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Category: Intelligence Agencies

  • MIL-OSI Security: Guatemalan Man Sentenced to Federal Prison for Conspiring to Distribute Methamphetamine in Dubuque, Iowa

    Source: Federal Bureau of Investigation (FBI) State Crime News

    A Guatemalan man who conspired to distribute methamphetamine was sentenced today to more than 12 years in federal prison.  Jose Eleazar Aceves‑Garcia, age 30, from Guatemala, received the prison term after a November 20, 2024 guilty plea to conspiracy to distribute at least 500 grams of a mixture or substance containing a detectable amount of methamphetamine and 50 grams of actual (pure) methamphetamine.

    In a plea agreement, Aceves-Garcia admitted that between January 2019 and January 2022, he distributed at least 400 pounds of ice methamphetamine to a co‑conspirator in the Dubuque area.  His fingerprints were on two packages, which contained a total of more than seven pounds of ice methamphetamine, that he mailed to the co-conspirator in Dubuque.  Aceves-Garcia also distributed a kilogram of heroin to the co-conspirator.

    Aceves-Garcia was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams.  Aceves-Garcia was sentenced to 151 months’ imprisonment and must serve a 5-year term of supervised release after the prison term.  There is no parole in the federal system.  Aceves-Garcia is being held in the United States Marshal’s custody until he can be transported to a federal prison.

    The case was prosecuted by Assistant United States Attorney Devra T. Hake and was investigated by the Dubuque Drug Task Force, Dubuque County Sheriff’s Office, Dubuque Police Department, Quad City Metropolitan Enforcement Group, Federal Bureau of Investigation, Drug Enforcement Administration, United States Postal Inspection Service, and the Iowa Division of Criminal Investigation Criminalistics Laboratory.

    Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.  The case file number is 23-CR-1022.  Follow us on X @USAO_NDIA.

    MIL Security OSI –

  • MIL-OSI Security: Iowa Man Arrested on Federal Stalking Charge

    Source: Federal Bureau of Investigation (FBI) State Crime News

    DES MOINES, Iowa – A Nevada, Iowa man made his initial appearance before a United States Magistrate Judge in the United States District Court for the Southern District of Iowa today.

    According to allegations in the criminal complaint, between January and April 2025, Tanner Dean Bandy, 28, engaged in a pattern of threatening conduct against a former romantic partner through text messages and voicemails. Two days prior to his arrest, on April 17, 2025, Bandy left a voicemail message discussing his intention to conduct a mass shooting at an Iowa State University commencement ceremony. On April 17, 2025, law enforcement searched Bandy’s residence and vehicle and located two firearms and ammunition. Bandy will remain detained in federal custody pending further proceedings.

    United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Federal Bureau of Investigations, Iowa State University Police Department, and Story County Sheriff’s Office are investigating this case.

    A criminal complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    MIL Security OSI –

  • MIL-OSI: Maris-Tech to Unveil Diamond Ultra at DEFEA 2025: Advanced 360° 3D Situational Awareness Platform for AFVs

    Source: GlobeNewswire (MIL-OSI)

    Live Demos of Diamond Ultra and Tactical Edge AI Solutions  at Hall 2, Stand C12

    Rehovot, Israel, April 25, 2025 (GLOBE NEWSWIRE) — Maris-Tech Ltd. (Nasdaq: MTEK, MTEKW) (“Maris-Tech” or the “Company”), a global leader in video and artificial intelligence (“AI”)- based edge computing technology, today announced that it will be participating in the upcoming DEFEA 2025 exhibition, taking place on May 6–8, 2025, at the Metropolitan Expo in Athens, Greece. Maris-Tech will present its latest AI-based edge computing video intelligence solutions at Hall 2, Stand C12, including live demonstrations of its new situational awareness platform, Diamond Ultra.

    Diamond Ultra provides 360° 3D situational awareness and advanced airborne threat protection, integrating up to 11 HD and SD camera inputs. Powered by dual AI acceleration, Diamond Ultra  enables real-time monitoring across all cameras simultaneously, delivering instant alerts on potential threats. Designed for mission-critical environments, Diamond Ultra enhances threat detection and response for urban and open terrain combat, supporting armored fighting vehicles (“AFVs”), observation posts, and various defense and surveillance applications.

    Visitors will see this high-performance platform in action and explore additional solutions like Opal, Coral, and Jupiter Drones. Built to perform in high-risk environments, Maris-Tech’s solutions combine ultra-low latency streaming, AI-powered threat classification, and ruggedized form factors optimized for defense and homeland security (“HLS”) applications.

    “We invite defense professionals to experience our 360° 3D situational awareness platform – Diamond Ultra – first hand, as well as explore our full suite of solutions at our booth,” said Israel Bar, Chief Executive Officer of Maris-Tech. “Our products are designed to deliver mission-critical insights where every second counts, ensuring defense teams are equipped with precise, actionable intelligence.”

    Attendees can book a face-to-face meeting with the Maris-Tech’s team in advance by emailing sales@maris-tech.com.

    About Maris-Tech Ltd.

    Maris-Tech is a global leader in video and AI-based edge computing technology, pioneering intelligent video transmission solutions that conquer complex encoding-decoding challenges. Our miniature, lightweight, and low-power products deliver high-performance capabilities, including raw data processing, seamless transfer, advanced image processing, and AI-driven analytics. Founded by Israeli technology sector veterans, Maris-Tech serves leading manufacturers worldwide in defense, aerospace, Intelligence gathering, HLS, and communication industries. We’re pushing the boundaries of video transmission and edge computing, driving innovation in mission-critical applications across commercial and defense sectors.

    For more information, visit https://www.maris-tech.com/

    Forward-Looking Statement Disclaimer

    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, that are intended to be covered by the “safe harbor” created by those sections. 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”, “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate” or other comparable terms. For example, the Company is using forward-looking statements when it is discussing the Company’s presentation and demonstration of its new AI-based platform, Diamond Ultra, and additional solutions like Opal, Coral, and Jupiter Drones at the DEFEA 2025 and future benefits of the Company’s products including mission-critical insights ensuring defense teams are equipped with precise, actionable intelligence. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: its ability to successfully market its products and services, including in the United States; the acceptance of its products and services by customers; its continued ability to pay operating costs and ability to meet demand for its products and services; the amount and nature of competition from other security and telecom products and services; the effects of changes in the cybersecurity and telecom markets; its ability to successfully develop new products and services; its success establishing and maintaining collaborative, strategic alliance agreements, licensing and supplier arrangements; its ability to comply with applicable regulations; and the other risks and uncertainties described in the Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 28, 2025, and its other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

    Investor Relations:

    Nir Bussy, CFO
    Tel: +972-72-2424022
    Nir@maris-tech.com

    The MIL Network –

  • MIL-OSI China: China deepens international collaboration to push forward deep-space exploration

    Source: People’s Republic of China – State Council News

    SHANGHAI, April 25 — China, with an open stance, is collaborating with the international community to drive breakthroughs in deep-space exploration and foster resource sharing, striving to build a shared future in space.

    On the occasion of Space Day of China, which is celebrated annually on April 24, the China National Space Administration (CNSA) announced a series of international collaboration initiatives to advance deep-space exploration.

    Seven institutions from six countries — France, Germany, Japan, Pakistan, the United Kingdom and the United States — have been authorized to borrow the lunar samples collected by China’s Chang’e-5 mission for scientific research.

    In 2020, the Chang’e-5 mission retrieved samples from the moon weighing about 1,731 grams, which were the first lunar samples in the world in over 40 years, helping advance humanity’s knowledge about the moon.

    Shan Zhongde, head of the CNSA, said China’s lunar exploration program has always adhered to the principles of equality, mutual benefits, peaceful utilization and win-win cooperation, sharing achievements with the international community.

    He added that CNSA will continue to accept international applications for lunar sample research, expressing hope that global scientists will make new discoveries that expand human knowledge and benefit humanity.

    With the advancement of China’s lunar exploration program, international cooperation continues to deepen. The CNSA announced that the Chang’e-8 mission, which is scheduled for launch around 2029, will carry payloads from 11 countries and regions and one international organization.

    Developers of the instruments to be aboard the Chang’e-8 are from Asia, Europe, Africa and South America.

    The Chang’e-8 mission will target the Leibnitz-Beta Plateau near the lunar south pole region, working with the earlier Chang’e-7 mission to conduct scientific exploration and in-situ resource utilization experiments. These efforts will lay the groundwork for the future International Lunar Research Station (ILRS).

    The ILRS, initiated by China, is a scientific experimental facility consisting of sections on the lunar surface and in lunar orbit, and is projected to be built in two phases: a basic model to be built by 2035 in the lunar south pole region, and an extended model to be built in the 2040s.

    A total of 17 countries and international organizations, and more than 50 international research institutions, have joined the ILRS, according to Bian Zhigang, deputy director of the CNSA.

    Bian stressed that the ILRS will offer new opportunities and platforms for fostering global cooperation, technological innovation and shared development.

    China welcomes international partners to participate in various stages of the ILRS and at all levels of the mission. This will promote the use of space technology to benefit humanity and advance the building of a community with a shared future for humanity in the field of outer space, he said.

    Amjad Ali, a senior official with the Space and Upper Atmosphere Research Commission (SUPARCO) of Pakistan, said that the CNSA leads in inclusive space exploration, enabling emerging space nations like Pakistan to rise.

    The Chang’e-8 mission will carry a 30-kilogram lunar rover developed by SUPARCO, contributing to terrain mapping and regolith analysis.

    “The CNSA-SUPARCO partnership strengthens intercultural dialogue, diplomacy and peaceful collaboration, proving that shared dreams can unite nations among the stars,” he added.

    Humanity can reach deeper space through collaboration from lunar soil to Martian surface.

    China aims to launch the Tianwen-3 Mars sample-return mission around 2028, with the primary scientific goal of searching for signs of life. The retrieval of samples from Mars is the most technically challenging space exploration mission since the Apollo program, and no such retrieval has ever been accomplished, said Liu Jizhong, chief designer of the mission.

    Despite this mission’s considerable challenges and limited resources, China still plans to allocate 20 kilograms of resources for international collaboration.

    China invites global partners to jointly advance Mars exploration and research, thereby expanding humanity’s understanding of the red planet, said CNSA.

    Joining hands, humanity can unlock mysteries beyond the stars.

    An astronomical satellite jointly developed by China and France has detected a gamma-ray burst dating back 13 billion years, likely originating from the collapse of an early star forming a black hole or a neutron star. This discovery offers humanity a glimpse into the universe’s infancy.

    The discovery made by the Space-based multi-band Variable Object Monitor (SVOM) was also released on the Space Day of China.

    The SVOM project, a major bilateral space collaboration between China and France spanning nearly two decades, is a contribution that Chinese and French scientists and engineers have made to the international astronomy community through years of cooperation, integrating high-tech resources from both countries.

    “Together, we will pool efforts to promote the development of the world’s space industry, ensuring that space innovations serve and enhance human well-being across broader domains, at deeper levels, and to higher standards,” Shan emphasized at the opening ceremony for the Space Day of China.

    At the invitation of the Permanent Mission of China in Vienna, the Permanent Representatives of Kenya and South Africa to Vienna, along with diplomats from the Permanent Missions of Venezuela, Belarus, Egypt, Malaysia, Indonesia, and Kazakhstan to Vienna, made a special trip to China to participate in the series of activities for the Space Day.

    Award-winning paintings created by Chinese children, depicting their space dreams, were presented to these diplomats.

    MIL OSI China News –

  • MIL-OSI: Pacific Financial Corp Earns $2.4 Million, or $0.24 per Diluted Share for First Quarter 2025; Board of Directors Approves 5% Stock Buyback Plan; Declares Quarterly Cash Dividend of $0.14 per Share

    Source: GlobeNewswire (MIL-OSI)

    ABERDEEN, Wash., April 25, 2025 (GLOBE NEWSWIRE) — Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.4 million, or $0.24 per diluted share for the first quarter of 2025, compared to $2.2 million, or $0.21 per diluted share for the fourth quarter of 2024, and $2.7 million, or $0.26 per diluted share for the first quarter of 2024. Current quarter net income includes a provision for credit losses of $83,000, compared to the recapture of $103,000 from the allowance for credit losses for the fourth quarter of 2024, and a provision for credit losses of $33,000 for the first quarter of 2024. Except for year-end December 31, 2024 financials, all results are unaudited.

    The Board of Directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on April 23, 2025. The dividend will be payable on May 23, 2025 to shareholders of record on May 9, 2025. Additionally, the Board of Directors has authorized an additional $5.3 million toward future stock repurchases, or approximately 5.0% of total shares outstanding.

    “We are pleased with our first quarter results; operating earnings were solid and benefitted from strong core deposit growth, margin expansion and a lower cost of deposits as well as the closure of the residential mortgage division in late 2024. During the quarter, we saw good progress with our deposit growth initiative with core deposit growth of $61.2 million or 7%. We continue to benefit from our strong core deposit base, with non-interest bearing accounts representing 36% of total deposits. The expansion in our net interest margin was fueled by higher rates on loan production and on investment purchases, as well as a declining cost of funds. Cost of funds declined 7 basis points to 1.10%, despite continued rate pressure. Demand for lending continues to be tempered by the current level of interest rates and economic uncertainty.” said Denise Portmann, President and Chief Executive Officer.

    “Our business model and strategies continue to be built on a culture of relationship banking with a strong foundation of sound credit quality lending standards. At quarter-end, our asset quality metrics remained strong, allowance for credit loss levels were solid and capital levels also remained strong. We believe the combination of our strong balance sheet, and prudent risk management will allow us to achieve sustainable growth and continue delivering results that benefit our stakeholders for the long term,” said Portmann.

    First Quarter 2025 Financial Highlights:

    • Return on average assets (“ROAA”) improved to 0.81%, compared to 0.74% for the fourth quarter 2024, and decreased from 0.95% for the first quarter 2024.
    • Return on average equity (“ROAE”) was 8.48%, compared to 7.27% from the preceding quarter, and 9.32% from the first quarter a year earlier.
    • Net interest income was $11.3 million, compared to $10.9 million for the fourth quarter of 2024, and $11.4 million for the first quarter of 2024.
    • Net interest margin (“NIM”) increased to 4.12%, compared to 3.99% from the preceding quarter, and 4.38% for the first quarter a year ago.
    • Provision for credit losses was $83,000 for the first quarter ended March 31, 2025, compared to a recapture of $103,000 for the preceding quarter and a provision of $33,000 in the first quarter a year ago.
    • Gross portfolio loan balances increased to $707.0 million at March 31, 2025, compared to $704.9 million at December 31, 2024, and increased 2%, or $12.8 million from $694.2 million one year earlier.
    • Total deposits increased $59.9 million, or 6%, to $1.07 billion at March 31, 2025 compared to the previous quarter and increased $78.9 million, or 8%, from one year earlier. Non-interest bearing deposits represent 36% of total deposits at March 31, 2025, and support a lower cost core deposits portfolio. Core deposits were 88% of total deposits at March 31, 2025.
    • Non-performing assets to total assets ratio remained low at 0.10%, or $1.2 million for the current quarter end and were 0.09% and $1.1 million three months earlier. Substandard loans decreased $41,000 to $2.7 million at March 31, 2025 and special mention assets declined $680,000 to $10.1 million at March 31, 2025.
    • Shareholder equity increased $3.1 million during the quarter largely due to net income and lower accumulated other comprehensive loss marks on the investment portfolio, offset by stock repurchases and dividend payments. Tangible book value per share was $10.33 at March 31, 2025, an increase from $9.80 at March 31, 2024.
    • Pacific Financial and Bank of the Pacific continue to exceed regulatory well-capitalized requirements. At March 31, 2025, Pacific Financial’s estimated leverage ratio was 10.9% and its estimated total risk-based capital ratio was 17.4%.

    Balance Sheet Review

    Total assets increased to $1.22 billion at March 31, 2025, compared to $1.15 billion at December 31, 2024, and $1.13 billion one year earlier.

    Cash and cash equivalents increased $63.7 million to $143.8 million at March 31, 2025 from $80.2 million at December 31, 2024 and $91.3 million one year earlier. The increase largely relates to deposit growth during the first quarter.

    Liquidity metrics continue to be strong and are managed to ensure adequate funding resources are available to meet customer demand. At March 31, 2025, the Company’s on and off-balance sheet sources totaled $549.7 million. This represents a coverage ratio of short-term funds available to uninsured and uncollateralized deposits of 212%. Included in available sources are collateralized credit lines the Company has established with the Federal Home Loan Bank of Des Moines (FHLB) and the Federal Reserve Bank of San Francisco, as well as unsecured borrowing lines from various correspondent banks. There were no balance outstanding on any of these facilities at quarter-end. Uninsured or uncollateralized deposits were 24% of total deposits at March 31, 2025.

    Investment securities increased $0.9 million to $305.4 million, compared to $304.5 million at December 31, 2024 and increased $16.9 million compared to the like period a year ago. The largest investment category was collateralized mortgage obligations which accounted for 51% of the investment portfolio at March 31, 2025, compared to 48% at December 31, 2024 and 45% one year earlier. The yield on the investment portfolio increased 15 basis points during the current quarter to 3.60% from 3.45% for both the prior quarter and the first quarter a year ago. During the quarter, the bank implemented a $9.0 million restructure with a loss of $165,000; improving yields by over 200 basis points on those investment funds. The adjusted duration of the portfolio was 4.31 years at March 31, 2025 compared to 4.35 years at March 31, 2024.

    Gross loans balances increased $2.1 million, to $707.0 million at March 31, 2025, compared to $704.9 million at December 31, 2024. During the first quarter of 2025, growth in new owner-occupied commercial real estate and multi-family loans more than offset the decline in commercial & agriculture, construction & development and residential 1-4 family loans. Year-over-year loan growth was 2%, or $12.8 million, with the largest increases in multi-family loans and owner-occupied commercial real estate increasing $17.9 million and $9.2 million, respectively. Loans classified as commercial real estate for regulatory concentration purposes totaled $263.4 million at March 31, 2025, or 189% of total risk-based capital.

    The Company continues to manage concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. In addition, the loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets.

    Credit quality: Nonperforming assets remain minimal at $1.2 million, or 0.10% of total assets at March 31, 2025, compared to $1.1 million, or 0.09% at December 31, 2024. Accruing loans past due more than 30 days represent only 0.04% of total loans. Total loans designated as special mention decreased to $10.1 million at March 31, 2025 compared to $10.8 million at December 31, 2024. The Company has zero other real estate owned as of March 31, 2025.

    Allowance for credit losses (“ACL”) remained at $8.9 million, or 1.26% of gross loans at March 31, 2025. A provision for credit losses of $83,000 was recorded in the current quarter resulting from $75,000 in net charge-offs and loan growth. This compares to a recapture for credit losses of $103,000 in the fourth quarter of 2024 and a provision for credit losses of $33,000 for the first quarter one year earlier.  

    Total deposits increased to $1.07 billion at March 31, 2025 from $1.01 billion the prior quarter and $995.8 million one year earlier. The company’s strong core deposit base continues to positively impact the Bank’s net interest margin and operating results. Non-interest bearing deposits continued to remain the largest category of deposits and represented 36% of deposits at March 31, 2025. Additionally, interest-bearing demand and money market deposits represented 23% and 18% of total deposits, respectively, at March 31, 2025, and CDs as a percentage of deposits declined during the quarter, after increasing since fourth quarter 2022. CD balances were 12% of total deposits for the current quarter compared to 13% at the prior quarter.

    Shareholders’ equity was $116.9 million at March 31, 2025, compared to $113.9 million at December 31, 2024, and $114.7 million at March 31, 2024. The increase in shareholders’ equity during the current quarter was primarily due to net income and a decrease in unrealized losses on available-for-sale securities with dividend payments and stock repurchases partially offsetting those increases. Net unrealized losses (after-tax) included in shareholders’ equity on available-for-sale securities were $14.2 million at March 31, 2025 compared to $17.5 million at December 31, 2024 and $16.6 million at March 31, 2024. During the quarter, the Company completed its repurchase of shares under the stock repurchase plan announced in October 2024.

    Book value per common share was $11.67 at March 31, 2025, compared to $11.26 at December 31, 2024, and $11.10 at March 31, 2024. The Company’s tangible common equity ratio declined to 8.6% at March 31, 2025 relative to 8.8% the prior quarter and 9.0% at March 31, 2024. Regulatory capital ratios of both the Company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the Company’s leverage ratio at 10.9% and total risk-based capital ratio at 17.4% as of March 31, 2025. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.

    Income Statement Review

    Net interest income increased $439,000 to $11.3 million for the first quarter of 2025, compared to $10.9 million for the fourth quarter of 2024, and decreased $111,000 compared to $11.4 million for the first quarter a year ago. The change in the current quarter compared to the preceding quarter reflects the impact of higher loan and investment yields, lower deposit and borrowing costs as well as growth in total interest earning assets resulting from core deposit growth during the quarter. The decrease in net interest income compared to the year ago quarter primarily reflects a rise in funding costs and a decrease in yields on interest-bearing cash as the FOMC decreased the federal funds rate 100 basis points in 2024.

    The Bank’s net interest margin improved to 4.12% for the quarter ended March 31, 2025 from 3.99% the prior quarter and declined from 4.38% one year earlier. The increase from the prior quarter resulted from both a 7 basis points decrease in costs of funds combined with a 13 basis point increase in loan yields and a 15 basis point increase in investment yields which was partially offset by a 34 basis point decrease in yields on interest-earning cash balances. Loan yields improved as longer term fixed and variable rate loans (originated in a lower rate environment) were renewed at higher rates. In addition, average loan yields on new originations were at higher yields than the current loan portfolio yield. Investment yields improved partially due to $32.3 million of investment purchases at higher yields over the last 6 months including a $9.0 million restructure that replaced lower yielding investments with higher yielding investments. The Bank continues to actively monitor and manage its costs of funds and even in a competitive environment was able to decrease rates on specific deposit categories during the first quarter. In addition, the high percentage of non-interest bearing deposits at 36% continues to help reduce volatility in deposit costs.

    Noninterest income decreased to $1.2 million for the current quarter, compared to $1.8 million for the linked quarter and $1.4 million a year earlier. The decrease compared to the linked quarter was primarily due to a loss on the sale of investment securities of $165,000 during the current quarter and a reduction in gain on sale of loans compared to the prior quarter as a result of closing the mortgage division during late 2024. In addition, a death benefit from a bank-owned life insurance policy realized in the fourth quarter of 2024 also contributed to the variance.   Fee and service charge income decreased in the first quarter of 2025 to $1.1 million compared to $1.3 million in the previous quarter and $1.1 million in the first quarter of 2024.

    Noninterest expenses decreased to $9.4 million for the first quarter of 2025 compared to $10.1 million for the prior quarter and $9.5 million for the first quarter of 2024. The decrease from the prior quarter was primarily related to reductions in mortgage lending salary and employee benefit costs and other mortgage lending costs resulting from the closure of the mortgage division in late 2024. The prior quarter included $773,000 in costs associated with severance and retention payments, lease termination costs and software contract termination expenses related to closing the mortgage division and $602,000 in other mortgage division costs.

    The company’s efficiency ratio decreased to 75.86% for the first quarter of 2025, compared to 79.80% in the preceding quarter and increased from 74.21% in the same quarter a year ago.

    Income tax expense: Federal and Oregon state income tax expenses totaled $544,000 for the current quarter, and $492,000 for the preceding quarter, resulting in effective tax rates of 18.6% and 18.5%, respectively. These income tax expenses reflect the benefits of tax exempt income on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank-owned life insurance.

    FINANCIAL HIGHLIGHTS (unaudited) Quarter Ended   Change From
     
    (In 000s, except per share data)                          
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024
        2025   2024   2024     $ %   $ %
    Earnings Ratios & Data                          
    Net Income $ 2,377   $ 2,162   $ 2,650     $ 215   10 % $ (273 ) -10 %
    Return on average assets   0.81%     0.74%     0.95%       0.07%       -0.14 %  
    Return on average equity   8.48%     7.27%     9.32%       1.21%       -0.84 %  
    Efficiency ratio (1)   75.86%     79.80%     74.21%       -3.94 %     1.65 %  
    Net-interest margin %(2)   4.12%     3.99%     4.38%       0.13%       -0.26 %  
                               
    Share Ratios & Data                          
    Basic earnings per share $ 0.24   $ 0.21   $ 0.26     $ 0.03   14 % $ (0.02 ) -8 %
    Diluted earning per share $ 0.24   $ 0.21   $ 0.26     $ 0.03   14 % $ (0.02 ) -8 %
    Book value per share(3) $ 11.67   $ 11.26   $ 11.10     $ 0.41   4 % $ 0.57   5 %
    Tangible book value per share(4) $ 10.33   $ 9.93   $ 9.80     $ 0.40   4 % $ 0.53   5 %
    Common shares outstanding   10,020     10,110     10,336       (90 ) -1 %   (316 ) -3 %
    PFLC stock price $ 10.90   $ 12.45   $ 10.15     $ (1.55 ) -12 % $ 0.75   7 %
    Dividends paid per share $ 0.14   $ 0.14   $ 0.14     $ –   0 % $ –   0 %
                               
    Balance Sheet Data                          
    Assets $ 1,218,969   $ 1,153,563   $ 1,134,586     $ 65,406   6 % $ 84,383   7 %
    Portfolio Loans $ 707,034   $ 704,865   $ 694,229     $ 2,169   0 % $ 12,805   2 %
    Deposits $ 1,074,646   $ 1,014,731   $ 995,756     $ 59,915   6 % $ 78,890   8 %
    Investments $ 305,377   $ 304,502   $ 288,439     $ 875   0 % $ 16,938   6 %
    Shareholders equity $ 116,949   $ 113,856   $ 114,725     $ 3,093   3 % $ 2,224   2 %
                               
    Liquidity Ratios                          
    Short-term funding to uninsured                          
    and uncollateralized deposits   212%     217%     251%       -5 %     -39 %  
    Uninsured and uncollateralized                          
    deposits to total deposits   24%     25%     22%       -1 %     2 %  
    Portfolio loans to deposits ratio   66%     69%     69%       -3 %     -3 %  
                               
    Asset Quality Ratios                          
    Non-performing assets to assets   0.10%     0.09%     0.13%       0.01%       -0.03 %  
    Non-accrual loans to portfolio loans   0.17%     0.16%     0.22%       0.01%       -0.05 %  
    Loan losses to avg portfolio loans   0.04%     -0.04 %   0.02%       0.08%       0.02 %  
    ACL to portfolio loans   1.26%     1.26%     1.24%       0.00%       0.02 %  
                               
    Capital Ratios (PFC)                          
    Total risk-based capital ratio   17.4%     17.5%     17.6%       -0.1 %     -0.2 %  
    Tier 1 risk-based capital ratio   16.3%     16.3%     16.5%       0.0%       -0.2 %  
    Common equity tier 1 ratio   14.7%     14.7%     14.8%       0.0%       -0.1 %  
    Leverage ratio   10.9%     11.3%     11.6%       -0.4 %     -0.7 %  
    Tangible common equity ratio   8.6%     8.8%     9.0%       -0.2 %     -0.4 %  
                               
    (1) Non-interest expense divided by net interest income plus noninterest income.
    (2) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.
    (3) Book value per share is calculated as the total common shareholders’ equity divided by the period ending number of common stock shares outstanding.
    (4) Tangible book value per share is calculated as the total common shareholders’ equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding.
                               
                               
    INCOME STATEMENT (unaudited) Quarter Ended   Change From
     
    ($ in 000s)                          
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024
        2025   2024   2024     $ %   $ %
    Interest Income                          
    Loan interest & fee income $ 10,304   $ 10,340   $ 10,224     $ (36 ) 0 % $ 80   1 %
    Interest earning cash income   1,208     942     935       266   28 %   273   29 %
    Investment income   2,678     2,590     2,475       88   3 %   203   8 %
    Interest Income   14,190     13,872     13,634       318   2 %   556   4 %
                               
    Interest Expense                          
    Deposits interest expense   2,694     2,796     1,991       (102 ) -4 %   703   35 %
    Other borrowings interest expense   206     225     242       (19 ) -8 %   (36 ) -15 %
    Interest Expense   2,900     3,021     2,233       (121 ) -4 %   667   30 %
    Net Interest Income   11,290     10,851     11,401       439   4 %   (111 ) -1 %
    Provision(recapture) for credit losses   83     (103 )   33       186   -181 %   50   152 %
    Net Interest Income after provision   11,207     10,954     11,368       253   2 %   (161 ) -1 %
                               
    Non-Interest Income                          
    Fees and service charges   1,117     1,267     1,101       (150 ) -12 %   16   1 %
    Gain on sale of investments, net   (165 )   –     –       (165 ) -100 %   (165 ) -100 %
    Gain on sale of loans, net   (2 )   267     152       (269 ) -101 %   (154 ) -101 %
    Income on bank-owned insurance   191     250     180       (59 ) -24 %   11   6 %
    Other non-interest income   12     (9 )   11       21   -233 %   1   9 %
    Non-Interest Income   1,153     1,775     1,444       (622 ) -35 %   (291 ) -20 %
                               
    Non-Interest Expense                          
    Salaries and employee benefits   5,969     6,288     5,994       (319 ) -5 %   (25 ) 0 %
    Occupancy   592     768     641       (176 ) -23 %   (49 ) -8 %
    Furniture, Fixtures & Equipment   302     289     284       13   4 %   18   6 %
    Marketing & donations   153     149     154       4   3 %   (1 ) -1 %
    Professional services   299     267     336       32   12 %   (37 ) -11 %
    Data Processing & IT   1,218     1,380     1,191       (162 ) -12 %   27   2 %
    Other   906     934     933       (28 ) -3 %   (27 ) -3 %
    Non-Interest Expense   9,439     10,075     9,533       (636 ) -6 %   (94 ) -1 %
    Income before income taxes   2,921     2,654     3,279       267   10 %   (358 ) -11 %
    Provision for income taxes   544     492     629       52   11 %   (85 ) -14 %
    Net Income $ 2,377   $ 2,162   $ 2,650     $ 215   10 %   (273 ) -10 %
                               
    Effective tax rate   18.6%     18.5%     19.2%       0.1%       -0.6 %  
    BALANCE SHEET (unaudited) Period Ended
    		   Change from
    		   % of Total
    ($ in 000s)    
                                       
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024       $ %   $ %   2025 2024 2024
    Assets                                  
    Cash on hand and in banks $ 18,975   $ 18,136   $ 15,597     $ 839   5 % $ 3,378   22 %   2 % 2 % 1 %
    Interest earning deposits   124,854     62,015     75,705       62,839   101 %   49,149   65 %   10 % 5 % 7 %
    Investment securities   305,377     304,502     288,439       875   0 %   16,938   6 %   25 % 26 % 25 %
    Loans held-for-sale   –     –     –       –   -100 %   –   -100 %   0 % 0 % 0 %
    Portfolio Loans, net of deferred fees   706,439     704,248     693,461       2,191   0 %   12,978   2 %   58 % 61 % 61 %
    Allowance for credit losses   (8,890 )   (8,851 )   (8,580 )     (39 ) 0 %   (310 ) 4 %   -1 % -1 % -1 %
    Net loans   697,549     695,397     684,881       2,152   0 %   12,668   2 %   57 % 60 % 60 %
    Premises & equipment   16,702     16,952     15,283       (250 ) -1 %   1,419   9 %   1 % 1 % 1 %
    Goodwill & Other Intangibles   13,435     13,435     13,435       –   0 %   –   0 %   1 % 1 % 1 %
    Bank-owned life Insurance   28,204     28,333     27,678       (129 ) 0 %   526   2 %   2 % 2 % 2 %
    Other assets   13,873     14,793     13,568       (920 ) -6 %   305   2 %   2 % 3 % 3 %
    Total Assets $ 1,218,969   $ 1,153,563   $ 1,134,586     $ 65,406   6 % $ 84,383   7 %   100 % 100 % 100 %
                                       
    Liabilities & Shareholders’ Equity                                  
    Deposits $ 1,074,646   $ 1,014,731   $ 995,756     $ 59,915   6 % $ 78,890   8 %   88 % 88 % 88 %
    Borrowings   13,403     13,403     13,403       –   0 %   –   0 %   1 % 1 % 1 %
    Other liabilities   13,971     11,573     10,702       2,398   21 %   3,269   31 %   1 % 1 % 1 %
    Shareholders’ equity   116,949     113,856     114,725       3,093   3 %   2,224   2 %   10 % 10 % 10 %
    Liabilities & Shareholders’ Equity $ 1,218,969   $ 1,153,563   $ 1,134,586     $ 65,406   6 % $ 84,383   7 %   100 % 100 % 100 %
                                       
                                       
    INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited) Period Ended
    		   Change from
    		   % of Total
       
    ($ in 000s)                                  
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024 Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024     $ %   $ %   2025 2024 2024
    Investment Securities                                  
    Collateralized mortgage obligations $ 156,105   $ 147,262   $ 129,213     $ 8,843   6 % $ 26,892   21 %   51 % 48 % 45 %
    Mortgage backed securities   40,396     46,112     37,753       (5,716 ) -12 %   2,643   7 %   13 % 15 % 13 %
    U.S. Government and agency securities 68,392     67,716     77,826       676   1 %   (9,434 ) -12 %   22 % 22 % 27 %
    Municipal securities   40,484     43,412     43,647       (2,928 ) -7 %   (3,163 ) -7 %   14 % 15 % 15 %
    Investment Securities $ 305,377   $ 304,502   $ 288,439     $ 875   0 % $ 16,938   6 %   100 % 100 % 100 %
                                       
    Held to maturity securities $ 40,718   $ 41,442   $ 49,132     $ (724 ) -2 % $ (8,414 ) -17 %   13 % 14 % 17 %
    Available for sale securities $ 264,659   $ 263,060   $ 239,307     $ 1,599   1 % $ 25,352   11 %   87 % 86 % 83 %
                                       
    Government & Agency securities $ 264,866   $ 261,063   $ 244,762     $ 3,803   1 % $ 20,104   8 %   87 % 86 % 85 %
    AAA, AA, A rated securities $ 39,822   $ 42,773   $ 43,008     $ (2,951 ) -7 % $ (3,186 ) -7 %   13 % 14 % 15 %
    Non-rated securities $ 689   $ 666   $ 669     $ 23   3 % $ 20   3 %   0 % 0 % 0 %
                                       
    AFS Unrealized Gain (Loss) $ (18,284 ) $ (22,437 ) $ (21,464 )   $ 4,153   -19 % $ 3,180   -15 %   -6 % -7 % -7 %
                                       
                                       
    LIQUIDITY (unaudited) Period Ended
    		   Change from
    		   % of Deposits
    ($ in 000s)    
                                       
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024 Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024     $ %   $ %   2025 2024 2024
    Short-term Funding                                  
    Cash and cash equivalents $ 129,616   $ 67,951   $ 80,052     $ 61,665   91 % $ 49,564   62 %   12 % 7 % 8 %
    Unencumbered AFS Securities   104,237     158,472     139,144       (54,235 ) -34 %   (34,907 ) -25 %   10 % 16 % 14 %
    Secured lines of Credit (FHLB, FRB)   315,876     324,187     337,553       (8,311 ) -3 %   (21,677 ) -6 %   29 % 32 % 34 %
    Short-term Funding $ 549,729   $ 550,610   $ 556,749     $ (881 ) 0 % $ (7,020 ) -1 %   51 % 54 % 56 %
                                       
                                       
    PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited) Period Ended
    		   Change from
    		   % of Total
       
    ($ in 000s)                                  
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024 Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024     $ %   $ %   2025 2024 2024
    Portfolio Loans                                  
    Commercial & agriculture $ 70,209   $ 75,240   $ 71,320     $ (5,031 ) -7 % $ (1,111 ) -2 %   10 % 11 % 10 %
    Real estate:                                  
    Construction and development   34,669     42,725     51,978       (8,056 ) -19 %   (17,309 ) -33 %   5 % 6 % 7 %
    Residential 1-4 family   101,810     103,489     99,808       (1,679 ) -2 %   2,002   2 %   14 % 15 % 14 %
    Multi-family   72,313     68,978     54,430       3,335   5 %   17,883   33 %   10 % 10 % 8 %
    CRE — owner occupied   176,850     165,120     167,631       11,730   7 %   9,219   5 %   25 % 23 % 24 %
    CRE — non owner occupied   160,022     159,582     157,322       440   0 %   2,700   2 %   23 % 23 % 23 %
    Farmland   27,411     26,864     26,752       547   2 %   659   2 %   4 % 4 % 4 %
    Consumer   63,750     62,867     64,988       883   1 %   (1,238 ) -2 %   9 % 8 % 10 %
    Portfolio Loans   707,034     704,865     694,229       2,169   0 %   12,805   2 %   100 % 100 % 100 %
    Less: ACL   (8,890 )   (8,851 )   (8,580 )                      
    Less: deferred fees   (595 )   (617 )   (768 )                      
    Net loans $ 697,549   $ 695,397   $ 684,881                        
                                       
    Regulatory Commercial Real Estate $ 263,424   $ 267,857   $ 261,155     $ (4,433 ) -2 % $ 2,269   1 %   37 % 38 % 38 %
    Total Risk Based Capital(1) $ 139,133   $ 139,458   $ 139,255     $ (325 ) 0 % $ (122 ) 0 %        
    CRE to Risk Based Capital(1)   189%     192%     188%         -3 %     1 %        
                                       
                                       
    CRE–MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited) Period Ended
    		   Change from
    		   % of Total
       
    ($ in 000s)                                  
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024 Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024     $ %   $ %   2025 2024 2024
    Collateral Composition(2)                                  
    Multifamily $ 76,421   $ 73,575   $ 61,085     $ 2,846   4 % $ 15,336   25 %   31 % 30 % 27 %
    Retail   36,616     36,813     36,192       (197 ) -1 %   424   1 %   15 % 15 % 16 %
    Hospitality   31,772     31,369     32,468       403   1 %   (696 ) -2 %   13 % 13 % 14 %
    Office   23,975     23,921     23,730       54   0 %   245   1 %   10 % 10 % 10 %
    Mixed Use   22,706     22,662     22,204       44   0 %   502   2 %   9 % 9 % 10 %
    Mini Storage   22,654     25,028     23,438       (2,374 ) -9 %   (784 ) -3 %   9 % 10 % 10 %
    Industrial   15,230     14,723     13,348       507   3 %   1,882   14 %   6 % 6 % 6 %
    Warehouse   8,146     7,531     7,483       615   8 %   663   9 %   3 % 3 % 3 %
    Special Purpose   6,874     6,921     7,058       (47 ) -1 %   (184 ) -3 %   3 % 3 % 3 %
    Other   2,648     3,155     3,259       (507 ) -16 %   (611 ) -19 %   1 % 1 % 1 %
    Total $ 247,042   $ 245,698   $ 230,265     $ 1,344   1 % $ 16,777   7 %   100 % 100 % 100 %
                                       
    (1) Bank of the Pacific
    (2) Includes loans in process of construction
                                       
                                       
    CREDIT QUALITY (unaudited) Period Ended
    		   Change from
    		        
             
    ($ in 000s)                                  
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024        
        2025   2024   2024     $ %   $ %        
    Risk Rating Distribution                                  
    Pass $ 694,240   $ 691,350   $ 684,779     $ 2,890   0 % $ 9,461   1 %        
    Special Mention   10,131     10,811     4,771       (680 ) -6 %   5,360   112 %        
    Substandard   2,663     2,704     4,679       (41 ) -2 %   (2,016 ) -43 %        
    Portfolio Loans $ 707,034   $ 704,865   $ 694,229     $ 2,169   0 % $ 12,805   2 %        
                                       
    Nonperforming Assets                                  
    Nonaccruing loans   1,225     1,094     1,526     $ 131   12 %   (301 ) -20 %        
    Other real estate owned   –     –     –       –   0 %   –   0 %        
    Nonperforming Assets $ 1,225   $ 1,094   $ 1,526     $ 131   12 %   (301 ) -20 %        
                                       
    Credit Metrics                                  
    Classified loans1 to portfolio loans   0.38%     0.38%     0.67%       0.00%       -0.29 %          
    ACL to classified loans1   333.83%     327.33%     183.37%       6.50%       150.46 %          
    Loans past due 30+ days to portfolio loans2   0.04%     0.14%     0.10%       -0.10%       -0.06 %          
    Nonperforming assets to total assets   0.10%     0.09%     0.13%       0.01%       -0.03 %          
    Nonaccruing loans to portfolio loans   0.17%     0.16%     0.22%       0.01%       -0.05 %          
                                       
    (1) Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower’s financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected.
    (2) Excludes non-accrual loans
     
                                       
    DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited) Period Ended
    		   Change from
    		   % of Total
       
    ($ in 000s)                                  
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024   Mar 31, Dec 31, Mar 31,
        2025   2024   2024     $ %   $ %   2025 2024 2024
    Deposits                                  
    Interest-bearing demand $ 243,363   $ 194,526   $ 177,735     $ 48,837   25 % $ 65,628   37 %   23 % 19 % 18 %
    Money market   197,184     193,324     169,095       3,860   2 %   28,089   17 %   18 % 19 % 17 %
    Savings   117,130     115,520     129,796       1,610   1 %   (12,666 ) -10 %   11 % 11 % 13 %
    Time deposits (CDs)   134,226     135,485     114,644       (1,259 ) -1 %   19,582   17 %   12 % 13 % 12 %
    Total interest-bearing deposits   691,903     638,855     591,270       53,048   8 %   100,633   17 %   64 % 62 % 60 %
    Non-interest bearing demand   382,743     375,876     404,486       6,867   2 %   (21,743 ) -5 %   36 % 38 % 40 %
    Total deposits $ 1,074,646   $ 1,014,731   $ 995,756     $ 59,915   6 % $ 78,890   8 %   100 % 100 % 100 %
                                       
    Insured Deposits $ 630,940   $ 629,600   $ 645,784     $ 1,340   0 % $ (385,920 ) -60 %   59 % 62 % 65 %
    Collateralized Deposits   183,842     131,327     127,733       52,515   40 %   56,109   44 %   17 % 13 % 13 %
    Uninsured Deposits   259,864     253,804     222,239       6,060   2 %   408,701   184 %   24 % 25 % 22 %
    Total Deposits $ 1,074,646   $ 1,014,731   $ 995,756     $ 59,915   6 % $ 78,890   8 %   100 % 100 % 100 %
                                       
    Consumer Deposits $ 472,839   $ 466,826   $ 470,442     $ 6,013   1 % $ 2,397   1 %   44 % 46 % 47 %
    Business Deposits   407,974     406,308     387,917       1,666   0 %   20,057   5 %   38 % 40 % 39 %
    Public Deposits   193,833     141,597     137,397       52,236   37 %   56,436   41 %   18 % 14 % 14 %
    Total Deposits $ 1,074,646   $ 1,014,731   $ 995,756     $ 59,915   6 % $ 78,890   8 %   100 % 100 % 100 %
    NET INTEREST MARGIN (unaudited) Quarter Ended   Change From
     
    ($ in 000s)                          
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024
        2025   2024   2024     $ %   $ %
                               
    Average Interest Bearing Balances                        
    Portfolio loans $ 701,071   $ 703,811   $ 688,918     $ (2,740 ) 0 % $ 12,153   2 %
    Loans held for sale $ –   $ 1,033   $ 595     $ (1,033 ) -100 % $ (595 ) -100 %
    Investment securities $ 305,074   $ 302,501   $ 292,375     $ 2,573   1 % $ 12,699   4 %
    Interest earning cash $ 110,007   $ 78,296   $ 68,873     $ 31,711   41 % $ 41,134   60 %
    Total interest-earning assets $ 1,116,152   $ 1,085,641   $ 1,050,761     $ 30,511   3 % $ 65,391   6 %
    Non-interest bearing deposits $ 378,470   $ 388,227   $ 395,004     $ (9,757 ) -3 % $ (16,534 ) -4 %
    Interest-bearing deposits $ 675,122   $ 628,475   $ 590,410     $ 46,647   7 % $ 84,712   14 %
    Total Deposits $ 1,053,592   $ 1,016,702   $ 985,414     $ 36,890   4 % $ 68,178   7 %
    Borrowings $ 13,403   $ 13,403   $ 13,403     $ –   0 % $ –   0 %
    Total interest-bearing liabilities $ 688,525   $ 641,878   $ 603,813     $ 46,647   7 % $ 84,712   14 %
                               
    Yield / Cost $(1)                          
    Portfolio loans $ 10,316   $ 10,336   $ 10,233     $ (20 ) 0 % $ 83   1 %
    Loans held for sale $ –   $ 16   $ 5     $ (16 ) -100 % $ (5 ) -100 %
    Investment securities $ 2,710   $ 2,622   $ 2,507     $ 88   3 % $ 203   8 %
    Interest-bearing cash $ 1,208   $ 942   $ 935     $ 266   28 % $ 273   29 %
    Total interest-earning assets $ 14,234   $ 13,916   $ 13,680     $ 318   2 % $ 554   4 %
    Interest-bearing deposits $ 2,694   $ 2,796   $ 1,991     $ (102 ) -4 % $ 703   35 %
    Borrowings $ 206   $ 225   $ 242     $ (19 ) -8 % $ (36 ) -15 %
    Total interest-bearing liabilities $ 2,900   $ 3,021   $ 2,233     $ (121 ) -4 % $ 667   30 %
    Net interest income $ 11,334   $ 10,895   $ 11,447     $ 439   4 % $ (113 ) -1 %
                               
    Yield / Cost %(1)                          
    Yield on portfolio loans   5.97 %   5.84 %   5.97 %     0.13 %     0.00 %  
    Yield on investment securities   3.60 %   3.45 %   3.45 %     0.15 %     0.15 %  
    Yield on interest-bearing cash   4.45 %   4.79 %   5.45 %     -0.34 %     -1.00 %  
    Cost of interest-bearing deposits   1.62 %   1.77 %   1.36 %     -0.15 %     0.26 %  
    Cost of borrowings   6.23 %   6.68 %   7.26 %     -0.45 %     -1.03 %  
    Cost of deposits and borrowings   1.10 %   1.17 %   0.90 %     -0.07 %     0.20 %  
                               
    Yield on interest-earning assets   5.17 %   5.10 %   5.24 %     0.07 %     -0.07 %  
    Cost of interest-bearing liabilities   1.71 %   1.87 %   1.49 %     -0.16 %     0.22 %  
    Net interest spread   3.46 %   3.23 %   3.75 %     0.23 %     -0.29 %  
    Net interest margin   4.12 %   3.99 %   4.38 %     0.13 %     -0.26 %  
                               
    (1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.      
                               
                               
    ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited) Quarter Ended   Change From
     
    ($ in 000s)                          
        Mar 31,   Dec 31,   Mar 31,     Dec 31, 2024   Mar 31, 2024
        2025   2024   2024     $ %   $ %
    Allowance for Credit Losses                          
    Beginning of period balance $ 8,851   $ 8,897   $ 8,530     $ (46 ) -1 % $ 321   4 %
    Impact of CECL Adoption (ASC 326)   –     –     –       –   -100 %   –   -100 %
    Charge-offs   (75 )   (32 )   (35 )     (43 ) 134 %   (40 ) 114 %
    Recoveries   –     105     2       (105 ) -100 %   (2 ) -100 %
    Net (charge-off) recovery   (75 )   73     (33 )     (148 ) -203 %   (42 ) 127 %
    Provision (recapture)   114     (119 )   83       233   -196 %   31   37 %
    End of period balance $ 8,890   $ 8,851   $ 8,580     $ 39   0 % $ 310   4 %
                               
    Net charge-off (recovery) to                          
    average portfolio loans   0.04 %   -0.04 %   0.02 %     0.08 %     0.02 %  
    ACL to portfolio loans   1.26 %   1.26 %   1.24 %     0.00 %     0.02 %  
                               
    Allowance for unfunded loans                          
    Beginning of period balance $ 540   $ 524   $ 698     $ 16   3 % $ (158 ) -23 %
    Impact of CECL Adoption (ASC 326)   –     –     –       –   -100 %   –   -100 %
    Provision (recapture)   (31 )   16     (50 )     (47 ) -294 %   19   -38 %
    End of period balance $ 509   $ 540   $ 648     $ (31 ) -6 % $ (139 ) -21 %

    ABOUT PACIFIC FINANCIAL CORPORATION

    Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At March 31, 2025, the Company had total assets of $1.22 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.

    Cautions Concerning Forward-Looking Statements
    This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.

