17			0.32			0.01			0.28			0.22

Summary Performance Ratios:
Return on average assets³		0.94	%		0.78	%		0.96	%		0.87	%		0.79	%
Return on average equity³		7.27			6.17			7.79			7.10			6.33
Return on average tangible common equity^{1, 3}		10.49			9.04			11.33			10.54			9.52
Efficiency ratio		60.91			67.04			61.94			59.11			62.45
Net interest margin		3.31			3.20			3.30			3.29			3.24

Selected Performance Metrics – Operating:
Diluted operating EPS¹	$	0.54		$	0.54		$	0.59		$	0.52		$	0.53
Pre-tax, pre-provision operating return on average assets^{1, 3}		1.41	%		1.28	%		1.38	%		1.42	%		1.42	%
Pre-tax, pre-provision operating return on average loans^{1, 3}		1.89			1.72			1.83			1.83			1.84
Operating return on average assets^1,3		0.96			0.93			1.00			0.91			0.95
Operating return on average tangible common equity^1,3		10.70			10.69			11.74			10.94			11.34
Operating efficiency ratio¹		60.62			62.98			60.63			58.41			58.73

Veritex Holdings, Inc. Capital Ratios:
Average stockholders’ equity to average total assets		12.96	%		12.58	%		12.31	%		12.26	%		12.43	%
Tangible common equity to tangible assets¹		9.95			9.54			9.37			9.14			9.02
Tier 1 capital to average assets (leverage)		10.55			10.32			10.06			10.06			10.12
Common equity tier 1 capital		11.04			11.09			10.86			10.49			10.37
Tier 1 capital to risk-weighted assets		11.31			11.36			11.13			10.75			10.63
Total capital to risk-weighted assets		13.46			13.96			13.91			13.45			13.33
Risk weighted assets	$	11,318,220		$	11,247,813		$	11,290,800		$	11,450,997		$	11,407,446

¹ Refer to the section titled “Reconciliation of Non-GAAP Financial Measures” after the financial highlights for a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures.
² Dividend amount represents dividend paid per common share subsequent to each respective quarter end.
³ Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (In thousands)

	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(unaudited)						(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	81,088		$	52,486		$	54,165		$	53,462		$	41,884
Interest bearing deposits in other banks		768,702			802,714			1,046,625			598,375			698,885
Cash and cash equivalents		849,790			855,200			1,100,790			651,837			740,769
Debt securities, net		1,463,157			1,478,538			1,423,610			1,349,354			1,344,930
Other investments		69,452			69,638			71,257			75,885			76,788
Loans held for sale (“LHFS”)		69,236			89,309			48,496			57,046			64,762
LHI, mortgage warehouse (“MW”)		571,775			605,411			630,650			568,047			449,531
LHI, excluding MW		8,828,672			8,899,133			9,028,575			9,209,094			9,249,551
Total loans		9,469,683			9,593,853			9,707,721			9,834,187			9,763,844
ACL		(111,773	)		(111,745	)		(117,162	)		(113,431	)		(112,032	)
Bank-owned life insurance		85,424			85,324			84,776			84,233			85,359
Bank premises, furniture and equipment, net		112,801			113,480			114,202			105,222			105,299
Other real estate owned (“OREO”)		24,268			24,737			9,034			24,256			18,445
Intangible assets, net of accumulated amortization		27,974			28,664			32,825			35,817			38,679
Goodwill		404,452			404,452			404,452			404,452			404,452
Other assets		210,863			226,200			211,471			232,518			241,863
Total assets	$	12,606,091		$	12,768,341		$	13,042,976		$	12,684,330		$	12,708,396
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing deposits	$	2,318,645		$	2,191,457		$	2,643,894		$	2,416,727		$	2,349,211
Interest-bearing transaction and savings deposits		5,180,495			5,061,157			4,204,708			3,979,454			4,220,114
Certificates and other time deposits		2,679,221			2,958,861			3,625,920			3,744,596			3,486,805
Correspondent money market deposits		486,762			541,117			561,489			584,067			597,690
Total deposits		10,665,123			10,752,592			11,036,011			10,724,844			10,653,820
Accounts payable and other liabilities		151,579			183,944			168,415			180,585			186,027
Advances from FHLB		—			—			—			—			100,000
Subordinated debentures and subordinated notes		155,909			230,736			230,536			230,285			230,034
Total liabilities		10,972,611			11,167,272			11,434,962			11,135,714			11,169,881
Stockholders’ equity:
Common stock		615			613			613			612			611
Additional paid-in capital		1,329,626			1,328,748			1,324,929			1,321,995			1,319,144
Retained earnings		526,044			507,903			493,921			473,801			457,499
Accumulated other comprehensive loss		(42,170	)		(65,076	)		(40,330	)		(76,713	)		(71,157	)
Treasury stock		(180,635	)		(171,119	)		(171,119	)		(171,079	)		(167,582	)
Total stockholders’ equity		1,633,480			1,601,069			1,608,014			1,548,616			1,538,515
Total liabilities and stockholders’ equity	$	12,606,091		$	12,768,341		$	13,042,976		$	12,684,330		$	12,708,396

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (In thousands, except per share data)

	For the Quarter Ended
	Mar 31, 2025		Dec 31, 2024			Sep 30, 2024		Jun 30, 2024		Mar 31, 2024
	(unaudited)		(unaudited)			(unaudited)		(unaudited)		(unaudited)
Interest income:
Loans, including fees	$	146,505	$	154,998		$	167,261	$	166,979	$	161,942
Debt securities		17,106		16,893			15,830		15,408		13,695
Deposits in financial institutions and Fed Funds sold		9,244		11,888			12,571		7,722		8,050
Equity securities and other investments		870		940			1,001		1,138		900
Total interest income		173,725		184,719			196,663		191,247		184,587
Interest expense:
Transaction and savings deposits		45,165		44,841			47,208		45,619		46,784
Certificates and other time deposits		30,268		40,279			46,230		44,811		40,492
Advances from FHLB		27		130			47		1,468		1,391
Subordinated debentures and subordinated notes		2,824		3,328			3,116		3,113		3,114
Total interest expense		78,284		88,578			96,601		95,011		91,781
Net interest income		95,441		96,141			100,062		96,236		92,806
Provision for credit losses		4,000		2,300			4,000		8,250		7,500
Provision (benefit) for unfunded commitments		1,300		(401	)		—		—		(1,541	)
Net interest income after provisions		90,141		94,242			96,062		87,986		86,847
Noninterest income:
Service charges and fees on deposit accounts		5,611		5,612			5,442		4,974		4,896
Loan fees		2,495		2,265			3,278		2,207		2,510
Loss on sales of debt securities		—		(4,397	)		—		—		(6,304	)
Government guaranteed loan income, net		3,301		5,368			780		1,320		2,614
Customer swap income		700		509			271		326		449
Other income		2,182		699			3,335		1,751		2,497
Total noninterest income		14,289		10,056			13,106		10,578		6,662
Noninterest expense:
Salaries and employee benefits		36,624		37,446			37,370		32,790		33,365
Occupancy and equipment		4,650		4,633			4,789		4,585		4,677
Professional and regulatory fees		4,931		5,564			4,903		5,617		6,053
Data processing and software expense		5,403		5,741			5,268		5,097		4,856
Marketing		2,032		2,896			2,781		1,976		1,546
Amortization of intangibles		2,438		2,437			2,438		2,438		2,438
Telephone and communications		330		323			335		365		261
Other		10,426		12,154			12,216		10,273		8,920
Total noninterest expense		66,834		71,194			70,100		63,141		62,116
Income before income tax expense		37,596		33,104			39,068		35,423		31,393
Income tax expense		8,526		8,222			8,067		8,221		7,237
Net income	$	29,070	$	24,882		$	31,001	$	27,202	$	24,156

Basic EPS	$	0.53	$	0.46		$	0.57	$	0.50	$	0.44
Diluted EPS	$	0.53	$	0.45		$	0.56	$	0.50	$	0.44
Weighted average basic shares outstanding		54,486		54,489			54,409		54,457		54,444
Weighted average diluted shares outstanding		55,123		55,237			54,932		54,823		54,842

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)

	For the Quarter Ended
	March 31, 2025							December 31, 2024							March 31, 2024
	Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Outstanding Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans¹	$	8,886,905		$	140,329	6.40	%	$	8,957,193		$	147,782	6.56	%	$	9,283,815		$	157,585		6.83	%
LHI, MW		426,724			6,176	5.87			492,372			7,216	5.83			279,557			4,357		6.27
Debt securities		1,467,220			17,106	4.73			1,458,057			16,893	4.61			1,294,994			13,695		4.25
Interest-bearing deposits in other banks		827,751			9,244	4.53			971,451			11,888	4.87			584,593			8,050		5.54
Equity securities and other investments		70,696			870	4.99			72,223			940	5.18			76,269			900		4.75
Total interest-earning assets		11,679,296			173,725	6.03			11,951,296			184,719	6.15			11,519,228			184,587		6.44
ACL		(111,563	)						(117,293	)						(112,229	)
Noninterest-earning assets		938,401							916,969							929,043
Total assets	$	12,506,134						$	12,750,972						$	12,336,042

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and savings deposits	$	5,449,091		$	45,165	3.36	%	$	5,001,159		$	44,841	3.57	%	$	4,639,445		$	46,784		4.06	%
Certificates and other time deposits		2,726,309			30,268	4.50			3,319,628			40,279	4.83			3,283,735			40,492		4.96
Advances from FHLB and Other		2,333			27	4.69			10,598			130	4.88			100,989			1,391		5.54
Subordinated debentures and subordinated notes		191,638			2,824	5.98			230,633			3,328	5.74			229,881			3,114		5.45
Total interest-bearing liabilities		8,369,371			78,284	3.79			8,562,018			88,578	4.12			8,254,050			91,781		4.47

Noninterest-bearing liabilities:
Noninterest-bearing deposits		2,345,586							2,400,809							2,355,315
Other liabilities		170,389							183,810							192,809
Total liabilities		10,885,346							11,146,637							10,802,174
Stockholders’ equity		1,620,788							1,604,335							1,533,868
Total liabilities and stockholders’ equity	$	12,506,134						$	12,750,972						$	12,336,042

Net interest rate spread²						2.24	%						2.03	%							1.97	%
Net interest income and margin³				$	95,441	3.31	%				$	96,141	3.20	%				$	92,806		3.24	%

¹ Includes average outstanding balances of LHFS of $66.3 million, $46.4 million and $53.9 million for the quarters ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively, and average balances of LHI, excluding MW.
² Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³ Net interest margin is equal to net interest income divided by average interest-earning assets.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited) Yield Trend

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
Average yield on interest-earning assets:
Loans¹		6.40	%		6.56	%		6.89	%		6.90	%		6.83	%
LHI, MW		5.87			5.83			6.75			6.36			6.27
Total Loans		6.38			6.53			6.89			6.88			6.81
Debt securities		4.73			4.61			4.55			4.58			4.25
Interest-bearing deposits in other banks		4.53			4.87			5.41			5.54			5.54
Equity securities and other investments		4.99			5.18			5.25			5.80			4.75
Total interest-earning assets		6.03	%		6.15	%		6.49	%		6.54	%		6.44	%

Average rate on interest-bearing liabilities:
Interest-bearing demand and savings deposits		3.36	%		3.57	%		4.00	%		4.01	%		4.06	%
Certificates and other time deposits		4.50			4.83			5.00			5.02			4.96
Advances from FHLB and other		4.69			4.88			5.73			5.54			5.54
Subordinated debentures and subordinated notes		5.98			5.74			5.38			5.44			5.45
Total interest-bearing liabilities		3.79	%		4.12	%		4.46	%		4.50	%		4.47	%

Net interest rate spread²		2.24	%		2.03	%		2.03	%		2.04	%		1.97	%
Net interest margin³		3.31	%		3.20	%		3.30	%		3.29	%		3.24	%

¹Includes average outstanding balances of LHFS of $66.3 million, $46.4 million, $54.3 million, $58.5 million and $53.9 million for the three months ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively, and average balances of LHI, excluding MW.
² Net interest rate spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
³ Net interest margin is equal to net interest income divided by average interest-earning assets.

Supplemental Yield Trend

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
Average cost of interest-bearing deposits		3.74	%		4.07	%		4.44	%		4.46	%		4.43	%
Average costs of total deposits, including noninterest-bearing		2.91			3.16			3.42			3.46			3.42

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited)

LHI and Deposit Portfolio Composition

	Mar 31, 2025					Dec 31, 2024					Sep 30, 2024					Jun 30, 2024					Mar 31, 2024
	(Dollars in thousands)
LHI¹
Commercial and Industrial (“C&I”)	$	2,717,037		30.7	%	$	2,693,538		30.2	%	$	2,728,544		30.2	%	$	2,798,260		30.4	%	$	2,785,987		30.1	%
Real Estate:
Owner occupied commercial (“OOCRE”)		795,808		9.0			780,003		8.8			807,223		8.9			806,285		8.7			788,376		8.5
Non-owner occupied commercial (“NOOCRE”)		2,266,526		25.6			2,382,499		26.7			2,338,094		25.9			2,369,848		25.7			2,352,993		25.5
Construction and land		1,214,260		13.7			1,303,711		14.7			1,436,540		15.8			1,536,580		16.7			1,568,257		16.9
Farmland		31,339		0.4			31,690		0.4			32,254		0.4			30,512		0.3			30,979		0.3
1-4 family residential		1,021,293		11.6			957,341		10.7			944,755		10.5			917,402		10.0			969,401		10.5
Multi-family residential		782,412		8.9			750,218		8.4			738,090		8.2			748,740		8.1			751,607		8.1
Consumer		8,597		0.1			9,115		0.1			11,292		0.1			9,245		0.1			8,882		0.1
Total LHI¹	$	8,837,272		100	%	$	8,908,115		100	%	$	9,036,792		100	%	$	9,216,872		100	%	$	9,256,482		100	%

MW		571,775					605,411					630,650					568,047					449,531

Total LHI¹	$	9,409,047				$	9,513,526				$	9,667,442				$	9,784,919				$	9,706,013

Total LHFS		69,236					89,309					48,496					57,046					64,762

Total loans	$	9,478,283				$	9,602,835				$	9,715,938				$	9,841,965				$	9,770,775

Deposits
Noninterest-bearing	$	2,318,645		21.7	%	$	2,191,457		20.4	%	$	2,643,894		24.0	%	$	2,416,727		22.5	%	$	2,349,211		22.1	%
Interest-bearing transaction		863,462		8.1			839,005		7.8			421,059		3.8			523,272		4.9			724,171		6.8
Money market		3,730,446		35.0			3,772,964		35.1			3,462,709		31.4			3,268,286		30.5			3,326,742		31.2
Savings		586,587		5.5			449,188		4.2			320,940		2.9			187,896		1.8			169,201		1.6
Certificates and other time deposits		2,679,221		25.1			2,958,861		27.5			3,625,920		32.8			3,744,596		34.9			3,486,805		32.7
Correspondent money market accounts		486,762		4.6			541,117		5.0			561,489		5.1			584,067		5.4			597,690		5.6
Total deposits	$	10,665,123		100	%	$	10,752,592		100	%	$	11,036,011		100	%	$	10,724,844		100	%	$	10,653,820		100	%

Total loans to deposits ratio		88.9	%				89.3	%				88.0	%				91.8	%				91.7	%

Total loans to deposit ratio, excluding MW loans and LHFS		82.9	%				82.8	%				81.9	%				85.9	%				86.9	%

¹ Total LHI does not include deferred fees of $8.6 million, $9.0 million, $8.2 million, $7.8 million and $6.9 million at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, respectively.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES Financial Highlights (Unaudited) Asset Quality

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars in thousands)
NPAs:
Nonaccrual loans	$	69,188		$	52,521		$	55,335		$	58,537		$	75,721
Nonaccrual PCD loans¹		196			—			70			73			9,419
Accruing loans 90 or more days past due²		3,249			1,914			2,860			143			220
Total nonperforming loans held for investment (“NPLs”)		72,633			54,435			58,265			58,753			85,360
Other real estate owned (“OREO”)		24,268			24,737			9,034			24,256			18,445
Total NPAs	$	96,901		$	79,172		$	67,299		$	83,009		$	103,805

Charge-offs:
1-4 family residential	$	—		$	—		$	—		$	(31	)	$	—
Multifamily		—			—			—			(198	)		—
OOCRE		—			—			—			—			(120	)
NOOCRE		(3,090	)		(5,113	)		—			(1,969	)		(4,293	)
C&I		(918	)		(4,586	)		(2,259	)		(5,601	)		(946	)
Consumer		(212	)		(420	)		(54	)		(30	)		(71	)
Total charge-offs	$	(4,220	)	$	(10,119	)	$	(2,313	)	$	(7,829	)	$	(5,430	)

Recoveries:
1-4 family residential	$	21		$	2		$	3		$	—		$	1
OOCRE		—			—			—			120			—
NOOCRE		—			1,323			—			—			—
C&I		32			1,047			1,962			361			96
MW		—			—			46			—			—
Consumer		195			30			33			497			49
Total recoveries	$	248		$	2,402		$	2,044		$	978		$	146

Net charge-offs	$	(3,972	)	$	(7,717	)	$	(269	)	$	(6,851	)	$	(5,284	)

Provision for credit losses	$	4,000		$	2,300		$	4,000		$	8,250		$	7,500

ACL	$	111,773		$	111,745		$	117,162		$	113,431		$	112,032

Asset Quality Ratios:
NPAs to total assets		0.77	%		0.62	%		0.52	%		0.65	%		0.82	%
NPAs, excluding nonaccrual PCD loans, to total assets		0.77			0.62			0.52			0.65			0.74
NPAs to total LHI and OREO		1.03			0.83			0.70			0.85			1.06
NPLs to total LHI		0.77			0.57			0.60			0.60			0.88
NPLs, excluding nonaccrual PCD loans, to total LHI		0.77			0.57			0.60			0.60			0.78
ACL to total LHI		1.19			1.18			1.21			1.16			1.15
ACL to total loans, excluding MW and LHFS		1.27			1.25			1.30			1.23			1.21
Net charge-offs to average loans outstanding³		0.17			0.32			0.01			0.28			0.22

¹ Nonaccrual PCD loans consist of PCD loans that transitioned upon adoption of ASC 326 Financial Instruments – Credit Losses and were accounted for on a pooled basis that have subsequently been placed on nonaccrual status.
² Accruing loans greater than 90 days past due exclude purchase credit deteriorated loans greater than 90 days past due that are accounted for on a pooled basis.
³ Annualized ratio for quarterly metrics.

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

We identify certain financial measures discussed in this earnings release as being “non-GAAP financial measures.” In accordance with SEC rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP, in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios calculated using exclusively either one or both of (i) financial measures calculated in accordance with GAAP and (ii) operating measures or other measures that are not non-GAAP financial measures.

The non-GAAP financial measures that we present in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we present in this earnings release may differ from that of other companies reporting measures with similar names. You should understand how such other financial institutions calculate their financial measures that appear to be similar or have similar names to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.

Tangible Book Value Per Common Share. Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less goodwill and core deposit intangibles, net of accumulated amortization; and (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by number of common shares outstanding. For tangible book value per common share, the most directly comparable financial measure calculated in accordance with GAAP is book value per common share.

We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and presents our tangible book value per common share compared with our book value per common share:

	As of
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars in thousands, except per share data)
Tangible Common Equity
Total stockholders’ equity	$	1,633,480		$	1,601,069		$	1,608,014		$	1,548,616		$	1,538,515
Adjustments:
Goodwill		(404,452	)		(404,452	)		(404,452	)		(404,452	)		(404,452	)
Core deposit intangibles		(16,306	)		(18,744	)		(21,182	)		(23,619	)		(26,057	)
Tangible common equity	$	1,212,722		$	1,177,873		$	1,182,380		$	1,120,545		$	1,108,006
Common shares outstanding		54,297			54,517			54,446			54,350			54,496

Book value per common share	$	30.08		$	29.37		$	29.53		$	28.49		$	28.23
Tangible book value per common share	$	22.33		$	21.61		$	21.72		$	20.62		$	20.33

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Tangible Common Equity to Tangible Assets. Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity, less goodwill and core deposit intangibles, net of accumulated amortization; (b) tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization; and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.

We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, in each case, exclusive of changes in core deposit intangibles. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and assets while not increasing our tangible common equity or tangible assets.

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets and presents our tangible common equity to tangible assets:

	As of
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars in thousands)
Tangible Common Equity
Total stockholders’ equity	$	1,633,480		$	1,601,069		$	1,608,014		$	1,548,616		$	1,538,515
Adjustments:
Goodwill		(404,452	)		(404,452	)		(404,452	)		(404,452	)		(404,452	)
Core deposit intangibles		(16,306	)		(18,744	)		(21,182	)		(23,619	)		(26,057	)
Tangible common equity	$	1,212,722		$	1,177,873		$	1,182,380		$	1,120,545		$	1,108,006
Tangible Assets
Total assets	$	12,606,091		$	12,768,341		$	13,042,976		$	12,684,330		$	12,708,396
Adjustments:
Goodwill		(404,452	)		(404,452	)		(404,452	)		(404,452	)		(404,452	)
Core deposit intangibles		(16,306	)		(18,744	)		(21,182	)		(23,619	)		(26,057	)
Tangible Assets	$	12,185,333		$	12,345,145		$	12,617,342		$	12,256,259		$	12,277,887
Tangible Common Equity to Tangible Assets		9.95	%		9.54	%		9.37	%		9.14	%		9.02	%

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Return on Average Tangible Common Equity. Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) net income available for common stockholders adjusted for amortization of core deposit intangibles (which we refer to as “return”) as net income, plus amortization of core deposit intangibles, less tax benefit at the statutory rate; (b) average tangible common equity as total average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization; and (c) return (as described in clause (a)) divided by average tangible common equity (as described in clause (b)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

We believe that this measure is important to many investors in the marketplace who are interested in the return on common equity, exclusive of the impact of core deposit intangibles. Goodwill and core deposit intangibles have the effect of increasing total stockholders’ equity while not increasing our tangible common equity. This measure is particularly relevant to acquisitive institutions that may have higher balances in goodwill and core deposit intangibles than non-acquisitive institutions.

The following table reconciles, as of the dates set forth below, average tangible common equity to average common equity and net income available for common stockholders adjusted for amortization of core deposit intangibles, net of taxes to net income and presents our return on average tangible common equity:

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars in thousands)
Net income available for common stockholders adjusted for amortization of core deposit intangibles
Net income	$	29,070		$	24,882		$	31,001		$	27,202		$	24,156
Adjustments:
Plus: Amortization of core deposit intangibles		2,438			2,437			2,438			2,438			2,438
Less: Tax benefit at the statutory rate		512			512			512			512			512
Net income available for common stockholders adjusted for amortization of core deposit intangibles	$	30,996		$	26,807		$	32,927		$	29,128		$	26,082

Average Tangible Common Equity
Total average stockholders’ equity	$	1,620,788		$	1,604,335		$	1,583,401		$	1,541,609		$	1,533,868
Adjustments:
Average goodwill		(404,452	)		(404,452	)		(404,452	)		(404,452	)		(404,452	)
Average core deposit intangibles		(17,904	)		(20,342	)		(22,789	)		(25,218	)		(27,656	)
Average tangible common equity	$	1,198,432		$	1,179,541		$	1,156,160		$	1,111,939		$	1,101,760
Return on Average Tangible Common Equity (Annualized)		10.49	%		9.04	%		11.33	%		10.54	%		9.52	%

VERITEX HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

Operating Earnings, Pre-tax, Pre-provision Operating Earnings and performance metrics calculated using Operating Earnings and Pre-tax, Pre-provision Operating Earnings, including Diluted Operating Earnings per Share, Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Assets, Pre-tax, Pre-Provision Operating Return on Average Loans, Operating Return on Average Tangible Common Equity and Operating Efficiency Ratio. Operating earnings, pre-tax, pre-provision operating earnings and the performance metrics calculated using these metrics, listed below, are non-GAAP measures used by management to evaluate the Company’s financial performance. We calculate (a) operating earnings as net income plus BOLI 1035 exchange charges, plus severance payments, plus loss on sales of debt securities available for sale (“AFS”), net, plus FDIC special assessment, less tax impact of adjustments, plus nonrecurring tax adjustments. We calculate (b) diluted operating earnings per share as operating earnings as described in clause (a) divided by weighted average diluted shares outstanding. We calculate (c) pre-tax, pre-provision operating earnings as operating earnings as described in clause (a) plus provision for income taxes, plus provision (benefit) for credit losses and unfunded commitments. We calculate (d) pre-tax, pre-provision operating return on average assets as pre-tax, pre-provision operating earnings as described in clause (a) divided by total average assets. We calculate (e) operating return on average assets as operating earnings as described in clause (a) divided by total average assets. We calculate (f) operating return on average tangible common equity as operating earnings as described in clause (a), adjusted for the amortization of intangibles and tax benefit at the statutory rate, divided by total average tangible common equity (average stockholders’ equity less average goodwill and average core deposit intangibles, net of accumulated amortization). We calculate (g) operating efficiency ratio as noninterest expense plus adjustments to operating noninterest expense divided by noninterest income plus adjustments to operating noninterest income, plus net interest income.

We believe that these measures and the operating metrics calculated utilizing these measures are important to management and many investors in the marketplace who are interested in understanding the ongoing operating performance of the Company and provide meaningful comparisons to its peers.

The following tables reconcile, as of the dates set forth below, operating net income and pre-tax, pre-provision operating earnings and related metrics:

	For the Quarter Ended
	Mar 31, 2025		Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024
	(Dollars in thousands, except per share data)
Operating Earnings
Net income	$	29,070	$	24,882	$	31,001	$	27,202	$	24,156
Plus: BOLI 1035 exchange charges¹		517		—		—		—		—
Plus: Severance payments²		—		1,545		1,487		613		—
Plus: Loss on sales of AFS securities, net		—		4,397		—		—		6,304
Plus: FDIC special assessment		—		—		—		134		—
Operating pre-tax income		29,587		30,824		32,488		27,949		30,460
Less: Tax impact of adjustments		109		1,248		307		166		1,323
Plus: Nonrecurring tax adjustments		229		193		—		527		—
Operating earnings	$	29,707	$	29,769	$	32,181	$	28,310	$	29,137

Weighted average diluted shares outstanding		55,123		55,237		54,932		54,823		54,842
Diluted EPS	$	0.53	$	0.45	$	0.56	$	0.50	$	0.44
Diluted operating EPS	$	0.54	$	0.54	$	0.59	$	0.52	$	0.53

¹Represents non-recurring charges for the completion of a 1035 exchange of BOLI contracts.
²Severance payments relate to certain restructurings made during the periods disclosed.

	For the Quarter Ended
	Mar 31, 2025			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024
	(Dollars in thousands)
Pre-Tax, Pre-Provision Operating Earnings
Net income	$	29,070		$	24,882		$	31,001		$	27,202		$	24,156
Plus: Provision for income taxes		8,526			8,222			8,067			8,221			7,237
Plus: Provision for credit losses and unfunded commitments		5,300			1,899			4,000			8,250			5,959
Plus: Severance payments		—			1,545			1,487			613			—
Plus: Loss on sale of AFS securities, net		—			4,397			—			—			6,304
Plus: BOLI 1035 exchange charges		517			—			—			—			—
Plus: FDIC special assessment		—			—			—			134			—
Pre-tax, pre-provision operating earnings	$	43,413		$	40,945		$	44,555		$	44,420		$	43,656

Average total assets	$	12,506,134		$	12,750,972		$	12,861,918		$	12,578,706		$	12,336,042
Pre-tax, pre-provision operating return on average assets¹		1.41	%		1.28	%		1.38	%		1.42	%		1.42	%

Average loans	$	9,313,629		$	9,449,565		$	9,661,774		$	9,765,428		$	9,563,372
Pre-tax, pre-provision operating return on average loans¹		1.89	%		1.72	%		1.83	%		1.83	%		1.84	%

Average total assets	$	12,506,134		$	12,750,972		$	12,861,918		$	12,578,706		$	12,336,042
Return on average assets¹		0.94	%		0.78	%		0.96	%		0.87	%		0.79	%
Operating return on average assets¹		0.96			0.93			1.00			0.91			0.95

Operating earnings adjusted for amortization of core deposit intangibles
Operating earnings	$	29,707		$	29,769		$	32,181		$	28,310		$	29,137
Adjustments:
Plus: Amortization of core deposit intangibles		2,438			2,437			2,438			2,438			2,438
Less: Tax benefit at the statutory rate		512			512			512			512			512
Operating earnings adjusted for amortization of core deposit intangibles	$	31,633		$	31,694		$	34,107		$	30,236		$	31,063

Average Tangible Common Equity
Total average stockholders’ equity	$	1,620,788		$	1,604,335		$	1,583,401		$	1,541,609		$	1,533,868
Adjustments:
Less: Average goodwill		(404,452	)		(404,452	)		(404,452	)		(404,452	)		(404,452	)
Less: Average core deposit intangibles		(17,904	)		(20,342	)		(22,789	)		(25,218	)		(27,656	)
Average tangible common equity	$	1,198,432		$	1,179,541		$	1,156,160		$	1,111,939		$	1,101,760
Operating return on average tangible common equity¹		10.70	%		10.69	%		11.74	%		10.94	%		11.34	%

Efficiency ratio		60.91	%		67.04	%		61.94	%		59.11	%		62.45	%
Operating efficiency ratio
Net interest income	$	95,441		$	96,141		$	100,062		$	96,236		$	92,806
Noninterest income		14,289			10,056			13,106			10,578			6,662
Plus: BOLI 1035 exchange charges		517			—			—			—			—
Plus: Loss on sale of AFS securities, net		—			4,397			—			—			6,304
Operating noninterest income		14,806			14,453			13,106			10,578			12,966
Noninterest expense		66,834			71,194			70,100			63,141			62,116
Less: FDIC special assessment		—			—			—			134			—
Less: Severance payments		—			1,545			1,487			613			—
Operating noninterest expense	$	66,834		$	69,649		$	68,613		$	62,394		$	62,116
Operating efficiency ratio		60.62	%		62.98	%		60.63	%		58.41	%		58.73	%

¹ Annualized ratio for quarterly metrics.

The MIL Network –

April 23, 2025

MIL-OSI: FS Bancorp, Inc. Reports First Quarter Net Income of $8.0 Million or $1.01 Per Diluted Share and the Forty-Ninth Consecutive Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

MOUNTLAKE TERRACE, Wash., April 22, 2025 (GLOBE NEWSWIRE) — FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2025 first quarter net income of $8.0 million, or $1.01 per diluted share, compared to $8.4 million, or $1.06 per diluted share, for the comparable quarter one year ago.

“Deposit growth exceeded expectations in the first quarter of 2025, enabling the Bank to be well positioned for our loan pipeline going into the second quarter,” stated Matthew Mullet, President/CFO.

“We are also pleased that our Board of Directors approved our forty-ninth consecutive quarterly cash dividend of $0.28 per common share, demonstrating our continued commitment to returning value to shareholders. The cash dividend will be paid on May 22, 2025, to shareholders of record as of May 8, 2025,” noted Joe Adams, CEO.

2025 First Quarter Highlights

Net income was $8.0 million for the first quarter of 2025, compared to $7.4 million for the previous quarter, and $8.4 million for the comparable quarter one year ago;
Total deposits increased $275.7 million, or 11.8%, to $2.62 billion at March 31, 2025, primarily due to an increase of $226.9 million in brokered deposits, compared to $2.34 billion at December 31, 2024, and increased $149.9 million, or 6.1%, from $2.47 billion at March 31, 2024. Noninterest-bearing deposits were $676.7 million at March 31, 2025, $638.2 million at December 31, 2024, and $646.9 million at March 31, 2024, reflecting growth in core deposits;
Borrowings decreased $239.0 million, or 77.6% to $68.8 million at March 31, 2025, compared to $307.8 million at December 31, 2024, and decreased $61.1 million, or 47.0%, from $129.9 million at March 31, 2024, and were primarily repositioned into wholesale brokered CDs noted above;
Loans receivable, net was virtually unchanged at $2.50 billion at both March 31, 2025, and December 31, 2024, and increased $85.7 million, or 3.5%, from $2.42 billion at March 31, 2024;
Consumer loans, of which 87.4% are home improvement loans, decreased $11.3 million, or 1.8%, to $608.9 million at March 31, 2025, compared to $620.2 million in the previous quarter, and decreased $37.2 million, or 5.8%, from $646.1 million in the comparable quarter one year ago. During the three months ended March 31, 2025, consumer loan originations included 79.9% of home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720;
Repurchased 98,317 shares of the Company’s common stock in the first quarter of 2025 at an average price of $39.06 per share with $873,000 remaining for future purchases under the existing share repurchase plan. On April 4, 2025, the Board authorized an additional share repurchase program of up to $5.0 million of the Company’s common stock;
Book value per share increased $0.86 to $39.12 at March 31, 2025, compared to $38.26 at December 31, 2024, and increased $3.06 from $36.06 at March 31, 2024. Tangible book value per share (non-GAAP financial measure) increased $0.94 to $36.96 at March 31, 2025, compared to $36.02 at December 31, 2024, and increased $3.49 from $33.47 at March 31, 2024. See, “Non-GAAP Financial Measures.”
Segment reporting in the first quarter of 2025 reflected net income of $7.8 million for the Commercial and Consumer Banking segment and $241,000 for the Home Lending segment, compared to net income of $7.4 million and net loss of $39,000 in the prior quarter, and net income of $8.2 million and $246,000 in the first quarter of 2024, respectively; and
Regulatory capital ratios at the Bank were 14.4% for total risk-based capital and 11.3% for Tier 1 leverage capital at March 31, 2025, compared to 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at December 31, 2024.

