Intelligence Agencies – Page 281

MIL-OSI Security: Benicia Man Pleads Guilty to Possessing a Firearm in His Second Federal Felon in Possession Case

Source: Office of United States Attorneys

SACRAMENTO, Calif. — Jeremiah Malik Jefferson, 27, of Benicia, pleaded guilty today to being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

According to court documents, during a November 2023 search of his residence, Jefferson was found to be in possession of a firearm that was loaded with a high-capacity magazine that had previously been reported stolen. Jefferson is prohibited from possessing a firearm due to multiple prior felony convictions, including for burglary and a previous conviction for being a felon in possession of a firearm.

Jefferson is scheduled to be sentenced on Feb. 11, 2025, by U.S. District Judge John A. Mendez. Jefferson faces a maximum statutory penalty of 15 years in prison and a $250,000 fine. The actual sentence, however, will 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.

This case is the product of an investigation by the U.S. Probation Office, the Benicia Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the FBI’s Solano County Violent Crimes Task Force. Assistant U.S. Attorney Adrian T. Kinsella is prosecuting the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the U.S. Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

MIL Security OSI –

January 24, 2025

MIL-OSI: Peapack-Gladstone Financial Corporation Reports Third Quarter Results

Source: GlobeNewswire (MIL-OSI)

BEDMINSTER, N.J., Oct. 22, 2024 (GLOBE NEWSWIRE) — Peapack-Gladstone Financial Corporation (NASDAQ Global Select Market: PGC) (the “Company”) announces its third quarter 2024 financial results.

This earnings release should be read in conjunction with the Company’s Q3 2024 Investor Update, a copy of which is available on our website at http://www.pgbank.com and via a current report on Form 8-K on the website of the Securities and Exchange Commission at http://www.sec.gov.

During the third quarter of 2024, deposits grew $279 million, to $5.9 billion, which represents an annualized growth rate of 20%. Nearly half of the deposit growth during the quarter was attributed to an increase in noninterest-bearing demand deposit balances which grew $130 million to $1.1 billion. Strong core relationship growth throughout 2024 has allowed the Company to repay all outstanding short-term borrowings and strengthen its liquidity position. The Company also saw an increase in loan demand during the third quarter. Outstanding loan balances increased by $51 million to $5.3 billion as of September 30, 2024.

The Company recorded net income of $7.6 million and diluted earnings per share (“EPS”) of $0.43 for the quarter ended September 30, 2024 compared to net income of $7.5 million and EPS of $0.42 for the quarter ended June 30, 2024.

Net interest income increased $2.6 million, or 8%, on a linked quarter basis to $37.7 million during the third quarter of 2024 compared to $35.0 million in the second quarter. The growth in net interest income was driven by continued improvement in the net interest margin. The net interest margin increased to 2.34% for the quarter ended September 30, 2024 compared to 2.25% for the quarter ended June 30, 2024 and 2.20% for the quarter ended March 31, 2024.

Douglas L. Kennedy, President and CEO said, “Our expansion into the metro New York market, leading with our ‘Single Point of Contact’ private banking strategy, continues to deliver results ahead of plan. Our third quarter results reflect this success through strong core deposit growth, continued improvement in net interest income and enhanced liquidity profile. Our New York Commercial Private Banking initiative is currently managing over $730 million in customer relationship deposits, which includes 31% in noninterest-bearing demand deposits. We expect that our expansion will become accretive to earnings in early 2025.”

Mr. Kennedy also noted, “During the third quarter of 2024, Moody’s reaffirmed our investment grade ratings with a stable outlook after a thorough analysis of our business model and balance sheet. We are fully aware of the headwinds created by the current interest rate environment, and we are confident in our ability to manage through any of these issues that may arise as we execute our private banking strategy, which over time will deliver shareholder value.”

The following are select highlights for the period ended September 30, 2024:

Wealth Management:

AUM/AUA in our Wealth Management Division totaled a record $12.1 billion at September 30, 2024 compared to $10.9 billion at December 31, 2023.
Gross new business inflows for Q3 2024 totaled $140 million ($130 million managed).
Wealth Management fee income was $15.2 million in Q3 2024, which amounted to 27% of total revenue for the quarter.

Commercial Banking and Balance Sheet Management:

Year-to-date total deposits have increased by $661 million, to $5.9 billion at September 30, 2024 compared to $5.3 billion at December 31, 2023. The Company intentionally allowed $121 million in high cost, non-core relationship deposits to roll off during the first nine months of 2024. Excluding this deposit run-off, core relationship deposits have grown by $782 million during 2024.
The Company has repaid $404 million in short-term borrowings as of September 30, 2024.
Total loans declined $116 million to $5.3 billion at September 30, 2024 from $5.4 billion at December 31, 2023. However, outstanding loans increased by $51 million during the three-month period ended September 30, 2024 after experiencing contraction during the first six months of 2024.
Commercial and industrial lending (“C&I”) drove a majority of the growth during the third quarter. C&I balances represent 42% of the total loan portfolio at September 30, 2024. A strong pipeline of new business has been built heading into Q4.
Fee income on unused commercial lines of credit totaled $845,000 for Q3 2024.
The net interest margin (“NIM”) was 2.34% in Q3 2024, an increase of 9 basis points compared to 2.25% at Q2 2024.
Noninterest-bearing demand deposits increased by $130 million during the third quarter of 2024 and represented 18% of total deposits as of September 30, 2024.

Capital Management:

Tangible book value per share increased 6% to $32.00 per share at September 30, 2024 compared to $30.31 at December 31, 2023. Book value per share increased 5% to $34.57 per share at September 30, 2024 compared to $32.90 at December 31, 2023.
During the third quarter, the Company repurchased 100,000 shares of common stock at a total cost of $2.6 million, or an average cost of $25.92 per share. During the first nine months of 2024, the Company repurchased 300,000 shares of common stock at a cost of $7.2 million. For the full year 2023, the Company repurchased 455,341 shares at a cost of $12.5 million.
At September 30, 2024, the Tier 1 Leverage Ratio stood at 10.99% for Peapack-Gladstone Bank (the “Bank”) and 9.33% for the Company. The Common Equity Tier 1 Ratio (to Risk-Weighted Assets) was 13.75% for the Bank and 11.67% for the Company at September 30, 2024. These ratios remain significantly above well capitalized standards, as capital continues to benefit from net income generation.

SUMMARY INCOME STATEMENT DETAILS:

The following tables summarize specified financial details for the periods shown.

Nine Months Ended September 30, 2024 Year Compared to Nine Months Ended September 30, 2023

	Nine Months Ended			Nine Months Ended
	September 30,			September 30,			Increase/
(Dollars in millions, except per share data) (unaudited)	2024			2023			(Decrease)
Net interest income	$	107.10		$	119.41		$	(12.31	)	(10	)%
Wealth management fee income		45.98			41.99			3.99		10
Capital markets activity		2.30			2.45			(0.15	)	(6	)
Other income		10.91			11.55			(0.64	)	(6	)
Total other income		59.19			55.99			3.20		6

Total Revenue		166.29			175.40			(9.11	)	(5	)%

Operating expenses		127.82			110.68			17.14		15
Pretax income before provision for credit losses		38.47			64.72			(26.25	)	(41	)
Provision for credit losses		5.76			9.06			(3.30	)	(36	)
Pretax income		32.71			55.66			(22.95	)	(41	)
Income tax expense		8.96			15.40			(6.44	)	(42	)
Net income	$	23.75		$	40.26		$	(16.51	)	(41	)%
Diluted EPS	$	1.34		$	2.23		$	(0.89	)	(40	)%

Return on average assets		0.49	%		0.84	%		(0.35	)
Return on average equity		5.42	%		9.66	%		(4.24	)

September 2024 Quarter Compared to Prior Year Quarter

	Three Months Ended			Three Months Ended
	September 30,			September 30,			Increase/
(Dollars in millions, except per share data) (unaudited)	2024			2023			(Decrease)
Net interest income	$	37.68		$	36.52		$	1.16		3	%
Wealth management fee income		15.15			13.98			1.17		8
Capital markets activity		0.44			0.61			(0.17	)	(28	)
Other income		3.35			4.76			(1.41	)	(30	)
Total other income		18.94			19.35			(0.41	)	(2	)

Total Revenue		56.62			55.87			0.75		1	%

Operating expenses		44.65			37.41			7.24		19
Pretax income before provision for credit losses		11.97			18.46			(6.49	)	(35	)
Provision for credit losses		1.22			5.86			(4.64	)	(79	)
Pretax income		10.75			12.60			(1.85	)	(15	)
Income tax expense		3.16			3.84			(0.68	)	(18	)
Net income	$	7.59		$	8.76		$	(1.17	)	(13	)%
Diluted EPS	$	0.43		$	0.49		$	(0.06	)	(12	)%

Return on average assets annualized		0.46	%		0.54	%		(0.08	)
Return on average equity annualized		5.12	%		6.20	%		(1.08	)

September 2024 Quarter Compared to Linked Quarter

	Three Months Ended			Three Months Ended
	September 30,			June 30,			Increase/
(Dollars in millions, except per share data) (unaudited)	2024			2024			(Decrease)
Net interest income	$	37.68		$	35.04		$	2.64		8	%
Wealth management fee income		15.15			16.42			(1.27	)	(8	)
Capital markets activity		0.44			0.59			(0.15	)	(25	)
Other income		3.35			4.55			(1.20	)	(26	)
Total other income		18.94			21.56			(2.62	)	(12	)

Total Revenue		56.62			56.60			0.02		0	%

Operating expenses		44.65			43.13			1.52		4
Pretax income before provision for credit losses		11.97			13.47			(1.50	)	(11	)
Provision for credit losses		1.22			3.91			(2.69	)	(69	)
Pretax income		10.75			9.56			1.19		12
Income tax expense		3.16			2.03			1.13		56
Net income	$	7.59		$	7.53		$	0.06		1	%
Diluted EPS	$	0.43		$	0.42		$	0.01		2	%

Return on average assets annualized		0.46	%		0.47	%		(0.01	)
Return on average equity annualized		5.12	%		5.22	%		(0.10	)

SUPPLEMENTAL QUARTERLY DETAILS:

Wealth Management

AUM/AUA in the Bank’s Wealth Management Division reached a record high of $12.1 billion at September 30, 2024 compared to $10.9 billion at December 31, 2023. For the September 2024 quarter, the Wealth Management Team generated $15.2 million in fee income, compared to $16.4 million for the June 30, 2024 quarter and $14.0 million for the September 2023 quarter. The equity markets continued to improve during 2024, contributing to the increase in AUM/AUA along with gross new business inflows of $547 million.

John Babcock, President of the Bank’s Wealth Management Division, noted, “Q3 2024 saw continued strong client inflows totaling new accounts and client additions of $140 million ($130 million managed). Our new business pipeline is healthy, and we continue to remain focused on delivering excellent service and advice to our clients. Our highly skilled wealth management professionals, our fiduciary powers and expertise, our financial planning capabilities combined with our high-touch client service model distinguishes us in our market and continues to drive our growth and success.”

Loans / Commercial Banking

Total loans declined $116 million, or 2%, to $5.3 billion at September 30, 2024 compared to December 31, 2023, primarily driven by repayments, maturities and tighter lending standards. Most of the decline in outstanding loans during the first nine months of 2024 was related to reductions in multifamily and commercial real estate balances. Total C&I loans and leases at September 30, 2024 were $2.2 billion or 42% of the total loan portfolio.

Mr. Kennedy noted, “Based on a more constructive economic backdrop, we recently began building our pipeline of C&I loans and leases and believe that loan demand will continue to show improvement as we look forward to coming periods ahead. We are proud to have built a leading middle market commercial banking franchise, as evidenced by our C&I Portfolio, Treasury Management services, Corporate Advisory and SBA businesses. We anticipate these business lines fit perfectly with our private banking business model and will generate solid production going forward. During the quarter we originated loans that carried an average spread of more than 4% above our cost of funds. Having this capability will help us in the near term as the real estate market adjusts to changing market conditions.”

Net Interest Income (NII)/Net Interest Margin (NIM)

The Company’s NII of $37.7 million and NIM of 2.34% for Q3 2024 increased $2.6 million and 9 basis points from NII of $35.0 million and NIM of 2.25% for the linked quarter (Q2 2024), and increased $1.2 million and 6 basis points from NII of $36.5 million and NIM of 2.28% compared to the prior year period (Q3 2023). Our single point of contact private banking strategy continues to deliver lower cost core deposit relationships. Noninterest-bearing checking deposits increased by $130 million during the third quarter of 2024, which also drove the improvement in NIM.

Funding / Liquidity / Interest Rate Risk Management

Total deposits increased $661 million to $5.9 billion at September 30, 2024 from $5.3 billion at December 31, 2023. The change in deposit balances included a decline in brokered deposits and non-core deposit relationships. The overall growth in deposits has strengthened balance sheet liquidity and reduced reliance on outside borrowings and other non-core funding sources. There were no outstanding overnight borrowings at September 30, 2024, compared to $404 million at December 31, 2023.

At September 30, 2024, the Company’s balance sheet liquidity (investments available for sale, interest-earning deposits and cash) totaled $1.2 billion, or 18% of assets. The Company maintains additional liquidity resources of approximately $3.0 billion through secured available borrowing facilities with the Federal Home Loan Bank and the Federal Reserve Discount Window. The available funding from the Federal Home Loan Bank and the Federal Reserve are secured by the Company’s loan and investment portfolios. The Company’s total on and off-balance sheet liquidity totaled $4.2 billion, which amounts to 293% of the total uninsured/uncollateralized deposits currently on the Company’s balance sheet.

Income from Capital Markets Activities

Noninterest income from Capital Markets activities (detailed below) totaled $435,000 for the September 2024 quarter compared to $586,000 for the June 2024 quarter and $613,000 for the September 2023 quarter.

	Three Months Ended		Three Months Ended		Three Months Ended
	September 30,		June 30,		September 30,
(Dollars in thousands, except per share data) (unaudited)	2024		2024		2023
Gain on loans held for sale at fair value (Mortgage banking)	$	15	$	34	$	37
Gain on sale of SBA loans		365		449		491
Corporate advisory fee income		55		103		85
Total capital markets activity	$	435	$	586	$	613

Other Noninterest Income (other than Wealth Management Fee Income and Income from Capital Markets Activities)

Other noninterest income was $3.4 million for Q3 2024 compared to $4.6 million for Q2 2024 and $4.8 million for Q3 2023. Q3 2024 included $225,000 of income recorded by the Equipment Finance Division related to equipment transfers to lessees upon the termination of leases, compared to $1.6 million in Q2 2024 and $2.3 million in Q3 2023, respectively. Additionally, Q3 2024 included $845,000 of unused line fees compared to $786,000 for Q2 2024 and $794,000 for Q3 2023.

Operating Expenses

The Company’s total operating expenses were $44.6 million for the third quarter of 2024, compared to $43.1 million for the second quarter of 2024 and $37.4 million for the quarter ended September 2023. The third quarter of 2024 reflects the full run rate of expenses associated with the Company’s expansion into New York City.

Mr. Kennedy noted, “We continue to make investments related to our strategic decision to expand into New York City and are confident that these investments will position us for future growth and profitability, which will ultimately translate to increased shareholder value. We continue to look for opportunities to create efficiencies and manage expenses throughout the Company while investing in enhancements to the client experience.”

Income Taxes

The effective tax rate for the three months ended September 30, 2024 was 29.4%, as compared to 21.2% for the June 2024 quarter and 30.5% for the quarter ended September 30, 2023. The June 2024 quarter included a one-time benefit related to the Company’s deferred tax assets associated with a surtax imposed by the State of New Jersey in June 2024. Excluding such benefit, the effective tax rate for the June 2024 quarter would have been approximately 29.0%.

Asset Quality / Provision for Credit Losses

Nonperforming assets remained elevated at $80.5 million, or 1.18% of total assets, at September 30, 2024, as compared to $82.1 million, or 1.26% of total assets, at June 30, 2024. Loans past due 30 to 89 days and still accruing were $31.4 million, or 0.59% of total loans, at September 30, 2024 compared to $34.7 million, or 0.66% of total loans, at June 30, 2024. Criticized and classified loans totaled $261.1 million at September 30, 2024, reflecting a decrease of $8.0 million as compared to $269.1 million at June 30, 2024. The Company currently has no loans or leases on deferral and still accruing.