    Contacts:
      Denise Portmann, President & CEO
      Carla Tucker, EVP & CFO
      360.533.8873

    The MIL Network –

  • MIL-OSI: Preferred Bank Reports First Quarter Results

    Source: GlobeNewswire (MIL-OSI)

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

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

    Highlights for the Quarter:

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

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

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

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

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

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

    Results of Operations

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

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

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

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

    Balance Sheet Summary

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

    Asset Quality

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

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

    Allowance for Credit Losses

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

    Capitalization

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

    Conference Call and Webcast

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

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

    About Preferred Bank

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

    Forward-Looking Statements

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

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

    Financial Tables to Follow

     
    PREFERRED BANK
    Condensed Consolidated Statements of Operations
    (unaudited)
    (in thousands, except for net income per share and shares)
               
               
      For the Quarter Ended
      March 31,   December 31,   March 31,
        2025       2024       2024  
    Interest income:          
    Loans, including fees $ 101,491     $ 111,596     $ 109,980  
    Investment securities   12,810       14,013       16,257  
    Fed funds sold   228       249       283  
     Total interest income   114,529       125,858       126,520  
               
    Interest expense:          
    Interest-bearing demand   16,590       18,245       22,290  
    Savings   69       85       75  
    Time certificates   33,887       37,030       34,330  
    Subordinated debt   1,325       1,325       1,325  
     Total interest expense   51,871       56,685       58,020  
     Net interest income   62,658       69,173       68,500  
    Provision for credit losses   700       2,000       4,400  
     Net interest income after provision for credit losses   61,958       67,173       64,100  
               
    Noninterest income:          
    Fees & service charges on deposit accounts   716       761       845  
    Letters of credit fee income   2,244       1,977       1,503  
    BOLI income   103       102       105  
    Net gain on sale of loans   275       112       103  
    Other income   660       685       509  
     Total noninterest income   3,998       3,637       3,065  
               
    Noninterest expense:          
    Salary and employee benefits   14,839       13,279       13,900  
    Net occupancy expense   2,294       10,110       1,711  
    Business development and promotion expense   462       340       266  
    Professional services   1,651       1,606       1,457  
    Office supplies and equipment expense   386       396       473  
    OREO valuation allowance and related expense   1,531       155       135  
    Other   2,206       2,360       2,086  
     Total noninterest expense   23,369       28,246       20,028  
     Income before provision for income taxes   42,587       42,564       47,137  
    Income tax expense   12,563       12,343       13,671  
     Net income $ 30,024     $ 30,221     $ 33,466  
               
    Income per share available to common shareholders          
     Basic $ 2.27     $ 2.29     $ 2.48  
     Diluted $ 2.23     $ 2.25     $ 2.44  
               
    Weighted-average common shares outstanding          
     Basic   13,226,582       13,190,696       13,508,878  
     Diluted   13,453,176       13,442,294       13,736,986  
               
    Cash dividends per common share $ 0.75     $ 0.75     $ 0.70  
               
    PREFERRED BANK
    Condensed Consolidated Statements of Financial Condition
    (unaudited)
    (in thousands)
           
           
      March 31,   December 31,
        2025       2024  
      (Unaudited)   (Audited)
    Assets      
    Cash and due from banks $ 905,183     $ 765,515  
    Fed funds sold   20,000       20,000  
    Cash and cash equivalents   925,183       785,515  
           
    Securities held-to-maturity, at amortized cost   19,745       20,021  
    Securities available-for-sale, at fair value   390,096       348,706  
           
    Loans held for sale, at lower of cost or fair value   –       2,214  
           
    Loans   5,634,413       5,640,615  
    Less allowance for credit losses   (72,274 )     (71,477 )
    Less amortized deferred loan fees, net   (9,652 )     (9,234 )
    Loans, net   5,552,487       5,559,904  
           
    Other real estate owned and repossessed assets   13,650       14,991  
    Bank furniture and fixtures, net   8,276       8,462  
    Bank-owned life insurance   10,502       10,433  
    Accrued interest receivable   31,775       33,561  
    Investment in affordable housing partnerships   63,612       58,346  
    Federal Home Loan Bank stock, at cost   15,000       15,000  
    Deferred tax assets   46,280       47,402  
    Income tax receivable   –       2,195  
    Operating lease right-of-use assets   20,281       13,182  
    Other assets   3,205       3,497  
    Total assets $ 7,100,092     $ 6,923,429  
           
    Liabilities and Shareholders’ Equity      
    Deposits:      
    Noninterest bearing demand deposits $ 730,270     $ 704,859  
    Interest bearing deposits:   2,099,987       2,026,965  
    Savings   32,631       30,150  
    Time certificates of $250,000 or more   1,531,715       1,477,931  
    Other time certificates   1,678,132       1,676,943  
    Total deposits   6,072,735       5,916,848  
           
    Subordinated debt issuance, net   148,529       148,469  
    Commitments to fund investment in affordable housing partnerships   20,956       21,623  
    Operating lease liabilities   24,021       16,990  
    Accrued interest payable   14,634       16,517  
    Other liabilities   40,613       39,830  
    Total liabilities   6,321,488       6,160,277  
           
    Shareholders’ equity   778,604       763,152  
    Total liabilities and shareholders’ equity $ 7,100,092     $ 6,923,429  
           
    Book value per common share $ 59.30     $ 57.86  
    Number of common shares outstanding   13,130,296       13,188,776  
    PREFERRED BANK
    Selected Consolidated Financial Information
    (unaudited)
    (in thousands, except for ratios)
               
               
      For the Quarter Ended
      March 31, December 31, September 30, June 30, March 31,
       2025   2024   2024   2024   2024 
    Unaudited historical quarterly operations data:          
    Interest income $ 114,529   $ 125,858   $ 129,424   $ 127,294   $ 126,520  
    Interest expense   51,871     56,685     60,576     61,187     58,020  
     Interest income before provision for credit losses   62,658     69,173     68,848     66,107     68,500  
    Provision for credit losses   700     2,000     3,200     2,500     4,400  
    Noninterest income   3,998     3,637     3,459     3,404     3,065  
    Noninterest expense   23,369     28,246     22,089     19,697     20,028  
    Income tax expense   12,563     12,343     13,635     13,722     13,671  
     Net income $ 30,024   $ 30,221   $ 33,383   $ 33,592   $ 33,466  
               
    Earnings per share          
     Basic $ 2.27   $ 2.29   $ 2.50   $ 2.51   $ 2.48  
     Diluted $ 2.23   $ 2.25   $ 2.46   $ 2.48   $ 2.44  
               
    Ratios for the period:          
    Return on average assets   1.76 %   1.74 %   1.95 %   1.97 %   2.00 %
    Return on beginning equity   15.96 %   16.03 %   18.37 %   19.31 %   19.36 %
    Net interest margin (Fully-taxable equivalent)   3.75 %   4.06 %   4.10 %   3.96 %   4.19 %
    Noninterest expense to average assets   1.37 %   1.62 %   1.29 %   1.15 %   1.20 %
    Efficiency ratio   35.06 %   38.79 %   30.55 %   28.34 %   27.99 %
    Net (recoveries) charge-offs to average loans (annualized)   -0.01 %   0.47 %   -0.00 %   0.68 %   0.26 %
               
    Ratios as of period end:          
    Tangible common equity ratio   10.96 %   11.02 %   10.92 %   10.55 %   10.35 %
    Tier 1 leverage capital ratio   11.52 %   11.33 %   11.28 %   10.89 %   10.80 %
    Common equity tier 1 risk-based capital ratio   11.86 %   11.80 %   11.66 %   11.52 %   11.50 %
    Tier 1 risk-based capital ratio   11.86 %   11.80 %   11.66 %   11.52 %   11.50 %
    Total risk-based capital ratio   15.15 %   15.11 %   15.06 %   14.93 %   15.08 %
    Allowances for credit losses to loans at end of period   1.28 %   1.27 %   1.36 %   1.34 %   1.49 %
    Allowance for credit losses to non-performing loans 0.91 x 1.89 x   3.92 x   1.79 x   4.33 x
               
    Average balances:          
    Total securities $ 402,754   $ 350,732   $ 356,590   $ 353,357   $ 348,961  
    Total loans   5,555,010     5,542,558     5,458,613     5,320,360     5,263,562  
    Total earning assets   6,780,438     6,788,487     6,684,766     6,728,498     6,585,853  
    Total assets   6,905,249     6,920,325     6,817,979     6,863,829     6,718,018  
    Total time certificate of deposits   3,164,766     3,144,523     2,874,985     2,884,259     2,852,860  
    Total interest bearing deposits   5,244,243     5,220,655     5,124,245     5,203,034     5,004,834  
    Total deposits   5,886,163     5,905,127     5,828,227     5,901,976     5,761,488  
    Total interest bearing liabilities   5,392,735     5,369,092     5,272,617     5,351,347     5,153,089  
    Total equity   779,339     760,345     747,222     715,190     704,996  
               
    PREFERRED BANK
    Selected Consolidated Financial Information
    (unaudited)
    (in thousands, except for ratios)
                             
                             
            As of
            March 31,   December 31,   September 30, June 30,   March 31,
            2025   2024   2024   2024   2024
    Unaudited quarterly statement of financial position data:                  
    Assets:                  
      Cash and cash equivalents $ 925,183     $ 785,515     $ 804,994     $ 917,677     $ 936,600  
      Securities held-to-maturity, at amortized cost   19,745       20,021       20,311       20,605       20,904  
      Securities available-for-sale, at fair value   390,096       348,706       337,363       331,909       333,411  
      Loans:                  
        Real estate – Mortgage:                  
          Real estate—Residential $ 779,462     $ 790,069     $ 753,453     $ 732,251     $ 724,101  
          Real estate—Commercial   2,897,956       2,840,771       2,882,506       2,833,430       2,777,608  
          Total Real Estate – Mortgage   3,677,418       3,630,840       3,635,959       3,565,681       3,501,709  
        Real estate – Construction:                  
          R/E Construction — Residential   306,283       296,580       274,214       238,062       236,596  
          R/E Construction — Commercial   269,065       287,185       290,308       247,582       213,727  
          Total real estate construction loans   575,348       583,765       564,522       485,644       450,323  
        Commercial and industrial   1,374,379       1,418,930       1,365,550       1,371,694       1,369,529  
        SBA   7,104       6,833       5,424       5,463       3,914  
        Consumer and others   164       247       124       118       379  
          Gross loans   5,634,413       5,640,615       5,571,579       5,428,600       5,325,854  
      Allowance for credit losses on loans   (72,274 )     (71,477 )     (76,051 )     (72,848 )     (79,311 )
      Net deferred loan fees   (9,652 )     (9,234 )     (10,414 )     (10,502 )     (10,460 )
        Net loans, excluding loans held for sale $ 5,552,487     $ 5,559,904     $ 5,485,114     $ 5,345,250     $ 5,236,083  
      Loans held for sale $ –     $ 2,214     $ 225     $ 955     $ 605  
        Net loans $ 5,552,487     $ 5,562,118     $ 5,485,339     $ 5,346,205     $ 5,236,688  
                             
      Other real estate owned and repossessed assets $ 13,650     $ 14,991     $ 15,082     $ 16,716     $ 16,716  
      Investment in affordable housing partnerships   63,612       58,346       58,009       60,432       62,854  
      Federal Home Loan Bank stock, at cost   15,000       15,000       15,000       15,000       15,000  
      Other assets   120,319       118,732       136,246       138,036       134,040  
        Total assets $ 7,100,092     $ 6,923,429     $ 6,872,344     $ 6,846,580     $ 6,756,213  
                             
    Liabilities:                  
      Deposits:                  
        Demand $ 730,270     $ 704,859     $ 682,859     $ 675,767     $ 709,767  
        Interest bearing demand   2,099,987       2,026,965       1,994,288       2,326,214       2,159,948  
        Savings   32,631       30,150       29,793       28,251       29,261  
        Time certificates of $250,000 or more   1,531,715       1,477,931       1,478,500       1,406,149       1,349,927  
        Other time certificates   1,678,132       1,676,943       1,682,324       1,442,381       1,552,805  
        Total deposits $ 6,072,735     $ 5,916,848     $ 5,867,764     $ 5,878,762     $ 5,801,708  
                             
      Subordinated debt issuance, net   148,529       148,469       148,410       148,351       148,292  
      Commitments to fund investment in affordable housing partnerships   20,956       21,623       23,617       27,946       29,647  
      Other liabilities   79,268       73,337       82,436       68,394       77,008  
        Total liabilities $ 6,321,488     $ 6,160,277     $ 6,122,227     $ 6,123,453     $ 6,056,655  
                             
    Equity:                    
      Net common stock, no par value $ 96,079     $ 105,501     $ 109,928     $ 113,509     $ 115,915  
      Retained earnings   705,360       685,108       664,808       640,675       616,417  
      Accumulated other comprehensive income   (22,835 )     (27,457 )     (24,619 )     (31,057 )     (32,774 )
        Total shareholders’ equity $ 778,604     $ 763,152     $ 750,117     $ 723,127     $ 699,558  
        Total liabilities and shareholders’ equity $ 7,100,092     $ 6,923,429     $ 6,872,344     $ 6,846,580     $ 6,756,213  
                             
    PREFERRED BANK
    Quarter-to-Date Average Balances, Yield and Rates
    (Unaudited)
                               
                           
          Three months ended
    March 31,    		   Three months ended
    December 31,    		   Three months ended
    March 31,
           2025     2024     2024 
            Interest Average     Interest Average     Interest Average
          Average Income or Yield/   Average Income or Yield/   Average Income or Yield/
          Balance Expense Rate   Balance Expense Rate   Balance Expense Rate
    ASSETS (Dollars in thousands)
    Interest earning assets:                      
      Loans (1,2) $ 5,556,521   $ 101,491   7.41 %   $ 5,543,215   $ 111,596   8.01 %   $ 5,265,940   $ 109,980   8.40 %
      Investment securities (3)   402,754     4,093   4.12 %     350,732     3,566   4.04 %     348,961     3,430   3.95 %
      Federal funds sold   20,222     228   4.57 %     20,172     249   4.91 %     20,390     283   5.58 %
      Other earning assets   800,941     8,816   4.46 %     874,368     10,546   4.80 %     950,562     12,928   5.47 %
        Total interest earning assets   6,780,438     114,628   6.86 %     6,788,487     125,957   7.38 %     6,585,853     126,621   7.73 %
      Deferred loan fees, net   (9,189 )         (9,808 )         (10,694 )    
      Allowance for credit losses on loans   (71,550 )         (75,474 )         (78,349 )    
    Noninterest earning assets:                      
      Cash and due from banks   11,513           10,626           11,244      
      Bank furniture and fixtures   8,439           8,866           10,084      
      Right of use assets   15,201           28,570           22,003      
      Other assets   170,397           169,058           177,877      
        Total assets $ 6,905,249         $ 6,920,325         $ 6,718,018      
                               
    LIABILITIES AND SHAREHOLDERS’ EQUITY
    Interest bearing liabilities:                      
      Deposits:                      
        Interest bearing demand and savings $ 2,079,477   $ 16,659   3.25 %   $ 2,076,132   $ 18,330   3.51 %   $ 2,151,974   $ 22,365   4.18 %
        TCD $250K or more   1,482,324     15,640   4.28 %     1,481,219     17,514   4.70 %     1,341,298     16,501   4.95 %
        Other time certificates   1,682,442     18,247   4.40 %     1,663,304     19,516   4.67 %     1,511,562     17,829   4.74 %
        Total interest bearing deposits   5,244,243     50,546   3.91 %     5,220,655     55,360   4.22 %     5,004,834     56,695   4.56 %
    Short-term borrowings   –     –   0.00 %     3     0   3.31 %     –     –   0.00 %
    Subordinated debt, net   148,492     1,325   3.62 %     148,434     1,325   3.55 %     148,255     1,325   3.59 %
        Total interest bearing liabilities   5,392,735     51,871   3.90 %     5,369,092     56,685   4.20 %     5,153,089     58,020   4.53 %
    Noninterest bearing liabilities:                      
      Demand deposits   641,920           684,472           756,654      
      Lease liability   18,963           25,486           19,500      
      Other liabilities   72,292           80,930           83,779      
        Total liabilities   6,125,910           6,159,980           6,013,022      
    Shareholders’ equity   779,339           760,345           704,996      
        Total liabilities and shareholders’ equity $ 6,905,249         $ 6,920,325         $ 6,718,018      
    Net interest income   $ 62,757         $ 69,272         $ 68,601    
    Net interest spread     2.96 %       3.18 %       3.20 %
    Net interest margin     3.75 %       4.06 %       4.19 %
                               
    Cost of Deposits:                      
      Noninterest bearing demand deposits $ 641,920         $ 684,472         $ 756,654      
      Interest bearing deposits   5,244,243     50,546   3.91 %     5,220,655     55,360   4.22 %     5,004,834     56,695   4.56 %
        Total Deposits $ 5,886,163   $ 50,546   3.48 %   $ 5,905,127   $ 55,360   3.73 %   $ 5,761,488   $ 56,695   3.96 %
                               
    (1) Includes non-accrual loans and loans held for sale                    
    (2) Net loan fee income of $865,000, $1.2 million, and $1.1 million for the quarter ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively, are included in the yield computations
    (3) Yields on securities have been adjusted to a tax-equivalent basis                  
    Preferred Bank
    Loan and Credit Quality Information
                 
    Allowance For Credit Losses History
            Quarter Ended   Year Ended
            March 31,
    2025    		   December 31,
    2024
             (Dollars in 000’s)
    Allowance For Credit Losses      
    Balance at Beginning of Period $ 71,477     $ 78,355  
      Charge-Offs      
        Commercial & Industrial   –       19,028  
        Total Charge-Offs   –       19,028  
                 
      Recoveries      
        Commercial & Industrial   97       50  
        Total Recoveries   97       50  
                 
      Net (Recoveries) Charge-Offs   (97 )     18,978  
      Provision for Credit Losses:   700       12,100  
    Balance at End of Period $ 72,274     $ 71,477  
                 
    Average Loans Held for Investment $ 5,555,010     $ 5,396,844  
    Loans Held for Investment at End of Period $ 5,634,413     $ 5,640,615  
    Net (Recoveries) Charge-Offs to Average Loans   -0.01%     0.35%
    Allowances for Credit Losses to Loans at End of Period   1.28%     1.27%
                 

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

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

    • On April 22, 2025, our Board of Directors declared the following distributions on our common stock:
           
    Month Ending Record Date Payment Date Amount Per Share
    July 31, 2025 July 17, 2025 July 31, 2025 $0.035
    August 31, 2025 August 15, 2025 August 29, 2025 $0.035
    September 30, 2025 September 16, 2025 September 30, 2025 $0.035
           
    • Net asset value (“NAV”) per share as of March 31, 2025 stood at $2.09, compared with a NAV per share on December 31, 2024 of $2.30.
    • Net investment income (“NII”) was approximately $6.1 million, or $0.09 per share, for the quarter ended March 31, 2025, compared with approximately $6.0 million, or $0.09 per share, for the quarter ended December 31, 2024.
    • Total investment income for the quarter ended March 31, 2025 amounted to approximately $10.2 million, which was approximately the same as the quarter ended December 31, 2024.
      • For the quarter ended March 31, 2025 we recorded investment income from our portfolio as follows:
        • $5.5 million from our debt investments;
        • $4.0 million from our CLO equity investments; and
        • $0.7 million from other income.
    • Our total expenses for the quarter ended March 31, 2025 were approximately $4.1 million, compared with total expenses of approximately $4.2 million for the quarter ended December 31, 2024.
    • As of March 31, 2025, the following metrics applied (note that none of these metrics represented a total return to shareholders):
      • The weighted average yield of our debt investments was 14.3% at current cost, compared with 15.8% as of December 31, 2024;
      • The weighted average effective yield of our CLO equity investments at current cost was 9.0%, compared with 8.8% as of December 31, 2024; and
      • The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 16.0%, compared with 16.2% as of December 31, 2024.
    • For the quarter ended March 31, 2025, we recorded a net decrease in net assets resulting from operations of approximately $8.1 million, consisting of:
      • NII of approximately $6.1 million;
      • Net realized losses of approximately $12.2 million; and
      • Net unrealized depreciation of approximately $2.1 million.
    • During the first quarter of 2025, our investment activity consisted of purchases of approximately $16.0 million, sales of approximately $10.7 million and repayments of approximately $8.7 million.
    • Our weighted average credit rating was 2.2 based on total fair value and 2.3 based on total principal amount as of March 31, 2025, compared with a weighted average credit rating of 2.3 based on total fair value and 2.4 based on total principal amount as of December 31, 2024.
    • As of March 31, 2025, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $3.9 million.
    • For the quarter ended March 31, 2025, we issued a total of approximately 1.3 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $3.5 million. As of March 31, 2025, we had approximately 71.2 million shares of common stock outstanding.

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

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

             
    OXFORD SQUARE CAPITAL CORP.
             
    STATEMENTS OF ASSETS AND LIABILITIES
        March 31,
    2025    		   December 31,
    2024
        (unaudited)    
    ASSETS                
    Non-affiliated/non-control investments (cost: $342,775,122 and $358,356,496, respectively)   $ 239,291,367     $ 256,238,759  
    Affiliated investments (cost: $16,814,586 and $16,836,822, respectively)     3,890,986       4,614,100  
    Cash and cash equivalents     37,252,672       34,926,468  
    Interest and distributions receivable     2,426,368       2,724,049  
    Securities sold not settled     1,589,875       —  
    Other assets     1,039,370       1,227,598  
    Total assets   $ 285,490,638     $ 299,730,974  
    LIABILITIES                
    Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $252,321 and $309,812, respectively   $ 44,538,429     $ 44,480,938  
    Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,286,553 and $1,381,619 respectively     79,213,447       79,118,381  
    Securities purchased not settled     9,516,875       12,027,463  
    Base Fee and Net Investment Income Incentive Fee payable to affiliate     1,058,784       1,215,964  
    Accrued interest payable     1,204,487       1,204,487  
    Accrued expenses     1,076,306       1,018,261  
    Total liabilities     136,608,328       139,065,494  
    COMMITMENTS AND CONTINGENCIES                
    NET ASSETS                
    Common stock, $0.01 par value, 100,000,000 shares authorized; 71,187,166 and 69,758,938 shares issued and outstanding, respectively     711,872       697,590  
    Capital in excess of par value     491,617,243       487,943,476  
    Total distributable earnings/(accumulated losses)     (343,446,805 )     (327,975,586 )
    Total net assets     148,882,310       160,665,480  
    Total liabilities and net assets   $ 285,490,638     $ 299,730,974  
    Net asset value per common share   $ 2.09     $ 2.30  
                     
     
    OXFORD SQUARE CAPITAL CORP.
             
    STATEMENTS OF OPERATIONS
    (unaudited)
             
        Three Months
    Ended
    March 31,
    2025    		   Three Months
    Ended
    March 31,
    2024
    INVESTMENT INCOME                
    From non-affiliated/non-control investments:                
    Interest income – debt investments   $ 5,534,755     $ 6,421,047  
    Income from securitization vehicles and investments     3,956,053       3,932,374  
    Other income     670,242       324,003  
    Total investment income from non-affiliated/non-control investments     10,161,050       10,677,424  
    Total investment income     10,161,050       10,677,424  
    EXPENSES                
    Interest expense     1,959,287       1,960,982  
    Base Fee     1,058,785       987,816  
    Professional fees     323,452       311,747  
    Compensation expense     239,577       206,898  
    General and administrative     355,259       346,625  
    Excise tax     120,816       325,800  
    Total expenses before incentive fees     4,057,176       4,139,868  
    Net Investment Income Incentive Fees     —       —  
    Total incentive fees     —       —  
    Total expenses     4,057,176       4,139,868  
    Net investment income     6,103,874       6,537,556  
    NET UNREALIZED (DEPRECIATION)/APPRECIATION AND REALIZED LOSSES ON INVESTMENT TRANSACTIONS                
    Net change in unrealized (depreciation)/appreciation on investments:                
    Non-Affiliate/non-control investments     (1,366,018 )     145,111  
    Affiliated investments     (700,878 )     (356,117 )
    Total net change in unrealized depreciation on investments     (2,066,896 )     (211,006 )
    Net realized losses:                
    Non-affiliated/non-control investments     (12,158,495 )     (8,094,940 )
    Total net realized losses     (12,158,495 )     (8,094,940 )
    Net decrease in net assets resulting from operations   $ (8,121,517 )   $ (1,768,390 )
    Net increase in net assets resulting from net investment income per common share (Basic and Diluted):   $ 0.09     $ 0.11  
    Net decrease in net assets resulting from operations per common share (Basic and Diluted):   $ (0.12 )   $ (0.03 )
    Weighted average shares of common stock outstanding (Basic and Diluted):     69,984,752       59,639,285  
    Distributions per share   $ 0.105     $ 0.105  
                     

    FINANCIAL HIGHLIGHTS (Unaudited)

        Three Months
    Ended
    March 31,
    2025    		   Three Months
    Ended
    March 31,
    2024
    Per Share Data                
    Net asset value at beginning of period   $ 2.30     $ 2.55  
    Net investment income(1)     0.09       0.11  
    Net realized and unrealized losses(2)     (0.20 )     (0.13 )
    Net decrease in net asset value from operations     (0.11 )     (0.02 )
    Distributions per share from net investment income     (0.11 )     (0.11 )
    Tax return of capital distributions(3)     —       —  
    Total distributions     (0.11 )     (0.11 )
    Effect of shares issued/repurchased, gross     0.01       —  
    Net asset value at end of period   $ 2.09     $ 2.42  
    Per share market value at beginning of period   $ 2.44     $ 2.86  
    Per share market value at end of period   $ 2.61     $ 3.17  
    Total return based on Market Value(4)     11.39 %     14.63 %
    Total return based on Net Asset Value(5)     (4.57 )%     (0.98 )%
    Shares outstanding at end of period     71,187,166       59,672,337  
                     
    Ratios/Supplemental Data(8)                
    Net assets at end of period (000’s)   $ 148,882     $ 144,340  
    Average net assets (000’s)   $ 153,493     $ 148,260  
    Ratio of expenses to average net assets(6)     10.57 %     11.17 %
    Ratio of net investment income to average net assets(6)     15.91 %     17.64 %
    Portfolio turnover rate(7)     6.26 %     3.09 %

    ____________

    (1) Represents per share net investment income for the period, based upon weighted average shares outstanding.
    (2) Net realized and unrealized losses include rounding adjustments to reconcile change in net asset value per share.
    (3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. The amounts and sources of distributions reported are only estimates (based on an average of the reported tax character historically) and are not being provided for U.S. tax reporting purposes.
    (4) Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan. Total return is not annualized.
    (5) Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. Total return is not annualized.
    (6) Annualized and includes excise tax.
    (7) Portfolio turnover rate is calculated using the lesser of the year-to-date investment sales and debt repayments or year-to-date investment purchases over the average of the total investments at fair value.
    (8) The following table provides supplemental performance ratios (annualized) measured for the three months ended March 31, 2025 and 2024:
       
        Three Months
    Ended
    March 31,
    2025    		   Three Months
    Ended
    March 31,
    2024
    Ratio of expenses to average net assets:            
    Operating expenses before incentive fees   10.57 %   11.17 %
    Net investment income incentive fees   — %   — %
    Ratio of expenses, excluding interest expense to average net assets   5.47 %   5.88 %
                 

    About Oxford Square Capital Corp.

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

    Forward-Looking Statements

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

    Contact:
    Bruce Rubin
    203-983-5280

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

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

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

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

    Quarterly Financial Performance

    First Quarter 2025 versus First Quarter 2024 highlights:

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

    First Quarter 2025 versus Fourth Quarter 2024 highlights:

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

    Capital Strength

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

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

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

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

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

    Loan Portfolio

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

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

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

    Diversified Deposit Base

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

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

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

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

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

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

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

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

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

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

    Net Interest Margin

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

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

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

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

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

    Asset Quality

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

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

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

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

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

    Investment Portfolio Overview

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

    Noninterest Income

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

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

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

    Noninterest Expense

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

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

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

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

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

    LAKELAND FINANCIAL CORPORATION
    FIRSTQUARTER2025FINANCIAL HIGHLIGHTS
     
      Three Months Ended
    (Unaudited – Dollars in thousands, except per share data) March 31,   December 31,   March 31,
    END OF PERIOD BALANCES   2025       2024       2024  
    Assets $ 6,851,178     $ 6,678,374     $ 6,566,861  
    Investments   1,132,854       1,122,994       1,144,816  
    Loans   5,223,221       5,117,948       4,997,559  
    Allowance for Credit Losses   92,433       85,960       73,180  
    Deposits   5,960,194       5,900,966       5,618,085  
    Brokered Deposits   125,409       41,560       185,767  
    Core Deposits (1)   5,834,785       5,859,406       5,432,318  
    Total Equity   694,509       683,911       647,009  
    Goodwill Net of Deferred Tax Assets   3,803       3,803       3,803  
    Tangible Common Equity (2)   690,706       680,108       643,206  
    Adjusted Tangible Common
    Equity (2)    		   854,585       846,040       809,395  
    AVERAGE BALANCES          
    Total Assets $ 6,762,970     $ 6,795,596     $ 6,554,468  
    Earning Assets   6,430,804       6,470,920       6,216,929  
    Investments   1,136,404       1,134,011       1,158,503  
    Loans   5,185,918       5,086,614       4,971,020  
    Total Deposits   5,874,725       6,011,122       5,630,431  
    Interest Bearing Deposits   4,616,381       4,729,201       4,356,328  
    Interest Bearing Liabilities   4,716,465       4,729,206       4,532,137  
    Total Equity   696,053       693,744       645,007  
    INCOME STATEMENT DATA          
    Net Interest Income $ 52,875     $ 51,694     $ 47,416  
    Net Interest Income-Fully Tax Equivalent   53,983       52,804       48,683  
    Provision for Credit Losses   6,800       3,691       1,520  
    Noninterest Income   10,928       11,876       12,612  
    Noninterest Expense   32,763       30,653       30,705  
    Net Income   20,085       24,190       23,401  
    Pretax Pre-Provision Earnings (2)   31,040       32,917       29,323  
    PER SHARE DATA          
    Basic Net Income Per Common Share $ 0.78     $ 0.94     $ 0.91  
    Diluted Net Income Per Common Share   0.78       0.94       0.91  
    Cash Dividends Declared Per Common Share   0.50       0.48       0.48  
    Dividend Payout   64.10 %     51.06 %     52.75 %
    Book Value Per Common Share (equity per share issued) $ 26.99     $ 26.62     $ 25.20  
    Tangible Book Value Per Common Share (2)   26.85       26.47       25.05  
    Market Value – High $ 71.77     $ 78.61     $ 73.22  
    Market Value – Low   58.24       61.10       60.56  
    Basic Weighted Average Common Shares Outstanding   25,714,818       25,686,276       25,657,063  
    Diluted Weighted Average Common Shares Outstanding   25,802,865       25,792,460       25,747,643  
               
               
      Three Months Ended
    (Unaudited – Dollars in thousands, except per share data) March 31,   December 31,   March 31,
    KEY RATIOS   2025       2024       2024  
    Return on Average Assets   1.20 %     1.42 %     1.44 %
    Return on Average Total Equity   11.70       13.87       14.59  
    Average Equity to Average Assets   10.29       10.21       9.84  
    Net Interest Margin   3.40       3.25       3.15  
    Efficiency (Noninterest Expense/Net Interest Income
    plus Noninterest Income)    		   51.35       48.22       51.15  
    Loans to Deposits   87.64       86.73       88.95  
    Investment Securities to Total Assets   16.54       16.82       17.43  
    Tier 1 Leverage (3)   12.30       12.15       12.01  
    Tier 1 Risk-Based Capital (3)   14.51       14.64       14.21  
    Common Equity Tier 1 (CET1) (3)   14.51       14.64       14.21  
    Total Capital (3)   15.77       15.90       15.46  
    Tangible Capital (2)   10.09       10.19       9.80  
    Adjusted Tangible Capital (2)   12.19       12.37       12.03  
    ASSET QUALITY          
    Loans Past Due 30 – 89 Days $ 4,288     $ 4,273     $ 3,177  
    Loans Past Due 90 Days or More   7       28       7  
    Nonaccrual Loans   57,392       56,431       14,762  
    Nonperforming Loans   57,399       56,459       14,769  
    Other Real Estate Owned   284       284       384  
    Other Nonperforming Assets   193       143       78  
    Total Nonperforming Assets   57,876       56,886       15,231  
    Individually Analyzed Loans   81,346       78,647       15,181  
    Non-Individually Analyzed Watch List Loans   134,218       132,499       168,133  
    Total Individually Analyzed and Watch List Loans   215,564       211,146       183,314  
    Gross Charge Offs   508       1,657       504  
    Recoveries   181       299       192  
    Net Charge Offs/(Recoveries)   327       1,358       312  
    Net Charge Offs/(Recoveries) to Average Loans   0.03 %     0.11 %     0.03 %
    Credit Loss Reserve to Loans   1.77       1.68       1.46  
    Credit Loss Reserve to Nonperforming Loans   161.04       152.25       495.51  
    Nonperforming Loans to Loans   1.10       1.10       0.30  
    Nonperforming Assets to Assets   0.84       0.85       0.23  
    Total Individually Analyzed and Watch List Loans to Total Loans   4.13 %     4.13 %     3.67 %
    OTHER DATA          
    Full Time Equivalent Employees   647       643       628  
    Offices   54       54       53  

    __________________________________________________

    (1)   Core deposits equals deposits less brokered deposits.
    (2)   Non-GAAP financial measure – see “Reconciliation of Non-GAAP Financial Measures”.
    (3)   Capital ratios for March 31, 2025 are preliminary until the Call Report is filed.
         
    CONSOLIDATED BALANCE SHEETS (in thousands, except share data)      
    ​ March 31,
    2025    		   December 31,
    2024
    ​ (Unaudited)   ​
    ASSETS      
    Cash and due from banks $ 89,325     $ 71,733  
    Short-term investments   145,899       96,472  
    Total cash and cash equivalents   235,224       168,205  
    ​      
    Securities available-for-sale, at fair value   1,000,875       991,426  
    Securities held-to-maturity, at amortized cost (fair value of $109,481 and $113,107, respectively)   131,979       131,568  
    Real estate mortgage loans held-for-sale   1,295       1,700  
    ​      
    Loans, net of allowance for credit losses of $92,433 and $85,960   5,130,788       5,031,988  
    ​      
    Land, premises and equipment, net   60,797       60,489  
    Bank owned life insurance   113,826       113,320  
    Federal Reserve and Federal Home Loan Bank stock   21,420       21,420  
    Accrued interest receivable   28,818       28,446  
    Goodwill   4,970       4,970  
    Other assets   121,186       124,842  
    Total assets $ 6,851,178     $ 6,678,374  
    ​      
    ​      
    LIABILITIES      
    Noninterest bearing deposits $ 1,296,907     $ 1,297,456  
    Interest bearing deposits   4,663,287       4,603,510  
    Total deposits   5,960,194       5,900,966  
           
    Borrowings – Federal Home Loan Bank advances   108,200       0  
    Accrued interest payable   14,699       15,117  
    Other liabilities   73,576       78,380  
    Total liabilities   6,156,669       5,994,463  
    ​      
    STOCKHOLDERS’ EQUITY      
    Common stock: 90,000,000 shares authorized, no par value      
    26,016,494 shares issued and 25,556,904 outstanding as of March 31, 2025      
    25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024   130,243       129,664  
    Retained earnings   743,650       736,412  
    Accumulated other comprehensive income (loss)   (163,879 )     (166,500 )
    Treasury stock, at cost (459,590 shares and 469,239 shares as of March 31, 2025 and December 31, 2024, respectively)   (15,594 )     (15,754 )
    Total stockholders’ equity   694,420       683,822  
    Noncontrolling interest   89       89  
    Total equity   694,509       683,911  
    Total liabilities and equity $ 6,851,178     $ 6,678,374  
     
    CONSOLIDATED STATEMENTS OF INCOME (unaudited – in thousands, except share and per share data)
    ​ Three Months Ended March 31,
    ​   2025       2024  
    NET INTEREST INCOME      
    Interest and fees on loans      
    Taxable $ 81,740     $ 82,042  
    Tax exempt   292       900  
    Interest and dividends on securities      
    Taxable   3,389       3,039  
    Tax exempt   3,910       3,947  
    Other interest income   1,124       1,106  
    Total interest income   90,455       91,034  
    ​ ​   ​
    Interest on deposits   36,458       41,164  
    Interest on short-term borrowings   1,122       2,454  
    Total interest expense   37,580       43,618  
    ​ ​   ​
    NET INTEREST INCOME   52,875       47,416  
    ​ ​   ​
    Provision for credit losses   6,800       1,520  
    ​ ​   ​
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES   46,075       45,896  
    ​ ​   ​
    NONINTEREST INCOME      
    Wealth advisory fees   2,867       2,455  
    Investment brokerage fees   452       522  
    Service charges on deposit accounts   2,774       2,691  
    Loan and service fees   2,884       2,852  
    Merchant and interchange fee income   822       863  
    Bank owned life insurance income   322       1,036  
    Mortgage banking income (loss)   (51 )     52  
    Net securities gains (losses)   0       (46 )
    Other income   858       2,187  
    Total noninterest income   10,928       12,612  
    ​ ​   ​
    NONINTEREST EXPENSE      
    Salaries and employee benefits   17,902       16,833  
    Net occupancy expense   1,980       1,740  
    Equipment costs   1,382       1,412  
    Data processing fees and supplies   4,265       3,839  
    Corporate and business development   1,406       1,381  
    FDIC insurance and other regulatory fees   800       789  
    Professional fees   2,380       2,463  
    Other expense   2,648       2,248  
    Total noninterest expense   32,763       30,705  
    ​ ​   ​
    INCOME BEFORE INCOME TAX EXPENSE   24,240       27,803  
    Income tax expense   4,155       4,402  
    NET INCOME $ 20,085     $ 23,401  
    ​ ​   ​
    BASIC WEIGHTED AVERAGE COMMON SHARES   25,714,818       25,657,063  
    ​ ​   ​
    BASIC EARNINGS PER COMMON SHARE $ 0.78     $ 0.91  
    ​      
    DILUTED WEIGHTED AVERAGE COMMON SHARES   25,802,865       25,747,643  
    ​      
    DILUTED EARNINGS PER COMMON SHARE $ 0.78     $ 0.91  
     
    LAKELAND FINANCIAL CORPORATION
    LOAN DETAIL
    (unaudited, in thousands)
     
      March 31,
    2025    		   December 31,
    2024    		   March 31,
    2024
    Commercial and industrial loans:                      
    Working capital lines of credit loans $ 716,522     13.7 %   $ 649,609     12.7 %   $ 646,459     12.9 %
    Non-working capital loans   807,048     15.5       801,256     15.6       830,817     16.6  
    Total commercial and industrial loans   1,523,570     29.2       1,450,865     28.3       1,477,276     29.5  
              ​            
    Commercial real estate and multi-family residential loans:                      
    Construction and land development loans   623,905     12.0       567,781     11.1       659,712     13.2  
    Owner occupied loans   804,933     15.4       807,090     15.8       833,410     16.7  
    Nonowner occupied loans   852,033     16.3       872,671     17.0       744,346     14.9  
    Multifamily loans   339,946     6.5       344,978     6.7       239,974     4.8  
    Total commercial real estate and multi-family residential loans   2,620,817     50.2       2,592,520     50.6       2,477,442     49.6  
              ​            
    Agri-business and agricultural loans:                      
    Loans secured by farmland   156,112     3.0       156,609     3.1       167,271     3.3  
    Loans for agricultural production   227,659     4.3       230,787     4.5       200,581     4.0  
    Total agri-business and agricultural loans   383,771     7.3       387,396     7.6       367,852     7.3  
              ​            
    Other commercial loans   94,927     1.8       95,584     1.9       120,302     2.4  
    Total commercial loans   4,623,085     88.5       4,526,365     88.4       4,442,872     88.8  
              ​            
    Consumer 1-4 family mortgage loans:                      
    Closed end first mortgage loans   265,855     5.1       259,286     5.1       260,633     5.2  
    Open end and junior lien loans   217,981     4.2       214,125     4.2       188,927     3.8  
    Residential construction and land development loans   16,359     0.3       16,818     0.3       10,956     0.2  
    Total consumer 1-4 family mortgage loans   500,195     9.6       490,229     9.6       460,516     9.2  
      ​       ​            
    Other consumer loans   102,254     1.9       104,041     2.0       97,369     2.0  
    Total consumer loans   602,449     11.5       594,270     11.6       557,885     11.2  
    Subtotal   5,225,534     100.0 %     5,120,635     100.0 %     5,000,757     100.0 %
    Less:  Allowance for credit losses   (92,433 )         (85,960 )   ​     (73,180 )   ​
    Net deferred loan fees   (2,313 )         (2,687 )   ​     (3,198 )   ​
    Loans, net $ 5,130,788         $ 5,031,988     ​   $ 4,924,379     ​
     
    LAKELAND FINANCIAL CORPORATION
    DEPOSITS AND BORROWINGS
    (unaudited, in thousands)
     
      March 31,
    2025    		   December 31,
    2024    		   March 31,
    2024
    Noninterest bearing demand deposits $ 1,296,907   $ 1,297,456   $ 1,254,200
    Savings and transaction accounts:          
    Savings deposits   293,768     276,179     296,671
    Interest bearing demand deposits   3,554,310     3,471,455     3,041,025
    Time deposits:          
    Deposits of $100,000 or more   602,577     642,776     805,832
    Other time deposits   212,632     213,100     220,357
    Total deposits $ 5,960,194   $ 5,900,966   $ 5,618,085
    FHLB advances and other borrowings   108,200     0     200,000
    Total funding sources $ 6,068,394   $ 5,900,966   $ 5,818,085
     

     

    LAKELAND FINANCIAL CORPORATION
    AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
    (UNAUDITED)
     
        Three Months Ended March 31, 2025   Three Months Ended December 31, 2024   Three Months Ended March 31, 2024
    (fully tax equivalent basis, dollars in thousands)   Average Balance   Interest Income   Yield (1)/
    Rate    		   Average Balance   Interest Income   Yield (1)/
    Rate    		   Average Balance   Interest Income   Yield (1)/
    Rate
    Earning Assets                                    
    Loans:                                    
    Taxable (2)(3)   $ 5,160,031     $ 81,740   6.42 %   $ 5,060,397     $ 83,253   6.54 %   $ 4,916,943     $ 82,042   6.71 %
    Tax exempt (1)     25,887       361   5.66       26,217       364   5.52       54,077       1,118   8.31  
    Investments: (1)                                    
    Securities     1,136,404       8,338   2.98       1,134,011       7,953   2.79       1,158,503       8,035   2.79  
    Short-term investments     2,964       28   3.83       2,765       29   4.17       2,710       33   4.90  
    Interest bearing deposits     105,518       1,096   4.21       247,530       2,881   4.63       84,696       1,073   5.10  
    Total earning assets   $ 6,430,804     $ 91,563   5.77 %   $ 6,470,920     $ 94,480   5.81 %   $ 6,216,929     $ 92,301   5.97 %
    Less:  Allowance for credit losses     (87,477 )             (84,687 )             (72,433 )        
    Nonearning Assets                                    
    Cash and due from banks     71,004               67,994               68,584          
    Premises and equipment     60,523               60,325               57,883          
    Other nonearning assets     288,116               281,044               283,505          
    Total assets   $ 6,762,970             $ 6,795,596             $ 6,554,468          
                                         
    Interest Bearing Liabilities                                    
    Savings deposits   $ 283,888     $ 42   0.06 %   $ 274,960     $ 43   0.06 %   $ 295,650     $ 49   0.07 %
    Interest bearing checking accounts     3,486,447       28,075   3.27       3,505,470       31,562   3.58       3,046,958       30,365   4.01  
    Time deposits:                                    
    In denominations under $100,000     212,934       1,832   3.49       214,429       1,921   3.56       224,139       1,918   3.44  
    In denominations over $100,000     633,112       6,509   4.17       734,342       8,150   4.42       789,581       8,832   4.50  
    Miscellaneous short-term borrowings     99,830       1,122   4.56       5       0   5.30       175,809       2,454   5.61  
    Long-term borrowings     254       0   0.00       0       0   0.00       0       0   0.00  
    Total interest bearing liabilities   $ 4,716,465     $ 37,580   3.23 %   $ 4,729,206     $ 41,676   3.51 %   $ 4,532,137     $ 43,618   3.87 %
    Noninterest Bearing Liabilities                                    
    Demand deposits     1,258,344               1,281,921               1,274,103          
    Other liabilities     92,108               90,725               103,221          
    Stockholders’ Equity     696,053               693,744               645,007          
    Total liabilities and stockholders’ equity   $ 6,762,970             $ 6,795,596             $ 6,554,468          
    Interest Margin Recap                                    
    Interest income/average earning assets         91,563   5.77 %         94,480   5.81 %         92,301   5.97 %
    Interest expense/average earning assets         37,580   2.37           41,676   2.56           43,618   2.82  
    Net interest income and margin       $ 53,983   3.40 %       $ 52,804   3.25 %       $ 48,683   3.15 %
    (1)   Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax-exempt securities acquired after January 1, 1983, included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $1.11 million, $1.11 million and $1.27 million in the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
    (2)   Loan fees, which are immaterial in relation to total taxable loan interest income for the three-month periods ended March 31, 2025, December 31, 2024, and March 31, 2024, are included as taxable loan interest income.
    (3)   Nonaccrual loans are included in the average balance of taxable loans.
         

    Reconciliation of Non-GAAP Financial Measures

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

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

      Three Months Ended
      Mar. 31, 2025   Dec. 31, 2024   Mar. 31, 2024
    Total Equity $ 694,509     $ 683,911     $ 647,009  
    Less: Goodwill   (4,970 )     (4,970 )     (4,970 )
    Plus: DTA Related to Goodwill   1,167       1,167       1,167  
    Tangible Common Equity   690,706       680,108       643,206  
    Market Value Adjustment in AOCI   163,879       165,932       166,189  
    Adjusted Tangible Common Equity   854,585       846,040       809,395  
               
    Assets $ 6,851,178     $ 6,678,374     $ 6,566,861  
    Less: Goodwill   (4,970 )     (4,970 )     (4,970 )
    Plus: DTA Related to Goodwill   1,167       1,167       1,167  
    Tangible Assets   6,847,375       6,674,571       6,563,058  
    Market Value Adjustment in AOCI   163,879       165,932       166,189  
    Adjusted Tangible Assets   7,011,254       6,840,503       6,729,247  
               
    Ending Common Shares Issued   25,727,393       25,689,730       25,677,399  
               
    Tangible Book Value Per Common Share $ 26.85     $ 26.47     $ 25.05  
               
    Tangible Common Equity/Tangible Assets   10.09 %     10.19 %     9.80 %
    Adjusted Tangible Common Equity/Adjusted Tangible Assets   12.19 %     12.37 %     12.03 %
               
    Net Interest Income $ 52,875     $ 51,694     $ 47,416  
    Plus:  Noninterest Income   10,928       11,876       12,612  
    Minus:  Noninterest Expense   (32,763 )     (30,653 )     (30,705 )
               
    Pretax Pre-Provision Earnings $ 31,040     $ 32,917     $ 29,323  
     

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

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

      Three Months Ended
      Mar. 31, 2025   Dec. 31, 2024   Mar. 31, 2024
    Noninterest Income $ 10,928     $ 11,876     $ 12,612  
    Less: Insurance Recovery   0       0       (1,000 )
    Adjusted Core Noninterest Income $ 10,928     $ 11,876     $ 11,612  
               
    Earnings Before Income Taxes $ 24,240     $ 29,226     $ 27,803  
    Adjusted Core Impact:          
    Noninterest Income   0       0       (1,000 )
    Total Adjusted Core Impact   0       0       (1,000 )
    Adjusted Earnings Before Income Taxes   24,240       29,226       26,803  
    Tax Effect   (4,155 )     (5,036 )     (4,153 )
    Core Operational Profitability (1) $ 20,085     $ 24,190     $ 22,650  
               
    Diluted Earnings Per Common Share $ 0.78     $ 0.94     $ 0.91  
    Impact of Adjusted Core Items   0.00       0.00       (0.03 )
    Core Operational Diluted Earnings Per Common Share $ 0.78     $ 0.94     $ 0.88  
               
    Adjusted Core Efficiency Ratio   51.35 %     48.22 %     52.02 %
    (1)   Core operational profitability was $751,000 lower than reported net income for the three months ended March 31, 2024.

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

    The MIL Network –

  • MIL-OSI Asia-Pac: RECEPTION HOSTED BY THE AMBASSADOR OF SWITZERLAND, HE VIKTOR VAVRICKA

    Source:

    REMARKS by the Prime Minister of the Independent State of Samoa, Honourable Fiame Naomi Mata’afa [Wednesday 9 April, 2025]

    Pastor Samoa Unoi,

    Your Excellency, Viktor Vavricka and your good lady,

    Members of the Diplomatic Corps,

    Ladies and Gentlemen,

    Talofa and a pleasant good evening to you all.

    It is a pleasure to join you this evening to celebrate the growing relations between Samoa and Switzerland. In that regard let me extend a very warm welcome to Your Excellency, Ambassador Viktor Vavricka and your good lady. I also congratulate you on your accreditation yesterday as the Ambassador of the Swiss Confederation to Samoa.

    We look forward to working closely with you to further strengthen the connections between our two nations.

    Samoa and Switzerland have enjoyed cordial relationship over four decades underpinned by mutual respect and our shared aspirations for sustainable development.

    Switzerland’s invaluable support has played a crucial role in advancing Samoa’s interests on the global stage. We acknowledge Switzerland’s financial assistance to support the establishment in 2022 of Samoa’s Embassy and Permanent Mission in Geneva, which serves as a vital platform for multilateral diplomacy to engage especially with UN agencies such as WTO, Human Rights, FAO and UNESCO.

    Your country’s generosity in this regard reflects its steadfast commitment to supporting small island developing states in amplifying their voices in the international arena.

    Switzerland’s contribution and investment in the Green Climate Fund GCF) and the Asian Development Bank (ADB) has benefitted Samoa through climate resilient projects for Small island developing states. These projects have continued to significantly assist Samoa in building resilience against climate change, promoting sustainable economic growth, and enhancing our disaster preparedness.

    Excellency, it would be remiss of me not to acknowledge the contribution made by Mrs. Sylvie Salanoa as the Swiss Honorary Consul to Samoa especially through Switzerland’s small grant aid which has benefitted our local community. Her dedication has added to fostering stronger ties between our two nations.

    Excellency, I am assured that your tenure as the Ambassador of Switzerland to Samoa will present new opportunities for collaboration and sustained progress in our relations.

    Ladies and gentlemen, please join me in proposing a toast: “To the close and enduring relations between Samoa and Switzerland”.

    Soifua and God bless.

    Photo by the Government of Samoa (Peseta Tusiga Taofiga)

    MIL OSI Asia Pacific News –

  • MIL-OSI: Beneficient Enters into New GP Primary Capital Transaction

    Source: GlobeNewswire (MIL-OSI)

    DALLAS, April 25, 2025 (GLOBE NEWSWIRE) — Beneficient (NASDAQ: BENF) (“Ben” or the “Company”), a technology-enabled platform providing exit opportunities and primary capital solutions and related trust and custody services to holders of alternative assets through its proprietary online platform AltAccess, today announced it has closed on the financing of a $233,333 primary capital commitment for Cork & Vines Fund I, LP (“Fund”), a fund managed by Cork & Vines GP, LP, an asset manager investing in opportunities within the premium experiential, luxury dining segment with a differentiated culinary and strategic wine program focus.

    The transaction represents Ben’s second GP Primary transaction of the fiscal year and third since formally launching the program in late 2024. In exchange for an interest in the Fund, the Fund received approximately $233,333 in stated value of shares of the Company’s Resettable Convertible Preferred Stock (the “Preferred Stock”), which is convertible at the election of the holder into shares of the Company’s Class A common stock, subject to the terms and conditions of the transaction documents. As a result of the transaction, the collateral for Company’s ExAlt loan portfolio is expected to increase by approximately $233,333 of interests in alternative assets. Concurrently, the Company also entered into a Preferred Liquidity Provider Program Agreement with the Fund, whereby the Company may facilitate ongoing liquidity solutions for the Fund and its limited partners.

    “We are excited to continue the momentum at the outset of this fiscal year by completing another GP primary capital transaction as we work to execute on our core liquidity and primary capital strategy,” said Beneficient management. “We believe this financing reflects our ability to close transactions that drive shareholder value and enhance the value of the collateral backing our ExAlt loan portfolio. We will continue to pursue additional opportunities that align with our strategic vision and growth objectives.”

    Upon closing of the previously announced Public Stockholder Enhancement Transactions (the “Transactions”), the Company believes this transaction will result in the addition of approximately $77,777 (and an aggregate of approximately $10.54 million) of tangible book value attributable to the Company’s stockholders.

    Beneficient’s GP Primary Commitment Program is focused on providing primary capital solutions and financing anchor commitments to general partners during their fundraising efforts while immediately deploying capital into our equity. Through the program, Beneficient seeks to help satisfy the up to $330 billion of potential demand for primary commitments to meet fundraising needs.

    Reconciliation of Non-GAAP Financial Measures      
    The following tables reconciles these non-GAAP financial measures to the most comparable GAAP financial measures as of December 31, 2024, on an actual basis and pro forma assuming the Transactions occurred on December 31, 2024.    
    (dollars in thousands)   Actual   Pro forma –
    Transactions     (1)    		   Pro forma –
    Transactions
    and GP
    Primary     (3)
    Tangible Book Value            
    Total equity (deficit)     14,260     14,260     24,093  
    Less: Goodwill and intangible assets     (13,014 )   (13,014 )   (13,014 )
    Plus: Total temporary equity     90,526     90,526     90,526  
    Tangible book value     91, 772     91,772     101,605  
                 
        Actual   Pro forma –
    Transactions     (1)    		   Pro forma –
    Transactions
    and GP
    Primary     (3)
    Tangible book value attributable to Ben public company stockholders            
    Tangible book value                       91,772                   91,772     101,605  
    Less: Tangible book value attributable to Beneficient Holdings noncontrolling interest holders                     (91,772 )   (82,595 )   (91,070 )
    Tangible book value attributable to Ben’s public company stockholders     –     9,177 (2)   10,535 (4)
                 
    Market Capitalization of Ben’s Class A and Class B common stock as of April 24, 2025 (5)   $ 2,211          
                     

    (1)  Assumes the Transactions closed on December 31, 2024 including that the Beneficient Holdings limited partnership agreement was amended to provide that Ben, as the indirect holder of the Class A Units and certain Designated Class S Ordinary Units of Beneficient Holdings, would receive in the event of a liquidation of Beneficient Holdings 10% of the first $100 million of distributions of Beneficient Holdings following the satisfaction of the debts and liabilities of Beneficient Holdings on a consolidated basis.
    (2)  Pro forma for the Transactions, represents 10% of the first $100 million of distributions of Beneficient Holdings in the event of the liquidation of Beneficient Holdings following the satisfaction of the debts and liabilities Beneficient Holdings on a consolidated basis.
    (3)  Assumes the Transactions closed on December 31, 2024 including that the Beneficient Holdings limited partnership agreement was amended to provide that Ben, as the indirect holder of the Class A Units and certain Designated Class S Ordinary Units of Beneficient Holdings, would receive in the event of a liquidation of Beneficient Holdings (i) 10% of the first $100 million of distributions of Beneficient Holdings following the satisfaction of the debts and liabilities of Beneficient Holdings on a consolidated basis and (ii) 33.3333% of the net asset value of the added alternative assets of up to $5 billion in connection with ExAlt Plan liquidity and primary capital transactions entered after December 22, 2024. Pro forma for GP Primary includes the primary capital transaction described herein plus the previously disclosed $9.6 million primary capital commitment for Pulse Pioneer Fund, LP.
    (4)  Pro forma for the Transactions, represents (i) 10% of the first $100 million of distributions of Beneficient Holdings in the event of the liquidation of Beneficient Holdings following the satisfaction of the debts and liabilities Beneficient Holdings on a consolidated basis and (ii) 33.3333% of the net asset value of the added alternative assets of up to $5 billion in connection with ExAlt Plan liquidity and primary capital transactions entered after December 22, 2024.
    (5)  Based upon the closing price of the Class A common stock as reported by Nasdaq as of market close on April 24, 2025.

    About Beneficient 
    Beneficient (Nasdaq: BENF) – Ben, for short – is on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors − mid-to-high net worth individuals, small-to-midsized institutions and General Partners seeking exit options, anchor commitments and valued-added services for their funds− with solutions that could help them unlock the value in their alternative assets. Ben’s AltQuote® tool provides customers with a range of potential exit options within minutes, while customers can log on to the AltAccess® portal to explore opportunities and receive proposals in a secure online environment.         

    Its subsidiary, Beneficient Fiduciary Financial, L.L.C., received its charter under the State of Kansas’ Technology-Enabled Fiduciary Financial Institution (TEFFI) Act and is subject to regulatory oversight by the Office of the State Bank Commissioner. 

    For more information, visit www.trustben.com or follow us on LinkedIn. 

    Contacts
    Matt Kreps: 214-597-8200, mkreps@darrowir.com
    Michael Wetherington: 214-284-1199, mwetherington@darrowir.com
    Investor Relations: investors@beneficient.com

    Important Information and Where You Can Find It
    This press release may be deemed to be solicitation material in respect of a vote of stockholders to approve the Transactions. In connection with the requisite stockholder approval, Ben will file with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement and a definitive proxy statement, which will be sent to the stockholders of Ben, seeking such approvals related to the Transactions.

    INVESTORS AND SECURITY HOLDERS OF BEN AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, WHEN AVAILABLE, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BEN AND THE TRANSACTIONS. Investors and security holders will be able to obtain a free copy of the proxy statement, as well as other relevant documents filed with the SEC containing information about Ben, without charge, at the SEC’s website (http://www.sec.gov). Copies of documents filed with the SEC by Ben can also be obtained, without charge, by directing a request to Investor Relations, Beneficient, 325 North St. Paul Street, Suite 4850, Dallas, Texas 75201, or email investors@beneficient.com.

    Participants in the Solicitation of Proxies in Connection with Transactions
    Ben and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the requisite stockholder approvals under the rules of the SEC. Information regarding Ben’s directors and executive officers is available in its annual report on Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on July 9, 2024 and certain current reports on Form 8-K filed by Ben. Other information regarding the participants in the solicitation of proxies with respect to the Transactions and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

    Not an Offer of Securities
    The information in this communication is for informational purposes only and shall not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities. The securities that are the subject of the Transactions have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

    Forward Looking Statements
    Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the Transactions, including receipt of required approvals and satisfaction of other customary closing conditions and excepted timing of closing of the Transactions, and expectations of future plans, strategies, and benefits of the Transactions. The words ”anticipate,” “believe,” ”continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” ”plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected.

    Important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, among others: the ultimate outcome of the Transactions, including obtaining the requisite vote of securityholders; the Company’s ability to meet expectations regarding the timing and completion of the Transactions; and the risks, uncertainties, and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.

    Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.  

    The MIL Network –

  • MIL-OSI: Ryoko Reviews: Must Read Before Buying Ryoko Pro Wi-Fi!

    Source: GlobeNewswire (MIL-OSI)

    FRANKLIN, Tenn., April 25, 2025 (GLOBE NEWSWIRE) — The internet has grown to become one of the greatest inventions of man. Many businesses, healthcare services, government operations and even the simplest day to day activities require some degree of Internet connection.

    Ryoko Reviews

    For something that is a necessity, many people are still struggling with fast, affordable and secure internet. You might have solved the problem of a stable internet in your home but what about when you are traveling?

    The Ryoko claims to offer quick, safe, and hassle-free internet access worldwide. The Ryoko Portable Wi-Fi is marketed as a gadget that will simplify your life by bringing fast internet access to you anywhere, without the inconvenience of costly roaming fees or insecure public Wi-Fi.

    Imagine being able to check your emails, surf the web, or even watch your favourite shows while camping in the woods or perhaps on a beautiful road trip. Doesn’t it sound like a dream? However, it is very much a reality with Ryoko.

    No matter where you are, you can get fast and secure internet with this compact, stylish, and remarkably portable Wi-Fi hotspot. Ryoko claims to ensure a flawless experience by automatically connecting to the best local network, whether you’re in a foreign metropolis or a secluded lodge in the country.

    Does it, however, truly live up to the hype? What is the difference between it and other portable Wi-Fi choices available on the market? Above all, is the investment worthwhile? Many USA intending buyers rated the product 4.9/5, with many searching for an honest review on Reddit, BBB and Trustpilot. We will be giving all the necessary details to help you make an informed purchase. Are you eager to learn more? Let’s get started!.

    What Is Ryoko Pro Portable Wi-Fi?
    (Ryoko Reviews)

    Ryoko Pro is a pocket-sized wireless router that creates a personal Wi-Fi network using global 4G LTE signals. It’s designed to deliver a fast, secure internet connection on the go. The device comes with a SIM card already preloaded with 500 MB of mobile data and has additional ad-blocking/anti-phishing capabilities.

    Ryoko Pro connects you to the best local networks, guaranteeing dependable service for all of your devices, whether you’re traveling to a remote location, heading out on a road trip, or just need a steady connection away from home. Ryoko ensures you stay connected to the world. With fast and reliable Wi-Fi available in more than 75+ countries, this gadget serves as a mobile hotspot and is a necessary travel companion both domestically and abroad.

    The Ryoko is lightweight, portable, and fits neatly in your pocket or purse. It’s ideal for people who need to access the internet while on the road without having to deal with the weight of conventional routers or finding a public Wi-Fi connection. You may use Ryoko to access the internet from any location, whether you’re working remotely from your vacation home, fishing by a lake, or camping in the woods.

    According to many verified USA, Canadian, UK, and Australian user reviews, Ryoko can run for up to eight hours between charges, which is more than enough power for an entire day of internet access while you’re out and about. Ryoko is designed to keep you online whether you are working while on the go, streaming a game, or keeping in touch with loved ones.

    First Impression: Unboxing the Ryoko Wi-Fi
    (Ryoko WiFi Reviews)

    Unboxing the Ryoko Pro is a simple yet satisfying experience that instantly reflects the product’s core promise: convenience without complexity. The packaging is compact, clean, and minimal — designed for travel, just like the device itself.

    Here’s what you will find inside the box:

    • Ryoko Pro Wi-Fi Device: The first thing you will notice is its size — smaller than a smartphone, lightweight, and sleek. Its matte finish and curved edges make it easy to grip and slip into your pocket, travel pouch, or even the palm of your hand.
    • Pre-installed SIM Card: One of Ryoko’s best features is that it arrives ready to use. You do not need to buy or insert a SIM — it is already installed and activated. This is a major relief for travelers who are used to fumbling with SIM trays or tracking down country-specific plans.
    • USB-C Charging Cable: The device includes a standard USB-C cable for quick charging. Some bundles may also include an optional magnetic charging dock, which lets you charge the device just by placing it on the base — no cords needed.
    • User Guide: A short, easy-to-follow instruction booklet walks you through setup. Spoiler: setup takes under 2 minutes. Most users don’t even need to open the manual.

    No tech skills? No problem. There is no app to install, no complicated configuration screens, and no extra software. Just press the power button, wait a few seconds, and the device automatically connects to the nearest available 4G LTE tower. Then you connect your phone, tablet, or laptop to the Ryoko Wi-Fi network, just like you would at home.

    From the moment you open the box, Ryoko feels like a device designed for modern life: lightweight, intuitive, and ready for action — whether that is working from the road, staying in touch on a hike, or streaming content in a cabin mile from the city.

    DON’T MISS OUT: Ryoko Wi-Fi Is Available At A Special Price – Click Here To Order From The Official Website

    How Does Ryoko Work?

    The Ryoko Portable Wi-Fi is definitely different from your regular portable WiFi; it works by creating a private, secure Wi-Fi network which automatically connects to the best local network in more than 75+ countries using virtual SIM technology. By choosing the best network for your location, Ryoko guarantees a strong connection irrespective of your location.

    The gadget is easy to set up; all you need to do is turn it on, connect your laptop, tablet, or phone to the Wi-Fi network, and you can begin working, browsing, or streaming. Up to ten devices can be online at once without compromising performance because of the device’s ability to connect to numerous devices at once. Even in places where regular cell coverage may not be strong, Ryoko’s 4G access guarantees high internet speeds.