Segment Reporting

The Company reports on two segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment is also responsible for managing the Bank’s investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.

The tables below provide a summary of segment reporting at or for the three months ended March 31, 2025 and 2024 (dollars in thousands):

	At or For the Three Months Ended March 31, 2025
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	28,407		$	2,575		$	30,982
Provision for credit losses		(1,321	)		(271	)		(1,592	)
Noninterest income ⁽²⁾		2,246			2,880			5,126
Noninterest expense ⁽³⁾		(20,176	)		(4,879	)		(25,055	)
Income before provision for income taxes		9,156			305			9,461
Provision for income taxes		(1,376	)		(64	)		(1,440	)
Net income	$	7,780		$	241		$	8,021
Total average assets for period ended	$	2,414,100		$	618,412		$	3,032,512
Full-time employees (“FTEs”)		454			113			567

	At or For the Three Months Ended March 31, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	28,086		$	2,260		$	30,346
Provision for credit losses		(1,251	)		(148	)		(1,399	)
Noninterest income ⁽²⁾		2,393			2,718			5,111
Noninterest expense ⁽³⁾		(19,008	)		(4,521	)		(23,529	)
Income before provision for income taxes		10,220			309			10,529
Provision for income taxes		(2,069	)		(63	)		(2,132	)
Net income	$	8,151		$	246		$	8,397
Total average assets for period ended	$	2,401,864		$	556,683		$	2,958,547
FTEs		440			130			570

__________________________________

(1	)	Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.
(2	)	Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three months ended March 31, 2025, the Company recorded a net increase in fair value of $263,000, compared to a net increase in fair value of $2,000 for the three months ended March 31, 2024. As of March 31, 2025 and 2024, there were $14.5 million and $15.0 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.
(3	)	Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three months ended March 31, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.8 million and $1.5 million, respectively.

Asset Summary

Total assets increased $36.9 million, or 1.2%, to $3.07 billion at March 31, 2025, compared to $3.03 billion at December 31, 2024, and increased $96.4 million, or 3.2%, from $2.97 billion at March 31, 2024. The increase in total assets at March 31, 2025, compared to December 31, 2024, included increases of $31.1 million in total cash and cash equivalents, $10.0 million in securities available-for-sale, $3.4 million in other assets, $3.2 million in loans held for sale (“HFS”) and $2.0 million in securities held-to-maturity, partially offset by decreases in FHLB stock of $10.4 million, loans receivable, net of $834,000 and core deposit intangible (“CDI”), net of $831,000. The increase compared to March 31, 2024, was primarily due to increases in loans receivable, net of $85.7 million, other assets of $21.1 million, total cash and cash equivalents of $17.3 million, and securities available-for-sale of $11.5 million. These increases were partially offset by decreases in certificates of deposit at other financial institutions of $22.0 million, loans HFS of $18.9 million, and CDI, net of $3.5 million.

LOAN PORTFOLIO
(Dollars in thousands)	March 31, 2025					December 31, 2024					March 31, 2024
COMMERCIAL REAL ESTATE (“CRE”) LOANS	Amount				%	Amount				%	Amount				%	Linked Quarter $ Change			Prior Year Quarter $ Change
CRE owner occupied	$	164,911		6.5	%	$	170,396		6.7	%	$	174,946		7.2	%	$	(5,485	)	$	(10,035	)
CRE non-owner occupied		174,188		6.9			174,921		6.9			184,109		7.5			(733	)		(9,921	)
Commercial and speculative construction and development		288,978		11.4			280,798		11.1			244,217		10.0			8,180			44,761
Multi-family		244,940		9.7			245,222		9.7			222,410		9.1			(282	)		22,530
Total CRE loans		873,017		34.5			871,337		34.4			825,682		33.8			1,680			47,335

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		637,299		25.2			617,322		24.4			580,050		23.7			19,977			57,249
Home equity		73,846		2.9			75,147		3.0			73,323		3.0			(1,301	)		523
Residential custom construction		48,810		1.9			49,902		2.0			57,129		2.3			(1,092	)		(8,319	)
Total residential real estate loans		759,955		30.0			742,371		29.4			710,502		29.0			17,584			49,453

CONSUMER LOANS
Indirect home improvement		532,038		21.0			541,946		21.4			568,802		23.2			(9,908	)		(36,764	)
Marine		73,737		2.9			74,931		3.0			73,921		3.0			(1,194	)		(184	)
Other consumer		3,118		0.1			3,304		0.1			3,409		0.1			(186	)		(291	)
Total consumer loans		608,893		24.0			620,181		24.5			646,132		26.3			(11,288	)		(37,239	)

COMMERCIAL BUSINESS LOANS
Commercial and industrial (“C&I”)		274,956		10.9			287,014		11.3			256,429		10.6			(12,058	)		18,527
Warehouse lending		15,949		0.6			12,918		0.4			8,113		0.3			3,031			7,836
Total commercial business loans		290,905		11.5			299,932		11.7			264,542		10.9			(9,027	)		26,363
Total loans receivable, gross		2,532,770		100.0	%		2,533,821		100.0	%		2,446,858		100.0	%		(1,051	)		85,912

Allowance for credit losses on loans		(31,653	)				(31,870	)				(31,479	)				217			(174	)
Total loans receivable, net	$	2,501,117				$	2,501,951				$	2,415,379				$	(834	)	$	85,738

The composition of CRE loans at the dates indicated were as follows:

(Dollars in thousands)	Mar 31, 2025		Dec 31, 2024		Mar 31, 2024
CRE by Type:	Amount		Amount		Amount
CRE non-owner occupied:
Office	$	39,406	$	39,697	$	41,625
Retail		35,520		36,568		38,712
Hospitality/restaurant		27,377		27,562		24,751
Self-storage		19,092		19,111		21,383
Mixed use		18,868		17,721		19,186
Industrial		15,033		15,125		17,475
Senior housing/assisted living		7,506		7,565		8,446
Other ⁽¹⁾		6,579		6,631		6,785
Land		2,314		2,421		3,151
Education/worship		2,493		2,520		2,595
Total CRE non-owner occupied		174,188		174,921		184,109
CRE owner occupied:
Agriculture		3,990		3,834		3,744
Industrial		66,618		67,064		63,683
Office		40,447		42,223		41,652
Retail		20,535		20,718		21,836
Hospitality/restaurant		7,306		10,396		10,933
Other ⁽²⁾		8,529		8,612		8,438
Car wash		—		—		7,713
Automobile related		7,266		7,325		7,479
Education/worship		4,641		4,608		4,604
Mixed use		5,579		5,616		4,864
Total CRE owner occupied		164,911		170,396		174,946
Total		339,099		345,317		359,055

__________________________________

(1	)	Primarily includes loans secured by mobile home parks totaling $758,000, $766,000, and $789,000, RV parks totaling $681,000, $685,000, and $696,000, automobile-related collateral totaling $584,000, $589,000, and $604,000, and other collateral totaling $4.6 million, $4.6 million, and $4.7 million at March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
(2	)	Primarily includes loans secured by gas stations totaling $1.5 million, $1.5 million and $1.7 million, non-profit organization totaling $1.4 million, $1.5 million and $915,000, and other collateral totaling $5.6 million, $5.6 million and $5.8 million at March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:

(Dollars in thousands)		For the Quarter Ended
CRE by type:	Jun 30, 2025		Sep 30, 2025		Dec 31, 2025		Mar 31, 2026		Jun 30, 2026		Sep 30, 2026		Dec 31, 2026		Mar 31, 2027		Total		Current Weighted Average Rate
Agriculture	$	723	$	—	$	312	$	175	$	—	$	292	$	—	$	—	$	1,502	6.14	%
Apartment		4,510		1,701		18,573		1,268		13,868		9,763		8,241		27,900		85,824	5.65
Auto related		790		—		—		—		—		—		—		—		790	4.15
Hotel / hospitality		1,760		1,315		—		115		1,265		—		—		—		4,455	4.75
Industrial		—		161		10,122		981		590		1,594		—		13,481		26,929	5.13
Mixed use		3,469		244		313		2,119		—		—		382		—		6,527	5.74
Office		11,077		4,127		966		519		1,641		559		7,749		2,878		29,516	4.96
Other		1,309		1,147		241		890		—		2,493		1,497		283		7,860	5.05
Retail		1,738		63		—		436		3,474		—		3,423		3,059		12,193	4.11
Senior housing and assisted living		—		—		—		2,157		—		—		—		—		2,157	4.75	%
Total	$	25,376	$	8,758	$	30,527	$	8,660	$	20,838	$	14,701	$	21,292	$	47,601	$	177,753

A breakdown of construction loans at the dates indicated were as follows:

(Dollars in thousands)	March 31, 2025					December 31, 2024
Construction Types:	Amount		Percent			Amount		Percent
Commercial construction – retail	$	8,157		2.4	%	$	8,079		2.4	%
Commercial construction – office		6,487		1.9			4,979		1.5
Commercial construction – self storage		16,012		4.7			13,480		4.1
Commercial construction – hotel		402		0.1			—		—
Multi-family		31,275		9.3			30,945		9.4
Custom construction – single family residential and single family manufactured residential		41,143		12.2			42,040		12.7
Custom construction – land, lot and acquisition and development		7,667		2.3			7,862		2.4
Speculative residential construction – vertical		186,042		55.1			180,381		54.5
Speculative residential construction – land, lot and acquisition and development		40,603		12.0			42,934		13.0
Total	$	337,788		100.0	%	$	330,700		100.0	%

(Dollars in thousands)	March 31, 2025					March 31, 2024
Construction Types:	Amount		Percent			Amount		Percent
Commercial construction – retail	$	8,157		2.4	%	$	8,290		2.8	%
Commercial construction – office		6,487		1.9			4,737		1.6
Commercial construction – self storage		16,012		4.7			10,000		3.3
Commercial construction – hotel		402		0.1			7,807		2.6
Multi-family		31,275		9.3			53,288		17.7
Custom construction – single family residential and single family manufactured residential		41,143		12.2			50,674		16.8
Custom construction – land, lot and acquisition and development		7,667		2.3			6,455		2.1
Speculative residential construction – vertical		186,042		55.1			134,047		44.5
Speculative residential construction – land, lot and acquisition and development		40,603		12.0			26,048		8.6
Total	$	337,788		100.0	%	$	301,346		100.0	%

Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:

(Dollars in thousands)	For the Three Months Ended
	March 31, 2025					December 31, 2024
	Amount		Percent			Amount		Percent			$ Change			% Change
Purchase	$	120,719		83.0	%	$	129,232		83.2	%	$	(8,513	)		(6.6	)%
Refinance		24,677		17.0			26,116		16.8			(1,439	)		(5.5	)%
Total	$	145,396		100.0	%	$	155,348		100.0	%	$	(9,952	)		(6.4	)%

(Dollars in thousands)	For the Three Months Ended March 31,
	2025					2024
	Amount		Percent			Amount		Percent			$ Change			% Change
Purchase	$	120,719		83.0	%	$	135,577		88.1	%	$	(14,858	)		(11.0	)%
Refinance		24,677		17.0			18,371		11.9			6,306			34.3	%
Total	$	145,396		100.0	%	$	153,948		100.0	%	$	(8,552	)		(5.6	)%

During the quarter ended March 31, 2025, the Company sold $91.9 million of one-to-four-family loans compared to $138.9 million during the previous quarter and $93.9 million during the same quarter one year ago. The decrease in the volume of loans sold during the current quarter compared to the prior quarter was primarily due to seasonal factors combined with economic volatility. Gross margins on home loan sales increased to 3.26% for the quarter ended March 31, 2025, compared to 3.14% in the previous quarter and decreased from 3.43% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.

Liabilities and Equity Summary

Changes in deposits at the dates indicated were as follows:

(Dollars in thousands)
	March 31, 2025					December 31, 2024
Transactional deposits:	Amount		Percent			Amount		Percent			$ Change			% Change
Noninterest-bearing checking	$	659,417		25.2	%	$	627,679		26.8	%	$	31,738			5.1	%
Interest-bearing checking ⁽¹⁾		201,469		7.7			176,561		7.5			24,908			14.1
Escrow accounts related to mortgages serviced ⁽²⁾		17,289		0.7			10,479		0.5			6,810			65.0
Subtotal		878,175		33.6			814,719		34.8			63,456			7.8
Savings		160,332		6.1			154,188		6.6			6,144			4.0
Money market ⁽³⁾		343,349		13.1			341,615		14.6			1,734			0.5
Subtotal		503,681		19.2			495,803		21.2			7,878			1.6
Certificates of deposit less than $100,000 ⁽⁴⁾		639,947		24.5			440,257		18.8			199,690			45.4
Certificates of deposit of $100,000 through $250,000		450,836		17.2			455,594		19.5			(4,758	)		(1.0	)
Certificates of deposit greater than $250,000		142,512		5.5			133,045		5.7			9,467			7.1
Subtotal		1,233,295		47.2			1,028,896		44.0			204,399			19.9
Total	$	2,615,151		100.0	%	$	2,339,418		100.0	%	$	275,733			11.8	%

(Dollars in thousands)
	March 31, 2025					March 31, 2024
Transactional deposits:	Amount		Percent			Amount		Percent			$ Change			% Change
Noninterest-bearing checking	$	659,417		25.2	%	$	618,526		25.1	%	$	40,891			6.6	%
Interest-bearing checking ⁽¹⁾		201,469		7.7			188,050		7.6			13,419			7.1
Escrow accounts related to mortgages serviced ⁽²⁾		17,289		0.7			28,373		1.2			(11,084	)		(39.1	)
Subtotal		878,175		33.6			834,949		33.9			43,226			5.2
Savings		160,332		6.1			153,025		6.2			7,307			4.8
Money market ⁽³⁾		343,349		13.1			364,944		14.8			(21,595	)		(5.9	)
Subtotal		503,681		19.2			517,969		21.0			(14,288	)		(2.8	)
Certificates of deposit less than $100,000 ⁽⁴⁾		639,947		24.5			579,153		23.5			60,794			10.5
Certificates of deposit of $100,000 through $250,000		450,836		17.2			424,463		17.2			26,373			6.2
Certificates of deposit greater than $250,000		142,512		5.5			108,763		4.4			33,749			31.0
Subtotal		1,233,295		47.2			1,112,379		45.1			120,916			10.9
Total	$	2,615,151		100.0	%	$	2,465,297		100.0	%	$	149,854			6.1	%

__________________________________

(1	)	Includes $30.1 million of brokered deposits at March 31, 2025, and no brokered deposits at December 31, 2024, and at March 31, 2024.
(2	)	Primarily noninterest-bearing accounts based on applicable state law.
(3	)	Includes $251,000, $279,000 and $8.0 million of brokered deposits at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
(4	)	Includes $339.9 million, $143.1 million, and $331.3 million of brokered deposits at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

At March 31, 2025, CDs, which include retail and non-retail CDs, totaled $1.23 billion, compared to $1.03 billion at December 31, 2024 and $1.11 billion at March 31, 2024, with non-retail CDs representing 28.5%, 15.0% and 31.0% of total CDs at such dates, respectively. At March 31, 2025, non-retail CDs, which include brokered CDs, online CDs and public funds CDs, increased $196.9 million to $351.7 million, compared to $154.8 million at December 31, 2024, primarily due to an increase of $196.8 million in brokered CDs. The increase in brokered CDs provided funds to pay down higher cost borrowings. Non-retail CDs totaled $351.7 million at March 31, 2025, compared to $344.5 million at March 31, 2024.

At March 31, 2025, the Bank had uninsured deposits of approximately $679.4 million, compared to approximately $652.7 million at December 31, 2024, and $614.1 million at March 31, 2024. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

At March 31, 2025, borrowings decreased $239.0 million to $68.8 million at March 31, 2025, from $307.8 million at December 31, 2024, and decreased $61.1 million from $129.9 million at March 31, 2024. These borrowings were comprised solely of FHLB advances.

Total stockholders’ equity increased $3.1 million to $298.8 million at March 31, 2025, from $295.8 million at December 31, 2024, and increased $20.9 million, from $277.9 million at March 31, 2024. The increase in stockholders’ equity at March 31, 2025, compared to December 31, 2024, was primarily due to net income of $8.0 million and $513,000 in equity award compensation, partially offset by share repurchases of $3.8 million and cash dividends paid of $2.2 million. Stockholders’ equity was also impacted by decreases in unrealized net losses on securities available for sale of $2.7 million, net of tax, and decreases in unrealized net gains on fair value and cash flow hedges of $2.6 million, net of tax, reflecting changes in market interest rates during the quarter, resulting in a $151,000 decrease in accumulated other comprehensive loss, net of tax. Book value per common share was $39.12 at March 31, 2025, compared to $38.26 at December 31, 2024, and $36.06 at March 31, 2024.

The Bank is considered “well capitalized” under the capital requirements established by the Federal Deposit Insurance Corporation (“FDIC”) with a total risk-based capital ratio of 14.4%, a Tier 1 leverage capital ratio of 11.3%, and a common equity Tier 1 (“CET1”) capital ratio of 13.2% at March 31, 2025.

The Company exceeded all regulatory capital requirements with a total risk-based capital ratio of 14.7%, a Tier 1 leverage capital ratio of 9.9%, and a CET1 ratio of 11.5% at March 31, 2025.

Credit Quality

The allowance for credit losses on loans (“ACLL”) was $31.7 million, or 1.25% of gross loans receivable (excluding loans HFS) at March 31, 2025, compared to $31.9 million, or 1.26% of gross loans receivable (excluding loans HFS), at December 31, 2024, and $31.5 million, or 1.29% of gross loans receivable (excluding loans HFS), at March 31, 2024. The slight decrease in the ACLL at March 31, 2025, compared to the prior quarter was primarily due to a decrease in the balance of higher risk consumer loans. The increase of $174,000 in the ACLL from the same quarter the prior year was primarily due to increases in CRE loans. The allowance for credit losses on unfunded loan commitments increased $66,000 to $1.5 million at March 31, 2025, compared to $1.4 million at December 31, 2024, and decreased $35,000 from $1.5 million at March 31, 2024, primarily due to an increase in the volume of unfunded commitments on construction loans

Nonperforming loans increased $870,000 to $14.5 million at March 31, 2025, compared to $13.6 million at December 31, 2024, and increased $2.4 million from $12.1 million at March 31, 2024. The increase in nonperforming loans compared to the prior quarter was primarily due to increases in nonperforming CRE construction and development loans of $1.5 million, nonperforming indirect home improvement loans of $1.1 million, and nonperforming one-to-four-family loans of $970,000, partially offset by decreases in nonperforming CRE loans of $1.6 million and nonperforming commercial business loans of $1.5 million. The increase in nonperforming loans compared to the same quarter the prior year was primarily due to increases in nonperforming construction and development loans of $1.8 million, nonperforming one-to-four-family loans of $961,000, and nonperforming indirect home improvement loans of $626,000, partially offset by a decrease in nonperforming commercial business loans of $1.4 million.

Loans classified as substandard increased $602,000 to $23.5 million at March 31, 2025, compared to $22.9 million at December 31, 2024, and decreased $1.4 million from $24.9 million at March 31, 2024. The increase in substandard loans compared to the prior quarter was primarily due to an increase of $1.5 million in CRE construction and development loans, $1.1 million in indirect home improvement loans, and $953,000 in one-to-four-family loans, partially offset by decreases in commercial business loans of $1.8 million and CRE of $1.6 million. The decrease in substandard loans compared to the prior year was primarily due to decreases of $3.1 million in C&I loans and $1.9 million in CRE loans, partially offset by increases of $1.8 million in CRE construction and development loans, $794,000 in one-to-four-family loans, and $626,000 in indirect home improvement loans.

Operating Results

Net interest income increased $636,000 to $31.0 million for the three months ended March 31, 2025, from $30.3 million for the three months ended March 31, 2024, primarily due to an increase in total interest income of $1.9 million, partially offset by an increase in interest expense of $1.3 million. The $1.9 million increase in total interest income was primarily due to an increase of $2.3 million in interest income on loans receivable, including fees, primarily as a result of net loan growth and variable rate loans repricing higher. The $1.3 million increase in total interest expense was primarily the result of higher market interest rates and a net increase in interest bearing liabilities.

NIM (annualized) increased six basis points to 4.32% for the three months ended March 31, 2025, from 4.26% for the same period in the prior year. The increase in NIM for the three months ended March 31, 2025, compared to the same period in 2024, reflects the increased yields on interest-earning assets.

The average total cost of funds, including noninterest-bearing checking, increased 17 basis points to 2.38% for the three months ended March 31, 2025, from 2.21% for the three months ended March 31, 2024. This increase was predominantly due to higher market rates for borrowings.

For the three months ended March 31, 2025, the provision for credit losses on loans was $1.5 million, compared to $1.4 million for the three months ended March 31, 2024. The provision for credit losses on loans reflects an increase in charge-off activity. During the three months ended March 31, 2025, net charge-offs increased $247,000 to $1.7 million, compared to $1.5 million for the same period last year. This increase was the result of increased net charge-offs of $487,000 in indirect home improvement loans and $25,000 in commercial business loans, partially offset by a net reduction of net charge-offs of $213,000 in marine loans and $46,000 in other consumer loans. Management attributes the increase in net charge-offs over the year primarily to volatile economic conditions.

Total noninterest income was unchanged at $5.1 million for the three months ended March 31, 2025 and 2024. Total noninterest expense was $25.0 million for the three months ended March 31, 2025, compared to $23.5 million for the three months ended March 31, 2024. The $1.5 million increase was primarily due to a $976,000 increase in salaries and benefits and a $437,000 increase in operations expense.

About FS Bancorp

FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, a recession or slowed economic growth; changes in the interest rate environment, including the increases and decrease in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on our market position, loan, and deposit products; adverse changes in the securities markets, the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; 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; 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; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; the potential for new or increased tariffs, trade restrictions or geopolitical tensions that could affect economic activity or specific industry sectors; environmental, social and governance goals; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on its website at www.fsbwa.com and on the SEC’s website at www.sec.gov.

Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management’s beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically disclaims 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.

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited)

										Linked			Prior Year
	March 31,			December 31,			March 31,			Quarter			Quarter
	2025			2024			2024			% Change			% Change
ASSETS
Cash and due from banks	$	18,657		$	19,280		$	17,149			(3	)		9
Interest-bearing deposits at other financial institutions		44,084			12,355			28,257			257			56
Total cash and cash equivalents		62,741			31,635			45,406			98			38
Certificates of deposit at other financial institutions		1,234			1,727			23,222			(29	)		(95	)
Securities available-for-sale, at fair value		291,133			281,175			279,643			4			4
Securities held-to-maturity, net		10,434			8,455			8,455			23			23
Loans held for sale, at fair value		31,038			27,835			49,957			12			(38	)
Loans receivable, net		2,501,117			2,501,951			2,415,379			—			4
Accrued interest receivable		14,406			13,881			14,455			4			—
Premises and equipment, net		29,451			29,756			30,326			(1	)		(3	)
Operating lease right-of-use		4,979			5,378			6,202			(7	)		(20	)
Federal Home Loan Bank stock, at cost		5,256			15,621			2,909			(66	)		81
Deferred tax asset, net		7,009			7,059			4,832			(1	)		45
Bank owned life insurance (“BOLI”), net		38,778			38,528			37,958			1			2
MSRs, held at the lower of cost or fair value		8,926			9,204			9,009			(3	)		(1	)
Goodwill		3,592			3,592			3,592			—			—
Core deposit intangible, net		12,879			13,710			16,402			(6	)		(21	)
Other assets		43,105			39,670			21,958			9			96
TOTAL ASSETS	$	3,066,078		$	3,029,177		$	2,969,705			1			3
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	676,706		$	638,158		$	646,899			6			5
Interest-bearing accounts		1,938,445			1,701,260			1,818,398			14			7
Total deposits		2,615,151			2,339,418			2,465,297			12			6
Borrowings		68,805			307,806			129,940			(78	)		(47	)
Subordinated notes:
Principal amount		50,000			50,000			50,000			—			—
Unamortized debt issuance costs		(389	)		(406	)		(456	)		(4	)		(15	)
Total subordinated notes less unamortized debt issuance costs		49,611			49,594			49,544			—			—
Operating lease liability		5,149			5,556			6,410			(7	)		(20	)
Other liabilities		28,522			31,036			40,582			(8	)		(30	)
Total liabilities		2,767,238			2,733,410			2,691,773			1			3
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding		—			—			—			—			—
Common stock, $.01 par value; 45,000,000 shares authorized; 7,742,907 shares issued and outstanding at March 31, 2025, 7,833,014 at December 31, 2024, and 7,805,795 at March 31, 2024		77			78			78			(1	)		(1	)
Additional paid-in capital		52,806			55,716			57,552			(5	)		(8	)
Retained earnings		262,945			257,113			236,720			2			11
Accumulated other comprehensive loss, net of tax		(16,988	)		(17,140	)		(16,418	)		(1	)		3
Total stockholders’ equity		298,840			295,767			277,932			1			8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,066,078		$	3,029,177		$	2,969,705			1			3

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited)

	Three Months Ended									Linked			Prior Year
	Mar 31,			Dec 31,			Mar 31,			Quarter			Quarter
	2025			2024			2024			% Change			% Change
INTEREST INCOME
Loans receivable, including fees	$	43,303		$	43,654		$	40,997			(1	)		6
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		3,485			3,320			3,883			5			(10	)
Total interest and dividend income		46,788			46,974			44,880			—			4
INTEREST EXPENSE
Deposits		13,058			13,543			12,882			(4	)		1
Borrowings		2,263			1,831			1,167			24			94
Subordinated notes		485			486			485			—			—
Total interest expense		15,806			15,860			14,534			—			9
NET INTEREST INCOME		30,982			31,114			30,346			—			2
PROVISION FOR CREDIT LOSSES		1,592			1,522			1,399			5			14
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		29,390			29,592			28,947			(1	)		2
NONINTEREST INCOME
Service charges and fee income		2,244			2,513			2,552			(11	)		(12	)
Gain on sale of loans		1,700			1,733			1,838			(2	)		(8	)
Gain on sale of MSRs		—			—			8,215			—			NM
Loss on sale of investment securities, net		—			—			(7,998	)		—			NM
Earnings on cash surrender value of BOLI		250			256			240			(2	)		4
Other noninterest income		932			108			264			763			253
Total noninterest income		5,126			4,610			5,111			11			—
NONINTEREST EXPENSE
Salaries and benefits		14,533			14,172			13,557			3			7
Operations		3,445			3,175			3,008			9			15
Occupancy		1,717			1,821			1,705			(6	)		1
Data processing		2,045			2,252			1,958			(9	)		4
Loan costs		548			781			585			(30	)		(6	)
Professional and board fees		1,186			1,038			923			14			28
FDIC insurance		538			490			532			10			1
Marketing and advertising		221			329			227			(33	)		(3	)
Amortization of core deposit intangible		831			876			941			(5	)		(12	)
(Recovery) impairment of servicing rights		(9	)		(583	)		93			(98	)		(110	)
Total noninterest expense		25,055			24,351			23,529			3			6
INCOME BEFORE PROVISION FOR INCOME TAXES		9,461			9,851			10,529			(4	)		(10	)
PROVISION FOR INCOME TAXES		1,440			2,469			2,132			(42	)		(32	)
NET INCOME	$	8,021		$	7,382		$	8,397			9			(4	)
Basic earnings per share	$	1.02		$	0.94		$	1.07			9			(5	)
Diluted earnings per share	$	1.01		$	0.92		$	1.06			10			(5	)

KEY FINANCIAL RATIOS AND DATA (Unaudited)

	At or For the Three Months Ended
	March 31,			December 31,			March 31,
PERFORMANCE RATIOS:	2025			2024			2024
Return on assets (ratio of net income to average total assets) ⁽¹⁾		1.07	%		0.98	%		1.14	%
Return on equity (ratio of net income to average total stockholders’ equity) ⁽¹⁾		10.80			9.88			12.29
Yield on average interest-earning assets ⁽¹⁾		6.53			6.51			6.30
Average total cost of funds ⁽¹⁾		2.38			2.38			2.21
Interest rate spread information – average during period		4.15			4.13			4.09
Net interest margin ⁽¹⁾		4.32			4.31			4.26
Operating expense to average total assets ⁽¹⁾		3.35			3.24			3.20
Average interest-earning assets to average interest-bearing liabilities ⁽¹⁾		142.94			143.27			144.51
Efficiency ratio ⁽²⁾		69.39			68.16			66.36
Common equity ratio (ratio of stockholders’ equity to total assets)		9.75			9.76			9.36
Tangible common equity ratio ⁽³⁾		9.26			9.25			8.74

	March 31,			December 31,			March 31,
ASSET QUALITY RATIOS AND DATA:	2025			2024			2024
Nonperforming assets to total assets at end of period ⁽⁴⁾		0.47	%		0.45	%		0.41	%
Nonperforming loans to total gross loans (excluding loans HFS) ⁽⁵⁾		0.57			0.54			0.49
Allowance for credit losses – loans to nonperforming loans ⁽⁵⁾		219.08			234.55			260.24
Allowance for credit losses – loans to total gross loans (excluding loans HFS)		1.25			1.26			1.29

	At or For the Three Months Ended
	March 31,			December 31,			March 31,
PER COMMON SHARE DATA:	2025			2024			2024
Basic earnings per share	$	1.02		$	0.94		$	1.07
Diluted earnings per share	$	1.01		$	0.92		$	1.06
Weighted average basic shares outstanding		7,695,320			7,723,250			7,703,789
Weighted average diluted shares outstanding		7,805,728			7,897,099			7,824,460
Common shares outstanding at end of period		7,639,844	⁽⁶⁾		7,729,951	⁽⁷⁾		7,707,651	⁽⁸⁾
Book value per share using common shares outstanding	$	39.12		$	38.26		$	36.06
Tangible book value per share using common shares outstanding ⁽⁹⁾	$	36.96		$	36.02		$	33.47

__________________________________

(1	)	Annualized.
(2	)	Total noninterest expense as a percentage of net interest income and total noninterest income.
(3	)	Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.
(4	)	Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets.
(5	)	Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due.
(6	)	Common shares were calculated using shares outstanding of 7,742,907 at March 31, 2025, less 103,063 unvested restricted stock shares.
(7	)	Common shares were calculated using shares outstanding of 7,833,014 at December 31, 2024, less 103,063 unvested restricted stock shares.
(8	)	Common shares were calculated using shares outstanding of 7,805,795 at March 31, 2024, less 98,144 unvested restricted stock shares.
(9	)	Tangible book value per share using outstanding common shares excludes intangible assets. This ratio represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.

(Dollars in thousands)	For the Three Months Ended Mar 31,				Qtr. Over Qtr.
Average Balances	2025		2024		$ Change
Assets
Loans receivable, net ⁽¹⁾	$	2,559,944	$	2,464,602	$	95,342
Securities available-for-sale, at amortized cost		310,417		331,413		(20,996	)
Securities held-to-maturity		8,656		8,500		156
Interest-bearing deposits and certificates of deposit at other financial institutions		16,161		59,514		(43,353	)
FHLB stock, at cost		11,948		2,174		9,774
Total interest-earning assets		2,907,126		2,866,203		40,923
Noninterest-earning assets		125,386		92,344		33,042
Total assets	$	3,032,512	$	2,958,547	$	73,965
Liabilities
Interest-bearing deposit accounts	$	1,765,605	$	1,832,767	$	(67,162	)
Borrowings		218,639		101,150		117,489
Subordinated notes		49,600		49,533		67
Total interest-bearing liabilities		2,033,844		1,983,450		50,394
Noninterest-bearing deposit accounts		663,824		657,083		6,741
Other noninterest-bearing liabilities		33,739		43,246		(9,507	)
Total liabilities	$	2,731,407	$	2,683,779	$	47,628

__________________________________

(1	)	Includes loans HFS.