For the quarter ended September 30, 2024, the Company’s provision for credit losses was $1.2 million compared to $3.9 million for the June 2024 quarter and $5.9 million for the September 2023 quarter. The provision for credit losses in the third quarter of 2024 was driven by overall slower loan growth along with additional specific reserves related to certain isolated credits, of $1.8 million partially offset by a recovery of approximately $2.1 million. The higher provision for the second quarter of 2024 was primarily driven by charge-offs related to the sale of two problem loans, which were approaching foreclosure and transferred to other real estate owned.

At September 30, 2024, the allowance for credit losses was $71.3 million (1.34% of total loans), compared to $68.0 million (1.29% of total loans) at June 30, 2024, and $68.6 million (1.25% of total loans) at September 30, 2023.

Mr. Kennedy noted, “We are starting to see some of our asset quality metrics improve, which supports our position that most of our credit issues are isolated to a small number of specific borrowers and sponsors. We continue to work through each credit one at a time while building up reserve coverage. All of the multifamily loans that matured or repriced in 2024 have continued to make their scheduled payments despite the higher rate environment.”

Capital

The Company’s capital position increased during the third quarter of 2024 due to net income of $7.6 million, which was partially offset by the repurchase of 100,000 shares through the Company’s repurchase program at a total cost of $2.6 million and the quarterly dividend payment totaling $882,000. Additionally, during the third quarter of 2024, capital benefited from a reduction in accumulated other comprehensive losses of $13.5 million, net of tax. The total accumulated other comprehensive loss declined to $54.8 million as of September 30, 2024 ($57.6 million loss related to the available for sale securities portfolio partially offset by a $2.8 million gain on the cash flow hedges).

Tangible book value per share increased 6% to $32.00 at September 30, 2024 from $30.31 at December 31, 2023. Tangible book value per share is a non-GAAP financial measure. See the reconciliation tables included in this release for further detail. Book value per share increased 5% to $34.57 per share at September 30, 2024 compared to $32.90 at December 31, 2023. The Company’s and Bank’s regulatory capital ratios as of September 30, 2024 remain strong and reflect increases from December 31, 2023 levels. Where applicable, such ratios remain well above regulatory well capitalized standards.

The Company employs quarterly capital stress testing modeling of an adverse case and severely adverse case. In the most recently completed stress test (as of June 30, 2024), under the severely adverse case, and no growth scenario, the Bank remains well capitalized over a two-year stress period.

On September 25, 2024, the Company declared a cash dividend of $0.05 per share payable on November 22, 2024 to shareholders of record on November 7, 2024.

ABOUT THE COMPANY

Peapack-Gladstone Financial Corporation is a New Jersey based bank holding company with total assets of $6.8 billion and assets under management/administration of $12.1 billion as of September 30, 2024. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides Private Banking customized solutions through its wealth management, commercial and retail solutions, including residential lending and online platforms, to businesses, not for profits and consumers. Peapack Private, the bank’s wealth management division, offers comprehensive financial, tax, fiduciary and investment advice and solutions to individuals, families, privately-held businesses, family offices and not-for-profit organizations, which help them to establish, maintain and expand their legacy. Together, Peapack-Gladstone Bank and Peapack Private offer an unparalleled commitment to client service. Visit http://www.pgbank.com and http://www.peapackprivate.com for more information.

FORWARD-LOOKING STATEMENTS

The foregoing may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as “expect,” “look,” “believe,” “anticipate,” “may” or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to:

our ability to successfully grow our business and implement our strategic plan, including our ability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
the impact of anticipated higher operating expenses in 2024 and beyond;
our ability to successfully integrate wealth management firm and team acquisitions;
our ability to successfully integrate our expanded employee base;
an unexpected decline in the economy, in particular in our New Jersey and New York market areas, including potential recessionary conditions;
declines in our net interest margin caused by the interest rate environment and/or our highly competitive market;
declines in the value in our investment portfolio;
impact from a pandemic event on our business, operations, customers, allowance for credit losses and capital levels;
higher than expected increases in our allowance for credit losses;
higher than expected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans or charge-offs;
inflation and changes in interest rates, which may adversely impact our margins and yields, reduce the fair value of our financial instruments, reduce our loan originations and lead to higher operating costs;
decline in real estate values within our market areas;
legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) that may result in increased compliance costs;
successful cyberattacks against our IT infrastructure and that of our IT and third-party providers;
higher than expected FDIC insurance premiums;
adverse weather conditions;
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
our inability to successfully generate new business in new geographic markets, including our expansion into New York City;
a reduction in our lower-cost funding sources;
changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio;
our inability to adapt to technological changes;
claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters;
our inability to retain key employees;
demands for loans and deposits in our market areas;
adverse changes in securities markets;
changes in New York City rent regulation law;
changes in governmental regulation, including, but not limited to, any increase in FDIC insurance premiums and changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System;
changes in accounting policies and practices; and/or
other unexpected material adverse changes in our financial condition, operations or earnings.

A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2023. Except as may be required by the applicable law or regulation, we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Contact:
Frank A. Cavallaro, SEVP and CFO
Peapack-Gladstone Financial Corporation
T: 908-306-8933

(Tables to follow)

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except per share data)
(Unaudited)

	For the Three Months Ended
	Sept 30,			June 30,			March 31,			Dec 31,			Sept 30,
	2024			2024			2024			2023			2023
Income Statement Data:
Interest income	$	83,203		$	79,238		$	79,194		$	80,178		$	78,489
Interest expense		45,522			44,196			44,819			43,503			41,974
Net interest income		37,681			35,042			34,375			36,675			36,515
Wealth management fee income		15,150			16,419			14,407			13,758			13,975
Service charges and fees		1,327			1,345			1,322			1,255			1,319
Bank owned life insurance		390			328			503			357			310
Gain on loans held for sale at fair value (Mortgage banking)		15			34			56			18			37
Gain on loans held for sale at lower of cost or fair value		—			23			—			—			—
Gain on sale of SBA loans		365			449			400			239			491
Corporate advisory fee income		55			103			818			39			85
Other income		1,162			2,938			1,306			1,339			3,541
Fair value adjustment for CRA equity security		474			(84	)		(111	)		585			(404	)
Total other income		18,938			21,555			18,701			17,590			19,354

Total revenue		56,619			56,597			53,076			54,265			55,869

Salaries and employee benefits		31,050			29,884			28,476			24,320			25,264
Premises and equipment		5,633			5,776			5,081			5,416			5,214
FDIC insurance expense		870			870			945			765			741
Other expenses		7,096			6,596			5,539			7,115			6,194
Total operating expenses		44,649			43,126			40,041			37,616			37,413
Pretax income before provision for credit losses		11,970			13,471			13,035			16,649			18,456
Provision for credit losses		1,224			3,911			627			5,026			5,856
Income before income taxes		10,746			9,560			12,408			11,623			12,600
Income tax expense		3,159			2,030			3,777			3,024			3,845
Net income	$	7,587		$	7,530		$	8,631		$	8,599		$	8,755

Per Common Share Data:
Earnings per share (basic)	$	0.43		$	0.42		$	0.49		$	0.48		$	0.49
Earnings per share (diluted)		0.43			0.42			0.48			0.48			0.49
Weighted average number of common shares outstanding:
Basic		17,616,046			17,747,070			17,711,639			17,770,158			17,856,961
Diluted		17,700,042			17,792,296			17,805,347			17,961,400			18,010,127
Performance Ratios:
Return on average assets annualized (ROAA)		0.46	%		0.47	%		0.54	%		0.53	%		0.54	%
Return on average equity annualized (ROAE)		5.12	%		5.22	%		5.94	%		6.13	%		6.20	%
Return on average tangible equity annualized (ROATCE) (A)		5.54	%		5.67	%		6.45	%		6.68	%		6.75	%
Net interest margin (tax-equivalent basis)		2.34	%		2.25	%		2.20	%		2.29	%		2.28	%
GAAP efficiency ratio (B)		78.86	%		76.20	%		75.44	%		69.32	%		66.97	%
Operating expenses / average assets annualized		2.73	%		2.70	%		2.51	%		2.33	%		2.31	%

(A) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.
(B) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in Thousands, except per share data)
(Unaudited)

	For the Nine Months Ended
	September 30,						Change
	2024			2023			$			%
Income Statement Data:
Interest income	$	241,635		$	223,832		$	17,803			8	%
Interest expense		134,537			104,418			30,119			29	%
Net interest income		107,098			119,414			(12,316	)		-10	%
Wealth management fee income		45,976			41,989			3,987			9	%
Service charges and fees		3,994			3,897			97			2	%
Bank owned life insurance		1,221			912			309			34	%
Gain on loans held for sale at fair value (Mortgage banking)		105			73			32			44	%
Gain on loans held for sale at lower of cost or fair value		23			—			23		N/A
Gain on sale of SBA loans		1,214			2,194			(980	)		-45	%
Corporate advisory fee income		976			180			796			442	%
Other income		5,406			7,147			(1,741	)		-24	%
Fair value adjustment for CRA equity security		279			(404	)		683			-169	%
Total other income		59,194			55,988			3,206			6	%

Total revenue		166,292			175,402			(9,110	)		-5	%

Salaries and employee benefits		89,410			76,204			13,206			17	%
Premises and equipment		16,490			14,317			2,173			15	%
FDIC insurance expense		2,685			2,181			504			23	%
Other expenses		19,231			17,977			1,254			7	%
Total operating expenses		127,816			110,679			17,137			15	%
Pretax income before provision for credit losses		38,476			64,723			(26,247	)		-41	%
Provision for credit losses		5,762			9,065			(3,303	)		-36	%
Income before income taxes		32,714			55,658			(22,944	)		-41	%
Income tax expense		8,966			15,403			(6,437	)		-42	%
Net income	$	23,748		$	40,255		$	(16,507	)		-41	%


Per Common Share Data:
Earnings per share (basic)	$	1.34		$	2.25		$	(0.91	)		-40	%
Earnings per share (diluted)		1.34			2.23			(0.89	)		-40	%
Weighted average number of common shares outstanding:
Basic		17,691,309			17,876,316			(185,007	)		-1	%
Diluted		17,746,560			18,091,524			(344,964	)		-2	%
Performance Ratios:
Return on average assets (ROAA)		0.49	%		0.84	%		(0.35	)%		-41	%
Return on average equity (ROAE)		5.42	%		9.66	%		(4.24	)%		-44	%
Return on average tangible equity (ROATCE) (A)		5.88	%		10.55	%		(4.67	)%		-44	%
Net interest margin (tax-equivalent basis)		2.26	%		2.54	%		(0.28	)%		-11	%
GAAP efficiency ratio (B)		76.86	%		63.10	%		13.76	%		22	%
Operating expenses / average assets		2.65	%		2.31	%		0.34	%		15	%

(A) Return on average tangible equity is calculated by dividing tangible equity by annualized net income. See Non-GAAP financial measures reconciliation included in these tables.
(B) Calculated as total operating expenses as a percentage of total revenue. For Non-GAAP efficiency ratio, see the Non-GAAP financial measures reconciliation included in these tables.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited)

	As of
	Sept 30,		June 30,		March 31,		Dec 31,		Sept 30,
	2024		2024		2024		2023		2023
ASSETS
Cash and due from banks	$	8,129	$	5,586	$	5,769	$	5,887	$	7,400
Federal funds sold		—		—		—		—		—
Interest-earning deposits		484,529		310,143		189,069		181,784		180,469
Total cash and cash equivalents		492,658		315,729		194,838		187,671		187,869
Securities available for sale		682,713		591,884		550,870		550,617		521,005
Securities held to maturity		103,158		105,013		106,498		107,755		108,940
CRA equity security, at fair value		13,445		12,971		13,055		13,166		12,581
FHLB and FRB stock, at cost (A)		12,459		12,478		18,079		31,044		34,158

Residential mortgage		591,374		579,057		581,426		578,427		585,295
Multifamily mortgage		1,784,861		1,796,687		1,827,165		1,836,390		1,871,853
Commercial mortgage		578,559		600,859		615,964		637,625		622,469
Commercial and industrial loans		2,247,853		2,185,827		2,235,342		2,284,940		2,321,917
Consumer loans		78,160		69,579		66,827		62,036		57,227
Home equity lines of credit		38,971		37,117		35,542		36,464		34,411
Other loans		389		172		184		238		265
Total loans		5,320,167		5,269,298		5,362,450		5,436,120		5,493,437
Less: Allowance for credit losses		71,283		67,984		66,251		65,888		68,592
Net loans		5,248,884		5,201,314		5,296,199		5,370,232		5,424,845

Premises and equipment		25,716		24,932		24,494		24,166		23,969
Accrued interest receivable		31,973		33,534		32,672		30,676		22,889
Bank owned life insurance		47,837		47,716		47,580		47,581		47,509
Goodwill and other intangible assets		45,198		45,470		45,742		46,014		46,286
Finance lease right-of-use assets		1,020		1,055		1,900		2,087		2,274
Operating lease right-of-use assets		41,650		38,683		16,035		12,096		12,800
Due from brokers		—		3,184		—		—		—
Other assets		47,081		71,387		60,591		53,752		76,456
TOTAL ASSETS	$	6,793,792	$	6,505,350	$	6,408,553	$	6,476,857	$	6,521,581

LIABILITIES
Deposits:
Noninterest-bearing demand deposits	$	1,079,877	$	950,368	$	914,893	$	957,687	$	947,405
Interest-bearing demand deposits		3,316,217		3,229,814		3,029,119		2,882,193		2,871,359
Savings		103,979		105,602		108,305		111,573		117,905
Money market accounts		902,562		824,158		775,132		740,559		761,833
Certificates of deposit – Retail		515,297		502,810		486,079		443,791		422,291
Certificates of deposit – Listing Service		7,454		7,454		7,704		7,804		9,103
Subtotal “customer” deposits		5,925,386		5,620,206		5,321,232		5,143,607		5,129,896
IB Demand – Brokered		10,000		10,000		10,000		10,000		10,000
Certificates of deposit – Brokered		—		26,000		145,480		120,507		119,463
Total deposits		5,935,386		5,656,206		5,476,712		5,274,114		5,259,359
Short-term borrowings		—		—		119,490		403,814		470,576
Finance lease liability		1,388		1,427		3,104		3,430		3,752
Operating lease liability		44,775		41,347		17,630		12,876		13,595
Subordinated debt, net		133,489		133,417		133,346		133,274		133,203
Due to brokers		—		9,981		—		—		—
Other liabilities		71,140		74,650		75,892		65,668		82,140
TOTAL LIABILITIES		6,186,178		5,917,028		5,826,174		5,893,176		5,962,625
Shareholders’ equity		607,614		588,322		582,379		583,681		558,956
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY	$	6,793,792	$	6,505,350	$	6,408,553	$	6,476,857	$	6,521,581
Assets under management and / or administration at Peapack-Gladstone Bank’s Private Wealth Management Division (market value, not included above-dollars in billions)	$	12.1	$	11.5	$	11.5	$	10.9	$	10.4

(A) FHLB means “Federal Home Loan Bank” and FRB means “Federal Reserve Bank.”