    Key Features Of Ryoko Portable Router
    (Ryoko Pro Reviews)

    Let’s go through the features and specifications that make the Ryoko special:

    • Worldwide Coverage Without Roaming Fees: Ryoko provides worldwide coverage in over 75+ countries, guaranteeing that you can stay connected wherever you are. Without having to buy pricey overseas SIM cards or worry about erratic roaming fees, Ryoko Pro effortlessly switches to the best local network. It’s a great device for tourists from other countries who wish to avoid paying expensive mobile data prices. As Sophia N. writes: “The connection was consistently fast and reliable, even in a remote area of the woods. It worked everywhere, from my campsite to the lakeside.”
    • Integrated Ad Blocker: Ryoko has a smart ad-blocking tool that protects against malware and phishing websites. For anyone who values privacy and performance, this means faster surfing, improved speed, and an extra layer of online security.
    • Lightweight and No Tangled Cables: Ryoko was created with portability in mind and is small enough to fit in your pocket or in the palm of your hand. Its elegant, wire-free design guarantees that you can access fast internet anywhere; no cumbersome setup or tangled cables, just unrestricted mobility.
    • USB-C Fast Charging: Ryoko uses a USB-C connector, which reduces downtime and the hassle of finding a special charger. Better yet, the kit comes with a USB-C cable, so you don’t need any more purchases to power up and stay connected.
    • Fast, Data-Efficient Connectivity: Take advantage of speeds of up to 150 MB/s while Ryoko’s data-saving technology makes every megabyte matter. Whether you use Ryoko for business, streaming, or surfing, it provides quick, efficient internet without using up too much data.
    • Longer Battery Life: You may not always have access to a power outlet when you’re traveling or working in the field. That’s where Ryoko’s remarkable battery life comes into play. With up to 8 hours of continuous use on a single charge, you won’t have to worry about running out of battery power when working, streaming, or browsing. Another verified USA buyer, David T., reported, “The battery life really exceeded my expectations. I can’t imagine traveling without it!” Ryoko is ideal for travels, treks, and even working remotely from a café without always needing to recharge.
    • Easy to Use and Set Up: If you are not too tech-savvy, setting up a mobile hotspot can sometimes be a pain. Ryoko’s straightforward plug-and-play design solves that issue. It will take little time to get you up and running, even if you are not a tech specialist. “She set it up on her own, and she’s not a big techie. It’s that easy!” David T. claims that his wife set it up easily. The Ryoko hassle-free experience is a great bonus for individuals who wish to be online without needless complex installations.
    • Supports Multiple Devices at Once: Ryoko enables you to connect up to ten devices at once, meaning that you can simultaneously use your tablet, phone, laptop, and other devices online. Families, groups, or everyone else who needs to keep several devices connected while traveling will find it ideal. Sophia N. “I was using my tablet while my dad was using his phone by the lake. Ryoko handled both connections smoothly!” She remembers using it during a camping trip with her family.
    • Safe Connection: Wi-Fi networks, such as those in cafes and airports, are notoriously unreliable. If you are handling sensitive data, such as online banking or business correspondence, Ryoko’s private and secure connection is definitely what you need. You can now travel with peace of mind knowing that your data is secure thanks to its secure connectivity. According to Carlanaise, “I need a stable, secure connection, and I get that 95% of the time with Ryoko.
    • Affordable: Ryoko is designed to save you a whole lot of money. Frequent traveler NomadNetizen expressed his dissatisfaction with traditional mobile providers, saying, “International data charges are a nightmare. Ryoko saved me from those expensive fees, and now I never travel without it.” Ryoko makes staying connected simple and affordable for families, digital nomads, and anyone else who needs dependable internet on the go.

    Who Needs The Ryoko Portable Wi-Fi Device?
    (Muama Ryoko Reviews)

    Everywhere, at any time, Ryoko provides the ease of a reliable connection. The following people will find the Ryoko Pro most beneficial:

    • International Travelers
      If you’ve ever landed in a new country and immediately stressed over mobile data, Ryoko is for you. Instead of buying a new SIM card in every country — or worse, paying for expensive roaming — you can just turn on your Ryoko device and connect. It works in over 70 countries (more on that later), so you stay online the moment your flight touches down.
    • Digital Nomads and Remote Workers
      From freelancers to full-time remote employees, stable Wi-Fi is non-negotiable. Ryoko eliminates the need to rely on cafes, coworking spaces, or hotel networks. It gives you a private, secure, and fast connection wherever you go — ideal for Zoom calls, email, file uploads, and cloud-based work.
    • Campers, Hikers & Outdoor Adventurers
      Ryoko has become a favorite among adventurers, especially those who travel to remote areas. Whether you’re camping by a lake, hiking through trails, or road-tripping across states, Ryoko can keep you online where traditional mobile signal might fail. Tim Bennet, an extreme athlete, even described it as a replacement for bulky satellite gear.
    • Families and Group Travelers
      With support for up to 10 devices at once, Ryoko is perfect for groups. Instead of buying separate data plans for each phone, tablet, or laptop, the whole family or team can connect to one secure network — saving money and making coordination easier during trips.
    • Anyone Tired of Public Wi-Fi
      Even at home or in the city, Ryoko is useful. Public Wi-Fi in cafes, airports, or malls is often slow, unreliable, or risky. Ryoko gives you your own private connection, reducing the chances of data theft or signal drops when you need to stay productive.

    In short, Ryoko is made for people who value mobility, security, and simplicity. If you’ve ever wished you could bring your home internet connection with you, this device is exactly that — only smarter, smaller, and safer.

    MUST SEE: CLICK HERE NOW TO GET THE RYOKO PRO DIRECTLY FROM THE OFFICIAL WEBSITE AT A DISCOUNTED PRICE

    Is Ryoko Legit or Scam?

    The Ryoko Portable Wi-Fi device is a genuine product that has gained a strong reputation among consumers for offering a secure and fast way to stay connected while on the go. Ryoko provides a safe substitute for costly roaming fees or slow public Wi-Fi networks.

    The Muama Ryoko’s capacity to offer internet access in more than 75+ countries makes it a great choice for tourists visiting other nations. Users will enjoy quick, safe connections even in more isolated or underdeveloped locations, such as lakes and forests, thanks to this worldwide coverage. Ryoko can sustain a strong connection even in locations that regular networks are unable to reach, as numerous consumers have noted in their reviews.

    Many people have mentioned how handy it is to have weather when going on road vacations, camping excursions, or visits to their summer residences. Also, many USA customers have confirmed that the device lasts for over 8 hours on a single charge, which is more than enough for the majority of trip days.

    Not to be overlooked is how easy it is to set up and use. Customers have reported that it is very user-friendly, with simple instructions that even people who are not tech-savvy can follow. The Ryoko Pro Portable Wi-Fi is authentic as all of its claims have been verified by real customers with an average rating of a whopping 4.9/5 . You have no reason to be scared; Ryoko is not a fraud!

    Ryoko Pro Wi-Fi vs. Regular Portable Wi-Fi
    (Ryoko Reviews)

    Several important factors distinguish the Ryoko Portable Wi-Fi from standard portable Wi-Fi. To help you make a better choice, we will compare the variations in performance, portability, battery life, and general user experience of the Ryoko and other portable Wi-Fi devices:

    Performance

    Ryoko Pro has received recognition for sustaining a steady internet connection even in remote locales. According to many USA user feedback, Ryoko performs exceptionally in remote locations, wooded areas, and lakes where other portable hotspots sometimes falter. This is a huge benefit for anyone who needs dependable internet, even while traveling.

    On the other hand, standard portable Wi-Fi devices are not always reliable. They often depend on carrier-specific data plans or local networks, which might not always provide the best coverage or speed, particularly in rural or isolated places, so the Ryoko got the win on this one

    Mobility

    The Ryoko Portable Wi-Fi has a huge edge in terms of portability. Among the lightest gadgets in its class, it’s compact enough to fit in your pocket, purse, or even your hand. Its portability has been praised by many users, making it ideal for lengthy road trips and trekking adventures.

    Regular portable Wi-Fi devices, on the other hand, are usually bigger. Additionally, they can have a less elegant design, which would make them more difficult to transport without a special place to store them in your backpack or travel box.

    Battery Life

    Another notable edge of the Ryoko Portable Wi-Fi is its battery life. Ryoko guarantees that you can stay online all day long without having to continuously recharge because of its remarkable 8-hour battery life on a single charge. Ryoko’s long-lasting battery is designed to meet your needs, whether you’re working remotely from a remote location or watching a game while camping.

    However, most standard portable Wi-Fi devices will not last as long. Many types require frequent charging, particularly when used for extended periods of time. The longer battery life of Ryoko is a significant advantage for tourists who require reliable internet connectivity for lengthy periods of time.

    Usability

    The Ryoko Portable Wi-Fi device is renowned for being easy to set up. It’s really simple to connect to, according to many verified users, and doesn’t require any additional programs or complex setups. It’s a fantastic option for anyone looking for rapid and easy internet access because of its user-friendly interface.

    Regular portable Wi-Fi devices, on the other hand, may call for more complicated configuration or particular carrier support, which might be difficult for non-techies. Additionally, some devices require manual setups or other programs, which complicates the experience for novices.

    It’s obvious that Ryoko Portable router delivers better performance, portability, battery life, and user-friendliness than a standard portable Wi-Fi device. Ryoko is the obvious choice if you need a secure connection that functions in remote locations and a portable gadget with a long battery life. Ryoko makes sure you stay connected with the least amount of trouble, whether you’re traveling for business, pleasure, or adventure.

    How To Use Ryoko WiFi (Setting Up and Instructions)

    One of the most impressive things about Ryoko Pro is how quickly and easily it gets you connected — no apps, no installations, and definitely no tech stress.

    Here’s how setup works from the moment you open the box:

    1.   Power It On:
    Press the power button. Ryoko boots up and automatically connects to the best available mobile network in your location.

    2.   Connect Your Device:
    You have two options:
            •        Scan the QR code on Ryoko’s screen using your device’s camera, or
            •        Open your Wi-Fi settings, find the Ryoko network, and enter the provided password.

    3.   Enjoy Private, Secure Internet:
    Once connected, you can browse, stream, email, or work online just as you would on home Wi-Fi — only now, your connection is mobile and encrypted.

    4.   Recharge When Needed:
    Ryoko lasts between up to 8 hours depending on how many devices are connected and how actively you use it. It charges with a USB-C cable or an optional magnetic dock — both are easy to travel with.

    No SIM switching, no waiting for activation, and no surprise fees — that’s the experience Ryoko was built to deliver.

    DON’T MISS OUT: Ryoko Pro Portable Wi-Fi Is Available At A Special Price – Click Here To Order Directly From The Official Website

    Is Ryoko Wi-Fi Free?

    One of the most common questions people ask before buying Ryoko Pro is:
    “Is the Wi-Fi free once I buy the device?”

    The short answer is — Ryoko Wi-Fi isn’t completely free, but it’s far more flexible and affordable than traditional options like roaming plans or country-specific SIM cards.

    Every Ryoko device comes with a pre-installed SIM card and an initial 500MB of free data. After that, users can top up their data anytime online — without contracts or surprise fees.

    You are not tied to a fixed monthly subscription. You only pay for what you use, when you need it — which makes it ideal for travelers, seasonal users, and people who want full control over their internet costs.

    While Ryoko Pro is not completely free to operate, it gives you full control over your data spending — no contracts, no surprises, and no overpriced roaming charges. You pay for data only when you need it, and at a rate that is easy to manage.

    Ryoko Reviews Consumer Reports and Complaints USA

    Ryoko Pro has gotten wonderful feedback from clients worldwide. Users praise its mobility, reliability, and ease of use. The encouraging comments demonstrate how well it works in both urban and rural settings. We have included some verified reviews from actual customers:

    • Jenny P. | Verified Buyer – I love it. Im using it when going to my summer house or short road trips. Everywhere connection is fast and great! I love its portable design. It is very light, small and stylish, and easy to hold in my hand or pocket. Battery worked for more than 8 hours, that’s what I need when I am on the road. It brings Internet to the most remote places, woods, lakes. With Ryoko I can enjoy watching the game on my phone while im away.
    • Sophia N.| Verified Buyer – Absolutely looove my ryoko! My cousin lent me hers and I tried it while camping. the connection was consistently fast and reliable; even though it was quite a remote area of the woods. I really liked how portable ryoko is, super light, didn’t take up any space in our backpacks. battery life also exceeded my expectations, lasted more than 8h. I was even able to enjoy the game on my tablet while fishing with my dad at the lake. Got home and immediately bought one for me and my husband.
    • David T.| Verified Buyer – The connection is fast and hardly ever patchy, even in the woods, it blew my mind. It’s super light, and the battery life really exceeded my expectations. I can’t imagine traveling without it! It’s a MUST if you’re outdoors a lot. my wife got one as well. She says that it was super easy to set up, which she did not expect because she’s not a big techie.
    • Dilip G. | Verified USA Customer – The product is fantastic. It works as advertised, and my family is happy with it. The connection is consistent and fast. It is a good recommendation, as I tried it and everything worked just as it should.

    MUST SEE: CLICK HERE NOW TO GET THE RYOKO WIFI DIRECTLY FROM THE OFFICIAL WEBSITE AT A DISCOUNTED PRICE

    Ryoko Reviews: Pros

    • Truly Portable: Ryoko is easy to carry in your pocket, backpack, or even your hand because of its stylish and small design. Perfect for tourists who appreciate ease of use.
    • Reliable Connection in Remote Areas: Numerous users have attested to the device’s ability to function even in isolated locations, such as forests, lakeshores, and rural cabins, perfect for outdoor excursions.
    • Long Battery Life: Ryoko can sustain prolonged surfing, streaming, or working sessions without need frequent recharging thanks to a battery that lasts more than eight hours.
    • Fast and Stable Internet: Even in areas where standard mobile networks fail, customer reviews highlight quick and reliable connections.
    • No Installation Difficulties: Simply turn it on and connect to get started. Without expert assistance, even non-technical individuals have found it simple to get started.
    • Supports Multiple Devices: Ryoko is ideal for small families or groups of friends traveling together because it can connect multiple devices at once.
    • Perfect for Gaming and Streaming: Users have used it to stream videos and games on tablets and smartphones, even when they’re outside without any lagging
    • Excellent for foreign Travel: Ryoko has consistently performed well for travelers throughout Europe, help them save money on expensive foreign data roaming fees.
    • Elegant and Understated Design: In addition to being highly efficient, the gadget has a nice appearance. It is fashionable, lightweight, and will not draw undue attention.

    Ryoko Pro Reviews: Cons

    • Initial Cost Could Be a Barrier: While it will definitely help you save money over time, some purchasers could find the initial cost to be a problem.
    • Not Available on Retail Stores: The best place to get the Ryoko is the official website online.
    • Limited in stock: The Ryoko is trending on many platforms online, so it will not be surprising if it runs out of stock.

    Ryoko Pro Price – What is the Cost?

    The Ryoko Portable Wi-Fi is marketed as a cost-effective, secure internet solution for anyone in need of safe, mobile connectivity, including tourists and home users. You can get yours at the following prices:

    Ryoko is currently available for a temporary discount of up to 70% off. Also, the manufacturers have made available a 30-Day money back guarantee rerun policy: Hurry while supplies last.

    Where To Buy Ryoko Pro Portable Wi-Fi

    To ensure you are getting a genuine Ryoko Pro Portable Wi-Fi with full features and warranty, it’s strongly recommended to purchase only from the official website.

    Buying directly from the source comes with several important benefits:

    • Authenticity guaranteed — no risk of counterfeits or outdated models
    • Exclusive deals — up to 70% off, free shipping, and other limited-time offers you won’t find elsewhere
    • Risk-free purchase — backed by a 30-day money-back guarantee and often a 1-year warranty

    The official website is the only place where you are guaranteed the latest version of Ryoko Pro, complete with updates, customer support, and trusted delivery.

    CLICK HERE TO BUY THE RYOKO PRO WIFI DIRECTLY FROM THE OFFICIAL WEBSITE AT A DISCOUNTED PRICE

    Frequently Asked Questions (Ryoko Pro Reviews)

    The Ryoko Portable Wi-Fi device has quickly gained popularity among digital nomads, tourists, and everyone else who needs secure on-the-go internet connectivity. Based on customer reviews and product specifications, below are the answers to some commonly asked questions concerning Ryoko.

    How many devices is Ryoko able to connect to?

    You can connect up to ten devices at once with Ryoko. Families, parties, or business travelers who need to keep several devices online would find this excellent. Ryoko makes sure that everyone stays connected without sacrificing speed.

    Is Ryoko’s battery life really good?

    Ryoko’s battery life is one of its noteworthy qualities. Depending on usage, it can run for up to eight hours on a single charge. It’s ideal for long flights, day trips, and remote work sessions when you might not always have access to a power source.

    Is it possible to use Ryoko abroad?

    Of course! With coverage in more than 75+ countries, Ryoko is made to be used anywhere in the world. Ryoko guarantees dependable internet access without incurring costly roaming fees, whether you’re visiting distant regions of North America, Europe, or Asia. You won’t have to worry about signal loss in far-off places because it automatically switches to the best network available in each location.

    How fast is Ryoko’s internet connection?

    Ryoko’s 4G network allows for high internet rates. Even in remote locations, users have reported seamless video calls, browsing, and streaming. Ryoko guarantees a quick and dependable connection whether you’re working, watching a game, or just surfing the internet.

    Is it safe to use Ryoko?

    It is safe to use the Ryoko Portable Wi-Fi. Compared to public Wi-Fi, it offers a private connection that is far safer than most other devices. It also aids in defence against dangerous websites and pop-ups thanks to an integrated ad blocker. Its dependability and security, particularly in remote areas, have been commended by numerous Canada consumer reports. Ryoko gives you peace of mind at all times, protecting your data as you browse, work, or stream.

    Which devices are compatible with my Ryoko router?

    Your Ryoko router can be connected to a smartphone, laptop, tablet, PC, or even a smartwatch. Additionally, you can share the Internet with the devices of your friends and family. Ten devices can be used simultaneously!

    Does the Ryoko come with a SIM card? What are my options for topping up, and how much data do I get with it?

    It already has 500MB of mobile data, and the SIM card is included! Ryoko has no roaming charges, and you can top it up at any time.

    Can my parents or children use it? They are not tech-savvy

    Of course! Ryoko was created with an emphasis on simplicity. It only needs two button controllers!

    What is the purpose of the Ad Blocker feature?

    • Block trackers and ads: To shield you from undesired ads and trackers, Ryoko employs one of the most extensive ad and tracker blocking lists available, which is compiled from more than two dozen carefully selected block lists.
    • Stops malware: The Ryoko stops malware from websites that have a reputation for spreading malware, initiating phishing scams, or acting as servers to connect to devices that are already infected.
    • Blocks phishing domains: Blocks phishing domains, which are designed to steal personal information by tricking you into believing you are on a website you are familiar with. For example, playpal.com can look a lot like paypal.com, which you may not notice unless you’re paying attention. Ryoko will help make sure that you are protected from such websites.

    Final Thoughts On Ryoko Reviews

    Customers all over the world have made the Ryoko Portable Wi-Fi their go-to mobile internet solution because of its features, which include but are not limited to global coverage, long battery life, and ease of use. Staying connected is one less worry with Ryoko, whether you’re traveling to a rural cabin, fishing by the lake, camping in the woods, or just doing your everyday tasks

    The entire purchase process is easy and stress-free. All users, from casual road trippers to tech-savvy digital nomads, have expressed the same sentiment: it works, and it works well. Simple setup. No heavy equipment. Just a quick, stable internet connection in your pocket. Additionally, you can rely on it all day long due to its long-lasting battery and lightweight design. Try the Ryoko out; you will find yourself wondering how you managed to survive without it. Hurry to the official website while supplies last!

    DON’T MISS OUT: Ryoko Pro Is Available At A Special Price – Click Here To Order Directly From The Official Website
    Media Contact:
    support@getryoko.com

    Disclaimer: All the information in this release is published in good faith and for general information purposes only. The content provider does not make any warranties about the completeness, reliability, and accuracy of this information. Any action you take upon the information you find on this press release, is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of our website.

    Photos accompanying this announcement are available at:

    https://www.globenewswire.com/NewsRoom/AttachmentNg/eb45d18d-b609-40bf-9259-44b06e25443f

    https://www.globenewswire.com/NewsRoom/AttachmentNg/7f9261dd-37a6-4ccd-b6e8-95f240796419

    https://www.globenewswire.com/NewsRoom/AttachmentNg/c4ff26b7-e0b0-4322-9361-39d827dc0f9b

    https://www.globenewswire.com/NewsRoom/AttachmentNg/a62beedd-817a-4dd9-805e-f3f240d21938

    The MIL Network –

  • MIL-OSI Security: FBI Surges Resources to Nigeria to Combat Financially Motivated Sextortion

    Source: Federal Bureau of Investigation FBI Crime News

    The FBI conducted a first-of-its-kind global operation to address the dangerous rise in American suicides attributed to this crime.

    Today, the FBI is announcing a global operation to combat financially motivated sextortion schemes operating out of Nigeria. In coordination with multiple law enforcement partners, the FBI conducted Operation Artemis—a surge of resources and personnel to Nigeria to address the high rate of sextortion related suicides attributed to Nigerian perpetrators. As a result of Operation Artemis, FBI investigations led to the arrests of 22 Nigerian subjects connected to financially motivated sextortion schemes. Of those 22 subjects, approximately half were directly linked to victims who took their own lives. This operation marks a significant step in the fight against child exploitation and brings justice and accountability to international perpetrators hiding anonymously behind screens.

    “Operation Artemis exemplifies the FBI’s never-ending mission to protect our most vulnerable, and to pursue the heinous criminals harming our children — no matter where they hide,” said FBI Director Kash Patel. “This operation highlights the critical need for international cooperation to address this growing threat, and it’s a fight we can’t take on without our valued partners across the globe. We hope this message encourages parents and guardians to continue to educate their children about online safety and serves as a reminder of the FBI’s relentless pursuit of keeping our children safe.”

    This announcement comes as the FBI has observed a 30% increase in sextortion-related tips received to our National Threat Operations Center from October 2024 to March 2025 as compared to the previous year. According to the FBI’s Internet Crime Complaint Center or IC3, there were over 54,000 victims in 2024, up from 34,000 in 2023. Over the last two years there have been nearly $65 million dollars in financial losses due to this crime. This comes as the FBI began observing a significant increase over the last three years in financially motivated sextortion schemes targeting young males ages 14-17, resulting in more than 20 minor victims dying by suicide.

    Given the alarming rise and similarities of these cases, the FBI opened investigations across the country with the goal of bringing answers and closure to grieving American families. Information gathered by the FBI’s Child Exploitation Operational Unit (CEOU) allowed the FBI to work collaboratively with all 55 of our field offices to identify nearly 3,000 victims of financially motivated sextortion. It was during these investigative steps that the commonality of perpetrators residing in Nigeria began to grow and paint a larger, more international scope of this crime.

    As a result of Operation Artemis, a Nigerian man was extradited to the U.S. in January and charged with causing the death of a South Carolina teenager who took his own life after being extorted by the suspect posing as a woman. Additionally, two men were extradited from Nigeria to the United States last year to face charges related to the sextortion and death of a young man in Pennsylvania. These subjects will now be held accountable in the American justice system, with more subjects still awaiting extraditions in Nigeria.

    The subjects arrested in this operation engaged in sophisticated, financially motivated sextortion schemes by contacting victims via social media platforms and posing as peers or potential romantic interests. Once trust or rapport was established, often through conversation in chatrooms or direct messages, the suspects coerced their victims into taking and sharing compromising images of themselves. Offenders then threatened to release the compromising photos unless they received immediate payment — typically requested via gift cards, mobile payment services, wire transfers, or cryptocurrency. Regardless of a payment being received or not, the perpetrators would often continue to manipulate their victims, leaving them feeling ashamed, isolated, and responsible.

    Operation Artemis was spearheaded by multiple units at the FBI’s Criminal Investigative Division, including CEOU and the Crimes and Crimes Against Children Human Trafficking Intelligence Unit, and across the globe at the FBI Legal Attaché offices in Abuja and Lagos. The FBI’s Victim Outreach Support and Strategy Program of the Victim Services Division also played a key role assisting victims’ families throughout these various investigations. The following FBI field offices also provided resources directly on the ground in Nigeria as well as invaluable investigative support and assistance: FBI Atlanta, Charlotte, Columbia, Houston, Jackson, Milwaukee, Nashville, Newark, New Orleans, Philadelphia, Richmond, San Diego, and St. Louis. Additionally, our partners at the Department of Justice Child Exploitation Obscenities Section served a critical role in ensuring the perpetrators in these cases face charges. Working together, we were able to obtain arrests, gather comprehensive forensic analyses, and conduct subject interviews on the ground in Nigeria.

    This operation would not have been possible without our partnerships with Homeland Security Investigations (HSI) and the National Center for Missing and Exploited Children (NCMEC), and their assistance in developing an ongoing, collaborative strategy to combat financially motivated sextortion. Multiple agencies also provided the FBI with assistance both with personnel and intelligence for this operation, leading to an even larger global perspective on the threat. FBI’s CEOU secured personnel assistance from our Five Eyes partners, including Canada’s Royal Canadian Mounted Police (RCMP) and the Australian Federal Police (AFP). The FBI also recognizes the valued partnership and assistance of Nigeria’s Economic and Financial Crimes Commission (EFCC).

    The FBI encourages parents to have ongoing conversations with their children and teenagers about online safety and to remind them they are not alone, and it is not their fault should they become a victim to these sophisticated and egregious schemes. If your child believes they are a victim of sextortion or financially motivated sextortion, please immediately report the activity to law enforcement and the FBI by calling 1-800-CALL-FBI (1-800-225-5324) or tips.fbi.gov. For immediate help or if you or a child is in danger, call 911. For 24/7 free, confidential mental health assistance, the 988 suicide and crisis hotline connects individuals in need of support with counselors across the United States.

    Take It Down is NCMEC’s free service that can help you remove or stop the online sharing of nude, partially nude, or sexually explicit images or videos taken of you when you were under 18 years old. You can remain anonymous while using the service and you won’t have to send your images or videos to anyone. Take It Down will work on public or unencrypted online platforms that have agreed to participate. Please visit takeitdown.ncmec.org.

    For more information on sextortion and financial sextortion, please visit the FBI’s resources on the threats at fbi.gov/sextortion and fbi.gov/financialsextortion.

    An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    MIL Security OSI –

  • MIL-OSI China: China’s space exploration benefits the world

    Source: People’s Republic of China – State Council News

    BEIJING, April 24 — China launched the Shenzhou-20 crewed spaceship Thursday, continuing efforts to advance space technology for all humanity — a vision long championed by Chinese President Xi Jinping.

    Over the past years, Xi has addressed the importance of international cooperation in peaceful space exploration and development on multiple occasions.

    During the meeting with the Shenzhou-12 astronauts in 2021, Xi said that progress in space science and technology will benefit people around the world, and China wants to use space exploration achievements to create a better future for mankind.

    When meeting representatives of the Chang’e-5 mission in 2021, Xi stressed actively conducting international cooperation and making more contributions to humanity’s well-being.

    According to the China Manned Space Agency, China is in discussions with other nations regarding potential foreign astronaut participation in the country’s future space station missions.

    China welcomes international applications for acquiring lunar samples brought back by the Chang’e-5 and Chang’e-6 probes for scientific research. Scientists from various countries have taken part in researching the Chang’e-5 lunar samples.

    Moreover, Chang’e-7 and Chang’e-8 lunar probes to be launched in the next three years will offer international payload capacity, according to the China National Space Administration (CNSA).

    China has also signed cooperation agreements with 17 countries and international organizations on the International Lunar Research Station (ILRS) construction, offering various levels and forms of collaboration opportunities.

    In a congratulatory letter to the First International Summit on BeiDou Navigation Satellite System (BDS) Applications in 2021, Xi said China is willing to share the achievements of the BDS with all parties, promote the progress of the global satellite navigation industry and make the BDS better serve the world and benefit humankind.

    To date, BDS services have been used in precision agriculture and smart ports in ASEAN countries, South Asia, West Asia, Eastern Europe and Africa to serve local economic and social development.

    Within the BRICS framework, China will continue advancing the development of the BRICS Remote Sensing Satellite Constellation to enhance disaster emergency data sharing.

    China will also provide satellite services to the Belt and Road Initiative partner countries, fostering their sustainable progress in agriculture, disaster prevention, and smart city initiatives.

    When he met with representatives of space scientists and engineers who participated in the research and development of the Chang’e-6 lunar mission last year, Xi called for deepening various forms of international exchange and cooperation in the field of space, sharing development achievements with other countries, improving outer space governance, and making space science and technology achievements more beneficial to all people.

    Outer space is a domain shared by humanity, and space exploration is humanity’s common cause, Xi said.

    MIL OSI China News –

  • MIL-OSI: Next Hydrogen Reports Q4 2024 and Fiscal 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    MISSISSAUGA, Ontario, April 24, 2025 (GLOBE NEWSWIRE) — Next Hydrogen Solutions Inc. (the “Company” or “Next Hydrogen”) (TSXV:NXH, OTC:NXHSF), a designer and manufacturer of electrolyzers, is pleased to report its financial results for the fourth quarter and full year ended December 31, 2024.

    “Next Hydrogen demonstrated best commercially available cell performance with best-in-class operating range, delivered its second-generation system to a customer site after an extended Factory Acceptance Test, secured a strategically important Green Ammonia project in partnership with GE and Casale, entered the aviation fuels vertical in partnership with Pratt & Whitney and secured funding support from Export Development Canada and existing investors,” said Raveel Afzaal, President & CEO. “With proven technology advantage and globally competitive gigawatt scale manufacturing capacity available through partnering with a leading hydrogen production system manufacturer, our objective is to drive a significant growth in our sales backlog in strategic verticals in 2025.”  

    2024 Financial Highlights

    • Cash balance was $3.5M as of December 31, 2024, compared to $10.9M as of December 31, 2023.
    • Revenue for the year ended December 31, 2024 was $1.4M compared to $1.0M in the same period of the prior year.
    • Net loss and comprehensive loss for the year ended December 31, 2024 was $14.6M compared to $12.0M in the same period of the prior year.

    Management is proud to highlight several recent milestones that demonstrate significant recent progress:

    • In April 2025, Next Hydrogen received a $5M working capital debt facility from the Export Development Canada (“EDC”), of which approximately $3M has been received in cash and the remaining $2M is expected later in the year. Next Hydrogen intends to use the funds where necessary to improve on its technology and for general corporate purposes.
    • Next Hydrogen has achieved over 40,000 hours of data on its test platform driving the significant improvement in cell performance achieved to date.
    • In March 2025, Next Hydrogen partnered with a leading hydrogen production system manufacturer with an existing gigawatt scale manufacturing facility to accelerate the scale-up and commercialization of its water electrolysis technology. This partnership provides Next Hydrogen with world-leading manufacturing capacity and competitively positions it to bid on large-scale projects globally starting in 2026. Next Hydrogen will continue to maintain control over intellectual property and electrolyzer design. The Company also aims to further expand its Canadian operations to ensure flexible supply chain and production that aligns with evolving clean energy policies, driving global green hydrogen adoption.
    • In March 2025, Next Hydrogen received ISO 9001-2015 and ISO 45001-2018 certifications for its 6610 Edwards Boulevard site in Mississauga, Canada. This demonstrates and certifies Next Hydrogen’s standardized quality systems, health and safety management systems, supplier selection processes, and continuous improvement processes. These certifications show that the Company has an efficient operating system capable of scaling to support its expanding customer base.
    • In March 2025, the Company appointed Adarsh Mehta to the Company’s board of directors (the “Board”). Ms. Mehta filled the vacancy on the Board resulting from the resignation of Mr. Matthew Fairlie, who resigned from the Board effective January 15, 2025. Ms. Mehta is VP of Business Development at Jenner Renewable Consulting, with 22 years of experience in renewable energy, leading technical reviews, due diligence, and development for over 2,500MW of wind and solar projects in the Americas. She served on the Canadian Wind Energy Association’s Board from 2008 to 2015 and was Chairperson in 2011. Her extensive expertise in renewable energy and project development is crucial for the Company’s growth.
    • As of December 2024, the Company closed a private placement offering (the “Offering”) and received unsecured convertible debentures (each, a “Debenture”) consisting of about $2.7M principal amount of Debentures. Next Hydrogen intends to use the proceeds of the Offering to invest in its scale-up efforts and for general corporate purposes.
    • In November 2024, Next Hydrogen and Pratt & Whitney announced a collaboration to demonstrate the use of hydrogen in aircraft engines as an enabler for reducing CO2 emissions. This project is partially funded by Canada’s Initiative for Sustainable Aviation Technology (“INSAT”) and will accelerate the Company’s efforts towards high efficiency, low-cost electrolyzers which are needed for establishing hydrogen production infrastructure for aviation fuel.
    • In October 2024, the Company successfully completed a durability test of its second-generation water electrolyzer technology (“GEN2”) electrolysis cells used in the efficient production of green hydrogen. The GEN2 cells will be deployed in Next Hydrogen electrolyzers at customer sites for commercial operation. Next Hydrogen previously reported that it has achieved its energy efficiency targets cell performance of 1.90 V/cell at 1 A/cm2 and 70°C for its GEN2 water electrolyzer technology which exceeded the reported US Department of Energy (“DOE”) technical targets status for energy efficiency. The GEN2 performance achievement has positioned the Company to being the industry leader in electrolysis cell performance.
    • In October 2024, Next Hydrogen welcomed Premier Doug Ford, Associate Minister Sam Oosterhoff, Minister Stephen Lecce, MPP Deepak Anand and MPP Rudy Cuzzetto to their manufacturing facility. This along with the visit from our Deputy Prime Minister (see below) demonstrates the strong alignment between the Company’s work and the national strategy for Canada to be a leader in green hydrogen production.
    • In September 2024, the Company successfully completed an extended Factory Acceptance Test for its GEN2 electrolysis cells. The Company plans to commission the system at an external reference site for market demonstration in 2025.
    • In August 2024, the Company was awarded a contract by the University of Minnesota (“UMN”) for its latest generation electrolysis technology to be installed at the UMN West Central Research and Outreach Center (“WCROC”). The WCROC project is supported by the U.S. Department of Energy’s Advanced Research Project Agency (“ARPA-E”) as well as other partners including RTI International (“RTI”) and will include technologies from Casale SA, RTI, UMN, Nutrien and Shell to demonstrate the production of ammonia from renewable energy targeting emerging energy markets and existing agricultural markets. Next Hydrogen will be supplying its latest third-generation Alkaline Water Electrolyzers featuring further advancements in energy efficiency, current density and operating pressure.
    • In May 2024, the Company was granted a repayable contribution of $2M from Federal Economic Development Agency for Southern Ontario. This non-interest-bearing contribution is intended to support the Company’s growth initiatives aimed at commercialization and business development advancements. The Company continues to be in advanced discussions with FedDev Ontario to help support its activities for 2025 and beyond.
    • In April 2024, Next Hydrogen welcomed former Deputy Prime Minister Chrystia Freeland, MP Kamal Khera and MP Peter Fonseca to their manufacturing facility to announce new investment tax credits which further supported the Canadian clean technology sector. Minister Freeland also stated publicly “Next Hydrogen in Mississauga is changing the game in renewable energy and clean hydrogen production!”

    For a more detailed discussion of Next Hydrogen’s fourth quarter and fiscal 2024 results, please see the Company’s financial statements and management’s discussion and analysis, which are available on the Company’s website at nexthydrogen.com or on SEDAR+ at www.sedarplus.ca.

    In addition, to better understand our achievements from 2024 and the outlook for 2025, please refer to the CEO letter included in the 2024 year-end MD&A.

    About Next Hydrogen

    Founded in 2007, Next Hydrogen is a designer and manufacturer of electrolyzers that use water and electricity as inputs to generate clean hydrogen for use as an energy source. Next Hydrogen’s unique cell design architecture supported by 40 patents enables high current density operations and superior dynamic response to efficiently convert intermittent renewable electricity into green hydrogen on an infrastructure scale. Following successful pilots, Next Hydrogen is scaling up its technology to deliver commercial solutions to decarbonize industrial and transportation sectors.

    Contact Information

    Raveel Afzaal, President and Chief Executive Officer
    Next Hydrogen Solutions Inc.
    Email: rafzaal@nexthydrogen.com
    Phone: 647-961-6620

    www.nexthydrogen.com

    Cautionary Statements

    This news release contains “forward-looking information” and “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the risks associated with the hydrogen industry in general; delays or changes in plans with respect to infrastructure development or capital expenditures; cell efficiency targets; expected order sizes for the product line; customer relationships and customer terms for testing of products at a customer site; the ability of the Corporation to optimize energy efficiencies; the Corporation’s available resources to double its growing backlog; uncertainty with respect to the timing of any contemplated transactions or partnerships, or whether such contemplated transactions or partnerships will be completed at all; whether the uncertainty of estimates and projections relating to costs and expenses; failure to obtain necessary regulatory approvals; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to infrastructure developments or capital expenditures; currency exchange rate fluctuations; as well as general economic conditions, stock market volatility; and the ability to access sufficient capital. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, there will be no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.

    The MIL Network –

  • MIL-OSI Security: Ex-Orange County Resident Sentenced to 7 Years in Federal Prison for Receiving Kickbacks from Sober Living Homes, Firearms Trafficking

    Source: United States Bureau of Alcohol Tobacco Firearms and Explosives (ATF)

    LOS ANGELES – A former resident of Orange County was sentenced today to 84 months in federal prison for soliciting and receiving nearly $500,000 in illegal kickbacks from corrupt sober living homes in exchange for finding them new patients in a process known as “body brokering” and for firearms trafficking.

    Darius Moore, 31, formerly of Santa Ana but most recently of North Carolina, was sentenced by United States District Judge Josephine L. Staton.

    Moore pleaded guilty in November 2021 to one count of conspiracy to pay or receive illegal remunerations for referrals to clinical treatment facilities and one count of soliciting or receiving illegal remunerations for referrals to clinical treatment facilities.

    From no later than February 2020 to December 2020, Moore conspired with addiction treatment facility owners to broker patients to the facilities for drug addiction treatment services. Moore knew the facilities would bill the referred patients’ private health insurance plans for the treatment services and then pay Moore a share of the resulting insurance proceeds as kickback payments.

    Over the course of his time working as a body broker, Moore was paid nearly $500,000 in kickbacks from the facilities.

    While free on bond in the “body brokering” criminal case, Moore violated his pretrial release conditions on several occasions, including in May 2023 when he sold two firearms and a drum magazine to buyers. In September 2023, a federal grand jury in the Western District of North Carolina charged him with one count of possession of a firearm by a convicted felon. After the North Carolina federal case was transferred to this district, Moore pleaded guilty in Los Angeles on February 14 to that count.

    Moore has been in federal custody since August 2023.

    The FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this matter with assistance from the California Department of Insurance.

    Assistant United States Attorney Nandor F.R. Kiss of the Orange County Office and Trial Attorney Siobhan M. Namazi of the Fraud Section of the Justice Department’s Criminal Division prosecuted this case.

    MIL Security OSI –

  • MIL-OSI Security: KC Man Sentenced to 5 Years for Fentanyl Conspiracy

    Source: United States Bureau of Alcohol Tobacco Firearms and Explosives (ATF)

    KANSAS CITY, Mo. – A Kansas City, Mo., man was sentenced in federal court today for his role in a conspiracy to distribute fentanyl.

    Colt Justin Draggoo, 22, was sentenced by U.S. District Judge Roseann Ketchmark to five years in federal prison without parole.

    On September 12, 2024, C. Draggoo plead guilty to one count of conspiracy to distribute fentanyl.

    C. Draggoo admitted that he sold fentanyl pills and collected drug money for his brother and co-defendant, Tiger Dean Draggoo. Between December 29, 2021, and October 22, 2022, C. Draggoo either brokered or sold approximately 263 pills containing fentanyl on behalf of his brother.

    C. Draggoo is the third defendant in this case to be sentenced. On Oct. 16, 2024, Tiger Dean Draggoo plead guilty to his role in the fentanyl conspiracy and to three counts of distributing fentanyl resulting in death. Three additional defendants have plead guilty and await sentencing.

    This case is being prosecuted by Assistant U.S. Attorneys Brad K. Kavanaugh and Robert Smith. It was investigated by the Jackson County Drug Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Belton, Mo., Police Department, the Raymore, Mo., Police Department, the Cass County, Mo., Sheriff’s Department, and the FBI.

    MIL Security OSI –

  • MIL-OSI: First Savings Financial Group, Inc. Reports Financial Results for the Second Fiscal Quarter Ended March 31, 2025

    Source: GlobeNewswire (MIL-OSI)

    JEFFERSONVILLE, Ind., April 24, 2025 (GLOBE NEWSWIRE) — First Savings Financial Group, Inc. (NASDAQ: FSFG – news) (the “Company”), the holding company for First Savings Bank (the “Bank”), today reported net income of $5.5 million, or $0.79 per diluted share, for the quarter ended March 31, 2025, compared to net income of $4.9 million, or $0.72 per diluted share, for the quarter ended March 31, 2024. Excluding nonrecurring items, the Company reported net income of $5.3 million (non-GAAP measure)(1) and net income per diluted share of $0.76 (non-GAAP measure)(1) for the quarter ended March 31, 2025 compared to $3.6 million, or $0.52 per diluted share for the quarter ended March 31, 2024.

    Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “We are pleased with the second fiscal quarter performance, including the continued improvement in the net interest margin, which has increased eighteen and twenty-one basis points for the three and six months ended, respectively. The SBA Lending segment posted its first profitable quarter since March 2024 and posted a solid level of loans originations and sales. Asset quality improved with nonperforming loans decreasing $3.8 million from the prior quarter and the ratio of nonperforming loans to total gross loans improving to 0.67%, a decrease of twenty basis points from the prior quarter. We are optimistic regarding the remainder of fiscal 2025 as we anticipate further expansion of the net interest margin, continued profitability from the SBA Lending segment, additional sales of home equity lines of credit (“HELOCS”), and stable and strong asset quality. We will continue our focus on customer deposit growth, select loan growth opportunities, preservation of asset quality, and prudent capital and liquidity management. We will also continue to evaluate options and strategies that we believe will maximize shareholder value.”

    (1) Non-GAAP net income and net income per diluted share exclude certain nonrecurring items. A reconciliation to GAAP and discussion of the use of non-GAAP measures is included in the table at the end of this release.

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

    Net interest income increased $1.7 million, or 11.6%, to $16.0 million for the three months ended March 31, 2025 as compared to the same period in 2024. The tax equivalent net interest margin for the three months ended March 31, 2025 was 2.93% as compared to 2.66% for the same period in 2024. The increase in net interest income was due to an increase of $807,000 in interest income and a decrease of $846,000 in interest expense. A table of average balance sheets, including average asset yields and average liability costs, is included at the end of this release.

    The Company recognized a reversal of provision for credit losses for loans and securities of $357,000 and $1,000, respectively, and a provision for unfunded lending commitments of $123,000 for the three months ended March 31, 2025, compared to a provision for credit losses for loans and securities of $713,000 and $23,000, respectively, and reversal of provision for unfunded lending commitments of $259,000 for the same period in 2024. The reversal of provisions during the 2025 period was due primarily to a decrease in qualitative reserves and $156,000 in net recoveries recognized during the period. The $156,000 in net recoveries during the three months ended March 31, 2025 included $215,000 in net recoveries related to unguaranteed portions of SBA loans. During the three months ended March 31, 2024, the Company recognized net charge-offs of $110,000, of which $15,000 was related to unguaranteed portions of SBA loans. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, decreased $4.2 million from $16.9 million at September 30, 2024 to $12.7 million at March 31, 2025, due primary to a $4.9 million decrease in loan balances guaranteed by the SBA.

    Noninterest income decreased $150,000 for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was due primarily to a $539,000 decrease in other income, partially offset by a $154,000 increase in service charges on deposit accounts and a $127,000 increase in net gain on sales of SBA loans. The decrease in other income in 2025 was primarily due to $492,000 gain on the sale of mortgage servicing rights during the 2024 period with no corresponding amount for 2025.

    Noninterest expense increased $1.9 million for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to increases in compensation and benefits and other operating expenses of $940,000 and $948,000, respectively. The increase in compensation and benefits was primarily due to an increase in bonus and incentive accruals in 2025. The increase in other operating expenses was primarily due a $656,000 reversal of accrued loss contingencies for SBA-guaranteed loans in the 2024 period compared to a reversal of $41,000 for the same period in 2025 and an adjustment to the valuation allowance related to the sale of residential mortgage servicing rights of $247,000 in 2024 with no corresponding amount in 2025.

    The Company recognized income tax expense of $589,000 for the three months ended March 31, 2025 compared to $866,000 for the same period in 2024. The decrease is due primarily to greater utilization of investment tax credits in the 2025 period. The effective tax rate for 2025 was 9.7% compared to 14.9% for 2024. The effective tax rate is well below the statutory tax rate primarily due to the recognition of investment tax credits related to solar projects in both the 2025 and 2024 periods.

    Results of Operations for the Six Months Ended March 31, 2025 and 2024

    The Company reported net income of $11.7 million, or $1.68 per diluted share, for the six months ended March 31, 2025 compared to net income of $5.8 million, or $0.85 per diluted share, for the six months ended March 31, 2024. Excluding nonrecurring items, the Company reported net income of $9.4 million (non-GAAP measure)(1) and net income per diluted share of $1.35 (non-GAAP measure)(1) for the six months ended March 31, 2025 compared to net income of $4.5 million and net income per diluted share of $0.66 for the six months ended March 31, 2024. The core banking segment reported net income of $11.4 million, or $1.64 per diluted share for the six months ended March 31, 2025 compared to net income of $8.6 million and net income per diluted share of $1.25 for the six months ended March 31, 2024. Excluding nonrecurring items, the core banking segment reported net income of $9.1 million (non-GAAP measure)(1), or $1.31 per diluted share (non-GAAP measure)(1) for the six months ended March 31, 2025 compared to net income of $7.7 million and net income per diluted share of $1.12 for the six months ended March 31, 2024.

    Net interest income increased $3.0 million, or 10.6%, to $31.5 million for the six months ended March 31, 2025 as compared to the same period in 2024. The tax equivalent net interest margin for the six months ended March 31, 2025 was 2.84% as compared to 2.68% for the same period in 2024. The increase in net interest income was due to a $4.6 million increase in interest income, partially offset by a $1.6 million increase in interest expense. A table of average balance sheets, including average asset yields and average liability costs, is included at the end of this release.

    The Company recognized a reversal of provision for credit losses for loans and securities of $848,000 and $7,000, respectively, and a provision for unfunded lending commitments of $169,000 for the six months ended March 31, 2025, compared to a provision for credit losses for loans and securities of $1.2 million and $23,000, respectively, and reversal of provision for unfunded lending commitments of $317,000 for the same period in 2024. The reversal of provisions during the 2025 period was due primarily to the bulk sale of approximately $87.2 million of HELOCS during the period and a decrease in qualitative reserves. The Company recognized net recoveries totaling $38,000 for the six months ended March 31, 2025, of which $164,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $119,000 in 2024, of which $64,000 was related to unguaranteed portions of SBA loans.

    Noninterest income increased $3.2 million for the six months ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to a $2.5 million net gain on sale of HELOCs in 2025, net gains of $403,000 on the sale of equity securities in 2025 with no corresponding gains for 2024, a $248,000 increase in service charges on deposit accounts, and a $263,000 increase in ATM and interchange fees, slightly offset by a $508,000 decrease in other income due to a $495,000 gain recognized on the sale of mortgage servicing rights during 2024 with no corresponding amount for 2025.

    Noninterest expense increased $824,000 for the six months ended March 31, 2025 as compared to the same period in 2024. The increase was due primarily to increases in other operating expenses and compensation and benefits of $962,000 and $453,000, respectively, partially offset by decreases in professional fees and occupancy and equipment of $454,000 and $380,000, respectively. The increase in other operating expenses was due primarily to a $721,000 reversal of accrued loss contingencies for SBA-guaranteed loans in 2024 compared to a reversal of $148,000 in 2025 and a $400,000 accrued contingent liability associated with employee benefits recognized in 2025 with no corresponding amount in 2024, partially offset by a decrease of $180,000 in 2025 to reverse previously accrued litigation expenses. The increase in compensation and benefits is primarily due to an increase in bonus and incentive accruals in 2025 compared to 2024. The decrease in professional fees and occupancy and equipment is primarily due to the cessation of national mortgage banking operations in the quarter ended December 31, 2023.

    The Company recognized income tax expense of $1.4 million for the six months ended March 31, 2025 compared to $390,000 for the same period in 2024. The increase is due primarily to higher taxable income in the 2025 period, including the aforementioned net gain on sale of loans. The effective tax rate for 2025 was 10.9% compared to 6.3%. The effective tax rate is well below the statutory tax rate primarily due to the recognition of investment tax credits related to solar projects in both the 2025 and 2024 periods.

    Comparison of Financial Condition at March 31, 2025 and September 30, 2024

    Total assets decreased $74.1 million, from $2.45 billion at September 30, 2024 to $2.38 billion at March 31, 2025. Net loans held for investment decreased $83.7 million during the six months ended March 31, 2025 due primarily to the $87.2 million bulk sale of home equity lines of credit.

    Total liabilities decreased $76.2 million due primarily to a decrease in total deposits of $91.7 million, partially offset by an increase in FHLB borrowings of $23.7 million. The decrease in total deposits was due to a decrease in brokered deposits of $112.4 million, due primarily to proceeds from the aforementioned bulk sale of home equity lines of credit and an increase in customer deposits of $20.7 million. As of March 31, 2025, deposits exceeding the FDIC insurance limit of $250,000 per insured account were 31.8% of total deposits and 15.1% of total deposits when excluding public funds insured by the Indiana Public Deposit Insurance Fund.

    Total stockholders’ equity increased $2.1 million, from $177.1 million at September 30, 2024 to $179.2 million at March 31, 2025, due primarily to a $9.6 million increase in retained net income, partially offset by a $8.2 million increase in accumulated other comprehensive loss. The increase in accumulated other comprehensive loss was due primarily to increasing long-term market interest rates during the six months ended March 31, 2025, which resulted in a decrease in the fair value of securities available for sale. At March 31, 2025 and September 30, 2024, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

    First Savings Bank is an entrepreneurial community bank headquartered in Jeffersonville, Indiana, which is directly across the Ohio River from Louisville, Kentucky, and operates fifteen depository branches within Southern Indiana. The Bank also has two national lending programs, including single-tenant net lease commercial real estate and SBA lending, with offices located predominately in the Midwest. The Bank is a recognized leader, both in its local communities and nationally for its lending programs. The employees of First Savings Bank strive daily to achieve the organization’s vision, We Expect To Be The BEST community BANK, which fuels our success. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “FSFG.”

    This release may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather, they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.

    Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions; changes in market interest rates; changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed in the Company’s periodic filings with the Securities and Exchange Commission.

    Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this release or made elsewhere from time to time by the Company or on its behalf. Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

    Contact:
    Tony A. Schoen, CPA
    Chief Financial Officer
    812-283-0724

     
    FIRST SAVINGS FINANCIAL GROUP, INC.
    CONSOLIDATED FINANCIAL HIGHLIGHTS
    (Unaudited)
                         
                         
        Three Months Ended   Six Months Ended    
    OPERATING DATA:   March 31,   March 31,    
    (In thousands, except share and per share data)     2025       2024       2025       2024      
                         
    Total interest income   $ 30,823     $ 30,016     $ 63,272     $ 58,671      
    Total interest expense     14,832       15,678       31,819       30,220      
                         
    Net interest income     15,991       14,338       31,453       28,451      
                         
    Provision (credit) for credit losses – loans     (357 )     713       (848 )     1,183      
    Provision (credit) for unfunded lending commitments     123       (259 )     169       (317 )    
    Provision (credit) for credit losses – securities     (1 )     23       (7 )     23      
                         
    Total provision (credit) for credit losses     (235 )     477       (686 )     889      
                         
    Net interest income after provision (credit) for credit losses     16,226       13,861       32,139       27,562      
                         
    Total noninterest income     3,560       3,710       9,663       6,492      
    Total noninterest expense     13,698       11,778       28,641       27,817      
                         
    Income before income taxes     6,088       5,793       13,161       6,237      
    Income tax expense     589       866       1,437       390      
                         
    Net income   $ 5,499     $ 4,927     $ 11,724     $ 5,847      
                         
    Net income per share, basic   $ 0.80     $ 0.72     $ 1.71     $ 0.86      
    Weighted average shares outstanding, basic     6,875,826       6,832,130       6,861,061       6,828,017      
                         
    Net income per share, diluted   $ 0.79     $ 0.72     $ 1.68     $ 0.85      
    Weighted average shares outstanding, diluted     6,960,020       6,859,611       6,961,829       6,849,928      
                         
                         
    Performance ratios (annualized)                    
    Return on average assets     0.93 %     0.84 %     0.98 %     0.50 %    
    Return on average equity     12.24 %     11.96 %     13.15 %     7.38 %    
    Return on average common stockholders’ equity     12.34 %     11.96 %     13.15 %     7.38 %    
    Net interest margin (tax equivalent basis)     2.93 %     2.66 %     2.84 %     2.68 %    
    Efficiency ratio     70.06 %     65.26 %     69.66 %     79.61 %    
                         
                         
                QTD       FYTD
    FINANCIAL CONDITION DATA:   March 31,   December 31,   Increase   September 30,   Increase
    (In thousands, except per share data)     2025       2024     (Decrease)     2024     (Decrease)
                         
    Total assets   $ 2,376,230     $ 2,388,735     $ (12,505 )   $ 2,450,368     $ (74,138 )
    Cash and cash equivalents     28,683       76,224       (47,541 )     52,142       (23,459 )
    Investment securities     244,084       242,634       1,450       249,719       (5,635 )
    Loans held for sale     61,239       24,441       36,798       25,716       35,523  
    Gross loans     1,900,660       1,905,199       (4,539 )     1,985,146       (84,486 )
    Allowance for credit losses     20,484       20,685       (201 )     21,294       (810 )
    Interest earning assets     2,219,504       2,234,258       (14,754 )     2,277,512       (58,008 )
    Goodwill     9,848       9,848       –       9,848       –  
    Core deposit intangibles     316       357       (41 )     398       (82 )
    Loan servicing rights     2,744       2,661       83       2,754       (10 )
    Noninterest-bearing deposits     185,252       183,239       2,013       191,528       (6,276 )
    Interest-bearing deposits (customer)     1,207,159       1,212,527       (5,368 )     1,180,196       26,963  
    Interest-bearing deposits (brokered)     396,770       437,008       (40,238 )     509,157       (112,387 )
    Federal Home Loan Bank borrowings     325,310       295,000       30,310       301,640       23,670  
    Subordinated debt and other borrowings     48,682       48,642       40       48,603       79  
    Total liabilities     2,197,041       2,212,708       (15,667 )     2,273,253       (76,212 )
    Accumulated other comprehensive loss     (19,385 )     (17,789 )     (1,596 )     (11,195 )     (8,190 )
    Total stockholders’ equity     179,189       176,027       3,162       177,115       2,074  
                         
    Book value per share   $ 25.90     $ 25.48       0.42     $ 25.72       0.18  
    Tangible book value per share (non-GAAP) (1)     24.43       24.00       0.43       24.23       0.20  
                         
    Non-performing assets:                    
    Nonaccrual loans – SBA guaranteed   $ 123     $ 4,444     $ (4,321 )   $ 5,036     $ (4,913 )
    Nonaccrual loans     12,597       12,124       473       11,906       691  
    Total nonaccrual loans   $ 12,720     $ 16,568     $ (3,848 )   $ 16,942     $ (4,222 )
    Accruing loans past due 90 days     –       –       –       –       –  
    Total non-performing loans     12,720       16,568       (3,848 )     16,942       (4,222 )
    Foreclosed real estate     444       444       –       444       –  
    Total non-performing assets   $ 13,164     $ 17,012     $ (3,848 )   $ 17,386     $ (4,222 )
                         
    Asset quality ratios:                    
    Allowance for credit losses as a percent of total gross loans     1.08 %     1.09 %     (0.01 %)     1.07 %     0.01 %
    Allowance for credit losses as a percent of nonperforming loans     161.04 %     124.85 %     36.19 %     125.69 %     35.35 %
    Nonperforming loans as a percent of total gross loans     0.67 %     0.87 %     (0.20 %)     0.85 %     (0.18 %)
    Nonperforming assets as a percent of total assets     0.55 %     0.71 %     (0.16 %)     0.71 %     (0.16 %)
                         
    (1) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item.
                         