Non-GAAP Financial Measures:

In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States (“GAAP”), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company’s tangible book value per share and tangible common equity ratio is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and facilitates comparison of the quality and composition of the Company’s capital over time and to its competitors. Where applicable, the Company has also presented comparable GAAP information.

These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders’ equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

Reconciliation of the GAAP book value per share and common equity ratio and the non-GAAP tangible book value per share and tangible common equity ratio is presented below.

(Dollars in thousands, except share and per share amounts)	March 31,				December 31,				March 31,
Tangible Book Value Per Share:	2025				2024				2024
Stockholders’ equity (GAAP)	$	298,840			$	295,767			$	277,932
Less: goodwill and core deposit intangible, net		(16,471	)			(17,302	)			(19,994	)
Tangible common stockholders’ equity (non-GAAP)	$	282,369			$	278,465			$	257,938

Common shares outstanding at end of period		7,639,844		⁽¹⁾		7,729,951		⁽²⁾		7,707,651		⁽³⁾

Book value per share (GAAP)	$	39.12			$	38.26			$	36.06
Tangible book value per share (non-GAAP)	$	36.96			$	36.02			$	33.47

Tangible Common Equity Ratio:
Total assets (GAAP)	$	3,066,078			$	3,029,177			$	2,969,705
Less: goodwill and core deposit intangible assets		(16,471	)			(17,302	)			(19,994	)
Tangible assets (non-GAAP)	$	3,049,607			$	3,011,875			$	2,949,711

Common equity ratio (GAAP)		9.75	%			9.76	%			9.36	%
Tangible common equity ratio (non-GAAP)		9.26				9.25				8.74

__________________________________

(1	)	Common shares were calculated using shares outstanding of 7,742,907 at March 31, 2025, less 103,063 unvested restricted stock shares.
(2	)	Common shares were calculated using shares outstanding of 7,833,014 at December 31, 2024, less 103,063 unvested restricted stock shares.
(3	)	Common shares were calculated using shares outstanding of 7,805,795 at March 31, 2024, less 98,144 unvested restricted stock shares.

Contacts:
Joseph C. Adams,
Chief Executive Officer

Matthew D. Mullet,
President/Chief Financial Officer

(425) 771-5299
www.FSBWA.com

The MIL Network –

April 23, 2025

MIL-OSI: First Bank Announces First Quarter 2025 Net Income of $9.4 Million

Source: GlobeNewswire (MIL-OSI)

HAMILTON, N.J., April 22, 2025 (GLOBE NEWSWIRE) — First Bank (Nasdaq Global Market: FRBA) (“the Bank”) today announced results for the first quarter of 2025. Net income for the first quarter of 2025 was $9.4 million, or $0.37 per diluted share, compared to $12.5 million, or $0.50 per diluted share, for the first quarter of 2024. Return on average assets, return on average equity and return on average tangible equityⁱ for the first quarter of 2025 were 1.00%, 9.20% and 10.54%, respectively, compared to 1.41%, 13.36% and 15.64%, respectively, for the first quarter of 2024.

First Quarter 2025 Performance Highlights:

Total loans of $3.24 billion at March 31, 2025 grew $91.8 million, or 11.8%, annualized, from the linked quarter ended December 31, 2024.
Total deposits were $3.12 billion at March 31, 2025, increasing $63.9 million, or 8.5% annualized from the linked quarter ended December 31, 2024.
Net interest margin measured 3.65% for the first quarter of 2025, increasing 11 basis points from 3.54% for the linked quarter ended December 31, 2024.
Tangible book value per shareⁱⁱ grew to $14.47 at March 31, 2025, increasing 8.0%, annualized, from $14.19 at December 31, 2024.
Strong asset quality continued, with nonperforming assets decreasing to 0.42% of total assets at March 31, 2025, compared to 0.46% at December 31, 2024 and 0.64% at March 31, 2024.

“We are pleased to report high-quality loan and deposit growth in the first quarter of 2025,” Patrick L. Ryan, President and CEO of First Bank, reflecting on the Bank’s performance. “Our team produced excellent Commercial and Industrial (“C&I”) loan growth during the quarter with an improved net interest margin and sustained asset quality. We are especially pleased to have achieved this with an efficiency ratio that remained below 60% for the 23^rd consecutive quarter, and with continued growth in our primary areas of focus. Our recent and ongoing investments in technology and new C&I lending and deposit-focused business units are building scale and bearing fruit, as reflected in our 10.8% year-over-year increase in tangible book value per share.”

Mr. Ryan continued, “Our success demonstrates a deep commitment to continuing our evolution from a traditional community bank into a full-service, middle market commercial bank. We are executing with a clear vision for our future success, growing our balance sheet and earnings power through strategic initiatives focused on diversification and profitability. Our goal is to achieve top-quartile performance among our peers in any economic environment. We expect our strong underwriting and diversification strategies will support quality growth in 2025 and beyond. As our new business units continue to scale up, we expect to see even better efficiency and profitability moving forward. Additionally, we are pleased to continue driving returns for shareholders through successful share buybacks and meaningful dividends.”

Income Statement

In the first quarter of 2025, the Bank’s net interest income increased to $32.1 million, growing $1.8 million, or 5.9%, compared to the same period in 2024. The increase was primarily driven by an increase of $2.2 million in interest income which outpaced the $450,000 increase in interest expense in the first quarter of 2025 compared to the same quarter in 2024. Net interest income increased $498,000, or 1.6%, over the linked fourth quarter of 2024. This increase was primarily driven by a decrease of $1.6 million in interest expense on deposits, resulting from lower average rates in the first quarter, partially offset by a $1.1 million decrease in interest income from interest bearing deposits with banks, due to lower average balances and yields.

The Bank’s tax equivalent net interest margin measured 3.65% for the first quarter of 2025, increasing by one basis point from 3.64% for the prior year quarter, and increasing by 11 basis points from 3.54% for the fourth quarter of 2024. The relatively flat margin from the prior year quarter was primarily driven by similar decreases in the average rate on interest earning assets and interest bearing liabilities. The Bank’s net interest margin increased compared to the linked fourth quarter primarily due to declines in average rates on deposits and borrowings outpacing the slight reduction in average rates on earning assets. The Bank’s tax equivalent net interest margin includes the impact of amortization and accretion of premiums and discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions. The net impact of amortization of premiums and accretion of discounts from fair value measurements of assets acquired and liabilities assumed in acquisitions was a $2.8 million increase in net interest income during the first quarter of 2025, compared to $3.1 million for the quarter ended December 31, 2024 and $4.2 million for the first quarter of 2024.

The Bank recorded a credit loss expense totaling $1.5 million during the first quarter of 2025, compared to a credit loss expense totaling $234,000 for the fourth quarter of 2024 and a $698,000 credit loss benefit for the first quarter of 2024. The increased credit loss expense for the first quarter of 2025 is primarily due to the Bank’s loan growth during the quarter. The Bank’s credit loss benefit for the first quarter of 2024 reflected the Bank’s strong and stable asset quality and lack of loan growth during the quarter.

In the first quarter of 2025, the Bank recorded non-interest income totaling $2.0 million, compared to non-interest income measuring $2.0 million during the same period in 2024 and $2.2 million in non-interest income during the fourth quarter of 2024. Non-interest income declined from the linked quarter primarily due to lower loan fee income.

Non-interest expense for the first quarter of 2025 was $20.4 million, an increase of $2.6 million, or 14.5%, compared to $17.8 million for the prior year quarter. Higher non-interest expense was largely due to increases of $1.1 million in salaries and employee benefits primarily due to a larger employee base, $832,000 in other real estate owned (“OREO”) expense due to an $815,000 impairment of an OREO asset recorded during the quarter, and $438,000 in occupancy and equipment primarily due to new branch locations added at the end of 2024.

On a linked quarter basis, non-interest expense increased $1.3 million from $19.1 million for the fourth quarter of 2024. The linked quarter increase primarily reflects increases of $781,000 in OREO expense due to the $815,000 impairment of an OREO asset recorded during the quarter, $606,000 in salaries and employee benefits costs due to year-end salary increases and higher payroll taxes due to bonus payments made in the first quarter of 2025, $202,000 in occupancy and equipment costs due to the new branch locations added at the end of 2024 and higher maintenance and repair costs. These increases were partially offset by a decrease of $425,000 in other professional fees compared to the linked quarter primarily due to lower consulting services and personnel placement fees.

Income tax expense for the three months ended March 31, 2025 was $2.8 million with an effective tax rate of 22.7%, compared to $2.7 million with an effective tax rate of 17.5% for the first quarter of 2024. The effective tax rate for the first quarter of 2025 included the impact of certain discrete items related to stock compensation activity as well as the impact of additional tax credit investments made by the Bank during the quarter. The effective tax rate for the first quarter of 2024 was lower due to certain one-time adjustments primarily related to the finalization of certain tax items related to our acquisition of Malvern Bancorp, Inc. and Malvern Bank, National Association (“Malvern”). Income tax expense for the three months ended December 31, 2024 was $3.9 million with an effective tax rate of 27.2%, which included additional tax related to the Bank’s bank-owned life insurance (“BOLI”) restructuring completed in the second half of 2024. We anticipate our future effective tax rate will be in the range of 23% to 24%.

Balance Sheet

Total assets increased $100.4 million, or 2.7%, from December 31, 2024 to March 31, 2025. Total loans as of March 31, 2025 increased $91.8 million, or 2.9%, from $3.14 billion at December 31, 2024. The Bank’s cash and cash equivalents increased by $16.2 million, or 5.9%, compared to December 31, 2024, as management continued to ensure adequate on-balance sheet liquidity.

The Bank reported total assets of $3.88 billion at March 31, 2025, an increase of $289.4 million, or 8.1%, from $3.59 billion at March 31, 2024. Total loans increased $243.6 million, or 8.1%, to $3.24 billion at March 31, 2025 compared to $2.99 billion at March 31, 2024. The increase primarily reflects strong organic loan growth, particularly in the C&I and owner-occupied commercial real estate portfolios.

Total deposits increased by $63.9 million or 2.1% from $3.06 billion at December 31, 2024 to $3.12 billion at March 31, 2025, due to a combination of in-market and brokered deposits which were utilized to support significant loan growth during the first quarter of 2025. The Bank’s total deposits increased $149.5 million, or 5.0%, from $2.97 billion at March 31, 2024. Organic deposit growth was primarily due to our team’s success in attracting new deposit relationships while also maintaining existing balances amid heightened industry-wide pricing competition.

During the three months ended March 31, 2025, stockholders’ equity increased by $5.8 million, or 1.4%, primarily due to net income, partially offset by dividends and share repurchases.

As of March 31, 2025, the Bank continued to exceed all regulatory capital requirements to be considered well-capitalized, with a Tier 1 Leverage ratio of 9.63%, a Tier 1 Risk-Based capital ratio of 9.59%, a Common Equity Tier 1 Capital ratio of 9.59%, and a Total Risk-Based capital ratio of 11.46%. The tangible stockholders’ equity to tangible assets ratioⁱⁱⁱ measured 9.47% as of March 31, 2025 compared to 9.56% at December 31, 2024. The decline from December 31, 2024, was primarily due to the asset growth during the quarter ended March 31, 2025.

Asset Quality

First Bank’s asset quality metrics remained favorable during the first quarter of 2025. Total nonperforming loans declined from $11.7 million at December 31, 2024 to $11.6 million at March 31, 2025. Total nonperforming assets declined from $17.3 million to $16.4 million during the same period primarily due to the $815,000 impairment of an OREO asset recorded during the quarter.

The Bank recorded net recoveries of $15,000 during the first quarter of 2025 compared to net recoveries of $155,000 in the fourth quarter of 2024 and net charge-offs of $5.3 million in the first quarter of 2024. Net charge-offs for the first quarter of 2024 reflected the charge-off of a $5.5 million purchased credit deteriorated (“PCD”) loan acquired from Malvern, partially offset by $201,000 in net recoveries. The allowance for credit losses on loans as a percentage of total loans measured 1.21% at March 31, 2025, compared to 1.20% at December 31, 2024 and 1.22% at March 31, 2024.

Liquidity and Borrowings

Management believes the Bank’s current liquidity position, coupled with our various contingent funding sources, provides the Bank with a strong liquidity base and a diverse source of funding options. The Bank’s cash and cash equivalents increased by $16.2 million, or 5.9%, compared to December 31, 2024, ensuring adequate on-balance sheet liquidity. Borrowings increased by $34.9 million compared to December 31, 2024, as the Bank utilized Federal Home Loan Bank (“FHLB”) advances to support loan growth, while continuing to maintain adequate available borrowing capacity at the FHLB.

Cash Dividend Declared

On February 21, 2025, the Bank paid $0.06 per share in cash dividends to common stockholders totaling $1.5 million that was declared by the Bank’s Board of Directors on January 21, 2025.

On April 15, 2025, the Bank’s Board of Directors declared a quarterly cash dividend of $0.06 per share to common stockholders of record at the close of business on May 9, 2025, payable on May 23, 2025.

Share Repurchase Program

During the first quarter of 2025 the Bank repurchased 256,454 shares of common stock at an average price of $15.06 per share, under the share repurchase program authorized in October 2024. Through March 31, 2025, 350,000 shares have been repurchased from the current share repurchase plan with a total cost of $5.2 million or $14.74 per share on average. The share repurchase program provides for the repurchase of up to 1.0 million shares of First Bank common stock with an aggregate repurchase amount of up to $16.0 million. The share repurchase program will expire on September 30, 2025.

Conference Call and Earnings Release Supplement

Additional details on the quarterly results and the Bank are included in the attached earnings release supplement. http://ml.globenewswire.com/Resource/Download/b39afd8e-20bb-4429-bcd7-61a0762ab19e

First Bank will host its earnings call on Wednesday, April 23, 2025 at 9:00 AM Eastern Time. The direct dial toll free number for the live call is 1-800-715-9871 and the access code is 3909613. For those unable to participate in the call, a replay will be available by dialing 1-800-770-2030 (access code 3909613) from one hour after the end of the conference call until July 22, 2025. Replay information will also be available on First Bank’s website at www.firstbanknj.com under the “About Us” tab. Click on “Investor Relations” to access the replay of the conference call.

About First Bank

First Bank is a New Jersey state-chartered bank with 26 full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Morristown, Pennington, Randolph, Somerset, Trenton and Williamstown, New Jersey; and Coventry, Devon, Doylestown, Lionville, Malvern, Media, Paoli, Trevose, Warminster and West Chester, Pennsylvania; and Palm Beach, Florida. With $3.88 billion in assets as of March 31, 2025, First Bank offers a full range of deposit and loan products to individuals and businesses throughout the New York City to Philadelphia corridor. First Bank’s common stock is listed on the Nasdaq Global Market under the symbol “FRBA.”

Forward Looking Statements

This press release contains certain forward-looking statements, either express or implied, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding First Bank’s future financial performance, business and growth strategy, projected plans and objectives, and related transactions, integration of acquired businesses, ability to recognize anticipated operational efficiencies, and other projections based on macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about First Bank, any of which may change over time and some of which may be beyond First Bank’s control. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: whether First Bank can: successfully implement its growth strategy, including identifying acquisition targets and consummating suitable acquisitions, integrate acquired entities and realize anticipated efficiencies, sustain its internal growth rate, and provide competitive products and services that appeal to its customers and target markets; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which First Bank operates and in which its loans are concentrated, including the effects of declines in housing market values; the impact of public health emergencies, on First Bank, its operations and its customers and employees; an increase in unemployment levels and slowdowns in economic growth; First Bank’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; changes in market interest rates may increase funding costs and reduce earning asset yields thus reducing margin; the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of First Bank’s investment securities portfolio; the extensive federal and state regulation, supervision and examination governing almost every aspect of First Bank’s operations, including changes in regulations affecting financial institutions and expenses associated with complying with such regulations; uncertainties in tax estimates and valuations, including due to changes in state and federal tax law; First Bank’s ability to comply with applicable capital and liquidity requirements, including First Bank’s ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; and possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies, and similar organizations. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Forward-Looking Statements” and “Risk Factors” in First Bank’s Annual Report on Form 10-K and any updates to those risk factors set forth in First Bank’s proxy statement, subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if First Bank’s underlying assumptions prove to be incorrect, actual results may differ materially from what First Bank anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and First Bank does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All forward-looking statements expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that First Bank or persons acting on First Bank’s behalf may issue.

______________________

This press release contains “non-GAAP” financial measures, which management uses in its analysis of First Bank’s performance. Management believes these non-GAAP financial measures allow for better comparability of period to period operating performance. Additionally, First Bank believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP measures is provided in the accompanying financial tables.

ⁱ Return on average tangible equity is a non-GAAP financial measure and is calculated by dividing net income by average tangible equity (average equity minus average goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release

ⁱⁱ Tangible book value per share is a non-GAAP financial measure and is calculated by dividing common shares outstanding by tangible equity (equity minus goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

ⁱⁱⁱ Tangible stockholders’ equity to tangible assets ratio is a non-GAAP financial measure and is calculated by dividing tangible equity (equity minus goodwill and other intangible assets) by tangible assets (total assets minus goodwill and other intangible assets). For a reconciliation of this non-GAAP financial measure, along with the other non-GAAP financial measures in this press release, to their comparable GAAP measures, see the financial reconciliations at the end of this press release.

FIRST BANK CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands, except for share data, unaudited)

	March 31, 2025		December 31, 2024
Assets
Cash and due from banks	$	32,396	$	18,252
Restricted cash		11,910		14,270
Interest bearing deposits with banks		243,778		239,392
Cash and cash equivalents		288,084		271,914
Interest bearing time deposits with banks		743		743
Investment securities available for sale, at fair value (amortized cost of $90,393 and $84,083, respectively)		85,059		77,413
Equity securities, at fair value		1,860		1,870
Investment securities held to maturity, net of allowance for credit losses of $209 and $206, respectively (fair value of $42,565 and $42,770, respectively)		46,387		47,123
Restricted investment in bank stocks		15,933		14,333
Other investments		13,388		11,612
Loans held for sale		618		–
Loans, net of deferred fees and costs		3,236,039		3,144,266
Less: Allowance for credit losses		(39,223)		(37,773)
Net loans		3,196,816		3,106,493
Premises and equipment, net		21,267		21,351
Other real estate owned, net		4,822		5,637
Accrued interest receivable		14,889		14,267
Bank-owned life insurance		86,258		85,553
Goodwill		44,166		44,166
Other intangible assets, net		8,341		8,827
Deferred income taxes, net		25,178		25,528
Other assets		26,950		43,516
Total assets	$	3,880,759	$	3,780,346

Liabilities and Stockholders’ Equity
Liabilities:
Non-interest bearing deposits	$	535,584	$	519,320
Interest bearing deposits		2,584,210		2,536,576
Total deposits		3,119,794		3,055,896
Borrowings		281,867		246,933
Subordinated debentures		29,981		29,954
Accrued interest payable		4,887		3,820
Other liabilities		29,315		34,587
Total liabilities		3,465,844		3,371,190
Stockholders’ Equity:
Preferred stock, par value $2 per share; 10,000,000 shares authorized; no shares issued and outstanding		–		–
Common stock, par value $5 per share; 40,000,000 shares authorized; 27,576,676 shares issued and 25,045,612 shares outstanding and 27,375,439 shares issued and 25,100,829 shares outstanding, respectively		136,220		135,495
Additional paid-in capital		124,555		124,524
Retained earnings		184,657		176,779
Accumulated other comprehensive loss		(3,938)		(4,925)
Treasury stock, 2,531,064 and 2,274,610 shares, respectively		(26,579)		(22,717)
Total stockholders’ equity		414,915		409,156
Total liabilities and stockholders’ equity	$	3,880,759	$	3,780,346

FIRST BANK CONSOLIDATED STATEMENTS OF INCOME (in thousands, except for share data, unaudited)

	Three Months Ended
	March 31,
	2025		2024
Interest and Dividend Income
Investment securities—taxable	$	1,188	$	1,182
Investment securities—tax-exempt		51		38
Interest bearing deposits with banks, Federal funds sold and other		2,997		3,025
Loans, including fees		51,552		49,319
Total interest and dividend income		55,788		53,564

Interest Expense
Deposits		20,844		20,786
Borrowings		2,412		2,116
Subordinated debentures		440		344
Total interest expense		23,696		23,246
Net interest income		32,092		30,318
Credit loss expense (benefit)		1,544		(698)
Net interest income after credit loss expense		30,548		31,016

Non-Interest Income
Service fees on deposit accounts		356		344
Loan fees		326		102
Income from bank-owned life insurance		793		785
Gains on sale of loans, net		29		229
Gains on recovery of acquired loans		24		118
Other non-interest income		443		386
Total non-interest income		1,971		1,964

Non-Interest Expense
Salaries and employee benefits		11,118		10,038
Occupancy and equipment		2,464		2,026
Legal fees		368		316
Other professional fees		726		756
Regulatory fees		684		602
Directors’ fees		282		242
Data processing		805		806
Marketing and advertising		399		296
Travel and entertainment		236		244
Insurance		214		244
Other real estate owned expense, net		920		88
Other expense		2,168		2,152
Total non-interest expense		20,384		17,810
Income Before Income Taxes		12,135		15,170
Income tax expense		2,754		2,658
Net Income	$	9,381	$	12,512

Basic earnings per common share	$	0.37	$	0.50
Diluted earnings per common share	$	0.37	$	0.50

Basic weighted average common shares outstanding		25,118,062		25,039,949
Diluted weighted average common shares outstanding		25,269,002		25,199,381

FIRST BANK AVERAGE BALANCE SHEETS WITH INTEREST AND AVERAGE RATES (dollars in thousands, unaudited)

	Three Months Ended March 31,
	2025						2024
	Average				Average		Average				Average
	Balance		Interest		Rate ⁽⁵⁾		Balance		Interest		Rate ⁽⁵⁾
Interest earning assets
Investment securities ^{(1) (2)}	$	134,274	$	1,250		3.78%	$	147,147	$	1,228		3.36%
Loans ⁽³⁾		3,170,772		51,552		6.59%		2,979,522		49,319		6.66%
Interest bearing deposits with banks,
Federal funds sold and other		234,032		2,575		4.46%		203,158		2,710		5.37%
Restricted investment in bank stocks		14,137		300		8.61%		10,421		199		7.68%
Other investments		14,054		122		3.52%		11,870		116		3.93%
Total interest earning assets ⁽²⁾		3,567,269		55,799		6.34%		3,352,118		53,572		6.43%
Allowance for credit losses		(38,181)						(37,607)
Non-interest earning assets		261,101						261,237
Total assets	$	3,790,189					$	3,575,748

Interest bearing liabilities
Interest bearing demand deposits	$	644,736	$	4,027		2.53%	$	618,941	$	3,666		2.38%
Money market deposits		1,045,013		8,631		3.35%		1,014,906		9,789		3.88%
Savings deposits		142,502		650		1.85%		162,113		574		1.42%
Time deposits		717,881		7,536		4.26%		671,546		6,757		4.05%
Total interest bearing deposits		2,550,132		20,844		3.31%		2,467,506		20,786		3.39%
Borrowings		234,526		2,412		4.17%		167,141		2,116		5.09%
Subordinated debentures		29,963		440		5.87%		42,470		344		3.24%
Total interest bearing liabilities		2,814,621		23,696		3.41%		2,677,117		23,246		3.49%
Non-interest bearing deposits		521,326						481,503
Other liabilities		40,570						40,586
Stockholders’ equity		413,672						376,542
Total liabilities and stockholders’ equity	$	3,790,189					$	3,575,748
Net interest income/interest rate spread ⁽²⁾				32,103		2.93%				30,326		2.92%
Net interest margin ^{(2) (4)}						3.65%						3.64%
Tax equivalent adjustment ⁽²⁾				(11)						(8)
Net interest income			$	32,092					$	30,318

(1) Average balance of investment securities available for sale is based on amortized cost.

(2) Interest and average rates are presented on a tax equivalent basis using a federal income tax rate of 21%.

(3) Average balances of loans include loans on nonaccrual status.

(4) Net interest income divided by average total interest earning assets.

(5) Annualized.

FIRST BANK QUARTERLY FINANCIAL HIGHLIGHTS (in thousands, except for share and employee data, unaudited)

	As of or For the Quarter Ended
	3/31/2025		12/31/2024		9/30/2024		6/30/2024		3/31/2024
EARNINGS
Net interest income	$	32,092	$	31,594	$	30,094	$	30,540	$	30,318
Credit loss expense (benefit)		1,544		234		1,579		63		(698)
Non-interest income		1,971		2,176		2,479		689		1,964
Non-interest expense		20,384		19,124		18,644		17,953		17,810
Income tax expense		2,754		3,915		4,188		2,140		2,658
Net income		9,381		10,497		8,162		11,073		12,512

PERFORMANCE RATIOS
Return on average assets ⁽¹⁾		1.00%		1.10%		0.88%		1.23%		1.41%
Return on average equity ⁽¹⁾		9.20%		10.27%		8.15%		11.52%		13.36%
Return on average tangible equity ^{(1) (2)}		10.54%		11.82%		9.42%		13.40%		15.64%
Net interest margin ^{(1) (3)}		3.65%		3.54%		3.48%		3.62%		3.64%
Yield on loans ⁽¹⁾		6.59%		6.62%		6.73%		6.81%		6.66%
Total cost of deposits ⁽¹⁾		2.75%		2.89%		3.06%		3.01%		2.83%
Efficiency ratio ⁽²⁾		57.65%		56.98%		58.49%		55.88%		55.56%

SHARE DATA
Common shares outstanding		25,045,612		25,100,829		25,186,920		25,144,983		25,096,449
Basic earnings per share	$	0.37	$	0.42	$	0.32	$	0.44	$	0.50
Diluted earnings per share		0.37		0.41		0.32		0.44		0.50
Book value per share		16.57		16.30		15.96		15.61		15.23
Tangible book value per share ⁽²⁾		14.47		14.19		13.84		13.46		13.06

MARKET DATA
Market value per share	$	14.81	$	14.07	$	15.20	$	12.74	$	13.74
Market value / Tangible book value		102.35%		99.16%		109.83%		94.65%		105.20%
Market capitalization	$	370,926	$	353,169	$	382,841	$	320,347	$	344,825

CAPITAL & LIQUIDITY
Stockholders’ equity / assets		10.69%		10.82%		10.70%		10.86%		10.64%
Tangible stockholders’ equity / tangible assets ⁽²⁾		9.47%		9.56%		9.41%		9.50%		9.27%
Loans / deposits		103.73%		102.89%		101.23%		101.02%		100.75%

ASSET QUALITY
Net charge-offs	$	(15)	$	(155)	$	386	$	175	$	5,293
Net charge-offs (recoveries), excluding PCD loan charge-off ⁽⁴⁾		(15)		(155)		386		175		(201)
Nonperforming loans		11,584		11,677		12,014		14,227		17,054
Nonperforming assets		16,406		17,314		17,651		20,226		23,053
Net charge offs / average loans ⁽¹⁾		0.00%		(0.02%)		0.05%		0.02%		0.72%
Net charge offs (recoveries), excluding PCD loan charge-off / average loans ^{(1) (4)}		(0.00%)		(0.02%)		0.05%		0.02%		(0.03%)
Nonperforming loans / total loans		0.36%		0.37%		0.39%		0.47%		0.57%
Nonperforming assets / total assets		0.42%		0.46%		0.47%		0.56%		0.64%
Allowance for credit losses on loans / total loans		1.21%		1.20%		1.21%		1.21%		1.22%
Allowance for credit losses on loans / nonperforming loans		338.60%		323.48%		311.59%		254.81%		213.42%

OTHER DATA
Total assets	$	3,880,759	$	3,780,346	$	3,757,653	$	3,615,731	$	3,591,398
Total loans		3,236,039		3,144,266		3,087,488		2,998,029		2,992,423
Total deposits		3,119,794		3,055,896		3,050,070		2,967,634		2,970,262
Total stockholders’ equity		414,915		409,156		402,070		392,489		382,254
Number of full-time equivalent employees		315		318		313		294		288

(1) Annualized.

(2) Non-GAAP financial measure that we believe provides management and investors with information that is useful in understanding our financial performance and condition. See the accompanying table, “Non-GAAP Financial Measures,” for calculation and reconciliation.

(3) Tax equivalent using a federal income tax rate of 21%.

(4) Excludes $5.5 million in a PCD loan charge-off in first quarter of 2024, which was reserved for through purchase accounting marks at the time of the Malvern acquisition.

FIRST BANK QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited)

	As of the Quarter Ended
	3/31/2025		12/31/2024		9/30/2024		6/30/2024		3/31/2024
LOAN COMPOSITION
Commercial and industrial	$	651,690	$	576,625	$	546,541	$	530,996	$	508,911
Commercial real estate:
Owner-occupied		694,113		671,357		688,988		647,625		625,643
Investor		1,160,549		1,181,684		1,170,508		1,143,954		1,172,311
Construction and development		200,262		205,096		193,460		190,108		184,816
Multi-family		308,217		287,843		267,861		270,238		279,668
Total commercial real estate		2,363,141		2,345,980		2,320,817		2,251,925		2,262,438
Residential real estate:
Residential mortgage and first lien home equity loans		142,298		142,769		144,081		144,978		154,704
Home equity–second lien loans and revolving lines of credit		52,438		51,020		49,763		46,882		45,869
Total residential real estate		194,736		193,789		193,844		191,860		200,573
Consumer and other		29,760		31,324		29,518		26,321		23,702
Total loans prior to deferred loan fees and costs		3,239,327		3,147,718		3,090,720		3,001,102		2,995,624
Net deferred loan fees and costs		(3,288)		(3,452)		(3,232)		(3,073)		(3,201)
Total loans	$	3,236,039	$	3,144,266	$	3,087,488	$	2,998,029	$	2,992,423

LOAN MIX
Commercial and industrial		20.1%		18.3%		17.7%		17.7%		17.0%
Commercial real estate:
Owner-occupied		21.5%		21.4%		22.3%		22.3%		20.9%
Investor		35.9%		37.6%		37.9%		37.9%		39.2%
Construction and development		6.2%		6.5%		6.3%		6.3%		6.2%
Multi-family		9.5%		9.1%		8.7%		8.7%		9.3%
Total commercial real estate		73.1%		74.6%		75.2%		75.2%		75.6%
Residential real estate:
Residential mortgage and first lien home equity loans		4.4%		4.6%		4.7%		4.7%		5.2%
Home equity–second lien loans and revolving lines of credit		1.6%		1.6%		1.6%		1.6%		1.5%
Total residential real estate		6.0%		6.2%		6.3%		6.3%		6.7%
Consumer and other		0.9%		1.0%		0.9%		0.9%		0.8%
Net deferred loan fees and costs		(0.1%)		(0.1%)		(0.1%)		(0.1%)		(0.1%)
Total loans		100.0%		100.0%		100.0%		100.0%		100.0%

FIRST BANK QUARTERLY FINANCIAL HIGHLIGHTS (dollars in thousands, unaudited)

	As of the Quarter Ended
	3/31/2025		12/31/2024		9/30/2024		6/30/2024		3/31/2024
DEPOSIT COMPOSITION
Non-interest bearing demand deposits	$	535,584	$	519,320	$	519,079	$	499,765	$	470,749
Interest bearing demand deposits		629,974		629,099		597,802		574,515		580,864
Money market and savings deposits		1,197,517		1,198,039		1,235,637		1,199,382		1,219,634
Time deposits		756,719		709,438		697,552		693,972		699,015
Total Deposits	$	3,119,794	$	3,055,896	$	3,050,070	$	2,967,634	$	2,970,262

DEPOSIT MIX
Non-interest bearing demand deposits		17.2%		17.0%		17.0%		16.8%		15.8%
Interest bearing demand deposits		20.2%		20.6%		19.6%		19.4%		19.6%
Money market and savings deposits		38.4%		39.2%		40.5%		40.4%		41.1%
Time deposits		24.2%		23.2%		22.9%		23.4%		23.5%
Total Deposits		100.0%		100.0%		100.0%		100.0%		100.0%

FIRST BANK NON-GAAP FINANCIAL MEASURES (in thousands, except for share data, unaudited)

	As of or For the Quarter Ended
	3/31/2025		12/31/2024		9/30/2024		6/30/2024		3/31/2024
Return on Average Tangible Equity
Net income (numerator)	$	9,381	$	10,497	$	8,162	$	11,073	$	12,512

Average stockholders’ equity	$	413,672	$	406,579	$	398,535	$	386,644	$	376,542
Less: Average Goodwill and other intangible assets, net		52,805		53,278		53,823		54,347		54,790
Average Tangible stockholders’ equity (denominator)	$	360,867	$	353,301	$	344,712	$	332,297	$	321,752

Return on average tangible equity ⁽¹⁾		10.54%		11.82%		9.42%		13.40%		15.64%

Tangible Book Value Per Share
Stockholders’ equity	$	414,915	$	409,156	$	402,070	$	392,489	$	382,254
Less: Goodwill and other intangible assets, net		52,507		52,993		53,484		54,026		54,483
Tangible stockholders’ equity (numerator)	$	362,408	$	356,163	$	348,586	$	338,463	$	327,771

Common shares outstanding (denominator)		25,045,612		25,100,829		25,186,920		25,144,983		25,096,449

Tangible book value per share	$	14.47	$	14.19	$	13.84	$	13.46	$	13.06

Tangible Equity / Tangible Assets
Stockholders’ equity	$	414,915	$	409,156	$	402,070	$	392,489	$	382,254
Less: Goodwill and other intangible assets, net		52,507		52,993		53,484		54,026		54,483
Tangible stockholders’ equity (numerator)	$	362,408	$	356,163	$	348,586	$	338,463	$	327,771

Total assets	$	3,880,759	$	3,780,346	$	3,757,653	$	3,615,731	$	3,591,398
Less: Goodwill and other intangible assets, net		52,507		52,993		53,484		54,026		54,483
Tangible total assets (denominator)	$	3,828,252	$	3,727,353	$	3,704,169	$	3,561,705	$	3,536,915

Tangible stockholders’ equity / tangible assets		9.47%		9.56%		9.41%		9.50%		9.27%

Efficiency Ratio
Non-interest expense	$	20,384	$	19,124	$	18,644	$	17,953	$	17,810
Less: Other real estate owned write-down		815		–		362		–		–
Adjusted non-interest expense (numerator)	$	19,569	$	19,124	$	18,282	$	17,953	$	17,810

Net interest income	$	32,092	$	31,594	$	30,094	$	30,540	$	30,318
Non-interest income		1,971		2,176		2,479		689		1,964
Total revenue		34,063		33,770		32,573		31,229		32,282
Add: Losses on sale of investment securities, net		–		–		555		–		–
(Subtract) Add: (Gains) losses on sale of loans, net		(29)		(38)		(135)		900		(229)
Less: Bank Owned Life Insurance Incentive		(88)		(168)		(1,116)		–		–
Adjusted total revenue (denominator)	$	33,946	$	33,564	$	31,877	$	32,129	$	32,053

Efficiency ratio		57.65%		56.98%		57.35%		55.88%		55.56%

(1) Annualized.