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

	As of
	Sept 30,			June 30,			March 31,			Dec 31,			Sept 30,
	2024			2024			2024			2023			2023
Asset Quality:
Loans past due over 90 days and still accruing	$	—		$	—		$	35		$	—		$	—
Nonaccrual loans		80,453			82,075			69,811			61,324			70,809
Other real estate owned		—			—			—			—			—
Total nonperforming assets	$	80,453		$	82,075		$	69,846		$	61,324		$	70,809

Nonperforming loans to total loans		1.51	%		1.56	%		1.30	%		1.13	%		1.29	%
Nonperforming assets to total assets		1.18	%		1.26	%		1.09	%		0.95	%		1.09	%

Performing modifications (A)(B)	$	51,796		$	26,788		$	12,311		$	248		$	248

Loans past due 30 through 89 days and still accruing	$	31,446		$	34,714		$	73,699		$	34,589		$	9,780

Loans subject to special mention	$	113,655		$	140,791		$	59,450		$	71,397		$	53,328

Classified loans	$	147,422		$	128,311		$	117,869		$	84,372		$	94,866

Individually evaluated loans	$	79,972		$	81,802		$	69,530		$	60,710		$	70,184

Allowance for credit losses (“ACL”):
Beginning of quarter	$	67,984		$	66,251		$	65,888		$	68,592		$	62,704
Provision for credit losses (C)		1,227			3,901			615			5,082			5,944
(Charge-offs)/recoveries, net (D)		2,072			(2,168	)		(252	)		(7,786	)		(56	)
End of quarter	$	71,283		$	67,984		$	66,251		$	65,888		$	68,592

ACL to nonperforming loans		88.60	%		82.83	%		94.85	%		107.44	%		96.87	%
ACL to total loans		1.34	%		1.29	%		1.24	%		1.21	%		1.25	%
Collectively evaluated ACL to total loans (E)		1.16	%		1.14	%		1.15	%		1.13	%		1.10	%

(A) Amounts reflect modifications that are paying according to modified terms.
(B) Excludes modifications included in nonaccrual loans of $3.7 million at September 30, 2024, $3.2 million at June 30, 2024, $3.2 million at March 31, 2024, $3.0 million at December 31, 2023 and $3.1 million at September 30, 2023.
(C) Excludes a credit of $3,000 at September 30, 2024, a provision of $10,000 at June 30, 2024, a provision of $12,000 at March 31, 2024, a credit of $55,000 at December 31, 2023 and a credit of $88,000 at September 30, 2023 related to off-balance sheet commitments.
(D) Net charge-offs for the quarter ended December 31, 2023 included charge-offs of $2.2 million of a previously established reserve to loans individually evaluated on one multifamily loan and $5.6 million on one equipment finance relationship.
(E) Total ACL less reserves to loans individually evaluated equals collectively evaluated ACL.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
SELECTED BALANCE SHEET DATA
(Dollars in Thousands)
(Unaudited)

	As of
	September 30,				December 31,				September 30,
	2024				2023				2023
Capital Adequacy
Equity to total assets (A)			8.94	%			9.01	%			8.57	%
Tangible equity to tangible assets (B)			8.33	%			8.36	%			7.92	%
Book value per share (C)		$	34.57			$	32.90			$	31.37
Tangible book value per share (D)		$	32.00			$	30.31			$	28.77

Tangible equity to tangible assets excluding other comprehensive loss*			9.07	%			9.28	%			9.06	%
Tangible book value per share excluding other comprehensive loss*		$	35.11			$	33.97			$	33.36

*Excludes other comprehensive loss of $54.8 million for the quarter ended September 30, 2024, $64.9 million for the quarter ended December 31, 2023, and $81.7 million for the quarter ended September 30, 2023. See Non-GAAP financial measures reconciliation included in these tables.

(A) Equity to total assets is calculated as total shareholders’ equity as a percentage of total assets at quarter end.
(B) Tangible equity and tangible assets are calculated by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. Tangible equity as a percentage of tangible assets at quarter end is calculated by dividing tangible equity by tangible assets at quarter end. See Non-GAAP financial measures reconciliation included in these tables.
(C) Book value per common share is calculated by dividing shareholders’ equity by quarter end common shares outstanding.
(D) Tangible book value per share excludes intangible assets. Tangible book value per share is calculated by dividing tangible equity by quarter end common shares outstanding. See Non-GAAP financial measures reconciliation tables.

	As of
	September 30,				December 31,				September 30,
	2024				2023				2023
Regulatory Capital – Holding Company
Tier I leverage	$	615,486	9.33	%	$	600,444	9.19	%	$	592,061	9.05	%
Tier I capital to risk-weighted assets		615,486	11.67			600,444	11.43			592,061	11.13
Common equity tier I capital ratio to risk-weighted assets		615,474	11.67			600,432	11.43			592,043	11.13
Tier I & II capital to risk-weighted assets		800,961	15.19			785,413	14.95			784,777	14.76

Regulatory Capital – Bank
Tier I leverage (E)	$	724,038	10.99	%	$	707,446	10.83	%	$	702,517	10.75	%
Tier I capital to risk-weighted assets (F)		724,038	13.75			707,446	13.48			702,517	13.22
Common equity tier I capital ratio to risk-weighted assets (G)		724,026	13.75			707,434	13.47			702,499	13.22
Tier I & II capital to risk-weighted assets (H)		789,954	15.00			773,083	14.73			768,979	14.47

(E) Regulatory well capitalized standard (including capital conservation buffer) = 4.00% ($264 million)
(F) Regulatory well capitalized standard (including capital conservation buffer) = 8.50% ($448 million)
(G) Regulatory well capitalized standard (including capital conservation buffer) = 7.00% ($369 million)
(H) Regulatory well capitalized standard (including capital conservation buffer) = 10.50% ($553 million)

PEAPACK-GLADSTONE FINANCIAL CORPORATION
LOANS CLOSED
(Dollars in Thousands)
(Unaudited)

	For the Quarters Ended
	Sept 30,		June 30,		March 31,		Dec 31,		Sept 30,
	2024		2024		2024		2023		2023
Residential loans retained	$	26,955	$	16,087	$	11,661	$	5,895	$	21,310
Residential loans sold		1,853		2,361		4,025		1,449		2,503
Total residential loans		28,808		18,448		15,686		7,344		23,813
Commercial real estate		4,300		2,600		11,500		21,375		3,900
Multifamily		11,295		4,330		1,900		5,725		3,000
Commercial (C&I) loans (A) (B)		242,829		103,065		145,803		145,397		176,845
SBA		9,106		8,200		2,790		7,326		300
Wealth lines of credit (A)		11,675		10,950		3,850		350		6,875
Total commercial loans		279,205		129,145		165,843		180,173		190,920
Installment loans		8,137		1,664		6,868		2,946		6,999
Home equity lines of credit (A)		10,421		4,787		2,103		4,174		6,275
Total loans closed	$	326,571	$	154,044	$	190,500	$	194,637	$	228,007

	For the Nine Months Ended
	Sept 30,		Sept 30,
	2024		2023
Residential loans retained	$	54,703	$	90,971
Residential loans sold		8,239		5,052
Total residential loans		62,942		96,023
Commercial real estate		18,400		66,125
Multifamily		17,525		59,812
Commercial (C&I) loans (A) (B)		491,697		543,631
SBA		20,096		23,963
Wealth lines of credit (A)		26,475		34,050
Total commercial loans		574,193		727,581
Installment loans		16,669		23,672
Home equity lines of credit (A)		17,311		15,303
Total loans closed	$	671,115	$	862,579

(A) Includes loans and lines of credit that closed in the period but not necessarily funded.
(B) Includes equipment finance.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)

	For the Three Months Ended
	September 30, 2024								September 30, 2023
	Average			Income/		Annualized			Average			Income/		Annualized
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	865,892		$	6,107		2.82	%	$	806,861		$	5,170		2.56	%
Tax-exempt (A) (B)		—			—		—			1,198			11		3.67

Loans (B) (C):
Mortgages		579,949			5,834		4.02			580,951			5,208		3.59
Commercial mortgages		2,381,771			27,362		4.60			2,502,351			27,746		4.44
Commercial		2,159,648			37,588		6.96			2,298,723			37,357		6.50
Commercial construction		22,371			507		9.07			12,346			282		9.14
Installment		73,440			1,267		6.90			56,248			967		6.88
Home equity		38,768			814		8.40			34,250			680		7.94
Other		239			6		10.04			234			7		11.97
Total loans		5,256,186			73,378		5.58			5,485,103			72,247		5.27
Federal funds sold		—			—		—			—			—		—
Interest-earning deposits		326,707			3,982		4.88			136,315			1,463		4.29
Total interest-earning assets		6,448,785			83,467		5.18	%		6,429,477			78,891		4.91	%
Noninterest-earning assets:
Cash and due from banks		7,521								6,954
Allowance for credit losses		(70,317	)							(63,625	)
Premises and equipment		25,530								23,880
Other assets		139,042								85,582
Total noninterest-earning assets		101,776								52,791
Total assets	$	6,550,561							$	6,482,268

LIABILITIES:
Interest-bearing deposits:
Checking	$	3,214,186		$	31,506		3.92	%	$	2,813,080		$	24,318		3.46	%
Money markets		833,325			6,419		3.08			771,781			4,458		2.31
Savings		104,293			117		0.45			118,718			75		0.25
Certificates of deposit – retail		512,794			5,540		4.32			415,665			3,459		3.33
Subtotal interest-bearing deposits		4,664,598			43,582		3.74			4,119,244			32,310		3.14
Interest-bearing demand – brokered		10,000			134		5.36			10,000			136		5.44
Certificates of deposit – brokered		7,913			106		5.36			102,777			1,183		4.60
Total interest-bearing deposits		4,682,511			43,822		3.74			4,232,021			33,629		3.18
Borrowings		—			—		—			470,616			6,569		5.58
Capital lease obligation		1,401			15		4.28			3,863			46		4.76
Subordinated debt		133,449			1,685		5.05			133,163			1,730		5.20
Total interest-bearing liabilities		4,817,361			45,522		3.78	%		4,839,663			41,974		3.47	%
Noninterest-bearing liabilities:
Demand deposits		1,016,014								990,854
Accrued expenses and other liabilities		124,399								86,598
Total noninterest-bearing liabilities		1,140,413								1,077,452
Shareholders’ equity		592,787								565,153
Total liabilities and shareholders’ equity	$	6,550,561							$	6,482,268
Net interest income				$	37,945							$	36,917
Net interest spread							1.40	%							1.44	%
Net interest margin (D)							2.34	%							2.28	%

(A) Average balances for available for sale securities are based on amortized cost.
(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.
(C) Loans are stated net of unearned income and include nonaccrual loans.
(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)

	For the Three Months Ended
	September 30, 2024								June 30, 2024
	Average			Income/		Annualized			Average			Income/		Annualized
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	865,892		$	6,107		2.82	%	$	801,715		$	5,168		2.58	%
Tax-exempt (A) (B)		—			—		—			—			—		—

Loans (B) (C):
Mortgages		579,949			5,834		4.02			576,944			5,582		3.87
Commercial mortgages		2,381,771			27,362		4.60			2,420,570			26,881		4.44
Commercial		2,159,648			37,588		6.96			2,191,370			37,067		6.77
Commercial construction		22,371			507		9.07			21,628			489		9.04
Installment		73,440			1,267		6.90			67,034			1,143		6.82
Home equity		38,768			814		8.40			36,576			748		8.18
Other		239			6		10.04			200			6		12.00
Total loans		5,256,186			73,378		5.58			5,314,322			71,916		5.41
Federal funds sold		—			—		—			—			—		—
Interest-earning deposits		326,707			3,982		4.88			207,287			2,418		4.67
Total interest-earning assets		6,448,785			83,467		5.18	%		6,323,324			79,502		5.03	%
Noninterest-earning assets:
Cash and due from banks		7,521								7,537
Allowance for credit losses		(70,317	)							(67,568	)
Premises and equipment		25,530								24,820
Other assets		139,042								99,838
Total noninterest-earning assets		101,776								64,627
Total assets	$	6,550,561							$	6,387,951

LIABILITIES:
Interest-bearing deposits:
Checking	$	3,214,186		$	31,506		3.92	%	$	3,094,386		$	29,252		3.78	%
Money markets		833,325			6,419		3.08			791,385			6,016		3.04
Savings		104,293			117		0.45			105,825			96		0.36
Certificates of deposit – retail		512,794			5,540		4.32			504,313			5,367		4.26
Subtotal interest-bearing deposits		4,664,598			43,582		3.74			4,495,909			40,731		3.62
Interest-bearing demand – brokered		10,000			134		5.36			10,000			134		5.36
Certificates of deposit – brokered		7,913			106		5.36			98,642			1,242		5.04
Total interest-bearing deposits		4,682,511			43,822		3.74			4,604,551			42,107		3.66
Borrowings		—			—		—			27,247			381		5.59
Capital lease obligation		1,401			15		4.28			2,869			22		3.07
Subordinated debt		133,449			1,685		5.05			133,377			1,686		5.06
Total interest-bearing liabilities		4,817,361			45,522		3.78	%		4,768,044			44,196		3.71	%
Noninterest-bearing liabilities:
Demand deposits		1,016,014								945,231
Accrued expenses and other liabilities		124,399								97,470
Total noninterest-bearing liabilities		1,140,413								1,042,701
Shareholders’ equity		592,787								577,206
Total liabilities and shareholders’ equity	$	6,550,561							$	6,387,951
Net interest income				$	37,945							$	35,306
Net interest spread							1.40	%							1.32	%
Net interest margin (D)							2.34	%							2.25	%

(A) Average balances for available for sale securities are based on amortized cost.
(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.
(C) Loans are stated net of unearned income and include nonaccrual loans.
(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
AVERAGE BALANCE SHEET
(Tax-Equivalent Basis, Dollars in Thousands)
(Unaudited)

	For the Nine Months Ended
	September 30, 2024								September 30, 2023
	Average			Income/					Average			Income/
	Balance			Expense		Yield			Balance			Expense		Yield
ASSETS:
Interest-earning assets:
Investments:
Taxable (A)	$	820,594		$	16,411		2.67	%	$	801,535		$	14,541		2.42	%
Tax-exempt (A) (B)		—			—		—			1,637			49		3.99

Loans (B) (C):
Mortgages		578,187			16,836		3.88			556,220			14,433		3.46
Commercial mortgages		2,420,772			81,783		4.50			2,495,175			80,503		4.30
Commercial		2,196,921			112,214		6.81			2,247,803			106,182		6.30
Commercial construction		20,981			1,425		9.06			7,903			536		9.04
Installment		68,605			3,524		6.85			49,214			2,416		6.55
Home equity		37,255			2,298		8.22			33,914			1,903		7.48
Other		218			19		11.62			260			22		11.28
Total loans		5,322,939			218,099		5.46			5,390,489			205,995		5.10
Federal funds sold		—			—		—			—			—		—
Interest-earning deposits		225,070			7,922		4.69			147,071			4,452		4.04
Total interest-earning assets		6,368,603			242,432		5.08	%		6,340,732			225,037		4.73	%
Noninterest-earning assets:
Cash and due from banks		8,384								8,388
Allowance for credit losses		(68,337	)							(62,753	)
Premises and equipment		24,917								23,850
Other assets		109,152								76,992
Total noninterest-earning assets		74,116								46,477
Total assets	$	6,442,719							$	6,387,209

LIABILITIES:
Interest-bearing deposits:
Checking	$	3,088,218		$	88,192		3.81	%	$	2,739,115		$	63,018		3.07	%
Money markets		794,297			17,959		3.01			893,567			13,185		1.97
Savings		106,200			302		0.38			128,437			148		0.15
Certificates of deposit – retail		498,353			15,762		4.22			386,488			7,650		2.64
Subtotal interest-bearing deposits		4,487,068			122,215		3.63			4,147,607			84,001		2.70
Interest-bearing demand – brokered		10,000			394		5.25			15,311			469		4.08
Certificates of deposit – brokered		78,042			2,950		5.04			51,916			1,584		4.07
Total interest-bearing deposits		4,575,110			125,559		3.66			4,214,834			86,054		2.72
Borrowings		87,224			3,848		5.88			331,170			13,249		5.33
Capital lease obligation		2,491			75		4.01			4,179			149		4.75
Subordinated debt		133,377			5,055		5.05			133,090			4,966		4.98
Total interest-bearing liabilities		4,798,202			134,537		3.74	%		4,683,273			104,418		2.97	%
Noninterest-bearing liabilities:
Demand deposits		959,571								1,066,162
Accrued expenses and other liabilities		101,247								82,215
Total noninterest-bearing liabilities		1,060,818								1,148,377
Shareholders’ equity		583,699								555,559
Total liabilities and shareholders’ equity	$	6,442,719							$	6,387,209
Net interest income				$	107,895							$	120,619
Net interest spread							1.34	%							1.76	%
Net interest margin (D)							2.26	%							2.54	%

(A) Average balances for available for sale securities are based on amortized cost.
(B) Interest income is presented on a tax-equivalent basis using a 21% federal tax rate.
(C) Loans are stated net of unearned income and include nonaccrual loans.
(D) Net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

PEAPACK-GLADSTONE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES RECONCILIATION

Tangible book value per share and tangible equity as a percentage of tangible assets at period end are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible equity and tangible assets by excluding the balance of intangible assets from shareholders’ equity and total assets, respectively. We calculate tangible book value per share by dividing tangible equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing shareholders’ equity by common shares outstanding at period end. We calculate tangible equity as a percentage of tangible assets at period end by dividing tangible equity by tangible assets at period end. We believe that this is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.