                         
    RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):
    The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company’s performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.
                     
        Three Months Ended   Six Months Ended    
    Net Income   March 31,   March 31,    
    (In thousands)     2025       2024       2025       2024      
                         
    Net income attributable to the Company (non-GAAP)   $ 5,313     $ 3,561     $ 9,367     $ 4,481      
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect     –       –       1,869       –      
    Plus: Gain on sale of equity securities, net of tax effect     –       –       302       –      
    Plus: Decrease in loss contingency for SBA-guaranteed loans, net of tax effect     –       492       –       492      
    Plus: Adjustment to MSR valuation allowance related to sale, net of tax effect     –       583       –       583      
    Plus: Gain on sale of premises and equipment, net of tax effect     186       90       186       90      
    Plus: Adjustment to previous data processing contract termination accrual, net of tax effect     –       117       –       117      
    Plus: Distribution from equity investment, net of tax effect     –       85       –       85      
    Net income attributable to the Company (GAAP)   $ 5,499     $ 4,927     $ 11,724     $ 5,847      
                         
    Net Income per Share, Diluted                    
                         
    Net income per share attributable to the Company, diluted (non-GAAP)   $ 0.76     $ 0.52     $ 1.35     $ 0.65      
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect     –       –       0.27       –      
    Plus: Gain on sale of equity securities, net of tax effect     –       –       0.03       –      
    Plus: Decrease in loss contingency for SBA-guaranteed loans, net of tax effect     –       0.07       –       0.07      
    Plus: Adjustment to MSR valuation allowance related to sale, net of tax effect     –       0.08       –       0.08      
    Plus: Gain on sale of premises and equipment, net of tax effect     0.03       0.01       0.03       0.01      
    Plus: Adjustment to previous data processing contract termination accrual, net of tax effect     –       0.02       –       0.02      
    Plus: Distribution from equity investment, net of tax effect     –       0.02       –       0.02      
    Net income per share, diluted (GAAP)   $ 0.79     $ 0.72     $ 1.68     $ 0.85      
                         
    Core Bank Segment Net Income                    
    (In thousands)                    
                         
    Net income attributable to the Core Bank (non-GAAP)   $ 4,883     $ 3,637     $ 9,081     $ 7,685      
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect     –       –       1,869       –      
    Plus: Gain on sale of equity securities, net of tax effect     –       –       302       –      
    Plus: Adjustment to MSR valuation allowance related to sale, net of tax effect     –       583       –       583      
    Plus: Gain on sale of premises and equipment, net of tax effect     186       90       186       90      
    Plus: Adjustment to previous data processing contract termination accrual, net of tax effect     –       117       –       117      
    Plus: Distribution from equity investment, net of tax effect     –       85       –       85      
    Net income attributable to the Core Bank (GAAP)   $ 5,069     $ 4,511     $ 11,438     $ 8,559      
                         
    Core Bank Segment Net Income per Share, Diluted                    
                         
    Core Bank net income per share, diluted (non-GAAP)   $ 0.70     $ 0.53     $ 1.31     $ 1.12      
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect     –       –       0.27       –      
    Plus: Gain on sale of equity securities, net of tax effect     –       –       0.03       –      
    Plus: Adjustment to MSR valuation allowance related to sale, net of tax effect     –       0.08       –       0.08      
    Plus: Gain on sale of premises and equipment, net of tax effect     –       0.01       0.03       0.01      
    Plus: Adjustment to previous data processing contract termination accrual, net of tax effect     0.03       0.02       –       0.02      
    Plus: Distribution from equity investment, net of tax effect     –       0.02       –       0.02      
    Core Bank net income per share, diluted (GAAP)   $ 0.73     $ 0.66     $ 1.64     $ 1.25      
                         
                         
    RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED) (CONTINUED):   Three Months Ended   Fiscal Year Ended    
    Efficiency Ratio   March 31,   March 31,    
    (In thousands)     2025       2024       2025       2024      
                         
    Net interest income (GAAP)   $ 15,991     $ 14,338     $ 31,453     $ 28,451      
                         
    Noninterest income (GAAP)     3,560       3,710       9,663       6,492      
                         
    Noninterest expense (GAAP)     13,698       11,778       28,641       27,817      
                         
    Efficiency ratio (GAAP)     70.06 %     65.26 %     69.66 %     79.61 %    
                         
    Noninterest income (GAAP)   $ 3,560     $ 3,710     $ 9,663     $ 6,492      
    Less: Gain on sale of loans, home equity lines of credit     –       –       (2,492 )     –      
    Less: Gain on sale of equity securities     –       –       (403 )     –      
    Less: Gain on sale of premises and equipment     (248 )     (120 )     (248 )     (120 )    
    Less: Adjustment to MSR valuation allowance related to sale     –       (530 )     –       (530 )    
    Less: Distribution from equity investment     –       (113 )     –       (113 )    
    Noninterest income (Non-GAAP)     3,312       2,947       6,520       5,729      
                         
    Noninterest expense (GAAP)   $ 13,698     $ 11,778     $ 28,641     $ 27,817      
    Plus: Adjustment to MSR valuation allowance related to sale     –       247       –       247      
    Plus: Decrease in loss contingency for SBA-guaranteed loans     –       656       –       656      
    Plus: Adjustment to previous data processing contract termination accrual     –       156       –       156      
    Noninterest expense (Non-GAAP)   $ 13,698     $ 12,837     $ 28,641     $ 28,876      
                         
    Efficiency ratio (excluding nonrecurring items) (non-GAAP)     70.96 %     74.27 %     75.42 %     84.48 %    
                         
                         
                QTD       FYTD
    Tangible Book Value Per Share   March 31,   December 31,   Increase   September 30,   Increase
    (In thousands, except share and per share data)     2025       2024     (Decrease)     2024     (Decrease)
                         
    Stockholders’ equity (GAAP)   $ 179,189     $ 176,027     $ 3,162     $ 177,115     $ 2,074  
    Less: goodwill and core deposit intangibles     (10,164 )     (10,205 )     41       (10,246 )     82  
    Tangible stockholders’ equity (non-GAAP)   $ 169,025     $ 165,822     $ 3,203     $ 166,869     $ 2,156  
                         
    Outstanding common shares     6,919,136       6,909,173     $ 9,963       6,887,106     $ 32,030  
                         
    Tangible book value per share (non-GAAP)   $ 24.43     $ 24.00     $ 0.43     $ 24.23     $ 0.20  
                         
    Book value per share (GAAP)   $ 25.90     $ 25.48     $ 0.42     $ 25.72     $ 0.18  
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED):   As of
    Summarized Consolidated Balance Sheets   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands, except per share data)     2025       2024       2024       2024       2024  
                         
    Total cash and cash equivalents   $ 28,683     $ 76,224     $ 52,142     $ 42,423     $ 62,969  
    Total investment securities     244,084       242,634       249,719       238,785       240,142  
    Total loans held for sale     61,239       24,441       25,716       125,859       19,108  
    Total loans, net of allowance for credit losses     1,880,176       1,884,514       1,963,852       1,826,980       1,882,458  
    Loan servicing rights     2,744       2,661       2,754       2,860       3,028  
    Total assets     2,376,230       2,388,735       2,450,368       2,393,491       2,364,983  
                         
    Customer deposits   $ 1,392,411     $ 1,395,766     $ 1,371,724     $ 1,312,997     $ 1,239,271  
    Brokered deposits     396,770       437,008       509,157       399,151       548,175  
    Total deposits     1,789,181       1,832,774       1,880,881       1,712,148       1,787,446  
    Federal Home Loan Bank borrowings     325,310       295,000       301,640       425,000       315,000  
                         
    Common stock and additional paid-in capital   $ 28,650     $ 28,382     $ 27,725     $ 27,592     $ 27,475  
    Retained earnings – substantially restricted     182,918       178,526       173,337       170,688       167,648  
    Accumulated other comprehensive loss     (19,385 )     (17,789 )     (11,195 )     (17,415 )     (17,144 )
    Unearned stock compensation     (862 )     (973 )     (901 )     (999 )     (1,096 )
    Less treasury stock, at cost     (12,132 )     (12,119 )     (11,851 )     (11,866 )     (11,827 )
    Total stockholders’ equity     179,189       176,027       177,115       168,000       165,056  
                         
    Outstanding common shares     6,919,136       6,909,173       6,887,106       6,883,656       6,883,160  
                         
                         
        Three Months Ended
    Summarized Consolidated Statements of Income   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands, except per share data)     2025       2024       2024       2024       2024  
                         
    Total interest income   $ 30,823     $ 32,449     $ 32,223     $ 31,094     $ 30,016  
    Total interest expense     14,832       16,987       17,146       16,560       15,678  
    Net interest income     15,991       15,462       15,077       14,534       14,338  
    Provision (credit) for credit losses – loans     (357 )     (491 )     1,808       501       713  
    Provision (credit) for unfunded lending commitments     123       46       (262 )     158       (259 )
    Provision (credit) for credit losses – securities     (1 )     (6 )     (86 )     84       23  
    Total provision (credit) for credit losses     (235 )     (451 )     1,460       743       477  
                         
    Net interest income after provision for credit losses     16,226       15,913       13,617       13,791       13,861  
                         
    Total noninterest income     3,560       6,103       2,842       3,196       3,710  
    Total noninterest expense     13,698       14,943       12,642       12,431       11,778  
    Income before income taxes     6,088       7,073       3,817       4,556       5,793  
    Income tax expense (benefit)     589       848       145       483       866  
    Net income     5,499       6,225       3,672       4,073       4,927  
                         
                         
    Net income per share, basic   $ 0.80     $ 0.91     $ 0.54     $ 0.60     $ 0.72  
    Weighted average shares outstanding, basic     6,875,826       6,851,153       6,832,626       6,832,452       6,832,130  
                         
    Net income per share, diluted   $ 0.79     $ 0.89     $ 0.53     $ 0.60     $ 0.72  
    Weighted average shares outstanding, diluted     6,960,020       6,969,223       6,894,532       6,842,336       6,859,611  
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):   Three Months Ended
    Noninterest Income Detail   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands)     2025       2024       2024       2024       2024  
                         
    Service charges on deposit accounts   $ 541     $ 567     $ 552     $ 538     $ 387  
    ATM and interchange fees     632       665       642       593       585  
    Net unrealized gain on equity securities     47       78       28       419       6  
    Net gain on equity securities     –       403       –       –       –  
    Net gain on sales of loans, Small Business Administration     1,078       711       647       581       951  
    Net gain on sales of loans, home equity lines of credit     –       2,492       –       –       –  
    Mortgage banking income     104       78       6       49       53  
    Increase in cash surrender value of life insurance     380       361       363       353       333  
    Gain on life insurance     –       108       –       –       –  
    Commission income     255       210       294       220       220  
    Real estate lease income     122       121       122       154       115  
    Net gain (loss) on premises and equipment     –       45       (4 )     –       120  
    Other income     401       264       192       289       940  
    Total noninterest income   $ 3,560     $ 6,103     $ 2,842     $ 3,196     $ 3,710  
                         
                         
        Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
    Consolidated Performance Ratios (Annualized)     2025       2024       2024       2024       2024  
                         
    Return on average assets     0.93 %     1.02 %     0.61 %     0.69 %     0.92 %
    Return on average equity     12.24 %     14.07 %     8.52 %     9.86 %     13.06 %
    Return on average common stockholders’ equity     12.34 %     14.07 %     8.52 %     9.86 %     13.06 %
    Net interest margin (tax equivalent basis)     2.93 %     2.75 %     2.72 %     2.67 %     2.66 %
    Efficiency ratio     70.06 %     69.29 %     70.55 %     70.11 %     65.26 %
                         
                         
        As of or for the Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
    Consolidated Asset Quality Ratios     2025       2024       2024       2024       2024  
                         
    Nonperforming loans as a percentage of total loans     0.67 %     0.87 %     0.85 %     0.91 %     0.82 %
    Nonperforming assets as a percentage of total assets     0.55 %     0.71 %     0.71 %     0.72 %     0.68 %
    Allowance for credit losses as a percentage of total loans     1.08 %     1.09 %     1.07 %     1.07 %     1.02 %
    Allowance for credit losses as a percentage of nonperforming loans     161.04 %     124.85 %     125.69 %     118.12 %     124.01 %
    Net charge-offs to average outstanding loans     -0.01 %     0.01 %     0.02 %     0.01 %     0.01 %
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):   Three Months Ended
    Segmented Statements of Income Information   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands)     2025       2024       2024       2024       2024  
                         
    Core Banking Segment:                    
    Net interest income   $ 14,259     $ 13,756     $ 14,083     $ 13,590     $ 13,469  
    Provision (credit) for credit losses – loans     (540 )     (745 )     1,339       320       909  
    Provision (credit) for unfunded lending commitments     35       (75 )     78       64       (259 )
    Provision (credit) for credit losses – securities     (1 )     (7 )     (86 )     84       23  
    Net interest income after provision (credit) for credit losses     14,765       14,583       12,752       13,122       12,796  
    Noninterest income     2,242       5,253       2,042       2,474       2,537  
    Noninterest expense     11,486       12,574       10,400       10,192       10,093  
    Income before income taxes     5,521       7,262       4,394       5,404       5,240  
    Income tax expense     452       893       301       689       729  
    Net income   $ 5,069     $ 6,369     $ 4,093     $ 4,715     $ 4,511  
                         
    SBA Lending Segment (Q2):                    
    Net interest income   $ 1,732     $ 1,706     $ 994     $ 944     $ 869  
    Provision (credit) for credit losses – loans     183       255       469       181       (196 )
    Provision (credit) for unfunded lending commitments     88       121       (340 )     94       –  
    Net interest income after provision for credit losses     1,461       1,330       865       669       1,065  
    Noninterest income     1,318       850       800       722       1,173  
    Noninterest expense     2,212       2,369       2,242       2,239       1,685  
    Income (loss) before income taxes     567       (189 )     (577 )     (848 )     553  
    Income tax expense (benefit)     137       (45 )     (156 )     (206 )     137  
    Net income (loss)   $ 430     $ (144 )   $ (421 )   $ (642 )   $ 416  
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):   Three Months Ended
    Segmented Statements of Income Information   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands, except percentage data)     2025       2024       2024       2024       2024  
                         
    Net Income (Loss) Per Share by Segment                    
    Net income per share, basic – Core Banking   $ 0.74     $ 0.93     $ 0.60     $ 0.69     $ 0.66  
    Net income (loss) per share, basic – SBA Lending (Q2)     0.06       (0.02 )     (0.06 )     (0.09 )     0.06  
    Total net income (loss) per share, basic   $ 0.80     $ 0.91     $ 0.54     $ 0.60     $ 0.72  
                         
    Net Income (Loss) Per Diluted Share by Segment                    
    Net income per share, diluted – Core Banking   $ 0.73     $ 0.91     $ 0.59     $ 0.69     $ 0.66  
    Net income (loss) per share, diluted – SBA Lending (Q2)     0.06       (0.02 )     (0.06 )     (0.09 )     0.06  
    Total net income (loss) per share, diluted   $ 0.79     $ 0.89     $ 0.53     $ 0.60     $ 0.72  
                         
    Return on Average Assets by Segment (annualized) (3)                    
    Core Banking     0.90 %     1.09 %     0.71 %     0.83 %     0.80 %
    SBA Lending     1.58 %     (0.55 %)     (1.71 %)     (2.91 %)     1.81 %
                         
    Efficiency Ratio by Segment (annualized) (3)                    
    Core Banking     69.61 %     66.15 %     64.50 %     63.45 %     63.06 %
    SBA Lending     72.52 %     92.68 %     124.97 %     134.39 %     82.52 %
                         
                         
        Three Months Ended
    Noninterest Expense Detail by Segment   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands)     2025       2024       2024       2024       2024  
                         
    Core Banking Segment:                    
    Compensation   $ 6,637     $ 7,245     $ 5,400     $ 5,587     $ 5,656  
    Occupancy     1,648       1,577       1,554       1,573       1,615  
    Advertising     429       338       399       253       205  
    Other     2,772       3,414       3,047       2,779       2,617  
    Total Noninterest Expense   $ 11,486     $ 12,574     $ 10,400     $ 10,192     $ 10,093  
                         
    SBA Lending Segment (Q2):                    
    Compensation   $ 1,892     $ 1,931     $ 1,854     $ 1,893     $ 1,933  
    Occupancy     50       59       55       51       58  
    Advertising     10       14       17       12       7  
    Other     260       365       316       283       (313 )
    Total Noninterest Expense   $ 2,212     $ 2,369     $ 2,242     $ 2,239     $ 1,685  
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):   Three Months Ended
    SBA Lending (Q2) Data   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands, except percentage data)     2025       2024       2024       2024       2024  
                         
    Final funded loans guaranteed portion sold, SBA   $ 15,716     $ 10,785     $ 10,880     $ 7,515     $ 15,144  
                         
    Gross gain on sales of loans, SBA   $ 1,508     $ 1,141     $ 1,029     $ 811     $ 1,443  
    Weighted average gross gain on sales of loans, SBA     9.60 %     10.58 %     9.46 %     10.79 %     9.53 %
                         
    Net gain on sales of loans, SBA (2)   $ 1,078     $ 711     $ 647     $ 581     $ 951  
    Weighted average net gain on sales of loans, SBA     6.86 %     6.59 %     5.95 %     7.73 %     6.28 %
                         
                         
    (2) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.
                         
                         
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):   Three Months Ended
    Summarized Consolidated Average Balance Sheets   March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands)     2025       2024       2024       2024       2024  
    Interest-earning assets                    
    Average balances:                    
    Interest-bearing deposits with banks   $ 11,851     $ 21,102     $ 16,841     $ 26,100     $ 24,587  
    Loans     1,946,338       2,010,082       1,988,997       1,943,716       1,914,609  
    Investment securities – taxable     102,744       101,960       99,834       101,350       102,699  
    Investment securities – nontaxable     161,579       160,929       158,917       157,991       157,960  
    FRB and FHLB stock     24,986       24,986       24,986       24,986       24,986  
    Total interest-earning assets   $ 2,247,498     $ 2,319,059     $ 2,289,575     $ 2,254,143     $ 2,224,841  
                         
    Interest income (tax equivalent basis):                    
    Interest-bearing deposits with banks   $ 168     $ 210     $ 209     $ 324     $ 261  
    Loans     27,998       29,617       29,450       28,155       27,133  
    Investment securities – taxable     921       914       910       918       923  
    Investment securities – nontaxable     1,719       1,715       1,685       1,665       1,662  
    FRB and FHLB stock     511       493       471       519       499  
    Total interest income (tax equivalent basis)   $ 31,317     $ 32,949     $ 32,725     $ 31,581     $ 30,478  
                         
    Weighted average yield (tax equivalent basis, annualized):                    
    Interest-bearing deposits with banks     5.67 %     3.98 %     4.96 %     4.97 %     4.25 %
    Loans     5.75 %     5.89 %     5.92 %     5.79 %     5.67 %
    Investment securities – taxable     3.59 %     3.59 %     3.65 %     3.62 %     3.59 %
    Investment securities – nontaxable     4.26 %     4.26 %     4.24 %     4.22 %     4.21 %
    FRB and FHLB stock     8.18 %     7.89 %     7.54 %     8.31 %     7.99 %
    Total interest-earning assets     5.57 %     5.68 %     5.72 %     5.60 %     5.48 %
                         
    Interest-bearing liabilities                    
    Interest-bearing deposits   $ 1,653,058     $ 1,671,156     $ 1,563,258     $ 1,572,871     $ 1,549,012  
    Federal Home Loan Bank borrowings     266,975       315,583       378,956       351,227       333,275  
    Subordinated debt and other borrowings     48,656       48,616       48,576       48,537       48,497  
    Total interest-bearing liabilities   $ 1,968,689     $ 2,035,355     $ 1,990,790     $ 1,972,635     $ 1,930,784  
                         
    Interest expense:                    
    Interest-bearing deposits   $ 12,069     $ 13,606     $ 12,825     $ 12,740     $ 12,546  
    Federal Home Loan Bank borrowings     2,001       2,617       3,521       3,021       2,298  
    Subordinated debt and other borrowings     762       764       800       799       833  
    Total interest expense   $ 14,832     $ 16,987     $ 17,146     $ 16,560     $ 15,677  
                         
    Weighted average cost (annualized):                    
    Interest-bearing deposits     2.92 %     3.26 %     3.28 %     3.24 %     3.24 %
    Federal Home Loan Bank borrowings     3.00 %     3.32 %     3.72 %     3.44 %     2.76 %
    Subordinated debt and other borrowings     6.26 %     6.29 %     6.59 %     6.58 %     6.87 %
    Total interest-bearing liabilities     3.01 %     3.34 %     3.45 %     3.36 %     3.25 %
                         
    Net interest income (taxable equivalent basis)   $ 16,485     $ 15,962     $ 15,579     $ 15,021     $ 14,801  
    Less: taxable equivalent adjustment     (494 )     (500 )     (502 )     (487 )     (463 )
    Net interest income   $ 15,991     $ 15,462     $ 15,077     $ 14,534     $ 14,338  
                         
    Interest rate spread (tax equivalent basis, annualized)     2.56 %     2.34 %     2.27 %     2.24 %     2.23 %
                         
    Net interest margin (tax equivalent basis, annualized)     2.93 %     2.75 %     2.72 %     2.67 %     2.66 %

    The MIL Network –

  • MIL-OSI Security: Federal Jury Convicts Five in Drug Trafficking Conspiracy that Used Semi-Trucks to Transport Liquid Meth from Mexico to Oklahoma

    Source: Office of United States Attorneys

    18 Now Convicted as Part of Drug Trafficking Organization Responsible for Approximately 16,000 Kilos of Methamphetamine with Estimated Street Value of $64,000,000

    OKLAHOMA CITY – A federal jury has convicted JUAN HERNANDEZ, 49, a Mexican-national living in Oklahoma City, JESSICA MUNIZ, 32, of Oklahoma City, and DENIS LEAL GUTIERREZ, 59, CESAR AZAMAR, 52, and ADRIAN NARVAEZ, 58, of Texas, for their roles in a drug trafficking organization (DTO) that specialized in transporting liquid methamphetamine by semi-truck from Mexico, through Texas, to Oklahoma City, and laundering the subsequent drug proceeds, announced U.S. Attorney Robert J. Troester.

    “Coordinating their drug trafficking scheme across international borders and state lines, these defendants flooded our state with methamphetamine worth millions of dollars,” said U.S. Attorney Robert J. Troester. “I praise the exceptional work of the federal and state law enforcement, and the federal prosecutors, for untangling and disrupting this major drug operation and for stopping its flow of lethal drugs into our communities.”

    “This multi-year collaboration among the FBI, DEA, IRS, Oklahoma City Police Department, and the U.S. Attorney’s Office has effectively dismantled a major drug trafficking organization that had been poisoning our community with deadly narcotics for years,” said FBI Oklahoma City Special Agent in Charge Doug Goodwater. “Together, we will continue to ensure those who participate in these dangerous criminal networks face the full weight of the American justice system.”

    On December 17, 2024, a federal Grand Jury returned a 16-count Second Superseding Indictment, charging the defendants for their respective roles in the DTO. The Second Superseding Indictment charged Gutierrez, Azamar, and Narvaez with drug conspiracy, Muniz with money laundering conspiracy, two counts of domestic money laundering, and five counts of international money laundering, and Hernandez with money laundering conspiracy, three counts of domestic money laundering, and three counts of international money laundering.

    On April 18, 2025, following a nine-day trial, a federal jury convicted the defendants on all counts.

    According to evidence presented at trial, the defendants and other co-conspirators worked with high-ranking members of a Mexico-based DTO to import liquid methamphetamine into the U.S. hidden in the gas tanks of semi-trucks. Gutierrez’s trucking company, DGC Express Co., had been responsible for transporting shipments of liquid methamphetamine to Oklahoma as far back as February 2021. Another trucking company owned by Gutierrez, Dare Express Co., assumed responsibility for transporting the liquid methamphetamine to Oklahoma and Georgia starting in at least May of 2023.  Evidence at trial further showed that Azamar was responsible for facilitating the transfer of the liquid methamphetamine from the Mexico-based semi-truck into the Dare Express semi-truck, which first occurred at a property rented by Gutierrez in Alamo, Texas, and later at the main business location of Dare Express in Edinburg, Texas. The Dare Express semi-truck used throughout 2023 to deliver liquid methamphetamine to Oklahoma and Georgia was registered under Narvaez’s name, and both Gutierrez and Narvaez instructed the truck drivers to deliver this liquid methamphetamine to Oklahoma and elsewhere.

    At trial, evidence also established that law enforcement seized significant amounts of methamphetamine during the investigation, including:

    • 907 kilograms on March 3, 2021, in Tecumseh, Oklahoma;
    • 92 kilograms on September 6, 2023, in Oklahoma City, Oklahoma;
    • 615 kilograms on December 8, 2023, in Wellston, Oklahoma;
    • 42 kilograms on April 1, 2024, in Tecumseh, Oklahoma; and
    • 86 kilograms on April 2, 2024, in Newalla, Oklahoma.

    There was also evidence presented at trial about the DTO’s money laundering activities. A high-ranking member of this DTO in Mexico directed family members in Oklahoma, specifically his brother, Hernandez, and his niece, Muniz, to launder drug proceeds on his behalf. Testimony and other evidence, including court documents, CashApp records, international wire remitter service records, and records from the Federal Bureau of Prisons and Oklahoma Department of Corrections, also established that this DTO supplied Oklahoma prison gangs with methamphetamine, specifically the Irish Mob Gang, the Universal Aryan Brotherhood, and the Sureños. These gang members or their associates then sent payments for methamphetamine disguised as CashApp payments to Hernandez and Muniz, who then wired the money to close associates of the DTO’s head in Mexico.

    At sentencing, Gutierrez, Azamar, and Narvaez each face up to life in federal prison and a fine of up to $10,000,000.  Following their convictions for money laundering conspiracy, domestic money laundering, and international money laundering, Hernandez and Muniz face up to 20 years in federal prison and fines of up to $500,000 per charge.

    As part of the overall investigation and prosecution of this DTO, two additional defendants have previously been sentenced and 11 additional codefendants have already pleaded guilty for their roles in the conspiracy.  In total, law enforcement has attributed responsibility to this DTO for bringing approximately 16,000 kilograms of methamphetamine into the U.S. from Mexico at an estimated street value of $64,000,000.

    In November 2024:

    • EVER ALONSO PANDO, 47, of Oklahoma City, was sentenced to serve 96 months in federal prison, and three years of supervised release, for two counts of maintaining a drug-involved premises, and
    • HECTOR REYES, 43, of Oklahoma City, was sentenced to serve 90 months in federal prison, followed by three years of supervised release, for possessing 50 grams or more of methamphetamine with intent to distribute.

    The remaining defendants have pleaded guilty as follows:

    • ADAN GARCIA MIRANDA, 29, of Texas, pleaded guilty to conspiring to possess 50 grams or more of methamphetamine with intent to distribute. At sentencing, Miranda faces up to 40 years in prison, and a fine of up to $5,000,000;
    • JORGE RAUL VEGA GARCIA, 30, of Mexico, pleaded guilty to possession of 500 grams or more of methamphetamine with intent to distribute. At sentencing, Garcia faces up to life in federal prison, and a fine of up to $10,000,000;
    • LUIS ALBERTO ROJAS PRECIADO, 28, of Illinois, pleaded guilty to conspiring to possess 500 grams or more of methamphetamine with intent to distribute. At sentencing, Preciado faces up to life in federal prison, and a fine of up to $10,000,000;
    • JOSE ALFREDO EQUIHUA, 39, of Mexico, pleaded guilty to conspiring to possess 500 grams or more of methamphetamine with intent to distribute. At sentencing, Equihua faces up to life in federal prison, and a fine of up to $10,000,000;
    • EDGAR RODRIGUEZ ONTIVEROS, 32, of Mexico, pleaded guilty to conspiring to possess 500 grams or more of methamphetamine with intent to distribute. At sentencing, Ontiveros faces up to life in federal prison, and a fine of up to $10,000,000;
    • ADRIAN PEREZ, 39, of Oklahoma City, pleaded guilty to conspiring to possess 500 grams or more of methamphetamine with intent to distribute and being a felon in possession of a firearm. Public record shows that Perez has previous felony convictions that include being a felon in possession of a firearm in Oklahoma County District Court case number CF-2022-4831 and using a vehicle to facilitate the intentional discharge of a firearm in Oklahoma County District Court case number CF-2003-1656. At sentencing, Perez faces up to life in federal prison, and a fine of up to $10,250,000;
    • PHILLIP RAY HOWARD, 53, of Newalla, Oklahoma, pleaded guilty to conspiring to possess 50 grams or more of methamphetamine with intent to distribute and being a felon in possession of a firearm. Public record shows that Howard has previous felony convictions that include possession of cocaine with intent to distribute in Oklahoma County District Court case number CF-2005-878. At sentencing, Howard faces up to 40 years in prison for the conspiracy charge, 15 years in prison for the firearm possession charge, and fines of up to $5,250,000;
    • RAY DAVID LARA, JR., 44, of Oklahoma City, pleaded guilty to possession of 500 grams or more of methamphetamine with intent to distribute. At sentencing, Perez faces up to life in federal prison and a fine of up to $10,250,000;
    • HERIBERTO DONAN OCHOA, 33, of Mexico, pleaded guilty to possession of 500 grams or more of methamphetamine with intent to distribute. At sentencing, Ochoa faces up to life in federal prison, and a fine of up to $10,000,000;
    • BRAULIO PADILLA, 50, of Oklahoma City, pleaded guilty to conspiring to possess 500 grams or more of methamphetamine with intent to distribute and being a felon in possession of a firearm. Public record reflects that Howard has several felony convictions, including for possession of a controlled dangerous substance in the presence of a child under 12 and possession of methamphetamine with intent to distribute in Oklahoma County District Court case numbers CF-2010-4880 and CF-2019-155, respectively. At sentencing, Padilla faces up to life in federal prison, and a fine of up to $10,250,000; and
    • MICHAEL J. ESTRADA, 36, of Chicago, pleaded guilty to possession of 500 grams or more of methamphetamine with intent to distribute. At sentencing, Estrada faces up to life in federal prison, and a fine of up to $10,000,000.

    This case is the result of an investigation by the FBI Oklahoma City Field Office, with assistance from the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Oklahoma City Police Department. This case is also part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Organized Crime Drug Enforcement Task Force (OCDETF) and Project Safe Neighborhood (PSN).

    Reference is made to public filings for additional information.

    MIL Security OSI –

  • MIL-OSI Security: Chinese National Indicted for Money Laundering Conspiracy Connected to Scam That Impersonated Federal Officers and Employees

    Source: Office of United States Attorneys

    A federal grand jury returned a one-count indictment today against Binghui Liu, 32, a citizen of China formerly residing in San Jose, charging him with a money laundering conspiracy, Acting U.S. Attorney Michele Beckwith announced.

    According to court documents, between February 2024 and April 2025 Liu and other co‑conspirators engaged in a scheme to launder proceeds derived from a government impersonation fraud scam. Members of the conspiracy pretended to be federal law enforcement officers or employees when contacting target victims. To seek money, the scammers provided false information about the victim’s bank accounts, for example by claiming that charges had been wrongfully filed against the victims and that their bank accounts would be frozen. The scammers typically instructed victims to withdraw their savings in cash and then arranged for a fake law enforcement officer or federal employee to pick up the cash for supposed safekeeping. The scammers used fake names, code words, and instructed the victims to take pictures of themselves and the cash packaged for pickup.

    Liu served as a money launderer in the fraud scheme. He went to victims throughout California and Nevada to take their money. Liu used code words and fake names, and victims were falsely told he was either a federal employee or law enforcement officer. At no point was Liu a federal employee or law enforcement officer.

    In one example, an elderly victim was contacted by someone pretending to be a U.S. Marshal, who informed the victim of a fake arrest warrant and the possibility that the victim’s bank account would be frozen. The victim was instructed to give the money to federal reserve employees, supposedly to protect the funds. The scammers then coached the victim on withdrawing funds, what to say to their bank about the large withdrawals, and how to package the funds for multiple different pickups. On April 9, 2025, FBI agents set up a sting operation. Liu arrived at the elderly victim’s house and took what he believed was $20,000 but was, in fact, fake money. The agents arrested Liu shortly after he took the fake cash. In total, the elderly victim lost over $780,000 to the fraud scheme.

    If you have information related to this case or believe you may be a victim, please submit a report at tips.fbi.gov or call your local FBI office.

    This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Cody S. Chapple and Arelis M. Clemente are prosecuting the case.

    If convicted, Liu faces a maximum statutory penalty of 20 years in prison and a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

    MIL Security OSI –

  • MIL-OSI Security: Mexican National Guilty of Illegal Re-entry

    Source: Office of United States Attorneys

    NEW ORLEANS, LOUISIANA – ActingUnited States Attorney Michael M. Simpson announced that SANTIAGO PUENTE-GARCIA (“PUENTE-GARCIA”), age 25, a native of Mexico, pled guilty on April 11, 2025 for illegal reentry of a removed alien, in violation of Title 18, United States Code, Section 1326(a).

    According to the indictment, PUENTE-GARCIA was previously removed from the United States on February 4, 2022.  He was later found in the Eastern District of Louisiana on October 29, 2024 and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.

    PUENTE-GARCIA faces a maximum term of imprisonment of two (2) years, a fine of up to $250,000, up to one year of supervised release, and a mandatory $100 special assessment fee. U.S. District Judge Lance M. Africk set sentencing for

    Acting U.S. Attorney Simpson praised the work of the United States Immigration and Customs Enforcement, Enforcement and Removal Operations, in investigating this matter. Assistant United States Attorney Jon Maestri of the General Crimes Unit is in charge of the prosecution.

     

    MIL Security OSI –

  • MIL-OSI Security: Grand Jury Returns Four Indictments

    Source: United States Bureau of Alcohol Tobacco Firearms and Explosives (ATF)

    MADISON, WIS. – A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments yesterday. You are advised that a charge is merely an accusation, and a person named as defendant in an indictment is presumed innocent unless and until proven guilty.

    WAUSAU MAN CHARGED WITH POSSESSING FENTANYL AND METHAMPHETAMINE FOR DISTRIBUTION

    Christopher Harter, 49, Wausau, Wisconsin is charged in a two-count indictment with possessing fentanyl and methamphetamine for distribution. The indictment alleges that on March 7, 2025, Harter possessed 40 grams or more of fentanyl and 50 grams or more of methamphetamine with intent to distribute.

    If convicted, Harter faces a mandatory minimum of 5 years in prison and a maximum penalty of 40 years in prison on each count.

    The charge against him is the result of an investigation conducted by Federal Bureau of Investigation’s Central Wisconsin Narcotics Task Force comprised of agents from the FBI, Wisconsin State Patrol, Wisconsin Department of Criminal Investigation, Lincoln County Sheriff’s Office, Marathon County Sheriff’s Office, Portage County Sheriff’s Office, Mountain Bay Police Department, Wausau Police Department and Wisconsin National Guard Counter Drug Program.  Assistant U.S. Attorney Taylor L. Kraus is handling the case.

    JACKSON COUNTY MAN CHARGED WITH POSSESSING METHAMPHETAMINE FOR DISTRIBUTION

    Elvin Amundson, 39, Sparta, Wisconsin is charged with possessing more than 500 grams of methamphetamine for distribution.  The indictment alleges that he possessed the methamphetamine on April 14, 2021.

    If convicted, Amundson faces a mandatory minimum of 10 years in prison and a maximum penalty of life.

    The charge against Amundson is the result of an investigation conducted by the Federal Bureau of Investigation and the Jackson County Sheriff’s Office.  Assistant U.S. Attorney Steven P. Anderson is handling the case.

    ROTHSCHILD MAN CHARGED WITH ILLEGALLY POSSESSING A FIREARM

    Edward L. Jackson III, 28, Rothschild, Wisconsin, is charged with possessing a firearm as a felon. The indictment alleges that on May 20, 2024, Jackson possessed a loaded Sig Sauer pistol. If convicted, Jackson faces a maximum penalty of fifteen years in prison.

    The charge against him is the result of an investigation conducted by the Wausau Police Department, the Wausau Police Department’s Community Resource Unit, and the Federal Bureau of Investigation’s Central Wisconsin Narcotics Task Force (CWNTF), with assistance from the ATF Madison Crime Gun Task Force and the Marathon County District Attorney’s Office. The CWNTF is comprised of agents from the FBI, Wisconsin State Patrol, Wisconsin Department of Criminal Investigation, Lincoln County Sheriff’s Office, Marathon County Sheriff’s Office, Portage County Sheriff’s Office, Mountain Bay Metro Police Department, Wausau Police Department and Wisconsin National Guard Counter Drug Program. The ATF Madison Crime Gun Task Force consists of federal agents from ATF and Task Force Officers (TFOs) from state and local agencies throughout the Western District of Wisconsin. Assistant U.S. Attorney Julie Pfluger is handling the case.

    MEXICAN CITIZEN FOUND IN EAU CLAIRE CHARGED WITH ILLEGALLY REENTERING UNITED STATES

    Mario Govea-Monarca, 23, a citizen of Mexico found in Eau Claire, Wisconsin, is charged with reentering the United States after having been previously removed. The indictment alleges that on November 29, 2023, Govea-Monarca was found in the Western District of Wisconsin after having previously been removed and without having obtained the express consent of the United States Attorney General or the Secretary of Homeland Security to reapply for admission to the United States.

    If convicted, Govea-Monarca faces a maximum penalty of two years in prison.

    The charge against him is the result of an investigation conducted by the Department of Homeland Security, Immigration and Customs Enforcement (ICE). Assistant U.S. Attorney Jennifer Remington is handling the case.

    All cases involving illegal immigration and firearms are part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Organized Crime Drug Enforcement Task Forces (OCDETFs) and Project Safe Neighborhood (PSN).

    MIL Security OSI –

  • MIL-OSI: Provident Financial Services, Inc. Announces First Quarter Earnings and Declares Quarterly Cash Dividend

    Source: GlobeNewswire (MIL-OSI)

    ISELIN, N.J., April 24, 2025 (GLOBE NEWSWIRE) — Provident Financial Services, Inc. (NYSE:PFS) (the “Company”) reported net income of $64.0 million, or $0.49 per basic and diluted share for the three months ended March 31, 2025, compared to $48.5 million, or $0.37 per basic and diluted share, for the three months ended December 31, 2024 and $32.1 million, or $0.43 per basic and diluted share, for the three months ended March 31, 2024. Net income for the three months ended March 31, 2025 was negatively impacted by a $2.7 million write-down on a foreclosed property, partially offset by a $624,000 profit on fixed asset sales related to the consolidation of three branches. While there were no transaction costs related to our merger with Lakeland Bancorp, Inc. (“Lakeland”) for the 2025 period, these costs totaled $20.2 million for the three months ended December 31, 2024 and $2.2 million for the three months ended March 31, 2024, respectively.

    Anthony J. Labozzetta, President and Chief Executive Officer commented, “With the integration of Lakeland behind us, we are starting to see the benefits of the transaction come to fruition. We are very pleased with our first quarter financial results and encouraged by the promising start to the year. Despite ongoing uncertainty in the markets, our core businesses, credit quality and risk management remain strong. Our team is focused on building the business, delivering exceptional customer service and creating value for all stakeholders while remaining agile in this rapidly changing economic and regulatory environment.”

    Performance Highlights for the First Quarter of 2025

    • Adjusted for a one-time write-down on a foreclosed property in the current quarter, as well as transaction costs related to the merger with Lakeland in prior quarters, the Company’s annualized adjusted returns on average assets, average equity and average tangible equity(1) were 1.11%, 10.13% and 16.15% for the quarter ended March 31, 2025, compared to 1.05%, 9.53% and 15.39% for the quarter ended December 31, 2024. A reconciliation between GAAP and the above non-GAAP ratios is shown on page 11 of the earnings release.
    • The Company’s annualized adjusted pre-tax, pre-provision returns on average assets, average equity and average tangible equity(2) were 1.61%, 14.63% and 21.18% for the quarter ended March 31, 2025, compared to 1.53%, 13.91% and 20.31% for the quarter ended December 31, 2024. A reconciliation between GAAP and the above non-GAAP ratios is shown on page 11 of the earnings release.
    • The Company’s total commercial and industrial (“C&I”) loan portfolio increased $74.3 million, or 6.5% annualized, to $4.68 billion as of March 31, 2025, from $4.61 billion as of December 31, 2024. Additionally, the Company’s total commercial portfolio increased $150.0 million, or 3.8% annualized to $16.19 billion as of March 31, 2025, from $16.04 billion as of December 31, 2024.
    • The net interest margin increased six basis points to 3.34% for the quarter ended March 31, 2025, from 3.28% for the trailing quarter, while the core net interest margin, which excludes the impact of purchase accounting accretion and amortization, increased nine basis points from the trailing quarter to 2.94%. The average yield on total loans decreased four basis points to 5.95% for the quarter ended March 31, 2025, compared to the trailing quarter, while the average cost of deposits, including non-interest-bearing deposits, decreased 14 basis points to 2.11% for the quarter ended March 31, 2025.
    • The Company recorded a $325,000 provision for credit losses on loans for the quarter ended March 31, 2025, compared to a $7.8 million provision for the trailing quarter. The decrease in the provision for credit losses for the quarter was primarily attributable to the change in a qualitative factor indexed to the forecasted unemployment rate that resulted in a decrease in reserves required on pooled loans within our Current Expected Credit Loss (“CECL”) model. The allowance for credit losses as a percentage of loans decreased to 1.02% as of March 31, 2025, from 1.04% as of December 31, 2024.
    • Insurance Agency income increased $858,000 or 17.9%, versus the same period in 2024, while pre-tax Insurance Agency net income increased $544,000 or 23.3% versus the same period in 2024.
    • As of March 31, 2025, the Company’s loan pipeline, consisting of work-in-process and loans approved pending closing, totaled $2.77 billion, with a weighted average interest rate of 6.31%.

    Declaration of Quarterly Dividend

    The Company’s Board of Directors declared a quarterly cash dividend of $0.24 per common share payable on May 30, 2025 to stockholders of record as of the close of business on May 16, 2025.

    Results of Operations

    Three months ended March 31, 2025 compared to the three months ended December 31, 2024

    For the three months ended March 31, 2025, net income was $64.0 million, or $0.49 per basic and diluted share, compared to net income of $48.5 million, or $0.37 per basic and diluted share, for the three months ended December 31, 2024.

    Net Interest Income and Net Interest Margin

    Net interest income was $181.7 million for the three months ended March 31, 2025 and the trailing quarter, despite there being two fewer calendar days in the first quarter of 2025, primarily due to favorable repricing of deposits.

    The Company’s net interest margin increased six basis points to 3.34% for the quarter ended March 31, 2025, from 3.28% for the trailing quarter. The weighted average yield on interest-earning assets for the quarter ended March 31, 2025 decreased three basis points to 5.63%, compared to the trailing quarter. The weighted average cost of interest-bearing liabilities for the quarter ended March 31, 2025 decreased 13 basis points from the trailing quarter to 2.90%. The average cost of interest-bearing deposits for the quarter ended March 31, 2025 decreased 17 basis points to 2.64%, compared to 2.81% for the trailing quarter. The average cost of total deposits, including non-interest-bearing deposits, was 2.11% for the quarter ended March 31, 2025, compared to 2.25% for the trailing quarter. The average cost of borrowed funds for the quarter ended March 31, 2025 was 3.76%, compared to 3.64% for the quarter ended December 31, 2024.

    Provision for Credit Losses on Loans

    For the quarter ended March 31, 2025, the Company recorded a $325,000 provision for credit losses on loans, compared with a provision for credit losses of $7.8 million for the quarter ended December 31, 2024.  The decrease in the provision for credit losses for the quarter was primarily attributable to the change in a qualitative factor indexed to the forecasted unemployment rate that resulted in a decrease in reserves required on pooled loans within our CECL model.  For the three months ended March 31, 2025, net charge-offs totaled $2.0 million, or an annualized four basis points of average loans, compared with net charge-offs of $5.5 million, or an annualized nine basis points of average loans, for the trailing quarter.

    Non-Interest Income and Expense

    For the three months ended March 31, 2025, non-interest income totaled $27.0 million, an increase of $2.9 million, compared to the trailing quarter. Insurance agency income increased $2.4 million to $5.7 million for the three months ended March 31, 2025, compared to the trailing quarter, mainly due to the receipt of contingent commissions and additional business in the current quarter. Additionally, other income increased $920,000 to $2.2 million for the three months ended March 31, 2025, compared to the trailing quarter, primarily due to an increase in profit on fixed asset sales, combined with an increase in net fees on loan-level interest rate swap transactions. Partially offsetting these increases to non-interest income, wealth management income decreased $327,000 to $7.3 million for the three months ended March 31, 2025, compared to the trailing quarter, mainly due to a decrease in the average market value of assets under management during the period, while BOLI income decreased $169,000 for the three months ended March 31, 2025, compared to the trailing quarter, primarily due to decreased equity valuations.

    Non-interest expense totaled $116.3 million for the three months ended March 31, 2025, a decrease of $18.1 million, compared to $134.3 million for the trailing quarter. Merger-related expenses, which were completed at the end of 2024, decreased $20.2 million for the three months ended March 31, 2025, compared to the trailing quarter. Other operating expenses decreased $929,000 to $16.4 million for the three months ended March 31, 2025, compared to $17.4 million for the trailing quarter, largely due to a prior quarter $1.4 million charge for contingent litigation reserves, combined with decreases in professional service and insurance expenses, partially offset by a $2.7 million write-down on a foreclosed property. Partially offsetting these decreases in non-interest expense, compensation and benefits expense increased $2.4 million to $62.4 million for the three months ended March 31, 2025, compared to $59.9 million for the trailing quarter. The increase in compensation and benefit expense was primarily due to increases in salary expense related to company-wide annual merit increases and severance expense, partially offset by a decrease in stock-based compensation. Additionally, net occupancy expense increased $1.4 million to $13.9 million for the three months ended March 31, 2025, compared to the trailing quarter, largely due to seasonal increases in snow removal, utilities and other maintenance costs.

    The Company’s annualized adjusted non-interest expense as a percentage of average assets(1) totaled 1.92% for the quarter ended March 31, 2025, compared to 1.90% for the trailing quarter. The efficiency ratio (adjusted non-interest expense divided by the sum of net interest income and non-interest income)(1) was 54.43% for the three months ended March 31, 2025, compared to 55.43% for the trailing quarter.

    Income Tax Expense

    For the three months ended March 31, 2025, the Company’s income tax expense was $27.8 million with an effective tax rate of 30.3%, compared with income tax expense of $14.2 million with an effective tax rate of 22.6% for the trailing quarter. The increase in tax expense and the effective tax rate for the three months ended March 31, 2025, compared with the trailing quarter was largely due to an increase in taxable income and a discrete item related to stock-based compensation, combined with a prior quarter $4.2 million tax benefit related to the revaluation of certain deferred tax assets to reflect the imposition by the State of New Jersey of a 2.5% Corporate Transit Fee, effective January 1, 2024.

    Three months ended March 31, 2025 compared to the three months ended March 31, 2024

    For the three months ended March 31, 2025, net income was $64.0 million, or $0.49 per basic and diluted share, compared to net income of $32.1 million, or $0.43 per basic and diluted share, for the three months ended March 31, 2024.

    Net Interest Income and Net Interest Margin

    Net interest income increased $88.1 million to $181.7 million for the three months ended March 31, 2025, from $93.7 million for same period in 2024.  The increase in net interest income was favorably impacted by the net assets added in the May 16, 2024 acquisition of Lakeland and related accretion of purchase accounting adjustments.

    The Company’s net interest margin increased 47 basis points to 3.34% for the quarter ended March 31, 2025, from 2.87% for the same period last year. The weighted average yield on interest-earning assets for the quarter ended March 31, 2025 increased 57 basis points to 5.63%, compared to 5.06% for the quarter ended March 31, 2024. The weighted average cost of interest-bearing liabilities increased 10 basis points for the quarter ended March 31, 2025 to 2.90%, compared to 2.80% for the first quarter of 2024. The average cost of interest-bearing deposits for the quarter ended March 31, 2025 was 2.64%, compared to 2.60% for the same period last year. Average non-interest-bearing demand deposits increased $1.65 billion to $3.72 billion for the quarter ended March 31, 2025, compared to $2.07 billion for the quarter ended March 31, 2024. The average cost of total deposits, including non-interest-bearing deposits, was 2.11% for the quarter ended March 31, 2025, compared with 2.04% for the quarter ended March 31, 2024. The average cost of borrowed funds for the quarter ended March 31, 2025 was 3.76%, compared to 3.60% for the same period last year.

    Provision for Credit Losses on Loans

    For the quarter ended March 31, 2025, the Company recorded a $325,000 provision for credit losses on loans, compared with a $200,000 provision for credit losses on loans for the quarter ended March 31, 2024.  The increase in the provision for credit losses was due to an increase in specific reserves on impaired credits. For the three months ended March 31, 2025, net charge-offs totaled $2.0 million, or an annualized four basis points of average loans, compared with net charge-offs of $971,000, or an annualized four basis points of average loans, for the quarter ended March 31, 2024.

    Non-Interest Income and Expense

    Non-interest income totaled $27.0 million for the quarter ended March 31, 2025, an increase of $6.2 million, compared to the same period in 2024. Fee income increased $3.7 million to $9.7 million for the three months ended March 31, 2025, compared to the prior year quarter, primarily due to increases in deposit fee income, debit card related fee income and commercial loan prepayment fees, resulting from the Lakeland merger. Other income increased $1.4 million to $2.2 million for the three months ended March 31, 2025, compared to the quarter ended March 31, 2024, primarily due to an increase in profit on fixed asset sales, combined with an increase in net fees on loan-level interest rate swap transactions and an increase in gains on sales of mortgage loans. Insurance agency income increased $858,000 to $5.7 million for the three months ended March 31, 2025, compared to the quarter ended March 31, 2024, largely due to an increase in contingency income and business activity, while BOLI income increased $275,000 to $2.1 million for the three months ended March 31, 2025, compared to the prior year quarter, related to the addition of Lakeland’s BOLI, partially offset by a decrease in equity valuations.

    For the three months ended March 31, 2025, non-interest expense totaled $116.3 million, an increase of $44.4 million, compared to the three months ended March 31, 2024. Compensation and benefits expense increased $22.3 million to $62.4 million for three months ended March 31, 2025, compared to $40.0 million for the same period in 2024. The increase was primarily due to the addition of Lakeland, combined with an increase in salary expense associated with Company-wide annual merit increases. Amortization of intangibles increased $8.8 million to $9.5 million for the three months ended March 31, 2024, compared to $705,000 for 2024, largely due to core deposit intangible amortization related to the addition of Lakeland. Other operating expense increased $6.1 million to $16.4 million for the three months ended March 31, 2025, compared to $10.3 million for the three months ended March 31, 2024, largely due to the addition of Lakeland and a $2.7 million write-down on a foreclosed property in the current quarter. Net occupancy expense increased $5.4 million to $13.9 million for the three months ended March 31, 2024, compared to the same period in 2024, primarily due to increased depreciation and maintenance expenses because of the addition of Lakeland. Data processing expense increased $2.8 million to $9.6 million for three months ended March 31, 2025, compared to $6.8 million for the same period in 2024. The increase in data processing expense was primarily due to increases in software service, telecommunication and core service expenses, due to the addition of Lakeland. Additionally, FDIC insurance expense increased $1.1 million to $3.4 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to increases in the assessment rate and average assets, as a result of the addition of Lakeland. Partially offsetting these increases in non-interest expense, merger-related expenses, which completed at the end of 2024 decreased $2.2 million for the three months ended March 31, 2025, compared to the same period in 2024.

    The Company’s annualized adjusted non-interest expense as a percentage of average assets(1) was 1.92% for the quarter ended March 31, 2025, compared to 1.99% for the same period in 2024. The efficiency ratio (adjusted non-interest expense divided by the sum of net interest income and non-interest income)(1) was 54.43% for the three months ended March 31, 2025 compared to 60.82% for the same respective period in 2024.

    Income Tax Expense

    For the three months ended March 31, 2025, the Company’s income tax expense was $27.8 million with an effective tax rate of 30.3%, compared with $10.9 million with an effective tax rate of 25.3% for the three months ended March 31, 2024. The increase in tax expense for the three months ended March 31, 2025, compared with the same period last year, was largely the result of an increase in taxable income and an increase in state tax rates as a result of the May 2024 Lakeland merger, as well as a discrete item related to stock-based compensation. The increase in state tax rates is a result of the Company no longer receiving benefit of a reduced New Jersey state rate available for the Company’s REIT and New Jersey investment company subsidiaries. The state of New Jersey allows certain bank subsidiaries with assets under $15 billion to benefit from the lower rate, however due to the Lakeland merger in May of 2024, the $15 billion asset threshold was crossed and the increased New Jersey rate was applicable.

    Asset Quality

    The Company’s total non-performing loans as of March 31, 2025 were $103.2 million, or 0.54% of total loans, compared $72.1 million, or 0.39% of total loans as of December 31, 2024 and $35.5 million, or 0.35% of total loans as of March 31, 2024. The $31.2 million increase in non-performing loans as of March 31, 2025, compared to the trailing quarter, was primarily attributable to two loans: a $20.3 million commercial real estate loan secured by a mixed use property with a current loan-to value of 53% and an $11.5 million construction loan secured by a nearly complete warehouse facility with a current loan-to-value of 62%. These loans have no prior charge-off history and carry no specific reserve allocations. As of March 31, 2025, impaired loans totaled $86.1 million with related specific reserves of $7.9 million, compared with impaired loans totaling $55.4 million with related specific reserves of $7.5 million as of December 31, 2024. As of March 31, 2024, impaired loans totaled $40.1 million with related specific reserves of $8.2 million.

    As of March 31, 2025, the Company’s allowance for credit losses related to the loan held for investment portfolio was 1.02% of total loans, compared to 1.04% and 0.98% as of December 31, 2024 and March 31, 2024, respectively. The allowance for credit losses decreased $1.7 million to $191.8 million as of March 31, 2025, from $193.4 million as of December 31, 2024. The decrease in the allowance for credit losses on loans at March 31, 2025 compared to December 31, 2024 was due to net charge-offs of $2.0 million, partially offset by a $325,000 provision for credit losses.

    The following table shows accruing past due loans and non-accrual loans on the dates indicated, as well as certain asset quality ratios.

        March 31, 2025   December 31, 2024   March 31, 2024  
        Number
    of
    Loans    		   Principal
    Balance
    of Loans    		   Number
    of
    Loans    		   Principal
    Balance
    of Loans    		   Number
    of
    Loans    		   Principal
    Balance
    of Loans    		  
        (Dollars in thousands)
    Accruing past due loans:                          
    30 to 59 days past due:                          
    Commercial mortgage loans   8   $ 13,696     7   $ 8,538     3   $ 5,052    
    Multi-family mortgage loans   1     7,433     —     —     4     12,069    
    Construction loans   —     —     —     —     —     —    
    Residential mortgage loans   27     6,905     22     6,388     11     3,568    
    Total mortgage loans   36     28,034     29     14,926     18     20,689    
    Commercial loans   37     13,472     23     4,248     11     4,493    
    Consumer loans   22     1,604     47     3,152     22     803    
    Total 30 to 59 days past due   95   $ 43,110     99   $ 22,326     51   $ 25,985    
                               
    60 to 89 days past due:                          
    Commercial mortgage loans   2   $ 196     4   $ 3,954     3   $ 1,148    
    Multi-family mortgage loans   —     —     —     —     —     —    
    Construction loans   —     —     —     —     —     —    
    Residential mortgage loans   18     5,009     17     5,049     6     804    
    Total mortgage loans   20     5,205     21     9,003     9     1,952    
    Commercial loans   15     3,743     9     2,377     3     332    
    Consumer loans   12     854     15     856     8     755    
    Total 60 to 89 days past due   47     9,802     45     12,236     20     3,039    
    Total accruing past due loans   142   $ 52,912     144   $ 34,562     71   $ 29,024    
                               
    Non-accrual:                          
    Commercial mortgage loans   18   $ 42,931     17   $ 20,883     8   $ 5,938    
    Multi-family mortgage loans   5     7,294     6     7,498     2     2,355    
    Construction loans   3     18,929     2     13,246     —     —    
    Residential mortgage loans   22     5,246     23     4,535     10     1,647    
    Total mortgage loans   48     74,400     48     46,162     20     9,940    
    Commercial loans   83     27,471     65     24,243     21     36,892    
    Consumer loans   19     1,352     23     1,656     11     760    
    Total non-accrual loans   150   $ 103,223     136   $ 72,061     52   $ 47,592    
                               
    Non-performing loans to total loans         0.54%           0.39%           0.44%    
    Allowance for loan losses to total non-performing loans         185.78%           268.43%           223.63%    
    Allowance for loan losses to total loans         1.02%           1.04%           0.98%    
     

    The increase in accruing past due loans versus the trailing quarter was primarily attributable to two loans: a $10.5 million commercial real estate loan which is expected to be fully resolved in the second quarter through the completion of a pending note sale and a $7.4 million commercial real estate loan that is in the process of refinancing with the Company.