The MIL Network –

April 23, 2025

MIL-OSI: First Community Bankshares, Inc. Announces First Quarter 2025 Results and Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

BLUEFIELD, Va., April 22, 2025 (GLOBE NEWSWIRE) — First Community Bankshares, Inc. (NASDAQ: FCBC) (www.firstcommunitybank.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter ended March 31, 2025. The Company reported net income of $11.82 million, or $0.64 per diluted common share, for the quarter ended March 31, 2025.

The Company also declared a quarterly cash dividend to common shareholders of thirty-one cents, $0.31 per common share. The quarterly dividend is payable to common shareholders of record on May 9, 2025, and is expected to be paid on May 23, 2025. This year marks the 40th consecutive year of regular dividends to common shareholders and the prior year was the 15th consecutive year of regular dividend increases.

First Quarter 2025 Highlights

Income Statement

Net interest margin for the first quarter of 2025 was 4.34%. The yield on earning assets decreased 5 basis points from the same period of 2024 and is primarily attributable to a decrease in interest income of $867 thousand. Interest income for loans and securities available-for-sale decreased $2.74 million and $470 thousand, respectively. The decreases were primarily due to decreases in the average balance for loans and securities available-for-sale of $154.04 million and $89.74 million, respectively. Additionally, the yield on loans decreased 8 basis points. The decrease in interest income on loans and securities available-for-sale was somewhat offset by an increase in interest income on interest-bearing deposits with banks. Interest expense on interest-bearing liabilities increased $472 thousand and is primarily attributable to an increase in yield of 11 basis points.
Noninterest income increased approximately $970 thousand, or 10.48%, when compared to the same quarter of 2024. The increase is primarily attributable to an increase in service charges on deposits of $526 thousand, or 15.89%, and an increase in other operating income of $491 thousand, or 35.07%. Noninterest expense increased $1.56 million, or 6.66% when compared to the same period of 2024. The increase is primarily attributable to an increase in salaries and benefits of $754 thousand, or 5.99%.
Annualized return on average assets (“ROA”) was 1.49% for the first quarter of 2025 compared to 1.60% for the same period of 2024. Annualized return on average common equity (“ROE”) was 9.49% for the first quarter of 2025 compared to 10.18% for the same period of 2024.

Balance Sheet and Asset Quality

Consolidated assets totaled $3.23 billion at March 31, 2025.
Loans decreased $33.39 million, or 1.38%, from December 31, 2024. Securities available for sale decreased $40.19 million, or 23.66%, from December 31, 2024. Deposits decreased $6.77 million, or 0.25%, which was largely a function of declining higher-rate time deposits. Stockholder equity decreased $29.98 million, or 5.69% due to the payment of a special cash dividend in the first quarter of 2025. The net effect of these balance sheet changes resulted in an increase in cash and cash equivalents of $37.23 million, or 9.86%.
The Company did not repurchase any common shares during the first quarter of 2025.
Non-performing loans to total loans increased to 0.85% when compared with the same quarter of 2024. The Company experienced net charge-offs for the first quarter of 2025 of $1.39 million, or 0.24% of annualized average loans, compared to net charge-offs of $1.74 million, or 0.27%, of annualized average loans for the same period in 2024.
The allowance for credit losses to total loans was 1.42% at March 31, 2025, compared to 1.44% at December 31, 2024 and 1.41% at March 31, 2024.
Book value per share at March 31, 2025, was $ 27.09, a decrease of $1.64 from year-end 2024. The decrease is primarily attributable to the payment of the special cash dividend in the first quarter of 2025 of $2.07 per share totaling approximately $37.93 million.

Non-GAAP Financial Measures

In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this news release include “tangible book value per common share,” “return on average tangible common equity,” “adjusted earnings,” “adjusted diluted earnings per share,” “adjusted return on average assets,” “adjusted return on average common equity,” “adjusted return on average tangible common equity,” and certain financial measures presented on a fully taxable equivalent (“FTE”) basis. FTE basis is calculated using the federal statutory income tax rate of 21%. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as a reconciliation to that comparable GAAP financial measure can be found in the attached tables to this press release. While the Company believes certain non-GAAP financial measures enhance the understanding of its business and performance, they are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions.

About First Community Bankshares, Inc.

First Community Bankshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 53 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of March 31, 2025. First Community Bank offers wealth management and investment advice and services through its Trust Division and through its wholly owned subsidiary, First Community Wealth Management, which collectively managed and administered $1.62 billion in combined assets as of March 31, 2025. The Company reported consolidated assets of $3.23 billion as of March 31, 2025. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. Additional investor information is available on the Company’s website at www.firstcommunitybank.com.

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; changes in banking laws and regulations; the degree of competition by traditional and non-traditional competitors; the impact of natural disasters, extreme weather events, military conflict , terrorism or other geopolitical events; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
(Amounts in thousands, except share and per share data)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Interest income
Interest and fees on loans	$	30,669		$	31,637		$	32,120		$	32,696		$	33,418
Interest on securities		1,238			1,447			1,070			1,211			1,698
Interest on deposits in banks		3,262			3,348			3,702			2,882			913
Total interest income		35,169			36,432			36,892			36,789			36,029
Interest expense
Interest on deposits		4,871			5,099			5,298			4,877			4,365
Interest on borrowings		–			–			–			–			35
Total interest expense		4,871			5,099			5,298			4,877			4,400
Net interest income		30,298			31,333			31,594			31,912			31,629
Provision for credit losses		321			1,082			1,360			144			1,011
Net interest income after provision		29,977			30,251			30,234			31,768			30,618
Noninterest income		10,229			10,337			10,452			9,342			9,259
Noninterest expense		24,944			24,107			24,177			24,897			23,386
Income before income taxes		15,262			16,481			16,509			16,213			16,491
Income tax expense		3,444			3,441			3,476			3,527			3,646
Net income	$	11,818		$	13,040		$	13,033		$	12,686		$	12,845


Earnings per common share
Basic	$	0.64		$	0.71		$	0.71		$	0.69		$	0.70
Diluted	$	0.64		$	0.71		$	0.71		$	0.71		$	0.71
Cash dividends per common share
Regular		0.31			0.31			0.31			0.29			0.29
Special cash dividend		2.07			–			–			–			–
Weighted average shares outstanding
Basic		18,324,760			18,299,612			18,279,612			18,343,958			18,476,128
Diluted		18,451,321			18,418,441			18,371,907			18,409,876			18,545,910
Performance ratios
Return on average assets		1.49	%		1.60	%		1.60	%		1.58	%		1.60	%
Return on average common equity		9.49	%		9.89	%		10.04	%		10.02	%		10.18	%
Return on average tangible common equity(1)		13.79	%		14.12	%		14.46	%		14.54	%		14.82	%

_____________

(1	)	A non-GAAP financial measure defined as net income divided by average stockholders’ equity less average goodwill and other intangible assets.

CONDENSED CONSOLIDATED QUARTERLY NONINTEREST INCOME AND EXPENSE (Unaudited)

	Three Months Ended
	March 31, 2025		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024
(Amounts in thousands)	March 31, 2025		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024
Noninterest income
Wealth management	$	1,162	$	1,251	$	1,071	$	1,064	$	1,099
Service charges on deposits		3,836		3,613		3,661		3,428		3,310
Other service charges and fees		3,340		3,575		3,697		3,670		3,450
Other operating income		1,891		1,898		2,023		1,180		1,400
Total noninterest income	$	10,229	$	10,337	$	10,452	$	9,342	$	9,259
Noninterest expense
Salaries and employee benefits	$	13,335	$	13,501	$	13,129	$	12,491	$	12,581
Occupancy expense		1,576		1,329		1,270		1,309		1,378
Furniture and equipment expense		1,575		1,562		1,574		1,687		1,545
Service fees		2,484		2,305		2,461		2,427		2,449
Advertising and public relations		1,055		1,165		967		933		796
Professional fees		372		295		221		330		372
Amortization of intangibles		524		535		536		530		530
FDIC premiums and assessments		362		365		365		364		369
Litigation expense		–		–		–		1,800		–
Other operating expense		3,661		3,050		3,654		3,026		3,366
Total noninterest expense	$	24,944	$	24,107	$	24,177	$	24,897	$	23,386

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EARNINGS (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
(Amounts in thousands, except per share data)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Adjusted Net Income for diluted earnings per share	$	11,818		$	13,040		$	13,033		$	12,686		$	12,845
Non-GAAP adjustments:
Loss (gain) on sale of securities		–			–			–			–			–
Merger expense		–			–			–			–			–
Day 2 provision for allowance for credit losses – Surrey		–			–			–			–			–
Litigation expense		–			–			–			1,800			–
Other items(1)		–			–			(825	)		–			–
Total adjustments		–			–			(825	)		1,800			–
Tax effect		–			–			(198	)		432			–
Adjusted earnings, non-GAAP	$	11,818		$	13,040		$	12,406		$	14,054		$	12,845

Adjusted diluted earnings per common share, non-GAAP	$	0.64		$	0.71		$	0.68		$	0.76		$	0.69
Performance ratios, non-GAAP
Adjusted return on average assets		1.49	%		1.60	%		1.53	%		1.75	%		1.60	%
Adjusted return on average common equity		9.49	%		9.89	%		9.56	%		11.10	%		10.18	%
Adjusted return on average tangible common equity (2)		13.79	%		14.12	%		13.77	%		16.11	%		14.82	%

_____________

(1	)	Includes other non-recurring income and expense items.
(2	)	A non-GAAP financial measure defined as adjusted earnings divided by average stockholders’ equity less average goodwill and other intangible assets.

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

	Three Months Ended March 31,
	2025							2024
	Average				Average Yield/			Average				Average Yield/
(Amounts in thousands)	Balance		Interest(1)		Rate(1)			Balance		Interest(1)		Rate(1)
Assets
Earning assets
Loans(2)(3)	$	2,395,068	$	30,757		5.21	%	$	2,549,107	$	33,500		5.29	%
Securities available for sale		149,266		1,261		3.43	%		239,010		1,731		2.91	%
Interest-bearing deposits		295,939		3,262		4.47	%		66,483		916		5.54	%
Total earning assets		2,840,273		35,280		5.04	%		2,854,600		36,147		5.09	%
Other assets		373,791							373,614
Total assets	$	3,214,064						$	3,228,214

Liabilities and stockholders’ equity
Interest-bearing deposits
Demand deposits	$	658,651	$	180		0.11	%	$	665,875	$	162		0.10	%
Savings deposits		891,148		3,311		1.51	%		866,084		3,412		1.58	%
Time deposits		238,254		1,380		2.35	%		249,974		790		1.27	%
Total interest-bearing deposits		1,788,053		4,871		1.10	%		1,781,933		4,364		0.98	%
Borrowings
Federal funds purchased		–		–		–			2,527		35		5.52	%
Retail repurchase agreements		1,071		–		0.06	%		1,127		–		0.05	%
Total borrowings		1,071		–		0.06	%		3,654		35		3.85	%
Total interest-bearing liabilities		1,789,124		4,871		1.10	%		1,785,587		4,399		0.99	%
Noninterest-bearing demand deposits		859,988							886,947
Other liabilities		60,167							48,298
Total liabilities		2,709,279							2,720,832
Stockholders’ equity		504,785							507,382
Total liabilities and stockholders’ equity	$	3,214,064						$	3,228,214
Net interest income, FTE(1)			$	30,409						$	31,748
Net interest rate spread						3.94	%						4.10	%
Net interest margin, FTE(1)						4.34	%						4.47	%

_____________

(1	)	Interest income and average yield/rate are presented on a FTE, non-GAAP, basis using the federal statutory income tax rate of 21%.
(2	)	Nonaccrual loans are included in the average balance; however, no related interest income is recorded during the period of nonaccrual.
(3	)	Interest on loans includes non-cash and accelerated purchase accounting accretion of $556 thousand and $781 thousand for the three months ended March 31, 2025 and 2024, respectively.

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
(Amounts in thousands, except per share data)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Assets
Cash and cash equivalents	$	414,682		$	377,454		$	315,338		$	329,877		$	248,905
Debt securities available for sale, at fair value		129,659			169,849			166,669			129,686			166,247
Loans held for investment, net of unearned income		2,382,699			2,416,089			2,444,113			2,473,268			2,519,833
Allowance for credit losses		(33,784	)		(34,825	)		(35,118	)		(34,885	)		(35,461	)
Loans held for investment, net		2,348,915			2,381,264			2,408,995			2,438,383			2,484,372
Premises and equipment, net		48,780			48,735			49,654			50,528			51,333
Other real estate owned		298			521			346			100			374
Interest receivable		9,306			9,207			9,883			9,984			10,719
Goodwill		143,946			143,946			143,946			143,946			143,946
Other intangible assets		12,490			13,014			13,550			14,085			14,615
Other assets		117,697			117,226			115,980			116,230			115,470
Total assets	$	3,225,773		$	3,261,216		$	3,224,361		$	3,232,819		$	3,235,981

Liabilities
Deposits
Noninterest-bearing	$	893,794		$	883,499		$	869,723		$	889,462		$	902,396
Interest-bearing		1,790,683			1,807,748			1,789,530			1,787,810			1,779,819
Total deposits		2,684,477			2,691,247			2,659,253			2,677,272			2,682,215
Securities sold under agreements to repurchase		908			906			954			894			1,006
Interest, taxes, and other liabilities		43,971			42,671			43,460			45,769			45,816
Total liabilities		2,729,356			2,734,824			2,703,667			2,723,935			2,729,037

Stockholders’ equity
Common stock		18,327			18,322			18,291			18,270			18,413
Additional paid-in capital		169,867			169,752			168,691			168,272			173,041
Retained earnings		317,728			349,489			342,121			334,756			327,389
Accumulated other comprehensive loss		(9,505	)		(11,171	)		(8,409	)		(12,414	)		(11,899	)
Total stockholders’ equity		496,417			526,392			520,694			508,884			506,944
Total liabilities and stockholders’ equity	$	3,225,773		$	3,261,216		$	3,224,361		$	3,232,819		$	3,235,981

Shares outstanding at period-end		18,326,657			18,321,795			18,290,938			18,270,273			18,413,088
Book value per common share	$	27.09		$	28.73		$	28.47		$	27.85		$	27.53
Tangible book value per common share(1)		18.55			20.16			19.86			19.20			18.92

_____________

(1	)	A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangible assets, divided by shares outstanding.

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
(Amounts in thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Allowance for Credit Losses
Balance at beginning of period:
Allowance for credit losses – loans	$	34,825		$	35,118		$	34,885		$	35,461		$	36,189
Allowance for credit losses – loan commitments		341			441			441			746			746
Total allowance for credit losses beginning of period		35,166			35,559			35,326			36,207			36,935
Provision for credit losses:
Provision for credit losses – loans		350			1,182			1,360			449			1,011
(Recovery of) provision for credit losses – loan commitments		(29	)		(100	)		–			(305	)		–
Total provision for credit losses – loans and loan commitments		321			1,082			1,360			144			1,011
Charge-offs		(1,998	)		(2,005	)		(1,799	)		(1,599	)		(2,448	)
Recoveries		607			530			672			574			709
Net (charge-offs) recoveries		(1,391	)		(1,475	)		(1,127	)		(1,025	)		(1,739	)
Balance at end of period:
Allowance for credit losses – loans		33,784			34,825			35,118			34,885			35,461
Allowance for credit losses – loan commitments		312			341			441			441			746
Ending balance	$	34,096		$	35,166		$	35,559		$	35,326		$	36,207

Nonperforming Assets
Nonaccrual loans	$	19,974		$	19,869		$	19,754		$	19,815		$	19,617
Accruing loans past due 90 days or more		117			149			176			19			30
Modified loans past due 90 days or more		125			135			–			–			–
Total nonperforming loans		20,216			20,153			19,930			19,834			19,647
OREO		298			521			346			100			374
Total nonperforming assets	$	20,514		$	20,674		$	20,276		$	19,934		$	20,021


Additional Information
Total modified loans	$	2,124		$	2,260		$	2,320		$	2,290		$	2,177

Asset Quality Ratios
Nonperforming loans to total loans		0.85	%		0.83	%		0.82	%		0.80	%		0.78	%
Nonperforming assets to total assets		0.64	%		0.63	%		0.63	%		0.62	%		0.62	%
Allowance for credit losses to nonperforming loans		167.12	%		172.80	%		176.21	%		175.88	%		180.49	%
Allowance for credit losses to total loans		1.42	%		1.44	%		1.44	%		1.41	%		1.41	%
Annualized net charge-offs (recoveries) to average loans		0.24	%		0.24	%		0.18	%		0.16	%		0.27	%

FOR MORE INFORMATION, CONTACT:

David D. Brown

(276) 326-9000

The MIL Network –

April 23, 2025

MIL-OSI: Orrstown Financial Services, Inc. Reports First Quarter 2025 Results

Source: GlobeNewswire (MIL-OSI)

Net income of $18.1 million, or $0.93 per diluted share, for the three months ended March 31, 2025 compared to net income of $13.7 million, or $0.71 per diluted share, for the three months ended December 31, 2024; the first quarter of 2025 included $1.6 million in expenses related to the merger compared to $3.9 million in expenses related to the merger and $0.5 million for a legal settlement for the fourth quarter of 2024;
Excluding the impact of the non-recurring charges referenced above, net of taxes, net income and diluted earnings per share were $19.3 million⁽¹⁾ and $1.00⁽¹⁾, respectively, for the first quarter of 2025 compared to $16.7 million⁽¹⁾ and $0.87⁽¹⁾, respectively, for the fourth quarter of 2024;
Net interest margin, on a tax equivalent basis, was 4.00% in the first quarter of 2025 compared to 4.05% in the fourth quarter of 2024; the net accretion impact of purchase accounting marks was $6.9 million of net interest income, which represents 51 basis points of net interest margin for the first quarter of 2025 compared to $7.2 million of net interest income, which represents 52 basis points of net interest margin for the fourth quarter of 2024;
Return on average assets was 1.35% and return on average equity was 13.98% for the three months ended March 31, 2025, compared to 1.00% and 10.54% for the return on average assets and return on average equity, respectively, for the three months ended December 31, 2024;
Excluding the impact of non-recurring charges referenced above, net of taxes, adjusted return on average assets was 1.45%⁽¹⁾ and adjusted return on average equity was 14.97%⁽¹⁾ for the three months ended March 31, 2025 compared to 1.22% and 12.86%, respectively, for the three months ended December 31, 2024;
Commercial loans declined by $49.7 million, or 2%, from December 31, 2024 to March 31, 2025 due primarily to strategic actions to reduce risk in the portfolio in an uncertain economic environment, including reducing commercial real estate (“CRE”) loan concentrations;
Noninterest expense decreased by $4.7 million from $42.9 million for the three months ended December 31, 2024 to $38.2 million for the three months ended March 31, 2025; salaries and benefits expense declined by $2.0 million from the fourth quarter of 2024 to the first quarter of 2025; merger-related expenses decreased by $2.3 million;
Recovery of $0.6 million was recorded for the provision for credit losses for the three months ended March 31, 2025 compared to expense of $2.1 million for the three months ended December 31, 2024; the decrease in loans contributed to the negative provision for credit losses during the first quarter of 2025; during the fourth quarter of 2024, the provision was driven by charge-offs of $3.0 million;
Total risk-based capital ratio was 13.1% at March 31, 2025 compared to 12.4% at December 31, 2024; the Tier 1 leverage ratio increased to 8.6% at March 31, 2025 compared to 8.3% at December 31, 2024; all capital ratios applicable to the Company were above relevant regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines;
Tangible common equity increased to 7.9% at March 31, 2025 compared to 7.5% at December 31, 2024;
Tangible book value per common share⁽¹⁾ increased to $21.99 per share at March 31, 2025 compared to $21.19 per share at December 31, 2024;
The Board of Directors declared a cash dividend of $0.26 per common share, payable May 13, 2025, to shareholders of record as of May 6, 2025.

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

HARRISBURG, Pa., April 22, 2025 (GLOBE NEWSWIRE) — Orrstown Financial Services, Inc. (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended March 31, 2025. Net income totaled $18.1 million for the three months ended March 31, 2025, compared to net income of $13.7 million for the three months ended December 31, 2024 and net income of $8.5 million for the three months ended March 31, 2024. Diluted earnings per share was $0.93 for the three months ended March 31, 2025, compared to diluted earnings per share of $0.71 for the three months ended December 31, 2024 and diluted earnings per share of $0.81 for the three months ended March 31, 2024. For the first quarter of 2025, excluding the impact of merger-related expenses, net of taxes, net income and diluted earnings per share were $19.3 million⁽¹⁾ and $1.00⁽¹⁾, respectively. For the fourth quarter of 2024, excluding the impact of merger-related expenses and other non-recurring charges, net of taxes, net income and diluted earnings per share were $16.7 million⁽¹⁾ and $0.87⁽¹⁾, respectively. For the first quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $9.2 million⁽¹⁾ and $0.88⁽¹⁾, respectively.

“While operating results continued to be impacted by merger-related expenses, core earnings were solid and net interest margin remained strong,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “We do not believe that merger-related expenses will be material going forward and expect operating results to normalize beginning later in the second quarter. A significant amount of our focus has been on completing a system conversion and creating a strong foundation for growth. The deliberate steps we have taken in the last few quarters to protect credit quality, build liquidity and enhance our capital ratios after the merger were intended to position the Company for growth, including the ability to accelerate commercial lending for strong credits and take advantage of strategic opportunities as they arise. We remain optimistic about the future, both in the short and long term.”

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment decreased by $55.2 million and totaled $3.9 billion at both March 31, 2025 and December 31, 2024. The decrease from the fourth quarter of 2024 was primarily due to strategic actions to reduce risk in the portfolio, including reducing CRE loan concentrations.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $25.8 million to $855.5 million at March 31, 2025 from $829.7 million at December 31, 2024. During the first quarter of 2025, the Bank purchased $39.6 million of investment securities and net unrealized gains were $3.8 million. These increases were partially offset by paydowns of $18.4 million. The overall duration of the Company’s investment securities portfolio was 4.3 years at March 31, 2025 compared to 4.1 years at December 31, 2024. See Appendix B for a summary of the Bank’s investment securities at March 31, 2025, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the first quarter of 2025, deposits increased by $10.6 million and totaled $4.6 billion at both March 31, 2025 and December 31, 2024. Interest-bearing demand deposits, non-interest bearing demand deposits and savings deposits increased by $52.5 million, $38.0 million and $4.1 million, respectively, from December 31, 2024 to March 31, 2025. These increases were partially offset by decreases in time deposits of $47.5 million and money market deposits of $36.5 million during the first quarter of 2025. The Bank has experienced some reductions in higher yielding promotional balances, but has been successful in retaining or replacing those deposits through demand deposit accounts. The Bank’s loan-to-deposit ratio decreased slightly to 84% at March 31, 2025 from 85% at December 31, 2024.

Borrowings

The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $100.3 million at March 31, 2025 compared to $115.4 million at December 31, 2024 due to the maturity of a $15 million FHLB advance during the first quarter of 2025. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed in a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.8 billion at March 31, 2025.

Income Statement

Net Interest Income and Margin

Net interest income was $48.8 million for the three months ended March 31, 2025 compared to $50.6 million for the three months ended December 31, 2024. The net interest margin, on a tax equivalent basis, decreased to 4.00% in the first quarter of 2025 from 4.05% in the fourth quarter of 2024, which was impacted by the Federal Funds rate cuts in the fourth quarter of 2024. Overall, the yield on loans declined by 23 basis points and the cost of deposits declined by 15 basis points from the fourth quarter of 2024 to the first quarter of 2025.

The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $6.9 million, which represented 51 basis points of net interest margin during the first quarter of 2025. During the fourth quarter of 2024, the net accretion impact of purchase accounting marks was $7.2 million, which represented 52 basis points of net interest margin. Funding costs continue to decline as market rates have been reduced.

Interest income on loans, on a tax equivalent basis, decreased by $4.7 million to $63.4 million for the three months ended March 31, 2025 compared to $68.1 million for the three months ended December 31, 2024. Average loans decreased by $51.6 million during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. There were also two fewer days in the first quarter of 2025 compared to the fourth quarter of 2024. The accretion of purchase accounting marks on loans totaled $6.6 million during the first quarter of 2025 compared to $7.6 million during the fourth quarter of 2024. This decrease reduced net interest margin by six basis points during the first quarter of 2025.

Interest income on investment securities, on a tax equivalent basis, was $10.1 million for the first quarter of 2025 compared to $9.9 million in the fourth quarter of 2024. Average investment securities increased by $15.7 million during the three months ended March 31, 2025 compared to the three months ended December 31, 2024 primarily due to the aforementioned purchases.

Interest expense, on a tax equivalent basis, decreased by $2.6 million to $26.8 million for the three months ended March 31, 2025 compared to $29.4 million for the three months ended December 31, 2024. Average interest-bearing deposits decreased by $77.1 million during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The cost of interest-bearing deposits declined by 16 basis points from the fourth quarter of 2024 to the first quarter of 2025. In addition, interest expense includes $0.6 million and $0.9 million of amortization of purchase accounting marks for the three months ended March 31, 2025 and December 31, 2024, respectively.

Provision for Credit Losses

The allowance for credit losses (“ACL”) on loans decreased to $47.8 million at March 31, 2025 from $48.7 million at December 31, 2024. The ACL to total loans was 1.23% at March 31, 2025 compared to 1.24% at December 31, 2024. The Company recorded a recovery in the provision for credit losses on loans of $0.6 million for the three months ended March 31, 2025 compared to provision expense of $2.1 million for the three months ended December 31, 2024. Net charge-offs were $0.3 million for the three months ended March 31, 2025 compared to $3.0 million for the three months ended December 31, 2024. During the fourth quarter of 2024, the Bank sold $6.0 million of loans, most of which were C&I loans, which resulted in a charge-off totaling $0.6 million. There was a corresponding $0.6 million of purchase accounting accretion associated with these loans during the fourth quarter of 2024.

Classified loans decreased by $12.4 million to $76.2 million at March 31, 2025 from $88.6 million at December 31, 2024 primarily due to repayments. Non-accrual loans decreased by $1.4 million to $22.7 million at March 31, 2025 from $24.1 million at December 31, 2024. Nonaccrual loans to total loans decreased to 0.59% at March 31, 2025 compared to 0.61% at December 31, 2024. Management believes the ACL to be adequate based on current asset quality metrics and economic forecasts. Substantial efforts have been made in the last few quarters to reduce risk in the loan portfolio and properly position the Bank for future growth

Noninterest Income

Noninterest income increased by $0.4 million to $11.6 million in the three months ended December 31, 2024 from $11.2 million in the three months ended December 31, 2024.

Wealth management income increased by $0.5 million to $5.4 million for the three months ended March 31, 2025 compared to $4.9 million for the three months ended December 31, 2024. While current market conditions are expected to negatively impact wealth management fees in the near term, the team continues to focus on alternative revenue sources and seeks to continuously grow the business.

Income from service charges was $2.4 million for the three months ended March 31, 2025 compared to $2.1 million for the three months ended December 31, 2024. There were reduced service charges in the fourth quarter due to fee waivers provided to clients in the post-conversion period from November through the end of the year.

Income from mortgage banking activities decreased from $0.5 million in the three months ended December 31, 2024 to $0.3 million in the three months ended March 31, 2025. This decrease was primarily due to a reduction in the fair value of mortgage servicing rights, which was driven by interest rate movements in the first quarter of 2025.

Noninterest Expenses

Noninterest expenses decreased by $4.7 million to $38.2 million in the three months ended March 31, 2025 from $42.9 million in the three months ended December 31, 2024.

For the three months ended March 31, 2025, merger-related expenses totaled $1.6 million, a decrease of $2.3 million, compared to $3.9 million for the three months ended December 31, 2024. The merger costs incurred during the first quarter of 2025 included software conversion costs and professional fees associated with the conversion and the external audit. While the Company expects to incur some residual merger-related expenses in the second quarter of 2025, they are not expected to be significant.

Salaries and benefits expense decreased by $2.0 million to $20.4 million for the three months ended March 31, 2025 compared to $22.4 million for the three months ended December 31, 2024. The decrease during the first quarter of 2025 is reflective of the continued synergies being achieved as a result of the merger. The generated savings are being partially offset by investments in talent designed to prepare the Company for additional growth and further enhance operational efficiency. In addition, salaries and benefits expense is typically elevated during the first quarter of the year due to employee benefit costs, including social security and unemployment taxes.

Professional services expense increased by $0.2 million from the three months ended December 31, 2024 to the three months ended March 31, 2025. The Company continued to utilize an elevated level of third-party assistance to enhance daily functions and operational processes throughout the organization. It is anticipated that the reliance on these services will decline in the second quarter of 2025.

Taxes other than income increased by $1.3 million in the three months ended March 31, 2025 compared to the three months ended December 31, 2024. This increase reflects an increase in the estimated state shares tax expense and the impact of certain tax credits recognized during the fourth quarter of 2024.

Income Taxes

The Company’s effective tax rate was 20.7% for the first quarter of 2025 compared to 20.1% for the fourth quarter of 2024. The Company’s effective tax rate for the three months ended March 31, 2025 is less than the 21% federal statutory rate primarily due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits partially offset by the disallowed portion of interest expense against earnings in association with the Bank’s tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the impact of nondeductible merger-related costs. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

Capital

Shareholders’ equity totaled $532.9 million at March 31, 2025 compared to $516.7 million at December 31, 2024. The increase is due to net income of $18.1 million and other comprehensive income of $4.7 million, primarily due to an increase in unrealized gains in the investment portfolio, partially offset by dividend payments of $5.0 million and share-based compensation activity of $1.6 million.

Tangible book value per share⁽¹⁾ increased to $21.99 per share at March 31, 2025 from $21.19 per share at December 31, 2024.

The Company’s tangible common equity ratio was 7.9% at March 31, 2025 compared to 7.5% at December 31, 2024. The Company’s total risk-based capital ratio was 13.1% at March 31, 2025 compared to 12.4% at December 31, 2024 driven by earnings and the effect of the decrease in loans on risk weighted assets. The Company’s Tier 1 leverage ratio increased to 8.6% at March 31, 2025 compared to 8.3% at December 31, 2024 driven by earnings during the first quarter of 2025.

At March 31, 2025, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

⁽¹⁾ Non-GAAP measure. See Appendix A for additional information.