The efficiency ratio is a non-GAAP measure of expense control relative to recurring revenue. We calculate the efficiency ratio by dividing total noninterest expenses, excluding other real estate owned provision, as determined under GAAP, by net interest income and total noninterest income as determined under GAAP, but excluding net gains/(losses) on loans held for sale at lower of cost or fair value and excluding net gains on securities from this calculation, which we refer to below as recurring revenue. We believe that this provides a reasonable measure of core expenses relative to core revenue.

We believe these non-GAAP financial measures provide information that is important to investors and useful in understanding our financial position, results and ratios because our management internally assesses our performance based, in part, on these measures. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titles measures reported by other companies. A reconciliation of the non-GAAP measures of tangible common equity, tangible book value per share and efficiency ratio to the underlying GAAP numbers is set forth below.

(Dollars in thousands, except per share data)

	Three Months Ended
	Sept 30,			June 30,			March 31,			Dec 31,			Sept 30,
Tangible Book Value Per Share	2024			2024			2024			2023			2023
Shareholders’ equity	$	607,614		$	588,322		$	582,379		$	583,681		$	558,956
Less: Intangible assets, net		45,198			45,470			45,742			46,014			46,286
Tangible equity	$	562,416		$	542,852		$	536,637		$	537,667		$	512,670
Less: other comprehensive loss		(54,820	)		(68,342	)		(67,760	)		(64,878	)		(81,653	)
Tangible equity excluding other comprehensive loss	$	617,236		$	611,194		$	604,397		$	602,545		$	594,323

Period end shares outstanding		17,577,747			17,666,490			17,761,538			17,739,677			17,816,922
Tangible book value per share	$	32.00		$	30.73		$	30.21		$	30.31		$	28.77
Tangible book value per share excluding other comprehensive loss	$	35.11		$	34.60		$	34.03		$	33.97		$	33.36
Book value per share		34.57			33.30			32.79			32.90			31.37

Tangible Equity to Tangible Assets
Total assets	$	6,793,792		$	6,505,350		$	6,408,553		$	6,476,857		$	6,521,581
Less: Intangible assets, net		45,198			45,470			45,742			46,014			46,286
Tangible assets	$	6,748,594		$	6,459,880		$	6,362,811		$	6,430,843		$	6,475,295
Less: other comprehensive loss		(54,820	)		(68,342	)		(67,760	)		(64,878	)		(81,653	)
Tangible assets excluding other comprehensive loss	$	6,803,414		$	6,528,222		$	6,430,571		$	6,495,721		$	6,556,948

Tangible equity to tangible assets		8.33	%		8.40	%		8.43	%		8.36	%		7.92	%
Tangible equity to tangible assets excluding other comprehensive loss		9.07	%		9.36	%		9.40	%		9.28	%		9.06	%
Equity to assets		8.94	%		9.04	%		9.09	%		9.01	%		8.57	%

(Dollars in thousands)

	Three Months Ended
	Sept 30,			June 30,			March 31,			Dec 31,			Sept 30,
Return on Average Tangible Equity	2024			2024			2024			2023			2023
Net income	$	7,587		$	7,530		$	8,631		$	8,599		$	8,755

Average shareholders’ equity	$	592,787		$	577,206		$	581,003		$	561,055		$	565,153
Less: Average intangible assets, net		45,350			45,624			45,903			46,167			46,468
Average tangible equity	$	547,437		$	531,582		$	535,100		$	514,888		$	518,685

Return on average tangible common equity		5.54	%		5.67	%		6.45	%		6.68	%		6.75	%

	For the Nine Months Ended
	Sept 30,			Sept 30,
Return on Average Tangible Equity	2024			2023
Net income	$	23,748		$	40,255

Average shareholders’ equity	$	583,699		$	555,559
Less: Average intangible assets, net		45,625			46,825
Average tangible equity		538,074			508,734

Return on average tangible common equity		5.88	%		10.55	%

(Dollars in thousands)

	Three Months Ended
	Sept 30,			June 30,			March 31,			Dec 31,			Sept 30,
Efficiency Ratio	2024			2024			2024			2023			2023
Net interest income	$	37,681		$	35,042		$	34,375		$	36,675		$	36,515
Total other income		18,938			21,555			18,701			17,590			19,354
Add:
Fair value adjustment for CRA equity security		(474	)		84			111			(585	)		404
Less:
Gain on loans held for sale at lower of cost or fair value		—			(23	)		—			—			—
Income from life insurance proceeds		(55	)		—			(181	)		—			—
Total recurring revenue		56,090			56,658			53,006			53,680			56,273

Operating expenses		44,649			43,126			40,041			37,616			37,413
Total operating expense		44,649			43,126			40,041			37,616			37,413

Efficiency ratio		79.60	%		76.12	%		75.54	%		70.07	%		66.48	%

(Dollars in thousands)

	For the Nine Months Ended
	Sept 30,			Sept 30,
Efficiency Ratio	2024			2023
Net interest income	$	107,098		$	119,414
Total other income		59,194			55,988
Add:
Fair value adjustment for CRA equity security		(279	)		404
Less:
Gain on loans held for sale at lower of cost or fair value		(23	)		—
Income from life insurance proceeds		(236	)		—
Total recurring revenue		165,754			175,806

Operating expenses		127,816			110,679
Less:
Accelerated Expense for Retirement		—			1,965
Branch Closure Expense		—			175
Total operating expense		127,816			108,539

Efficiency ratio		77.11	%		61.74	%

The MIL Network –

January 24, 2025

MIL-OSI: FS Bancorp, Inc. Reports Third Quarter Net Income of $10.3 Million or $1.29 Per Diluted Share and the Forty-Seventh Consecutive Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

MOUNTLAKE TERRACE, Wash., Oct. 22, 2024 (GLOBE NEWSWIRE) — FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2024 third quarter net income of $10.3 million, or $1.29 per diluted share, compared to $9.0 million, or $1.13 per diluted share, for the comparable quarter one year ago. For the nine months ended September 30, 2024, net income was $27.6 million, or $3.45 per diluted share, compared to net income of $26.3 million, or $3.33 per diluted share, for the comparable nine-month period in 2023.

“Deposit growth experienced in the third quarter of 2024 was a direct result of the Bank-wide focus and strategic planning objective to fund loan growth with core deposits,” stated Joe Adams, CEO. “We are also pleased that our Board of Directors approved our forty-seventh consecutive quarterly cash dividend of $0.27 per common share, demonstrating our continued commitment to returning value to shareholders. The cash dividend will be paid on November 21, 2024, to shareholders of record as of November 7, 2024,” concluded Adams.

2024 Third Quarter Highlights

Net income was $10.3 million for the third quarter of 2024, compared to $9.0 million for both the previous quarter and the comparable quarter one year ago;
Net interest margin (“NIM”) increased to 4.35% for the third quarter of 2024, compared to 4.29% in the previous quarter, and 4.34% for the comparable quarter one year ago;
Total deposits increased $44.5 million, or 1.9%, to $2.43 billion at September 30, 2024, primarily due to an increase in noninterest-bearing checking of $34.4 million and certificates of deposit (“CDs”) of $15.0 million, compared to $2.38 billion at June 30, 2024 and decreased $27.1 million, or 1.1%, from $2.45 billion at September 30, 2023. Noninterest-bearing deposits were $657.8 million at September 30, 2024, $623.3 million at June 30, 2024, and $670.2 million at September 30, 2023;
Borrowings decreased $18.1 million, or 9.9% to $163.8 million at September 30, 2024, compared to $181.9 million at June 30, 2024, as a result of the Company’s strategic planning objective to fund loan growth with core deposits;
Loans receivable, net was unchanged at $2.46 billion at September 30, 2024, and June 30, 2024, and increased $88.1 million, or 3.7%, from $2.38 billion at September 30, 2023;
Consumer loans, of which 87.3% are home improvement loans, decreased $9.3 million, or 1.4%, to $632.4 million at September 30, 2024, compared to $641.7 million in the previous quarter, and decreased $7.7 million, or 1.2%, from $640.1 million in the comparable quarter one year ago. Yields on consumer loans increased 18 basis points to 7.59% from 7.41% at the end of the second quarter 2024. During the three months ended September 30, 2024, consumer loan originations included 80.4% of home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720 and 83.9% of home improvement loans with a UCC-2 security filing;
For the third quarter of 2024, there was a tax benefit of $420,000, compared to tax provisions of $2.4 million in the prior quarter, and $2.5 million for the same quarter last year. The tax benefit for the third quarter of 2024 was due to $28.4 million of energy tax credits purchased during the current quarter related to the Inflation Reduction Act of 2022;
Repurchased 97,000 shares of the Company’s common stock in the third quarter of 2024 at an average price of $43.58 per share with $1.4 million remaining for future purchases under the share repurchase plan that was approved in July 2024;
Book value per share increased $0.30 to $37.45 at September 30, 2024, compared to $37.15 at June 30, 2024, and increased $4.87 from $32.58 at September 30, 2023. Tangible book value per share (non-GAAP financial measure) increased $0.44 to $35.10 at September 30, 2024, compared to $34.66 at June 30, 2024, and increased $5.37 from $29.73 at September 30, 2023. See, “Non-GAAP Financial Measures.”
Segment reporting in the third quarter of 2024 reflected net income of $9.3 million for the Commercial and Consumer Banking segment and $1.0 million for the Home Lending segment, compared to net income of $8.0 million and $1.0 million in the prior quarter, and net income of $8.8 million and $166,000 in the third quarter of 2023, respectively;
The percentage of available unencumbered cash and secured borrowing capacity at the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank to uninsured deposits was 182% at September 30, 2024, compared to 191% in the prior quarter. The average deposit size per FDIC-insured account at the Bank was $33,000 and $32,000 for September 30, 2024 and June 30, 2024, respectively; and
Regulatory capital ratios at the Bank were 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at September 30, 2024, compared to 13.9% for total risk-based capital and 10.9% for Tier 1 leverage capital at June 30, 2024.

Segment Reporting

The Company reports two segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.

The Company reflected the sale of servicing rights in the first quarter of 2024 as a gain to the Commercial and Consumer Banking segment to offset the realized loss on sale of investment securities and will allocate the gain on a straight-line basis over four years as intercompany income from the Commercial and Consumer Banking segment to the Home Lending segment.

The tables below provide a summary of segment reporting at or for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

	At or For the Three Months Ended September 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	28,612		$	2,632		$	31,244
Provision for credit losses		(1,331	)		(182	)		(1,513	)
Noninterest income ⁽²⁾		2,257			3,710			5,967
Noninterest expense ⁽³⁾		(20,199	)		(5,633	)		(25,832	)
Income before (provision) benefit for income taxes		9,339			527			9,866
(Provision) benefit for income taxes		(71	)		491			420
Net income	$	9,268		$	1,018		$	10,286
Total average assets for period ended	$	2,347,855		$	612,935		$	2,960,790
Full-time employees (“FTEs”)		442			117			559

	At or For the Three Months Ended September 30, 2023
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	27,563		$	3,071		$	30,634
Provision for credit losses		(437	)		(111	)		(548	)
Noninterest income ⁽²⁾		2,680			2,302			4,982
Noninterest expense ⁽³⁾		(18,539	)		(5,047	)		(23,586	)
Income before provision for income taxes		11,267			215			11,482
Provision for income taxes		(2,480	)		(49	)		(2,529	)
Net income	$	8,787		$	166		$	8,953
Total average assets for period ended	$	2,361,014		$	540,372		$	2,901,386
FTEs		434			128			562

	At or For the Nine Months Ended September 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	84,749		$	7,242		$	91,991
Provision for credit losses		(3,796	)		(193	)		(3,989	)
Noninterest income ⁽²⁾		6,919			10,027			16,946
Noninterest expense ⁽³⁾		(58,250	)		(14,968	)		(73,218	)
Income before (provision) benefit for income taxes		29,622			2,108			31,730
(Provision) benefit for income taxes		(4,253	)		165			(4,088	)
Net income	$	25,369		$	2,273		$	27,642
Total average assets for period ended	$	2,369,740		$	586,001		$	2,955,741
FTEs		442			117			559

	At or For the Nine Months Ended September 30, 2023
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	83,332		$	9,516		$	92,848
Provision for credit losses		(2,555	)		(817	)		(3,372	)
Noninterest income ⁽²⁾		7,766			7,268			15,034
Noninterest expense ⁽³⁾		(56,099	)		(15,215	)		(71,314	)
Income before provision for income taxes		32,444			752			33,196
Provision for income taxes		(6,758	)		(157	)		(6,915	)
Net income	$	25,686		$	595		$	26,281
Total average assets for period ended	$	2,288,996		$	520,513		$	2,809,509
FTEs		434			128			562

__________________________

(1)		Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.
(2)		Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value, and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and nine months ended September 30, 2024, the Company recorded net increases in fair value of $262,000 and $448,000, respectively, as compared to net decreases in fair value of $343,000 and $285,000 for the three and nine months ended September 30, 2023. As of September 30, 2024 and 2023, there were $13.9 million and $15.2 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from loans held for sale to loans held for investment.
(3)		Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and nine months ended September 30, 2024 and 2023, the Home Lending segment included allocated overhead expenses of $1.8 million and $4.8 million, compared to $1.5 million and $4.7 million, respectively.

Asset Summary

Total assets increased $28.8 million, or 1.0%, to $2.97 billion at September 30, 2024, compared to $2.94 billion at June 30, 2024, and increased $50.1 million, or 1.7%, from $2.92 billion at September 30, 2023. The increase in total assets at September 30, 2024, compared to June 30, 2024, included increases of $15.7 million in other assets, consisting primarily of a federal income tax receivable of $25.7 million, $7.3 million in total cash and cash equivalents, $7.0 million in securities available-for-sale, and $6.5 million in loans receivable, net, partially offset by decreases in loans held for sale (“HFS”) of $4.4 million, and core deposit intangible (“CDI”), net of $897,000. The increase compared to September 30, 2023, was primarily due to increases in loans receivable, net of $88.1 million, loans HFS of $30.7 million, other assets of $13.1 million, and FHLB stock of $5.8 million. These increases were partially offset by decreases in total cash and cash equivalents of $40.3 million, securities available-for-sale of $23.7 million, mortgage servicing rights (“MSR”) of $8.9 million, certificates of deposit at other financial institutions of $5.6 million, CDI, net of $3.7 million, deferred tax asset, net of $3.2 million, operating lease right-of-use assets of $1.7 million, and premises and equipment, net of $900,000.