    As of March 31, 2025 and December 31, 2024, the Company held foreclosed assets of $6.8 million and $9.5 million, respectively. Foreclosed assets as of March 31, 2025 were comprised of commercial real estate. Total non-performing assets as of March 31, 2025 increased $28.4 million to $110.0 million, or 0.45% of total assets, from $81.5 million, or 0.34% of total assets as of December 31, 2024. During the three months ended March 31, 2025, there was a write-down of a foreclosed commercial property of $2.7 million based on a contracted sales price. The sale of this property is expected to close in the second quarter of 2025, reducing foreclosed assets by $5.8 million.

    Balance Sheet Summary

    Total assets as of March 31, 2025 were $24.22 billion, a $172.9 million increase from December 31, 2024. The increase in total assets was primarily due to a $132.0 million increase in total loans and a $110.5 million increase in total investments, partially offset by a decrease in intangible and other assets.

    The Company’s loans held for investment portfolio totaled $18.79 billion as of March 31, 2025 and $18.66 billion as of December 31, 2024. The portfolio consisted of the following:

      March 31, 2025   December 31, 2024    
      (Dollars in thousands)
    Mortgage loans:          
    Commercial $ 7,295,651     $ 7,228,078      
    Multi-family   3,458,190       3,382,933      
    Construction   756,356       823,503      
    Residential   1,994,404       2,010,637      
    Total mortgage loans   13,504,601       13,445,151      
    Commercial loans   4,682,902       4,608,600      
    Consumer loans   613,453       613,819      
    Total gross loans   18,800,956       18,667,570      
    Premiums on purchased loans   1,337       1,338      
    Net deferred fees and unearned discounts   (10,922)       (9,538)      
    Total loans $ 18,791,371     $ 18,659,370      
     

    During the three months ended March 31, 2025, the loans held for investment portfolio had net increases of $75.3 million of multi-family loans, $74.3 million of commercial loans and $67.6 million of commercial mortgage loans, partially offset by net decreases of $67.1 million of construction loans and $16.2 million of residential mortgage loans. Total commercial loans, consisting of commercial real estate, multi-family, commercial and construction loans, represented 86.1% of the loan portfolio as of March 31, 2025, compared to 85.9% as of December 31, 2024.

    For the three months ended March 31, 2025, loan funding, including advances on lines of credit, totaled $1.93 billion, compared with $622.7 million for the same period in 2024.

    As of March 31, 2025, the Company’s unfunded loan commitments totaled $2.88 billion, including commitments of $1.75 billion in commercial loans, $517.7 million in construction loans and $141.4 million in commercial mortgage loans. Unfunded loan commitments as of December 31, 2024 and March 31, 2024 were $2.73 billion and $1.97 billion, respectively.

    The loan pipeline, consisting of work-in-process and loans approved pending closing, totaled $2.77 billion as of March 31, 2025, compared to $1.79 billion and $1.08 billion as of December 31, 2024 and March 31, 2024, respectively.

    Total investment securities were $3.34 billion as of March 31, 2025, a $110.5 million increase from December 31, 2024. This increase was primarily due to purchases of mortgage-backed and municipal securities and a decrease in unrealized losses on available for sale debt securities.

    Total deposits decreased $175.0 million during the three months ended March 31, 2025, to $18.45 billion. Total savings and demand deposit accounts decreased $172.5 million to $15.28 billion as of March 31, 2025, while total time deposits decreased $2.4 million to $3.17 billion as of March 31, 2025. The decrease in savings and demand deposits consisted of a $142.8 million decrease in interest bearing demand deposits, a $22.0 million decrease in money market deposits and a $8.7 million decrease in savings deposits, partially offset by a $1.1 million increase in non-interest-bearing demand deposits. Within total savings and demand deposits, total municipal deposits decreased $130.8 million to $3.38 billion as of March 31, 2025, mainly due to seasonal outflows. The decrease in time deposits consisted of a $78.6 million decrease in retail time deposits, partially offset by a $76.2 million increase in brokered time deposits.

    Borrowed funds increased $315.8 million during the three months ended March 31, 2025, to $2.34 billion. The increase in borrowings was largely due to asset funding requirements. Borrowed funds represented 9.6% of total assets as of March 31, 2025, an increase from 8.4% as of December 31, 2024.

    Stockholders’ equity increased $57.6 million during the three months ended March 31, 2025, to $2.66 billion, primarily due to net income earned for the period and a decrease in unrealized losses on available for sale debt securities, partially offset by cash dividends paid to stockholders. For the three months ended March 31, 2025, common stock repurchases totaled 99,541 shares at an average cost of $18.19 per share, all of which were made in connection with withholding to cover income taxes on the vesting of stock-based compensation. As of March 31, 2025, approximately 873,000 shares remained eligible for repurchase under the current authorization. Book value per share and tangible book value per share(1) as of March 31, 2025 were $20.35 and $14.15, respectively, compared with $19.93 and $13.66, respectively, as of December 31, 2024.

    About the Company

    Provident Financial Services, Inc. is the holding company for Provident Bank, a community-oriented bank offering “Commitment you can count on” since 1839. Provident Bank provides a comprehensive array of financial products and services through its network of branches throughout New Jersey, Bucks, Lehigh and Northampton counties in Pennsylvania, as well as Orange, Queens and Nassau Counties in New York. The Bank also provides fiduciary and wealth management services through its wholly owned subsidiary, Beacon Trust Company and insurance services through its wholly owned subsidiary, Provident Protection Plus, Inc.

    Post Earnings Conference Call

    Representatives of the Company will hold a conference call for investors on Friday, April 25, 2025 at 10:00 a.m. Eastern Time to discuss the Company’s financial results for the quarter ended March 31, 2025. The call may be accessed by dialing 1-888-412-4131 (United States Toll Free) and 1-646-960-0134 (United States Local). Speakers will need to enter conference ID code (3610756) before being met by a live operator. Internet access to the call is also available (listen only) at provident.bank by going to Investor Relations and clicking on “Webcast.”

    Forward Looking Statements

    Certain statements contained herein are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “project,” “intend,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those set forth in Item 1A of the Company’s Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, inflation and unemployment, competitive products and pricing, real estate values, fiscal and monetary policies of the U.S. Government, the effects of the recent turmoil in the banking industry, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets, the availability of and costs associated with sources of liquidity, and the impact of a potential shutdown of the federal government.

    The Company cautions readers not to place undue reliance on any such forward-looking statements which speak only as of the date they are made. The Company advises readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not assume any duty, and does not undertake, to update any forward-looking statements to reflect events or circumstances after the date of this statement.

    Footnotes

    (1) Annualized adjusted pre-tax, pre-provision return on average assets, annualized return on average tangible equity, tangible book value per share, annualized adjusted non-interest expense as a percentage of average assets and the efficiency ratio are non-GAAP financial measures. Please refer to the Notes following the Consolidated Financial Highlights which contain the reconciliation of GAAP to non-GAAP financial measures and the associated calculations.

                 
    PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
    Consolidated Financial Highlights
    (Dollars in Thousands, except share data) (Unaudited)
         
      As of or for the
    Three months ended    		  
      March 31,   December 31,   March 31,  
        2025       2024       2024    
    Statement of Income            
    Net interest income $ 181,728     $ 181,737     $ 93,670    
    Provision for credit losses   638       8,880       186    
    Non-interest income   27,030       24,175       20,807    
    Non-interest expense   116,267       134,323       71,321    
    Income before income tax expense   91,853       62,709       42,970    
    Net income   64,028       48,524       32,082    
    Diluted earnings per share $ 0.49     $ 0.37     $ 0.43    
    Interest rate spread   2.73%       2.63%       2.26%    
    Net interest margin   3.34%       3.28%       2.87%    
                 
    Profitability            
    Annualized return on average assets   1.08%       0.81%       0.92%    
    Annualized adjusted return on average assets (1)   1.11%       1.05%       0.97%    
    Annualized return on average equity   9.84%       7.36%       7.60%    
    Annualized adjusted return on average equity (1)   10.13%       9.53%       8.04%    
    Annualized return on average tangible equity (1)   15.73%       12.21%       10.40%    
    Annualized adjusted return on average tangible equity (1)   16.15%       15.39%       11.16%    
    Annualized adjusted non-interest expense to average assets (3)   1.92%       1.90%       1.99%    
    Efficiency ratio (4)   54.43%       55.43%       60.82%    
                 
    Asset Quality            
    Non-accrual loans $ 103,223     $ 72,061     $ 47,592    
    90+ and still accruing   —       —       —    
    Non-performing loans   103,223       72,061       47,592    
    Foreclosed assets   6,755       9,473       11,324    
    Non-performing assets   109,978       81,534       58,916    
    Non-performing loans to total loans   0.54%       0.39%       0.44%    
    Non-performing assets to total assets   0.45%       0.34%       0.42%    
    Allowance for loan losses $ 191,770     $ 193,432     $ 106,429    
    Allowance for loan losses to total non-performing loans   185.78%       268.43%       223.63%    
    Allowance for loan losses to total loans   1.02%       1.04%       0.98%    
    Net loan charge-offs $ 1,987     $ 5,493     $ 971    
    Annualized net loan charge-offs to average total loans   0.04%       0.12%       0.04%    
                 
    Average Balance Sheet Data            
    Assets $ 24,049,318     $ 23,908,514     $ 14,093,767    
    Loans, net   18,590,877       18,487,443       10,668,992    
    Earning assets   21,946,053       21,760,458       12,862,910    
    Core deposits   15,497,343       15,581,608       9,129,244    
    Borrowings   1,918,069       1,711,806       1,940,981    
    Interest-bearing liabilities   17,297,892       17,093,382       10,074,106    
    Stockholders’ equity   2,638,361       2,624,019       1,698,170    
    Average yield on interest-earning assets   5.63%       5.66%       5.06%    
    Average cost of interest-bearing liabilities   2.90%       3.03%       2.80%    
                 

    Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
    (Dollars in Thousands, except share data)

    The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.

                   
    (1) Annualized Adjusted Return on Average Assets, Equity and Tangible Equity              
        Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Net Income   $ 64,028     $ 48,524     $ 32,082    
    Write-down on ORE property     2,690       —       —    
    Merger-related transaction costs     —       20,184       2,202    
    Less: income tax expense     (809)       (5,819)       (342)    
    Annualized adjusted net income   $ 65,909     $ 62,889     $ 33,942    
    Less: Amortization of Intangibles (net of tax)   $ 6,642     $ 6,649     $ 493    
    Annualized adjusted net income for annualized adjusted return on average tangible equity   $ 72,551     $ 69,538     $ 34,434    
                   
    Annualized Adjusted Return on Average Assets     1.11%       1.05%       0.97%    
    Annualized Adjusted Return on Average Equity     10.13%       9.53%       8.04%    
    Annualized Adjusted Return on Average Tangible Equity     16.15%       15.39%       11.16%    
                   
    (2) Annualized adjusted pre-tax, pre-provision (“PTPP”) returns on average assets, average equity and average tangible equity              
        Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Net income   $ 64,028     $ 48,524     $ 32,082    
    Adjustments to net income:              
    Provision charge (benefit) for credit losses     638       8,880       (320)    
    Write-down on ORE property     2,690       —       —    
    Merger-related transaction costs     —       20,184       2,202    
    Income tax expense     27,825       14,185       10,888    
    PTPP income   $ 95,181     $ 91,773     $ 44,852    
                   
    Annualized adjusted PTPP income   $ 386,012     $ 365,097     $ 180,394    
    Average assets   $ 24,049,318     $ 23,908,514     $ 14,093,767    
    Average equity   $ 2,638,361     $ 2,624,019     $ 1,698,170    
    Average tangible equity   $ 1,822,407     $ 1,797,994     $ 1,240,475    
                   
    Annualized adjusted PTPP return on average assets     1.61%       1.53%       1.28%    
    Annualized adjusted PTPP return on average equity     14.63%       13.91%       10.62%    
    Annualized adjusted PTPP return on average tangible equity     21.18%       20.31%       14.54%    
                   
    (3) Annualized Return on Average Tangible Equity              
        Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Total average stockholders’ equity   $ 2,638,361     $ 2,624,019     $ 1,698,170    
    Less: total average intangible assets     815,954       826,025       457,695    
    Total average tangible stockholders’ equity   $ 1,822,407     $ 1,797,994     $ 1,240,475    
                   
    Net income     64,028       48,524       32,082    
    Less: Amortization of Intangibles, net of tax     6,642       6,649       493    
    Total net income   $ 70,670     $ 55,173     $ 32,575    
                   
    Annualized return on average tangible equity (net income/total average tangible stockholders’ equity)     15.73%       12.21%       10.56%    
                   
    (4) Annualized Adjusted Non-Interest Expense to Average Assets              
        Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Reported non-interest expense   $ 116,267     $ 134,323     $ 71,321    
    Adjustments to non-interest expense:              
    Credit loss (benefit) expense for off-balance sheet credit exposures     —       —       (506)    
    Write-down on ORE property     2,690       —       —    
    Merger-related transaction costs     —       20,184       2,202    
    Adjusted non-interest expense   $ 113,577     $ 114,139     $ 69,625    
                   
    Annualized adjusted non-interest expense   $ 460,618     $ 454,075     $ 280,030    
                   
    Average assets   $ 24,049,318     $ 23,908,514     $ 14,093,767    
                   
    Annualized adjusted non-interest expense/average assets     1.92%       1.90%       1.99%    
                   
    (5) Efficiency Ratio Calculation              
        Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Net interest income   $ 181,728     $ 181,737     $ 93,670    
    Non-interest income     27,030       24,175       20,807    
    Adjustments to non-interest income:              
    Net (gain) loss on securities transactions     (87)       14       1    
    Adjusted non-interest income   $ 26,943     $ 24,189     $ 20,808    
    Total income   $ 208,671     $ 205,926     $ 114,478    
                   
    Adjusted non-interest expense   $ 113,577     $ 114,139     $ 69,625    
                   
    Efficiency ratio (adjusted non-interest expense/income)     54.43%       55.43%       60.82%    
                   
    (6) Book and Tangible Book Value per Share   Three Months Ended  
        March 31,   December 31,   March 31,  
          2025       2024       2024    
    Total stockholders’ equity   $ 2,658,794     $ 2,601,207     $ 1,695,162    
    Less: total intangible assets     809,725       819,230       457,239    
    Total tangible stockholders’ equity   $ 1,849,069     $ 1,781,977     $ 1,237,923    
                   
    Shares outstanding     130,661,195       130,489,493       75,928,193    
                   
    Book value per share (total stockholders’ equity/shares outstanding)   $ 20.35     $ 19.93     $ 22.33    
    Tangible book value per share (total tangible stockholders’ equity/shares outstanding)   $ 14.15     $ 13.66     $ 16.30    
                   
                   
    PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
    Consolidated Statements of Financial Condition
    March 31, 2025 (Unaudited) and December 31, 2024
    (Dollars in Thousands)
           
    Assets March 31, 2025   December 31, 2024
    Cash and cash equivalents $ 234,076     $ 205,939  
    Available for sale debt securities, at fair value   2,878,785       2,768,915  
    Held to maturity debt securities, (net of $17,000 allowance as of March 31, 2025 (unaudited) and $14,000 allowance as of December 31, 2024)   314,005       327,623  
    Equity securities, at fair value   19,871       19,110  
    Federal Home Loan Bank stock   126,271       112,767  
    Loans held for sale   149,961       162,453  
    Loans held for investment   18,791,371       18,659,370  
    Less allowance for credit losses   191,770       193,432  
    Net loans   18,749,562       18,628,391  
    Foreclosed assets, net   6,755       9,473  
    Banking premises and equipment, net   115,424       119,622  
    Accrued interest receivable   91,776       91,160  
    Intangible assets   809,725       819,230  
    Bank-owned life insurance   407,986       405,893  
    Other assets   470,523       543,702  
    Total assets $ 24,224,759     $ 24,051,825  
           
    Liabilities and Stockholders’ Equity      
    Deposits:      
    Demand deposits $ 13,612,189     $ 13,775,991  
    Savings deposits   1,670,920       1,679,667  
    Certificates of deposit of $250,000 or more   767,626       789,342  
    Other time deposits   2,398,128       2,378,813  
    Total deposits   18,448,863       18,623,813  
    Mortgage escrow deposits   51,261       42,247  
    Borrowed funds   2,336,191       2,020,435  
    Subordinated debentures   402,853       401,608  
    Other liabilities   326,797       362,515  
    Total liabilities   21,565,965       21,450,618  
           
    Stockholders’ equity:      
    Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued   —       —  
    Common stock, $0.01 par value, 200,000,000 shares authorized, 137,565,966 shares issued and 130,663,184 shares outstanding as of March 31, 2025 and 130,489,493 outstanding as of December 31, 2024.   1,376       1,376  
    Additional paid-in capital   1,836,665       1,834,495  
    Retained earnings   1,021,266       989,111  
    Accumulated other comprehensive loss   (110,246)       (135,355)  
    Treasury stock   (90,267)       (88,420)  
    Total stockholders’ equity   2,658,794       2,601,207  
    Total liabilities and stockholders’ equity $ 24,224,759     $ 24,051,825  
    PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
    Consolidated Statements of Income
    Three months ended March 31, 2025, December 31, 2024 and March 31, 2024
    (Dollars in Thousands, except per share data) (Unaudited)
                 
      Three Months Ended  
      March 31,   December 31,   March 31,  
        2025     2024       2024    
    Interest and dividend income:            
    Real estate secured loans $ 187,054   $ 194,236     $ 107,456    
    Commercial loans   75,819     75,978       36,100    
    Consumer loans   10,158     10,815       4,523    
    Available for sale debt securities, equity securities and Federal Home Loan Bank stock   29,644     27,197       12,330    
    Held to maturity debt securities   1,996     2,125       2,268    
    Deposits, federal funds sold and other short-term investments   675     1,596       1,182    
    Total interest income   305,346     311,947       163,859    
                 
    Interest expense:            
    Deposits   97,420     105,922       52,534    
    Borrowed funds   17,778     15,652       17,383    
    Subordinated debt   8,420     8,636       272    
    Total interest expense   123,618     130,210       70,189    
    Net interest income   181,728     181,737       93,670    
    Provision charge for credit losses   638     8,880       (320)    
    Net interest income after provision for credit losses   181,090     172,857       93,990    
                 
    Non-interest income:            
    Fees   9,655     9,687       5,912    
    Wealth management income   7,328     7,655       7,488    
    Insurance agency income   5,651     3,289       4,793    
    Bank-owned life insurance   2,092     2,261       1,817    
    Net gain (loss) on securities transactions   87     (14)       (1)    
    Other income   2,217     1,297       798    
    Total non-interest income   27,030     24,175       20,807    
                 
    Non-interest expense:            
    Compensation and employee benefits   62,366     59,937       40,048    
    Net occupancy expense   13,927     12,562       8,520    
    Data processing expense   9,605     9,881       6,783    
    FDIC Insurance   3,385     3,411       2,272    
    Amortization of intangibles   9,501     9,511       705    
    Advertising and promotion expense   1,060     1,485       966    
    Merger-related expenses   —     20,184       2,202    
    Other operating expenses   16,423     17,352       10,331    
    Total non-interest expense   116,267     134,323       71,827    
    Income before income tax expense   91,853     62,709       42,970    
    Income tax expense   27,825     14,185       10,888    
    Net income $ 64,028   $ 48,524     $ 32,082    
                 
    Basic earnings per share $ 0.49   $ 0.37     $ 0.43    
    Average basic shares outstanding   130,325,393     130,067,244       75,260,029    
                 
    Diluted earnings per share $ 0.49   $ 0.37     $ 0.43    
    Average diluted shares outstanding   130,380,475     130,163,872       75,275,660    
    PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
    Net Interest Margin Analysis
    Quarterly Average Balances
    (Dollars in Thousands) (Unaudited)
      March 31, 2025   December 31, 2024   March 31, 2024
      Average Balance   Interest   Average
    Yield/Cost    		   Average Balance   Interest   Average
    Yield/Cost    		   Average Balance   Interest   Average
    Yield/Cost
    Interest-Earning Assets:                                  
    Deposits $ 80,074   $ 675   4.21%     $ 117,998   $ 1,596   5.38%     $ 87,869   $ 1,182   5.41%  
    Available for sale debt securities   2,827,699     27,621   3.89%       2,720,066     25,064   3.69%       1,673,950     10,022   2.39%  
    Held to maturity debt securities, net (1)   320,036     1,996   2.50%       328,147     2,125   2.59%       357,246     2,268   2.54%  
    Equity securities, at fair value   19,840     —   — %     19,920     —   — %     1,099     —   — %
    Federal Home Loan Bank stock   107,527     2,023   7.53%       86,885     2,134   9.82%       73,754     2,308   12.52%  
    Net loans: (2)                                  
    Total mortgage loans   13,297,168     187,054   5.70%       13,287,942     194,236   5.75%       7,990,218     107,456   5.33%  
    Total commercial loans   4,684,572     75,819   6.56%       4,587,048     75,978   6.54%       2,381,965     36,100   6.03%  
    Total consumer loans   609,137     10,158   6.76%       612,453     10,815   7.02%       296,809     4,523   6.13%  
    Total net loans   18,590,877     273,031   5.95%       18,487,443     281,029   5.99%       10,668,992     148,079   5.51%  
    Total interest-earning assets $ 21,946,053   $ 305,346   5.63%     $ 21,760,458   $ 311,947   5.66%     $ 12,862,910   $ 163,859   5.06%  
                                       
    Non-Interest Earning Assets:                                  
    Cash and due from banks   134,205             159,151             116,563        
    Other assets   1,969,060             1,988,905             1,114,294        
    Total assets $ 24,049,318           $ 23,908,514           $ 14,093,767        
                                       
    Interest-Bearing Liabilities:                                  
    Demand deposits $ 10,095,570   $ 65,433   2.63%     $ 10,115,827   $ 71,265   2.80%     $ 5,894,062   $ 41,566   2.84%  
    Savings deposits   1,682,596     924   0.22%       1,677,725     968   0.23%       1,163,181     637   0.22%  
    Time deposits   3,199,620     31,063   3.94%       3,187,172     33,689   4.21%       1,065,170     10,331   3.90%  
    Total Deposits   14,977,786     97,420   2.64%       14,980,724     105,922   2.81%       8,122,413     52,534   2.60%  
                                       
    Borrowed funds   1,918,069     17,778   3.76%       1,711,806     15,652   3.64%       1,940,981     17,383   3.60%  
    Subordinated debentures   402,037     8,420   8.49%       400,852     8,636   8.57%       10,712     272   10.23%  
    Total interest-bearing liabilities   17,297,892     123,618   2.90%       17,093,382     130,210   3.03%       10,074,106     70,189   2.80%  
                                       
    Non-Interest Bearing Liabilities:                                  
    Non-interest bearing deposits   3,719,177             3,788,056             2,072,001        
    Other non-interest bearing liabilities   393,888             403,057             249,490        
    Total non-interest bearing liabilities   4,113,065             4,191,113             2,321,491        
    Total liabilities   21,410,957             21,284,495             12,395,597        
    Stockholders’ equity   2,638,361             2,624,019             1,698,170        
    Total liabilities and stockholders’ equity $ 24,049,318           $ 23,908,514           $ 14,093,767        
                                       
    Net interest income     $ 181,728           $ 181,737           $ 93,670    
                                       
    Net interest rate spread         2.73%             2.63%             2.26%  
    Net interest-earning assets $ 4,648,161           $ 4,667,076           $ 2,788,804        
                                       
    Net interest margin (3)         3.34%             3.28%             2.87%  
                                       
    Ratio of interest-earning assets to total interest-bearing liabilities 1.27x           1.27x           1.28x        
       
    (1 ) Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.
    (2 ) Average outstanding balances are net of the allowance for loan losses, deferred loan fees and expenses, loan premiums and discounts and include loans held for sale and non-accrual loans.
    (3 ) Annualized net interest income divided by average interest-earning assets.
    The following table summarizes the quarterly net interest margin for the previous five quarters.      
      3/31/25   12/31/24   9/30/24   6/30/24   3/31/24
      1st Qtr.   4th Qtr.   3rd Qtr.   2nd Qtr.   1st Qtr.
    Interest-Earning Assets:                  
    Securities 3.86%     3.78%     3.69%     3.40%     2.87%  
    Net loans 5.95%     5.99%     6.21%     6.05%     5.51%  
    Total interest-earning assets 5.63%     5.66%     5.84%     5.67%     5.06%  
                       
    Interest-Bearing Liabilities:                  
    Total deposits 2.64%     2.81%     2.96%     2.84%     2.60%  
    Total borrowings 3.76%     3.64%     3.73%     3.83%     3.60%  
    Total interest-bearing liabilities 2.90%     3.03%     3.19%     3.09%     2.80%  
                       
    Interest rate spread 2.73%     2.63%     2.65%     2.58%     2.26%  
    Net interest margin 3.34%     3.28%     3.31%     3.21%     2.87%  
                       
    Ratio of interest-earning assets to interest-bearing liabilities 1.27x     1.27x     1.26x     1.25x     1.28x  
    PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY
    Net Interest Margin Analysis
    Average Year to Date Balances
    (Dollars in Thousands) (Unaudited)
                           
      March 31, 2025   March 31, 2024
      Average       Average   Average       Average
      Balance   Interest   Yield/Cost   Balance   Interest   Yield/Cost
    Interest-Earning Assets:                      
    Deposits $ 80,074   $ 675   4.21%     $ 87,869   $ 1,182   5.41%  
    Available for sale debt securities   2,827,699     27,621   3.89%       1,673,950     10,022   2.39%  
    Held to maturity debt securities, net (1)   320,036     1,996   2.50%       357,246     2,268   2.54%  
    Equity securities, at fair value   19,840     —   —%       1,099     —   —%  
    Federal Home Loan Bank stock   107,527     2,023   7.53%       73,754     2,308   12.52%  
    Net loans: (2)                      
    Total mortgage loans   13,297,168     187,054   5.70%       7,990,218     107,456   5.33%  
    Total commercial loans   4,684,572     75,819   6.56%       2,381,965     36,100   6.03%  
    Total consumer loans   609,137     10,158   6.76%       296,809     4,523   6.13%  
    Total net loans   18,590,877     273,031   5.95%       10,668,992     148,079   5.51%  
    Total interest-earning assets $ 21,946,053   $ 305,346   5.63%     $ 12,862,910   $ 163,859   5.06%  
                           
    Non-Interest Earning Assets:                      
    Cash and due from banks   134,205             116,563        
    Other assets   1,969,060             1,114,294        
    Total assets $ 24,049,318           $ 14,093,767        
                           
    Interest-Bearing Liabilities:                      
    Demand deposits $ 10,095,570   $ 65,433   2.63%     $ 5,894,062   $ 41,566   2.84%  
    Savings deposits   1,682,596     924   0.22%       1,163,181     637   0.22%  
    Time deposits   3,199,620     31,063   3.94%       1,065,170     10,331   3.90%  
    Total deposits   14,977,786     97,420   2.64%       8,122,413     52,534   2.60%  
    Borrowed funds   1,918,069     17,778   3.76%       1,940,981     17,383   3.60%  
    Subordinated debentures   402,037     8,420   8.49%       10,712     272   10.23%  
    Total interest-bearing liabilities $ 17,297,892   $ 123,618   2.90%     $ 10,074,106   $ 70,189   2.80%  
                           
    Non-Interest Bearing Liabilities:                      
    Non-interest bearing deposits   3,719,177             2,072,001        
    Other non-interest bearing liabilities   393,888             249,490        
    Total non-interest bearing liabilities   4,113,065             2,321,491        
    Total liabilities   21,410,957             12,395,597        
    Stockholders’ equity   2,638,361             1,698,170        
    Total liabilities and stockholders’ equity $ 24,049,318           $ 14,093,767        
                           
    Net interest income     $ 181,728           $ 93,670    
                           
    Net interest rate spread         2.73%             2.26%  
    Net interest-earning assets $ 4,648,161           $ 2,788,804        
                           
    Net interest margin (3)         3.34%             2.87%  
                           
    Ratio of interest-earning assets to total interest-bearing liabilities 1.27x           1.28x        
                           
                           
    (1) Average outstanding balance amounts shown are amortized cost, net of allowance for credit losses.
    (2) Average outstanding balance are net of the allowance for loan losses, deferred loan fees and expenses, loan premium and discounts and include loans held for sale and non-accrual loans.
    (3) Annualized net interest income divided by average interest-earning assets.
    The following table summarizes the year-to-date net interest margin for the previous three years.
                 
      Three Months Ended  
      March 31, 2025   March 31, 2024   March 31, 2023  
    Interest-Earning Assets:            
    Securities 3.86%     2.87%     2.52%    
    Net loans 5.95%     5.51%     5.12%    
    Total interest-earning assets 5.63%     5.06%     4.63%    
                 
    Interest-Bearing Liabilities:            
    Total deposits 2.64%     2.60%     1.39%    
    Total borrowings 3.76%     3.60%     2.48%    
    Total interest-bearing liabilities 2.90%     2.80%     1.54%    
                 
    Interest rate spread 2.73%     2.26%     3.09%    
    Net interest margin 3.34%     2.87%     3.48%    
                 
    Ratio of interest-earning assets to interest-bearing liabilities 1.27x     1.28x     1.34x    

    CONTACT: Investor Relations, 1-732-590-9300

    The MIL Network –

  • MIL-OSI USA: Commissioner Kristin N. Johnson: Africa Fintech Summit 2025 Keynote Remarks

    Source: US Commodity Futures Trading Commission

    It is a privilege to join you today to kick-off the Africa Fintech Summit of 2025. Twice a year this convening serves as one of the largest gatherings of Africa’s Fintech Community—connecting entrepreneurs, investors, and regulators during the International Monetary Fund/World Bank spring meeting week in Washington, DC. and in the fall in Africa. My tremendous thanks to the organizers and hosts. 
    As you arrived this morning, I am sure you were able to appreciate the perfect spring weather and blooming cherry blossoms that we ordered for you this week. There are few places in DC that are lovelier this time of year than where we sit, here in Georgetown. 
    In my career, I have learned about entrepreneurship from mentors and clients at the world’s largest investment banks, small start-ups, and family-founded businesses. My family’s history as entrepreneurs and informal investors in community small businesses dates to the mid-1800s here in the United States. Perhaps one day, I will have the opportunity to continue this tradition and help fund the businesses of innovative founders. 
    Today, I am a Commissioner at the U.S. Commodity Futures Trading Commission, nominated by former President Biden and unanimously confirmed by the United States Senate.[1] At the CFTC, we oversee U.S. markets and market participants for derivatives contracts that reference commodities. According to a Bank for International Settlements report, the notional value of the global derivatives market is over $730 trillion.[2] In recent years, courts and Congress have indicated intentions to expand the CFTC’s mandate to include oversight of emerging technologies, including distributed digital ledger technologies commonly referred to as blockchain technologies, digital assets, including cryptocurrencies, and certain platforms within the assemblage of technologies referred to as artificial intelligence. 
    African Fintech Firms Inspire a World of Innovation
    African fintech firms demonstrate curiosity, creativity, and driven commitment to deliver first-rate fintech products and services to consumers and businesses on the continent and around the world.   
    During my time as a CFTC Commissioner, I have traveled to South Africa, Kenya, Zambia, and Ghana to meet with fintech entrepreneurs. I have witnessed first-hand the exceptional creativity and curiosity that drives African fintech entrepreneurs. As you well know from CNBC’s announcement last year, six African fintech firms are among the world’s top fintech companies PalmPay, Flutterwave, Kuda, MTN, Piggvest, and Yoco.[3] African fintech firms have emerged from every corner of the continent. 
    In various stages of development—from incubators to early stages (pre-seed) capital raising to joint ventures with Google, Microsoft, and AWS—African fintech firms enhance financial accessibility, inclusivity, and consumer empowerment. These businesses integrate the most advanced technologies available, reflect global thought leadership in the potential for emerging technologies to reshape access and opportunities for both consumer and commercial finance, and create pathways for inclusion that have inspired creative consumer finance solutions around the globe.
    As you know well, the recipe for entrepreneurial success begins with a great idea. Yet, building opportunities in fast-moving, high-tech markets requires a number of critical inputs as well as conditions to facilitate growth and development. Entrepreneurs or innovators, funders or sources of capital, and, yes, regulators all have an important role to play in promoting responsible innovation and growth. It has been my pleasure to collaborate with regulators around the continent as they consider ways to spur innovation and growth. Last year, during my keynote remarks at the South African Reserve Bank Fintech Summit in Johannesburg[4] and at the beginning of this year in Ghana, I emphasized the opportunities for African fintech firms to innovate using AI in consumer finance. 
    The Rise of AI in Fintech
    As I noted in my opening remarks at The South African Reserve Bank Fintech Summit last year,
    While our markets have long relied upon AI for a variety of risk management and predictive pricing functions, we are witnessing rapid developments beyond reinforcement learning and neural networks in generative AI.
    Increasingly, diverse industries and sectors of our economy identify opportunities to integrate aspects of the assemblage of technologies that we commonly describe as AI or AI technologies. AI enables doctors to diagnose and map diseases earlier, faster, and with greater accuracy than ever before in the history of medicine. Farmers who cultivate crops that feed [] nation[s] may integrate AI to better manage access to vital resources such as freshwater, enabling more efficient irrigation, fertilization, and crop rotation leading to more sustainable farming.
    In our markets, AI offers similar efficiencies for faster trade execution and settlement, more accurate pricing prediction, and more precise risk management oversight. Markets have witnessed increasing adoption of AI including AI-driven investment advising, trade execution, risk management, and market surveillance.[5]
    Financial services firms are fully embracing the powers of AI, making increasingly large investments in infrastructure to support AI and expanding the roster of use cases. One economist estimates that investments in AI may reach $97 billion by 2027.[6] 
    Notable Challenges for Inclusion 
    As AI adoption expands across markets, however, there are a number of notable challenges. For many, the costs of relying on large language models or agentic AI will place these technologies beyond the resources of their businesses. 
    Accessibility and Inclusivity Challenges for Global Competitors 
    The high cost of developing advanced AI technologies and the infrastructure to support their use poses significant accessibility and inclusivity barriers, particularly disadvantaging smaller competitors and institutions in emerging markets. These barriers limit the widespread adoption of AI-driven financial solutions, which can disproportionately affect underserved and economically disadvantaged populations who could most benefit from improved financial services. This can make it exceptionally hard for emerging companies to incorporate AI into their services if the infrastructure does not already exist. To that end, we are seeing private companies form partnerships to make necessary investments to scale up AI capabilities in Africa, like Cassava Technologies, a global technology leader, and their partnership with Nvidia to develop Africa’s first AI factory in South Africa.[7] 
    At the Commission, we have also explored regulatory frameworks addressing AI’s role in financial markets through an ongoing conversation with market participants.[8] The Commission has acknowledged the potential for AI-driven systems to impact consumer protection indirectly through enhanced market integrity and risk management protocols, but it has also acknowledged the dangers that consumers can face.[9] 
    I have repeatedly emphasized the need to establish robust principles-based regulatory frameworks at the Commission to combat consumer-facing issues like AI-enabled market manipulation and fraud, through my repeated emphasis on the need to promote the explainability of AI models, the implementation of data controls and measures to address bias, clear governance frameworks for accountability and testing, and the establishment of an interagency task force and an AI Fraud Task Force to tackle fraud full force.[10] In particular, firms implementing this technology in consumer-facing ways must adhere to existing laws on fairness, transparency, and privacy.
    The Financial Stability Board (FSB) has highlighted the importance of international collaboration in setting standards for responsible AI use, advocating for coordinated frameworks that ensure consumer protection, fairness, and transparency in AI-powered financial services globally.[11] International collaboration amongst regulators can aid in streamlining the growing body of international standards which can be difficult to navigate and present a significant barrier to emerging companies. Meanwhile, countries like Singapore have also made significant strides in regulating and supporting consumer-facing AI applications through initiatives like the Monetary Authority of Singapore’s regulatory sandbox framework, allowing fintech startups to test AI-driven solutions in controlled environments, balancing innovation with consumer protection.[12]
    Africa’s Embrace of AI to Promote Accessibility, Consumer Interaction, and Further Innovation
    Through strategic partnerships between AI startups, larger corporations, and governmental agencies, increased access to advanced AI technologies and traditional financial services have been more readily obtainable. Sitoyo Lopokoiyit, CEO and founder of M-Pesa, and others demonstrate how strategic partnerships, cost-effective approaches, and mobile-first innovations can significantly reduce barriers, enabling broader AI adoption and the growth of consumer inclusive financial services. M-Pesa, a mobile money services platform, which hosts millions of customers and facilitates billions in transactions per year, may be used to deposit money into an account, “store it on … cell phones, send balances using PINs secured by SMS text messages, and enable buyers and sellers of goods to redeem and access purchases as well as deposits for regular money…. M-Pesa represents the potential to develop platforms that give customers access to banking services, reduce transaction costs, and otherwise overcome the endemic frictions that have challenged access to financial services for millions.”[13] 
    M-Pesa’s business model is particularly interesting because of how effectively it has created access for individuals who have historically lacked access to basic financial services. I previously traveled to Kenya to meet with the CEO and President of M-Pesa, as well as central bankers, the governor of the Central Bank of Kenya, and deputy governors and market regulators, to discuss the uptick in retail market participation and the considerations for consumer protection that come with the increased accessibility to financial markets. 
    Conclusion
    Continued partnerships between African fintech innovators, African regulators, and U.S. regulators and institutions can help foster shared growth and technological advancement for both parties. Such collaborations offer significant opportunities, combining African innovation in financial inclusion and mobile technologies with U.S. strengths in regulatory frameworks, research, and infrastructure. These synergistic relationships can enhance global fintech capabilities, drive inclusive economic growth, and promote greater financial stability and consumer protection worldwide.
    Conferences like the one we are participating in today are of vital importance to the notion of collaboration. The issues discussed, the connections made, and the lessons shared here today can help propel markets forward in a way that not only protects the consumer but also empowers the consumer.
    Thank you again for allowing me to join you today. I look forward to hearing from each of the panels and speakers and continuing to develop great relationships with the leading voices in fintech in Africa.

    [1] The thoughts and perspectives that I share with you today are my own; they are not the views and perspectives of my fellow Commissioners, the Commission, or the staff of the CFTC.

    MIL OSI USA News –

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

    Source: GlobeNewswire (MIL-OSI)

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

    First Quarter 2025 Summary1

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

    CEO Commentary

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

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

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

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

    REVENUE REVIEW

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

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

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

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

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

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

    Noninterest Income             Change   Change
                1Q25 vs   1Q25 vs
    (In thousands) 1Q25   4Q24   1Q24   4Q24   1Q24
    Investment services and trust activities $ 3,544     $ 3,779   $ 3,503     (6)%   1 %
    Service charges and fees   2,131       2,159     2,144     (1)%   (1)%
    Card revenue   1,744       1,833     1,943     (5)%   (10)%
    Loan revenue   1,194       1,841     856     (35)%   39 %
    Bank-owned life insurance   1,057       719     660     47 %   60 %
    Investment securities gains, net   33       161     36     (80)%   (8)%
    Other   433       345     608     26 %   (29)%
    Total noninterest income $ 10,136     $ 10,837   $ 9,750     (6)%   4 %
                       
    MSR adjustment (included above in Loan revenue) $ (213 )   $ 164   $ (368 )   (230)%   (42)%
                                 

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

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

    EXPENSE REVIEW

    Noninterest Expense             Change   Change
                1Q25 vs   1Q25 vs
    (In thousands) 1Q25   4Q24   1Q24   4Q24   1Q24
    Compensation and employee benefits $ 21,212   $ 20,684   $ 20,930   3 %   1 %
    Occupancy expense of premises, net   2,588     2,772     2,813   (7)%   (8)%
    Equipment   2,426     2,688     2,600   (10)%   (7)%
    Legal and professional   2,226     2,534     2,059   (12)%   8 %
    Data processing   1,698     1,719     1,360   (1)%   25 %
    Marketing   552     793     598   (30)%   (8)%
    Amortization of intangibles   1,408     1,449     1,637   (3)%   (14)%
    FDIC insurance   917     980     942   (6)%   (3)%
    Communications   159     154     196   3 %   (19)%
    Foreclosed assets, net   74     56     358   32 %   (79)%
    Other   3,033     3,543     2,072   (14)%   46 %
         Total noninterest expense $ 36,293   $ 37,372   $ 35,565   (3)%   2 %
                               
    Merger-related Expenses          
             
    (In thousands) 1Q25   4Q24   1Q24
    Compensation and employee benefits $                 —   $                 —   $               241
    Occupancy expense of premises, net                     —                       —                     152
    Equipment                     —                       21                     149
    Legal and professional                     40                       —                     573
    Data processing                     —                       10                       61
    Marketing                     —                       —                       32
    Communications                     —                       —                         1
    Other                     —                       —                     105
    Total merger-related expenses $                 40   $                 31   $            1,314
                     

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

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

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

    BALANCE SHEET REVIEW

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

    Loans Held for Investment March 31, 2025   December 31, 2024   March 31, 2024  
    (Dollars in thousands) Balance   % of Total   Balance   % of Total   Balance   % of Total  
    Commercial and industrial $1,140,138   26.5 % $1,126,813   26.1 % $1,105,718   25.0 %
    Agricultural 131,409   3.1   119,051   2.8   113,029   2.6  
    Commercial real estate                        
    Construction and development 293,280   6.8   324,896   7.5   403,571   9.1  
    Farmland 180,633   4.2   182,460   4.2   184,109   4.2  
    Multifamily 421,204   9.8   423,157   9.8   409,504   9.3  
    Other 1,425,062   33.0   1,414,168   32.7   1,440,645   32.7  
    Total commercial real estate 2,320,179   53.8   2,344,681   54.2   2,437,829   55.3  
    Residential real estate                        
    One-to-four family first liens 471,688   11.0   477,150   11.1   495,408   11.2  
    One-to-four family junior liens 182,346   4.2   179,232   4.2   182,001   4.1  
    Total residential real estate 654,034   15.2   656,382   15.3   677,409   15.3  
    Consumer 58,424   1.4   68,700   1.6   80,661   1.8  
    Loans held for investment, net of unearned income $4,304,184   100.0 % $4,315,627   100.0 % $4,414,646   100.0 %
                             
    Total commitments to extend credit $1,080,300       $1,080,737       $1,230,612      

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

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

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

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

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

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

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

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

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

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

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

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

    CREDIT QUALITY REVIEW

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

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

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

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


    CONFERENCE CALL DETAILS

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

    ABOUT MIDWESTONE FINANCIAL GROUP, INC.

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

    Cautionary Note Regarding Forward-Looking Statements

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

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

    MIDWESTONE FINANCIAL GROUP, INC.
    FIVE QUARTER CONSOLIDATED BALANCE SHEETS

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

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

      Three Months Ended
      March 31,   December 31,   September 30,   June 30,   March 31,
    (In thousands, except per share data)   2025     2024     2024       2024     2024
    Interest income                  
    Loans, including fees $            59,462   $            62,458   $            62,521     $            61,643   $            57,947
    Taxable investment securities                13,327                  11,320                   8,779                     9,228                   9,460
    Tax-exempt investment securities                    703                      728                   1,611                     1,663                   1,710
    Other                 1,247                   3,761                      785                        242                      418
    Total interest income                74,739                  78,267                  73,696                    72,776                  69,535
    Interest expense                  
    Deposits                25,484                  27,324                  29,117                    28,942                  27,726
    Short-term borrowings                      25                      115                   5,043                     5,409                   4,975
    Long-term debt                 1,791                   1,890                   2,015                     2,078                   2,103
    Total interest expense                27,300                  29,329                  36,175                    36,429                  34,804
    Net interest income                47,439                  48,938                  37,521                    36,347                  34,731
    Credit loss expense                 1,687                   1,291                   1,535                     1,267                   4,689
    Net interest income after credit loss expense                45,752                  47,647                  35,986                    35,080                  30,042
    Noninterest income                  
    Investment services and trust activities                 3,544                   3,779                   3,410                     3,504                   3,503
    Service charges and fees                 2,131                   2,159                   2,170                     2,156                   2,144
    Card revenue                 1,744                   1,833                   1,935                     1,907                   1,943
    Loan revenue                 1,194                   1,841                      760                     1,525                      856
    Bank-owned life insurance                 1,057                      719                      879                        668                      660
    Investment securities gains (losses), net                      33                      161              (140,182 )                        33                        36
    Other                    433                      345                      640                    11,761                      608
    Total noninterest income (loss)                10,136                  10,837              (130,388 )                  21,554                   9,750
    Noninterest expense                  
    Compensation and employee benefits                21,212                  20,684                  19,943                    20,985                  20,930
    Occupancy expense of premises, net                 2,588                   2,772                   2,443                     2,435                   2,813
    Equipment                 2,426                   2,688                   2,486                     2,530                   2,600
    Legal and professional                 2,226                   2,534                   2,261                     2,253                   2,059
    Data processing                 1,698                   1,719                   1,580                     1,645                   1,360
    Marketing                    552                      793                      619                        636                      598
    Amortization of intangibles                 1,408                   1,449                   1,470                     1,593                   1,637
    FDIC insurance                    917                      980                      923                     1,051                      942
    Communications                    159                      154                      159                        191                      196
    Foreclosed assets, net                      74                        56                      330                        138                      358
    Other                 3,033                   3,543                   3,584                     2,304                   2,072
    Total noninterest expense                36,293                  37,372                  35,798                    35,761                  35,565
    Income (loss) before income tax expense                19,595                  21,112              (130,200 )                  20,873                   4,227
    Income tax expense (benefit)                 4,457                   4,782                (34,493 )                   5,054                      958
    Net income (loss) $            15,138   $            16,330   $          (95,707 )   $            15,819   $             3,269
                       
    Earnings (loss) per common share                  
    Basic $               0.73   $               0.79   $              (6.05 )   $               1.00   $               0.21
    Diluted $               0.73   $               0.78   $              (6.05 )   $               1.00   $               0.21
    Weighted average basic common shares outstanding                20,797                  20,776                  15,829                    15,763                  15,723
    Weighted average diluted common shares outstanding                20,849                  20,851                  15,829                    15,781                  15,774
    Dividends paid per common share $            0.2425   $            0.2425   $            0.2425     $            0.2425   $            0.2425
                                   

    MIDWESTONE FINANCIAL GROUP, INC.
    FINANCIAL STATISTICS

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

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

      Three Months Ended
      March 31, 2025   December 31, 2024   March 31, 2024
    (Dollars in thousands) Average
    Balance    		   Interest
    Income/
    Expense    		   Average
    Yield/
    Cost    		   Average
    Balance    		   Interest
    Income/
    Expense    		   Average
    Yield/
    Cost    		   Average Balance   Interest
    Income/
    Expense    		   Average
    Yield/
    Cost
    ASSETS                                  
    Loans, including fees (1)(2)(3) $4,290,710   $60,443   5.71%   $4,307,583   $63,443   5.86%   $4,298,216   $58,867   5.51%
    Taxable investment securities 1,207,844   13,327   4.47%   1,080,716   11,320   4.17%   1,557,603   9,460   2.44%
    Tax-exempt investment securities (2)(4) 105,563   865   3.32%   109,183   896   3.26%   328,736   2,097   2.57%
    Total securities held for investment(2) 1,313,407   14,192   4.38%   1,189,899   12,216   4.08%   1,886,339   11,557   2.46%
    Other 124,133   1,247   4.07%   309,904   3,761   4.83%   30,605   418   5.49%
    Total interest earning assets(2) $5,728,250   $75,882   5.37%   $5,807,386   $79,420   5.44%   $6,215,160   $70,842   4.58%
    Other assets 440,296           472,589           420,219        
    Total assets $6,168,546           $6,279,975           $6,635,379        
    LIABILITIES AND SHAREHOLDERS’ EQUITY                                  
    Interest checking deposits $1,240,586   $2,127   0.70%   $1,252,481   $2,205   0.70%   $1,301,470   $2,890   0.89%
    Money market deposits 1,002,743   6,333   2.56%   1,046,571   7,197   2.74%   1,102,543   8,065   2.94%
    Savings deposits 835,731   3,057   1.48%   799,931   3,158   1.57%   694,143   2,047   1.19%
    Time deposits 1,397,595   13,967   4.05%   1,410,542   14,764   4.16%   1,446,981   14,724   4.09%
    Total interest bearing deposits 4,476,655   25,484   2.31%   4,509,525   27,324   2.41%   4,545,137   27,726   2.45%
    Securities sold under agreements to repurchase 2,705   5   0.75%   3,640   8   0.87%   5,330   11   0.83%
    Other short-term borrowings —   20   —%   6,465   107   6.58%   409,525   4,964   4.88%
    Total short-term borrowings 2,705   25   3.75%   10,105   115   4.53%   414,855   4,975   4.82%
    Long-term debt 113,364   1,791   6.41%   116,018   1,890   6.48%   123,266   2,103   6.86%
    Total borrowed funds 116,069   1,816   6.35%   126,123   2,005   6.32%   538,121   7,078   5.29%
    Total interest bearing liabilities $4,592,724   $27,300   2.41%   $4,635,648   $29,329   2.52%   $5,083,258   $34,804   2.75%
    Noninterest bearing deposits 922,164           955,375           935,977        
    Other liabilities 82,280           125,536           88,611        
    Shareholders’ equity 571,378           563,416           527,533        
    Total liabilities and shareholders’ equity $6,168,546           $6,279,975           $6,635,379        
    Net interest income(2)     $48,582           $50,091           $36,038    
    Net interest spread(2)         2.96%           2.92%           1.83%
    Net interest margin(2)         3.44%           3.43%           2.33%
                                       
    Total deposits(5) $5,398,819   $25,484   1.91%   $5,464,900   $27,324   1.99%   $5,481,114   $27,726   2.03%
    Cost of funds(6)         2.01%           2.09%           2.33%
    (1) Average balance includes nonaccrual loans.
    (2) Tax equivalent. The federal statutory tax rate utilized was 21%.
    (3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $256 thousand, $456 thousand, and $237 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Loan purchase discount accretion was $1.2 million, $2.5 million, and $1.2 million for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Tax equivalent adjustments were $981 thousand, $985 thousand, and $920 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The federal statutory tax rate utilized was 21%.
    (4) Interest income includes tax equivalent adjustments of $162 thousand, $168 thousand, and $387 thousand for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The federal statutory tax rate utilized was 21%.
    (5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
    (6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.
       

    Non-GAAP Measures

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

    Tangible Common Equity/Tangible Book Value                    
    per Share/Tangible Common Equity Ratio   March 31,   December 31,   September 30,   June 30,   March 31,
    (Dollars in thousands, except per share data)     2025       2024       2024       2024       2024  
    Total shareholders’ equity   $ 579,625     $ 559,696     $ 562,238     $ 543,286     $ 528,040  
    Intangible assets, net     (93,399 )     (94,807 )     (96,257 )     (97,327 )     (100,649 )
    Tangible common equity   $ 486,226     $ 464,889     $ 465,981     $ 445,959     $ 427,391  
                         
    Total assets   $ 6,254,394     $ 6,236,329     $ 6,552,482     $ 6,581,658     $ 6,748,015  
    Intangible assets, net     (93,399 )     (94,807 )     (96,257 )     (97,327 )     (100,649 )
    Tangible assets   $ 6,160,995     $ 6,141,522     $ 6,456,225     $ 6,484,331     $ 6,647,366  
                         
    Book value per share   $ 27.85     $ 26.94     $ 27.06     $ 34.44     $ 33.53  
    Tangible book value per share(1)   $ 23.36     $ 22.37     $ 22.43     $ 28.27     $ 27.14  
    Shares outstanding     20,815,715       20,777,485       20,774,919       15,773,468       15,750,471  
                         
    Common equity ratio     9.27 %     8.97 %     8.58 %     8.25 %     7.83 %
    Tangible common equity ratio(2)     7.89 %     7.57 %     7.22 %     6.88 %     6.43 %
                                             

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

        Three Months Ended
    Return on Average Tangible Equity   March 31,   December 31,   March 31,
    (Dollars in thousands)     2025       2024       2024  
    Net income   $ 15,138     $ 16,330     $ 3,269  
    Intangible amortization, net of tax(1)     1,047       1,075       1,228  
    Tangible net income   $ 16,185     $ 17,405     $ 4,497  
                 
    Average shareholders’ equity   $ 571,378     $ 563,416     $ 527,533  
    Average intangible assets, net     (94,169 )     (95,498 )     (95,296 )
    Average tangible equity   $ 477,209     $ 467,918     $ 432,237  
                 
    Return on average equity     10.74 %     11.53 %     2.49 %
    Return on average tangible equity(2)     13.75 %     14.80 %     4.18 %
                             

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

    Net Interest Margin, Tax Equivalent/
    Core Net Interest Margin    		   Three Months Ended
      March 31,   December 31,   March 31,
    (Dollars in thousands)     2025       2024       2024  
    Net interest income   $ 47,439     $ 48,938     $ 34,731  
    Tax equivalent adjustments:            
    Loans(1)     981       985       920  
    Securities(1)     162       168       387  
    Net interest income, tax equivalent   $ 48,582     $ 50,091     $ 36,038  
    Loan purchase discount accretion     (1,166 )     (2,496 )     (1,152 )
    Core net interest income   $ 47,416     $ 47,595     $ 34,886  
                 
    Net interest margin     3.36 %     3.35 %     2.25 %
    Net interest margin, tax equivalent(2)     3.44 %     3.43 %     2.33 %
    Core net interest margin(3)     3.36 %     3.26 %     2.26 %
    Average interest earning assets   $ 5,728,250     $ 5,807,386     $ 6,215,160  
                             

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

          Three Months Ended
    Loan Yield, Tax Equivalent / Core Yield on Loans   March 31,   December 31,   March 31,
    (Dollars in thousands)     2025       2024       2024  
    Loan interest income, including fees     $ 59,462     $ 62,458     $ 57,947  
    Tax equivalent adjustment(1)       981       985       920  
    Tax equivalent loan interest income     $ 60,443     $ 63,443     $ 58,867  
    Loan purchase discount accretion       (1,166 )     (2,496 )     (1,152 )
    Core loan interest income     $ 59,277     $ 60,947     $ 57,715  
                   
    Yield on loans       5.62 %     5.77 %     5.42 %
    Yield on loans, tax equivalent(2)       5.71 %     5.86 %     5.51 %
    Core yield on loans(3)       5.60 %     5.63 %     5.40 %
    Average loans     $ 4,290,710     $ 4,307,583     $ 4,298,216  
                               

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

          Three Months Ended
    Efficiency Ratio   March 31,   December 31,   March 31,
    (Dollars in thousands)     2025       2024       2024  
    Total noninterest expense     $ 36,293     $ 37,372     $ 35,565  
    Amortization of intangibles       (1,408 )     (1,449 )     (1,637 )
    Merger-related expenses       (40 )     (31 )     (1,314 )
    Noninterest expense used for efficiency ratio     $ 34,845     $ 35,892     $ 32,614  
                   
    Net interest income, tax equivalent(1)     $ 48,582     $ 50,091     $ 36,038  
    Plus: Noninterest income       10,136       10,837       9,750  
    Less: Investment securities gains, net       33       161       36  
    Net revenues used for efficiency ratio     $ 58,685     $ 60,767     $ 45,752  
                   
    Efficiency ratio (2)       59.38 %     59.06 %     71.28 %
                               

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

          Three Months Ended
    Adjusted Earnings   March 31,   December 31,   March 31,
    (Dollars in thousands, except per share data)     2025       2024     2024  
    Net income     $         15,138     $         16,330   $           3,269  
    Less: Investment securities gains, net of tax(1)                        25                      119                      27  
    Less: Mortgage servicing rights (loss) gain, net of tax(1)                     (158 )                    122                   (276 )
    Plus: Merger-related expenses, net of tax(1)                        30                        23                    986  
    Adjusted earnings     $         15,301     $         16,112   $           4,504  
                   
    Weighted average diluted common shares outstanding                 20,849                 20,851               15,774  
                   
    Earnings per common share – diluted     $             0.73     $             0.78   $             0.21  
    Adjusted earnings per common share(2)     $             0.73     $             0.77   $             0.29  
                             

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

    Category: Earnings

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

    Source: MidWestOne Financial Group, Inc.