Investor Relations Contact:

Neelesh Kalani

Executive Vice President, Chief Financial Officer

Phone (717) 510-7097

FINANCIAL HIGHLIGHTS (Unaudited)


	Three Months Ended
	March 31,			March 31,
(In thousands)		2025			2024

Profitability for the period:
Net interest income	$	48,761		$	26,881
(Recovery of) Provision for credit losses		(554	)		298
Noninterest income		11,624			6,630
Noninterest expenses		38,176			22,469
Income before income tax expense		22,763			10,744
Income tax expense		4,712			2,213
Net income available to common shareholders	$	18,051		$	8,531

Financial ratios:
Return on average assets ⁽¹⁾		1.35	%		1.11	%
Return on average assets, adjusted ^{(1) (2) (3)}		1.45	%		1.19	%
Return on average equity ⁽¹⁾		13.98	%		12.79	%
Return on average equity, adjusted ^{(1) (2) (3)}		14.97	%		13.79	%
Net interest margin ⁽¹⁾		4.00	%		3.77	%
Efficiency ratio		63.2	%		67.0	%
Efficiency ratio, adjusted ^{(2) (3)}		60.5	%		65.0	%
Income per common share:
Basic	$	0.94		$	0.82
Basic, adjusted ^{(2) (3)}	$	1.01		$	0.89
Diluted	$	0.93		$	0.81
Diluted, adjusted ^{(2) (3)}	$	1.00		$	0.88

Average equity to average assets		9.65	%		8.66	%

⁽¹⁾ Annualized for the three months ended March 31, 2025 and 2024.
⁽²⁾ Ratio has been adjusted for the non-recurring charges for all periods presented.
⁽³⁾ Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
	March 31,			December 31,
(Dollars in thousands, except per share amounts)		2025			2024
At period-end:
Total assets	$	5,441,586		$	5,441,589
Loans, net of allowance for credit losses		3,828,181			3,882,525
Loans held-for-sale, at fair value		5,261			6,614
Securities available for sale, at fair value		855,456			829,711
Total deposits		4,633,716			4,623,096
FHLB advances and other borrowings and Securities sold under agreements to repurchase		123,480			141,227
Subordinated notes and trust preferred debt		68,850			68,680
Shareholders’ equity		532,936			516,682

Credit quality and capital ratios⁽¹⁾:
Allowance for credit losses to total loans		1.23	%		1.24	%
Total nonaccrual loans to total loans		0.59	%		0.61	%
Nonperforming assets to total assets		0.42	%		0.45	%
Allowance for credit losses to nonaccrual loans		210	%		202	%
Total risk-based capital:
Orrstown Financial Services, Inc.		13.1	%		12.4	%
Orrstown Bank		13.0	%		12.4	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		10.8	%		10.2	%
Orrstown Bank		11.9	%		11.2	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.6	%		10.0	%
Orrstown Bank		11.9	%		11.2	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		8.6	%		8.3	%
Orrstown Bank		9.5	%		9.1	%

Book value per common share	$	27.32		$	26.65

⁽¹⁾ Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands, except per share amounts)	March 31, 2025			December 31, 2024
Assets
Cash and due from banks	$	64,376		$	51,026
Interest-bearing deposits with banks		222,744			197,848
Cash and cash equivalents		287,120			248,874
Restricted investments in bank stocks		19,693			20,232
Securities available for sale (amortized cost of $886,782 and $864,920 at March 31, 2025 and December 31, 2024, respectively)		855,456			829,711
Loans held for sale, at fair value		5,261			6,614
Loans		3,875,985			3,931,214
Less: Allowance for credit losses		(47,804	)		(48,689	)
Net loans		3,828,181			3,882,525
Premises and equipment, net		51,729			50,217
Cash surrender value of life insurance		144,798			143,854
Goodwill		68,106			68,106
Other intangible assets, net		45,230			47,765
Accrued interest receivable		19,893			21,058
Deferred tax assets, net		36,206			42,647
Other assets		79,913			79,986
Total assets	$	5,441,586		$	5,441,589

Liabilities
Deposits:
Noninterest-bearing	$	932,152		$	894,176
Interest-bearing		3,701,564			3,728,920
Total deposits		4,633,716			4,623,096
Securities sold under agreements to repurchase and federal funds purchased		23,131			25,863
FHLB advances and other borrowings		100,349			115,364
Subordinated notes and trust preferred debt		68,850			68,680
Other liabilities		82,604			91,904
Total liabilities		4,908,650			4,924,907

Shareholders’ Equity
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding		—			—
Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,721,340 shares issued and 19,509,642 outstanding at March 31, 2025; 19,722,640 shares issued and 19,389,967 outstanding at December 31, 2024		1,026			1027
Additional paid—in capital		421,445			423,274
Retained earnings		139,547			126,540
Accumulated other comprehensive loss		(24,024	)		(26,316	)
Treasury stock— 211,698 and 332,673 shares, at cost at March 31, 2025 and December 31, 2024, respectively		(5,058	)		(7,843	)
Total shareholders’ equity		532,936			516,682
Total liabilities and shareholders’ equity	$	5,441,586		$	5,441,589

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended
	March 31,			March 31,
(Dollars in thousands, except per share amounts)		2025			2024
Interest income
Loans	$	63,432		$	36,233
Investment securities – taxable		8,944			4,584
Investment securities – tax-exempt		875			877
Short-term investments		2,268			956
Total interest income		75,519			42,650
Interest expense
Deposits		24,260			13,516
Securities sold under agreements to repurchase and federal funds purchased		84			25
FHLB advances and other borrowings		1,118			1,474
Subordinated notes and trust preferred debt		1,296			754
Total interest expense		26,758			15,769
Net interest income		48,761			26,881
(Recovery of) Provision for credit losses		(554	)		298
Net interest income after (recovery of) provision for credit losses		49,315			26,583
Noninterest income
Service charges		2,395			1,200
Interchange income		1,427			911
Swap fee income		394			199
Wealth management income		5,415			3,102
Mortgage banking activities		302			458
Investment securities gains (losses)		13			(5	)
Other income		1,678			765
Total noninterest income		11,624			6,630
Noninterest expenses
Salaries and employee benefits		20,388			13,752
Occupancy, furniture and equipment		4,675			2,639
Data processing		924			1,265
Advertising and bank promotions		499			398
FDIC insurance		824			441
Professional services		1,826			631
Taxes other than income		942			494
Intangible asset amortization		2,535			225
Merger-related expenses		1,649			672
Restructuring expenses		91			—
Other operating expenses		3,823			1,952
Total noninterest expenses		38,176			22,469
Income before income tax expense		22,763			10,744
Income tax expense		4,712			2,213
Net income	$	18,051		$	8,531


	Three Months Ended
	March 31,		March 31,
	2025		2024
Share information:
Basic earnings per share	$	0.94	$	0.82
Diluted earnings per share	$	0.93	$	0.81
Dividends paid per share	$	0.26	$	0.20
Weighted average shares – basic		19,157		10,349
Weighted average shares – diluted		19,328		10,482

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
	Three Months Ended
	3/31/2025							12/31/2024							9/30/2024							6/30/2024							3/31/2024
			Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-
	Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent
(In thousands)	Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate
Assets
Federal funds sold & interest-bearing bank balances	$	203,347	$	2,268		4.52	%	$	199,236	$	2,492		4.96	%	$	184,465	$	2,452		5.29	%	$	142,868	$	1,864		5.25	%	$	74,523	$	956		5.16	%
Investment securities ⁽¹⁾⁽²⁾		865,126		10,052		4.65			849,389		9,887		4.66			849,700		10,123		4.77			538,451		6,114		4.54			519,851		5,694		4.39
Loans ^{(1)(3)(4)(5)(6)}		3,909,694		63,641		6.59			3,961,269		68,073		6.82			3,989,259		70,849		7.07			2,324,942		35,690		6.17			2,308,103		36,382		6.34
Total interest-earning assets		4,978,167		75,961		6.17			5,009,894		80,452		6.38			5,023,424		83,424		6.61			3,006,261		43,668		5.84			2,902,477		43,032		5.96
Other assets		447,530							454,271							491,719							204,863							196,295
Total assets	$	5,425,697						$	5,464,165						$	5,515,143						$	3,211,124						$	3,098,772
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits⁽⁷⁾	$	2,473,543		14,156		2.32		$	2,522,885		15,575		2.45		$	2,554,743		16,165		2.52		$	1,649,753		10,118		2.47		$	1,570,622		9,192		2.35
Savings deposits⁽⁷⁾		273,313		165		0.25			272,718		166		0.24			283,337		148		0.21			165,467		140		0.34			170,005		144		0.34
Time deposits		970,588		9,939		4.15			998,963		11,109		4.41			1,014,628		12,290		4.82			481,721		5,007		4.18			428,443		4,180		3.92
Total interest-bearing deposits		3,717,444		24,260		2.65			3,794,566		26,850		2.81			3,852,708		28,603		2.95			2,296,941		15,265		2.67			2,169,070		13,516		2.51
Securities sold under agreements to repurchase and federal funds purchased		26,163		84		1.30			21,572		67		1.23			23,075		96		1.66			13,412		27		0.81			12,010		25		0.85
FHLB advances and other borrowings		112,859		1,118		4.02			115,373		1,165		4.01			115,388		1,154		3.98			115,000		1,152		4.03			137,505		1,474		4.31
Subordinated notes and trust preferred debt		68,739		1,296		7.65			68,571		1,360		7.88			68,399		1,437		8.36			32,118		734		9.19			32,100		754		9.45
Total interest-bearing liabilities		3,925,205		26,758		2.76			4,000,082		29,442		2.92			4,059,570		31,290		3.07			2,457,471		17,178		2.81			2,350,685		15,769		2.70
Noninterest-bearing demand deposits		887,726							849,999							807,886							423,037							417,469
Other liabilities		89,077							97,685							110,017							57,828							62,329
Total liabilities		4,902,008							4,947,766							4,977,473							2,938,336							2,830,483
Shareholders’ equity		523,689							516,399							537,670							272,788							268,289
Total	$	5,425,697						$	5,464,165						$	5,515,143						$	3,211,124						$	3,098,772
Taxable-equivalent net interest income / net interest spread				49,203		3.41	%				51,010		3.46	%				52,134		3.55	%				26,490		3.02	%				27,263		3.26	%
Taxable-equivalent net interest margin						4.00	%						4.05	%						4.14	%						3.54	%						3.77	%
Taxable-equivalent adjustment				(442	)						(437	)						(437	)						(387	)						(382	)
Net interest income			$	48,761						$	50,573						$	51,697						$	26,103						$	26,881
Ratio of average interest-earning assets to average interest-bearing liabilities						127	%						125	%						124	%						122	%						123	%


NOTES:
⁽¹⁾ Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾ Average balance of investment securities is computed at fair value.
⁽³⁾ Average balances include nonaccrual loans.
⁽⁴⁾ Interest income on loans includes prepayment and late fees, where applicable.
⁽⁵⁾ Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024.
⁽⁶⁾ Interest income on loans includes accretion on purchase accounting marks of $6.6 million, $7.6 million, $7.3 million, $0.2 million, and $0.1 million for the three months ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, respectively.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Profitability for the quarter:
Net interest income	$	48,761		$	50,573		$	51,697		$	26,103		$	26,881
(Recovery of) Provision for credit losses		(554	)		1,755			13,681			812			298
Noninterest income		11,624			11,247			12,386			7,172			6,630
Noninterest expenses		38,176			42,930			60,299			22,639			22,469
Income (loss) before income taxes		22,763			17,135			(9,897	)		9,824			10,744
Income tax expense (benefit)		4,712			3,451			(1,994	)		2,086			2,213
Net income (loss)	$	18,051		$	13,684		$	(7,903	)	$	7,738		$	8,531

Financial ratios:
Return on average assets⁽¹⁾		1.35	%		1.00	%	(0.57)%				0.97	%		1.11	%
Return on average assets, adjusted^(1)(2)(3)		1.45	%		1.22	%		1.55	%		1.09	%		1.19	%
Return on average equity⁽¹⁾		13.98	%		10.54	%	(5.85)%				11.41	%		12.79	%
Return on average equity, adjusted^(1)(2)(3)		14.97	%		12.86	%		15.85	%		12.88	%		13.79	%
Net interest margin⁽¹⁾		4.00	%		4.05	%		4.14	%		3.54	%		3.77	%
Efficiency ratio		63.2	%		69.4	%		94.1	%		68.0	%		67.0	%
Efficiency ratio, adjusted⁽²⁾⁽³⁾		60.5	%		62.3	%		60.2	%		64.6	%		65.0	%

Per share information:
Income (loss) per common share:
Basic	$	0.94		$	0.72		$	(0.41	)	$	0.74		$	0.82
Basic, adjusted⁽²⁾⁽³⁾		1.01			0.87			1.12			0.84			0.89
Diluted		0.93			0.71			(0.41	)		0.73			0.81
Diluted, adjusted⁽²⁾⁽³⁾		1.00			0.87			1.11			0.83			0.88
Book value		27.32			26.65			26.65			25.97			25.38
Book value, adjusted^{(2) (3)}		27.38			28.40			28.24			26.12			25.44
Tangible book value⁽³⁾		21.99			21.19			21.12			24.08			23.47
Tangible book value, adjusted^{(2) (3)}		22.06			22.94			22.72			24.23			23.53
Cash dividends paid		0.26			0.23			0.23			0.20			0.20

Average basic shares		19,157			19,118			19,088			10,393			10,349
Average diluted shares		19,328			19,300			19,226			10,553			10,482
⁽¹⁾Annualized.
⁽²⁾ Ratio has been adjusted for non-recurring expenses for all periods presented.
⁽³⁾ Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	March 31, 2025		December 31, 2024			September 30, 2024		June 30, 2024			March 31, 2024
Noninterest income:
Service charges	$	2,395	$	2,050		$	2,360	$	1,283		$	1,200
Interchange income		1,427		1,608			1,779		961			911
Swap fee income		394		597			505		375			199
Wealth management income		5,415		4,902			5,037		3,312			3,102
Mortgage banking activities		302		517			491		369			458
Other income		1,678		1,578			1,943		884			765
Investment securities gains (losses)		13		(5	)		271		(12	)		(5	)
Total noninterest income	$	11,624	$	11,247		$	12,386	$	7,172		$	6,630

Noninterest expenses:
Salaries and employee benefits	$	20,388	$	22,444		$	27,190	$	13,195		$	13,752
Occupancy, furniture and equipment		4,675		4,893			4,333		2,705			2,639
Data processing		924		1,540			2,046		1,237			1,265
Advertising and bank promotions		499		878			537		774			398
FDIC insurance		824		955			862		419			441
Professional services		1,826		1,591			1,119		801			631
Taxes other than income		942		(312	)		503		49			494
Intangible asset amortization		2,535		2,838			2,464		215			225
Provision for legal settlement		—		478			—		—			—
Merger-related expenses		1,649		3,887			16,977		1,135			672
Restructuring expenses		91		39			257		—			—
Other operating expenses		3,823		3,699			4,011		2,109			1,952
Total noninterest expenses	$	38,176	$	42,930		$	60,299	$	22,639		$	22,469

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Balance Sheet at quarter end:
Cash and cash equivalents	$	287,120		$	248,874		$	236,780		$	132,509		$	182,722
Restricted investments in bank stocks		19,693			20,232			20,247			11,147			11,453
Securities available for sale		855,456			829,711			826,828			529,082			514,909
Loans held for sale, at fair value		5,261			6,614			3,561			1,562			535
Loans:
Commercial real estate:
Owner occupied		617,854			633,567			622,726			371,301			364,280
Non-owner occupied		1,157,383			1,160,238			1,164,501			710,477			707,871
Multi-family		257,724			274,135			276,296			151,542			147,773
Non-owner occupied residential		168,354			179,512			190,786			89,156			91,858
Agricultural		134,916			125,156			129,486			25,551			25,909
Commercial and industrial		455,494			451,384			471,983			349,425			339,615
Acquisition and development:
1-4 family residential construction		40,621			47,432			56,383			32,439			22,277
Commercial and land development		227,434			241,424			262,317			129,883			118,010
Municipal		30,780			30,044			27,960			10,594			10,925
Total commercial loans		3,090,560			3,142,892			3,202,438			1,870,368			1,828,518
Residential mortgage:
First lien		464,642			460,297			451,195			271,153			270,748
Home equity – term		9,224			5,988			6,508			4,633			4,966
Home equity – lines of credit		295,820			303,561			303,165			192,736			189,966
Installment and other loans		15,739			18,476			18,131			8,713			8,875
Total loans		3,875,985			3,931,214			3,981,437			2,347,603			2,303,073
Allowance for credit losses		(47,804	)		(48,689	)		(49,630	)		(29,864	)		(29,165	)
Net loans held for investment		3,828,181			3,882,525			3,931,807			2,317,739			2,273,908
Goodwill		68,106			68,106			70,655			18,724			18,724
Other intangible assets, net		45,230			47,765			46,144			1,974			2,189
Total assets		5,441,586			5,441,589			5,470,589			3,198,782			3,183,331
Total deposits		4,633,716			4,623,096			4,650,853			2,702,884			2,695,951
FHLB advances and other borrowings and Securities sold under agreements to repurchase		123,480			141,227			137,310			129,625			127,099
Subordinated notes and trust preferred debt		68,850			68,680			68,510			32,128			32,111
Total shareholders’ equity		532,936			516,682			516,206			278,376			271,682

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Capital and credit quality measures⁽¹⁾:
Total risk-based capital:
Orrstown Financial Services, Inc.		13.1	%		12.4	%		12.4	%		13.3	%		13.4	%
Orrstown Bank		13.0	%		12.4	%		12.2	%		13.1	%		13.1	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		10.8	%		10.2	%		10.0	%		11.1	%		11.2	%
Orrstown Bank		11.9	%		11.2	%		11.0	%		12.0	%		11.9	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.6	%		10.0	%		9.8	%		11.1	%		11.2	%
Orrstown Bank		11.9	%		11.2	%		11.0	%		12.0	%		11.9	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		8.6	%		8.3	%		8.0	%		8.9	%		9.0	%
Orrstown Bank		9.5	%		9.1	%		8.8	%		9.5	%		9.6	%

Average equity to average assets		9.65	%		9.45	%		9.75	%		8.50	%		8.66	%
Allowance for credit losses to total loans		1.23	%		1.24	%		1.25	%		1.27	%		1.27	%
Total nonaccrual loans to total loans		0.59	%		0.61	%		0.68	%		0.36	%		0.56	%
Nonperforming assets to total assets		0.42	%		0.45	%		0.49	%		0.26	%		0.40	%
Allowance for credit losses to nonaccrual loans		210	%		202	%		184	%		357	%		226	%

Other information:
Net charge-offs (recoveries)	$	331		$	3,002		$	269		$	113		$	(42	)
Classified loans		76,211			88,628			105,465			48,722			48,997
Nonperforming and other risk assets:
Nonaccrual loans		22,727			24,111			26,927			8,363			12,886
Other real estate owned		138			138			138			—			—
Total nonperforming assets		22,865			24,249			27,065			8,363			12,886
Financial difficulty modifications still accruing		5,127			4,897			9,497			—			—
Loans past due 90 days or more and still accruing		400			641			337			187			99
Total nonperforming and other risk assets	$	28,392		$	29,787		$	36,899		$	8,550		$	12,985

(1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard.

Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges.

As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $113.3 million and $115.9 million at March 31, 2025 and December 31, 2024, respectively. In addition, during the three months ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, the Company incurred $1.6 million, $3.9 million, $17.0 million, $1.1 million and $0.7 million in in merger-related expenses, respectively. During the three months ended December 31, 2024 and September 30, 2024, the Company incurred other non-recurring charges totaling $0.5 million and $20.2 million, respectively.

Tangible book value per common share and the impact of the non-recurring expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

The following tables present the computation of each non-GAAP based measure:

(In thousands)

Tangible Book Value per Common Share	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Shareholders’ equity (most directly comparable GAAP-based measure)	$	532,936		$	516,682		$	516,206		$	278,376		$	271,682
Less: Goodwill		68,106			68,106			70,655			18,724			18,724
Other intangible assets		45,230			47,765			46,144			1,974			2,189
Related tax effect		(9,498	)		(10,031	)		(9,690	)		(415	)		(460	)
Tangible common equity (non-GAAP)	$	429,098		$	410,842		$	409,097		$	258,093		$	251,229

Common shares outstanding		19,510			19,390			19,373			10,720			10,705

Book value per share (most directly comparable GAAP-based measure)	$	27.32		$	26.65		$	26.65		$	25.97		$	25.38
Intangible assets per share		5.33			5.46			5.53			1.89			1.91
Tangible book value per share (non-GAAP)	$	21.99		$	21.19		$	21.12		$	24.08		$	23.47

(In thousands)	Three Months Ended
Adjusted Ratios for Non-recurring Charges	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Net income (loss) (A) – most directly comparable GAAP-based measure	$	18,051		$	13,684		$	(7,903	)	$	7,738		$	8,531
Plus: Merger-related expenses (B)		1,649			3,887			16,977			1,135			672
Plus: Executive retirement expenses (B)		—			35			4,758			—			—
Plus: Provision for credit losses on non-PCD loans (B)		—			—			15,504			—			—
Plus: Provision for legal settlement (B)		—			478			—			—			—
Less: Related tax effect (C)		(368	)		(1,386	)		(7,915	)		(139	)		(1	)
Adjusted net income (D=A+B-C) – Non-GAAP	$	19,332		$	16,698		$	21,421		$	8,734		$	9,202

Average assets (E)	$	5,425,697		$	5,464,165		$	5,515,143		$	3,211,124		$	3,098,772
Return on average assets (= A / E) – most directly comparable GAAP-based measure⁽¹⁾		1.35	%		1.00	%	(0.57) %				0.97	%		1.11	%
Return on average assets, adjusted (= D / E) – Non-GAAP⁽¹⁾		1.45	%		1.22	%		1.55	%		1.09	%		1.19	%

Average equity (F)	$	523,689		$	516,399		$	537,670		$	272,788		$	268,289
Return on average equity (= A / F) – most directly comparable GAAP-based measure⁽¹⁾		13.98	%		10.54	%	(5.85) %				11.41	%		12.79	%
Return on average equity, adjusted (= D / F) – Non-GAAP⁽¹⁾		14.97	%		12.86	%		15.85	%		12.88	%		13.79	%

Weighted average shares – basic (G) – most directly comparable GAAP-based measure		19,157			19,118			19,088			10,393			10,349
Basic earnings (loss) per share (= A / G) – most directly comparable GAAP-based measure	$	0.94		$	0.72		$	(0.41	)	$	0.74		$	0.82
Basic earnings per share, adjusted (= D / G) – Non-GAAP	$	1.01		$	0.87		$	1.12		$	0.84		$	0.89

Weighted average shares – diluted (H) – most directly comparable GAAP-based measure		19,328			19,300			19,226			10,553			10,482
Diluted earnings (loss) per share (= A / H) – most directly comparable GAAP-based measure	$	0.93		$	0.71		$	(0.41	)	$	0.73		$	0.81
Diluted earnings per share, adjusted (= D / H) – Non-GAAP	$	1.00		$	0.87		$	1.11		$	0.83		$	0.88

(1) Annualized

	Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Noninterest expense (I) – most directly comparable GAAP-based measure	$	38,176		$	42,930		$	60,299		$	22,639		$	22,469
Less: Merger-related expenses (B)		(1,649	)		(3,887	)		(16,977	)		(1,135	)		(672	)
Less: Executive retirement expenses (B)		—			(35	)		(4,758	)		—			—
Less: Provision for legal settlement (B)		—			(478	)		—			—			—
Adjusted noninterest expense (J = I – B) – Non-GAAP	$	36,527		$	38,531		$	38,564		$	21,504		$	21,797

Net interest income (K)	$	48,761		$	50,573		$	51,697		$	26,103		$	26,881
Noninterest income (L)		11,624			11,247			12,386			7,172			6,630
Total operating income (M = K + L)	$	60,385		$	61,820		$	64,083		$	33,275		$	33,511

Efficiency ratio (= I / M) – most directly comparable GAAP-based measure		63.2	%		69.4	%		94.1	%		68.0	%		67.0	%
Efficiency ratio, adjusted (= J / M) – Non-GAAP		60.5	%		62.3	%		60.2	%		64.6	%		65.0	%

(1) Annualized

Appendix B- Investment Portfolio Concentrations

The following table summarizes the credit ratings and collateral associated with the Company’s investment security portfolio, excluding equity securities, at March 31, 2025:

(In thousands)

Sector	Portfolio Mix		Amortized Book		Fair Value		Credit Enhancement		AAA		AA		A		BBB		BB		NR		Collateral / Guarantee Type
Unsecured ABS	—	%	$	2,952	$	2,768	27	%	—	%	—	%	—	%	—	%	—	%	100	%	Unsecured Consumer Debt
Student Loan ABS	—			3,808		3,792	28		—		—		—		—		—		100		Seasoned Student Loans
Federal Family Education Loan ABS	9			78,231		77,955	11		1		47		33		7		12		—		Federal Family Education Loan ⁽¹⁾
PACE Loan ABS	—			1,943		1,710	7		100		—		—		—		—		—		PACE Loans ⁽²⁾
Non-Agency CMBS	2			13,966		14,022	30		—		—		—		—		—		100
Non-Agency RMBS	2			16,323		14,726	16		100		—		—		—		—		—		Reverse Mortgages ⁽³⁾
Municipal – General Obligation	11			99,248		89,952			17		76		7		—		—		—
Municipal – Revenue	14			120,676		107,154			—		82		12		—		—		6
SBA ReRemic ⁽⁵⁾	—			2,095		2,087			—		100		—		—		—		—		SBA Guarantee ⁽⁴⁾
Small Business Administration	1			5,511		5,629			—		100		—		—		—		—		SBA Guarantee ⁽⁴⁾
Agency MBS	19			164,144		162,334			—		100		—		—		—		—		Residential Mortgages ⁽⁴⁾
Agency CMO	40			355,699		352,729			—		100		—		—		—		—
U.S. Treasury securities	2			20,040		18,417			—		100		—		—		—		—		U.S. Government Guarantee ⁽⁴⁾
Corporate bonds	—			1,939		1,974			—		—		52		48		—		—
	100	%	$	886,575	$	855,249			4	%	87	%	5	%	1	%	—	%	3	%

⁽¹⁾ 97% guaranteed by U.S. government
⁽²⁾ PACE acronym represents Property Assessed Clean Energy loans
⁽³⁾ Non-agency reverse mortgages with current structural credit enhancements
⁽⁴⁾ Guaranteed by U.S. government or U.S. government agencies
⁽⁵⁾ SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits

Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor’s, Moody’s, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor’s rates U.S. government obligations at AA+.

About the Company

With $5.4 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes counties in Pennsylvania, Maryland, Delaware, Virginia and West Virginia within a 75-mile radius of the Company’s executive and administrative offices as well as the District of Columbia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company’s management with respect to, among other things, future events and the Company’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results to differ from those expressed or implied by the forward-looking statements include, but are not limited to, the following: interest rate changes or volatility; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company’s strategic growth plan due to changes in current or future market conditions; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in, and evolving interpretations of, existing and future laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus Valley Bancorp are not realized when expected or at all; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2024 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.

The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company’s behalf may issue.

The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.

The MIL Network –

April 23, 2025

MIL-OSI: Enphase Energy Reports Financial Results for the First Quarter of 2025

Source: GlobeNewswire (MIL-OSI)

FREMONT, Calif., April 22, 2025 (GLOBE NEWSWIRE) — Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today financial results for the first quarter of 2025, which included the summary below from its President and CEO, Badri Kothandaraman.

We reported quarterly revenue of $356.1 million in the first quarter of 2025, along with 48.9% for non-GAAP gross margin. We shipped approximately 1.53 million microinverters, or 688.5 megawatts DC, and 170.1 megawatt hours (MWh) of IQ^® Batteries.

Highlights for the first quarter of 2025 are listed below:

Completed IQ^® Meter Collar testing with PG&E and four other U.S. utilities
Strong U.S. manufacturing: shipped approximately 1.21 million microinverters and 44.1 MWh of IQ Batteries
Revenue of $356.1 million
GAAP gross margin of 47.2%; non-GAAP gross margin of 48.9% with net IRA benefit
Non-GAAP gross margin of 38.3%, excluding net IRA benefit of 10.6%
GAAP operating income of $31.9 million; non-GAAP operating income of $94.6 million
GAAP net income of $29.7 million; non-GAAP net income of $89.2 million
GAAP diluted earnings per share of $0.22; non-GAAP diluted earnings per share of $0.68
Free cash flow of $33.8 million; ending cash, cash equivalents, restricted cash and marketable securities of $1.53 billion

Our revenue and earnings for the first quarter of 2025 are provided below, compared with the prior quarter:

(In thousands, except per share and percentage data)

	GAAP									Non-GAAP
	Q1 2025			Q4 2024			Q1 2024			Q1 2025			Q4 2024			Q1 2024
Revenue	$	356,084		$	382,713		$	263,339		$	356,084		$	382,713		$	263,339
Gross margin		47.2	%		51.8	%		43.9	%		48.9	%		53.2	%		46.2	%
Operating expenses	$	136,319		$	143,489		$	144,607		$	79,423		$	83,322		$	82,587
Operating income (loss)	$	31,922		$	54,804		$	(29,099	)	$	94,637		$	120,434		$	38,994
Net income (loss)	$	29,730		$	62,160		$	(16,097	)	$	89,243		$	125,862		$	47,956
Basic EPS	$	0.23		$	0.46		$	(0.12	)	$	0.68		$	0.94		$	0.35
Diluted EPS	$	0.22		$	0.45		$	(0.12	)	$	0.68		$	0.94		$	0.35

Total revenue for the first quarter of 2025 was $356.1 million, compared to $382.7 million in the fourth quarter of 2024. Our revenue in the United States for the first quarter of 2025 decreased approximately 13%, compared to the fourth quarter. The decline was the result of seasonality and softening in U.S. demand, partially offset by safe harbor revenue of $54.3 million. Our revenue in Europe increased approximately 7% for the first quarter of 2025, compared to the fourth quarter. The increase in revenue was primarily due to higher battery sales as we ramped shipments of our IQ^® Battery 5P with FlexPhase.

Our non-GAAP gross margin was 48.9% in the first quarter of 2025, compared to 53.2% in the fourth quarter, primarily due to lower bookings of 45X production tax credits and product mix. Our non-GAAP gross margin, excluding net benefit from the Inflation Reduction Act (IRA), was 38.3% in the first quarter of 2025, compared to 39.7% in the fourth quarter, primarily due to product mix.

Our non-GAAP operating expenses were $79.4 million in the first quarter of 2025, compared to $83.3 million in the fourth quarter. The decrease was the result of restructuring actions initiated in the fourth quarter of 2024. Our non-GAAP operating income was $94.6 million in the first quarter of 2025, compared to $120.4 million in the fourth quarter.

We exited the first quarter of 2025 with $1.53 billion in cash, cash equivalents, restricted cash and marketable securities and generated $48.4 million in cash flow from operations in the first quarter. During the first quarter of 2025, we paid off the entire principal amount of $102.2 million in convertible senior notes that matured on March 1, 2025. Our capital expenditures were $14.6 million in the first quarter of 2025, compared to $8.1 million in the fourth quarter of 2024.

In the first quarter of 2025, we repurchased 1,594,105 shares of our common stock at an average price of $62.71 per share for a total of approximately $100.0 million. We also spent approximately $12.1 million by withholding shares to cover taxes for employee stock vesting that reduced the diluted shares by 203,358 shares.

We shipped 170.1 MWh of IQ Batteries in the first quarter of 2025, compared to 152.4 MWh in the fourth quarter. More than 10,900 installers worldwide are certified to install our IQ Batteries, compared to more than 10,300 installers worldwide in the fourth quarter of 2024.

During the first quarter of 2025, we shipped approximately 1.21 million microinverters from our contract manufacturers in the United States that we booked for 45X production tax credits. We continued to ship our IQ8HC™ Microinverters, IQ8P-3P™ Commercial Microinverters, and IQ^® Battery 5Ps from our contract manufacturers in the United States. When paired with other U.S.-made solar components, our products enable lease and power purchase agreement (PPA) providers to qualify for the domestic content bonus tax credit under the IRA.

We continued to make progress with recent product introductions. We are now shipping our IQ Battery 5P with FlexPhase into Germany, Austria, Switzerland, Luxembourg, and Poland. Customers appreciate the reliable backup power the product delivers for both single-and three-phase installations. Our IQ^® EV Charger 2, currently shipping to 14 countries in Europe, is our most advanced residential charger to date. This product can support up to 22 kW of three-phase charging and operate either as a standalone charger or fully integrated with Enphase microinverters and batteries. Finally, our customers are enjoying the plug-and-play simplicity of our IQ^® PowerPack 1500, our first foray into the portable consumer market.

In the second quarter of 2025, we expect to introduce our fourth-generation IQ^® Battery 10C, IQ Meter Collar, and IQ^® Combiner 6C products in the United States. Together, these products will make backup installations easy and help reduce costs. We also expect to launch our IQ^® Balcony Solar Kit, a simple and efficient solution for harnessing solar energy from panels installed on apartment balconies, in Germany and Belgium.