LOAN PORTFOLIO
(Dollars in thousands)	September 30, 2024						June 30, 2024						September 30, 2023
	Amount			Percent			Amount			Percent			Amount			Percent
REAL ESTATE LOANS
Commercial	$	352,933			14.1	%	$	359,404			14.4	%	$	364,673			15.2	%
Construction and development		292,366			11.7			274,209			11.0			289,873			12.0
Home equity		75,063			3.0			73,749			3.0			67,103			2.8
One-to-four-family (excludes HFS)		591,666			23.7			588,966			23.7			540,670			22.5
Multi-family		238,462			9.6			239,675			9.6			243,661			10.1
Total real estate loans		1,550,490			62.1			1,536,003			61.7			1,505,980			62.6

CONSUMER LOANS
Indirect home improvement		552,226			22.2			563,621			22.7			562,650			23.4
Marine		76,845			3.1			74,627			3.0			73,887			3.1
Other consumer		3,346			0.1			3,440			0.1			3,547			0.1
Total consumer loans		632,417			25.4			641,688			25.8			640,084			26.6

COMMERCIAL BUSINESS LOANS
Commercial and industrial (“C&I”)		296,773			11.9			285,183			11.5			236,520			9.8
Warehouse lending		15,249			0.6			25,548			1.0			23,489			1.0
Total commercial business loans		312,022			12.5			310,731			12.5			260,009			10.8
Total loans receivable, gross		2,494,929			100.0	%		2,488,422			100.0	%		2,406,073			100.0	%

Allowance for credit losses on loans		(31,232	)					(31,238	)					(30,501	)
Total loans receivable, net	$	2,463,697					$	2,457,184					$	2,375,572

Loans receivable, net was unchanged at $2.46 billion at September 30, 2024 and June 30, 2024, and increased $88.1 million from $2.38 billion at September 30, 2023. Total real estate loans remained virtually unchanged at $1.55 billion at September 30, 2024, compared to June 30, 2024, however, there were notable shifts within the portfolio. Specifically, construction and development loans increased $18.2 million, one-to-four-family loans (excluding HFS) increased $2.7 million mainly due to new loan originations, and home equity loans increased $1.3 million. These gains were partially offset by declines of $6.5 million in commercial real estate loans and $1.2 million in multi-family loans. In addition, commercial business loans increased $1.3 million to $312.0 million at September 30, 2024, up from $310.7 million on June 30, 2024, resulting from an increase of $11.6 million in C&I loans and a decrease of $10.3 million in warehouse lending. Consumer loans decreased $9.3 million to $632.4 million at September 30, 2024, compared to June 30, 2024, resulting from an $11.4 million decrease in indirect home improvement loans, partially offset by an increase of $2.2 million in marine loans.

The composition of CRE loans at the dates indicated were as follows:

(Dollars in thousands)
	September 30, 2024		June 30, 2024		September 30, 2023
CRE by Type:	Amount		Amount		Amount
Agriculture	$	3,610	$	3,639	$	3,926
CRE Non-owner occupied:
Office		40,672		41,381		41,878
Retail		36,070		37,507		37,865
Hospitality/restaurant		27,743		28,314		25,252
Self storage		19,130		19,141		21,381
Mixed use		17,881		18,062		16,768
Industrial		15,402		17,163		17,431
Senior housing/assisted living		7,621		7,675		8,556
Other ⁽¹⁾		6,684		6,847		7,814
Land		2,523		3,021		6,381
Education/worship		2,545		2,571		2,645
Total CRE non-owner occupied		176,271		181,682		185,971
CRE owner occupied:
Industrial		63,577		63,969		63,307
Office		42,156		41,978		41,663
Retail		19,968		20,885		23,228
Hospitality/restaurant		10,528		10,800		14,153
Other ⁽²⁾		8,116		8,354		8,850
Car wash		9,575		9,607		7,818
Automobile related		8,874		8,200		8,193
Education/worship		4,609		4,610		4,617
Mixed use		5,649		5,680		2,947
Total CRE owner occupied		173,052		174,083		174,776
Total	$	352,933	$	359,404	$	364,673

__________________________________

(1)		Primarily includes loans secured by mobile home parks totaling $774,000, $782,000, and $2.4 million, RV parks totaling $689,000, $692,000, and $702,000, automobile-related collateral totaling $594,000, $599,000, and $0, and other collateral totaling $4.6 million, $4.7 million, and $4.8 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(2)		Primarily includes loans secured by gas stations totaling $1.5 million, $1.6 million and $1.7 million, non-profit organization totaling $901,000, $908,000 and $928,000, and other collateral totaling $5.7 million, $5.1 million and $6.2 million at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.

The following tables includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:

(Dollars in thousands)		For the Quarter Ended																	Current Weighted
	Dec 31,		Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,				Average
CRE by type:	2024		2025		2025		2025		2025		2026		2026		2026		Total		Rate
Agriculture	$	926	$	—	$	424	$	—	$	311	$	181	$	259	$	306	$	2,407	6.40%
Apartment		9,990		9,817		5,271		1,829		18,671		1,908		14,485		9,797		71,768	4.87%
Auto related		—		—		2,091		—		—		—		—		—		2,091	4.18%
Hotel / hospitality		—		579		1,212		1,336		—		118		1,307		—		4,552	4.39%
Industrial		8,337		897		588		—		10,361		584		173		1,636		22,576	5.29%
Mixed use		795		1,750		3,490		250		318		—		—		—		6,603	5.00%
Office		4,702		11,171		—		4,214		988		528		1,666		566		23,835	4.88%
Other		1,227		—		116		1,168		246		901		—		2,545		6,203	4.96%
Retail		1,266		2,006		—		83		—		465		3,285		—		7,105	4.15%
Senior housing and assisted living		—		—		—		—		—		2,186		—		—		2,186	4.75%
Total	$	27,243	$	26,220	$	13,192	$	8,880	$	30,895	$	6,871	$	21,175	$	14,850	$	149,326	4.91%

A breakdown of construction loans at the dates indicated were as follows:

(Dollars in thousands)
	September 30, 2024					June 30, 2024
Construction Types:	Amount		Percent			Amount		Percent
Commercial construction ─ retail	$	8,710		3.0	%	$	8,698		3.2	%
Commercial construction ─ office		4,737		1.6			4,737		1.7
Commercial construction ─ self storage		10,408		3.5			10,000		3.6
Commercial construction ─ car wash		7,807		2.7			7,807		2.8
Multi-family		30,931		10.6			30,960		11.3
Custom construction ─ single family residential and single family manufactured residential		43,528		14.9			46,107		16.8
Custom construction ─ land, lot and acquisition and development		8,220		2.8			7,310		2.7
Speculative residential construction ─ vertical		145,549		49.8			131,293		47.9
Speculative residential construction ─ land, lot and acquisition and development		32,476		11.1			27,297		10.0
Total	$	292,366		100.0	%	$	274,209		100.0	%

(Dollars in thousands)
	September 30, 2024					September 30, 2023
Construction Types:	Amount		Percent			Amount		Percent
Commercial construction ─ retail	$	8,710		3.0	%	$	7,347		2.5	%
Commercial construction ─ office		4,737		1.6			4,591		1.6
Commercial construction ─ self storage		10,408		3.5			10,734		3.7
Commercial construction ─ car wash		7,807		2.7			7,287		2.5
Multi-family		30,931		10.6			52,913		18.3
Custom construction ─ single family residential and single family manufactured residential		43,528		14.9			44,542		15.4
Custom construction ─ land, lot and acquisition and development		8,220		2.8			7,012		2.4
Speculative residential construction ─ vertical		145,549		49.8			124,244		42.8
Speculative residential construction ─ land, lot and acquisition and development		32,476		11.1			31,203		10.8
Total	$	292,366		100.0	%	$	289,873		100.0	%

Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:

(Dollars in thousands)	For the Three Months Ended					For the Three Months Ended
	September 30, 2024					June 30, 2024
	Amount		Percent			Amount		Percent			$ Change			% Change
Purchase	$	168,088		85.7	%	$	193,715		92.3	%	$	(25,627	)		(13.2	)%
Refinance		28,001		14.3			16,173		7.7			11,828			73.1	%
Total	$	196,089		100.0	%	$	209,888		100.0	%	$	(13,799	)		(6.5	)%

(Dollars in thousands)	For the Three Months Ended September 30,
	2024					2023
	Amount		Percent			Amount		Percent			$ Change		% Change
Purchase	$	168,088		85.7	%	$	139,345		92.1	%	$	28,743		20.6	%
Refinance		28,001		14.3			12,001		7.9			16,000		133.3	%
Total	$	196,089		100.0	%	$	151,346		100.0	%	$	44,743		29.6	%

(Dollars in thousands)	For the Nine Months Ended September 30,
	2024					2023
	Amount		Percent			Amount		Percent			$ Change		% Change
Purchase	$	497,705		88.8	%	$	387,211		91.8	%	$	110,494		28.5	%
Refinance		62,546		11.2			34,635		8.2			27,911		80.6	%
Total	$	560,251		100.0	%	$	421,846		100.0	%	$	138,405		32.8	%

During the quarter ended September 30, 2024, the Company sold $167.6 million of one-to-four-family loans compared to $164.5 million during the previous quarter and $117.6 million during the same quarter one year ago. Gross margins on home loan sales were unchanged at 2.96% for both quarters ended September 30, 2024, and June 30, 2024, and declined from 3.08% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.

Liabilities and Equity Summary

Changes in deposits at the dates indicated were as follows:

(Dollars in thousands)
	September 30, 2024					June 30, 2024
Transactional deposits:	Amount		Percent			Amount		Percent			$ Change			% Change
Noninterest-bearing checking	$	641,270		26.4	%	$	613,137		25.7	%	$	28,133			4.6	%
Interest-bearing checking ⁽¹⁾		165,944		6.8			166,839		7.0			(895	)		(0.5	)
Escrow accounts related to mortgages serviced ⁽²⁾		16,483		0.7			10,212		0.4			6,271			61.4
Subtotal		823,697		33.9			790,188		33.1			33,509			4.2
Savings		151,364		6.2			151,398		6.4			(34	)		(0.0	)
Money market ⁽³⁾		340,049		14.0			343,995		14.4			(3,946	)		(1.1	)
Subtotal		491,413		20.2			495,393		20.8			(3,980	)		(0.8	)
Certificates of deposit less than $100,000 ⁽⁴⁾		533,441		22.0			530,537		22.3			2,904			0.5
Certificates of deposit of $100,000 through $250,000		452,705		18.7			427,893		18.0			24,812			5.8
Certificates of deposit greater than $250,000		126,075		5.2			138,792		5.8			(12,717	)		(9.2	)
Subtotal		1,112,221		45.9			1,097,222		46.1			14,999			1.4
Total	$	2,427,331		100.0	%	$	2,382,803		100.0	%	$	44,528			1.9	%

(Dollars in thousands)
	September 30, 2024					September 30, 2023
Transactional deposits:	Amount		Percent			Amount		Percent			$ Change			% Change
Noninterest-bearing checking	$	641,270		26.4	%	$	643,670		26.2	%	$	(2,400	)		(0.4	)%
Interest-bearing checking ⁽¹⁾		165,944		6.8			219,468		8.9			(53,524	)		(24.4	)
Escrow accounts related to mortgages serviced ⁽²⁾		16,483		0.7			26,489		1.1			(10,006	)		(37.8	)
Subtotal		823,697		33.9			889,627		36.2			(65,930	)		(7.4	)
Savings		151,364		6.2			157,901		6.4			(6,537	)		(4.1	)
Money market ⁽³⁾		340,049		14.0			389,962		15.9			(49,913	)		(12.8	)
Subtotal		491,413		20.2			547,863		22.3			(56,450	)		(10.3	)
Certificates of deposit less than $100,000 ⁽⁴⁾		533,441		22.0			527,032		21.5			6,409			1.2
Certificates of deposit of $100,000 through $250,000		452,705		18.7			406,545		16.6			46,160			11.4
Certificates of deposit greater than $250,000		126,075		5.2			83,377		3.4			42,698			51.2
Subtotal		1,112,221		45.9			1,016,954		41.5			95,267			9.4
Total	$	2,427,331		100.0	%	$	2,454,444		100.0	%	$	(27,113	)		(1.1	)%

__________________________________

(1)		There were no brokered deposits at September 30, 2024 and June 30, 2024, compared to $50.1 million at September 30, 2023.
(2)		Noninterest-bearing accounts.
(3)		Includes $1.0 million, $4.0 million and $51,000 of brokered deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
(4)		Includes $250.2 million, $261.0 million, and $323.3 million of brokered deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

At September 30, 2024, CDs, which include retail and non-retail CDs, totaled $1.11 billion, compared to $1.10 billion at June 30, 2024 and $1.02 billion at September 30, 2023, with non-retail CDs representing 22.5%, 24.9% and 33.2% of total CDs at such dates, respectively. At September 30, 2024, non-retail CDs, which include brokered CDs, online CDs and public funds CDs, decreased $10.4 million to $262.9 million, compared to $273.4 million at June 30, 2024, primarily due to a decrease of $10.8 million in brokered CDs. Non-retail CDs totaled $262.9 million at September 30, 2024, compared to $337.2 million at September 30, 2023.

At September 30, 2024, the Bank had uninsured deposits of approximately $644.9 million, compared to approximately $586.6 million at June 30, 2024, and $591.6 million at September 30, 2023. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

At September 30, 2024, borrowings decreased $18.1 million to $163.8 million at September 30, 2024, from $181.9 million at June 30, 2024, and increased $41.9 million from $121.9 million at September 30, 2023. These borrowings were comprised of FHLB advances of $153.8 million, and overnight borrowings of $10.0 million.

Total stockholders’ equity increased $4.9 million to $288.9 million at September 30, 2024, from $284.0 million at June 30, 2024, and increased $38.2 million, from $250.7 million at September 30, 2023. The increase in stockholders’ equity at September 30, 2024, compared to June 30, 2024, reflects net income of $10.3 million, partially offset by cash dividends paid of $2.1 million. Stockholders’ equity was also impacted by decreases in unrealized net losses on securities available for sale of $4.2 million, net of tax, and decreases in unrealized net gains on fair value and cash flow hedges of $7.0 million, net of tax, reflecting changes in market interest rates during the quarter, resulting in a $2.7 million increase in accumulated other comprehensive loss, net of tax. Book value per common share was $37.45 at September 30, 2024, compared to $37.15 at June 30, 2024, and $32.58 at September 30, 2023.

The Bank is considered well capitalized under the capital requirements established by the Federal Deposit Insurance Corporation (“FDIC”) with a total risk-based capital ratio of 14.2%, a Tier 1 leverage capital ratio of 11.2%, and a common equity Tier 1 (“CET1”) capital ratio of 12.9% at September 30, 2024.

The Company exceeded all regulatory capital requirements with a total risk-based capital ratio of 14.4%, a Tier 1 leverage capital ratio of 9.7%, and a CET1 ratio of 11.2% at September 30, 2024.

Credit Quality

The allowance for credit losses on loans (“ACLL”) was $31.2 million, or 1.25% of gross loans receivable (excluding loans HFS) at September 30, 2024, compared to $31.2 million, or 1.26% of gross loans receivable (excluding loans HFS), at June 30, 2024, and $30.5 million, or 1.27% of gross loans receivable (excluding loans HFS), at September 30, 2023. The virtually static balance in the ACLL at September 30, 2024, compared to the prior quarter was primarily due to insignificant changes in the loan portfolio period over period and provision for credit losses on loans that offset consumer loan net charge-offs. The increase of $731,000 in the ACLL from the same quarter the prior year was primarily due to organic loan growth and increases in nonperforming loans and net charge-offs. The allowance for credit losses on unfunded loan commitments decreased $79,000 to $1.5 million at September 30, 2024, compared to $1.6 million at June 30, 2024, and decreased $291,000 from $1.8 million at September 30, 2023.

Nonperforming loans decreased $634,000 to $10.8 million at September 30, 2024, compared to $11.4 million at June 30, 2024, and increased $5.2 million from $5.6 million at September 30, 2023. The decrease in nonperforming loans compared to the prior quarter was primarily due to decreases in nonperforming indirect home improvement loans of $549,000 and marine loans of $94,000. The increase in nonperforming loans compared to the same quarter the prior year was primarily due to increases in nonperforming construction and development loans of $4.7 million and commercial business loans of $461,000.