    Industry: Banks

    Contact:

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

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Asset Quality

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

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

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

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

    About Middlefield Banc Corp.

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

    Additional information is available at www.middlefieldbank.bank.

    NON-GAAP FINANCIAL MEASURES

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

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

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

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

        March 31,     December 31,     September 30,     June 30,     March 31,  
    Balance Sheets (period end)   2025     2024     2024     2024     2024  
    ASSETS                                        
    Cash and due from banks   $ 56,150     $ 46,037     $ 61,851     $ 50,496     $ 44,816  
    Federal funds sold     10,720       9,755       12,022       1,762       1,438  
    Cash and cash equivalents     66,870       55,792       73,873       52,258       46,254  
    Investment securities available for sale, at fair value     165,014       165,802       169,895       166,424       167,890  
    Other investments     1,021       855       895       881       907  
    Loans held for sale     –       –       249       –       –  
    Loans:                                        
    Commercial real estate:                                        
    Owner occupied     185,412       181,447       187,313       182,809       178,543  
    Non-owner occupied     413,621       412,291       407,159       385,648       398,845  
    Multifamily     88,737       89,849       94,798       86,951       81,691  
    Residential real estate     351,274       353,442       345,748       337,121       331,480  
    Commercial and industrial     235,547       229,034       213,172       234,702       227,433  
    Home equity lines of credit     147,154       143,379       137,761       131,047       129,287  
    Construction and other     122,653       103,608       111,550       132,530       135,716  
    Consumer installment     5,951       6,564       7,030       6,896       7,131  
    Total loans     1,550,349       1,519,614       1,504,531       1,497,704       1,490,126  
    Less allowance for credit losses     22,401       22,447       22,526       21,795       21,069  
    Net loans     1,527,948       1,497,167       1,482,005       1,475,909       1,469,057  
    Premises and equipment, net     22,339       20,565       20,528       20,744       21,035  
    Goodwill     36,356       36,356       36,356       36,356       36,356  
    Core deposit intangibles     5,361       5,611       5,869       6,126       6,384  
    Bank-owned life insurance     34,866       35,259       35,049       34,802       34,575  
    Accrued interest receivable and other assets     28,581       35,952       32,916       34,686       34,210  
    TOTAL ASSETS   $ 1,888,356     $ 1,853,359     $ 1,857,635     $ 1,828,186     $ 1,816,668  
        March 31,     December 31,     September 30,     June 30,     March 31,  
        2025     2024     2024     2024     2024  
    LIABILITIES                                        
    Deposits:                                        
    Noninterest-bearing demand   $ 369,492     $ 377,875     $ 390,933     $ 387,024     $ 390,185  
    Interest-bearing demand     222,953       208,291       218,002       206,542       209,015  
    Money market     481,664       414,074       376,619       355,630       318,823  
    Savings     189,943       197,749       199,984       192,472       196,721  
    Time     275,673       247,704       327,231       327,876       332,165  
    Total deposits     1,539,725       1,445,693       1,512,769       1,469,544       1,446,909  
    Federal Home Loan Bank advances     110,000       172,400       106,000       125,000       137,000  
    Other borrowings     11,609       11,660       11,711       11,762       11,812  
    Accrued interest payable and other liabilities     13,229       13,044       16,450       15,092       15,372  
    TOTAL LIABILITIES     1,674,563       1,642,797       1,646,930       1,621,398       1,611,093  
    STOCKHOLDERS’ EQUITY                                        
    Common stock, no par value; 25,000,000 shares authorized, 9,960,503                                        
    shares issued, 8,081,193 shares outstanding as of March 31, 2025     162,195       161,999       161,916       161,823       161,823  
    Additional paid-in capital     515       246       108       –       –  
    Retained earnings     112,432       109,299       106,067       105,342       102,791  
    Accumulated other comprehensive loss     (20,440 )     (20,073 )     (16,477 )     (19,468 )     (18,130 )
    Treasury stock, at cost; 1,879,310 shares as of March 31, 2025     (40,909 )     (40,909 )     (40,909 )     (40,909 )     (40,909 )
    TOTAL STOCKHOLDERS’ EQUITY     213,793       210,562       210,705       206,788       205,575  
                                             
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 1,888,356     $ 1,853,359     $ 1,857,635     $ 1,828,186     $ 1,816,668  
                                             

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

        For the Three Months Ended  
        March 31,     December 31,     September 30,     June 30,     March 31,  
    Statements of Income   2025     2024     2024     2024     2024  
                                             
    INTEREST AND DIVIDEND INCOME                                        
    Interest and fees on loans   $ 23,387     $ 23,308     $ 23,441     $ 23,422     $ 22,395  
    Interest-earning deposits in other institutions     291       320       348       386       437  
    Federal funds sold     155       151       143       122       152  
    Investment securities:                                        
    Taxable interest     530       528       528       505       467  
    Tax-exempt interest     960       961       962       966       972  
    Dividends on stock     150       170       191       198       189  
    Total interest and dividend income     25,473       25,438       25,613       25,599       24,612  
    INTEREST EXPENSE                                        
    Deposits     7,885       8,582       8,792       8,423       7,466  
    Short-term borrowings     1,347       1,128       1,575       1,920       1,993  
    Other borrowings     143       173       173       173       184  
    Total interest expense     9,375       9,883       10,540       10,516       9,643  
    NET INTEREST INCOME     16,098       15,555       15,073       15,083       14,969  
    Provision for (recovery of) credit losses     95       (177 )     2,234       87       (136 )
    NET INTEREST INCOME AFTER PROVISION                                        
    FOR (RECOVERY OF) CREDIT LOSSES     16,003       15,732       12,839       14,996       15,105  
    NONINTEREST INCOME                                        
    Service charges on deposit accounts     989       1,068       959       971       909  
    Gain (Loss) on equity securities     (34 )     56       14       (27 )     (52 )
    Earnings on bank-owned life insurance     493       230       246       227       227  
    Gain on sale of loans     24       64       56       69       10  
    Revenue from investment services     268       237       206       269       204  
    Gross rental income     –       1       –       –       67  
    Other income     204       258       262       251       431  
    Total noninterest income     1,944       1,914       1,743       1,760       1,796  
                                             
    NONINTEREST EXPENSE                                        
    Salaries and employee benefits     6,557       5,996       6,201       6,111       6,333  
    Occupancy expense     687       596       627       601       552  
    Equipment expense     225       221       203       261       240  
    Data processing costs     1,271       1,174       1,214       1,135       1,217  
    Ohio state franchise tax     399       390       399       397       397  
    Federal deposit insurance expense     267       293       255       256       251  
    Professional fees     598       611       539       557       558  
    Advertising expense     364       371       283       508       419  
    Software amortization expense     90       83       74       21       22  
    Core deposit intangible amortization     249       258       257       258       258  
    Gross other real estate owned expenses     –       –       –       –       99  
    Other expense     1,486       1,810       1,819       1,797       1,619  
    Total noninterest expense     12,193       11,803       11,871       11,902       11,965  
                                             
    Income before income taxes     5,754       5,843       2,711       4,854       4,936  
    Income taxes     924       995       371       690       769  
                                             
    NET INCOME   $ 4,830     $ 4,848     $ 2,340     $ 4,164     $ 4,167  
                                             
    PTPP (1)   $ 5,849     $ 5,666     $ 4,945     $ 4,941     $ 4,800  
    (1)  See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.
     

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

        For the Three Months Ended  
        March 31,     December 31,     September 30,     June 30,     March 31,  
        2025     2024     2024     2024     2024  
    Per common share data                                        
    Net income per common share – basic   $ 0.60     $ 0.60     $ 0.29     $ 0.52     $ 0.52  
    Net income per common share – diluted   $ 0.60     $ 0.60     $ 0.29     $ 0.52     $ 0.51  
    Dividends declared per share   $ 0.21     $ 0.20     $ 0.20     $ 0.20     $ 0.20  
    Book value per share (period end)   $ 26.46     $ 26.08     $ 26.11     $ 25.63     $ 25.48  
    Tangible book value per share (period end) (1) (2)   $ 21.29     $ 20.88     $ 20.87     $ 20.37     $ 20.18  
    Dividends declared   $ 1,697     $ 1,616     $ 1,615     $ 1,613     $ 1,613  
    Dividend yield     3.05 %     2.84 %     2.76 %     3.34 %     3.37 %
    Dividend payout ratio     35.13 %     33.33 %     69.02 %     38.74 %     38.71 %
    Average shares outstanding – basic     8,078,805       8,071,905       8,071,032       8,067,144       8,091,203  
    Average shares outstanding – diluted     8,097,545       8,092,357       8,086,872       8,072,499       8,096,317  
    Period ending shares outstanding     8,081,193       8,073,708       8,071,032       8,067,144       8,067,144  
                                             
    Selected ratios                                        
    Return on average assets (Annualized)     1.04 %     1.04 %     0.50 %     0.91 %     0.92 %
    Return on average equity (Annualized)     9.22 %     9.19 %     4.45 %     8.15 %     8.16 %
    Return on average tangible common equity (1) (3)     11.48 %     11.50 %     5.58 %     10.29 %     10.30 %
    Efficiency (4)     65.22 %     65.05 %     67.93 %     67.97 %     68.68 %
    Equity to assets at period end     11.32 %     11.36 %     11.34 %     11.31 %     11.32 %
    Noninterest expense to average assets     0.65 %     0.63 %     0.66 %     0.64 %     0.66 %
    (1)  See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.
    (2)  Calculated by dividing tangible common equity by shares outstanding.
    (3)  Calculated by dividing annualized net income for each period by average tangible common equity.
    (4)  The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income.
     
        For the Three Months Ended  
        March 31,     December 31,     September 30,     June 30,     March 31,  
    Yields   2025     2024     2024     2024     2024  
    Interest-earning assets:                                        
    Loans receivable (1)     6.17 %     6.12 %     6.19 %     6.27 %     6.11 %
    Investment securities (1) (2)     3.69 %     3.63 %     3.62 %     3.59 %     3.52 %
    Interest-earning deposits with other banks     3.57 %     4.23 %     4.27 %     4.59 %     4.88 %
    Total interest-earning assets     5.81 %     5.78 %     5.84 %     5.92 %     5.77 %
    Deposits:                                        
    Interest-bearing demand deposits     2.13 %     2.07 %     2.16 %     1.93 %     1.86 %
    Money market deposits     3.38 %     3.81 %     3.93 %     3.95 %     3.81 %
    Savings deposits     0.82 %     0.75 %     0.71 %     0.64 %     0.58 %
    Certificates of deposit     3.93 %     4.21 %     4.49 %     4.57 %     4.06 %
    Total interest-bearing deposits     2.82 %     3.05 %     3.17 %     3.15 %     2.88 %
    Non-Deposit Funding:                                        
    Borrowings     4.58 %     4.93 %     5.54 %     5.60 %     5.61 %
    Total interest-bearing liabilities     3.01 %     3.21 %     3.41 %     3.45 %     3.23 %
    Cost of deposits     2.10 %     2.24 %     2.33 %     2.30 %     2.08 %
    Cost of funds     2.30 %     2.41 %     2.58 %     2.61 %     2.42 %
    Net interest margin (3)     3.69 %     3.56 %     3.46 %     3.51 %     3.54 %
    (1)  Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.
    (2)  Yield is calculated on the basis of amortized cost.
    (3)  Net interest margin represents net interest income as a percentage of average interest-earning assets.
     

    MIDDLEFIELD BANC CORP.
    Consolidated Selected Financial Highlights
    (unaudited)

        For the Three Months Ended  
        March 31,     December 31,     September 30,     June 30,     March 31,  
    Asset quality data   2025     2024     2024     2024     2024  
    (Dollar amounts in thousands, unaudited)                                        
    Nonperforming assets (1)   $ 29,550     $ 29,984     $ 30,078     $ 15,961     $ 10,831  
                                             
    Allowance for credit losses   $ 22,401     $ 22,447     $ 22,526     $ 21,795     $ 21,069  
    Allowance for credit losses/total loans     1.44 %     1.48 %     1.50 %     1.46 %     1.41 %
    Net charge-offs (recoveries):                                        
    Quarter-to-date   $ (209 )   $ 151     $ 1,382     $ (29 )   $ (68 )
    Year-to-date     (209 )     1,436       1,285       (97 )     (68 )
    Net charge-offs (recoveries) to average loans, annualized:                                        
    Quarter-to-date     (0.06 %)     0.04 %     0.36 %     (0.01 %)     (0.02 %)
    Year-to-date     (0.06 %)     0.10 %     0.11 %     (0.01 %)     (0.02 %)
                                             
    Nonperforming loans/total loans     1.91 %     1.97 %     2.00 %     1.07 %     0.73 %
    Allowance for credit losses/nonperforming loans     75.81 %     74.86 %     74.89 %     136.55 %     194.52 %
    Nonperforming assets/total assets     1.56 %     1.62 %     1.62 %     0.87 %     0.60 %
    (1) Nonperforming assets consist of nonperforming loans.
     

    MIDDLEFIELD BANC CORP.
    GAAP to Non-GAAP Reconciliations

    Reconciliation of Common Stockholders’ Equity to Tangible Common Equity   For the Three Months Ended  
    (Dollar amounts in thousands, unaudited)   March 31,     December 31,     September 30,     June 30,     March 31,  
        2025     2024     2024     2024     2024  
                                             
    Stockholders’ equity   $ 213,793     $ 210,562     $ 210,705     $ 206,788     $ 205,575  
    Less goodwill and other intangibles     41,717       41,967       42,225       42,482       42,740  
    Tangible common equity   $ 172,076     $ 168,595     $ 168,480     $ 164,306     $ 162,835  
                                             
    Shares outstanding     8,081,193       8,073,708       8,071,032       8,067,144       8,067,144  
    Tangible book value per share   $ 21.29     $ 20.88     $ 20.87     $ 20.37     $ 20.18  
                                             
    Reconciliation of Average Equity to Return on Average Tangible Common Equity   For the Three Months Ended  
                                             
        March 31,     December 31,     September 30,     June 30,     March 31,  
        2025     2024     2024     2024     2024  
                                             
    Average stockholders’ equity   $ 212,465     $ 209,864     $ 209,096     $ 205,379     $ 205,342  
    Less average goodwill and other intangibles     41,839       42,092       42,350       42,607       42,654  
    Average tangible common equity   $ 170,626     $ 167,772     $ 166,746     $ 162,772     $ 162,688  
                                             
    Net income   $ 4,830     $ 4,848     $ 2,340     $ 4,164     $ 4,167  
    Return on average tangible common equity (annualized)     11.48 %     11.50 %     5.58 %     10.29 %     10.30 %
                                             
    Reconciliation of Pre-Tax Pre-Provision Income (PTPP)   For the Three Months Ended  
                                             
        March 31,     December 31,     September 30,     June 30,     March 31,  
        2025     2024     2024     2024     2024  
                                             
    Net income   $ 4,830     $ 4,848     $ 2,340     $ 4,164     $ 4,167  
    Add income taxes     924       995       371       690       769  
    Add provision for (recovery of) credit losses     95       (177 )     2,234       87       (136 )
    PTPP   $ 5,849     $ 5,666     $ 4,945     $ 4,941     $ 4,800  
                                             

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

        For the Three Months Ended  
        March 31,     March 31,  
        2025     2024  
        Average             Average     Average             Average  
        Balance     Interest     Yield/Cost     Balance     Interest     Yield/Cost  
    Interest-earning assets:                                                
    Loans receivable (1)   $ 1,537,337     $ 23,387       6.17 %   $ 1,476,543     $ 22,395       6.11 %
    Investment securities (1) (2)     191,996       1,490       3.69 %     191,851       1,439       3.56 %
    Interest-earning deposits with other banks (3)     67,661       596       3.57 %     64,139       778       4.88 %
    Total interest-earning assets     1,796,994       25,473       5.81 %     1,732,533       24,612       5.78 %
    Noninterest-earning assets     84,542                       90,151                  
    Total assets   $ 1,881,536                     $ 1,822,684                  
    Interest-bearing liabilities:                                                
    Interest-bearing demand deposits   $ 220,192     $ 1,154       2.13 %   $ 211,009     $ 978       1.86 %
    Money market deposits     458,446       3,816       3.38 %     298,479       2,827       3.81 %
    Savings deposits     192,931       388       0.82 %     201,080       290       0.58 %
    Certificates of deposit     261,006       2,527       3.93 %     333,871       3,371       4.06 %
    Short-term borrowings     120,238       1,347       4.54 %     144,357       1,993       5.55 %
    Other borrowings     11,639       143       4.98 %     11,840       184       6.25 %
    Total interest-bearing liabilities     1,264,452       9,375       3.01 %     1,200,636       9,643       3.23 %
    Noninterest-bearing liabilities:                                                
    Noninterest-bearing demand deposits     390,354                       400,209                  
    Other liabilities     14,265                       16,497                  
    Stockholders’ equity     212,465                       205,342                  
    Total liabilities and stockholders’ equity   $ 1,881,536                     $ 1,822,684                  
    Net interest income           $ 16,098                     $ 14,969          
    Interest rate spread (4)                     2.80 %                     2.55 %
    Net interest margin (5)                     3.69 %                     3.54 %
    Ratio of average interest-earning assets to average interest-bearing liabilities                     142.12 %                     144.30 %
                                                     
    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $272 and  $281 for the three months ended March 31, 2025 and 2024, respectively.
    (2) Yield is calculated on the basis of amortized cost.
    (3) Includes dividends received on restricted stock.
    (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income as a percentage of average interest-earning assets.
     
        For the Three Months Ended  
        March 31,     December 31,  
        2025     2024  
        Average             Average     Average             Average  
        Balance     Interest     Yield/Cost     Balance     Interest     Yield/Cost  
    Interest-earning assets:                                                
    Loans receivable (1)   $ 1,537,337     $ 23,387       6.17 %   $ 1,517,051     $ 23,308       6.12 %
    Investment securities (1) (2)     191,996       1,490       3.69 %     191,390       1,489       3.63 %
    Interest-earning deposits with other banks (3)     67,661       596       3.57 %     60,241       641       4.23 %
    Total interest-earning assets     1,796,994       25,473       5.81 %     1,768,682       25,438       5.78 %
    Noninterest-earning assets     84,542                       88,205                  
    Total assets   $ 1,881,536                     $ 1,856,887                  
    Interest-bearing liabilities:                                                
    Interest-bearing demand deposits   $ 220,192     $ 1,154       2.13 %   $ 216,492     $ 1,126       2.07 %
    Money market deposits     458,446       3,816       3.38 %     393,298       3,768       3.81 %
    Savings deposits     192,931       388       0.82 %     197,257       373       0.75 %
    Certificates of deposit     261,006       2,527       3.93 %     313,582       3,315       4.21 %
    Short-term borrowings     120,238       1,347       4.54 %     93,200       1,128       4.81 %
    Other borrowings     11,639       143       4.98 %     11,690       173       5.89 %
    Total interest-bearing liabilities     1,264,452       9,375       3.01 %     1,225,519       9,883       3.21 %
    Noninterest-bearing liabilities:                                                
    Noninterest-bearing demand deposits     390,354                       404,428                  
    Other liabilities     14,265                       17,076                  
    Stockholders’ equity     212,465                       209,864                  
    Total liabilities and stockholders’ equity   $ 1,881,536                     $ 1,856,887                  
    Net interest income           $ 16,098                     $ 15,555          
    Interest rate spread (4)                     2.80 %                     2.57 %
    Net interest margin (5)                     3.69 %                     3.56 %
    Ratio of average interest-earning assets to average interest-bearing liabilities                     142.12 %                     144.32 %
    (1)  Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $272 and $280 for the three months ended March 31, 2025 and December 31, 2024, respectively.
    (2) Yield is calculated on the basis of amortized cost.
    (3) Includes dividends received on restricted stock.
    (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income as a percentage of average interest-earning assets.

    The MIL Network –

  • MIL-OSI: USCB Financial Holdings, Inc. Reports Record Fully Diluted EPS of $0.38 for Q1 2025, a 65% increase over same period last year; ROAA of 1.19% and ROAE of 14.15%

    Source: GlobeNewswire (MIL-OSI)

    MIAMI, April 24, 2025 (GLOBE NEWSWIRE) — USCB Financial Holdings, Inc. (the “Company”) (NASDAQ: USCB), the holding company for U.S. Century Bank (the “Bank”), reported net income of $7.7 million or $0.38 per fully diluted share for the three months ended March 31, 2025, compared with net income of $4.6 million or $0.23 per fully diluted share for the same period in 2024.

    “We are proud to report a record quarter, highlighted by fully diluted EPS of $0.38. This performance reflects solid execution across all of our strategic priorities including annualized double-digit loan and deposit growth, maintaining disciplined pricing, clean asset quality, and strong cost controls. Our return on average assets was 1.19%, the highest since the fourth quarter of 2021,” said Luis de la Aguilera. Chairman, President and CEO. “Our continued focus on asset quality, profitability, and growing the Bank in a safe and sound manner has positioned the Company well to navigate the current challenging market and economic environment with confidence and resilience.”

    Unless otherwise stated, all percentage comparisons in the bullet points below are calculated at or for the quarter ended March 31, 2025 compared to at or for the quarter ended March 31, 2024 and annualized where appropriate.

    Profitability

    • Annualized return on average assets for the quarter ended March 31, 2025 was 1.19% compared to 0.76% for the first quarter of 2024.
    • Annualized return on average stockholders’ equity for the quarter ended March 31, 2025 was 14.15% compared to 9.61% for the first quarter of 2024.
    • The efficiency ratio for the quarter ended March 31, 2025 was 52.79% compared to 63.41% for the first quarter of 2024.
    • Net interest margin for the quarter ended March 31, 2025 was 3.10% compared to 2.62% for the first quarter of 2024.
    • Net interest income before provision for credit losses was $19.1 million for the quarter ended March 31, 2025, an increase of $4.0 million or 26.1% compared to $15.2 million for the same period in 2024.

    Balance Sheet

    • Total assets were $2.7 billion at March 31, 2025, representing an increase of $188.2 million or 7.6% from $2.5 billion at March 31, 2024.
    • Total loans held for investment were $2.0 billion at March 31, 2025, representing an increase of $215.0 million or 11.8% from $1.8 billion at March 31, 2024.
    • Total deposits were $2.3 billion at March 31, 2025, representing an increase of $206.8 million or 9.8% from $2.1 billion at March 31, 2024.
    • Total stockholders’ equity was $225.1 million at March 31, 2025, representing an increase of $30.1 million or 15.4% from $195.0 million at March 31, 2024. Total stockholders’ equity included accumulated comprehensive loss of $41.1 million at March 31, 2025 compared to accumulated comprehensive loss of $45.4 million at March 31, 2024.

    Asset Quality

    • The allowance for credit losses (“ACL”) increased by $3.3 million to $24.7 million at March 31, 2025 from $21.5 million at March 31, 2024.
    • The ACL represented 1.22% of total loans at March 31, 2025 and 1.18% at March 31, 2024.
    • The provision for credit loss was $681 thousand for the quarter ended March 31, 2025, an increase of $271 thousand compared to $410 thousand for the same period in 2024.
    • The ratio of non-performing loans to total loans was 0.20% at March 31, 2025 and 0.03% at March 31, 2024. Non-performing loans totaled $4.2 million at March 31, 2025 and $456 thousand at March 31, 2024.

    Non-interest Income and Non-interest Expense

    • Non-interest income was $3.7 million for the three months ended March 31, 2025, an increase of $1.3 million or 50.8% compared to $2.5 million for the same period in 2024.
    • Non-interest expense was $12.1 million for the three months ended March 31, 2025, an increase of $0.9 million or 7.9% compared to $11.2 million for the same period in 2024.

    Capital

    • On April 21, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per share of the Company’s Class A common stock. The dividend will be paid on June 5, 2025 to shareholders of record at the close of business on May 15, 2025.
    • As of March 31, 2025, total risk-based capital ratios for the Company and the Bank were 13.72% and 13.65%, respectively.
    • Tangible book value per common share (a non-GAAP measure) was $11.23 at March 31, 2025, representing increase of $0.42 or 3.9% from $10.81 at December 31, 2024. At March 31, 2025, tangible book value per common share was negatively affected by ($2.05) per share due to an accumulated comprehensive loss of $41.1 million mostly due to changes in the market value of the Company’s available for sale securities. At December 31, 2024, tangible book value per common share was negatively affected by ($2.24) per share due to an accumulated comprehensive loss of $44.5 million.

    Conference Call and Webcast

    The Company will host a conference call on Friday, April 25, 2025, at 11:00 a.m. Eastern Time to discuss the Company’s unaudited financial results for the quarter ended March 31, 2025. To access the conference call, dial (833) 816-1416 (U.S. toll-free) and ask to join the USCB Financial Holdings Call.

    Additionally, interested parties can listen to a live webcast of the call in the “Investor Relations” section of the Company’s website at www.uscentury.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

    About USCB Financial Holdings, Inc.

    USCB Financial Holdings, Inc. is the bank holding company for U.S. Century Bank. Established in 2002, U.S. Century Bank is one of the largest community banks headquartered in Miami, and one of the largest community banks in the State of Florida. U.S. Century Bank is rated 5-Stars by BauerFinancial, the nation’s leading independent bank rating firm. U.S. Century Bank offers customers a wide range of financial products and services and supports numerous community organizations, including the Greater Miami Chamber of Commerce, the South Florida Hispanic Chamber of Commerce, and ChamberSouth. For more information about us or to find a banking center near you, please call (305) 715-5200 or visit www.uscentury.com.

    Forward-Looking Statements

    This earnings release may contain statements that are not historical in nature and are intended to be, and are hereby identified as, forward-looking statements for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are those that are not historical facts. The words “may,” “will,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “aim,” “plan,” “estimate,” “seek,” “continue,” and “intend,”, the negative of these terms, as well as other similar words and expressions of the future, are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements related to our projected growth, anticipated future financial performance, and management’s long-term performance goals, as well as statements relating to the anticipated effects on our results of operations and financial condition from expected or potential developments or events, or business and growth strategies, including anticipated internal growth and balance sheet restructuring.

    These forward-looking statements involve significant risks and uncertainties that could cause our actual results to differ materially from those anticipated in such statements. Potential risks and uncertainties include, but are not limited to:

    • the strength of the United States economy in general and the strength of the local economies in which we conduct operations;
    • our ability to successfully manage interest rate risk, credit risk, liquidity risk, and other risks inherent to our industry;
    • the accuracy of our financial statement estimates and assumptions, including the estimates used for our credit loss reserve and deferred tax asset valuation allowance;
    • the efficiency and effectiveness of our internal control procedures and processes;
    • our ability to comply with the extensive laws and regulations to which we are subject, including the laws for each jurisdiction where we operate;
    • adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry;
    • deposit attrition and the level of our uninsured deposits;
    • legislative or regulatory changes and changes in accounting principles, policies, practices or guidelines, including the on-going effects of the Current Expected Credit Losses (“CECL”) standard;
    • the lack of a significantly diversified loan portfolio and the concentration in the South Florida market, including the risks of geographic, depositor, and industry concentrations, including our concentration in loans secured by real estate, in particular, commercial real estate;
    • the effects of climate change;
    • the concentration of ownership of our common stock;
    • fluctuations in the price of our common stock;
    • our ability to fund or access the capital markets at attractive rates and terms and manage our growth, both organic growth as well as growth through other means, such as future acquisitions;
    • inflation, interest rate, unemployment rate, and market and monetary fluctuations;
    • the effects of potential new or increased tariffs and trade restrictions
    • impacts of international hostilities and geopolitical events;
    • increased competition and its effect on the pricing of our products and services as well as our interest rate spread and net interest margin;
    • the loss of key employees;
    • the effectiveness of our risk management strategies, including operational risks, including, but not limited to, client, employee, or third-party fraud and security breaches; and
    • other risks described in this earnings release and other filings we make with the Securities and Exchange Commission (“SEC”).

    All forward-looking statements are necessarily only estimates of future results, and there can be no assurance  that actual results will not differ materially from expectations. Therefore, you are cautioned not to place undue reliance on any forward-looking statements. Further, forward-looking statements included in this earnings release are made only as of the date hereof, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events, unless required to do so under the federal securities laws. You should also review the risk factors described in the reports the Company filed or will file with the SEC.

    Non-GAAP Financial Measures

    This earnings release includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes certain operating performance measures. Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating the Company’s operations and underlying performance trends. Further, management uses these measures in managing and evaluating the Company’s business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables’ included in the exhibits to this earnings release.

    All numbers included in this press release are unaudited unless otherwise noted.

    Contacts:

    Investor Relations
    InvestorRelations@uscentury.com

    Media Relations
    Martha Guerra-Kattou
    MGuerra@uscentury.com

     
    USCB FINANCIAL HOLDINGS, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
    (Dollars in thousands, except per share data)
                   
      Three Months Ended March 31,
      2025   2024
    Interest income:              
    Loans, including fees $ 30,245     $ 26,643  
    Investment securities   3,024       2,811  
    Interest-bearing deposits in financial institutions   709       1,433  
    Total interest income   33,978       30,887  
    Interest expense:              
    Interest-bearing checking deposits   338       369  
    Savings and money market deposits   9,335       10,394  
    Time deposits   3,918       3,294  
    FHLB advances and other borrowings   1,272       1,672  
    Total interest expense   14,863       15,729  
    Net interest income before provision for credit losses   19,115       15,158  
    Provision for credit losses   681       410  
    Net interest income after provision for credit losses   18,434       14,748  
    Non-interest income:              
    Service fees   2,331       1,651  
    Gain on sale of loans held for sale, net   525       67  
    Other non-interest income   860       746  
    Total non-interest income   3,716       2,464  
    Non-interest expense:              
    Salaries and employee benefits   7,636       6,310  
    Occupancy   1,284       1,314  
    Regulatory assessments and fees   421       433  
    Consulting and legal fees   193       592  
    Network and information technology services   505       507  
    Other operating expense   2,013       2,018  
    Total non-interest expense   12,052       11,174  
    Net income before income tax expense   10,098       6,038  
    Income tax expense   2,440       1,426  
    Net income $ 7,658     $ 4,612  
    Per share information:              
    Net income per common share, basic $ 0.38     $ 0.23  
    Net income per common share, diluted $ 0.38     $ 0.23  
    Cash dividends declared $ 0.10     $ 0.05  
    Weighted average shares outstanding:              
    Common shares, basic   20,020,933       19,633,330  
    Common shares, diluted   20,319,535       19,698,258  
                   
     
    USCB FINANCIAL HOLDINGS, INC.
    SELECTED FINANCIAL DATA (UNAUDITED)
    (Dollars in thousands, except per share data)
                                 
      As of or For the Three Months Ended
      3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Income statement data:                            
    Net interest income $ 19,115     $ 19,358     $ 18,109     $ 17,311     $ 15,158  
    Provision for credit losses   681       1,030       931       786       410  
    Net interest income after provision for credit losses   18,434       18,328       17,178       16,525       14,748  
    Service fees   2,331       2,667       2,544       1,977       1,651  
    Gain on sale of securities available for sale, net   –       –       –       14       –  
    Gain on sale of loans held for sale, net   525       154       109       417       67  
    Other income   860       806       785       803       746  
    Total non-interest income   3,716       3,627       3,438       3,211       2,464  
    Salaries and employee benefits   7,636       7,930       7,200       7,353       6,310  
    Occupancy   1,284       1,337       1,341       1,266       1,314  
    Regulatory assessments and fees   421       405       452       476       433  
    Consulting and legal fees   193       552       161       263       592  
    Network and information technology services   505       494       513       479       507  
    Other operating expense   2,013       2,136       1,787       1,723       2,018  
    Total non-interest expense   12,052       12,854       11,454       11,560       11,174  
    Net income before income tax expense   10,098       9,101       9,162       8,176       6,038  
    Income tax expense   2,440       2,197       2,213       1,967       1,426  
    Net income $ 7,658     $ 6,904     $ 6,949     $ 6,209     $ 4,612  
    Per share information:                            
    Net income per common share, basic $ 0.38     $ 0.35     $ 0.35     $ 0.32     $ 0.23  
    Net income per common share, diluted $ 0.38     $ 0.34     $ 0.35     $ 0.31     $ 0.23  
    Cash dividends declared $ 0.10     $ 0.05     $ 0.05     $ 0.05     $ 0.05  
    Balance sheet data (at period-end):                            
    Cash and cash equivalents $ 97,984     $ 77,035     $ 38,486     $ 77,261     $ 126,546  
    Securities available-for-sale $ 275,139     $ 260,221     $ 259,527     $ 236,444     $ 259,992  
    Securities held-to-maturity $ 161,790     $ 164,694     $ 167,001     $ 169,606     $ 173,038  
    Total securities $ 436,929     $ 424,915     $ 426,528     $ 406,050     $ 433,030  
    Loans held for investment (1) $ 2,036,212     $ 1,972,848     $ 1,931,362     $ 1,869,249     $ 1,821,196  
    Allowance for credit losses $ (24,740 )   $ (24,070 )   $ (23,067 )   $ (22,230 )   $ (21,454 )
    Total assets $ 2,677,382     $ 2,581,216     $ 2,503,954     $ 2,458,270     $ 2,489,142  
    Non-interest-bearing demand deposits $ 605,489     $ 575,159     $ 637,313     $ 579,243     $ 576,626  
    Interest-bearing deposits $ 1,704,080     $ 1,598,845     $ 1,489,304     $ 1,477,459     $ 1,526,168  
    Total deposits $ 2,309,569     $ 2,174,004     $ 2,126,617     $ 2,056,702     $ 2,102,794  
    FHLB advances and other borrowings $ 108,000     $ 163,000     $ 118,000     $ 162,000     $ 162,000  
    Total liabilities $ 2,452,294     $ 2,365,828     $ 2,290,038     $ 2,257,250     $ 2,294,131  
    Total stockholders’ equity $ 225,088     $ 215,388     $ 213,916     $ 201,020     $ 195,011  
    Capital ratios:(2)                            
    Leverage ratio   9.61 %     9.53 %     9.34 %     9.03 %     8.91 %
    Common equity tier 1 capital   12.48 %     12.28 %     12.01 %     11.93 %     11.80 %
    Tier 1 risk-based capital   12.48 %     12.28 %     12.01 %     11.93 %     11.80 %
    Total risk-based capital   13.72 %     13.51 %     13.22 %     13.12 %     12.98 %
                                 
    (1) Loan amounts include deferred fees/costs.
    (2) Reflects the Company’s regulatory capital ratios which are provided for informational purposes only; as a small bank holding company, the Company is not subject to regulatory capital requirements. The Bank’s total risk-based capital at March 31, 2025 was 13.65%.
     
    USCB FINANCIAL HOLDINGS, INC.
    AVERAGE BALANCES, RATIOS, AND OTHER DATA (UNAUDITED)
    (Dollars in thousands)
                                 
      As of or For the Three Months Ended
      3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Average balance sheet data:                            
    Cash and cash equivalents $ 82,610     $ 56,937     $ 87,937     $ 107,831     $ 132,266  
    Securities available-for-sale $ 265,154     $ 255,786     $ 244,882     $ 263,345     $ 239,896  
    Securities held-to-maturity $ 163,510     $ 165,831     $ 168,632     $ 171,682     $ 174,142  
    Total securities $ 428,664     $ 421,617     $ 413,514     $ 435,027     $ 414,038  
    Loans held for investment(1) $ 1,986,856     $ 1,958,566     $ 1,878,230     $ 1,828,487     $ 1,781,528  
    Total assets $ 2,606,593     $ 2,544,592     $ 2,485,434     $ 2,479,222     $ 2,436,103  
    Interest-bearing deposits $ 1,652,147     $ 1,547,789     $ 1,468,067     $ 1,473,513     $ 1,473,831  
    Non-interest-bearing demand deposits $ 563,040     $ 590,829     $ 609,456     $ 610,370     $ 574,760  
    Total deposits $ 2,215,187     $ 2,138,618     $ 2,077,523     $ 2,083,883     $ 2,048,591  
    FHLB advances and other borrowings $ 138,944     $ 151,804     $ 156,043     $ 162,000     $ 164,187  
    Total liabilities $ 2,387,088     $ 2,328,877     $ 2,278,793     $ 2,281,467     $ 2,243,011  
    Total stockholders’ equity $ 219,505     $ 215,715     $ 206,641     $ 197,755     $ 193,092  
    Performance ratios:                            
    Return on average assets (2)   1.19 %     1.08 %     1.11 %     1.01 %     0.76 %
    Return on average equity (2)   14.15 %     12.73 %     13.38 %     12.63 %     9.61 %
    Net interest margin (2)   3.10 %     3.16 %     3.03 %     2.94 %     2.62 %
    Non-interest income to average assets (2)   0.58 %     0.57 %     0.55 %     0.52 %     0.41 %
    Non-interest expense to average assets (2)   1.88 %     2.01 %     1.83 %     1.88 %     1.84 %
    Efficiency ratio (3)   52.79 %     55.92 %     53.16 %     56.33 %     63.41 %
    Loans by type (at period end): (4)                            
    Residential real estate $ 301,164     $ 297,979     $ 283,477     $ 256,807     $ 237,906  
    Commercial real estate $ 1,150,129     $ 1,128,399     $ 1,095,112     $ 1,053,030     $ 1,057,800  
    Commercial and industrial $ 256,326     $ 258,311     $ 246,539     $ 248,525     $ 228,045  
    Correspondent banks $ 103,026     $ 82,438     $ 103,815     $ 112,510     $ 100,182  
    Consumer and other $ 218,711     $ 198,091     $ 198,604     $ 194,644     $ 194,325  
    Asset quality data:                            
    Allowance for credit losses to total loans   1.22 %     1.22 %     1.19 %     1.19 %     1.18 %
    Allowance for credit losses to non-performing loans   595 %     889 %     846 %     2,933 %     4,705 %
    Total non-performing loans(5) $ 4,156     $ 2,707     $ 2,725     $ 758     $ 456  
    Non-performing loans to total loans   0.20 %     0.14 %     0.14 %     0.04 %     0.03 %
    Non-performing assets to total assets(5)   0.16 %     0.10 %     0.11 %     0.03 %     0.02 %
    Net charge-offs (recoveries of) to average loans (2)   0.00 %     (0.00 )%     (0.00 )%     (0.00 )%     (0.00 )%
    Net charge-offs (recovery) of credit losses $ 2     $ (11 )   $ (6 )   $ (2 )   $ (7 )
    Interest rates and yields:(2)                            
    Loans held for investment   6.17 %     6.25 %     6.32 %     6.16 %     6.01 %
    Investment securities   2.81 %     2.63 %     2.61 %     2.80 %     2.69 %
    Total interest-earning assets   5.51 %     5.57 %     5.61 %     5.54 %     5.34 %
    Deposits(6)   2.49 %     2.48 %     2.66 %     2.64 %     2.76 %
    FHLB advances and other borrowings   3.71 %     3.81 %     4.05 %     4.03 %     4.10 %
    Total interest-bearing liabilities   3.37 %     3.47 %     3.79 %     3.76 %     3.86 %
    Other information:                            
    Full-time equivalent employees   201       199       198       197       199  
                                 
    (1) Loan amounts include deferred fees/costs.
    (2) Annualized.
    (3) Efficiency ratio is defined as total non-interest expense divided by sum of net interest income and total non-interest income.
    (4) Loan amounts exclude deferred fees/costs.
    (5) The amounts for total non-performing loans and total non-performing assets are the same at the dates presented since there was no other real estate owned (OREO) recorded at any of the dates presented.
    (6) Reflects effect of non-interest-bearing deposits.
     
    USCB FINANCIAL HOLDINGS, INC.
    NET INTEREST MARGIN (UNAUDITED)
    (Dollars in thousands)
                                   
      Three Months Ended March 31,
      2025     2024  
      Average
    Balance    		   Interest   Yield/Rate (1)   Average
    Balance    		   Interest   Yield/Rate (1)
    Assets                              
    Interest-earning assets:                              
    Loans held for investment(2) $ 1,986,856   $ 30,245   6.17 %   $ 1,781,528   $ 26,643   6.01 %
    Investment securities (3)   436,935     3,024   2.81 %     419,989     2,811   2.69 %
    Other interest-earning assets   75,182     709   3.82 %     125,244     1,433   4.60 %
    Total interest-earning assets   2,498,973     33,978   5.51 %     2,326,761     30,887   5.34 %
    Non-interest-earning assets   107,620               109,342          
    Total assets $ 2,606,593             $ 2,436,103          
    Liabilities and stockholders’ equity                              
    Interest-bearing liabilities:                              
    Interest-bearing checking deposits $ 53,611     338   2.56 %   $ 53,344     369   2.78 %
    Saving and money market deposits   1,199,027     9,335   3.16 %     1,097,575     10,394   3.81 %
    Time deposits   399,509     3,918   3.98 %     322,912     3,294   4.10 %
    Total interest-bearing deposits   1,652,147     13,591   3.34 %     1,473,831     14,057   3.84 %
    FHLB advances and other borrowings   138,944     1,272   3.71 %     164,187     1,672   4.10 %
    Total interest-bearing liabilities   1,791,091     14,863   3.37 %     1,638,018     15,729   3.86 %
    Non-interest-bearing demand deposits   563,040               574,760          
    Other non-interest-bearing liabilities   32,957               30,233          
    Total liabilities   2,387,088               2,243,011          
    Stockholders’ equity   219,505               193,092          
    Total liabilities and stockholders’ equity $ 2,606,593             $ 2,436,103          
    Net interest income       $ 19,115             $ 15,158    
    Net interest spread (4)             2.14 %               1.48 %
    Net interest margin (5)             3.10 %               2.62 %
                                   
    (1) Annualized.
    (2) Average loan balances include non-accrual loans. Interest income on loans includes accretion of deferred loan fees, net of deferred loan costs.
    (3) At fair value except for securities held to maturity. This amount includes FHLB stock.
    (4) Net interest spread is the average yield earned on total interest-earning assets minus the average rate paid on total interest-bearing liabilities.
    (5) Net interest margin is the ratio of net interest income to total interest-earning assets.
     
    USCB FINANCIAL HOLDINGS, INC.
    NON-GAAP FINANCIAL MEASURES (UNAUDITED)
    (Dollars in thousands)
                                 
      As of or For the Three Months Ended
      3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Pre-tax pre-provision (“PTPP”) income:(1)                            
    Net income $ 7,658     $ 6,904     $ 6,949     $ 6,209     $ 4,612  
    Plus: Provision for income taxes   2,440       2,197       2,213       1,967       1,426  
    Plus: Provision for credit losses   681       1,030       931       786       410  
    PTPP income $ 10,779     $ 10,131     $ 10,093     $ 8,962     $ 6,448  
                                 
    PTPP return on average assets:(1)                            
    PTPP income $ 10,779     $ 10,131     $ 10,093     $ 8,962     $ 6,448  
    Average assets $ 2,606,593     $ 2,544,592     $ 2,485,434     $ 2,479,222     $ 2,436,103  
    PTPP return on average assets (2)   1.68 %     1.58 %     1.62 %     1.45 %     1.06 %
                                 
    Operating net income:(1)                            
    Net income $ 7,658     $ 6,904     $ 6,949     $ 6,209     $ 4,612  
    Less: Net gains on sale of securities   –       –       –       14       –  
    Less: Tax effect on sale of securities   –       –       –       (4 )     –  
    Operating net income $ 7,658     $ 6,904     $ 6,949     $ 6,199     $ 4,612  
                                 
    Operating PTPP income:(1)                            
    PTPP income $ 10,779     $ 10,131     $ 10,093     $ 8,962     $ 6,448  
    Less: Net gains on sale of securities   –       –       –       14       –  
    Operating PTPP income $ 10,779     $ 10,131     $ 10,093     $ 8,948     $ 6,448  
                                 
    Operating PTPP return on average assets:(1)                            
    Operating PTPP income $ 10,779     $ 10,131     $ 10,093     $ 8,948     $ 6,448  
    Average assets $ 2,606,593     $ 2,544,592     $ 2,485,434     $ 2,479,222     $ 2,436,103  
    Operating PTPP return on average assets (2)   1.68 %     1.58 %     1.62 %     1.45 %     1.06 %
                                 
    Operating return on average assets:(1)                            
    Operating net income $ 7,658     $ 6,904     $ 6,949     $ 6,199     $ 4,612  
    Average assets $ 2,606,593     $ 2,544,592     $ 2,485,434     $ 2,479,222     $ 2,436,103  
    Operating return on average assets (2)   1.19 %     1.08 %     1.11 %     1.01 %     0.76 %
                                 
    Operating return on average equity:(1)                            
    Operating net income $ 7,658     $ 6,904     $ 6,949     $ 6,199     $ 4,612  
    Average equity $ 219,505     $ 215,715     $ 206,641     $ 197,755     $ 193,092  
    Operating return on average equity (2)   14.15 %     12.73 %     13.38 %     12.61 %     9.61 %
                                 
    Operating Revenue:(1)                            
    Net interest income $ 19,115     $ 19,358     $ 18,109     $ 17,311     $ 15,158  
    Non-interest income   3,716       3,627       3,438       3,211       2,464  
    Less: Net gains on sale of securities   –       –       –       14       –  
    Operating revenue $ 22,831     $ 22,985     $ 21,547     $ 20,508     $ 17,622  
                                 
    Operating Efficiency Ratio:(1)                            
    Total non-interest expense $ 12,052     $ 12,854     $ 11,454     $ 11,560     $ 11,174  
    Operating revenue $ 22,831     $ 22,985     $ 21,547     $ 20,508     $ 17,622  
    Operating efficiency ratio   52.79 %     55.92 %     53.16 %     56.37 %     63.41 %
                                 
    (1) The Company believes these non-GAAP measurements are key indicators of the ongoing earnings power of the Company.
    (2) Annualized.
     
    USCB FINANCIAL HOLDINGS, INC.
    NON-GAAP FINANCIAL MEASURES (UNAUDITED)
    (Dollars in thousands, except per share data)
                                 
      As of or For the Three Months Ended
      3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Tangible book value per common share (at period-end):(1)                            
    Total stockholders’ equity $ 225,088     $ 215,388     $ 213,916     $ 201,020     $ 195,011  
    Less: Intangible assets   –       –       –       –       –  
    Tangible stockholders’ equity $ 225,088     $ 215,388     $ 213,916     $ 201,020     $ 195,011  
    Total shares issued and outstanding (at period-end):                            
    Total common shares issued and outstanding   20,048,385       19,924,632       19,620,632       19,630,632       19,650,463  
    Tangible book value per common share(2) $ 11.23     $ 10.81     $ 10.90     $ 10.24     $ 9.92  
                                 
    Operating diluted net income per common share:(1)                            
    Operating net income $ 7,658     $ 6,904     $ 6,949     $ 6,199     $ 4,612  
    Total weighted average diluted shares of common stock   20,319,535       20,183,731       19,825,211       19,717,167       19,698,258  
    Operating diluted net income per common share: $ 0.38     $ 0.34     $ 0.35     $ 0.31     $ 0.23  
                                 
    Tangible Common Equity/Tangible Assets(1)                            
    Tangible stockholders’ equity $ 225,088     $ 215,388     $ 213,916     $ 201,020     $ 195,011  
    Tangible total assets(3) $ 2,677,382     $ 2,581,216     $ 2,503,954     $ 2,458,270     $ 2,489,142  
    Tangible Common Equity/Tangible Assets   8.41 %     8.34 %     8.54 %     8.18 %     7.83 %
                                 
    (1) The Company believes these non-GAAP measurements are key indicators of the ongoing earnings power of the Company.
    (2) Excludes the dilutive effect, if any, of shares of common stock issuable upon exercise of outstanding stock options.
    (3) Since the Company has no intangible assets, tangible total assets is the same amount as total assets calculated under GAAP.