BUSINESS HIGHLIGHTS

On April 8 and 9, 2025, Enphase Energy announced the launch of its IQ Battery 5P with FlexPhase with backup capability for customers in Luxembourg and Poland.

On April 3, 2025, Enphase Energy announced the introduction of its IQ^® System Controller in France and the Netherlands, enabling backup power.

On April 1, 2025, Enphase Energy announced that more than 2,500 SunPower customers have transitioned to Enphase monitoring since SunPower’s bankruptcy filing in August 2024.

On March 18, 2025, Enphase Energy welcomed Brazil’s ABNT NBR 17193 fire safety standard, which outlines stringent recommendations like rapid shutdown requirements for solar installations in all buildings.

On March 11, 2025, Enphase Energy announced production shipments of its newest electric vehicle (EV) charger, the IQ EV Charger 2, in 14 European markets.

On March 3, 2025, Enphase Energy announced increased deployments of its solution for expanding legacy net energy metering (NEM) solar energy systems in California as utilities streamline their approval process.

On Feb. 11, 2025, Enphase Energy announced the launch of an expanded IQ Battery 5P product with support for both single-phase 120/208 V and split-phase 120/240 V, for new home projects in California.

On Feb. 6, 2025, Enphase Energy announced that it is expanding its support for grid services programs – or virtual power plants (VPPs) – in Puerto Rico, Colorado, and Nova Scotia, Canada, powered by the IQ Battery 5P.

SECOND QUARTER 2025 FINANCIAL OUTLOOK

For the second quarter of 2025, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

Revenue to be within a range of $340.0 million to $380.0 million, which includes shipments of 160 to 180 MWh of IQ Batteries. The second quarter of 2025 financial outlook includes approximately $40.0 million of safe harbor revenue. We define safe harbor revenue as any sales made to customers who plan to install the inventory over more than one year.
GAAP gross margin to be within a range of 42.0% to 45.0% with net IRA benefit, including approximately two percentage points of new tariff impact.
Non-GAAP gross margin to be within a range of 44.0% to 47.0% with net IRA benefit and 35.0% to 38.0% excluding net IRA benefit, including approximately two percentage points of new tariff impact. Non-GAAP gross margin excludes stock-based compensation expense and acquisition related amortization.
Net IRA benefit to be within a range of $30.0 million to $33.0 million based on estimated shipments of 1,000,000 units of U.S. manufactured microinverters.
GAAP operating expenses to be within a range of $136.0 million to $140.0 million.
Non-GAAP operating expenses to be within a range of $78.0 million to $82.0 million, excluding $58.0 million estimated for stock-based compensation expense, acquisition related expenses and amortization, restructuring and asset impairment charges.

For 2025, Enphase expects a GAAP tax rate of 21-23% and a non-GAAP tax rate of 15-17%, including IRA benefits.

Follow Enphase Online

Use of non-GAAP Financial Measures

Enphase Energy has presented certain non-GAAP financial measures in this press release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. Non-GAAP financial measures presented by Enphase Energy include non-GAAP gross profit, gross margin, operating expenses, income from operations, net income, net income per share (basic and diluted), net IRA benefit, and free cash flow.

These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Enphase Energy’s results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Enphase Energy uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase Energy believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

As presented in the “Reconciliation of Non-GAAP Financial Measures” tables below, each of the non-GAAP financial measures excludes one or more of the following items for purposes of calculating non-GAAP financial measures to facilitate an evaluation of Enphase Energy’s current operating performance and a comparison to its past operating performance:

Stock-based compensation expense. Enphase Energy excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is significantly affected by Enphase Energy’s stock price at the time of an award over which management has limited to no control.

Acquisition related expenses and amortization. This item represents expenses incurred related to Enphase Energy’s business acquisitions, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amortization of acquired intangible assets are not reflective of Enphase Energy’s ongoing financial performance.

Restructuring and asset impairment charges. Enphase Energy excludes restructuring and asset impairment charges due to the nature of the expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of fees paid for cash-based severance costs, accelerated stock-based compensation expense and asset write-downs of property and equipment and acquired intangible assets, and other contract termination costs resulting from restructuring initiatives.

Non-cash interest expense. This item consists primarily of amortization of debt issuance costs and accretion of debt discount because these expenses do not represent a cash outflow for Enphase Energy except in the period the financing was secured and such amortization expense is not reflective of Enphase Energy’s ongoing financial performance.

Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or benefit to exclude the income tax effects of GAAP adjustments such as stock-based compensation, amortization of purchased intangibles, and other non-recurring items that are not reflective of Enphase Energy ongoing financial performance.

Non-GAAP net income per share, diluted. Enphase Energy excludes the dilutive effect of in-the-money portion of convertible senior notes as they are covered by convertible note hedge transactions that reduce potential dilution to our common stock upon conversion of the Notes due 2025, Notes due 2026, and Notes due 2028, and includes the dilutive effect of employee’s stock-based awards and the dilutive effect of warrants. Enphase Energy believes these adjustments provide useful supplemental information to the ongoing financial performance.

Net IRA benefit. This item represents the advanced manufacturing production tax credit (AMPTC) from the IRA for manufacturing microinverters in the United States, partially offset by the incremental manufacturing cost incurred in the United States relative to manufacturing in Mexico, India, and China. The AMPTC is accounted for by Enphase Energy as an income-based government grants that reduces cost of revenues in the condensed consolidated statements of operations.

Free cash flow. This item represents net cash flows from operating activities less purchases of property and equipment.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its first quarter 2025 results and second quarter 2025 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (833) 634-5018. A live webcast of the conference call will also be accessible from the “Investor Relations” section of Enphase Energy’s website at https://investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (877) 344-7529; replay access code 9557806, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its second quarter of 2025 financial outlook, including revenue, shipments of IQ Batteries by MWh, gross margin with net IRA benefit and excluding net IRA benefit, estimated shipments of U.S. manufactured microinverters, operating expenses, and annualized effective tax rate with IRA benefit; its expectations regarding the expected net IRA benefit; its expectations on the timing and introduction of new products and updates to existing products, including the IQ Battery 10C, IQ Meter Collar, and IQ Combiner 6C products in the United States, and the IQ Balcony Solar Kit in Germany and Belgium; its expectations regarding the domestic content bonus tax credit for its product offerings; and the capabilities, advantages, features, and performance of its technology and products. These forward-looking statements are based on Enphase Energy’s current expectations and inherently involve significant risks and uncertainties. Enphase Energy’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in its most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other documents on file with the SEC from time to time and available on the SEC’s website at www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

A copy of this press release can be found on the investor relations page of Enphase Energy’s website at https://investor.enphase.com.

About Enphase Energy, Inc.

Enphase Energy, a global energy technology company based in Fremont, CA, is the world’s leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped approximately 81.5 million microinverters, and approximately 4.8 million Enphase-based systems have been deployed in over 160 countries. For more information, visit https://investor.enphase.com.

© 2025 Enphase Energy, Inc. All rights reserved. Enphase Energy, Enphase, the “e” logo, IQ, IQ8, and certain other marks listed at https://enphase.com/trademark-usage-guidelines are trademarks or service marks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:
Zach Freedman
Enphase Energy, Inc.
Investor Relations
ir@enphaseenergy.com


ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Net revenues	$	356,084		$	382,713		$	263,339
Cost of revenues		187,843			184,420			147,831
Gross profit		168,241			198,293			115,508
Operating expenses:
Research and development		50,174			50,390			54,211
Sales and marketing		48,948			51,799			53,307
General and administrative		34,035			31,901			35,182
Restructuring and asset impairment charges		3,162			9,399			1,907
Total operating expenses		136,319			143,489			144,607
Income (loss) from operations		31,922			54,804			(29,099	)
Other income, net
Interest income		17,032			18,417			19,709
Interest expense		(2,047	)		(2,252	)		(2,196	)
Other income (expense), net		(14	)		(1,270	)		87
Total other income, net		14,971			14,895			17,600
Income before income taxes		46,893			69,699			(11,499	)
Income tax provision		(17,163	)		(7,539	)		(4,598	)
Net income (loss)	$	29,730		$	62,160		$	(16,097	)
Net income (loss) per share:
Basic	$	0.23		$	0.46		$	(0.12	)
Diluted	$	0.22		$	0.45		$	(0.12	)
Shares used in per share calculation:
Basic		131,869			133,815			135,891
Diluted		136,208			138,128			135,891


ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	350,077	$	369,110
Restricted cash		65,013		95,006
Marketable securities		1,116,780		1,253,480
Accounts receivable, net		225,625		223,749
Inventory		144,025		165,004
Prepaid expenses and other assets		295,725		220,735
Total current assets		2,197,245		2,327,084
Property and equipment, net		142,219		147,514
Intangible assets, net		37,408		42,398
Goodwill		212,359		211,571
Other assets		211,447		205,542
Deferred tax assets, net		305,408		315,567
Total assets	$	3,106,086	$	3,249,676
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	115,374	$	90,032
Accrued liabilities		212,169		196,887
Deferred revenues, current		167,771		237,225
Warranty obligations, current		33,298		34,656
Debt, current		630,677		101,291
Total current liabilities		1,159,289		660,091
Long-term liabilities:
Deferred revenues, non-current		333,704		341,982
Warranty obligations, non-current		170,149		158,233
Other liabilities		61,032		55,265
Debt, non-current		571,214		1,201,089
Total liabilities		2,295,388		2,416,660
Total stockholders’ equity		810,698		833,016
Total liabilities and stockholders’ equity	$	3,106,086	$	3,249,676


ENPHASE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Cash flows from operating activities:
Net income (loss)	$	29,730		$	62,160		$	(16,097	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		19,915			20,665			20,137
Net accretion of premium (discount) on marketable securities		3,512			(7,490	)		2,825
Provision (benefit) for doubtful accounts		62			2,206			(130	)
Asset impairment		27			4,702			332
Non-cash interest expense		1,679			2,188			2,132
Net gain from change in fair value of debt securities		(323	)		(3,697	)		(942	)
Stock-based compensation		55,633			51,830			60,833
Deferred income taxes		8,560			(30,675	)		(8,292	)
Changes in operating assets and liabilities:
Accounts receivable		1,760			2,684			77,359
Inventory		20,979			(6,167	)		5,702
Prepaid expenses and other assets		(75,553	)		(16,487	)		(10,897	)
Accounts payable, accrued and other liabilities		54,232			(27,396	)		(66,284	)
Warranty obligations		10,558			8,657			(11,923	)
Deferred revenues		(82,357	)		104,112			(5,554	)
Net cash provided by operating activities		48,414			167,292			49,201
Cash flows from investing activities:
Purchases of property and equipment		(14,608	)		(8,064	)		(7,371	)
Investment in tax equity fund		(6,904	)		—			—
Purchases of marketable securities		(200,826	)		(93,138	)		(472,268	)
Maturities and sale of marketable securities		335,398			351,843			497,373
Net cash provided by investing activities		113,060			250,641			17,734
Cash flows from financing activities:
Settlement of Notes due 2025		(102,168	)		—			(2	)
Repurchase of common stock		(99,964	)		(199,666	)		(41,996	)
Payment of excise tax on net stock repurchases		—			(2,773	)		—
Proceeds from issuance of common stock under employee equity plans		67			4,719			1,186
Payment of withholding taxes related to net share settlement of equity awards		(12,110	)		(5,012	)		(60,042	)
Net cash used in financing activities		(214,175	)		(202,732	)		(100,854	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		3,675			(7,410	)		(1,177	)
Net increase (decrease) in cash and cash equivalents and restricted cash		(49,026	)		207,791			(35,096	)
Cash, cash equivalents and restricted cash—Beginning of period		464,116			256,325			288,748
Cash, cash equivalents and restricted cash—End of period	$	415,090		$	464,116		$	253,652


ENPHASE ENERGY, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands, except per share data and percentages) (Unaudited)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Gross profit (GAAP)	$	168,241		$	198,293		$	115,508
Stock-based compensation		4,239			3,678			4,182
Acquisition related amortization		1,580			1,784			1,891
Gross profit (Non-GAAP)	$	174,060		$	203,755		$	121,581

Gross margin (GAAP)		47.2	%		51.8	%		43.9	%
Stock-based compensation		1.2			0.9			1.6
Acquisition related amortization		0.5			0.5			0.7
Gross margin (Non-GAAP)		48.9	%		53.2	%		46.2	%

Operating expenses (GAAP)	$	136,319		$	143,489		$	144,607
Stock-based compensation⁽¹⁾		(50,885	)		(47,884	)		(56,651	)
Acquisition related expenses and amortization		(2,849	)		(2,884	)		(3,462	)
Restructuring and asset impairment charges⁽¹⁾		(3,162	)		(9,399	)		(1,907	)
Operating expenses (Non-GAAP)	$	79,423		$	83,322		$	82,587

⁽¹⁾Includes stock-based compensation as follows:
Research and development	$	21,647		$	20,951		$	24,550
Sales and marketing		16,396			15,893			18,178
General and administrative		12,842			11,041			13,923
Restructuring and asset impairment charges		509			267			—
Total	$	51,394		$	48,152		$	56,651

Income (loss) from operations (GAAP)	$	31,922		$	54,804		$	(29,099	)
Stock-based compensation		55,124			51,563			60,833
Acquisition related expenses and amortization		4,429			4,668			5,353
Restructuring and asset impairment charges		3,162			9,399			1,907
Income from operations (Non-GAAP)	$	94,637		$	120,434		$	38,994

Net income (loss) (GAAP)	$	29,730		$	62,160		$	(16,097	)
Stock-based compensation		55,124			51,563			60,833
Acquisition related expenses and amortization		4,429			4,668			5,353
Restructuring and asset impairment charges		3,162			9,399			1,907
Non-cash interest expense		1,678			2,188			2,132
Non-GAAP income tax adjustment		(4,880	)		(4,116	)		(6,172	)
Net income (Non-GAAP)	$	89,243		$	125,862		$	47,956

Net income (loss) per share, basic (GAAP)	$	0.23		$	0.46		$	(0.12	)
Stock-based compensation		0.42			0.39			0.45
Acquisition related expenses and amortization		0.04			0.03			0.04
Restructuring and asset impairment charges		0.02			0.07			0.01
Non-cash interest expense		0.01			0.02			0.02
Non-GAAP income tax adjustment		(0.04	)		(0.03	)		(0.05	)
Net income per share, basic (Non-GAAP)	$	0.68		$	0.94		$	0.35

Shares used in basic per share calculation GAAP and Non-GAAP		131,869			133,815			135,891

Net income (loss) per share, diluted (GAAP)	$	0.22		$	0.45		$	(0.12	)
Stock-based compensation		0.42			0.39			0.44
Acquisition related expenses and amortization		0.04			0.04			0.04
Restructuring and asset impairment charges		0.03			0.07			0.01
Non-cash interest expense		0.01			0.02			0.02
Non-GAAP income tax adjustment		(0.04	)		(0.03	)		(0.04	)
Net income per share, diluted (Non-GAAP)	$	0.68		$	0.94		$	0.35

Shares used in diluted per share calculation GAAP		136,208			138,128			135,891
Shares used in diluted per share calculation Non-GAAP		132,133			134,053			136,730

Income-based government grants (GAAP)	$	53,631		$	68,040		$	18,617
Incremental cost for manufacturing in U.S.		(15,773	)		(16,123	)		(4,882	)
Net IRA benefit (Non-GAAP)	$	37,858		$	51,917		$	13,735

Net cash provided by operating activities (GAAP)	$	48,414		$	167,292		$	49,201
Purchases of property and equipment		(14,608	)		(8,064	)		(7,371	)
Free cash flow (Non-GAAP)	$	33,806		$	159,228		$	41,830

This press release was published by a CLEAR® Verified individual.

The MIL Network –

April 23, 2025

MIL-OSI: Western New England Bancorp, Inc. Reports Results for Three Months Ended March 31, 2025 and Declares Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

WESTFIELD, Mass., April 22, 2025 (GLOBE NEWSWIRE) — Western New England Bancorp, Inc. (the “Company” or “WNEB”) (NasdaqGS: WNEB), the holding company for Westfield Bank (the “Bank”), announced today the unaudited results of operations for the three months ended March 31, 2025. The Company reported net income of $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, compared to net income of $3.0 million, or $0.14 per diluted share, for the three months ended March 31, 2024. On a linked quarter basis, net income was $2.3 million, or $0.11 per diluted share, compared to net income of $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.07 per share on the Company’s common stock. The dividend will be payable on or about May 21, 2025 to shareholders of record on May 7, 2025.

In addition, the Company announced that its Board of Directors authorized a new stock repurchase plan (the “2025 Plan”), pursuant to which the Company may repurchase up to 1.0 million shares of the Company’s common stock, or approximately 4.8% of the Company’s outstanding common stock as of today. The 2025 Plan will commence upon the completion of the Company’s existing share repurchase plan (the “2024 Plan”). The 2024 Plan was approved by the Board of Directors on May 21, 2024, and as of March 31, 2025, there were 265,609 shares of common stock available for repurchase under the 2024 Plan.

James C. Hagan, President and Chief Executive Officer, commented, “I am pleased to report the results for the first quarter of 2025. Our strong, diversified core deposit base and our disciplined approach to managing our funding costs have resulted in an increase in net interest income for the third consecutive quarter. The net interest margin increased eight basis points to 2.49% compared to the preceding quarter. We will continue to proactively manage our funding costs and benefit from our liability sensitive balance sheet to support net interest margin growth. In the first quarter, core deposits increased $70.2 million, or 4.5%, and represented 70.0% of total deposits while the loan-to-deposit ratio decreased to 89.3%. During the same period, average funding costs decreased four basis points.

“We continue to focus on extending credit within our markets and servicing the needs of our existing customer base while ensuring new opportunities present the appropriate levels of risk and return. Consistent with our prudent credit culture, we continue to proactively identify and manage credit risk within the loan portfolio. Our asset quality remains strong, with nonaccrual loans at 0.29% of total loans as of March 31, 2025.

“The Company is considered to be well-capitalized, as defined by regulators and internal Company targets, and we remain disciplined in our capital management strategies. We continue to believe that buying back shares represents a valuable use of the Company’s capital. Today, we announced the 2025 Plan, which will commence upon the completion of the 2024 Plan. Our stock repurchase programs are an integral element of our capital management strategies. As such, we believe that repurchasing common stock enhances shareholder value. We are pleased to be able to continue to return value to shareholders through share repurchases.”

Hagan concluded, “Our commitment to strong capital and liquidity levels gives us a solid foundation to take advantage of opportunities in the markets we serve and to enhance shareholder value in the long term.”

Key Highlights:

Loans and Deposits

Total gross loans increased $9.3 million, or 0.4%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 76.7% of total assets, at March 31, 2025. The increase in total gross loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $8.1 million, or 1.0%, and an increase in commercial and industrial loans of $4.7 million, or 2.2%. These increases were partially offset by a decrease in commercial real estate loans of $3.0 million, or 0.3%, and a decrease in consumer loans of $526,000, or 12.0%.

At March 31, 2025, total deposits of $2.3 billion increased $66.0 million, or 2.9%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $70.2 million, or 4.5%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.6 billion, or 70.0% of total deposits, at March 31, 2025. Time deposits decreased $4.3 million, or 0.6%, from $703.6 million at December 31, 2024 to $699.3 million at March 31, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at March 31, 2025 and at December 31, 2024. The loan-to-deposit ratio decreased from 91.5% at December 31, 2024 to 89.3% at March 31, 2025.

Liquidity

The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities, a diversified deposit base and access to diversified borrowing sources. At March 31, 2025, the Company had $1.1 billion in immediately available liquidity, compared to $665.6 million in uninsured deposits, or 28.6% of total deposits, representing a coverage ratio of 171.5%.

Uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep account or a reciprocal time deposit through the Certificate of Deposit Account Registry System. IntraFi allows for up to $250.0 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through insurance.

Allowance for Credit Losses and Credit Quality

At March 31, 2025, the allowance for credit losses was $19.7 million, or 0.95% of total loans, compared to $19.5 million, or 0.94% of total loans, at December 31, 2024. The allowance for loan losses, as a percentage of nonaccrual loans, was 327.1% and 362.9% at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, nonaccrual loans totaled $6.0 million, or 0.29% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. Total delinquent loans decreased from $5.0 million, or 0.24% of total loans, at December 31, 2024 to $4.5 million, or 0.22% of total loans, at March 31, 2025. At March 31, 2025 and December 31, 2024, the Company did not have any other real estate owned.

Net Interest Margin

The net interest margin increased eight basis points from 2.41% for the three months ended December 31, 2024 to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, increased eight basis points from 2.43% for the three months ended December 31, 2024, compared to 2.51% for the three months ended March 31, 2025.

Stock Repurchase Program

On May 21, 2024, the Board of Directors authorized the 2024 Plan under which the Company may repurchase up to 1.0 million shares of its common stock, or approximately 4.6%, of the Company’s then-outstanding shares of common stock. During the three months ended March 31, 2025, the Company repurchased 206,709 shares of common stock under the 2024 Plan, with an average price per share of $9.12. As of March 31, 2025, there were 265,609 shares of common stock available for repurchase under the 2024 Plan.

On April 22, 2025, the Board of Directors authorized the 2025 Plan, pursuant to which the Company may repurchase up to 1.0 million shares of common stock, or approximately 4.8% of the Company’s outstanding shares as of the date the 2025 Plan was announced. Repurchases under the 2025 Plan will commence upon the completion of the 2024 Plan.

The repurchase of shares under the stock repurchase program is administered through an independent broker. The shares of common stock repurchased under both the 2024 Plan and the 2025 Plan have been and will continue to be, as applicable, purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, or otherwise, depending upon market conditions. There is no guarantee as to the exact number, or value, of shares that will be repurchased by the Company, and the Company may discontinue repurchases at any time that the Company’s management (“Management”) determines additional repurchases are not warranted. The timing and amount of additional share repurchases under both the 2024 Plan and the 2025 Plan will depend on a number of factors, including the Company’s stock price performance, ongoing capital planning considerations, general market conditions, and applicable legal requirements.

Book Value and Tangible Book Value

At March 31, 2025, the Company’s book value per share was $11.44, compared to $11.30 at December 31, 2024, while tangible book value per share, a non-GAAP financial measure, increased $0.15, or 1.4%, from $10.63 at December 31, 2024 to $10.78 at March 31, 2025. See pages 16-17 for the related tangible book value calculation and a reconciliation of GAAP to non-GAAP financial measures.

Net Income for the Three Months Ended March 31, 2025 Compared to the Three Months Ended December 31, 2024.

For the three months ended March 31, 2025, the Company reported a decrease in net income of $985,000, or 30.0%, from $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024, to $2.3 million, or $0.11 per diluted share. Net interest income increased $261,000, or 1.7%, the provision for credit losses increased $904,000, non-interest income decreased $495,000, or 15.2%, and non-interest expense increased $258,000, or 1.7%. Return on average assets and return on average equity were 0.35% and 3.94%, respectively, for the three months ended March 31, 2025, compared to 0.49% and 5.48%, respectively, for the three months ended December 31, 2024.

Net Interest Income and Net Interest Margin

On a sequential quarter basis, net interest income, our primary driver of revenues, increased $261,000, or 1.7%, to $15.5 million for the three months ended March 31, 2025, from $15.3 million for the three months ended December 31, 2024. The increase in net interest income was primarily due to a decrease in interest expense of $410,000, or 3.1%, partially offset by a decrease in interest income of $149,000, or 0.5%.

The net interest margin increased eight basis points from 2.41% for the three months ended December 31, 2024 to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, increased eight basis points from 2.43% for the three months ended December 31, 2024, compared to 2.51% for the three months ended March 31, 2025.

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.56% for the three months ended March 31, 2025, compared to 4.52% for the three months ended December 31, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.89% for the three months ended March 31, 2025, compared to 4.86% for the three months ended December 31, 2024. During the three months ended March 31, 2025, average interest-earning assets increased $12.7 million, or 0.5% to $2.5 billion, primarily due to an increase in average loans of $10.7 million, or 0.5%, and an increase in average securities of $3.9 million, or 1.1%.

The average cost of total funds, including non-interest bearing accounts and borrowings, decreased four basis points from 2.20% for the three months ended December 31, 2024 to 2.16% for the three months ended March 31, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 10 basis points to 1.08% for the three months ended March 31, 2025, from 0.98% for the three months ended December 31, 2024. The average cost of time deposits decreased 20 basis points from 4.31% for the three months ended December 31, 2024, to 4.11% for the three months ended March 31, 2025. The average cost of borrowings, including subordinated debt, was 5.04% for the three months ended December 31, 2024 and for the three months ended March 31, 2025. Average demand deposits, an interest-free source of funds, decreased $9.6 million, or 1.6%, from $579.2 million, or 25.6% of total average deposits, for the three months ended December 31, 2024, to $569.6 million, or 24.8% of total average deposits, for the three months ended March 31, 2025.

Provision for (Reversal of) Credit Losses

During the three months ended March 31, 2025, the Company recorded a provision for credit losses of $142,000, compared to a reversal of credit losses of $762,000 during the three months ended December 31, 2024. The increase was primarily due to changes in the most recent macroeconomic forecast. The provision for credit losses was also determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions. Management will continue to monitor macroeconomic variables related to the interest rate environment, changing tariff policies and concerns of an economic downturn. Management believes it is appropriately reserved for the current economic environment.

During the three months ended March 31, 2025, the Company recorded net charge-offs of $29,000, compared to net recoveries of $128,000 for the three months ended December 31, 2024.

Non-Interest Income

On a sequential quarter basis, non-interest income decreased $495,000, or 15.2%, to $2.8 million for the three months ended March 31, 2025, from $3.3 million for the three months ended December 31, 2024. During the three months ended March 31, 2025, service charges and fees on deposits decreased $17,000, or 0.7%, to $2.3 million from the three months ended December 31, 2024. Income from bank-owned life insurance (“BOLI”) decreased $13,000, or 2.7%, from the three months ended December 31, 2024 to $473,000 for the three months ended March 31, 2025. During the three months ended March 31, 2025, the Company reported a gain of $7,000 from mortgage banking activities, compared to a loss of $11,000 during the three months ended December 31, 2024. During the three months ended March 31, 2025, the Company reported unrealized losses on marketable equity securities of $5,000, compared to unrealized losses of $9,000, during the three months ended December 31, 2024. During the three months ended December 31, 2024, the Company reported gains on non-marketable equity investments of $300,000 and did not have comparable income during the three months ended March 31, 2025. During the three months ended December 31, 2024, the Company reported $187,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the three months ended March 31, 2025.

Non-Interest Expense

For the three months ended March 31, 2025, non-interest expense increased $258,000, or 1.7%, to $15.2 million from $14.9 million for the three months ended December 31, 2024. Occupancy expense increased $156,000, or 12.4%, primarily due to snow removal costs of $143,000. Advertising expense increased $119,000, or 38.4%, professional fees increased $75,000, or 15.9%, FDIC insurance expense increased $42,000, or 10.8%, and software related expenses increased $17,000, or 2.6%. These increases were partially offset by a decrease in furniture and equipment expense of $18,000, or 3.6%, a decrease in data processing expense of $18,000, or 2.0%, a decrease in debit card processing and ATM network costs of $16,000, or 2.7%, a decrease in salaries and related benefits of $16,000, or 0.2%, and a decrease in other non-interest expense of $83,000, or 5.8%.

For the three months ended March 31, 2025 and the three months ended December 31, 2024, the efficiency ratio was 83.0% and 80.6%, respectively. For the three months ended March 31, 2025, the adjusted efficiency ratio, a non-GAAP financial measure, was 83.0% compared to 81.9% for the three months ended December 31, 2024. The increases in the efficiency ratio and the adjusted efficiency ratio were driven by higher expenses and lower non-interest income during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The Company’s detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document. See pages 16-17 for the related adjusted efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.

Income Tax Provision

Income tax expense for the three months ended March 31, 2025 was $664,000, with an effective tax rate of 22.4%, compared to $1.1 million, with an effective tax rate of 24.6%, for the three months ended December 31, 2024.

Net Income for the Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024.

The Company reported net income of $2.3 million, or $0.11 per diluted share, for the three months ended March 31, 2025, compared to net income of $3.0 million, or $0.14 per diluted share, for the three months ended March 31, 2024. Net interest income increased $188,000, or 1.2%, provision for credit losses increased $692,000, non-interest income increased $85,000, or 3.2%, and non-interest expense increased $402,000, or 2.7%, during the same period. Return on average assets and return on average equity were 0.35% and 3.94%, respectively, for the three months ended March 31, 2025, compared to 0.47% and 5.04%, respectively, for the three months ended March 31, 2024.

Net Interest Income and Net Interest Margin

Net interest income increased $188,000, or 1.2%, to $15.5 million, for the three months ended March 31, 2025, from $15.3 million for the three months ended March 31, 2024. The increase in net interest income was due to an increase in interest and dividend income of $1.8 million, or 6.9%, partially offset by an increase in interest expense of $1.6 million, or 14.6%. The increase in interest expense was primarily due to an increase in average interest-bearing deposits of $156.1 million, or 9.9%, and an increase in the average cost of interest-bearing deposit accounts of 29 basis points from the three months ended March 31, 2024 to the three months ended March 31, 2025. As a result, the net interest margin decreased from 2.57% for the three months ended March 31, 2024, to 2.49% for the three months ended March 31, 2025. The net interest margin, on a tax-equivalent basis, was 2.51% for the three months ended March 31, 2025, compared to 2.59% for the three months ended March 31, 2024.

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 11 basis points from 4.45% for the three months ended March 31, 2024 to 4.56% for the three months ended March 31, 2025. The average loan yield, without the impact of tax-equivalent adjustments, was 4.89% for the three months ended March 31, 2025, compared to 4.82% for the three months ended March 31, 2024. During the three months ended March 31, 2025, average interest-earning assets increased $126.6 million, or 5.3%, to $2.5 billion, primarily due to an increase in average loans of $51.8 million, or 2.6%, an increase in average short-term investments, consisting of cash and cash equivalents, of $66.7 million, an increase in average securities of $5.9 million, or 1.6%, and an increase in average other investments of $2.3 million, or 18.6%.

The average cost of total funds, including non-interest bearing accounts and borrowings, increased 19 basis points from 1.97% for the three months ended March 31, 2024, to 2.16% for the three months ended March 31, 2025. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 32 basis points from 0.76% for the three months ended March 31, 2024 to 1.08% for the three months ended March 31, 2025. The average cost of time deposits decreased one basis point from 4.12% for the three months ended March 31, 2024 to 4.11% for the three months ended March 31, 2025. The average cost of borrowings, including subordinated debt, increased 13 basis points from 4.91% for the three months ended March 31, 2024 to 5.04% for the three months ended March 31, 2025. Average demand deposits, an interest-free source of funds, increased $11.9 million, or 2.1%, from $557.7 million, or 26.1% of total average deposits, for the three months ended March 31, 2024, to $569.6 million, or 24.8% of total average deposits, for the three months ended March 31, 2025.

Provision for (Reversal of) Credit Losses

During the three months ended March 31, 2025, the Company recorded a provision for credit losses of $142,000, compared to a reversal of credit losses of $550,000 during the three months ended March 31, 2024. The increase was primarily due to changes in the most recent macroeconomic forecast. The provision for credit losses was also determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions. Management will continue to monitor macroeconomic variables related to the interest rate environment, the continued discussion on tariffs and the concerns of an economic downturn. Management believes it is appropriately reserved for the current economic environment.

During the three months ended March 31, 2025, the Company recorded net charge-offs of $29,000, compared to net recoveries of $67,000 for the three months ended March 31, 2024.

Non-Interest Income

Non-interest income increased $85,000, or 3.2%, from $2.7 million, for the three months ended March 31, 2024 to $2.8 million for the three months ended March 31, 2025, primarily due to a $65,000, or 2.9%, increase in service charges and fees and an increase in income from BOLI of $20,000, or 4.4%.

Non-Interest Expense

Non-interest expense increased $402,000, or 2.7%, from $14.8 million for the three months ended March 31, 2024 to $15.2 million for the three months ended March 31, 2025. Salaries and benefits increased $169,000, or 2.0%, advertising expense increased $80,000, or 22.9%, occupancy expense increased $49,000, or 3.6%, debit card processing and ATM network costs increased $25,000, or 4.5%, FDIC insurance expense increased $21,000, or 5.1%, data processing expense increased $20,000, or 2.3%, furniture and equipment expense increased $3,000, or 0.6%, and other non-interest expense increased $98,000, or 7.8%. These increases were partially offset by a decrease in software related expenses of $40,000, or 5.7%, and a decrease in professional fees of $23,000, or 4.0%.