Loans classified as substandard decreased $1.1 million to $23.2 million at September 30, 2024, compared to $24.3 million at June 30, 2024, and increased $4.0 million from $19.2 million at September 30, 2023. The decrease in substandard loans compared to the prior quarter was primarily due to a decrease of $549,000 in indirect home improvement loans, $323,000 in commercial real estate loans, $94,000 in marine loans, $74,000 in C&I loans, and $59,000 in one-to-four family loans. The increase in substandard loans compared to the prior year was primarily due to increases of $4.7 million in construction and development loans, $108,000 in home equity loans, $102,000 in indirect home improvement loans, partially offset by decreases of $462,000 in C&I loans, $293,000 in one-to-four-family loans, and $173,000 in marine loans. There was no other real estate owned (“OREO”) property at September 30, 2024 and June 30, 2024, compared to one OREO property (a closed branch in Centralia, Washington) of $570,000 at September 30, 2023.

Operating Results

Net interest income increased $610,000 to $31.2 million for the three months ended September 30, 2024, from $30.6 million for the three months ended September 30, 2023, primarily due to an increase in interest and dividend income of $3.8 million, partially offset by an increase in interest expense of $3.2 million. The $3.8 million increase in total interest income was primarily due to an increase of $3.9 million in interest income on loans receivable, including fees, primarily as a result of new loans being originated at higher rates and variable rate loans repricing higher. The $3.2 million increase in total interest expense was primarily the result of higher market interest rates, higher utilization of borrowings and a shift in deposit mix from transactional accounts to higher cost CDs.

For the nine months ended September 30, 2024, net interest income decreased $857,000 to $92.0 million, from $92.8 million for the nine months ended September 30, 2023, resulting from an increase in interest expense of $16.0 million and an increase in interest income of $15.1 million.

NIM (annualized) increased one basis point to 4.35% for the three months ended September 30, 2024, from 4.34% for the same period in the prior year, and decreased 26 basis points to 4.30% for the nine months ended September 30, 2024, from 4.56% for the nine months ended September 30, 2023. The change in NIM for the three and nine months ended September 30, 2024 compared to the same periods in 2023, reflects the increased costs of deposits and borrowings, which outpaced the increased yields earned on interest-earning assets.

The average total cost of funds, including noninterest-bearing checking, increased 47 basis points to 2.39% for the three months ended September 30, 2024, from 1.92% for the three months ended September 30, 2023. This increase was predominantly due to higher market rates for deposits and increased utilization of higher cost borrowings. The average cost of funds increased 75 basis points to 2.33% for the nine months ended September 30, 2024, from 1.58% for the nine months ended September 30, 2023, also reflecting increases in market interest rates over last year and increased utilization of borrowings. Management remains focused on matching deposit/liability duration with the duration of loans/assets where feasible.

For the three and nine months ended September 30, 2024, the provision for credit losses on loans was $1.5 million and $4.0 million, compared to $683,000 and $4.1 million for the three and nine months ended September 30, 2023. The provision for credit losses on loans reflects an increase in charge-off activity for the quarter and increases in the loan portfolio for the year-to-date periods.

During the three months ended September 30, 2024, net charge-offs increased $1.1 million to $1.6 million, compared to $531,000 for the same period last year. This increase was the result of increased net charge-offs of $996,000 in indirect home improvement loans and $82,000 in marine loans, partially offset by a net recovery of $8,000 in other consumer loans. Net charge-offs increased $2.7 million to $4.3 million during the nine months ended September 30, 2024, compared to $1.6 million during the nine months ended September 30, 2023. This increase included net charge-off increases of $1.5 million in indirect home improvement loans, $1.0 million C&I loans, $146,000 in marine loans and $117,000 in other consumer loans. Management attributes the increase in net charge-offs over the year primarily to volatile economic conditions.

Noninterest income increased $985,000 to $6.0 million for the three months ended September 30, 2024, from $5.0 million for the three months ended September 30, 2023. The increase reflects a $648,000 increase in gain on sale of loans, primarily as a result of the increased volume of loans sold and an increase of $566,000 in other noninterest income, primarily due to fair value changes on loans. Noninterest income during the three months ended September 30, 2024, also reflects a $141,000 gain on the sale of MSRs, with no similar transaction occurring in the comparable quarter last year. These increases were partially offset by a $400,000 decrease in service charges and fee income, primarily due to the sale of MSRs in the first quarter of 2024. Noninterest income increased $1.9 million to $16.9 million for the nine months ended September 30, 2024, from $15.0 million for the nine months ended September 30, 2023. This increase was primarily the result of an $8.4 million gain on sale of MSRs recorded during the first nine months of 2024 with no similar transaction occurring in the comparable nine month period in 2023, and a $1.5 million increase in gain on sale of loans, partially offset by a $7.8 million loss on sale of investment securities resulting from management’s strategic decision to increase the yields earned on and reduce the duration of the securities portfolio, and an $839,000 decrease in service charges and fee income due to a reduction in loan servicing fees due to the sale of MSRs in the first quarter of 2024.

Noninterest expense increased $2.2 million to $25.8 million for the three months ended September 30, 2024, from $23.6 million for the three months ended September 30, 2023. The increase in noninterest expense was primarily due to increases of $506,000 in impairment of MSRs, $482,000 in salaries and benefits, $557,000 in professional and board fees, which included $571,000 in nonrecurring consulting charges and legal fees related to application/system upgrades and tax credit work, $418,000 in operations, $315,000 in data processing, and a decrease of $105,000 in amortization of CDI. Noninterest expense increased $1.9 million to $73.2 million for the nine months ended September 30, 2024, from $71.3 million for the nine months ended September 30, 2023. This increase was primarily due to increases of $1.1 million in data processing, $1.0 million in professional and board fees which included $824,000 in nonrecurring consulting charges and legal fees for the reasons stated above, $610,000 in operations expense, and $545,000 in impairment of MSRs, partially offset by a decrease of $1.6 million in acquisition costs as a result of no acquisition costs during the current period.

For the three months ended September 30, 2024, the Company recorded a benefit for income taxes of $420,000 as compared to a provision for income taxes of $2.5 million for the three months ended September 30, 2023. The tax benefit was primarily due to the purchase during the quarter ended September 30, 2024, of alternative energy tax credits available under the Inflation Reduction Act of 2022, resulting in a gain of $2.3 million, which was partially offset by the $1.8 million provision for income taxes recorded on net income for the three months ended September 30, 2024. The Inflation Reduction Act of 2022 introduced several energy tax credits designed to promote clean energy investments, reduce carbon emissions, and accelerate the transition to renewable energy. The effective corporate income tax rates for the three months ended September 30, 2024 and 2023 were (4.3)% which was reduced by 2,300 basis points due to the energy tax credits discussed above, and 22.0%, respectively. The decrease in the effective corporate income tax rate, excluding the effects of the energy tax credits, was attributable to tax benefits derived from the exercises of employee stock options during the current quarter.

About FS Bancorp

FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, a recession or slowed economic growth; changes in the interest rate environment, including the increases and decrease in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures, changes in the interest rate environment, adverse changes in the securities markets, the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; environmental, social and governance goals; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on its website at http://www.fsbwa.com and on the SEC’s website at http://www.sec.gov.

Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management’s beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) (Unaudited)

										Linked			Prior Year
	September 30,			June 30,			September 30,			Quarter			Quarter
	2024			2024			2023			% Change			% Change
ASSETS
Cash and due from banks	$	17,950		$	20,005		$	18,137			(10	)		(1	)
Interest-bearing deposits at other financial institutions		22,390			13,006			62,536			72			(64	)
Total cash and cash equivalents		40,340			33,011			80,673			22			(50	)
Certificates of deposit at other financial institutions		12,001			12,707			17,636			(6	)		(32	)
Securities available-for-sale, at fair value		228,199			221,182			251,917			3			(9	)
Securities held-to-maturity, net		8,455			8,455			8,455			—			—
Loans held for sale, at fair value		49,373			53,811			18,636			(8	)		165
Loans receivable, net		2,463,697			2,457,184			2,375,572			—			4
Accrued interest receivable		14,014			13,792			13,925			2			1
Premises and equipment, net		30,026			29,999			30,926			—			(3	)
Operating lease right-of-use		5,365			5,784			7,042			(7	)		(24	)
Federal Home Loan Bank stock, at cost		9,504			10,322			3,696			(8	)		157
Other real estate owned		—			—			570			—			(100	)
Deferred tax asset, net		4,222			4,590			7,424			(8	)		(43	)
Bank owned life insurance (“BOLI”), net		38,453			38,201			37,480			1			3
MSRs, held at the lower of cost or fair value		8,739			9,352			17,657			(7	)		(51	)
Goodwill		3,592			3,592			3,592			—			—
Core deposit intangible, net		14,586			15,483			18,323			(6	)		(20	)
Other assets		39,642			23,912			26,548			66			49
TOTAL ASSETS	$	2,970,208		$	2,941,377		$	2,920,072			1			2
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	657,753		$	623,349		$	670,158			6			(2	)
Interest-bearing accounts		1,769,578			1,759,454			1,784,286			1			(1	)
Total deposits		2,427,331			2,382,803			2,454,444			2			(1	)
Borrowings		163,806			181,895			121,895			(10	)		34
Subordinated notes:
Principal amount		50,000			50,000			50,000			—			—
Unamortized debt issuance costs		(423	)		(439	)		(489	)		(4	)		(13	)
Total subordinated notes less unamortized debt issuance costs		49,577			49,561			49,511			—			—
Operating lease liability		5,548			5,979			7,269			(7	)		(24	)
Other liabilities		35,044			37,113			36,288			(6	)		(3	)
Total liabilities		2,681,306			2,657,351			2,669,407			1			—
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding		—			—			—			—			—
Common stock, $.01 par value; 45,000,000 shares authorized; 7,817,172 shares issued and outstanding at September 30, 2024, 7,742,607 at June 30, 2024, and 7,796,095 at September 30, 2023		78			77			78			1			—
Additional paid-in capital		55,264			55,834			57,464			(1	)		(4	)
Retained earnings		251,843			243,651			222,532			3			13
Accumulated other comprehensive loss, net of tax		(18,283	)		(15,536	)		(29,409	)		18			(38	)
Total stockholders’ equity		288,902			284,026			250,665			2			15
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,970,208		$	2,941,377		$	2,920,072			1			2

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited)

	Three Months Ended									Linked			Prior Year
	September 30,			June 30,			September 30,			Quarter			Quarter
	2024			2024			2023			% Change			% Change
INTEREST INCOME
Loans receivable, including fees	$	43,800		$	42,406		$	39,874			3			10
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		3,243			3,534			3,396			(8	)		(5	)
Total interest and dividend income		47,043			45,940			43,270			2			9
INTEREST EXPENSE
Deposits		13,486			13,252			10,462			2			29
Borrowings		1,828			1,801			1,689			1			8
Subordinated notes		485			486			485			—			—
Total interest expense		15,799			15,539			12,636			2			25
NET INTEREST INCOME		31,244			30,401			30,634			3			2
PROVISION FOR CREDIT LOSSES		1,513			1,077			548			40			176
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		29,731			29,324			30,086			1			(1	)
NONINTEREST INCOME
Service charges and fee income		2,482			2,479			2,882			—			(14	)
Gain on sale of loans		2,523			2,463			1,875			2			35
Gain on sale of MSRs		141			—			—			NM			NM
Gain on sale of investment securities, net		11			151			—			(93	)		NM
Earnings on cash surrender value of BOLI		252			242			233			4			8
Other noninterest income		558			533			(8	)		5			(7,075	)
Total noninterest income		5,967			5,868			4,982			2			20
NONINTEREST EXPENSE
Salaries and benefits		13,985			13,378			13,503			5			4
Operations		3,827			3,519			3,409			9			12
Occupancy		1,662			1,669			1,588			—			5
Data processing		2,156			2,058			1,841			5			17
Loan costs		666			653			564			2			18
Professional and board fees		1,223			888			666			38			84
FDIC insurance		533			450			561			18			(5	)
Marketing and advertising		377			377			452			—			(17	)
Amortization of core deposit intangible		897			919			1,002			(2	)		(10	)
Impairment (recovery) of servicing rights		506			(54	)		—			(1,037	)		NM
Total noninterest expense		25,832			23,857			23,586			8			10
INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES		9,866			11,335			11,482			(13	)		(14	)
(BENEFIT) PROVISION FOR INCOME TAXES		(420	)		2,376			2,529			(118	)		(117	)
NET INCOME	$	10,286		$	8,959		$	8,953			15			15
Basic earnings per share	$	1.32		$	1.15		$	1.15			15			15
Diluted earnings per share	$	1.29		$	1.13		$	1.13			14			14

	Nine Months Ended					Year
	September 30,			September 30,		Over Year
	2024			2023		% Change
INTEREST INCOME
Loans receivable, including fees	$	127,203		$	114,082		12
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		10,660			8,667		23
Total interest and dividend income		137,863			122,749		12
INTEREST EXPENSE
Deposits		39,620			24,696		60
Borrowings		4,796			3,749		28
Subordinated note		1,456			1,456		—
Total interest expense		45,872			29,901		53
NET INTEREST INCOME		91,991			92,848		(1	)
PROVISION FOR CREDIT LOSSES		3,989			3,372		18
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		88,002			89,476		(2	)
NONINTEREST INCOME
Service charges and fee income		7,513			8,352		(10	)
Gain on sale of loans		6,824			5,298		29
Gain on sale of MSRs		8,356			—		NM
Loss on sale of investment securities, net		(7,836	)		—		NM
Earnings on cash surrender value of BOLI		734			681		8
Other noninterest income		1,355			703		93
Total noninterest income		16,946			15,034		13
NONINTEREST EXPENSE
Salaries and benefits		40,920			40,880		—
Operations		10,354			9,744		6
Occupancy		5,036			4,670		8
Data processing		6,172			5,092		21
Loan costs		1,904			2,077		(8	)
Professional and board fees		3,034			2,001		52
FDIC insurance		1,515			1,732		(13	)
Marketing and advertising		981			1,072		(8	)
Acquisition costs		—			1,562		100
Amortization of core deposit intangible		2,757			2,484		11
Impairment of servicing rights		545			—		NM
Total noninterest expense		73,218			71,314		3
INCOME BEFORE PROVISION FOR INCOME TAXES		31,730			33,196		(4	)
PROVISION FOR INCOME TAXES		4,088			6,915		(41	)
NET INCOME	$	27,642		$	26,281		5
Basic earnings per share	$	3.54		$	3.38		5
Diluted earnings per share	$	3.45		$	3.33		4

KEY FINANCIAL RATIOS AND DATA (Unaudited)

	At or For the Three Months Ended
	September 30,			June 30,			September 30,
	2024			2024			2023
PERFORMANCE RATIOS:
Return on assets (ratio of net income to average total assets) ⁽¹⁾		1.38	%		1.22	%		1.22	%
Return on equity (ratio of net income to average equity) ⁽¹⁾		14.08			12.72			13.81
Yield on average interest-earning assets ⁽¹⁾		6.56			6.48			6.13
Average total cost of funds ⁽¹⁾		2.39			2.38			1.92
Interest rate spread information – average during period		4.17			3.33			4.21
Net interest margin ⁽¹⁾		4.35			4.29			4.34
Operating expense to average total assets ⁽¹⁾		3.47			3.26			3.23
Average interest-earning assets to average interest-bearing liabilities ⁽¹⁾		144.28			166.25			145.14
Efficiency ratio ⁽²⁾		69.42			65.78			66.22
Common equity ratio (ratio of stockholders’ equity to total assets)		9.73			9.66			8.58
Tangible common equity ratio ⁽³⁾		9.17			9.07			7.89

	For the Nine Months Ended
	September 30,			September 30,
	2024			2023
PERFORMANCE RATIOS:
Return on assets (ratio of net income to average total assets) ⁽¹⁾		1.25	%		1.25	%
Return on equity (ratio of net income to average equity) ⁽¹⁾		13.05			14.13
Yield on average interest-earning assets ⁽¹⁾		6.44			6.03
Average total cost of funds ⁽¹⁾		2.33			1.58
Interest rate spread information – average during period		4.11			4.45
Net interest margin ⁽¹⁾		4.30			4.56
Operating expense to average total assets ⁽¹⁾		3.31			3.39
Average interest-earning assets to average interest-bearing liabilities		144.14			146.23
Efficiency ratio ⁽²⁾		67.21			66.10

	September 30,			June 30,			September 30,
	2024			2024			2023
ASSET QUALITY RATIOS AND DATA:
Nonperforming assets to total assets at end of period ⁽⁴⁾		0.36	%		0.39	%		0.21	%
Nonperforming loans to total gross loans (excluding loans HFS) ⁽⁵⁾		0.43			0.46			0.23
Allowance for credit losses – loans to nonperforming loans ⁽⁵⁾		290.07			273.95			493.46
Allowance for credit losses – loans to total gross loans (excluding loans HFS)		1.25			1.26			1.27

	At or For the Three Months Ended
	September 30,			June 30,			September 30,
	2024			2024			2023
PER COMMON SHARE DATA:
Basic earnings per share	$	1.32		$	1.15		$	1.15
Diluted earnings per share	$	1.29		$	1.13		$	1.13
Weighted average basic shares outstanding		7,676,102			7,688,246			7,667,981
Weighted average diluted shares outstanding		7,854,389			7,796,253			7,780,430
Common shares outstanding at end of period		7,713,359	⁽⁶⁾		7,644,463	⁽⁷⁾		7,693,951	⁽⁸⁾
Book value per share using common shares outstanding	$	37.45		$	37.15		$	32.58
Tangible book value per share using common shares outstanding ⁽³⁾	$	35.10		$	34.66		$	29.73

__________________________________

(1)		Annualized.
(2)		Total noninterest expense as a percentage of net interest income and total noninterest income.
(3)		Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.
(4)		Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets.
(5)		Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due.
(6)		Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 unvested restricted stock shares.
(7)		Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.
(8)		Common shares were calculated using shares outstanding of 7,796,095 at September 30, 2023, less 102,144 unvested restricted stock shares.