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

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

    QUARTERLY HIGHLIGHTS:

    Net Income Earnings Per Share Pre-Provision Net
    Revenue (“PPNR”)    (1)    		 Fully Tax Equivalent
    (“FTE”) Net Interest
    Margin(1)    		 Efficiency Ratio(1) Tangible Book Value
    Per Share    (1)
               
    $11.6 million $0.19 $16.6 million 3.39% 63.96% $8.48
               


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

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

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

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

    Results of Operations:

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

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

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

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

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

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

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

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

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

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

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

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

    Financial Condition and Capital Management:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Credit Quality:

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

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

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

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

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

    Reclassifications

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

    Non-GAAP Financial Measures

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

    Forward-Looking Statement Disclaimer

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

    Member FDIC

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

                                 
        For the Quarter Ended:   Percent Change From:  
    CONSOLIDATED INCOME STATEMENTS      March 31,       December 31,       March 31,       December 31,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024    2024   
    Interest income   $ 61,832   $ 64,043   $ 56,960   (3 ) % 9   %
    Interest expense     18,472     20,448     17,458   (10 ) % 6   %
    Net interest income before provision                            
    for credit losses on loans     43,360     43,595     39,502   (1 ) % 10   %
    Provision for credit losses on loans     274     1,331     184   (79 ) % 49   %
    Net interest income after provision                            
    for credit losses on loans     43,086     42,264     39,318   2   % 10   %
    Noninterest income:                            
    Service charges and fees on deposit                            
    accounts     892     885     877   1   % 2   %
    FHLB and FRB stock dividends     590     590     591   0   % 0   %
    Increase in cash surrender value of                            
    life insurance     538     528     518   2   % 4   %
    Gain on sales of SBA loans     98     125     178   (22 ) % (45 ) %
    Servicing income     82     77     90   6   % (9 ) %
    Termination fees     87     18     13   383   % 569   %
    Other     409     552     371   (26 ) % 10   %
    Total noninterest income     2,696     2,775     2,638   (3 ) % 2   %
    Noninterest expense:                            
    Salaries and employee benefits     16,575     16,976     15,509   (2 ) % 7   %
    Occupancy and equipment     2,534     2,495     2,443   2   % 4   %
    Professional fees     1,580     1,711     1,327   (8 ) % 19   %
    Other     8,767     9,122     8,257   (4 ) % 6   %
    Total noninterest expense     29,456     30,304     27,536   (3 ) % 7   %
    Income before income taxes     16,326     14,735     14,420   11   % 13   %
    Income tax expense     4,700     4,114     4,254   14   % 10   %
    Net income   $ 11,626   $ 10,621   $ 10,166   9   % 14   %
                                 
    PER COMMON SHARE DATA                            
    (unaudited)                              
    Basic earnings per share   $ 0.19   $ 0.17   $ 0.17   12   % 12   %
    Diluted earnings per share   $ 0.19   $ 0.17   $ 0.17   12   % 12   %
    Weighted average shares outstanding – basic     61,479,579     61,320,505     61,186,623   0   % 0   %
    Weighted average shares outstanding – diluted     61,708,361     61,679,735     61,470,552   0   % 0   %
    Common shares outstanding at period-end     61,611,121     61,348,095     61,253,625   0   % 1   %
    Dividend per share   $ 0.13   $ 0.13   $ 0.13   0   % 0   %
    Book value per share   $ 11.30   $ 11.24   $ 11.04   1   % 2   %
    Tangible book value per share(1)   $ 8.48   $ 8.41   $ 8.17   1   % 4   %
                                 
    KEY PERFORMANCE METRICS                                 
    (in $000’s, unaudited)                                 
    Annualized return on average equity     6.81 %   6.16 %   6.08 % 11   % 12   %
    Annualized return on average tangible                            
    common equity(1)     9.09 %   8.25 %   8.24 % 10   % 10   %
    Annualized return on average assets     0.85 %   0.75 %   0.79 % 13   % 8   %
    Annualized return on average tangible assets(1)     0.88 %   0.78 %   0.82 % 13   % 7   %
    Net interest margin (FTE)(1)     3.39 %   3.32 %   3.31 % 2   % 2   %
    Total revenue   $ 46,056   $ 46,370   $ 42,140   (1 ) % 9   %
    Pre-provision net revenue(1)   $ 16,600   $ 16,066   $ 14,604   3   % 14   %
    Efficiency ratio(1)     63.96 %   65.35 %   65.34 % (2 ) % (2 ) %
                                 
    AVERAGE BALANCES                                
    (in $000’s, unaudited)                                 
    Average assets   $ 5,559,896   $ 5,607,840   $ 5,178,636   (1 ) % 7   %
    Average tangible assets(1)   $ 5,386,001   $ 5,433,439   $ 5,002,597   (1 ) % 8   %
    Average earning assets   $ 5,188,317   $ 5,235,986   $ 4,810,505   (1 ) % 8   %
    Average loans held-for-sale   $ 2,290   $ 2,260   $ 2,749   1   % (17 ) %
    Average loans held-for-investment   $ 3,429,014   $ 3,388,729   $ 3,297,240   1   % 4   %
    Average deposits   $ 4,717,517   $ 4,771,491   $ 4,360,150   (1 ) % 8   %
    Average demand deposits – noninterest-bearing   $ 1,167,330   $ 1,222,393   $ 1,177,078   (5 ) % (1 ) %
    Average interest-bearing deposits   $ 3,550,187   $ 3,549,098   $ 3,183,072   0   % 12   %
    Average interest-bearing liabilities   $ 3,589,872   $ 3,588,755   $ 3,222,603   0   % 11   %
    Average equity   $ 692,733   $ 686,263   $ 672,292   1   % 3   %
    Average tangible common equity(1)   $ 518,838   $ 511,862   $ 496,253   1   % 5   %
                                 

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

                                     
        For the Quarter Ended:  
    CONSOLIDATED INCOME STATEMENTS      March 31,       December 31,       September 30,      June 30,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Interest income   $ 61,832   $ 64,043   $ 60,852   $ 58,489   $ 56,960  
    Interest expense     18,472     20,448     21,523     19,622     17,458  
    Net interest income before provision                                
    for credit losses on loans     43,360     43,595     39,329     38,867     39,502  
    Provision for credit losses on loans     274     1,331     153     471     184  
    Net interest income after provision                                
    for credit losses on loans     43,086     42,264     39,176     38,396     39,318  
    Noninterest income:                                
    Service charges and fees on deposit                                
    accounts     892     885     908     891     877  
    FHLB and FRB stock dividends     590     590     586     588     591  
    Increase in cash surrender value of                                
    life insurance     538     528     530     521     518  
    Gain on sales of SBA loans     98     125     94     76     178  
    Servicing income     82     77     108     90     90  
    Termination fees     87     18     46     100     13  
    Gain on proceeds from company-owned                                
    life insurance     —     —     —     219     —  
    Other     409     552     554     379     371  
    Total noninterest income     2,696     2,775     2,826     2,864     2,638  
    Noninterest expense:                                
    Salaries and employee benefits     16,575     16,976     15,673     15,794     15,509  
    Occupancy and equipment     2,534     2,495     2,599     2,689     2,443  
    Professional fees     1,580     1,711     1,306     1,072     1,327  
    Other     8,767     9,122     7,977     8,633     8,257  
    Total noninterest expense     29,456     30,304     27,555     28,188     27,536  
    Income before income taxes     16,326     14,735     14,447     13,072     14,420  
    Income tax expense     4,700     4,114     3,940     3,838     4,254  
    Net income   $ 11,626   $ 10,621   $ 10,507   $ 9,234   $ 10,166  
                                     
    PER COMMON SHARE DATA                                
    (unaudited)                                    
    Basic earnings per share   $ 0.19   $ 0.17   $ 0.17   $ 0.15   $ 0.17  
    Diluted earnings per share   $ 0.19   $ 0.17   $ 0.17   $ 0.15   $ 0.17  
    Weighted average shares outstanding – basic     61,479,579     61,320,505     61,295,877     61,279,914     61,186,623  
    Weighted average shares outstanding – diluted     61,708,361     61,679,735     61,546,157     61,438,088     61,470,552  
    Common shares outstanding at period-end     61,611,121     61,348,095     61,297,344     61,292,094     61,253,625  
    Dividend per share   $ 0.13   $ 0.13   $ 0.13   $ 0.13   $ 0.13  
    Book value per share   $ 11.30   $ 11.24   $ 11.18   $ 11.08   $ 11.04  
    Tangible book value per share(1)   $ 8.48   $ 8.41   $ 8.33   $ 8.22   $ 8.17  
                                     
    KEY PERFORMANCE METRICS                                   
    (in $000’s, unaudited)                                     
    Annualized return on average equity     6.81 %   6.16 %   6.14 %   5.50 %   6.08 %
    Annualized return on average tangible                                
    common equity(1)     9.09 %   8.25 %   8.27 %   7.43 %   8.24 %
    Annualized return on average assets     0.85 %   0.75 %   0.78 %   0.71 %   0.79 %
    Annualized return on average tangible assets(1)     0.88 %   0.78 %   0.81 %   0.74 %   0.82 %
    Net interest margin (FTE)(1)     3.39 %   3.32 %   3.15 %   3.23 %   3.31 %
    Total revenue   $ 46,056   $ 46,370   $ 42,155   $ 41,731   $ 42,140  
    Pre-provision net revenue(1)   $ 16,600   $ 16,066   $ 14,600   $ 13,543   $ 14,604  
    Efficiency ratio(1)     63.96 %   65.35 %   65.37 %   67.55 %   65.34 %
                                     
    AVERAGE BALANCES                                     
    (in $000’s, unaudited)                                     
    Average assets   $ 5,559,896   $ 5,607,840   $ 5,352,067   $ 5,213,171   $ 5,178,636  
    Average tangible assets(1)   $ 5,386,001   $ 5,433,439   $ 5,177,114   $ 5,037,673   $ 5,002,597  
    Average earning assets   $ 5,188,317   $ 5,235,986   $ 4,980,082   $ 4,840,670   $ 4,810,505  
    Average loans held-for-sale   $ 2,290   $ 2,260   $ 1,493   $ 1,503   $ 2,749  
    Average loans held-for-investment   $ 3,429,014   $ 3,388,729   $ 3,359,647   $ 3,328,358   $ 3,297,240  
    Average deposits   $ 4,717,517   $ 4,771,491   $ 4,525,946   $ 4,394,545   $ 4,360,150  
    Average demand deposits – noninterest-bearing   $ 1,167,330   $ 1,222,393   $ 1,172,304   $ 1,127,145   $ 1,177,078  
    Average interest-bearing deposits   $ 3,550,187   $ 3,549,098   $ 3,353,642   $ 3,267,400   $ 3,183,072  
    Average interest-bearing liabilities   $ 3,589,872   $ 3,588,755   $ 3,393,264   $ 3,306,972   $ 3,222,603  
    Average equity   $ 692,733   $ 686,263   $ 680,404   $ 675,108   $ 672,292  
    Average tangible common equity(1)   $ 518,838   $ 511,862   $ 505,451   $ 499,610   $ 496,253  
                                     

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

                                 
        End of Period:   Percent Change From:  
    CONSOLIDATED BALANCE SHEETS      March 31,       December 31,       March 31,       December 31,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024    2024   
    ASSETS                            
    Cash and due from banks   $ 44,281     $ 29,864     $ 32,543     48   % 36   %
    Other investments and interest-bearing deposits                            
    in other financial institutions     700,769       938,259       508,816     (25 ) % 38   %
    Securities available-for-sale, at fair value     370,976       256,274       404,474     45   % (8 ) %
    Securities held-to-maturity, at amortized cost     576,718       590,016       636,249     (2 ) % (9 ) %
    Loans – held-for-sale – SBA, including deferred costs     1,884       2,375       1,946     (21 ) % (3 ) %
    Loans – held-for-investment:                            
    Commercial     489,241       531,350       452,231     (8 ) % 8   %
    Real estate:                            
    CRE – owner occupied     616,825       601,636       585,031     3   % 5   %
    CRE – non-owner occupied     1,363,275       1,341,266       1,271,184     2   % 7   %
    Land and construction     136,106       127,848       129,712     6   % 5   %
    Home equity     119,138       127,963       122,794     (7 ) % (3 ) %
    Multifamily     284,510       275,490       269,263     3   % 6   %
    Residential mortgages     465,330       471,730       490,035     (1 ) % (5 ) %
    Consumer and other     12,741       14,837       16,439     (14 ) % (22 ) %
    Loans     3,487,166       3,492,120       3,336,689     0   % 5   %
    Deferred loan fees, net     (268 )     (183 )     (587 )   46   % (54 ) %
    Total loans – held-for-investment, net of deferred fees     3,486,898       3,491,937       3,336,102     0   % 5   %
    Allowance for credit losses on loans     (48,262 )     (48,953 )     (47,888 )   (1 ) % 1   %
    Loans, net     3,438,636       3,442,984       3,288,214     0   % 5   %
    Company-owned life insurance     81,749       81,211       80,007     1   % 2   %
    Premises and equipment, net     9,772       10,140       9,986     (4 ) % (2 ) %
    Goodwill     167,631       167,631       167,631     0   % 0   %
    Other intangible assets     5,986       6,439       8,074     (7 ) % (26 ) %
    Accrued interest receivable and other assets     115,853       119,813       118,134     (3 ) % (2 ) %
    Total assets   $ 5,514,255     $ 5,645,006     $ 5,256,074     (2 ) % 5   %
                                 
    LIABILITIES AND SHAREHOLDERS’ EQUITY                            
    Liabilities:                            
    Deposits:                            
    Demand, noninterest-bearing   $ 1,128,593     $ 1,214,192     $ 1,242,059     (7 ) % (9 ) %
    Demand, interest-bearing     949,068       936,587       925,100     1   % 3   %
    Savings and money market     1,353,293       1,325,923       1,124,900     2   % 20   %
    Time deposits – under $250     37,592       38,988       38,105     (4 ) % (1 ) %
    Time deposits – $250 and over     213,357       206,755       200,739     3   % 6   %
    ICS/CDARS – interest-bearing demand, money market                            
    and time deposits     1,001,365       1,097,586       913,757     (9 ) % 10   %
    Total deposits     4,683,268       4,820,031       4,444,660     (3 ) % 5   %
    Subordinated debt, net of issuance costs     39,691       39,653       39,539     0   % 0   %
    Accrued interest payable and other liabilities     95,106       95,595       95,579     (1 ) % 0   %
    Total liabilities     4,818,065       4,955,279       4,579,778     (3 ) % 5   %
                                 
    Shareholders’ Equity:                            
    Common stock     511,596       510,070       507,578     0   % 1   %
    Retained earnings     191,401       187,762       181,306     2   % 6   %
    Accumulated other comprehensive loss     (6,807 )     (8,105 )     (12,588 )   (16 ) % (46 ) %
    Total shareholders’ equity     696,190       689,727       676,296     1   % 3   %
    Total liabilities and shareholders’ equity   $ 5,514,255     $ 5,645,006     $ 5,256,074     (2 ) % 5   %
                                 
                                   
        End of Period:
    CONSOLIDATED BALANCE SHEETS      March 31,       December 31,       September 30,      June 30,       March 31, 
    (in $000’s, unaudited)   2025   2024   2024   2024   2024
    ASSETS                              
    Cash and due from banks   $ 44,281     $ 29,864     $ 49,722     $ 37,497     $ 32,543  
    Other investments and interest-bearing deposits                              
    in other financial institutions     700,769       938,259       906,588       610,763       508,816  
    Securities available-for-sale, at fair value     370,976       256,274       237,612       273,043       404,474  
    Securities held-to-maturity, at amortized cost     576,718       590,016       604,193       621,178       636,249  
    Loans – held-for-sale – SBA, including deferred costs     1,884       2,375       1,649       1,899       1,946  
    Loans – held-for-investment:                              
    Commercial     489,241       531,350       481,266       477,929       452,231  
    Real estate:                              
    CRE – owner occupied     616,825       601,636       602,062       594,504       585,031  
    CRE – non-owner occupied     1,363,275       1,341,266       1,310,578       1,283,323       1,271,184  
    Land and construction     136,106       127,848       125,761       125,374       129,712  
    Home equity     119,138       127,963       124,090       126,562       122,794  
    Multifamily     284,510       275,490       273,103       268,968       269,263  
    Residential mortgages     465,330       471,730       479,524       484,809       490,035  
    Consumer and other     12,741       14,837       14,179       18,758       16,439  
    Loans     3,487,166       3,492,120       3,410,563       3,380,227       3,336,689  
    Deferred loan fees, net     (268 )     (183 )     (327 )     (434 )     (587 )
    Total loans – held-for-investment, net of deferred fees     3,486,898       3,491,937       3,410,236       3,379,793       3,336,102  
    Allowance for credit losses on loans     (48,262 )     (48,953 )     (47,819 )     (47,954 )     (47,888 )
    Loans, net     3,438,636       3,442,984       3,362,417       3,331,839       3,288,214  
    Company-owned life insurance     81,749       81,211       80,682       80,153       80,007  
    Premises and equipment, net     9,772       10,140       10,398       10,310       9,986  
    Goodwill     167,631       167,631       167,631       167,631       167,631  
    Other intangible assets     5,986       6,439       6,966       7,521       8,074  
    Accrued interest receivable and other assets     115,853       119,813       123,738       121,190       118,134  
    Total assets   $ 5,514,255     $ 5,645,006     $ 5,551,596     $ 5,263,024     $ 5,256,074  
                                   
    LIABILITIES AND SHAREHOLDERS’ EQUITY                              
    Liabilities:                              
    Deposits:                              
    Demand, noninterest-bearing   $ 1,128,593     $ 1,214,192     $ 1,272,139     $ 1,187,320     $ 1,242,059  
    Demand, interest-bearing     949,068       936,587       913,910       928,246       925,100  
    Savings and money market     1,353,293       1,325,923       1,309,676       1,126,520       1,124,900  
    Time deposits – under $250     37,592       38,988       39,060       39,046       38,105  
    Time deposits – $250 and over     213,357       206,755       196,945       203,886       200,739  
    ICS/CDARS – interest-bearing demand, money market                              
    and time deposits     1,001,365       1,097,586       997,803       959,592       913,757  
    Total deposits     4,683,268       4,820,031       4,729,533       4,444,610       4,444,660  
    Other short-term borrowings     —       —       —       —       —  
    Subordinated debt, net of issuance costs     39,691       39,653       39,615       39,577       39,539  
    Accrued interest payable and other liabilities     95,106       95,595       97,096       99,638       95,579  
    Total liabilities     4,818,065       4,955,279       4,866,244       4,583,825       4,579,778  
                                   
    Shareholders’ Equity:                              
    Common stock     511,596       510,070       509,134       508,343       507,578  
    Retained earnings     191,401       187,762       185,110       182,571       181,306  
    Accumulated other comprehensive loss     (6,807 )     (8,105 )     (8,892 )     (11,715 )     (12,588 )
    Total shareholders’ equity     696,190       689,727       685,352       679,199       676,296  
    Total liabilities and shareholders’ equity   $ 5,514,255     $ 5,645,006     $ 5,551,596     $ 5,263,024     $ 5,256,074  
                                   
                                 
        At or For the Quarter Ended:   Percent Change From:  
    CREDIT QUALITY DATA      March 31,       December 31,       March 31,       December 31,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024    2024   
    Nonaccrual loans – held-for-investment:                            
    Land and construction loans   $ 4,793   $ 5,874   $ 4,673   (18 ) % 3   %
    Home equity and other loans     927     290     120   220   % 673   %
    Commercial loans     324     1,014     1,127   (68 ) % (71 ) %
    CRE loans     —     —     —   N/A     N/A    
    Total nonaccrual loans – held-for-investment:     6,044     7,178     5,920   (16 ) % 2   %
    Loans over 90 days past due                            
    and still accruing     268     489     1,951   (45 ) % (86 ) %
    Total nonperforming loans     6,312     7,667     7,871   (18 ) % (20 ) %
    Foreclosed assets     —     —     —   N/A     N/A    
    Total nonperforming assets   $ 6,312   $ 7,667   $ 7,871   (18 ) % (20 ) %
    Net charge-offs during the quarter   $ 965   $ 197   $ 254   390   % 280   %
    Provision for credit losses on loans during the quarter   $ 274   $ 1,331   $ 184   (79 ) % 49   %
    Allowance for credit losses on loans   $ 48,262   $ 48,953   $ 47,888   (1 ) % 1   %
    Classified assets   $ 40,034   $ 41,661   $ 35,392   (4 ) % 13   %
    Allowance for credit losses on loans to total loans     1.38 %   1.40 %   1.44 % (1 ) % (4 ) %
    Allowance for credit losses on loans to total nonperforming loans     764.61 %   638.49 %   608.41 % 20   % 26   %
    Nonperforming assets to total assets     0.11 %   0.14 %   0.15 % (21 ) % (27 ) %
    Nonperforming loans to total loans     0.18 %   0.22 %   0.24 % (18 ) % (25 ) %
    Classified assets to Heritage Commerce Corp                            
    Tier 1 capital plus allowance for credit losses on loans     7 %   7 %   6 % 0   % 17   %
    Classified assets to Heritage Bank of Commerce                            
    Tier 1 capital plus allowance for credit losses on loans     7 %   7 %   6 % 0   % 17   %
                                 
    OTHER PERIOD-END STATISTICS                                 
    (in $000’s, unaudited)                                 
    Heritage Commerce Corp:                            
    Tangible common equity (1)   $ 522,573   $ 515,657   $ 500,591   1   % 4   %
    Shareholders’ equity / total assets     12.63 %   12.22 %   12.87 % 3   % (2 ) %
    Tangible common equity / tangible assets (1)     9.78 %   9.43 %   9.85 % 4   % (1 ) %
    Loan to deposit ratio     74.45 %   72.45 %   75.06 % 3   % (1 ) %
    Noninterest-bearing deposits / total deposits     24.10 %   25.19 %   27.94 % (4 ) % (14 ) %
    Total capital ratio     15.9 %   15.6 %   15.6 % 2   % 2   %
    Tier 1 capital ratio     13.6 %   13.4 %   13.4 % 1   % 1   %
    Common Equity Tier 1 capital ratio     13.6 %   13.4 %   13.4 % 1   % 1   %
    Tier 1 leverage ratio     9.8 %   9.6 %   10.2 % 2   % (4 ) %
    Heritage Bank of Commerce:                            
    Tangible common equity / tangible assets (1)     10.15 %   9.79 %   10.22 % 4   % (1 ) %
    Total capital ratio     15.4 %   15.1 %   15.1 % 2   % 2   %
    Tier 1 capital ratio     14.1 %   13.9 %   13.9 % 1   % 1   %
    Common Equity Tier 1 capital ratio     14.1 %   13.9 %   13.9 % 1   % 1   %
    Tier 1 leverage ratio     10.2 %   10.0 %   10.6 % 2   % (4 ) %
                                 

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

                                     
        At or For the Quarter Ended:  
    CREDIT QUALITY DATA      March 31,       December 31,       September 30,      June 30,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Nonaccrual loans – held-for-investment:                                
    Land and construction loans   $ 4,793   $ 5,874   $ 5,862   $ 4,774   $ 4,673  
    Home equity and other loans     927     290     84     108     120  
    Commercial loans     324     1,014     752     900     1,127  
    CRE loans     —     —     —     —     —  
    Total nonaccrual loans – held-for-investment:     6,044     7,178     6,698     5,782     5,920  
    Loans over 90 days past due                                
    and still accruing     268     489     460     248     1,951  
    Total nonperforming loans     6,312     7,667     7,158     6,030     7,871  
    Foreclosed assets     —     —     —     —     —  
    Total nonperforming assets   $ 6,312   $ 7,667   $ 7,158   $ 6,030   $ 7,871  
    Net charge-offs during the quarter   $ 965   $ 197   $ 288   $ 405   $ 254  
    Provision for credit losses on loans during the quarter   $ 274   $ 1,331   $ 153   $ 471   $ 184  
    Allowance for credit losses on loans   $ 48,262   $ 48,953   $ 47,819   $ 47,954   $ 47,888  
    Classified assets   $ 40,034   $ 41,661   $ 32,609   $ 33,605   $ 35,392  
    Allowance for credit losses on loans to total loans     1.38 %   1.40 %   1.40 %   1.42 %   1.44 %
    Allowance for credit losses on loans to total nonperforming loans     764.61 %   638.49 %   668.05 %   795.26 %   608.41 %
    Nonperforming assets to total assets     0.11 %   0.14 %   0.13 %   0.11 %   0.15 %
    Nonperforming loans to total loans     0.18 %   0.22 %   0.21 %   0.18 %   0.24 %
    Classified assets to Heritage Commerce Corp                                
    Tier 1 capital plus allowance for credit losses on loans     7 %   7 %   6 %   6 %   6 %
    Classified assets to Heritage Bank of Commerce                                
    Tier 1 capital plus allowance for credit losses on loans     7 %   7 %   6 %   6 %   6 %
                                     
    OTHER PERIOD-END STATISTICS                                     
    (in $000’s, unaudited)                                     
    Heritage Commerce Corp:                                
    Tangible common equity (1)   $ 522,573   $ 515,657   $ 510,755   $ 504,047   $ 500,591  
    Shareholders’ equity / total assets     12.63 %   12.22 %   12.35 %   12.91 %   12.87 %
    Tangible common equity / tangible assets (1)     9.78 %   9.43 %   9.50 %   9.91 %   9.85 %
    Loan to deposit ratio     74.45 %   72.45 %   72.11 %   76.04 %   75.06 %
    Noninterest-bearing deposits / total deposits     24.10 %   25.19 %   26.90 %   26.71 %   27.94 %
    Total capital ratio     15.9 %   15.6 %   15.6 %   15.6 %   15.6 %
    Tier 1 capital ratio     13.6 %   13.4 %   13.4 %   13.4 %   13.4 %
    Common Equity Tier 1 capital ratio     13.6 %   13.4 %   13.4 %   13.4 %   13.4 %
    Tier 1 leverage ratio     9.8 %   9.6 %   10.0 %   10.2 %   10.2 %
    Heritage Bank of Commerce:                                
    Tangible common equity / tangible assets (1)     10.15 %   9.79 %   9.86 %   10.28 %   10.22 %
    Total capital ratio     15.4 %   15.1 %   15.1 %   15.1 %   15.1 %
    Tier 1 capital ratio     14.1 %   13.9 %   13.9 %   13.9 %   13.9 %
    Common Equity Tier 1 capital ratio     14.1 %   13.9 %   13.9 %   13.9 %   13.9 %
    Tier 1 leverage ratio     10.2 %   10.0 %   10.4 %   10.6 %   10.6 %
                                     

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

                                       
        For the Quarter Ended   For the Quarter Ended  
        March 31, 2025   December 31, 2024  
                    Interest      Average               Interest      Average  
    NET INTEREST INCOME AND NET INTEREST MARGIN   Average   Income/   Yield/   Average   Income/   Yield/  
    (in $000’s, unaudited)   Balance   Expense   Rate   Balance   Expense   Rate  
    Assets:                                  
    Loans, core bank   $ 2,945,072       39,758     5.47 % $ 2,899,347     $ 39,852     5.47 %
    Prepayment fees     —       224     0.03 %   —       35     0.00 %
    Bay View Funding factored receivables     60,250       2,942     19.80 %   59,153       3,084     20.74 %
    Purchased residential mortgages     427,963       3,597     3.41 %   434,846       3,732     3.41 %
    Loan fair value mark / accretion     (1,981 )     181     0.02 %   (2,357 )     429     0.06 %
    Loans, gross (1)(2)     3,431,304       46,702     5.52 %   3,390,989       47,132     5.53 %
    Securities – taxable     876,092       5,559     2.57 %   800,174       4,475     2.22 %
    Securities – exempt from Federal tax (3)     30,480       275     3.66 %   30,570       274     3.57 %
    Other investments and interest-bearing deposits                                  
    in other financial institutions     850,441       9,354     4.46 %   1,014,253       12,220     4.79 %
    Total interest earning assets (3)     5,188,317       61,890     4.84 %   5,235,986       64,101     4.87 %
    Cash and due from banks     31,869                 32,569              
    Premises and equipment, net     10,007                 10,301              
    Goodwill and other intangible assets     173,895                 174,401              
    Other assets     155,808                 154,583              
    Total assets   $ 5,559,896               $ 5,607,840              
                                       
    Liabilities and shareholders’ equity:                                  
    Deposits:                                  
    Demand, noninterest-bearing   $ 1,167,330               $ 1,222,393              
                                       
    Demand, interest-bearing     944,375       1,438     0.62 %   906,581       1,452     0.64 %
    Savings and money market     1,323,038       8,073     2.47 %   1,339,397       9,090     2.70 %
    Time deposits – under $100     11,383       47     1.67 %   11,388       49     1.71 %
    Time deposits – $100 and over     234,421       2,129     3.68 %   234,446       2,310     3.92 %
    ICS/CDARS – interest-bearing demand, money market                                  
    and time deposits     1,036,970       6,248     2.44 %   1,057,286       7,009     2.64 %
    Total interest-bearing deposits     3,550,187       17,935     2.05 %   3,549,098       19,910     2.23 %
    Total deposits     4,717,517       17,935     1.54 %   4,771,491       19,910     1.66 %
                                       
    Short-term borrowings     18       —     0.00 %   28       —     0.00 %
    Subordinated debt, net of issuance costs     39,667       537     5.49 %   39,629       538     5.40 %
    Total interest-bearing liabilities     3,589,872       18,472     2.09 %   3,588,755       20,448     2.27 %
    Total interest-bearing liabilities and demand,                                  
    noninterest-bearing / cost of funds     4,757,202       18,472     1.57 %   4,811,148       20,448     1.69 %
    Other liabilities     109,961                 110,429              
    Total liabilities     4,867,163                 4,921,577              
    Shareholders’ equity     692,733                 686,263              
    Total liabilities and shareholders’ equity   $ 5,559,896               $ 5,607,840              
                                       
    Net interest income / margin (3)           43,418     3.39 %         43,653     3.32 %
    Less tax equivalent adjustment (3)           (58 )               (58 )      
    Net interest income         $ 43,360     3.39 %       $ 43,595     3.31 %
                                       

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

                                       
        For the Quarter Ended   For the Quarter Ended  
        March 31, 2025   March 31, 2024  
                    Interest      Average               Interest      Average  
    NET INTEREST INCOME AND NET INTEREST MARGIN   Average   Income/   Yield/   Average   Income/   Yield/  
    (in $000’s, unaudited)   Balance   Expense   Rate   Balance   Expense   Rate  
    Assets:                                  
    Loans, core bank   $ 2,945,072     $ 39,758     5.47 % $ 2,795,351     $ 37,721     5.43 %
    Prepayment fees     —       224     0.03 %   —       24     0.00 %
    Bay View Funding factored receivables     60,250       2,942     19.80 %   53,511       2,838     21.33 %
    Purchased residential mortgages     427,963       3,597     3.41 %   454,240       3,788     3.35 %
    Loan fair value mark / accretion     (1,981 )     181     0.02 %   (3,113 )     229     0.03 %
    Loans, gross (1)(2)     3,431,304       46,702     5.52 %   3,299,989       44,600     5.44 %
    Securities – taxable     876,092       5,559     2.57 %   1,042,484       6,183     2.39 %
    Securities – exempt from Federal tax (3)     30,480       275     3.66 %   31,939       286     3.60 %
    Other investments and interest-bearing deposits                                  
    in other financial institutions     850,441       9,354     4.46 %   436,093       5,951     5.49 %
    Total interest earning assets (3)     5,188,317       61,890     4.84 %   4,810,505       57,020     4.77 %
    Cash and due from banks     31,869                 33,214              
    Premises and equipment, net     10,007                 10,015              
    Goodwill and other intangible assets     173,895                 176,039              
    Other assets     155,808                 148,863              
    Total assets   $ 5,559,896               $ 5,178,636              
                                       
    Liabilities and shareholders’ equity:                                  
    Deposits:                                  
    Demand, noninterest-bearing   $ 1,167,330               $ 1,177,078              
                                       
    Demand, interest-bearing     944,375       1,438     0.62 %   920,048       1,554     0.68 %
    Savings and money market     1,323,038       8,073     2.47 %   1,067,581       6,649     2.50 %
    Time deposits – under $100     11,383       47     1.67 %   10,945       42     1.54 %
    Time deposits – $100 and over     234,421       2,129     3.68 %   221,211       2,064     3.75 %
    ICS/CDARS – interest-bearing demand, money market                                  
    and time deposits     1,036,970       6,248     2.44 %   963,287       6,611     2.76 %
    Total interest-bearing deposits     3,550,187       17,935     2.05 %   3,183,072       16,920     2.14 %
    Total deposits     4,717,517       17,935     1.54 %   4,360,150       16,920     1.56 %
                                       
    Short-term borrowings     18       —     0.00 %   15       —     0.00 %
    Subordinated debt, net of issuance costs     39,667       537     5.49 %   39,516       538     5.48 %
    Total interest-bearing liabilities     3,589,872       18,472     2.09 %   3,222,603       17,458     2.18 %
    Total interest-bearing liabilities and demand,                                  
    noninterest-bearing / cost of funds     4,757,202       18,472     1.57 %   4,399,681       17,458     1.60 %
    Other liabilities     109,961                 106,663              
    Total liabilities     4,867,163                 4,506,344              
    Shareholders’ equity     692,733                 672,292              
    Total liabilities and shareholders’ equity   $ 5,559,896               $ 5,178,636              
                                       
    Net interest income / margin (3)           43,418     3.39 %         39,562     3.31 %
    Less tax equivalent adjustment (3)           (58 )               (60 )      
    Net interest income         $ 43,360     3.39 %       $ 39,502     3.30 %

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

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

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

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

                                     
    TANGIBLE BOOK VALUE PER SHARE   March 31,    December 31,    September 30,   June 30,   March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Capital components:                                
    Total Equity (GAAP)   $ 696,190     $ 689,727     $ 685,352     $ 679,199     $ 676,296    
    Less: Preferred Stock     —       —       —       —       —    
    Total Common Equity     696,190       689,727       685,352       679,199       676,296    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (5,986 )     (6,439 )     (6,966 )     (7,521 )     (8,074 )  
    Total Tangible Common Equity (non-GAAP)   $ 522,573     $ 515,657     $ 510,755     $ 504,047     $ 500,591    
                                     
    Common shares outstanding at period-end     61,611,121       61,348,095       61,297,344       61,292,094       61,253,625    
                                     
    Tangible book value per share (non-GAAP)   $ 8.48     $ 8.41     $ 8.33     $ 8.22     $ 8.17    
                                               

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

                                     
    RETURN ON AVERAGE TANGIBLE COMMON   For the Quarter Ended:  
    EQUITY AND AVERAGE TANGIBLE COMMON ASSETS   March 31,    December 31,    September 30,   June 30,   March 31,   
    (in $000’s, unaudited)   2025   2024     2024    2024   2024  
    Net income   $ 11,626     $ 10,621     $ 10,507     $ 9,234     $ 10,166    
                                     
    Average tangible common equity components:                                
    Average Equity (GAAP)   $ 692,733     $ 686,263     $ 680,404     $ 675,108     $ 672,292    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (6,264 )     (6,770 )     (7,322 )     (7,867 )     (8,408 )  
    Total Average Tangible Common Equity (non-GAAP)   $ 518,838     $ 511,862     $ 505,451     $ 499,610     $ 496,253    
                                     
    Annualized return on average tangible common equity (non-GAAP)     9.09   %   8.25   %   8.27   %   7.43   %   8.24   %
                                     
    Average tangible assets components:                                
    Average Assets (GAAP)   $ 5,559,896     $ 5,607,840     $ 5,352,067     $ 5,213,171     $ 5,178,636    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (6,264 )     (6,770 )     (7,322 )     (7,867 )     (8,408 )  
    Total Average Tangible Assets (non-GAAP)   $ 5,386,001     $ 5,433,439     $ 5,177,114     $ 5,037,673     $ 5,002,597    
                                     
    Annualized return on average tangible assets (non-GAAP)     0.88   %   0.78   %   0.81   %   0.74   %   0.82   %
                                               

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

                                     
        For the Quarter Ended:  
        March 31,    December 31,    September 30,    June 30,    March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Net interest income before                                
    credit losses on loans (GAAP)   $ 43,360   $ 43,595   $ 39,329   $ 38,867   $ 39,502  
    Tax-equivalent adjustment on securities –                                
    exempt from Federal tax     58     58     59     60     60  
    Net interest income, FTE (non-GAAP)   $ 43,418   $ 43,653   $ 39,388   $ 38,927   $ 39,562  
                                     
    Average balance of total interest earning assets   $ 5,188,317   $ 5,235,986   $ 4,980,082   $ 4,840,670   $ 4,810,505  
                                     
    Net interest margin (annualized net interest income divided by the                                
    average balance of total interest earnings assets) (GAAP)     3.39 %   3.31 %   3.14 %   3.23 %   3.30 %
                                     
    Net interest margin, FTE (annualized net interest income, FTE,                                
    divided by the average balance of total                                
    earnings assets) (non-GAAP)     3.39 %   3.32 %   3.15 %   3.23 %   3.31 %
                                     

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

                                   
        For the Quarter Ended:
        March 31,    December 31,    September 30,   June 30,   March 31, 
    (in $000’s, unaudited)   2025   2024   2024   2024   2024
                                   
                                   
    Net interest income before credit losses on loans   $ 43,360     $ 43,595     $ 39,329     $ 38,867     $ 39,502  
    Noninterest income     2,696       2,775       2,826       2,864       2,638  
    Total revenue     46,056       46,370     $ 42,155     $ 41,731     $ 42,140  
    Less: Noninterest expense     (29,456 )     (30,304 )     (27,555 )     (28,188 )     (27,536 )
    PPNR (non-GAAP)   $ 16,600     $ 16,066     $ 14,600     $ 13,543     $ 14,604  
                                             

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

                                     
        For the Quarter Ended:  
        March 31,    December 31,    September 30,   June 30,   March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Noninterest expense   $ 29,456   $ 30,304   $ 27,555   $ 28,188   $ 27,536  
                                     
    Net interest income before credit losses on loans   $ 43,360   $ 43,595   $ 39,329   $ 38,867   $ 39,502  
    Noninterest income     2,696     2,775     2,826     2,864     2,638  
    Total revenue   $ 46,056   $ 46,370   $ 42,155   $ 41,731   $ 42,140  
                                     
    Efficiency ratio (noninterest expense divided                                
    by total revenue) (non-GAAP)     63.96 %   65.35 %   65.37 %   67.55 %   65.34 %
                                     

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

                                     
    TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS   March 31,    December 31,    September 30,      June 30,       March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024   
    Capital components:                                
    Total Equity (GAAP)   $ 696,190     $ 689,727     $ 685,352     $ 679,199     $ 676,296    
    Less: Preferred Stock     —       —       —       —       —    
    Total Common Equity     696,190       689,727       685,352       679,199       676,296    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (5,986 )     (6,439 )     (6,966 )     (7,521 )     (8,074 )  
    Total Tangible Common Equity (non-GAAP)   $ 522,573     $ 515,657     $ 510,755     $ 504,047     $ 500,591    
                                     
    Asset components:                                
    Total Assets (GAAP)   $ 5,514,255     $ 5,645,006     $ 5,551,596     $ 5,263,024     $ 5,256,074    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (5,986 )     (6,439 )     (6,966 )     (7,521 )     (8,074 )  
    Total Tangible Assets (non-GAAP)   $ 5,340,638     $ 5,470,936     $ 5,376,999     $ 5,087,872     $ 5,080,369    
                                     
    Tangible common equity / tangible assets (non-GAAP)     9.78   %   9.43   %   9.50   %   9.91   %   9.85   %
                                               

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

                                     
    TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS   March 31,    December 31,    September 30,      June 30,    March 31,   
    (in $000’s, unaudited)   2025   2024   2024   2024   2024  
    Capital components:                                
    Total Equity (GAAP)   $ 715,605     $ 709,379     $ 704,585     $ 697,964     $ 694,543    
    Less: Preferred Stock     —       —       —       —       —    
    Total Common Equity     715,605       709,379       704,585       697,964       694,543    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (5,986 )     (6,439 )     (6,966 )     (7,521 )     (8,074 )  
    Total Tangible Common Equity (non-GAAP)   $ 541,988     $ 535,309     $ 529,988     $ 522,812     $ 518,838    
                                     
    Asset components:                                
    Total Assets (GAAP)   $ 5,512,160     $ 5,641,646     $ 5,548,576     $ 5,260,500     $ 5,254,044    
    Less: Goodwill     (167,631 )     (167,631 )     (167,631 )     (167,631 )     (167,631 )  
    Less: Other Intangible Assets     (5,986 )     (6,439 )     (6,966 )     (7,521 )     (8,074 )  
    Total Tangible Assets (non-GAAP)   $ 5,338,543     $ 5,467,576     $ 5,373,979     $ 5,085,348     $ 5,078,339    
                                     
    Tangible common equity / tangible assets (non-GAAP)     10.15   %   9.79   %   9.86   %   10.28   %   10.22   %
                                               

    The MIL Network –

  • MIL-OSI: OceanFirst Financial Corp. Announces First Quarter Financial Results

    Source: GlobeNewswire (MIL-OSI)

    RED BANK, N.J., April 24, 2025 (GLOBE NEWSWIRE) — OceanFirst Financial Corp. (NASDAQ:OCFC) (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), announced net income available to common stockholders of $20.5 million, or $0.35 per diluted share, for the quarter ended March 31, 2025, a decrease from $27.7 million, or $0.47 per diluted share, for the corresponding prior year period, and a decrease from $20.9 million, or $0.36 per diluted share, for the linked quarter. Selected performance metrics are as follows (refer to “Selected Quarterly Financial Data” for additional information):

        For the Three Months Ended,
        March 31,   December 31,   March 31,
    Performance Ratios (Annualized):   2025   2024   2024
    Return on average assets   0.62 %   0.61 %   0.82 %
    Return on average stockholders’ equity   4.85     4.88     6.65  
    Return on average tangible stockholders’ equity (a)   7.05     7.12     9.61  
    Return on average tangible common equity (a)   7.40     7.47     10.09  
    Efficiency ratio   65.67     67.86     59.56  
    Net interest margin   2.90     2.69     2.81  

    (a) Return on average tangible stockholders’ equity and return on average tangible common equity (“ROTCE”) are non-GAAP (“generally accepted accounting principles”) financial measures. Refer to “Explanation of Non-GAAP Financial Measures,” “Selected Quarterly Financial Data” and “Non-GAAP Reconciliation” tables for reconciliation and additional information regarding non-GAAP financial measures.

    Core earnings1 for the quarter ended March 31, 2025 were $20.3 million, or $0.35 per diluted share, a decrease from $25.6 million, or $0.44 per diluted share, for the corresponding prior year period, and a decrease from $22.1 million, or $0.38 per diluted share, for the linked quarter.

    Core earnings PTPP1 for the quarter ended March 31, 2025 was $32.4 million, or $0.56 per diluted share, as compared to $36.2 million, or $0.62 per diluted share, for the corresponding prior year period, and $29.6 million, or $0.51 per diluted share, for the linked quarter. Selected performance metrics are as follows:

        For the Three Months Ended,
        March 31,   December 31,   March 31,
    Core Ratios1 (Annualized):     2025       2024       2024  
    Return on average assets     0.62 %     0.65 %     0.76 %
    Return on average tangible stockholders’ equity     7.00       7.51       8.91  
    Return on average tangible common equity     7.34       7.89       9.36  
    Efficiency ratio     65.81       67.74       61.05  
    Core diluted earnings per share   $ 0.35     $ 0.38     $ 0.44  
    Core PTPP diluted earnings per share     0.56       0.51       0.62  

    Key developments for the recent quarter are described below:

    • Margin Expansion: Net interest margin increased 21 basis points to 2.90%, from 2.69%, and net interest income increased by $3.3 million to $86.7 million driven by a decrease in total cost of deposits to 2.06% from 2.32% in the linked quarter.
    • Commercial Loans: Commercial and industrial loans increased $95.1 million, or 6.1% as compared to the linked quarter. Additionally, the total commercial loan pipeline increased 90% to $375.6 million from $197.5 million in the linked quarter.
    • Provision for Credit Losses: Provision for credit losses was $5.3 million reflecting a net loan reserve build of $5.2 million, primarily driven by elevated uncertainty around macroeconomic conditions. This resulted in an increase of five basis points in the allowance for loan credit losses to total loans to 0.78%. Criticized and classified loans decreased by 5% to $149.3 million compared to the linked quarter, providing strong evidence of stable credit performance for the Company’s loan portfolio.

    Chairman and Chief Executive Officer, Christopher D. Maher, commented on the Company’s results, “We are pleased to present our current quarter results, which reflect a meaningful expansion of net interest income and net interest margin, continued strong asset quality metrics, and further capital accretion, including share repurchases.” Mr. Maher added, “Additionally, we understand the increased market uncertainty and volatility, but we have confidence that the Company is well-positioned. Finally, we are pleased that the first quarter talent recruiting season has resulted in a robust addition of commercial banking talent. Reflecting the strength of the commercial banking platform we have built, 36 highly experienced commercial bankers have joined OceanFirst this year.”

    The Company’s Board of Directors declared its 113th consecutive quarterly cash dividend on common stock. The quarterly cash dividend on common stock of $0.20 per share will be paid on May 16, 2025 to common stockholders of record on May 5, 2025. The Company’s Board of Directors also previously declared a quarterly cash dividend on preferred stock of $0.4375 per depositary share, representing 1/40th interest in the Series A Preferred Stock. This dividend will be paid on May 15, 2025 to preferred stockholders of record on April 30, 2025. The Company has notified the preferred stockholders that it intends to redeem the Series A Preferred Stock in full on May 15, 2025.

    1 Core earnings and core earnings before income taxes and provision for credit losses (“PTPP” or “Pre-Tax-Pre-Provision”), and ratios derived therefrom, are non-GAAP financial measures. For the periods presented, core earnings exclude merger related expenses, net (gain) loss on equity investments, net gain on sale of trust business, the opening provision for credit losses in connection with the acquisition of Spring Garden Capital Group, LLC (“Spring Garden”), the Federal Deposit Insurance Corporation (“FDIC”) special assessment, and the income tax effect of these items, (collectively referred to as “non-core” operations). PTPP excludes the aforementioned pre-tax “non-core” items along with income tax expense (benefit) and provision for credit losses (exclusive of the Spring Garden opening provision). Refer to “Explanation of Non-GAAP Financial Measures,” “Selected Quarterly Financial Data” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.

    Results of Operations

    The current quarter was impacted by a decrease in average interest earning assets and liabilities, benefited from funding cost repricing efforts, and included a sale of non-performing residential and consumer loans of $5.1 million, which had related charge-offs of $720,000. Additionally, the current quarter included non-recurring benefits of $842,000 in other income and $1.3 million in normal incentive related adjustments.

    Net Interest Income and Margin

    Three months ended March 31, 2025 vs. March 31, 2024

    Net interest income increased to $86.7 million, from $86.2 million, primarily reflecting the net impact of the decreasing interest rate environment. Net interest margin increased to 2.90%, from 2.81%, which included the impact of purchase accounting accretion and prepayment fees of 0.03% and 0.04%, respectively. Net interest margin increased primarily due to the decrease in cost of funds outpacing the decrease in yield on average interest-earning assets.

    Average interest-earning assets decreased by $238.4 million primarily due to a decrease in commercial loans and securities. The average yield for interest-earning assets decreased to 5.13%, from 5.26%.

    The cost of average interest-bearing liabilities decreased to 2.78%, from 3.03%, primarily due to lower cost of deposits and, to a lesser extent, Federal Home Loan Bank (“FHLB”) advances. The total cost of deposits decreased 25 basis points to 2.06%, from 2.31%. Average interest-bearing liabilities decreased by $226.1 million, primarily due to decreases in savings, time deposits and other borrowings, largely offset by an increase in FHLB advances.

    Three months ended March 31, 2025 vs. December 31, 2024

    Net interest income increased by $3.3 million and net interest margin increased to 2.90%, from 2.69%, primarily reflecting the impact of deposit repricing. Net interest income included the impact of purchase accounting accretion and prepayment fees of 0.03% in the current quarter and none in the prior quarter.

    Average interest-earning assets decreased by $219.5 million, primarily due to decreases in securities and interest-earning cash deposits. The yield on average interest-earning assets decreased to 5.13%, from 5.15%.

    Average interest-bearing liabilities decreased by $211.3 million, primarily due to decreases in deposits and other borrowings, partly offset by an increase in FHLB advances. The total cost of average interest-bearing liabilities decreased to 2.78%, from 3.04%, primarily due to lower cost of deposits. The total cost of deposits decreased to 2.06%, from 2.32%.

    Provision for Credit Losses

    Provision for credit losses for the quarter ended March 31, 2025 was $5.3 million, as compared to $591,000 for the corresponding prior year period and $3.5 million for the linked quarter. The linked quarter included a $1.4 million initial provision for credit losses related to the acquisition of Spring Garden. The current quarter provision was primarily driven by elevated uncertainty around macroeconomic conditions.

    Net loan charge-offs were $636,000 for the quarter ended March 31, 2025, as compared to net loan charge-offs of $349,000 for the corresponding prior year period and net loan recoveries of $158,000 in the linked quarter. The current quarter includes charge-offs of $720,000 related to the sale of $5.1 million non-performing residential and consumer loans. Refer to “Results of Operations” section for further discussion.

    Non-interest Income

    Three months ended March 31, 2025 vs. March 31, 2024

    Other income decreased to $11.3 million, as compared to $12.3 million. Other income was favorably impacted by non-core operations of $205,000 related to net gains on equity investments in the current quarter. The prior year other income was favorably impacted by non-core operations of $3.1 million related to net gains on equity investments and a gain on sale of a portion of the Company’s trust business.

    Excluding non-core operations, other income increased by $1.8 million. The primary drivers were increases related to net gain on sale of loans of $501,000, commercial loan swap income of $482,000, and an increase in non-recurring other income of $842,000 as noted above.

    Three months ended March 31, 2025 vs. December 31, 2024

    Excluding non-core operations, other income decreased by $1.2 million from $12.2 million in the linked quarter. The primary drivers were decreases in fees and service charges of $1.5 million, primarily due to lower title fee income as a result of seasonality, and income from bank owned life insurance of $686,000, related to non-recurring death benefits of $768,000 in the linked quarter. This was partly offset by increases in commercial loan swap income of $534,000 and non-recurring other income of $842,000 noted above.

    Non-interest Expense

    Three months ended March 31, 2025 vs. March 31, 2024

    Operating expenses increased to $64.3 million, as compared to $58.7 million. Operating expenses in the prior year were adversely impacted by non-core operations of $418,000 from an FDIC special assessment.

    Excluding non-core operations, operating expenses increased by $6.0 million. The primary driver was an increase in compensation and benefits of $4.0 million, mostly due to acquisitions at the end of the prior year and annual merit increases. Additional drivers were increases in other operating expenses of $1.0 million, due to additional loan servicing expense, and increases in data processing expense of $691,000, partly due to acquisitions at the end of the prior year.

    Three months ended March 31, 2025 vs. December 31, 2024

    Operating expenses in the linked quarter were $64.8 million and were adversely impacted by non-core items of $110,000 from merger-related expenses. Excluding non-core operations, operating expenses decreased by $445,000. This included a decrease in normal incentive related adjustments of $1.3 million, offset by annual merit increases during the year. Additionally, there were decreases in other operating expense of $840,000, mostly related to lower title costs and marketing of $507,000. This was partly offset by an increase in federal deposit insurance and regulatory assessments of $466,000.

    Income Tax Expense

    The provision for income taxes was $6.8 million for the quarter ended March 31, 2025, as compared to $10.6 million for the same prior year period and $5.1 million for the linked quarter. The effective tax rate was 24.1% for the quarter ended March 31, 2025, as compared to 27.1% for the same prior year period and 18.7% for the linked quarter. The prior year’s effective tax rate was negatively impacted by 3.0% due to a one-time write-off of a deferred tax asset of $1.2 million. The linked quarter’s effective tax rate was positively impacted by utilization of higher tax credits.

    Financial Condition

    March 31, 2025 vs. December 31, 2024

    Total assets decreased by $112.0 million to $13.31 billion, from $13.42 billion, primarily due to decreases in total debt securities. Debt securities available-for-sale decreased by $81.3 million to $746.2 million, from $827.5 million, primarily due to principal reductions, maturities and calls. Debt securities held-to-maturity decreased by $40.4 million to $1.01 billion, from $1.05 billion, primarily due to principal repayments. Loans held-for-sale decreased by $11.5 million to $9.7 million from $21.2 million. Total loans increased by $7.2 million to $10.13 billion, from $10.12 billion, while the loan pipeline increased by $197.8 million to $504.4 million, from $306.7 million. Other assets decreased by $14.9 million to $170.8 million, from $185.7 million, primarily due to a decrease in market values associated with customer interest rate swap programs.

    Total liabilities decreased by $118.3 million to $11.60 billion, from $11.72 billion primarily related to a funding mix-shift. Deposits increased by $110.7 million to $10.18 billion, from $10.07 billion, primarily due to increases in non-interest bearing, savings and time deposits. Time deposits increased to $2.12 billion, from $2.08 billion, representing 20.8% and 20.7% of total deposits, respectively. Time deposits included an increase in brokered time deposits of $295.8 million, offset by a decrease in retail time deposits of $251.1 million. The loan-to-deposit ratio was 99.5%, as compared to 100.5%. FHLB advances decreased by $181.6 million to $891.0 million, from $1.07 billion partly driven by a shift to slightly favorably priced brokered deposits.

    Other liabilities decreased by $58.0 million to $240.4 million, from $298.4 million, primarily due to a decrease in the market values of derivatives associated with customer interest rate swaps and related collateral received from counterparties.

    Capital levels remain strong and in excess of “well-capitalized” regulatory levels at March 31, 2025, including the Company’s estimated common equity tier one capital ratio which remained at 11.2%.

    Total stockholders’ equity increased to $1.71 billion, as compared to $1.70 billion, primarily reflecting net income, partially offset by capital returns comprising of dividends and share repurchases. During the quarter ended March 31, 2025, the Company repurchased 398,395 shares totaling $6.9 million representing a weighted average cost of $17.20. The Company had 1,228,863 shares available for repurchase under the authorized repurchase program. Additionally, accumulated other comprehensive loss decreased by $2.6 million primarily due to increases in fair market value of available-for-sale debt securities, net of tax.

    The Company’s tangible common equity2 increased by $7.3 million to $1.12 billion. The Company’s stockholders’ equity to assets ratio was 12.84% at March 31, 2025, and tangible common equity to tangible assets ratio increased by 14 basis points during the quarter to 8.76%, primarily due to the drivers described above.

    Book value per common share increased to $29.27, as compared to $29.08. Tangible book value per common share2 increased to $19.16, as compared to $18.98.

    2 Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures and exclude the impact of intangible assets, goodwill, and preferred equity from both stockholders’ equity and total assets. Refer to “Explanation of Non-GAAP Financial Measures” and the “Non-GAAP Reconciliation” tables for additional information regarding non-GAAP financial measures.

    Asset Quality

    March 31, 2025 vs. December 31, 2024

    The Company’s non-performing loans increased to $37.0 million, from $35.5 million, and represented 0.37% and 0.35% of total loans, respectively. The allowance for loan credit losses as a percentage of total non-performing loans was 213.14%, as compared to 207.19%. The level of 30 to 89 days delinquent loans increased to $46.2 million, from $36.6 million, primarily related to commercial loans. Criticized and classified assets, including other real estate owned, decreased to $151.2 million, from $159.9 million. The Company’s allowance for loan credit losses was 0.78% of total loans, as compared to 0.73%. Refer to “Provision for Credit Losses” section for further discussion.

    The Company’s asset quality, excluding purchased with credit deterioration (“PCD”) loans, was as follows. Non-performing loans increased to $29.2 million, from $27.6 million. The allowance for loan credit losses as a percentage of total non-performing loans was 269.43%, as compared to 266.73%. The level of 30 to 89 days delinquent loans, excluding non-performing loans, increased to $35.8 million, from $33.6 million.

    Explanation of Non-GAAP Financial Measures

    Reported amounts are presented in accordance with GAAP. The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding non-core operations and in some instances excluding income taxes and provision for credit losses, and reporting equity and asset amounts excluding intangible assets, goodwill or preferred stock, all of which can vary from period to period, provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.

    Annual Meeting

    The Company previously announced that its Annual Meeting of Stockholders will be held on Monday, May 19, 2025 at 8:00 a.m. Eastern Time. The record date for stockholders to vote at the Annual Meeting is Tuesday, March 25, 2025. Voting before the meeting is encouraged, even for stockholders planning to participate in the virtual webcast. Votes may be submitted by telephone or online according to the instructions on the proxy card or by mail. A link to the live webcast is available by visiting oceanfirst.com – Investor Relations. Access will begin at 7:45 a.m. Eastern Time to allow time for stockholders to log-in with the control number provided on the proxy card prior to the 8:00 a.m. Eastern Time scheduled start. Eligible stockholders may also vote during the live meeting online at www.virtualshareholdermeeting.com/OCFC2025 by entering the 16-digit control number included on the proxy card or notice. As a reminder, participants of the meeting are not required to vote. Additional information regarding virtual access to the meeting will be distributed prior to the meeting.

    Conference Call

    As previously announced, the Company will host an earnings conference call on Friday, April 25, 2025 at 11:00 a.m. Eastern Time. The direct dial number for the call is (833) 470-1428, using the access code 934356. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (855) 762-8306, from one hour after the end of the call until May 2, 2025. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

    OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank N.A., founded in 1902, is a $13.3 billion regional bank providing financial services throughout New Jersey and in the major metropolitan areas between Massachusetts and Virginia. OceanFirst Bank delivers commercial and residential financing, treasury management, trust and asset management, and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey. To learn more about OceanFirst, go to www.oceanfirst.com. 

    Forward-Looking Statements

    In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project”, “will”, “should”, “may”, “view”, “opportunity”, “potential”, or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, inflation, general economic conditions, including potential recessionary conditions, levels of unemployment in the Company’s lending area, real estate market values in the Company’s lending area, potential goodwill impairment, natural disasters, potential increases to flood insurance premiums, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the imposition of tariffs or other domestic or international governmental policies, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, the availability of low-cost funding, changes in liquidity, including the size and composition of the Company’s deposit portfolio, and the percentage of uninsured deposits in the portfolio, changes in capital management and balance sheet strategies and the ability to successfully implement such strategies, competition, demand for financial services in the Company’s market area, changes in consumer spending, borrowing and saving habits, changes in accounting principles, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees, the impact of pandemics on our operations and financial results and those of our customers and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, under Item 1A – Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

     
    OceanFirst Financial Corp.
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (dollars in thousands)
     
        March 31,   December 31,   March 31,
          2025       2024       2024  
        (Unaudited)       (Unaudited)
    Assets            
    Cash and due from banks   $ 163,721     $ 123,615     $ 130,422  
    Debt securities available-for-sale, at estimated fair value     746,168       827,500       744,944  
    Debt securities held-to-maturity, net of allowance for securities credit losses of $898 at March 31, 2025, $967 at December 31, 2024, and $1,058 at March 31, 2024 (estimated fair value of $926,075 at March 31, 2025, $952,917 at December 31, 2024, and $1,029,965 at March 31, 2024)     1,005,476       1,045,875       1,128,666  
    Equity investments     87,365       84,104       103,201  
    Restricted equity investments, at cost     102,172       108,634       85,689  
    Loans receivable, net of allowance for loan credit losses of $78,798 at March 31, 2025, $73,607 at December 31, 2024, and $67,173 at March 31, 2024     10,058,072       10,055,429       10,068,209  
    Loans held-for-sale     9,698       21,211       4,702  
    Interest and dividends receivable     44,843       45,914       52,502  
    Other real estate owned     1,917       1,811       —  
    Premises and equipment, net     114,588       115,256       119,211  
    Bank owned life insurance     269,398       270,208       266,615  
    Assets held for sale     —       —       28  
    Goodwill     523,308       523,308       506,146  
    Intangibles     11,740       12,680       8,669  
    Other assets     170,812       185,702       199,974  
    Total assets   $ 13,309,278     $ 13,421,247     $ 13,418,978  
    Liabilities and Stockholders’ Equity            
    Deposits   $ 10,177,023     $ 10,066,342     $ 10,236,851  
    Federal Home Loan Bank advances     891,021       1,072,611       658,436  
    Securities sold under agreements to repurchase with customers     65,132       60,567       66,798  
    Other borrowings     197,808       197,546       425,722  
    Advances by borrowers for taxes and insurance     28,789       23,031       28,187  
    Other liabilities     240,388       298,393       337,147  
    Total liabilities     11,600,161       11,718,490       11,753,141  
    Stockholders’ equity:            
    OceanFirst Financial Corp. stockholders’ equity     1,708,322       1,701,650       1,665,112  
    Non-controlling interest     795       1,107       725  
    Total stockholders’ equity     1,709,117       1,702,757       1,665,837  
    Total liabilities and stockholders’ equity   $ 13,309,278     $ 13,421,247     $ 13,418,978  
    OceanFirst Financial Corp.
    CONSOLIDATED STATEMENTS OF INCOME
    (in thousands, except per share amounts)
     
        For the Three Months Ended,
        March 31,   December 31,   March 31,
          2025       2024       2024  
        |———————- (Unaudited) ———————-|
    Interest income:            
    Loans   $ 133,019     $ 135,438     $ 137,121  
    Debt securities     17,270       19,400       19,861  
    Equity investments and other     3,414       4,782       4,620  
    Total interest income     153,703       159,620       161,602  
    Interest expense:            
    Deposits     51,046       59,889       59,855  
    Borrowed funds     16,005       16,402       15,523  
    Total interest expense     67,051       76,291       75,378  
    Net interest income     86,652       83,329       86,224  
    Provision for credit losses     5,340       3,467       591  
    Net interest income after provision for credit losses     81,312       79,862       85,633  
    Other income:            
    Bankcard services revenue     1,463       1,595       1,416  
    Trust and asset management revenue     406       416       526  
    Fees and service charges     4,712       6,207       4,473  
    Net gain on sales of loans     858       1,076       357  
    Net gain (loss) on equity investments     205       (5 )     1,923  
    Net loss from other real estate operations     (16 )     (20 )     —  
    Income from bank owned life insurance     1,852       2,538       1,862  
    Commercial loan swap income     620       86       138  
    Other     1,153       339       1,591  
    Total other income     11,253       12,232       12,286  
    Operating expenses:            
    Compensation and employee benefits     36,740       36,602       32,759  
    Occupancy     5,497       5,280       5,199  
    Equipment     921       1,026       1,130  
    Marketing     1,108       1,615       990  
    Federal deposit insurance and regulatory assessments     2,983       2,517       3,135  
    Data processing     6,647       6,366       5,956  
    Check card processing     1,170       1,134       1,050  
    Professional fees     2,425       2,620       2,732  
    Amortization of intangibles     940       876       844  
    Merger related expenses     —       110       —  
    Other operating expense     5,863       6,703       4,877  
    Total operating expenses     64,294       64,849       58,672  
    Income before provision for income taxes     28,271       27,245       39,247  
    Provision for income taxes     6,808       5,083       10,637  
    Net income     21,463       22,162       28,610  
    Net (loss) income attributable to non-controlling interest     (46 )     253       (57 )
    Net income attributable to OceanFirst Financial Corp.     21,509       21,909       28,667  
    Dividends on preferred shares     1,004       1,004       1,004  
    Net income available to common stockholders   $ 20,505     $ 20,905     $ 27,663  
    Basic earnings per share   $ 0.35     $ 0.36     $ 0.47  
    Diluted earnings per share   $ 0.35     $ 0.36     $ 0.47  
    Average basic shares outstanding     58,102       58,026       58,789  
    Average diluted shares outstanding     58,111       58,055       58,791  
    OceanFirst Financial Corp.
    SELECTEDLOANAND DEPOSIT DATA
    (dollars in thousands)
     
    LOANS RECEIVABLE   At
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Commercial:                    
    Commercial real estate – investor   $ 5,200,137     $ 5,287,683     $ 5,273,159     $ 5,324,994     $ 5,322,755  
    Commercial and industrial:                    
    Commercial and industrial – real estate (1)     896,647       902,219       841,930       857,710       914,582  
    Commercial and industrial – non-real estate (1)     748,575       647,945       660,879       616,400       677,176  
    Total commercial and industrial     1,645,222       1,550,164       1,502,809       1,474,110       1,591,758  
        Total commercial     6,845,359       6,837,847       6,775,968       6,799,104       6,914,513  
    Consumer:                    
    Residential real estate     3,053,318       3,049,763       3,003,213       2,977,698       2,965,276  
    Home equity loans and lines and other consumer (“other consumer”)     226,633       230,462       242,975       242,526       245,859  
        Total consumer     3,279,951       3,280,225       3,246,188       3,220,224       3,211,135  
        Total loans     10,125,310       10,118,072       10,022,156       10,019,328       10,125,648  
    Deferred origination costs (fees), net     11,560       10,964       10,508       10,628       9,734  
    Allowance for loan credit losses     (78,798 )     (73,607 )     (69,066 )     (68,839 )     (67,173 )
        Loans receivable, net   $ 10,058,072     $ 10,055,429     $ 9,963,598     $ 9,961,117     $ 10,068,209  
    Mortgage loans serviced for others   $ 222,963     $ 191,279     $ 142,394     $ 104,136     $ 89,555  
      At March 31, 2025 Average Yield                    
    Loan pipeline (2):                      
    Commercial 7.37 %   $ 375,622     $ 197,491     $ 199,818     $ 166,206     $ 66,167  
    Residential real estate 6.41       116,121       97,385       137,978       80,330       57,340  
    Other consumer 8.51       12,681       11,783       13,788       12,586       13,030  
    Total 7.18 %   $ 504,424     $ 306,659     $ 351,584     $ 259,122     $ 136,537  
      For the Three Months Ended
      March 31,   December 31,   September 30,   June 30,   March 31,
      2025     2024       2024       2024       2024  
      Average Yield                    
    Loan originations:                      
    Commercial (3) 7.61 %   $ 233,968     $ 268,613     $ 245,886     $ 56,053     $ 123,010  
    Residential real estate 6.53       167,162       235,370       169,273       121,388       78,270  
    Other consumer 8.49       15,825       11,204       15,760       16,970       11,405  
    Total 7.21 %   $ 416,955     $ 515,187     $ 430,919     $ 194,411     $ 212,685  
    Loans sold     $ 104,991    (4) $ 127,508     $ 65,296     $ 45,045     $ 29,965  
    (1) During the quarter ended March 31, 2025, the Company retrospectively reclassified loans which were previously referred to as ‘commercial real estate – owner occupied’ and ‘commercial and industrial’ to ‘commercial and industrial – real estate’ and ‘commercial and industrial – non-real estate’, respectively. Collectively, these loans are referred to as ‘commercial and industrial’.
    (2) Loan pipeline includes loans approved but not funded.
    (3) Excludes commercial loan pool purchases of $24.3 million and $76.1 million for the three months ended March 31, 2025 and December 31, 2024, respectively.
    (4) Excludes sale of non-performing residential and consumer loans of $5.1 million for the three months ended March 31, 2025.