For the three months ended March 31, 2025 and the three months ended March 31, 2024, the efficiency ratio was 83.0% and 82.0%, respectively. For the three months ended March 31, 2025, the adjusted efficiency ratio, a non-GAAP financial measure, was 83.0% compared to 82.0% for the three months ended March 31, 2024. The increases in the efficiency ratio and the adjusted efficiency ratio were driven by higher expenses during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. See pages 16-17 for the efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.

Income Tax Provision

For the three months ended March 31, 2025, income tax expense was $664,000, with an effective tax rate of 22.4%, compared to $827,000, with an effective tax rate of 21.8%, for the three months ended March 31, 2024.

Balance Sheet

At March 31, 2025, total assets were $2.7 billion, an increase of $56.2 million, or 2.1%, from December 31, 2024. The increase in total assets was primarily due to an increase in total gross loans of $9.3 million, or 0.4%, an increase in cash and cash equivalents of $44.1 million, or 66.4%, and an increase in investment securities of $3.6 million, or 1.0%.

Investments

At March 31, 2025, the investment securities portfolio totaled $369.8 million, or 13.6% of total assets, compared to $366.1 million, or 13.8% of total assets, at December 31, 2024. At March 31, 2025, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $7.1 million, or 4.4%, from $160.7 million at December 31, 2024 to $167.8 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $3.4 million, or 1.7%, from $205.0 million at December 31, 2024 to $201.6 million at March 31, 2025.

At March 31, 2025, the Company reported unrealized losses on the available-for-sale securities portfolio of $27.8 million, or 14.2% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities at December 31, 2024. At March 31, 2025, the Company reported unrealized losses on the held-to-maturity securities portfolio of $35.8 million, or 17.8% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2024.

The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable equity securities. The securities, with the exception of $8.7 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized as the issuances approach maturity.

Management regularly reviews the portfolio for securities in an unrealized loss position. At March 31, 2025 and December 31, 2024, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the Federal Home Loan Bank (“FHLB”) as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization and payoffs, which support’s the Bank’s objective to provide liquidity.

Total Loans

Total gross loans increased $9.3 million, or 0.4%, from $2.1 billion, or 77.9% of total assets, at December 31, 2024 to $2.1 billion, or 76.7% of total assets, at March 31, 2025. The increase in total gross loans was primarily driven by an increase in residential real estate loans, including home equity loans, of $8.1 million, or 1.0%, and an increase in commercial and industrial loans of $4.7 million, or 2.2%. These increases were partially offset by a decrease in commercial real estate loans of $3.0 million, or 0.3%, and a decrease in consumer loans of $526,000, or 12.0%.

The following table presents a summary of the loan portfolio by the major classification of loans at the periods indicated:

	March 31, 2025		December 31, 2024
	(Dollars in thousands)

Commercial real estate loans:
Non-owner occupied	$	881,105	$	880,828
Owner-occupied		191,582		194,904
Total commercial real estate loans		1,072,687		1,075,732

Residential real estate loans:
Residential		659,984		653,802
Home equity		123,804		121,857
Total residential real estate loans		783,788		775,659

Commercial and industrial loans		216,368		211,656

Consumer loans		3,865		4,391
Total gross loans		2,076,708		2,067,438
Unamortized premiums and net deferred loans fees and costs		2,853		2,751
Total loans	$	2,079,561	$	2,070,189

Credit Quality

Management continues to closely monitor the loan portfolio for any signs of deterioration in borrowers’ financial condition and also in light of speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and interest rates. We continue to proactively take steps to mitigate risk in our loan portfolio.

Total delinquency was $4.5 million, or 0.22% of total loans, at March 31, 2025, compared to $5.0 million, or 0.24% of total loans at December 31, 2024. At March 31, 2025, nonaccrual loans totaled $6.0 million, or 0.29% of total loans, compared to $5.4 million, or 0.26% of total loans, at December 31, 2024. At March 31, 2025 and December 31, 2024, there were no loans 90 or more days past due and still accruing interest. Total nonaccrual assets totaled $6.0 million, or 0.22% of total assets, at March 31, 2025, compared to $5.4 million, or 0.20% of total assets, at December 31, 2024. At March 31, 2025 and December 31, 2024, the Company did not have any other real estate owned.

At March 31, 2025, the allowance for credit losses was $19.7 million, or 0.95% of total loans and 327.1% of nonaccrual loans, compared to $19.5 million, or 0.94% of total loans and 362.9% of nonaccrual loans, at December 31, 2024. Total criticized loans, defined as special mention and substandard loans, decreased $2.1 million, or 5.5%, from $38.4 million, or 1.9% of total loans, at December 31, 2024 to $36.3 million, or 1.7% of total loans, at March 31, 2025.

Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At March 31, 2025, the commercial real estate portfolio totaled $1.1 billion, and represented 51.7% of total loans. Of the $1.1 billion, $881.1 million, or 82.1%, was categorized as non-owner occupied commercial real estate and represented 325.8% of the Bank’s total risk-based capital. More details on the diversification of the loan portfolio are available in the supplementary earnings presentation.

Deposits

At March 31, 2025, total deposits were $2.3 billion and increased $66.0 million, or 2.9%, from December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $70.2 million, or 4.5%, from $1.6 billion, or 68.9% of total deposits, at December 31, 2024, to $1.6 billion, or 70.0% of total deposits, at March 31, 2025. Non-interest-bearing deposits increased $24.4 million, or 4.3%, to $590.0 million, and represent 25.3% of total deposits, money market accounts increased $45.7 million, or 6.9%, to $707.2 million, savings accounts increased $9.8 million, or 5.4%, to $191.4 million and interest-bearing checking accounts decreased $9.6 million, or 6.4%, to $140.8 million.

Time deposits decreased $4.3 million, or 0.6%, from $703.6 million at December 31, 2024 to $699.3 million at March 31, 2025. Brokered time deposits, which are included in time deposits, totaled $1.7 million at March 31, 2025 and at December 31, 2024. The Company has experienced growth and movement in both money market accounts and non-interest-bearing deposits as a result of seasonal customer behaviors, relationship pricing, and the current interest rate environment, as opposed to time deposit specials or interest rate adjustments. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term core customer relationship base by competing for and retaining deposits in our local market. At March 31, 2025, the Bank’s uninsured deposits totaled $665.6 million, or 28.6% of total deposits, compared to $643.6 million, or 28.4% of total deposits, at December 31, 2024.

The table below is a summary of our deposit balances for the periods noted:

	March 31, 2025		December 31, 2024		March 31, 2024
	(Dollars in thousands)
Core Deposits:
Demand accounts	$	589,996	$	565,620	$	559,928
Interest-bearing accounts		140,769		150,348		125,377
Savings accounts		191,398		181,618		190,732
Money market accounts		707,153		661,478		624,474
Total Core Deposits	$	1,629,316	$	1,559,064	$	1,500,511
Time Deposits:		699,277		703,583		643,236
Total Deposits:	$	2,328,593	$	2,262,647	$	2,143,747

FHLB and Subordinated Debt

At March 31, 2025, total borrowings decreased $860,000, or 0.7%, from $123.1 million at December 31, 2024 to $122.3 million. At March 31, 2025, short-term borrowings decreased $870,000, or 16.1%, to $4.5 million, compared to $5.4 million at December 31, 2024. Long-term borrowings were $98.0 million at March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, borrowings also consisted of $19.8 million in fixed-to-floating rate subordinated notes.

As of March 31, 2025, the Company had $447.5 million of additional borrowing capacity at the FHLB, $378.5 million of additional borrowing capacity under the Federal Reserve Bank Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.

Capital

At March 31, 2025, shareholders’ equity was $237.7 million, or 8.8% of total assets, compared to $235.9 million, or 8.9% of total assets, at December 31, 2024. The change was primarily attributable to a decrease in accumulated other comprehensive loss of $2.6 million, cash dividends paid of $1.4 million, repurchase of shares at a cost of $2.0 million, partially offset by net income of $2.3 million. At March 31, 2025, total shares outstanding were 20,774,319. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets.

	March 31, 2025				December 31, 2024
	Company		Bank		Company		Bank
Total Capital (to Risk Weighted Assets)	14.28	%	13.56	%	14.38	%	13.65	%
Tier 1 Capital (to Risk Weighted Assets)	12.27	%	12.55	%	12.37	%	12.64	%
Common Equity Tier 1 Capital (to Risk Weighted Assets)	12.27	%	12.55	%	12.37	%	12.64	%
Tier 1 Leverage Ratio (to Adjusted Average Assets)	9.06	%	9.26	%	9.14	%	9.34	%

Dividends

Although the Company has historically paid quarterly dividends on its common stock and currently intends to continue to pay such dividends, the Company’s ability to pay such dividends depends on a number of factors, including restrictions under federal laws and regulations on the Company’s ability to pay dividends, and as a result, there can be no assurance that dividends will continue to be paid in the future.

About Western New England Bancorp, Inc.

Western New England Bancorp, Inc. is a Massachusetts-chartered stock holding company and the parent company of Westfield Bank, CSB Colts, Inc., Elm Street Securities Corporation, WFD Securities, Inc. and WB Real Estate Holdings, LLC. Western New England Bancorp, Inc. and its subsidiaries are headquartered in Westfield, Massachusetts and operate 25 banking offices throughout western Massachusetts and northern Connecticut. To learn more, visit our website at www.westfieldbank.com.

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, with respect to the Company’s financial condition, liquidity, results of operations, future performance, and business. Forward-looking statements may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to:

unpredictable changes in general economic or political conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry;
the duration and scope of potential pandemics, including the emergence of new variants and the response thereto;
unstable political and economic conditions, including changes in tariff policies, which could materially impact credit quality trends and the ability to generate loans and gather deposits;
inflation and governmental responses to inflation, including recent sustained increases and potential future increases in interest rates that reduce margins;
the effect on our operations of governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Basel guidelines, capital requirements and other applicable laws and regulations;
significant changes in accounting, tax or regulatory practices or requirements;
new legal obligations or liabilities or unfavorable resolutions of litigation;
disruptive technologies in payment systems and other services traditionally provided by banks;
the highly competitive industry and market area in which we operate;
operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks;
failure or circumvention of our internal controls or procedures;
changes in the securities markets which affect investment management revenues;
increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments;
the soundness of other financial services institutions which may adversely affect our credit risk;
certain of our intangible assets may become impaired in the future;
new lines of business or new products and services, which may subject us to additional risks;
changes in key management personnel which may adversely impact our operations;
severe weather, natural disasters, acts of war or terrorism and other external events which could significantly impact our business; and
other risk factors detailed from time to time in our SEC filings.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from the results discussed in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except to the extent required by law.

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Net Income and Other Data (Dollars in thousands, except per share data) (Unaudited)

	Three Months Ended
	March 31,			December 31,				September 30,				June 30,				March 31,
		2025				2024				2024				2024				2024
INTEREST AND DIVIDEND INCOME:
Loans	$	24,984			$	25,183			$	25,134			$	24,340			$	24,241
Securities		2,422				2,273				2,121				2,141				2,114
Other investments		191				214				189				148				136
Short-term investments		840				916				396				173				113
Total interest and dividend income		28,437				28,586				27,840				26,802				26,604

INTEREST EXPENSE:
Deposits		11,376				11,443				11,165				10,335				9,293
Short-term borrowings		54				60				71				186				283
Long-term debt		1,219				1,557				1,622				1,557				1,428
Subordinated debt		254				253				254				254				254
Total interest expense		12,903				13,313				13,112				12,332				11,258

Net interest and dividend income		15,534				15,273				14,728				14,470				15,346

PROVISION FOR (REVERSAL OF) CREDIT LOSSES		142				(762	)			941				(294	)			(550	)

Net interest and dividend income after provision for (reversal of) credit losses		15,392				16,035				13,787				14,764				15,896

NON-INTEREST INCOME:
Service charges and fees on deposits		2,284				2,301				2,341				2,341				2,219
Income from bank-owned life insurance		473				486				470				502				453
Unrealized (loss) gain on marketable equity securities		(5	)			(9	)			10				4				8
Gain (loss) on sale of mortgages		7				(11	)			246				–				–
Gain on non-marketable equity investments		–				300				–				987				–
Loss on disposal of premises and equipment		–				–				–				–				(6	)
Other income		–				187				74				–				–
Total non-interest income		2,759				3,254				3,141				3,834				2,674

NON-INTEREST EXPENSE:
Salaries and employees’ benefits		8,413				8,429				8,112				7,901				8,244
Occupancy		1,412				1,256				1,217				1,218				1,363
Furniture and equipment		487				505				483				483				484
Data processing		882				900				869				846				862
Software		659				642				612				566				699
Debit/ATM card processing expense		577				593				649				643				552
Professional fees		546				471				540				581				569
FDIC insurance		431				389				338				323				410
Advertising		429				310				271				339				349
Other		1,348				1,431				1,315				1,414				1,250
Total non-interest expense		15,184				14,926				14,406				14,314				14,782

INCOME BEFORE INCOME TAXES		2,967				4,363				2,522				4,284				3,788

INCOME TAX PROVISION		664				1,075				618				771				827
NET INCOME	$	2,303			$	3,288			$	1,904			$	3,513			$	2,961

Basic earnings per share	$	0.11			$	0.16			$	0.09			$	0.17			$	0.14
Weighted average shares outstanding		20,385,481				20,561,749				20,804,162				21,056,173				21,180,968
Diluted earnings per share	$	0.11			$	0.16			$	0.09			$	0.17			$	0.14
Weighted average diluted shares outstanding		20,514,098				20,701,276				20,933,833				21,163,762				21,271,323

Other Data:
Return on average assets (1)		0.35	%			0.49	%			0.29	%			0.55	%			0.47	%
Return on average equity (1)		3.94	%			5.48	%			3.19	%			6.03	%			5.04	%
Efficiency ratio		83.00	%			80.56	%			80.62	%			78.20	%			82.03	%
Adjusted efficiency ratio (2)		82.98	%			81.85	%			80.67	%			82.68	%			82.04	%
Net interest margin		2.49	%			2.41	%			2.40	%			2.42	%			2.57	%
Net interest margin, on a fully tax-equivalent basis		2.51	%			2.43	%			2.42	%			2.44	%			2.59	%
(1) Annualized.
(2) The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gain on non-marketable equity investments, and loss on disposal of premises and equipment.

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands) (Unaudited)

	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
Cash and cash equivalents	$	110,579		$	66,450		$	72,802		$	53,458		$	22,613
Securities available-for-sale, at fair value		167,800			160,704			155,889			135,089			138,362
Securities held to maturity, at amortized cost		201,557			205,036			213,266			217,632			221,242
Marketable equity securities, at fair value		414			397			252			233			222
Federal Home Loan Bank of Boston and other restricted stock – at cost		5,818			5,818			7,143			7,143			3,105

Loans		2,079,561			2,070,189			2,049,002			2,026,226			2,025,566
Allowance for credit losses		(19,669	)		(19,529	)		(19,955	)		(19,444	)		(19,884	)
Net loans		2,059,892			2,050,660			2,029,047			2,006,782			2,005,682

Bank-owned life insurance		77,529			77,056			76,570			76,100			75,598
Goodwill		12,487			12,487			12,487			12,487			12,487
Core deposit intangible		1,344			1,438			1,531			1,625			1,719
Other assets		71,864			73,044			71,492			75,521			76,206
TOTAL ASSETS	$	2,709,284		$	2,653,090		$	2,640,479		$	2,586,070		$	2,557,236

Total deposits	$	2,328,593		$	2,262,647		$	2,224,206		$	2,171,809		$	2,143,747
Short-term borrowings		4,520			5,390			4,390			6,570			11,470
Long-term debt		98,000			98,000			128,277			128,277			120,646
Subordinated debt		19,761			19,751			19,741			19,731			19,722
Securities pending settlement		2,093			8,622			2,513			102			–
Other liabilities		18,641			22,770			20,697			23,104			25,855
TOTAL LIABILITIES		2,471,608			2,417,180			2,399,824			2,349,593			2,321,440

TOTAL SHAREHOLDERS’ EQUITY		237,676			235,910			240,655			236,477			235,796
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,709,284		$	2,653,090		$	2,640,479		$	2,586,070		$	2,557,236

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Other Data (Dollars in thousands, except per share data) (Unaudited)

	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
Shares outstanding at end of period		20,774,319			20,875,713			21,113,408			21,357,849			21,627,690

Operating results:
Net interest income	$	15,534		$	15,273		$	14,728		$	14,470		$	15,346
Provision for (reversal of) credit losses		142			(762	)		941			(294	)		(550	)
Non-interest income		2,759			3,254			3,141			3,834			2,674
Non-interest expense		15,184			14,926			14,406			14,314			14,782
Income before income provision for income taxes		2,967			4,363			2,522			4,284			3,788
Income tax provision		664			1,075			618			771			827
Net income		2,303			3,288			1,904			3,513			2,961

Performance Ratios:
Net interest margin		2.49	%		2.41	%		2.40	%		2.42	%		2.57	%
Net interest margin, on a fully tax-equivalent basis		2.51	%		2.43	%		2.42	%		2.44	%		2.59	%
Interest rate spread		1.74	%		1.63	%		1.60	%		1.66	%		1.85	%
Interest rate spread, on a fully tax-equivalent basis		1.76	%		1.65	%		1.62	%		1.67	%		1.86	%
Return on average assets		0.35	%		0.49	%		0.29	%		0.55	%		0.47	%
Return on average equity		3.94	%		5.48	%		3.19	%		6.03	%		5.04	%
Efficiency ratio (GAAP)		83.00	%		80.56	%		80.62	%		78.20	%		82.03	%
Adjusted efficiency ratio (non-GAAP)⁽¹⁾		82.98	%		81.85	%		80.67	%		82.68	%		82.04	%

Per Common Share Data:
Basic earnings per share	$	0.11		$	0.16		$	0.09		$	0.17		$	0.14
Earnings per diluted share		0.11			0.16			0.09			0.17			0.14
Cash dividend declared		0.07			0.07			0.07			0.07			0.07
Book value per share		11.44			11.30			11.40			11.07			10.90
Tangible book value per share (non-GAAP)⁽²⁾		10.78			10.63			10.73			10.41			10.25

Asset Quality:
30-89 day delinquent loans	$	2,459		$	3,694		$	3,059		$	3,270		$	3,000
90 days or more delinquent loans		2,027			1,301			1,253			2,280			1,716
Total delinquent loans		4,486			4,995			4,312			5,550			4,716
Total delinquent loans as a percentage of total loans		0.22	%		0.24	%		0.21	%		0.27	%		0.23	%
Nonaccrual loans	$	6,014		$	5,381		$	4,873		$	5,845		$	5,837
Nonaccrual loans as a percentage of total loans		0.29	%		0.26	%		0.24	%		0.29	%		0.29	%
Nonaccrual assets as a percentage of total assets		0.22	%		0.20	%		0.18	%		0.23	%		0.23	%
Allowance for credit losses as a percentage of nonaccrual loans		327.05	%		362.93	%		409.50	%		332.66	%		340.65	%
Allowance for credit losses as a percentage of total loans		0.95	%		0.94	%		0.97	%		0.96	%		0.98	%
Net loan charge-offs (recoveries)	$	29		$	(128	)	$	98		$	10		$	(67	)
Net loan charge-offs (recoveries) as a percentage of average loans		0.00	%		(0.01	)%		0.00	%		0.00	%		0.00	%
(1) The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gains on non-marketable equity investments, and loss on disposal of premises and equipment.
(2) Tangible book value per share (non-GAAP) represents the value of the Company’s tangible assets divided by its current outstanding shares.

The following table sets forth the information relating to our average balances and net interest income for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024 and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.

	Three Months Ended
	March 31, 2025									December 31, 2024								March 31, 2024
	Average						Average Yield/			Average					Average Yield/			Average					Average Yield/
	Balance		Interest				Cost⁽⁸⁾			Balance		Interest			Cost⁽⁸⁾			Balance		Interest			Cost⁽⁸⁾
	(Dollars in thousands)
ASSETS:
Interest-earning assets
Loans(1)(2)	$	2,073,486		$	25,105			4.91	%	$	2,062,822	$	25,311			4.88	%	$	2,021,713	$	24,351			4.84	%
Securities(2)		365,371			2,422			2.69			361,476		2,273			2.50			359,493		2,114			2.37
Other investments		14,819			191			5.23			15,924		214			5.35			12,494		136			4.38
Short-term investments(3)		76,039			840			4.48			76,795		916			4.75			9,386		113			4.84
Total interest-earning assets		2,529,715			28,558			4.58			2,517,017		28,714			4.54			2,403,086		26,714			4.47
Total non-interest-earning assets		156,733									155,538								154,410
Total assets	$	2,686,448								$	2,672,555							$	2,557,496

LIABILITIES AND EQUITY:
Interest-bearing liabilities
Interest-bearing checking accounts	$	140,960			250			0.72		$	149,231		264			0.70		$	135,559		234			0.69
Savings accounts		183,869			40			0.09			179,122		38			0.08			186,125		39			0.08
Money market accounts		704,215			3,968			2.29			654,965		3,553			2.16			626,267		2,587			1.66
Time deposit accounts		702,748			7,118			4.11			700,324		7,588			4.31			627,699		6,433			4.12
Total interest-bearing deposits		1,731,792			11,376			2.66			1,683,642		11,443			2.70			1,575,650		9,293			2.37
Short-term borrowings and long-term debt		122,786			1,527			5.04			147,748		1,870			5.04			160,802		1,965			4.91
Interest-bearing liabilities		1,854,578			12,903			2.82			1,831,390		13,313			2.89			1,736,452		11,258			2.61
Non-interest-bearing deposits		569,638									579,168								557,711
Other non-interest-bearing liabilities		25,464									23,380								27,078
Total non-interest-bearing liabilities		595,102									602,548								584,789
Total liabilities		2,449,680									2,433,938								2,321,241
Total equity		236,768									238,617								236,255
Total liabilities and equity	$	2,686,448								$	2,672,555							$	2,557,496
Less: Tax-equivalent adjustment(2)					(121	)							(128	)							(110	)
Net interest and dividend income				$	15,534							$	15,273							$	15,346
Net interest rate spread(4)								1.74	%							1.63	%							1.85	%
Net interest rate spread, on a tax-equivalent basis(5)								1.76	%							1.65	%							1.86	%
Net interest margin(6)								2.49	%							2.41	%							2.57	%
Net interest margin, on a tax-equivalent basis(7)								2.51	%							2.43	%							2.59	%
Ratio of average interest-earning assets to average interest-bearing liabilities								136.40	%							137.44	%							138.39	%
(1) Loans, including nonaccrual loans, are net of deferred loan origination costs and unadvanced funds.
(2) Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21%. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income.
(3) Short-term investments include federal funds sold.
(4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(5) Net interest rate spread, on a tax-equivalent basis, represents the difference between the tax-equivalent weighted average yield on interest-earning assets and the tax-equivalent weighted average cost of interest-bearing liabilities.
(6) Net interest margin represents net interest and dividend income as a percentage of average interest-earning assets.
(7) Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets.
(8) Annualized.

Reconciliation of Non-GAAP to GAAP Financial Measures

The Company believes that certain non-GAAP financial measures provide information to investors that is useful in understanding its results of operations and financial condition. Because not all companies use the same calculation, this presentation may not be comparable to other similarly titled measures calculated by other companies. A reconciliation of these non-GAAP financial measures is provided below.

	For the quarter ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
	(Dollars in thousands)

Loan interest (no tax adjustment)	$	24,984		$	25,183		$	25,134		$	24,340		$	24,241
Tax-equivalent adjustment		121			128			119			114			110
Loan interest (tax-equivalent basis)	$	25,105		$	25,311		$	25,253		$	24,454		$	24,351

Net interest income (no tax adjustment)	$	15,534		$	15,273		$	14,728		$	14,470		$	15,346
Tax equivalent adjustment		121			128			119			114			110
Net interest income (tax-equivalent basis)	$	15,655		$	15,401		$	14,847		$	14,584		$	15,456

Average interest-earning assets	$	2,529,715		$	2,517,017		$	2,441,236		$	2,400,633		$	2,403,086
Net interest margin (no tax adjustment)		2.49	%		2.41	%		2.40	%		2.42	%		2.57	%
Net interest margin, tax-equivalent		2.51	%		2.43	%		2.42	%		2.44	%		2.59	%

Book Value per Share (GAAP)	$	11.44		$	11.30		$	11.40		$	11.07		$	10.90
Non-GAAP adjustments:
Goodwill		(0.60	)		(0.60	)		(0.59	)		(0.58	)		(0.58	)
Core deposit intangible		(0.06	)		(0.07	)		(0.08	)		(0.08	)		(0.07	)
Tangible Book Value per Share (non-GAAP)	$	10.78		$	10.63		$	10.73		$	10.41		$	10.25

	For the quarter ended
	3/31/2025			12/31/2024			9/30/2024			6/30/2024			3/31/2024
	(Dollars in thousands)

Efficiency Ratio:
Non-interest Expense (GAAP)	$	15,184		$	14,926		$	14,406		$	14,314		$	14,782

Net Interest Income (GAAP)	$	15,534		$	15,273		$	14,728		$	14,470		$	15,346

Non-interest Income (GAAP)	$	2,759		$	3,254		$	3,141		$	3,834		$	2,674
Non-GAAP adjustments:
Unrealized losses (gains) on marketable equity securities		5			9			(10	)		(4	)		(8	)
Gain on non-marketable equity investments		–			(300	)		–			(987	)		–
Loss on disposal of premises and equipment		–			–			–			–			6
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP)	$	2,764		$	2,963		$	3,131		$	2,843		$	2,672
Total Revenue for Adjusted Efficiency Ratio (non-GAAP)	$	18,298		$	18,236		$	17,859		$	17,313		$	18,018

Efficiency Ratio (GAAP)		83.00	%		80.56	%		80.62	%		78.20	%		82.03	%

Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP))		82.98	%		81.85	%		80.67	%		82.68	%		82.04	%

For further information contact:
James C. Hagan, President and CEO
Guida R. Sajdak, Executive Vice President and CFO
Meghan Hibner, First Vice President and Investor Relations Officer
413-568-1911

The MIL Network –

April 23, 2025

MIL-OSI: National Bank Holdings Corporation Announces First Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

NYSE Ticker: NBHC

DENVER, April 22, 2025 (GLOBE NEWSWIRE) — National Bank Holdings Corporation (the “Company”) reported:

	For the quarter⁽¹⁾									For the quarter – adjusted⁽¹⁾⁽²⁾
	1Q25			4Q24			1Q24			1Q25			4Q24			1Q24
Net income ($000’s)	$	24,231		$	28,184		$	31,391		$	24,231		$	33,232		$	31,391
Earnings per share – diluted	$	0.63		$	0.73		$	0.82		$	0.63		$	0.86		$	0.82
Return on average assets		0.99	%		1.13	%		1.28	%		0.99	%		1.33	%		1.28	%
Return on average tangible assets⁽²⁾		1.09	%		1.23	%		1.39	%		1.09	%		1.44	%		1.39	%
Return on average equity		7.42	%		8.59	%		10.30	%		7.42	%		10.13	%		10.30	%
Return on average tangible common equity⁽²⁾		10.64	%		12.31	%		15.14	%		10.64	%		14.40	%		15.14	%

(1)		Ratios are annualized.
(2)		See non-GAAP reconciliations below.

In announcing these results, Chief Executive Officer Tim Laney shared, “We delivered quarterly net income of $24.2 million and $0.63 of earnings per diluted share. The quarter’s results were negatively impacted by elevated provision primarily resulting from a loan charge-off involving suspected fraud by the borrower. Removing the impact of the fraud-related charge-off and a payroll tax credit benefit included in the quarter, earnings per share would have exceeded analysts’ median estimate for the quarter. It’s noteworthy that we delivered a return on tangible assets of 1.1% even in light of the charge-off. Further, past dues and non-performing loan ratios improved during the quarter. With a solid net interest margin of 3.93%, we drove 3.4% growth in our fully taxable equivalent net interest income over the same period last year.”

Mr. Laney added, “Our commitment to serve our clients, coupled with building a fortress balance sheet with strong capital, liquidity, and diversified sources of funding has led us to be recognized by Forbes as one of the best banks in the United States. Our Common Equity Tier 1 capital ratio totaled 13.6% and tangible book value per share grew $0.66 during the quarter to $25.94 per share. We have built our Bank to withstand uncertain and volatile times, and we continue to make meaningful investments in technology and drive shareholders returns.”

First Quarter 2025 Results
(All comparisons refer to the fourth quarter of 2024, except as noted)

Net income totaled $24.2 million or $0.63 per diluted share, compared to $28.2 million or $0.73 per diluted share. The first quarter’s results were impacted by $10.2 million of provision expense recorded primarily to cover a charge-off on one credit driven by suspected fraudulent activity by the borrower. The return on average tangible assets totaled 1.09%, compared to 1.23%, and the return on average tangible common equity totaled 10.64%, compared to 12.31%.

Net Interest Income
Fully taxable equivalent net interest income totaled $88.6 million, compared to $92.0 million, decreasing $3.4 million due to two fewer business days in the first quarter and a decrease of $37.9 million in average earning assets. The fully taxable equivalent net interest margin narrowed six basis points to 3.93%, driven by a 13 basis point decrease in earning asset yields, partially offset by an eight basis point improvement in the cost of funds.

Loans
Loans totaled $7.6 billion at March 31, 2025, compared to $7.8 billion. We generated quarterly loan fundings of $255.7 million, led by commercial loan fundings of $160.2 million. The first quarter weighted average rate on new loans at the time of origination was 7.3%, compared to the quarter’s weighted average yield of 6.4% on our loan portfolio.

Asset Quality and Provision for Credit Losses
The Company recorded $10.2 million of provision expense for credit losses during the first quarter, compared to $2.0 million. The current quarter’s provision expense was recorded primarily to cover the charge-off on one credit driven by suspected fraudulent activity by the borrower. Annualized net charge-offs totaled 0.80% of average total loans, compared to 0.11%. Non-performing loans decreased one basis point to 0.45% of total loans at March 31, 2025, and non-performing assets decreased one basis point to 0.46% of total loans and OREO at March 31, 2025. The allowance for credit losses as a percentage of loans totaled 1.18% at March 31, 2025, compared to 1.22% at December 31, 2024.

Deposits
Average total deposits decreased $111.6 million to $8.3 billion during the first quarter 2025, and average transaction deposits (defined as total deposits less time deposits) decreased $113.1 million to $7.2 billion. Transaction deposits on a spot basis grew $147.7 million to $7.4 billion at March 31, 2025. The loan to deposit ratio totaled 90.8% at March 31, 2025, compared to 94.1%. The mix of transaction deposits to total deposits was 87.4% at March 31, 2025, compared to 87.6%.

Non-Interest Income
Non-interest income totaled $15.4 million during the first quarter, compared to $11.1 million. Included in the prior quarter was $6.6 million of non-recurring loss on investment security sales. Mortgage banking income increased $1.0 million, compared to the prior quarter. Service charges and bank card fees decreased $0.7 million due to seasonality, and other non-interest income was $2.6 million lower due to lower SBA gains on sale and swap fee activity during the first quarter.

Non-Interest Expense
Non-interest expense decreased $2.5 million to $62.0 million during the first quarter. Salaries and benefits decreased $1.1 million primarily due to payroll tax credits realized in the first quarter. Data processing decreased $0.5 million, and professional services expense decreased $0.2 million driven by our continued disciplined expense management. Included within other non-interest expense in the prior quarter was $1.2 million of banking center consolidation-related expense. The fully taxable equivalent efficiency ratio was 57.7% at March 31, 2025, compared to 57.0%, excluding other intangible assets amortization and the prior quarter’s non-recurring loss on investment security sales.

Income tax expense decreased $0.9 million to $5.6 million, due to the first quarter’s lower pre-tax income. The effective tax rate was 18.8% for the first quarter, consistent with the prior quarter.

Capital
Capital ratios continue to be well in excess of federal bank regulatory agency “well capitalized” thresholds. The tier 1 leverage ratio totaled 10.89%, and the common equity tier 1 capital ratio totaled 13.61% at March 31, 2025. Shareholders’ equity increased $24.2 million to $1.3 billion at March 31, 2025, primarily driven by $13.1 million of growth in retained earnings from net income after covering the quarter’s dividend, and a $10.0 million improvement in accumulated other comprehensive loss due to changes in the interest rate environment.

Common book value per share increased $0.61 to $34.90 at March 31, 2025. Tangible common book value per share increased $0.66 to $25.94 driven by the quarter’s earnings after covering the quarterly dividend, and a $0.26 improvement in accumulated other comprehensive loss.

Year-Over-Year Review

(All comparisons refer to the first quarter of 2024, except as noted)

Net income totaled $24.2 million, or $0.63 per diluted share, compared to net income of $31.4 million, or $0.82 per diluted share in the same period prior year. The decrease compared to the prior year was largely driven by higher provision expense of $10.2 million. Fully taxable equivalent pre-provision net revenue increased $1.4 million to $42.0 million. The return on average tangible assets totaled 1.09%, compared to 1.39%, and the return on average tangible common equity was 10.64%, compared to 15.14%.