(Dollars in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Linked Qtr.			Prior Year Qtr.
Average Balances	2024		2023		2024		2023		$ Change			$ Change
Assets
Loans receivable, net ⁽¹⁾	$	2,536,106	$	2,423,691	$	2,504,129	$	2,362,885	$	112,415		$	141,244
Securities available-for-sale, at amortized cost		250,957		294,148		288,460		276,835		(43,191	)		11,625
Securities held-to-maturity		8,500		8,500		8,500		8,500		–			–
Interest-bearing deposits and certificates of deposit at other financial institutions		48,546		68,369		49,887		67,163		(19,823	)		(17,276	)
FHLB stock, at cost		10,739		4,626		6,666		5,190		6,113			1,476
Total interest-earning assets		2,854,848		2,799,334		2,857,642		2,720,573		55,514			137,069
Noninterest-earning assets		105,941		102,052		98,099		88,936		3,889			9,163
Total assets	$	2,960,789	$	2,901,386	$	2,955,741	$	2,809,509	$	59,403		$	146,232
Liabilities
Interest-bearing deposit accounts	$	1,737,793	$	1,741,257	$	1,788,324	$	1,703,688	$	(3,464	)	$	84,636
Borrowings		191,279		138,013		144,635		107,254		53,266			37,381
Subordinated notes		49,567		49,500		49,550		49,484		67			66
Total interest-bearing liabilities		1,978,639		1,928,770		1,982,509		1,860,426		49,869			122,083
Noninterest-bearing deposit accounts		650,852		676,000		648,345		664,319		(25,148	)		(15,974	)
Other noninterest-bearing liabilities		40,606		39,365		41,965		36,095		1,241			5,870
Total liabilities	$	2,670,097	$	2,644,135	$	2,672,819	$	2,560,840	$	25,962		$	111,979

__________________________________

(1)		Includes loans HFS.

Non-GAAP Financial Measures:

In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States (“GAAP”), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company’s tangible book value per share and tangible common equity ratio is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and facilitates comparison of the quality and composition of the Company’s capital over time and to its competitors. Where applicable, the Company has also presented comparable GAAP information.

These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders’ equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

Reconciliation of the GAAP book value per share and common equity ratio and the non-GAAP tangible book value per share and tangible common equity ratio is presented below.

(Dollars in thousands, except share and per share amounts)	September 30,			June 30,			September 30,
Tangible Book Value Per Share:	2024			2024			2023
Stockholders’ equity (GAAP)	$	288,902		$	284,026		$	250,665
Less: goodwill and core deposit intangible, net		(18,178	)		(19,075	)		(21,915	)
Tangible common stockholders’ equity (non-GAAP)	$	270,724		$	264,951		$	228,750

Common shares outstanding at end of period		7,713,359	⁽¹⁾		7,644,463	⁽²⁾		7,693,951	⁽³⁾

Book value per share (GAAP)	$	37.45		$	37.15		$	32.58
Tangible book value per share (non-GAAP)	$	35.10		$	34.66		$	29.73

Tangible Common Equity Ratio:
Total assets (GAAP)	$	2,970,208		$	2,941,377		$	2,920,072
Less: goodwill and core deposit intangible assets		(18,178	)		(19,075	)		(21,915	)
Tangible assets (non-GAAP)	$	2,952,030		$	2,922,302		$	2,898,157

Common equity ratio (GAAP)		9.73	%		9.66	%		8.58	%
Tangible common equity ratio (non-GAAP)		9.17			9.07			7.89

_________________________

(1)		Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 unvested restricted stock shares.
(2)		Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.
(3)		Common shares were calculated using shares outstanding of 7,796,095 at September 30, 2023, less 102,144 unvested restricted stock shares.

Contacts:
Joseph C. Adams,
Chief Executive Officer
Matthew D. Mullet,
President/Chief Financial Officer
(425) 771-5299
http://www.FSBWA.com

The MIL Network –

January 24, 2025

MIL-OSI: Renasant Corporation Announces Earnings for the Third Quarter of 2024, Receipt of Shareholder Approval of the Merger With the First Bancshares, Inc.

Source: GlobeNewswire (MIL-OSI)

TUPELO, Miss., Oct. 22, 2024 (GLOBE NEWSWIRE) — Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the third quarter of 2024.

(Dollars in thousands, except earnings per share)	Three Months Ended						Nine Months Ended
	Sep 30, 2024		Jun 30, 2024		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Net income and earnings per share:
Net income	$	72,455	$	38,846	$	41,833	$	150,710	$	116,554
After-tax gain on sale of insurance agency		38,951		—		—		38,951		—
After-tax loss on sale of securities (including impairments)		—		—		—		—		(17,859	)
Basic EPS		1.18		0.69		0.75		2.60		2.08
Diluted EPS		1.18		0.69		0.74		2.59		2.07
Adjusted diluted EPS (Non-GAAP)⁽¹⁾		0.70		0.69		0.74		2.03		2.38
Impact to diluted EPS from after-tax gain on sale of insurance agency		0.63		—		—		0.67		—
Impact to diluted EPS from after-tax loss on sale of securities (including impairments)		—		—		—		—		(0.31	)

“The financial results for the quarter reflect solid performance and balance sheet strength,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “We were pleased to receive shareholder approval today and look forward to completing our merger with The First in the first half of 2025, pending all required regulatory approvals and satisfaction of all other conditions.”

Quarterly Highlights

Merger Agreement with The First Bancshares, Inc. and Other Transactions

On July 29, 2024, the Company announced its merger with The First Bancshares, Inc. (“The First”). Today, the shareholders of both Renasant and The First approved the merger and the related issuance of shares of Renasant common stock to the shareholders of The First
On July 31, 2024, Renasant completed its public offering of an aggregate of 7,187,500 shares of its common stock at a price of $32.00 per share. The net proceeds of the offering after deducting underwriting discounts and other offering expenses were approximately $217.0 million
Effective July 1, 2024, Renasant sold the assets of its insurance agency for cash proceeds of $56.4 million, recognizing a positive after-tax impact to earnings of $34.1 million, which is net of transaction expenses

Earnings

Net income for the third quarter of 2024 was $72.5 million; diluted EPS and adjusted diluted EPS (non-GAAP)⁽¹⁾ were $1.18 and $0.70, respectively
Net interest income (fully tax equivalent) for the third quarter of 2024 was $133.6 million, up $6.0 million on a linked quarter basis
For the third quarter of 2024, net interest margin was 3.36%, up 5 basis points on a linked quarter basis
Cost of total deposits was 2.51% for the third quarter of 2024, up 4 basis points on a linked quarter basis
Noninterest income increased $50.5 million on a linked quarter basis primarily due to the $53.3 million pre-tax gain on the insurance agency sale, offset by the loss of insurance commissions as a result of the sale
Mortgage banking income decreased $1.3 million on a linked quarter basis. The mortgage division generated $543.6 million in interest rate lock volume in the third quarter of 2024, a decrease of $16.7 million on a linked quarter basis. Gain on sale margin was 1.56% for the third quarter of 2024, down 13 basis points on a linked quarter basis
Noninterest expense increased $10.0 million on a linked quarter basis. Merger and conversion expenses of $11.3 million for the third quarter of 2024 related to both the announced merger with The First and the insurance agency sale contributed to the increase

Balance Sheet

Loans increased $22.9 million on a linked quarter basis, representing 0.7% annualized net loan growth
Securities decreased $9.0 million on a linked quarter basis. Cash flows related to principal payments reduced securities by $43.4 million which was offset by a positive fair market value adjustment in our available-for-sale portfolio of $34.4 million
Deposits at September 30, 2024 increased $254.5 million on a linked quarter basis. Brokered deposits decreased $31.8 million on a linked quarter basis to $126.8 million at September 30, 2024. Noninterest bearing deposits decreased $9.7 million on a linked quarter basis and represented 24.3% of total deposits at September 30, 2024

Capital and Stock Repurchase Program

Book value per share and tangible book value per share (non-GAAP)⁽¹⁾ increased 0.1% and 8.9%, respectively, on a linked quarter basis
Effective October 22, 2024, the Company’s Board of Directors approved a $100.0 million stock repurchase program under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This plan replaces the Company’s $100.0 million stock repurchase program that expired in October 2024. There was no buyback activity during the third quarter of 2024

Credit Quality

The Company recorded a provision for credit losses of $0.9 million for the third quarter of 2024, compared to $3.3 million for the second quarter of 2024
The ratio of allowance for credit losses on loans to total loans was 1.59% at September 30, 2024, unchanged on a linked quarter basis
The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 168.07% at September 30, 2024, compared to 203.88% at June 30, 2024
Net loan charge-offs for the third quarter of 2024 were $0.7 million, or 0.02% of average loans on an annualized basis
Nonperforming loans to total loans increased to 0.94% at September 30, 2024 compared to 0.78% at June 30, 2024, and criticized loans (which include classified and Special Mention loans) to total loans increased to 3.02% at September 30, 2024, compared to 2.62% at June 30, 2024

⁽¹⁾ This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Income Statement

(Dollars in thousands, except per share data)	Three Months Ended														Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023		Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Interest income
Loans held for investment	$	202,655		$	198,397		$	192,390		$	188,535	$	181,129		$	593,442		$	516,114
Loans held for sale		4,212			3,530			2,308			3,329		3,751			10,050			8,478
Securities		10,304			10,410			10,700			10,728		10,669			31,414			39,760
Other		11,872			7,874			7,781			7,839		10,128			27,527			22,536
Total interest income		229,043			220,211			213,179			210,431		205,677			662,433			586,888
Interest expense
Deposits		90,787			87,621			82,613			77,168		70,906			261,021			155,163
Borrowings		7,258			7,564			7,276			7,310		7,388			22,098			38,351
Total interest expense		98,045			95,185			89,889			84,478		78,294			283,119			193,514
Net interest income		130,998			125,026			123,290			125,953		127,383			379,314			393,374
Provision for credit losses
Provision for loan losses		1,210			4,300			2,638			2,518		5,315			8,148			16,275
Recovery of unfunded commitments		(275	)		(1,000	)		(200	)		—		(700	)		(1,475	)		(3,200	)
Total provision for credit losses		935			3,300			2,438			2,518		4,615			6,673			13,075
Net interest income after provision for credit losses		130,063			121,726			120,852			123,435		122,768			372,641			380,299
Noninterest income		89,299			38,762			41,381			20,356		38,200			169,442			92,719
Noninterest expense		121,983			111,976			112,912			111,880		108,369			346,871			327,742
Income before income taxes		97,379			48,512			49,321			31,911		52,599			195,212			145,276
Income taxes		24,924			9,666			9,912			3,787		10,766			44,502			28,722
Net income	$	72,455		$	38,846		$	39,409		$	28,124	$	41,833		$	150,710		$	116,554

Adjusted net income (non-GAAP)⁽¹⁾	$	42,960		$	38,846		$	36,572		$	42,887	$	41,833		$	118,588		$	134,413
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)⁽¹⁾	$	56,238		$	51,812		$	48,231		$	52,614	$	57,214		$	156,281		$	180,789

Basic earnings per share	$	1.18		$	0.69		$	0.70		$	0.50	$	0.75		$	2.60		$	2.08
Diluted earnings per share		1.18			0.69			0.70			0.50		0.74			2.59			2.07
Adjusted diluted earnings per share (non-GAAP)⁽¹⁾		0.70			0.69			0.65			0.76		0.74			2.03			2.38
Average basic shares outstanding		61,217,094			56,342,909			56,208,348			56,141,628		56,138,618			57,934,806			56,085,556
Average diluted shares outstanding		61,632,448			56,684,626			56,531,078			56,611,217		56,523,887			58,297,554			56,393,957
Cash dividends per common share	$	0.22		$	0.22		$	0.22		$	0.22	$	0.22		$	0.66		$	0.66

⁽¹⁾ This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Performance Ratios

	Three Months Ended										Nine Months Ended
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Return on average assets	1.63	%	0.90	%	0.92	%	0.65	%	0.96	%	1.16	%	0.90	%
Adjusted return on average assets (non-GAAP)⁽¹⁾	0.97		0.90		0.86		0.99		0.96		0.91		1.04
Return on average tangible assets (non-GAAP)⁽¹⁾	1.75		0.98		1.00		0.71		1.05		1.25		0.99
Adjusted return on average tangible assets (non-GAAP)⁽¹⁾	1.05		0.98		0.93		1.08		1.05		0.99		1.13
Return on average equity	11.29		6.68		6.85		4.93		7.44		8.38		7.04
Adjusted return on average equity (non-GAAP)⁽¹⁾	6.69		6.68		6.36		7.53		7.44		6.59		8.12
Return on average tangible equity (non-GAAP)⁽¹⁾	18.83		12.04		12.45		9.26		13.95		14.69		13.35
Adjusted return on average tangible equity (non-GAAP)⁽¹⁾	11.26		12.04		11.58		13.94		13.95		11.61		15.35
Efficiency ratio (fully taxable equivalent)	54.73		67.31		67.52		75.11		64.38		62.33		66.28
Adjusted efficiency ratio (non-GAAP)⁽¹⁾	64.62		66.60		68.23		66.18		63.60		66.46		62.61
Dividend payout ratio	18.64		31.88		31.43		44.00		29.33		25.38		31.73

Capital and Balance Sheet Ratios

	As of
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Shares outstanding		63,564,028			56,367,924			56,304,860			56,142,207			56,140,713
Market value per share	$	32.50		$	30.54		$	31.32		$	33.68		$	26.19
Book value per share		41.82			41.77			41.25			40.92			39.78
Tangible book value per share (non-GAAP)⁽¹⁾		26.02			23.89			23.32			22.92			21.76
Shareholders’ equity to assets		14.80	%		13.45	%		13.39	%		13.23	%		13.00	%
Tangible common equity ratio (non-GAAP)⁽¹⁾		9.76			8.16			8.04			7.87			7.55
Leverage ratio		11.32			9.81			9.75			9.62			9.48
Common equity tier 1 capital ratio		12.88			10.75			10.59			10.52			10.46
Tier 1 risk-based capital ratio		13.67			11.53			11.37			11.30			11.25
Total risk-based capital ratio		17.32			15.15			15.00			14.93			14.91

⁽¹⁾ This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Noninterest Income and Noninterest Expense