     

    DEPOSITS   At
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Type of Account                    
    Non-interest-bearing   $ 1,660,738     $ 1,617,182     $ 1,638,447     $ 1,632,521     $ 1,639,828  
    Interest-bearing checking     4,006,653       4,000,553       3,896,348       3,667,837       3,865,699  
    Money market     1,337,570       1,301,197       1,288,555       1,210,312       1,150,979  
    Savings     1,052,504       1,066,438       1,071,946       1,115,688       1,260,309  
    Time deposits (1)     2,119,558       2,080,972       2,220,871       2,367,659       2,320,036  
    Total deposits   $ 10,177,023     $ 10,066,342     $ 10,116,167     $ 9,994,017     $ 10,236,851  
    (1) Includes brokered time deposits of $370.5 million, $74.7 million, $201.0 million, $401.6 million, and $543.4 million at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively.

     

    OceanFirst Financial Corp.
    ASSET QUALITY
    (dollars in thousands)
     
        March 31,   December 31,   September 30,   June 30,   March 31,
    ASSET QUALITY(1)     2025       2024       2024       2024       2024  
    Non-performing loans:                    
    Commercial real estate – investor   $ 23,595     $ 17,000     $ 12,478     $ 19,761     $ 21,507  
    Commercial and industrial:                    
    Commercial and industrial – real estate     4,690       4,787       4,368       4,081       3,355  
    Commercial and industrial – non-real estate     22       32       122       434       567  
    Total commercial and industrial     4,712       4,819       4,490       4,515       3,922  
    Residential real estate     5,709       10,644       9,108       7,213       7,181  
    Other consumer     2,954       3,064       2,063       1,933       2,401  
    Total non-performing loans(1)   $ 36,970     $ 35,527     $ 28,139     $ 33,422     $ 35,011  
    Other real estate owned     1,917       1,811       —       —       —  
    Total non-performing assets   $ 38,887     $ 37,338     $ 28,139     $ 33,422     $ 35,011  
    Delinquent loans 30 to 89 days   $ 46,246     $ 36,550     $ 15,458     $ 9,655     $ 17,534  
    Modifications to borrowers experiencing financial difficulty(2)                    
    Non-performing (included in total non-performing loans above)   $ 8,307     $ 3,232     $ 3,043     $ 3,210     $ 3,467  
    Performing     27,592       27,631       20,652       20,529       8,579  
    Total modifications to borrowers experiencing financial difficulty(2)   $ 35,899     $ 30,863     $ 23,695     $ 23,739     $ 12,046  
    Allowance for loan credit losses   $ 78,798     $ 73,607     $ 69,066     $ 68,839     $ 67,173  
    Allowance for loan credit losses as a percent of total loans receivable(3)     0.78 %     0.73 %     0.69 %     0.69 %     0.66 %
    Allowance for loan credit losses as a percent of total non-performing loans(3)     213.14       207.19       245.45       205.97       191.86  
    Non-performing loans as a percent of total loans receivable     0.37       0.35       0.28       0.33       0.35  
    Non-performing assets as a percent of total assets     0.29       0.28       0.21       0.25       0.26  
    Supplemental PCD and non-performing loans                    
    PCD loans, net of allowance for loan credit losses   $ 21,737     $ 22,006     $ 15,323     $ 16,058     $ 16,700  
    Non-performing PCD loans     7,724       7,931       2,887       2,841       3,525  
    Delinquent PCD and non-performing loans 30 to 89 days     10,489       2,997       1,279       1,188       2,088  
    PCD modifications to borrowers experiencing financial difficulty(2)     22       23       24       26       25  
    Asset quality, excluding PCD loans(4)                    
    Non-performing loans(1)     29,246       27,596       25,252       30,581       31,486  
    Non-performing assets     31,163       29,407       25,252       30,581       31,486  
    Delinquent loans 30 to 89 days (excludes non-performing loans)     35,757       33,553       14,179       8,467       15,446  
    Modifications to borrowers experiencing financial difficulty(2)     35,877       30,840       23,671       23,713       12,021  
    Allowance for loan credit losses as a percent of total non-performing loans(3)     269.43 %     266.73 %     273.51 %     225.10 %     213.34 %
    Non-performing loans as a percent of total loans receivable     0.29       0.27       0.25       0.31       0.31  
    Non-performing assets as a percent of total assets     0.23       0.22       0.19       0.23       0.23  
    (1) The quarter ended March 31, 2025 included the sale of non-performing residential and consumer loans of $5.1 million and the quarter ended September 30, 2024 included the resolution of a single commercial relationship exposure of $7.2 million.
    (2) Balances have been revised to represent only modifications to borrowers experiencing financial difficulty, in accordance with ASU 2022-02 adopted on January 1, 2023.
    (3) Loans acquired from acquisitions were recorded at fair value. The net unamortized credit and PCD marks on these loans, not reflected in the allowance for loan credit losses, was $5.6 million, $6.0 million, $5.7 million, $6.1 million and $7.0 million at March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024, respectively.
    (4) All balances and ratios exclude PCD loans.
    NET LOAN (CHARGE-OFFS) RECOVERIES   For the Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Net loan (charge-offs) recoveries:                    
    Loan charge-offs   $ (798 )   $ (55 )   $ (124 )   $ (1,600 )   $ (441 )
    Recoveries on loans     162       213       212       148       92  
    Net loan (charge-offs) recoveries   $ (636 )   $ 158     $ 88     $ (1,452 )   $ (349 )
    Net loan (charge-offs) recoveries to average total loans (annualized)     0.03 %     NM *     NM *     0.06 %     0.01 %
    Net loan (charge-offs) recoveries detail:                    
    Commercial   $ 25     $ 92     $ 129     $ (1,576 ) (1) $ (35 )
    Residential real estate     (720 ) (2)   (17 )     (6 )     87       66  
    Other consumer     59       83       (35 )     37       (380 )
    Net loan (charge-offs) recoveries   $ (636 )   $ 158     $ 88     $ (1,452 )   $ (349 )
    (1) The three months ended June 30, 2024 included a charge-off related to a single commercial real estate relationship of $1.6 million.
    (2) The three months ended March 31, 2025 included charge-offs of $720,000 related to the sale of non-performing residential loans.
    * Not meaningful as amounts are net loan recoveries.

     

    OceanFirst Financial Corp.
    ANALYSIS OF NET INTEREST INCOME
     
        For the Three Months Ended
        March 31, 2025   December 31, 2024   March 31, 2024
    (dollars in thousands)   Average
    Balance    		   Interest   Average
    Yield/
    Cost (1)    		   Average
    Balance    		   Interest   Average
    Yield/
    Cost (1)    		   Average
    Balance    		   Interest   Average
    Yield/
    Cost (1)
    Assets:                                    
    Interest-earning assets:                                    
    Interest-earning deposits and short-term investments   $ 95,439     $ 983   4.18 %   $ 195,830     $ 2,415   4.91 %   $ 163,192     $ 2,226   5.49 %
    Securities (2)     2,003,206       19,701   3.99       2,116,911       21,767   4.09       2,098,421       22,255   4.27  
    Loans receivable, net (3)                                    
    Commercial     6,781,005       98,260   5.88       6,794,158       101,003   5.91       6,925,048       104,421   6.06  
    Residential real estate     3,065,679       31,270   4.08       3,049,092       30,455   4.00       2,974,468       28,596   3.85  
    Other consumer     228,553       3,489   6.19       236,161       3,980   6.70       248,396       4,104   6.65  
    Allowance for loan credit losses, net of deferred loan costs and fees     (61,854 )     —   —       (60,669 )     —   —       (59,141 )     —   —  
    Loans receivable, net     10,013,383       133,019   5.37       10,018,742       135,438   5.38       10,088,771       137,121   5.46  
    Total interest-earning assets     12,112,028       153,703   5.13       12,331,483       159,620   5.15       12,350,384       161,602   5.26  
    Non-interest-earning assets     1,199,865               1,213,569               1,206,336          
    Total assets   $ 13,311,893             $ 13,545,052             $ 13,556,720          
    Liabilities and Stockholders’ Equity:                                    
    Interest-bearing liabilities:                                    
    Interest-bearing checking   $ 4,135,952       21,433   2.10 %   $ 4,050,428       22,750   2.23 %   $ 3,925,965       20,795   2.13 %
    Money market     1,322,003       9,353   2.87       1,325,119       10,841   3.25       1,092,003       9,172   3.38  
    Savings     1,058,015       1,785   0.68       1,070,816       2,138   0.79       1,355,718       4,462   1.32  
    Time deposits     1,916,109       18,475   3.91       2,212,750       24,160   4.34       2,414,063       25,426   4.24  
    Total     8,432,079       51,046   2.46       8,659,113       59,889   2.75       8,787,749       59,855   2.74  
    FHLB Advances     996,293       11,359   4.62       854,748       10,030   4.67       644,818       7,771   4.85  
    Securities sold under agreements to repurchase     64,314       428   2.70       76,856       513   2.66       68,500       411   2.41  
    Other borrowings     283,150       4,218   6.04       396,412       5,859   5.88       500,901       7,341   5.89  
    Total borrowings     1,343,757       16,005   4.83       1,328,016       16,402   4.91       1,214,219       15,523   5.14  
    Total interest-bearing liabilities     9,775,836       67,051   2.78       9,987,129       76,291   3.04       10,001,968       75,378   3.03  
    Non-interest-bearing deposits     1,597,972               1,627,376               1,634,583          
    Non-interest-bearing liabilities     222,951               227,221               247,129          
    Total liabilities     11,596,759               11,841,726               11,883,680          
    Stockholders’ equity     1,715,134               1,703,326               1,673,040          
    Total liabilities and equity   $ 13,311,893             $ 13,545,052             $ 13,556,720          
    Net interest income       $ 86,652           $ 83,329           $ 86,224    
    Net interest rate spread (4)           2.35 %           2.11 %           2.23 %
    Net interest margin (5)           2.90 %           2.69 %           2.81 %
    Total cost of deposits (including non-interest-bearing deposits)           2.06 %           2.32 %           2.31 %
    (1) Average yields and costs are annualized.
    (2) Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost, net of allowance for securities credit losses.
    (3) Amount is net of deferred loan costs and fees, undisbursed loan funds, discounts and premiums and allowance for loan credit losses, and includes loans held for sale and non-performing loans.
    (4) Net 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 divided by average interest-earning assets.

     

    OceanFirst Financial Corp.
    SELECTED QUARTERLY FINANCIAL DATA
    (in thousands, except per share amounts)
     
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Selected Financial Condition Data:                    
    Total assets   $ 13,309,278     $ 13,421,247     $ 13,488,483     $ 13,321,755     $ 13,418,978  
    Debt securities available-for-sale, at estimated fair value     746,168       827,500       911,753       721,484       744,944  
    Debt securities held-to-maturity, net of allowance for securities credit losses     1,005,476       1,045,875       1,075,131       1,105,843       1,128,666  
    Equity investments     87,365       84,104       95,688       104,132       103,201  
    Restricted equity investments, at cost     102,172       108,634       98,545       92,679       85,689  
    Loans receivable, net of allowance for loan credit losses     10,058,072       10,055,429       9,963,598       9,961,117       10,068,209  
    Deposits     10,177,023       10,066,342       10,116,167       9,994,017       10,236,851  
    Federal Home Loan Bank advances     891,021       1,072,611       891,860       789,337       658,436  
    Securities sold under agreements to repurchase and other borrowings     262,940       258,113       501,090       504,490       492,520  
    Total stockholders’ equity     1,709,117       1,702,757       1,694,508       1,676,669       1,665,837  
        For the Three Months Ended,
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Selected Operating Data:                    
    Interest income   $ 153,703     $ 159,620     $ 161,525     $ 159,426     $ 161,602  
    Interest expense     67,051       76,291       79,306       77,163       75,378  
    Net interest income     86,652       83,329       82,219       82,263       86,224  
    Provision for credit losses (excluding Spring Garden)     5,340       2,041       517       3,114       591  
    Spring Garden opening provision for credit losses     —       1,426       —       —       —  
    Net interest income after provision for credit losses     81,312       79,862       81,702       79,149       85,633  
    Other income (excluding equity investments and sale of trust)     11,048       12,237       11,826       10,098       9,201  
    Net gain (loss) on equity investments     205       (5 )     1,420       887       1,923  
    Net gain on sale of trust business     —       —       1,438       —       1,162  
    Operating expenses (excluding FDIC special assessment and merger related expenses)     64,294       64,739       62,067       58,620       58,254  
    FDIC special assessment     —       —       —       —       418  
    Merger related expenses     —       110       1,669       —       —  
    Income before provision for income taxes     28,271       27,245       32,650       31,514       39,247  
    Provision for income taxes     6,808       5,083       7,464       7,082       10,637  
    Net income     21,463       22,162       25,186       24,432       28,610  
    Net (loss) income attributable to non-controlling interest     (46 )     253       70       59       (57 )
    Net income attributable to OceanFirst Financial Corp.   $ 21,509     $ 21,909     $ 25,116     $ 24,373     $ 28,667  
    Net income available to common stockholders   $ 20,505     $ 20,905     $ 24,112     $ 23,369     $ 27,663  
    Diluted earnings per share   $ 0.35     $ 0.36     $ 0.42     $ 0.40     $ 0.47  
    Net accretion/amortization of purchase accounting adjustments included in net interest income   $ 219     $ 20     $ 741     $ 1,086     $ 921  
        At or For the Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
        2025   2024   2024   2024   2024
    Selected Financial Ratios and Other Data (1) (2):                    
    Performance Ratios (Annualized):                    
    Return on average assets (3)   0.62 %   0.61 %   0.71 %   0.70 %   0.82 %
    Return on average tangible assets (3) (4)   0.65     0.64     0.74     0.73     0.85  
    Return on average stockholders’ equity (3)   4.85     4.88     5.68     5.61     6.65  
    Return on average tangible stockholders’ equity (3) (4)   7.05     7.12     8.16     8.10     9.61  
    Return on average tangible common equity (3) (4)   7.40     7.47     8.57     8.51     10.09  
    Stockholders’ equity to total assets   12.84     12.69     12.56     12.59     12.41  
    Tangible stockholders’ equity to tangible assets (4)   9.19     9.06     9.10     9.08     8.92  
    Tangible common equity to tangible assets (4)   8.76     8.62     8.68     8.64     8.49  
    Net interest rate spread   2.35     2.11     2.06     2.11     2.23  
    Net interest margin   2.90     2.69     2.67     2.71     2.81  
    Operating expenses to average assets   1.96     1.90     1.89     1.75     1.74  
    Efficiency ratio (5)   65.67     67.86     65.77     62.86     59.56  
    Loan-to-deposit ratio   99.50     100.50     99.10     100.30     98.90  
        At or For the Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Trust and Asset Management:                    
    Wealth assets under administration and management (“AUA/M”)   $ 149,106     $ 147,956     $ 152,797     $ 150,519     $ 236,891  
    Nest Egg AUA/M     453,803       431,434       430,413       403,647       407,478  
    Total AUA/M     602,909       579,390       583,210       554,166       644,369  
    Per Share Data:                    
    Cash dividends per common share   $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.20  
    Book value per common share at end of period     29.27       29.08       29.02       28.67       28.32  
    Tangible book value per common share at end of period (4)     19.16       18.98       19.28       18.93       18.63  
    Common shares outstanding at end of period     58,383,525       58,554,871       58,397,094       58,481,418       58,812,498  
    Preferred shares outstanding at end of period     57,370       57,370       57,370       57,370       57,370  
    Number of full-service customer facilities:     39       39       39       39       39  
    Quarterly Average Balances                    
    Total securities   $ 2,003,206     $ 2,116,911     $ 2,063,633     $ 2,058,711     $ 2,098,421  
    Loans receivable, net     10,013,383       10,018,742       9,958,794       10,012,491       10,088,771  
    Total interest-earning assets     12,112,028       12,331,483       12,232,672       12,203,776       12,350,384  
    Total goodwill and intangibles     535,657       534,942       513,731       514,535       515,356  
    Total assets     13,311,893       13,545,052       13,438,696       13,441,218       13,556,720  
    Time deposits     1,916,109       2,212,750       2,339,370       2,337,458       2,414,063  
    Total deposits (including non-interest-bearing deposits)     10,030,051       10,286,489       10,175,856       10,173,315       10,422,332  
    Total borrowings     1,343,757       1,328,016       1,333,245       1,325,372       1,214,219  
    Total interest-bearing liabilities     9,775,836       9,987,129       9,874,358       9,872,522       10,001,968  
    Non-interest bearing deposits     1,597,972       1,627,376       1,634,743       1,626,165       1,634,583  
    Stockholders’ equity     1,715,134       1,703,326       1,689,035       1,674,453       1,673,040  
    Tangible stockholders’ equity (4)     1,179,477       1,168,384       1,175,304       1,159,918       1,157,684  
                         
    Quarterly Yields and Costs                    
    Total securities     3.99 %     4.09 %     4.23 %     4.22 %     4.27 %
    Loans receivable, net     5.37       5.38       5.46       5.46       5.46  
    Total interest-earning assets     5.13       5.15       5.26       5.25       5.26  
    Time deposits     3.91       4.34       4.58       4.46       4.24  
    Total cost of deposits (including non-interest-bearing deposits)     2.06       2.32       2.44       2.37       2.31  
    Total borrowed funds     4.83       4.91       5.07       5.19       5.14  
    Total interest-bearing liabilities     2.78       3.04       3.20       3.14       3.03  
    Net interest spread     2.35       2.11       2.06       2.11       2.23  
    Net interest margin     2.90       2.69       2.67       2.71       2.81  
    (1) With the exception of end of quarter ratios, all ratios are based on average daily balances.
    (2) Performance ratios for each period are presented on a GAAP basis and include non-core operations. Refer to “Non-GAAP Reconciliation.”
    (3) Ratios for each period are based on net income available to common stockholders.
    (4) Tangible stockholders’ equity and tangible assets exclude goodwill and other intangibles. Tangible common equity (also referred to as “tangible book value”) excludes goodwill, intangibles and preferred equity. Refer to “Non-GAAP Reconciliation.”
    (5) Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income.
    OceanFirst Financial Corp.
    OTHER ITEMS
    (dollars in thousands, except per share amounts)
     
    NON-GAAP RECONCILIATION
     
        For the Three Months Ended
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Core Earnings:                    
    Net income available to common stockholders (GAAP)   $ 20,505     $ 20,905     $ 24,112     $ 23,369     $ 27,663  
    (Less) add non-recurring and non-core items:                    
    Spring Garden opening provision for credit losses     —       1,426       —       —       —  
    Net (gain) loss on equity investments     (205 )     5       (1,420 )     (887 )     (1,923 )
    Net gain on sale of trust business     —       —       (1,438 )     —       (1,162 )
    FDIC special assessment     —       —       —       —       418  
    Merger related expenses     —       110       1,669       —       —  
    Income tax expense (benefit) on items     49       (388 )     270       188       642  
    Core earnings (Non-GAAP)   $ 20,349     $ 22,058     $ 23,193     $ 22,670     $ 25,638  
    Income tax expense   $ 6,808     $ 5,083     $ 7,464     $ 7,082     $ 10,637  
    Provision for credit losses     5,340       3,467       517       3,114       591  
    Less: non-core provision for credit losses     —       1,426       —       —       —  
    Less: income tax expense (benefit) on non-core items     49       (388 )     270       188       642  
    Core earnings PTPP (Non-GAAP)   $ 32,448     $ 29,570     $ 30,904     $ 32,678     $ 36,224  
    Core earnings diluted earnings per share   $ 0.35     $ 0.38     $ 0.39     $ 0.39     $ 0.44  
    Core earnings PTPP diluted earnings per share   $ 0.56     $ 0.51     $ 0.53     $ 0.56     $ 0.62  
                         
    Core Ratios (Annualized):                    
    Return on average assets     0.62 %     0.65 %     0.69 %     0.68 %     0.76 %
    Return on average tangible stockholders’ equity     7.00       7.51       7.85       7.86       8.91  
    Return on average tangible common equity     7.34       7.89       8.24       8.26       9.36  
    Efficiency ratio     65.81       67.74       66.00       63.47       61.05  
        March 31,   December 31,   September 30,   June 30,   March 31,
          2025       2024       2024       2024       2024  
    Tangible Equity:                    
    Total stockholders’ equity   $ 1,709,117     $ 1,702,757     $ 1,694,508     $ 1,676,669     $ 1,665,837  
    Less:                    
    Goodwill     523,308       523,308       506,146       506,146       506,146  
    Intangibles     11,740       12,680       7,056       7,859       8,669  
    Tangible stockholders’ equity     1,174,069       1,166,769       1,181,306       1,162,664       1,151,022  
    Less:                    
    Preferred stock     55,527       55,527       55,527       55,527       55,527  
    Tangible common equity   $ 1,118,542     $ 1,111,242     $ 1,125,779     $ 1,107,137     $ 1,095,495  
                         
    Tangible Assets:                    
    Total assets   $ 13,309,278     $ 13,421,247     $ 13,488,483     $ 13,321,755     $ 13,418,978  
    Less:                    
    Goodwill     523,308       523,308       506,146       506,146       506,146  
    Intangibles     11,740       12,680       7,056       7,859       8,669  
    Tangible assets   $ 12,774,230     $ 12,885,259     $ 12,975,281     $ 12,807,750     $ 12,904,163  
                         
    Tangible stockholders’ equity to tangible assets     9.19 %     9.06 %     9.10 %     9.08 %     8.92 %
    Tangible common equity to tangible assets     8.76 %     8.62 %     8.68 %     8.64 %     8.49 %


    C    ompany Contact:

    Patrick S. Barrett
    Chief Financial Officer
    OceanFirst Financial Corp.
    Tel: (732) 240-4500, ext. 27507
    Email: pbarrett@oceanfirst.com

    The MIL Network –

  • MIL-OSI USA: Three Members of an International Money Laundering Organization Charged with Laundering Millions of Dollars in Drug Proceeds

    Source: US State of Vermont

    A federal grand jury in Florence, South Carolina, returned an indictment on April 22, charging Nasir Ullah, 28, and Naim Ullah, 32, both of Sumter, South Carolina, and Puquan Huang, 49, of Buford, Georgia, with conspiring to launder millions of dollars of proceeds derived from drug trafficking.

    “As alleged in the indictment, the defendants laundered tens of millions of dollars in drug proceeds from the United States through China and the Middle East, enabling a continuous flow of fentanyl and other dangerous drugs into our country from Mexico,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “Dismantling transnational criminal organizations and Chinese Money Laundering Organizations that support them is a critical priority for the Department. Alongside DEA and our local law enforcement partners, we will continue to prosecute the financial networks that fuel illegal drug trade and profit from the sale of deadly substances.”

    “We are committed to dismantling criminal organizations that seek to profit through the distribution of dangerous drugs like cocaine and fentanyl across South Carolina and beyond,” said Acting U.S. Attorney Brook B. Andrews for the District of South Carolina. “This $30 million money laundering operation, which has international ties, was conducted in multiple communities in our state. We will continue to work tirelessly with our law enforcement partners to trace these illicit funds, disrupt these networks, and hold those involved accountable for the harm they present.”

    “Cases like this exemplify the value of partnerships,” said Acting Special Agent in Charge Jae W. Chung of the DEA Atlanta Division. “The volume of dangerous drugs, including deadly fentanyl, impacts our communities beyond comprehension. This investigation and subsequent arrests demonstrate DEA’s commitment to protecting our community by destroying these drug trafficking and money laundering organizations.”

    According to court documents, unsealed today, Ullah, Naim Ullah, and Huang allegedly worked for a money laundering organization that laundered at least $30 million in proceeds related to the distribution of illegal drugs, including cocaine and fentanyl, which were unlawfully imported into the United States, typically through Mexico. Ullah, Naim Ullah, Huang, and their co-conspirators allegedly traveled throughout the United States to collect drug proceeds. They communicated with co-conspirators in China to arrange for the laundering of these proceeds through transactions designed to conceal the illegal source of the proceeds, including disguising the source of the drug proceeds by moving money through the shipment of electronic goods to China and the Middle East.

    Ullah, Naim Ullah, and Huang are charged with conspiracy to commit money laundering. If convicted, they each face a maximum penalty of 20 years in prison.

    The DEA’s Charleston, South Carolina Resident Office is investigating the case, with assistance from the DEA’s Special Operations Division, Bilateral Investigations Unit; DEA’s Office of Special Intelligence, Document and Media Exploitation Unit; DEA’s offices in Columbia, South Carolina and Atlanta; the FBI’s offices in Charleston and Columbia, South Carolina; the U.S. Air Force, Office of Special Investigations; the South Carolina Law Enforcement Division; the Sumter County Sheriff’s Office; the South Carolina Highway Patrol; the Fort Mill Police Department; the York County Sheriff’s Office; the North Charleston Police Department; the Mount Pleasant Police Department; and the Richland County Sheriff’s Department.

    Trial Attorneys Mary K. Daly and Jasmin Salehi Fashami of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Everett E. McMillian for the District of South Carolina are prosecuting the case.

    The Third and Fifth Judicial Circuit Solicitor’s Offices of South Carolina provided assistance in this case.

    An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    MIL OSI USA News –

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

    Source: GlobeNewswire (MIL-OSI)

    ST. PETERSBURG, Fla., April 24, 2025 (GLOBE NEWSWIRE) — BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or the “Company”), parent company of BayFirst National Bank (the “Bank”) today reported a net loss of $0.3 million, or $0.17 per common share and diluted common share, for the first quarter of 2025, a decrease of 103.4% compared to $9.8 million, or $2.27 per common share or $2.11 per diluted common share, in the fourth quarter of 2024.

    “While we were encouraged by net interest margin expansion and steady operating expenses during the quarter, our operating results were impacted by deteriorating economic conditions, resulting in net charge-offs and provision expense continuing to be elevated and lower valuations on our portfolio of loans measured at fair value,” stated Thomas G. Zernick, Chief Executive Officer. “Our business customers have been impacted by inflationary pressures, the continued high interest rate environment, recent macro economic changes and the resulting uncertainty. While we wait for clarity regarding the level and duration of the tariffs and begin to see the impact to the general economy from the recent policy changes, we will continue our practice of robust loan oversight and maintain close contact with our borrowers to better understand the longer-term implication to their businesses.”

    “Part of our strategic plan is to grow recurring revenue through net interest income, thereby resulting in less reliance on the gain on sale from government guaranteed loans,” Zernick continued. “A critical element of this strategy focuses on growing our low-cost deposit account base to fund our rapidly expanding conventional commercial and consumer loan portfolios. During the quarter, we did a good job of growing core deposit accounts while letting higher-cost time deposits run off. We serve individuals, families and small businesses, with a focus on checking and savings accounts which are not only less rate sensitive but also are far less volatile. Moreover, our focus on providing checking and savings accounts to a broad segment of the communities we serve expands our overall franchise in the attractive Tampa Bay region and increases opportunities for offering consumer loans, residential mortgages, and small business loans throughout our markets. As management works diligently to address credit concerns moving forward, we are exploring strategies to de-risk unguaranteed SBA loan balances on our balance sheet including portfolio sales and continuing to strengthen credit underwriting on SBA 7(a) loans.”

    “One of the highlights of the first quarter was strong loan growth within the community bank, supported by steady loan demand in the greater Tampa Bay market,” said Zernick. “Total loans held for investment increased nearly 2% during the first quarter and 16% over the past year. Community bank loans increased 4% during the current quarter, which included increases in CRE and consumer loans, while government guaranteed loan balances decreased 2% during the quarter. Despite a volatile national economic environment, our focus on local relationships and personalized banking solutions remains at the core of our success. We remain confident in our ability to return to profitability and drive long-term shareholder value while staying true to our mission of supporting the financial well-being of our local communities.”

    First Quarter 2025 Performance Review

    • Net interest margin was 3.77% in the first quarter of 2025, an increase of 17 basis points from 3.60% in the fourth quarter of 2024 and an increase of 35 basis points from 3.42% in the first quarter of 2024.
    • The Company’s government guaranteed loan team originated $106.3 million in new loans during the first quarter of 2025, a slight decrease from $107.8 million of loans produced in the previous quarter, and a decrease from $130.6 million of loans produced during the first quarter of 2024. Since the launch in 2022 of the Company’s Bolt loan program, an SBA 7(a) loan product designed to expeditiously provide working capital loans of $150 thousand or less, the Company has originated 6,207 Bolt loans totaling $802.0 million, of which 481 Bolt loans totaling $60.5 million were originated during the first quarter.
    • As we reported last quarter, the Company is pausing the practice of electing to measure SBA 7(a) loans at fair value and continued that in the first quarter, however one originated USDA guaranteed loan for $4.8 million was measured at fair value during the first quarter of 2025 versus no loans in the fourth quarter of 2024 and $37 million in the first quarter of 2024.
    • Loans held for investment increased by $18.3 million, or 1.7%, during the first quarter of 2025 to $1.08 billion and increased $149.9 million, or 16.0%, over the past year. During the quarter, the Company originated $157.5 million of loans and sold $72.5 million of government guaranteed loan balances.
    • Deposits decreased $15.0 million, or 1.3%, during the first quarter of 2025 and increased $121.0 million, or 12.0%, over the past year to $1.13 billion. A $19.5 million decrease in deposits during the quarter was in primarily high cost interest-bearing time deposits while noninterest-bearing checking accounts increased $4.5 million during the quarter.
    • Book value and tangible book value at March 31, 2025 were $22.77 per common share, a decrease from $22.95 at December 31, 2024.

    Results of Operations

    Net Income (Loss)

    The Company had a net loss of $0.3 million for the first quarter of 2025, compared to net income of $9.8 million in the fourth quarter of 2024 and $0.8 million in the first quarter of 2024. The change in the first quarter of 2025 from the preceding quarter was primarily the result of the pre-tax gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, which was part of a sale-leaseback transaction. Also contributing to lower earnings was a decrease in gain on sale of government guaranteed loans of $1.1 million, a decrease in government guaranteed loan fair value gains of $0.7 million, and an increase in noninterest expense of $0.5 million, primarily higher occupancy and data processing costs, partially offset by an increase in net interest income of $0.3 million and a decrease in income tax expense on continuing operations of $3.4 million. The change from the first quarter of 2024 was due to a decrease in gain on sale of government guaranteed loans of $0.8 million, a decrease in government guaranteed loan fair value gains of $4.1 million, and a decrease in government guaranteed loan packaging fees of $0.7 million. This was partially offset by an increase in net interest income of $2.3 million and a decrease in noninterest expense of $2.0 million.

    Net Interest Income and Net Interest Margin

    Net interest income from continuing operations was $11.0 million in the first quarter of 2025, an increase from $10.7 million during the fourth quarter of 2024, and an increase from $8.7 million during the first quarter of 2024. The net interest margin was 3.77% in the first quarter of 2025, an increase of 17 basis points from 3.60% in the fourth quarter of 2024 and an increase of 35 basis points from 3.42% in the first quarter of 2024.

    The increase in net interest income from continuing operations during the first quarter of 2025, as compared to the fourth quarter of 2024, was mainly due to a decrease in interest cost on deposits of $1.2 million, partially offset by a decrease in loan interest income, including fees, of $1.0 million.

    The increase in net interest income from continuing operations during the first quarter of 2025, as compared to the year ago quarter, was mainly due to an increase in loan interest income, including fees, of $1.5 million and a decrease in interest expense on deposits of $0.8 million.

    Noninterest Income

    Noninterest income from continuing operations was $8.8 million for the first quarter of 2025, which was a decrease from $22.3 million in the fourth quarter of 2024 and a decrease from $14.3 million in the first quarter of 2024. This $5.5 million decrease is due to lower borrower demand combined with tighter credit guidelines deployed over the past year. The decrease in the first quarter of 2025, as compared to the fourth quarter of 2024, was primarily the result of the pre-tax gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, which was part of a sale-leaseback transaction, and decreases in gain on sale of government guaranteed loans of $1.1 million and government guaranteed loan fair value gains of $0.7 million. The decrease in the first quarter of 2025, as compared to the first quarter of 2024, was the result of decreases in gain on sale of government guaranteed loans of $0.8 million, fair value gains on government guaranteed loans of $4.1 million, and government guaranteed loan packaging fees of $0.7 million.

    Noninterest Expense

    Noninterest expense from continuing operations was $15.8 million in the first quarter of 2025 compared to $15.3 million in the fourth quarter of 2024 and $17.8 million in the first quarter of 2024. The increase in the first quarter of 2025, as compared to the prior quarter, was primarily due to increases in occupancy expense of $0.4 million, data processing expense of $0.3 million, and loan origination and collection expenses of $0.3 million, partially offset by a decrease in compensation expense of $0.4 million. The decrease in the first quarter of 2025, as compared to the first quarter of 2024, was primarily due to lower compensation expense of $1.5 million, professional fees of $0.6 million, and loan origination and collection expenses of $0.7 million. This was partially offset by higher occupancy expense of $0.5 million and data processing expense of $0.5 million.

    Balance Sheet

    Assets

    Total assets increased $3.7 million, or 0.3%, during the first quarter of 2025 to $1.29 billion, mainly due to increases in loans held for investment of $18.3 million, partially offset by a decrease in cash and cash equivalents of $14.6 million. Compared to the end of the first quarter last year, total assets increased $147.8 million, or 12.9%, driven primarily by growth of loans held for investment of $149.9 million.

    Loans

    Loans held for investment increased $18.3 million, or 1.7%, during the first quarter of 2025 and $149.9 million, or 16.0%, over the past year to $1.08 billion, due to originations in both conventional community bank loans and government guaranteed loans, partially offset by government guaranteed loan sales.

    Deposits

    Deposits decreased $15.0 million, or 1.3%, during the first quarter of 2025 and increased $121.0 million, or 12.0%, from the first quarter of 2024, ending March 31, 2025 at $1.13 billion. During the first quarter, there were decreases in savings and money market deposit account balances of $6.7 million and time deposit balances of $17.1 million, partially offset by increases in noninterest-bearing deposit account balances of $4.5 million and interest-bearing transaction account balances of $4.3 million. The majority of the deposits are generated through the community bank in the Tampa Bay/Sarasota area. At March 31, 2025, approximately 81% of total deposits were insured by the FDIC. At times, the Bank has brokered time deposit and non-maturity deposit relationships available to diversify its funding sources. At March 31, 2025, December 31, 2024, and March 31, 2024, the Company had $112.3 million, $112.1 million, and $30.5 million, respectively, of brokered deposits.

    Asset Quality

    The Company recorded a provision for credit losses in the first quarter of $4.4 million, compared to provisions of $4.5 million for the fourth quarter of 2024 and $4.1 million during the first quarter of 2024.

    The ratio of ACL to total loans held for investment at amortized cost was 1.61% at March 31, 2025, 1.54% as of December 31, 2024, and 1.62% as of March 31, 2024. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 1.84% at March 31, 2025, 1.79% as of December 31, 2024, and 1.88% as of March 31, 2024.

    Net charge-offs for the first quarter of 2025 were $3.3 million, which was a decrease from $3.4 million for the fourth quarter of 2024 and $3.7 million in the first quarter of 2024. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.28% for the first quarter of 2025, compared to 1.34% in the fourth quarter of 2024 and 1.71% in the first quarter of 2024. Nonperforming assets were 2.08% of total assets as of March 31, 2025, compared to 1.50% as of December 31, 2024, and 0.97% as of March 31, 2024. Nonperforming assets, excluding government guaranteed loan balances, were 1.22% of total assets as of March 31, 2025, compared to 1.06% as of December 31, 2024, and 0.70% as of March 31, 2024. As we discussed in previous quarters, the Bank developed an express modification program for SBA 7(a) borrowers to help those borrowers who are challenged with larger payments in the higher interest rate environment compared to interest rates at the time the loans were originated.

    Capital

    The Bank’s Tier 1 leverage ratio was 8.56% as of March 31, 2025, compared to 8.82% as of December 31, 2024, and 9.12% as of March 31, 2024. The CET 1 and Tier 1 capital ratio to risk-weighted assets were 10.47% as of March 31, 2025, compared to 10.89% as of December 31, 2024, and 11.04% as of March 31, 2024. The total capital to risk-weighted assets ratio was 11.73% as of March 31, 2025, compared to 12.14% as of December 31, 2024, and 12.29% as of March 31, 2024.

    Liquidity

    The Bank’s overall liquidity position remains strong and stable with liquidity in excess of internal minimums as stated by policy and monitored by management and the Board. The on-balance sheet liquidity ratio at March 31, 2025 was 8.04%, as compared to 9.17% at December 31, 2024. The Bank has robust liquidity resources which include secured borrowings available from the Federal Home Loan Bank, the Federal Reserve, and lines of credit with other financial institutions. As of March 31, 2025, the Bank had $20.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions. This compared to no borrowings from FHLB, the FRB, or other financial institutions at December 31, 2024.

    Recent Events

    Share Repurchase Program. During the first quarter of 2025, the Company announced that its Board of Directors has adopted a share repurchase program. Under the repurchase program, the Company may repurchase up to $2.0 million of the Company’s outstanding shares, over a period beginning on January 28, 2025, and continuing until the earlier of the completion of the repurchase, or December 31, 2025, or termination of the program by the Board of Directors. To date, the Company has purchased $335 thousand of shares through this share repurchase program.

    Second Quarter Common Stock Dividend. On April 22, 2025, BayFirst’s Board of Directors declared a second quarter 2025 cash dividend of $0.08 per common share. The dividend will be payable June 15, 2025 to common shareholders of record as of June 1, 2025. The Company has continuously paid quarterly common stock cash dividends since 2016.

    Conference Call

    BayFirst’s management team will host a conference call on Friday, April 25, 2025, at 9:00 a.m. ET to discuss its first quarter results. Interested investors may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com. Investment professionals are invited to dial (800) 549-8228 to participate in the call using Conference ID 90275. A replay of the call will be available for one year at www.bayfirstfinancial.com.

    About BayFirst Financial Corp.

    BayFirst Financial Corp. is a registered bank holding company based in St. Petersburg, Florida which commenced operations on September 1, 2000. Its primary source of income is derived from its wholly owned subsidiary, BayFirst National Bank, a national banking association which commenced business operations on February 12, 1999. The Bank currently operates twelve full-service banking offices throughout the Tampa Bay-Sarasota region and offers a broad range of commercial and consumer banking services to businesses and individuals. It was named the best bank in Florida in 2024, according to Forbes and was the 10th largest SBA 7(a) lender by number of units originated and 19th largest by dollar volume nationwide through the SBA’s quarter ended March 31, 2025. As of March 31, 2025, BayFirst Financial Corp. had $1.29 billion in total assets.

    Forward-Looking Statements

    In addition to the historical information contained herein, this presentation includes “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, weather events, or climate change, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements.

       
    BAYFIRST FINANCIAL CORP.
    SELECTED FINANCIAL DATA (Unaudited)
       
      At or for the three months ended
    (Dollars in thousands, except for share data) 3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Net income (loss) $ (335 )   $ 9,776     $ 1,137     $ 866     $ 824  
    Balance sheet data:                  
    Average loans held for investment at amortized cost   1,027,648       1,003,867       948,528       902,417       855,040  
    Average total assets   1,287,618       1,273,296       1,228,040       1,178,501       1,126,315  
    Average common shareholders’ equity   96,053       87,961       86,381       84,948       85,385  
    Total loans held for investment   1,084,817       1,066,559       1,042,445       1,008,314       934,868  
    Total loans held for investment, excl gov’t gtd loan balances   943,979       917,075       885,444       844,659       776,302  
    Allowance for credit losses   16,513       15,512       14,186       13,843       13,906  
    Total assets   1,291,957       1,288,297       1,245,099       1,217,869       1,144,194  
    Total deposits   1,128,267       1,143,229       1,112,196       1,042,388       1,007,315  
    Common shareholders’ equity   94,034       94,869       86,242       84,911       84,578  
    Share data:                  
    Basic earnings (loss) per common share $ (0.17 )   $ 2.27     $ 0.18     $ 0.12     $ 0.11  
    Diluted earnings (loss) per common share   (0.17 )     2.11       0.18       0.12       0.11  
    Dividends per common share   0.08       0.08       0.08       0.08       0.08  
    Book value per common share   22.77       22.95       20.86       20.54       20.45  
    Tangible book value per common share (1)   22.77       22.95       20.86       20.54       20.45  
    Performance and capital ratios:                  
    Return on average assets(2) (0.10 )%     3.07 %     0.37 %     0.29 %     0.29 %
    Return on average common equity(2) (3.00 )%     42.71 %     3.48 %     2.26 %     2.06 %
    Net interest margin(2)   3.77 %     3.60 %     3.34 %     3.43 %     3.42 %
    Dividend payout ratio (46.01 )%     3.52 %     43.98 %     68.91 %     75.27 %
    Asset quality ratios:                  
    Net charge-offs $ 3,301     $ 3,369     $ 2,757     $ 3,261     $ 3,652  
    Net charge-offs/avg loans held for investment at amortized cost(2)   1.28 %     1.34 %     1.16 %     1.45 %     1.71 %
    Nonperforming loans(3) $ 24,806     $ 17,607     $ 15,489     $ 12,312     $ 9,877  
    Nonperforming loans (excluding gov’t gtd balance)(3) $ 15,078     $ 13,570     $ 10,992     $ 8,054     $ 7,568  
    Nonperforming loans/total loans held for investment(3)   2.42 %     1.75 %     1.62 %     1.34 %     1.15 %
    Nonperforming loans (excl gov’t gtd balance)/total loans held for investment(3)   1.47 %     1.35 %     1.15 %     0.87 %     0.88 %
    ACL/Total loans held for investment at amortized cost   1.61 %     1.54 %     1.48 %     1.50 %     1.62 %
    ACL/Total loans held for investment at amortized cost, excl government guaranteed loans   1.84 %     1.79 %     1.70 %     1.73 %     1.88 %
    Other Data:                  
    Full-time equivalent employees   305       299       295       302       313  
    Banking center offices   12       12       12       12       12  
    (1) See section entitled “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” below for a reconciliation to most comparable GAAP equivalent.
    (2) Annualized
    (3) Excludes loans measured at fair value
                       

    Reconciliation and Management Explanation of Non-GAAP Financial Measures

    Some of the financial measures included in this report are not measures of financial condition or performance recognized by GAAP. These non-GAAP financial measures include tangible common shareholders’ equity and tangible book value per common share. Our management uses these non-GAAP financial measures in its analysis of our performance, and we believe that providing this information to financial analysts and investors allows them to evaluate capital adequacy.

    The following presents the calculation of the non-GAAP financial measures.

     
    Tangible Common Shareholders’ Equity and Tangible Book Value Per Common Share (Unaudited)
      As of
    (Dollars in thousands, except for share data) March 31, 2025   December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024
    Total shareholders’ equity $ 110,085     $ 110,920     $ 102,293     $ 100,962     $ 100,629  
    Less: Preferred stock liquidation preference   (16,051 )     (16,051 )     (16,051 )     (16,051 )     (16,051 )
    Total equity available to common shareholders   94,034       94,869       86,242       84,911       84,578  
    Less: Goodwill   —       —       —       —       —  
    Tangible common shareholders’ equity $ 94,034     $ 94,869     $ 86,242     $ 84,911     $ 84,578  
                       
    Common shares outstanding   4,129,027       4,132,986       4,134,059       4,134,219       4,134,914  
    Tangible book value per common share $ 22.77     $ 22.95     $ 20.86     $ 20.54     $ 20.45  
                                           
    BAYFIRST FINANCIAL CORP.
    CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands) 3/31/2025
    		   12/31/2024
    		   3/31/2024
    Assets (Unaudited)       (Unaudited)
    Cash and due from banks $ 6,517     $ 4,499     $ 4,425  
    Interest-bearing deposits in banks   56,637       73,289       53,080  
    Cash and cash equivalents   63,154       77,788       57,505  
    Time deposits in banks   2,025       2,270       3,000  
    Investment securities available for sale, at fair value (amortized cost $39,507, $40,279, and $46,816 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively)   36,318       36,291       42,514  
    Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $12, $12, and $14 (fair value: $2,356, $2,346, and $2,352 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively)   2,488       2,488       2,487  
    Nonmarketable equity securities   5,480       4,526       5,228  
    Government guaranteed loans held for sale   —       —       2,226  
    Government guaranteed loans held for investment, at fair value   57,901       60,833       77,769  
    Loans held for investment, at amortized cost   1,026,916       1,005,726       857,099  
    Allowance for credit losses on loans   (16,513 )     (15,512 )     (13,906 )
    Net Loans held for investment, at amortized cost   1,010,403       990,214       843,193  
    Accrued interest receivable   9,153       9,155       7,625  
    Premises and equipment, net   32,769       33,249       39,327  
    Loan servicing rights   16,460       16,534       15,742  
    Right-of-use operating lease assets   15,484       15,814       2,499  
    Bank owned life insurance   26,696       26,513       25,974  
    Other real estate owned   132       132       404  
    Other assets   13,494       12,490       18,401  
    Assets from discontinued operations   —       —       300  
    Total assets $ 1,291,957     $ 1,288,297     $ 1,144,194  
    Liabilities:      
    Noninterest-bearing deposit accounts $ 106,236     $ 101,743     $ 96,977  
    Interest-bearing transaction accounts   261,074       256,793       250,478  
    Savings and money market deposit accounts   467,766       474,425       391,915  
    Time deposits   293,191       310,268       267,945  
    Total deposits   1,128,267       1,143,229       1,007,315  
    FHLB borrowings   20,000       —       15,000  
    Subordinated debentures   5,957       5,956       5,950  
    Notes payable   1,820       1,934       2,276  
    Accrued interest payable   1,053       1,036       1,598  
    Operating lease liabilities   14,102       14,510       2,673  
    Deferred income tax liabilities   648       301       728  
    Accrued expenses and other liabilities   10,025       10,411       7,496  
    Liabilities from discontinued operations   —       —       529  
    Total liabilities   1,181,872       1,177,377       1,043,565  
    Shareholders’ equity: (Unaudited)       (Unaudited)
    Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $6,395 each period   6,161       6,161       6,161  
    Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $3,210 each period   3,123       3,123       3,123  
    Preferred stock, Series C; no par value, 10,000 shares authorized, 6,446 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024; aggregate liquidation preference of $6,446 at March 31, 2025, December 31, 2024, and March 31, 2024   6,446       6,446       6,446  
    Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,129,027, 4,132,986, and 4,134,914 shares issued and outstanding at March 31, 2025, December 31, 2024, and March 31, 2024, respectively   54,657       54,764       54,776  
    Accumulated other comprehensive loss, net   (2,378 )     (2,956 )     (3,188 )
    Unearned compensation   (1,006 )     (752 )     (1,192 )
    Retained earnings   43,082       44,134       34,503  
    Total shareholders’ equity   110,085       110,920       100,629  
    Total liabilities and shareholders’ equity $ 1,291,957     $ 1,288,297     $ 1,144,194  
                           
    BAYFIRST FINANCIAL CORP.
    CONSOLIDATED STATEMENTS OF INCOME
      For the Quarter Ended
    (Dollars in thousands, except per share data) 3/31/2025   12/31/2024   3/31/2024
    Interest income: (Unaudited)   (Unaudited)   (Unaudited)
    Loans, including fees $ 19,751     $ 20,747     $ 18,228  
    Interest-bearing deposits in banks and other   934       1,007       959  
    Total interest income   20,685       21,754       19,187  
    Interest expense:          
    Deposits   9,431       10,600       10,215  
    Other   255       501       230  
    Total interest expense   9,686       11,101       10,445  
    Net interest income   10,999       10,653       8,742  
    Provision for credit losses   4,400       4,546       4,058  
    Net interest income after provision for credit losses   6,599       6,107       4,684  
    Noninterest income:          
    Loan servicing income, net   736       582       795  
    Gain on sale of government guaranteed loans, net   7,327       8,425       8,089  
    Service charges and fees   449       451       444  
    Government guaranteed loans fair value gain (loss), net   (755 )     (80 )     3,305  
    Government guaranteed loan packaging fees   716       773       1,407  
    Gain on sale of premises and equipment   —       11,649       —  
    Other noninterest income   278       476       228  
    Total noninterest income   8,751       22,276       14,268  
    Noninterest Expense:          
    Salaries and benefits   7,998       7,351       8,005  
    Bonus, commissions, and incentives   71       1,074       1,571  
    Occupancy and equipment   1,634       1,217       1,110  
    Data processing   2,045       1,749       1,560  
    Marketing and business development   487       390       588  
    Professional services   732       803       1,349  
    Loan origination and collection   1,035       758       1,719  
    Employee recruiting and development   617       445       597  
    Regulatory assessments   339       379       282  
    Other noninterest expense   855       1,169       992  
    Total noninterest expense   15,813       15,335       17,773  
    Income (loss) before taxes from continuing operations   (463 )     13,048       1,179  
    Income tax expense (benefit) from continuing operations   (128 )     3,272       296  
    Net income (loss) from continuing operations   (335 )     9,776       883  
    Loss from discontinued operations before income taxes   —       —       (78 )
    Income tax benefit from discontinued operations   —       —       (19 )
    Net loss from discontinued operations   —       —       (59 )
               
    Net income (loss)   (335 )     9,776       824  
    Preferred dividends   385       385       385  
    Net income available to (loss attributable to) common shareholders $ (720 )   $ 9,391     $ 439  
    Basic earnings (loss) per common share: (Unaudited)   (Unaudited)   (Unaudited)
    Continuing operations $ (0.17 )   $ 2.27     $ 0.12  
    Discontinued operations   —       —       (0.01 )
    Basic earnings (loss) per common share $ (0.17 )   $ 2.27     $ 0.11  
               
    Diluted earnings (loss) per common share:          
    Continuing operations $ (0.17 )   $ 2.11     $ 0.12  
    Discontinued operations   —       —       (0.01 )
    Diluted earnings (loss) per common share $ (0.17 )   $ 2.11     $ 0.11  
                           

    Loan Composition

    (Dollars in thousands) 3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
      (Unaudited)       (Unaudited)   (Unaudited)   (Unaudited)
    Real estate:                  
    Residential $ 339,886     $ 330,870     $ 321,740     $ 304,234     $ 285,214  
    Commercial   296,351       305,721       292,026       288,185       273,227  
    Construction and land   46,740       32,914       33,784       35,759       36,764  
    Commercial and industrial   234,384       226,522       200,212       192,140       182,264  
    Commercial and industrial – PPP   457       941       1,656       2,324       2,965  
    Consumer and other   93,889       93,826       92,546       85,789       63,854  
    Loans held for investment, at amortized cost, gross   1,011,707       990,794       941,964       908,431       844,288  
    Deferred loan costs, net   20,521       19,499       18,060       17,299       16,233  
    Discount on government guaranteed loans   (8,727 )     (8,306 )     (7,880 )     (7,731 )     (7,674 )
    Premium on loans purchased, net   3,415       3,739       3,860       4,173       4,252  
    Loans held for investment, at amortized cost, net   1,026,916       1,005,726       956,004       922,172       857,099  
    Government guaranteed loans held for investment, at fair value   57,901       60,833       86,441       86,142       77,769  
    Total loans held for investment, net $ 1,084,817     $ 1,066,559     $ 1,042,445     $ 1,008,314     $ 934,868  
                                           

    Nonperforming Assets (Unaudited)

    (Dollars in thousands) 3/31/2025   12/31/2024   9/30/2024   6/30/2024   3/31/2024
    Nonperforming loans (government guaranteed balances), at amortized cost, gross $ 9,728     $ 4,037     $ 4,497     $ 4,258     $ 2,309  
    Nonperforming loans (unguaranteed balances), at amortized cost, gross   15,078       13,570       10,992       8,054       7,568  
    Total nonperforming loans, at amortized cost, gross   24,806       17,607       15,489       12,312       9,877  
    Nonperforming loans (government guaranteed balances), at fair value   507       —       24       341       94  
    Nonperforming loans (unguaranteed balances), at fair value   1,419       1,490       1,535       1,284       729  
    Total nonperforming loans, at fair value   1,926       1,490       1,559       1,625       823  
    OREO   132       132       —       1,633       404  
    Repossessed assets   36       36       94       —       —  
    Total nonperforming assets, gross $ 26,900     $ 19,265     $ 17,142     $ 15,570     $ 11,104  
    Nonperforming loans as a percentage of total loans held for investment(1)   2.42 %     1.75 %     1.62 %     1.34 %     1.15 %
    Nonperforming loans (excluding government guaranteed balances) to total loans held for investment(1)   1.47 %     1.35 %     1.15 %     0.87 %     0.88 %
    Nonperforming assets as a percentage of total assets   2.08 %     1.50 %     1.38 %     1.28 %     0.97 %
    Nonperforming assets (excluding government guaranteed balances) to total assets   1.22 %     1.06 %     0.88 %     0.82 %     0.70 %
    ACL to nonperforming loans(1)   66.57 %     88.10 %     91.59 %     112.44 %     140.79 %
    ACL to nonperforming loans (excluding government guaranteed balances)(1)   109.52 %     114.31 %     129.06 %     171.88 %     183.75 %
    (1) Excludes loans measured at fair value
    Contacts:  
    Thomas G. Zernick Scott J. McKim
    Chief Executive Officer Chief Financial Officer
    727.399.5680 727.521.7085

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