Fully taxable equivalent net interest income increased $2.9 million to $88.6 million. Average earning assets increased $12.6 million, including average loan growth of $29.3 million and average investment securities growth of $22.6 million. The fully taxable equivalent net interest margin widened 15 basis points to 3.93%, as an 18 basis point decrease in the cost of funds outpaced a three basis point decrease in earning asset yields. Average interest bearing liabilities increased $35.8 million due to higher average deposit balances, and the cost of funds totaled 2.07%, compared to 2.25% in the same period prior year.

Loans outstanding totaled $7.6 billion as of March 31, 2025, increasing $77.2 million or 1.0%. New loan fundings over the trailing twelve months totaled $1.6 billion, led by commercial fundings of $1.1 billion.

The Company recorded $10.2 million of provision expense for credit losses, compared to no provision expense for credit losses in the first quarter of 2024. The current quarter’s provision expense was recorded primarily to cover the charge-off on one credit driven by suspected fraudulent activity by the borrower. Annualized net charge-offs totaled 0.80% of average total loans, compared to minimal net charge-offs in the same period prior year. Non-performing loans decreased two basis points to 0.45% of total loans at March 31, 2025, and non-performing assets decreased seven basis points to 0.46% of total loans and OREO at March 31, 2025. The allowance for credit losses as a percentage of loans totaled 1.18% at March 31, 2025, compared to 1.29% at March 31, 2024.

Average total deposits increased $41.5 million or 0.5% to $8.3 billion, and average transaction deposits decreased $4.5 million. The mix of transaction deposits to total deposits was 87.4% at March 31, 2025, compared to 88.3%.

Non-interest income totaled $15.4 million, compared to $17.7 million, decreasing primarily due to $2.3 million lower other non-interest income driven by timing of SBA loan gain on sales and swap fee income activity, and a $0.6 million gain from the sale of a banking center building included in the first quarter of 2024.

Non-interest expense decreased $0.8 million to $62.0 million. Salaries and benefits decreased $2.2 million primarily due to payroll tax credits realized during the first quarter 2025, which was partially offset by increases in data processing and occupancy and equipment, driven by investments in technology.

Income tax expense totaled $5.6 million, a decrease of $1.9 million, driven by lower pre-tax income. The effective tax rate was 18.8%, compared to 19.3% in the first quarter of 2024.

Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, April 23, 2025. Interested parties may listen to this call by dialing (877) 400-0505 using the participant passcode of 7036929 and asking for the NBHC Q1 2025 Earnings Call. The earnings release and a link to the replay of the call will be available on the Company’s website at www.nationalbankholdings.com by visiting the investor relations area.

About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise, delivering high quality client service and committed to stakeholder results. Through its bank subsidiaries, NBH Bank and Bank of Jackson Hole Trust, National Bank Holdings Corporation operates a network of over 90 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. Its trust and wealth management business is operated in its core footprint under the Bank of Jackson Hole Trust charter. NBH Bank operates under a single state charter through the following brand names as divisions of NBH Bank: in Colorado, Community Banks of Colorado and Community Banks Mortgage; in Kansas and Missouri, Bank Midwest and Bank Midwest Mortgage; in Texas, Utah, New Mexico and Idaho, Hillcrest Bank and Hillcrest Bank Mortgage; and in Wyoming, Bank of Jackson Hole and Bank of Jackson Hole Mortgage. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

For more information visit: cobnks.com, bankmw.com, hillcrestbank.com, bankofjacksonhole.com, or nbhbank.com, or connect with any of our brands on LinkedIn.

About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including “adjusted return on average assets,” “tangible assets,” “return on average tangible assets,” “adjusted return on average equity,” “tangible common equity,” “return on average tangible common equity,” “tangible common book value per share,” “tangible common equity to tangible assets,” “non-interest expense excluding other intangible assets amortization,” “non-interest income adjusted for the loss on security sales,” “efficiency ratio excluding other intangible assets amortization, adjusted for the loss on security sales,” “adjusted net income,” “adjusted earnings per share – diluted,” “net income excluding the impact of other intangible assets amortization expense, adjusted for the loss on security sales, after tax,” “net income adjusted for the loss on security sales, after tax,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “adjusted return on average tangible assets,” “adjusted return on average tangible common equity,” “pre-provision net revenue,” “pre-provision net revenue, adjusted for the loss on security sales,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not discuss historical facts but instead relate to expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. Forward-looking statements are generally identified by words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend,” “goal,” “focus,” “maintains,” “future,” “ultimately, ” “likely,” “anticipate,” “ensure,” “strategy,” “objective,” and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties. We have based these statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, liquidity, results of operations, business strategy and growth prospects. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements and, therefore, you are cautioned not to place undue reliance on such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: business and economic conditions along with external events both generally and in the financial services industry; susceptibility to credit risk and fluctuations in the value of real estate and other collateral securing a significant portion of our loan portfolio, including with regards to real estate acquired through foreclosure, and the accuracy of appraisals related to such real estate; the allowance for credit losses and fair value adjustments may be insufficient to absorb losses in our loan portfolio; our ability to maintain sufficient liquidity to meet the requirements of deposit withdrawals and other business needs; changes impacting monetary supply and the businesses of our clients and counterparties, including levels of market interest rates, inflation, currency values, monetary and fiscal policies, and the volatility of trading markets; changes in the fair value of our investment securities and the ability of companies in which we invest to commercialize their technology or product concepts; the loss of certain executive officers and key personnel; any service interruptions, cyber incidents or other breaches relating to our technology systems, security systems or infrastructure or those of our third-party providers; the occurrence of fraud or other financial crimes within our business; competition from other financial institutions and financial services providers and the effects of disintermediation within the banking business including consolidation within the industry; changes to federal government lending programs like the Small Business Administration’s Preferred Lender Program and the Federal Housing Administration’s insurance programs, including the impact of a government shutdown on such programs; impairment of our mortgage servicing rights, disruption in the secondary market for mortgage loans, declines in real estate values, or being required to repurchase mortgage loans or reimburse investors; developments in technology, such as artificial intelligence, the success of our digital growth strategy, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our clients’ expectations for convenience and security; our ability to execute our organic growth and acquisition strategies; the accuracy of projected operating results for assets and businesses we acquire as well as our ability to drive organic loan growth to replace loans in our existing portfolio with comparable loans as loans are paid down; changes to federal, state and local laws and regulations along with executive orders applicable to our business, including tax laws; our ability to comply with and manage costs related to extensive government regulation and supervision, including current and future regulations affecting bank holding companies and depository institutions; the application of any increased assessment rates imposed by the Federal Deposit Insurance Corporation (“FDIC”); claims or legal action brought against us by third parties or government agencies; and other factors, risks, trends and uncertainties described elsewhere in our other filings with the Securities and Exchange Commission (the “SEC”). The forward-looking statements are made as of the date of this press release, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

Contacts:
Analysts/Institutional Investors:
Emily Gooden, Chief Accounting Officer and Investor Relations Director, (720) 554-6640, ir@nationalbankholdings.com
Nicole Van Denabeele, Chief Financial Officer, (720) 529-3370, ir@nationalbankholdings.com

Media:
Jody Soper, Chief Marketing Officer, (303) 784-5925, Jody.Soper@nbhbank.com


NATIONAL BANK HOLDINGS CORPORATION FINANCIAL SUMMARY Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data)

	For the three months ended
	March 31,		December 31,			March 31,
	2025		2024			2024
Total interest and dividend income	$	129,963	$	136,086		$	131,732
Total interest expense		43,272		45,955			47,702
Net interest income		86,691		90,131			84,030
Taxable equivalent adjustment		1,910		1,874			1,692
Net interest income FTE⁽¹⁾		88,601		92,005			85,722
Provision expense for credit losses		10,200		1,979			—
Net interest income after provision for credit losses FTE⁽¹⁾		78,401		90,026			85,722
Non-interest income:
Service charges		4,118		4,359			4,391
Bank card fees		4,194		4,671			4,578
Mortgage banking income		3,315		2,296			2,655
Other non-interest income		3,749		6,375			6,070
Loss on security sales		—		(6,582	)		—
Total non-interest income		15,376		11,119			17,694
Non-interest expense:
Salaries and benefits		34,362		35,459			36,520
Occupancy and equipment		10,837		10,193			9,941
Professional fees		1,423		1,599			1,646
Data processing		4,401		4,900			4,066
Other non-interest expense		9,017		10,418			8,653
Other intangible assets amortization		1,977		1,977			2,008
Total non-interest expense		62,017		64,546			62,834

Income before income taxes FTE⁽¹⁾		31,760		36,599			40,582
Taxable equivalent adjustment		1,910		1,874			1,692
Income before income taxes		29,850		34,725			38,890
Income tax expense		5,619		6,541			7,499
Net income	$	24,231	$	28,184		$	31,391
Earnings per share – basic	$	0.63	$	0.73		$	0.82
Earnings per share – diluted		0.63		0.73			0.82
Common stock dividend		0.29		0.29			0.27

(1)		Net interest income is presented on a GAAP basis and fully taxable equivalent (FTE) basis, as the Company believes this non-GAAP measure is the preferred industry measurement for this item. The FTE adjustment is for the tax benefit on certain tax exempt loans using the federal tax rate of 21% for each period presented.


NATIONAL BANK HOLDINGS CORPORATION Consolidated Statements of Financial Condition (Unaudited) (Dollars in thousands, except share and per share data)

	March 31, 2025			December 31, 2024			March 31, 2024
ASSETS
Cash and cash equivalents	$	246,298		$	127,848		$	292,931
Investment securities available-for-sale		634,376			527,547			685,666
Investment securities held-to-maturity		706,912			533,108			570,850
Non-marketable securities		76,203			76,462			73,439
Loans		7,646,296			7,751,143			7,569,052
Allowance for credit losses		(90,192	)		(94,455	)		(97,607	)
Loans, net		7,556,104			7,656,688			7,471,445
Loans held for sale		11,885			24,495			14,065
Other real estate owned		615			662			4,064
Premises and equipment, net		204,567			196,773			168,956
Goodwill		306,043			306,043			306,043
Intangible assets, net		54,489			58,432			64,212
Other assets		301,378			299,635			315,805
Total assets	$	10,098,870		$	9,807,693		$	9,967,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Non-interest bearing demand deposits	$	2,215,313		$	2,213,685		$	2,292,917
Interest bearing demand deposits		1,337,905			1,411,860			1,427,856
Savings and money market		3,812,312			3,592,312			3,801,013
Total transaction deposits		7,365,530			7,217,857			7,521,786
Time deposits		1,058,677			1,020,036			995,976
Total deposits		8,424,207			8,237,893			8,517,762
Securities sold under agreements to repurchase		20,749			18,895			19,577
Long-term debt		54,588			54,511			54,278
Federal Home Loan Bank advances		80,000			50,000			—
Other liabilities		190,018			141,319			144,029
Total liabilities		8,769,562			8,502,618			8,735,646
Shareholders’ equity:
Common stock		515			515			515
Additional paid in capital		1,168,433			1,167,431			1,163,773
Retained earnings		521,939			508,864			454,211
Treasury stock		(301,531	)		(301,694	)		(306,460	)
Accumulated other comprehensive loss, net of tax		(60,048	)		(70,041	)		(80,209	)
Total shareholders’ equity		1,329,308			1,305,075			1,231,830
Total liabilities and shareholders’ equity	$	10,098,870		$	9,807,693		$	9,967,476
SHARE DATA
Average basic shares outstanding		38,068,455			38,327,964			38,031,358
Average diluted shares outstanding		38,229,869			38,565,164			38,188,480
Ending shares outstanding		38,094,105			38,054,482			37,806,148
Common book value per share	$	34.90		$	34.29		$	32.58
Tangible common book value per share⁽¹⁾(non-GAAP)		25.94			25.28			23.32
CAPITAL RATIOS
Average equity to average assets		13.35	%		13.10	%		12.40	%
Tangible common equity to tangible assets⁽¹⁾		10.13	%		10.16	%		9.17	%
Tier 1 leverage ratio		10.89	%		10.69	%		9.99	%
Common equity tier 1 risk-based capital ratio		13.61	%		13.20	%		12.35	%
Tier 1 risk-based capital ratio		13.61	%		13.20	%		12.35	%
Total risk-based capital ratio		15.49	%		15.11	%		14.30	%

(1)		Represents a non-GAAP financial measure. See non-GAAP reconciliations below.


NATIONAL BANK HOLDINGS CORPORATION Loan Portfolio (Dollars in thousands)

Period End Loan Balances by Type

					March 31, 2025				March 31, 2025
					vs. December 31, 2024				vs. March 31, 2024
	March 31, 2025		December 31, 2024		% Change		March 31, 2024		% Change
Originated:
Commercial:
Commercial and industrial	$	1,871,301	$	1,881,570	(0.5	)%	$	1,777,328	5.3	%
Municipal and non-profit		1,116,724		1,106,865	0.9	%		1,062,287	5.1	%
Owner-occupied commercial real estate		1,026,692		1,048,481	(2.1	)%		875,303	17.3	%
Food and agribusiness		251,120		266,332	(5.7	)%		241,654	3.9	%
Total commercial		4,265,837		4,303,248	(0.9	)%		3,956,572	7.8	%
Commercial real estate non-owner occupied		1,136,176		1,123,718	1.1	%		1,092,780	4.0	%
Residential real estate		915,139		922,328	(0.8	)%		923,103	(0.9	)%
Consumer		11,955		12,773	(6.4	)%		14,936	(20.0	)%
Total originated		6,329,107		6,362,067	(0.5	)%		5,987,391	5.7	%

Acquired:
Commercial:
Commercial and industrial		105,493		114,255	(7.7	)%		132,532	(20.4	)%
Municipal and non-profit		271		277	(2.2	)%		294	(7.8	)%
Owner-occupied commercial real estate		198,339		215,663	(8.0	)%		234,486	(15.4	)%
Food and agribusiness		33,831		36,987	(8.5	)%		57,896	(41.6	)%
Total commercial		337,934		367,182	(8.0	)%		425,208	(20.5	)%
Commercial real estate non-owner occupied		659,680		688,620	(4.2	)%		767,419	(14.0	)%
Residential real estate		318,510		331,510	(3.9	)%		387,101	(17.7	)%
Consumer		1,065		1,764	(39.6	)%		1,933	(44.9	)%
Total acquired		1,317,189		1,389,076	(5.2	)%		1,581,661	(16.7	)%
Total loans	$	7,646,296	$	7,751,143	(1.4	)%	$	7,569,052	1.0	%

Loan Fundings⁽¹⁾

	First quarter		Fourth quarter		Third quarter		Second quarter		First quarter
	2025		2024		2024		2024		2024
Commercial:
Commercial and industrial	$	108,594	$	146,600	$	93,711	$	241,910	$	53,978
Municipal and non-profit		12,506		49,175		35,677		28,785		14,564
Owner occupied commercial real estate		37,762		117,850		70,517		102,615		35,128
Food and agribusiness		1,338		15,796		19,205		11,040		(7,204	)
Total commercial		160,200		329,421		219,110		384,350		96,466
Commercial real estate non-owner occupied		65,254		119,132		91,809		83,184		73,789
Residential real estate		29,300		30,750		47,322		36,124		29,468
Consumer		970		726		1,010		1,547		234
Total	$	255,724	$	480,029	$	359,251	$	505,205	$	199,957

(1)		Loan fundings are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings (paydowns) under revolving lines of credit were $21,752, $64,375, $16,302, $19,281 and ($59,523) for the periods noted in the table above, respectively.


NATIONAL BANK HOLDINGS CORPORATION Summary of Net Interest Margin (Dollars in thousands)

	For the three months ended								For the three months ended								For the three months ended
	March 31, 2025								December 31, 2024								March 31, 2024
	Average					Average			Average					Average			Average					Average
	balance			Interest		rate			balance			Interest		rate			balance			Interest		rate
Interest earning assets:
Originated loans FTE⁽¹⁾⁽²⁾	$	6,335,931		$	102,221		6.54	%	$	6,368,697		$	107,400		6.71	%	$	6,046,849		$	100,914		6.71	%
Acquired loans		1,351,726			19,547		5.86	%		1,425,344			22,253		6.21	%		1,611,521			24,289		6.06	%
Loans held for sale		19,756			349		7.16	%		20,196			320		6.30	%		12,017			225		7.53	%
Investment securities available-for-sale		716,938			4,617		2.58	%		735,977			3,196		1.74	%		751,168			4,103		2.18	%
Investment securities held-to-maturity		635,961			4,120		2.59	%		537,970			3,887		2.89	%		579,160			2,514		1.74	%
Other securities		31,386			480		6.12	%		29,256			434		5.93	%		35,036			616		7.03	%
Interest earning deposits		48,206			539		4.53	%		60,400			470		3.10	%		91,579			763		3.35	%
Total interest earning assets FTE⁽²⁾	$	9,139,904		$	131,873		5.85	%	$	9,177,840		$	137,960		5.98	%	$	9,127,330		$	133,424		5.88	%
Cash and due from banks	$	77,237							$	81,371							$	102,583
Other assets		794,374								793,734								756,230
Allowance for credit losses		(95,492	)							(95,750	)							(97,882	)
Total assets	$	9,916,023							$	9,957,195							$	9,888,261
Interest bearing liabilities:
Interest bearing demand, savings and money market deposits	$	5,027,052		$	32,511		2.62	%	$	5,087,799		$	35,443		2.77	%	$	4,947,811		$	36,413		2.96	%
Time deposits		1,035,983			8,756		3.43	%		1,034,560			9,169		3.53	%		990,041			7,584		3.08	%
Federal Home Loan Bank advances		107,151			1,105		4.18	%		66,428			820		4.91	%		228,236			3,181		5.61	%
Other borrowings⁽³⁾		50,277			382		3.08	%		18,374			5		0.11	%		18,929			6		0.13	%
Long-term debt		54,539			518		3.85	%		54,464			518		3.78	%		54,229			518		3.84	%
Total interest bearing liabilities	$	6,275,002		$	43,272		2.80	%	$	6,261,625		$	45,955		2.92	%	$	6,239,246		$	47,702		3.07	%
Demand deposits	$	2,197,300							$	2,249,614							$	2,280,997
Other liabilities		119,806								141,327								141,735
Total liabilities		8,592,108								8,652,566								8,661,978
Shareholders’ equity		1,323,915								1,304,629								1,226,283
Total liabilities and shareholders’ equity	$	9,916,023							$	9,957,195							$	9,888,261
Net interest income FTE⁽²⁾				$	88,601							$	92,005							$	85,722
Interest rate spread FTE⁽²⁾							3.05	%							3.06	%							2.81	%
Net interest earning assets	$	2,864,902							$	2,916,215							$	2,888,084
Net interest margin FTE⁽²⁾							3.93	%							3.99	%							3.78	%
Average transaction deposits	$	7,224,352							$	7,337,413							$	7,228,808
Average total deposits		8,260,335								8,371,973								8,218,849
Ratio of average interest earning assets to average interest bearing liabilities		145.66	%							146.57	%							146.29	%

(1)		Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
(2)		Presented on a fully taxable equivalent basis using the statutory tax rate of 21%. The tax equivalent adjustments included above are $1,910, $1,874 and $1,692 for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.
(3)		Other borrowings includes securities sold under agreements to repurchase and cash collateral received from counterparties in connection with derivative swap agreements.


NATIONAL BANK HOLDINGS CORPORATION Allowance for Credit Losses and Asset Quality (Dollars in thousands)

Allowance for Credit Losses Analysis

	As of and for the three months ended
	March 31, 2025			December 31, 2024			March 31, 2024
Beginning allowance for credit losses	$	94,455		$	95,047		$	97,947
Charge-offs		(15,251	)		(2,391	)		(278	)
Recoveries		138			175			188
Provision expense (release) for credit losses		10,850			1,624			(250	)
Ending allowance for credit losses (“ACL”)	$	90,192		$	94,455		$	97,607
Ratio of annualized net charge-offs to average total loans during the period		0.80	%		0.11	%		0.00	%
Ratio of ACL to total loans outstanding at period end		1.18	%		1.22	%		1.29	%
Ratio of ACL to total non-performing loans at period end		260.52	%		262.42	%		272.52	%
Total loans	$	7,646,296		$	7,751,143		$	7,569,052
Average total loans during the period		7,660,974			7,772,712			7,632,635
Total non-performing loans		34,620			35,994			35,817

Past Due and Non-accrual Loans

	March 31, 2025			December 31, 2024			March 31, 2024
Loans 30-89 days past due and still accruing interest	$	17,003		$	23,164		$	3,495
Loans 90 days past due and still accruing interest		1,012			14,940			1
Non-accrual loans		34,620			35,994			35,817
Total past due and non-accrual loans	$	52,635		$	74,098		$	39,313
Total 90 days past due and still accruing interest and non-accrual loans to total loans		0.47	%		0.66	%		0.47	%

Asset Quality Data

	March 31, 2025			December 31, 2024			March 31, 2024
Non-performing loans	$	34,620		$	35,994		$	35,817
OREO		615			662			4,064
Total non-performing assets	$	35,235		$	36,656		$	39,881
Total non-performing loans to total loans		0.45	%		0.46	%		0.47	%
Total non-performing assets to total loans and OREO		0.46	%		0.47	%		0.53	%


NATIONAL BANK HOLDINGS CORPORATION Key Metrics⁽¹⁾

	As of and for the three months ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Return on average assets		0.99	%		1.13	%		1.28	%
Return on average tangible assets⁽²⁾		1.09	%		1.23	%		1.39	%
Return on average tangible assets, adjusted⁽²⁾		1.09	%		1.44	%		1.39	%
Return on average equity		7.42	%		8.59	%		10.30	%
Return on average tangible common equity⁽²⁾		10.64	%		12.31	%		15.14	%
Return on average tangible common equity, adjusted⁽²⁾		10.64	%		14.40	%		15.14	%
Loan to deposit ratio (end of period)		90.77	%		94.09	%		88.86	%
Non-interest bearing deposits to total deposits (end of period)		26.30	%		26.87	%		26.92	%
Net interest margin⁽³⁾		3.85	%		3.91	%		3.70	%
Net interest margin FTE⁽²⁾⁽³⁾		3.93	%		3.99	%		3.78	%
Interest rate spread FTE⁽²⁾⁽⁴⁾		3.05	%		3.06	%		2.81	%
Yield on earning assets⁽⁵⁾		5.77	%		5.90	%		5.80	%
Yield on earning assets FTE⁽²⁾⁽⁵⁾		5.85	%		5.98	%		5.88	%
Cost of funds		2.07	%		2.15	%		2.25	%
Cost of deposits		2.03	%		2.12	%		2.15	%
Non-interest income to total revenue FTE⁽⁶⁾		14.79	%		10.78	%		17.11	%
Efficiency ratio		60.76	%		63.75	%		61.77	%
Efficiency ratio excluding other intangible assets amortization FTE, adjusted⁽²⁾		57.74	%		57.03	%		58.82	%
Pre-provision net revenue	$	40,050		$	36,704		$	38,890
Pre-provision net revenue FTE⁽²⁾		41,960			38,578			40,582
Pre-provision net revenue FTE, adjusted⁽²⁾		41,960			45,160			40,582

Total Loans Asset Quality Data⁽⁷⁾⁽⁸⁾
Non-performing loans to total loans		0.45	%		0.46	%		0.47	%
Non-performing assets to total loans and OREO		0.46	%		0.47	%		0.53	%
Allowance for credit losses to total loans		1.18	%		1.22	%		1.29	%
Allowance for credit losses to non-performing loans		260.52	%		262.42	%		272.52	%
Net charge-offs to average loans		0.80	%		0.11	%		0.00	%

(1)		Ratios are annualized.
(2)		Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below.
(3)		Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
(4)		Interest rate spread represents the difference between the weighted average yield on interest earning assets, including FTE income, and the weighted average cost of interest bearing liabilities. Ratio represents a non-GAAP financial measure.
(5)		Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
(6)		Non-interest income to total revenue represents non-interest income divided by the sum of net interest income FTE and non-interest income. Ratio represents a non-GAAP financial measure.
(7)		Non-performing loans consist of non-accruing loans and modified loans on non-accrual.
(8)		Total loans are net of unearned discounts and fees.


NATIONAL BANK HOLDINGS CORPORATION NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Dollars in thousands, except share and per share data)

Tangible Common Book Value Ratios

	March 31, 2025			December 31, 2024			March 31, 2024
Total shareholders’ equity	$	1,329,308		$	1,305,075		$	1,231,830
Less: goodwill and other intangible assets, net		(354,800	)		(356,777	)		(362,709	)
Add: deferred tax liability related to goodwill		13,638			13,535			12,539
Tangible common equity (non-GAAP)	$	988,146		$	961,833		$	881,660

Total assets	$	10,098,870		$	9,807,693		$	9,967,476
Less: goodwill and other intangible assets, net		(354,800	)		(356,777	)		(362,709	)
Add: deferred tax liability related to goodwill		13,638			13,535			12,539
Tangible assets (non-GAAP)	$	9,757,708		$	9,464,451		$	9,617,306

Tangible common equity to tangible assets calculations:
Total shareholders’ equity to total assets		13.16	%		13.31	%		12.36	%
Less: impact of goodwill and other intangible assets, net		(3.03	)%		(3.15	)%		(3.19	)%
Tangible common equity to tangible assets (non-GAAP)		10.13	%		10.16	%		9.17	%

Tangible common book value per share calculations:
Tangible common equity (non-GAAP)	$	988,146		$	961,833		$	881,660
Divided by: ending shares outstanding		38,094,105			38,054,482			37,806,148
Tangible common book value per share (non-GAAP)	$	25.94		$	25.28		$	23.32


NATIONAL BANK HOLDINGS CORPORATION (Dollars in thousands, except share and per share data) Return on Average Tangible Assets and Return on Average Tangible Equity

	As of and for the three months ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Net income	$	24,231		$	28,184		$	31,391
Add: loss on security sales, after tax (non-GAAP)⁽¹⁾		—			5,048			—
Net income adjusted for the loss on security sales, after tax (non-GAAP)⁽¹⁾	$	24,231		$	33,232		$	31,391

Net income	$	24,231		$	28,184		$	31,391
Add: impact of other intangible assets amortization expense, after tax		1,516			1,516			1,534
Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP)	$	25,747		$	29,700		$	32,925

Net income excluding the impact of other intangible assets amortization expense, after tax	$	25,747		$	29,700		$	32,925
Add: loss on security sales, after tax (non-GAAP)⁽¹⁾		—			5,048			—
Net income excluding the impact of other intangible assets amortization expense, adjusted for the loss on security sales, after tax (non-GAAP)⁽¹⁾	$	25,747		$	34,748		$	32,925

Average assets	$	9,916,023		$	9,957,195		$	9,888,261
Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill		(342,425	)		(344,417	)		(351,383	)
Average tangible assets (non-GAAP)	$	9,573,598		$	9,612,778		$	9,536,878

Average shareholders’ equity	$	1,323,915		$	1,304,629		$	1,226,283
Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill		(342,425	)		(344,417	)		(351,383	)
Average tangible common equity (non-GAAP)	$	981,490		$	960,212		$	874,900

Return on average assets		0.99	%		1.13	%		1.28	%
Adjusted return on average assets (non-GAAP)		0.99	%		1.33	%		1.28	%
Return on average tangible assets (non-GAAP)		1.09	%		1.23	%		1.39	%
Adjusted return on average tangible assets (non-GAAP)		1.09	%		1.44	%		1.39	%
Return on average equity		7.42	%		8.59	%		10.30	%
Adjusted return on average equity (non-GAAP)		7.42	%		10.13	%		10.30	%
Return on average tangible common equity (non-GAAP)		10.64	%		12.31	%		15.14	%
Adjusted return on average tangible common equity (non-GAAP)		10.64	%		14.40	%		15.14	%

(1) Adjustments:
Loss on security sales (non-GAAP)	$	—		$	6,582		$	—
Tax benefit impact		—			(1,534	)		—
Total adjustments, after tax (non-GAAP)	$	—		$	5,048		$	—

Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

	As of and for the three months ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Interest income	$	129,963		$	136,086		$	131,732
Add: impact of taxable equivalent adjustment		1,910			1,874			1,692
Interest income FTE (non-GAAP)	$	131,873		$	137,960		$	133,424

Net interest income	$	86,691		$	90,131		$	84,030
Add: impact of taxable equivalent adjustment		1,910			1,874			1,692
Net interest income FTE (non-GAAP)	$	88,601		$	92,005		$	85,722

Average earning assets	$	9,139,904		$	9,177,840		$	9,127,330
Yield on earning assets		5.77	%		5.90	%		5.80	%
Yield on earning assets FTE (non-GAAP)		5.85	%		5.98	%		5.88	%
Net interest margin		3.85	%		3.91	%		3.70	%
Net interest margin FTE (non-GAAP)		3.93	%		3.99	%		3.78	%

Efficiency Ratio and Pre-Provision Net Revenue

	As of and for the three months ended
	March 31,			December 31,			March 31,
	2025			2024			2024
Net interest income	$	86,691		$	90,131		$	84,030
Add: impact of taxable equivalent adjustment		1,910			1,874			1,692
Net interest income FTE (non-GAAP)	$	88,601		$	92,005		$	85,722

Non-interest income	$	15,376		$	11,119		$	17,694
Add: loss on security sales (non-GAAP)		—			6,582			—
Non-interest income adjusted for the loss on security sales (non-GAAP)	$	15,376		$	17,701		$	17,694

Non-interest expense	$	62,017		$	64,546		$	62,834
Less: other intangible assets amortization		(1,977	)		(1,977	)		(2,008	)
Non-interest expense excluding other intangible assets amortization (non-GAAP)	$	60,040		$	62,569		$	60,826

Efficiency ratio		60.76	%		63.75	%		61.77	%
Efficiency ratio FTE (non-GAAP)		59.64	%		62.59	%		60.76	%
Efficiency ratio excluding other intangible assets amortization, adjusted for the loss on security sales FTE (non-GAAP)		57.74	%		57.03	%		58.82	%
Pre-provision net revenue (non-GAAP)	$	40,050		$	36,704		$	38,890
Pre-provision net revenue, FTE (non-GAAP)		41,960			38,578			40,582
Pre-provision net revenue FTE, adjusted for the loss on security sales (non-GAAP)		41,960			45,160			40,582

Adjusted Net Income and Earnings Per Share

	As of and for the three months ended
	March 31,		December 31,		March 31,
	2025		2024		2024
Adjustments to net income:
Net income	$	24,231	$	28,184	$	31,391
Add: adjustment for the loss on security sales, after tax (non-GAAP)		—		5,048		—
Adjusted net income (non-GAAP)	$	24,231	$	33,232	$	31,391

Adjustments to earnings per share:
Earnings per share diluted	$	0.63	$	0.73	$	0.82
Add: adjustment for the loss on security sales, after tax (non-GAAP)		—		0.13		—
Adjusted earnings per share – diluted (non-GAAP)	$	0.63	$	0.86	$	0.82

The MIL Network –

April 23, 2025

MIL-OSI Europe: Written question – Possible double counting of CO2 and distortions caused by unclear rules on the use of subsidised options such as biomethane to meet requirements – E-001494/2025

Source: European Parliament

Question for written answer E-001494/2025
to the Commission
Rule 144
Martin Sonneborn (NI)

Regulation (EU) 2023/1805 on the use of renewable and low-carbon fuels in maritime transport aims to cut greenhouse gas emissions produced by maritime transport. The regulation refers to the sustainability and emissions performance criteria in the Renewable Energy Directives (RED II/III). The question of whether or not already subsidised options for meeting those criteria, such as subsidised biomethane and similar energy sources, can be used to meet the targets is left open, however.

This creates a risk that the same CO₂ is counted twice: once in the country of origin – through national support programmes such as feed-in tariffs – and again in calculations relating to the obligations arising from the regulation. In the absence of a clear legal framework, there is a risk that subsidised options are promoted over non-subsidised options, given that subsidised options are often available on the market at lower prices.

Revised Directive 2003/87/EC on the inclusion of shipping in the scheme for greenhouse gas emission allowance trading (EU ETS) expressly and repeatedly calls for double counting to be avoided. It remains unclear whether that requirement is also incorporated into the regulation.

1.Is there a guarantee that greenhouse gas reductions are not counted twice for the purposes of this regulation?
2.Can subsidised options to meet requirements be taken into account, provided that they meet the criteria of the Renewable Energy Directives?
3.Does the Commission intend to issue corresponding guidelines or delegated acts? If so, when are they planned to be published?

Submitted: 10.4.2025

Last updated: 22 April 2025

MIL OSI Europe News –

April 23, 2025

Category: Emissions Trading