(Dollars in thousands)	Three Months Ended												Nine Months Ended
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023			Sep 30, 2023			Sep 30, 2024		Sep 30, 2023
Noninterest income
Service charges on deposit accounts	$	10,438	$	10,286	$	10,506	$	10,603		$	9,743		$	31,230	$	28,596
Fees and commissions		4,116		3,944		3,949		4,130			4,108			12,009		13,771
Insurance commissions		—		2,758		2,716		2,583			3,264			5,474		8,519
Wealth management revenue		5,835		5,684		5,669		5,668			5,986			17,188		16,464
Mortgage banking income		8,447		9,698		11,370		6,592			7,533			29,515		25,821
Gain on sale of insurance agency		53,349		—		—		—			—			53,349		—
Net losses on sales of securities (including impairments)		—		—		—		(19,352	)		—			—		(22,438	)
Gain on extinguishment of debt		—		—		56		620			—			56		—
BOLI income		2,858		2,701		2,691		2,589			2,469			8,250		7,874
Other		4,256		3,691		4,424		6,923			5,097			12,371		14,112
Total noninterest income	$	89,299	$	38,762	$	41,381	$	20,356		$	38,200		$	169,442	$	92,719
Noninterest expense
Salaries and employee benefits	$	71,307	$	70,731	$	71,470	$	71,841		$	69,458		$	213,508	$	209,927
Data processing		4,133		3,945		3,807		3,971			3,907			11,885		11,224
Net occupancy and equipment		11,415		11,844		11,389		11,653			11,548			34,648		34,818
Other real estate owned		56		105		107		306			(120	)		268		(39	)
Professional fees		3,189		3,195		3,348		2,854			3,338			9,732		10,817
Advertising and public relations		3,677		3,807		4,886		3,084			3,474			12,370		11,642
Intangible amortization		1,160		1,186		1,212		1,274			1,311			3,558		4,106
Communications		2,176		2,112		2,024		2,026			2,006			6,312		6,212
Merger and conversion related expenses		11,273		—		—		—			—			11,273		—
Other		13,597		15,051		14,669		14,871			13,447			43,317		39,035
Total noninterest expense	$	121,983	$	111,976	$	112,912	$	111,880		$	108,369		$	346,871	$	327,742

Mortgage Banking Income

(Dollars in thousands)	Three Months Ended										Nine Months Ended
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Gain on sales of loans, net	$	4,499	$	5,199	$	4,535	$	1,860	$	3,297	$	14,233	$	12,713
Fees, net		2,646		2,866		1,854		2,010		2,376		7,366		7,041
Mortgage servicing income, net		1,302		1,633		4,981		2,722		1,860		7,916		6,067
Total mortgage banking income	$	8,447	$	9,698	$	11,370	$	6,592	$	7,533	$	29,515	$	25,821

Balance Sheet

(Dollars in thousands)	As of
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Assets
Cash and cash equivalents	$	1,275,620		$	851,906		$	844,400		$	801,351		$	741,156
Securities held to maturity, at amortized cost		1,150,531			1,174,663			1,199,111			1,221,464			1,245,595
Securities available for sale, at fair value		764,844			749,685			764,486			923,279			909,108
Loans held for sale, at fair value		291,735			266,406			191,440			179,756			241,613
Loans held for investment		12,627,648			12,604,755			12,500,525			12,351,230			12,168,023
Allowance for credit losses on loans		(200,378	)		(199,871	)		(201,052	)		(198,578	)		(197,773	)
Loans, net		12,427,270			12,404,884			12,299,473			12,152,652			11,970,250
Premises and equipment, net		280,550			280,966			282,193			283,195			284,368
Other real estate owned		9,136			7,366			9,142			9,622			9,258
Goodwill and other intangibles		1,004,136			1,008,062			1,009,248			1,010,460			1,011,735
Bank-owned life insurance		389,138			387,791			385,186			382,584			379,945
Mortgage servicing rights		71,990			72,092			71,596			91,688			90,241
Other assets		293,890			306,570			289,466			304,484			298,352
Total assets	$	17,958,840		$	17,510,391		$	17,345,741		$	17,360,535		$	17,181,621

Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	3,529,801		$	3,539,453		$	3,516,164		$	3,583,675		$	3,734,197
Interest-bearing		10,979,950			10,715,760			10,720,999			10,493,110			10,422,913
Total deposits		14,509,751			14,255,213			14,237,163			14,076,785			14,157,110
Short-term borrowings		108,732			232,741			108,121			307,577			107,662
Long-term debt		433,177			428,677			428,047			429,400			427,399
Other liabilities		249,102			239,059			250,060			249,390			256,127
Total liabilities		15,300,762			15,155,690			15,023,391			15,063,152			14,948,298

Shareholders’ equity:
Common stock		332,421			296,483			296,483			296,483			296,483
Treasury stock		(97,251	)		(97,534	)		(99,683	)		(105,249	)		(105,300	)
Additional paid-in capital		1,488,678			1,304,782			1,303,613			1,308,281			1,304,891
Retained earnings		1,063,324			1,005,086			978,880			952,124			936,573
Accumulated other comprehensive loss		(129,094	)		(154,116	)		(156,943	)		(154,256	)		(199,324	)
Total shareholders’ equity		2,658,078			2,354,701			2,322,350			2,297,383			2,233,323
Total liabilities and shareholders’ equity	$	17,958,840		$	17,510,391		$	17,345,741		$	17,360,535		$	17,181,621

Net Interest Income and Net Interest Margin

(Dollars in thousands)	Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:
Loans held for investment	$	12,584,104	$	204,935	6.47	%	$	12,575,651	$	200,670	6.41	%	$	12,030,109	$	183,521	6.06	%
Loans held for sale		272,110		4,212	6.19	%		219,826		3,530	6.42	%		227,982		3,751	6.58	%
Taxable securities		1,794,421		9,212	2.05	%		1,832,002		9,258	2.02	%		2,097,285		9,459	1.80	%
Tax-exempt securities⁽¹⁾		262,621		1,390	2.12	%		263,937		1,451	2.20	%		285,588		1,566	2.19	%
Total securities		2,057,042		10,602	2.06	%		2,095,939		10,709	2.04	%		2,382,873		11,025	1.85	%
Interest-bearing balances with banks		894,313		11,872	5.28	%		595,030		7,874	5.32	%		729,049		10,128	5.51	%
Total interest-earning assets		15,807,569		231,621	5.82	%		15,486,446		222,783	5.77	%		15,370,013		208,425	5.39	%
Cash and due from banks		189,425						187,519						180,708
Intangible assets		1,004,701						1,008,638						1,012,460
Other assets		679,901						688,766						672,232
Total assets	$	17,681,596					$	17,371,369					$	17,235,413
Interest-bearing liabilities:
Interest-bearing demand⁽²⁾	$	7,333,508	$	60,326	3.26	%	$	7,094,411	$	56,132	3.17	%	$	6,520,145	$	41,464	2.52	%
Savings deposits		815,545		729	0.36	%		839,638		729	0.35	%		942,619		793	0.33	%
Brokered deposits		150,991		1,998	5.25	%		294,650		3,944	5.37	%		947,387		12,732	5.33	%
Time deposits		2,546,860		27,734	4.33	%		2,487,873		26,816	4.34	%		2,002,506		15,917	3.15	%
Total interest-bearing deposits		10,846,904		90,787	3.32	%		10,716,572		87,621	3.28	%		10,412,657		70,906	2.70	%
Borrowed funds		562,146		7,258	5.14	%		583,965		7,564	5.19	%		564,772		7,388	5.22	%
Total interest-bearing liabilities		11,409,050		98,045	3.41	%		11,300,537		95,185	3.38	%		10,977,429		78,294	2.84	%
Noninterest-bearing deposits		3,509,266						3,509,109						3,800,160
Other liabilities		209,763						223,992						226,219
Shareholders’ equity		2,553,517						2,337,731						2,231,605
Total liabilities and shareholders’ equity	$	17,681,596					$	17,371,369					$	17,235,413
Net interest income/ net interest margin			$	133,576	3.36	%			$	127,598	3.31	%			$	130,131	3.36	%
Cost of funding					2.61	%					2.58	%					2.11	%
Cost of total deposits					2.51	%					2.47	%					1.98	%

⁽¹⁾ U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.
⁽²⁾ Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Net Interest Income and Net Interest Margin, continued

(Dollars in thousands)	Nine Months Ended
	September 30, 2024						September 30, 2023
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:
Loans held for investment	$	12,522,802	$	600,245	6.39	%	$	11,866,662	$	523,040	5.89	%
Loans held for sale		215,978		10,050	6.20	%		175,100		8,478	6.46	%
Taxable securities⁽¹⁾		1,839,249		27,975	2.03	%		2,402,739		35,129	1.95	%
Tax-exempt securities		265,601		4,346	2.18	%		349,617		6,076	2.32	%
Total securities		2,104,850		32,321	2.05	%		2,752,356		41,205	2.00	%
Interest-bearing balances with banks		687,318		27,527	5.35	%		573,498		22,536	5.25	%
Total interest-earning assets		15,530,948		670,143	5.75	%		15,367,616		595,259	5.18	%
Cash and due from banks		188,485						189,324
Intangible assets		1,007,710						1,012,613
Other assets		694,427						674,476
Total assets	$	17,421,570					$	17,244,029
Interest-bearing liabilities:
Interest-bearing demand⁽²⁾	$	7,128,721	$	168,958	3.16	%	$	6,235,322	$	90,947	1.95	%
Savings deposits		838,443		2,188	0.35	%		999,436		2,432	0.33	%
Brokered deposits		296,550		11,929	5.36	%		719,603		27,445	5.10	%
Time deposits		2,451,733		77,946	4.25	%		1,769,246		34,339	2.59	%
Total interest-bearing deposits		10,715,447		261,021	3.25	%		9,723,607		155,163	2.13	%
Borrowed funds		569,476		22,098	5.17	%		1,026,467		38,351	4.99	%
Total interest-bearing liabilities		11,284,923		283,119	3.35	%		10,750,074		193,514	2.41	%
Noninterest-bearing deposits		3,512,318						4,073,265
Other liabilities		221,932						208,491
Shareholders’ equity		2,402,397						2,212,199
Total liabilities and shareholders’ equity	$	17,421,570					$	17,244,029
Net interest income/ net interest margin			$	387,024	3.32	%			$	401,745	3.49	%
Cost of funding					2.55	%					1.75	%
Cost of total deposits					2.45	%					1.50	%

⁽¹⁾ U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.
⁽²⁾ Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Supplemental Margin Information

(Dollars in thousands)	Three Months Ended									Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Earning asset mix:
Loans held for investment		79.61	%		81.20	%		78.27	%		80.63	%		77.22	%
Loans held for sale		1.72			1.42			1.48			1.39			1.14
Securities		13.01			13.53			15.50			13.55			17.91
Interest-bearing balances with banks		5.66			3.85			4.75			4.43			3.73
Total		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Funding sources mix:
Noninterest-bearing demand		23.52	%		23.69	%		25.72	%		23.74	%		27.48	%
Interest-bearing demand⁽¹⁾		49.16			47.90			44.12			48.18			42.06
Savings		5.47			5.67			6.38			5.67			6.74
Brokered deposits		1.01			1.99			6.41			2.00			4.85
Time deposits		17.07			16.80			13.55			16.57			11.94
Borrowed funds		3.77			3.95			3.82			3.84			6.93
Total		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Net interest income collected on problem loans	$	642		$	(146	)	$	(820	)	$	619		$	(64	)
Total accretion on purchased loans		1,089			897			1,290			2,786			3,049
Total impact on net interest income	$	1,731		$	751		$	470		$	3,405		$	2,985
Impact on net interest margin		0.04	%		0.02	%		0.01	%		0.03	%		0.03	%
Impact on loan yield		0.05			0.02			0.02			0.04	%		0.03	%

⁽¹⁾ Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Loan Portfolio

(Dollars in thousands)	As of
	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Sep 30, 2023
Loan Portfolio:
Commercial, financial, agricultural	$	1,804,961	$	1,847,762	$	1,869,408	$	1,871,821	$	1,819,891
Lease financing		98,159		102,996		107,474		116,020		120,724
Real estate – construction		1,198,838		1,355,425		1,243,535		1,333,397		1,407,364
Real estate – 1-4 family mortgages		3,440,038		3,435,818		3,429,286		3,439,919		3,398,876
Real estate – commercial mortgages		5,995,152		5,766,478		5,753,230		5,486,550		5,313,166
Installment loans to individuals		90,500		96,276		97,592		103,523		108,002
Total loans	$	12,627,648	$	12,604,755	$	12,500,525	$	12,351,230	$	12,168,023

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands)	As of
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Nonperforming Assets:
Nonaccruing loans	$	113,872		$	97,795		$	73,774		$	68,816		$	69,541
Loans 90 days or more past due		5,351			240			451			554			532
Total nonperforming loans		119,223			98,035			74,225			69,370			70,073
Other real estate owned		9,136			7,366			9,142			9,622			9,258
Total nonperforming assets	$	128,359		$	105,401		$	83,367		$	78,992		$	79,331

Criticized Loans
Classified loans	$	218,135		$	191,595		$	206,502		$	166,893		$	186,052
Special Mention loans		163,804			138,343			138,366			99,699			89,858
Criticized loans⁽¹⁾	$	381,939		$	329,938		$	344,868		$	266,592		$	275,910

Allowance for credit losses on loans	$	200,378		$	199,871		$	201,052		$	198,578		$	197,773
Net loan charge-offs	$	703		$	5,481		$	164		$	1,713		$	1,933
Annualized net loan charge-offs / average loans		0.02	%		0.18	%		0.01	%		0.06	%		0.06	%
Nonperforming loans / total loans		0.94			0.78			0.59			0.56			0.58
Nonperforming assets / total assets		0.71			0.60			0.48			0.46			0.46
Allowance for credit losses on loans / total loans		1.59			1.59			1.61			1.61			1.63
Allowance for credit losses on loans / nonperforming loans		168.07			203.88			270.87			286.26			282.24
Criticized loans / total loans		3.02			2.62			2.76			2.16			2.27

⁽¹⁾ Criticized loans include classified and Special Mention loans.

CONFERENCE CALL INFORMATION:
A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern Time (9:00 AM Central Time) on Wednesday, October 23, 2024.

The webcast is accessible through Renasant’s investor relations website at http://www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=YvWBKrUB. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2024 Third Quarter Earnings Webcast and Conference Call. International participants should dial 1-412-902-4145 to access the conference call.

The webcast will be archived on http://www.renasant.com after the call and will remain accessible for one year. A replay can be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 8626805 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 6, 2024.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 120-year-old financial services institution. Renasant has assets of approximately $18.0 billion and operates 186 banking, lending, mortgage and wealth management offices throughout the Southeast as well as offering factoring and asset-based lending on a nationwide basis.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain, or incorporate by reference, statements about Renasant Corporation that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “focus,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions (including its recently-announced acquisition of The First Bancshares, Inc. described under the “Quarterly Highlights” heading above) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the proposed merger with The First Bancshares, Inc.; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring and mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in policy by regulatory agencies or increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of our proposed merger with The First Bancshares, Inc.; (ix) changes in the securities and foreign exchange markets; (x) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xi) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xiv) general economic, market or business conditions, including the impact of inflation; (xv) changes in demand for loan and deposit products and other financial services; (xvi) concentrations of credit or deposit exposure; (xvii) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xviii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xix) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xx) geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; (xxi) the impact, extent and timing of technological changes; and (xxii) other circumstances, many of which are beyond management’s control.

Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in the Company’s filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at http://www.renasant.com and the SEC’s website at http://www.sec.gov.

The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.

NON-GAAP FINANCIAL MEASURES:
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this press release and the presentation slides furnished to the SEC on the same Form 8-K as this release contain non-GAAP financial measures, namely, (i) adjusted loan yield, (ii) adjusted net interest income and margin, (iii) pre-provision net revenue (including on an as-adjusted basis), (iv) adjusted net income, (v) adjusted diluted earnings per share, (vi) tangible book value per share, (vii) the tangible common equity ratio, (viii) certain performance ratios (namely, the ratio of pre-provision net revenue to average assets, the return on average assets and on average equity, and the return on average tangible assets and on average tangible common equity (including each of the foregoing on an as-adjusted basis)), and (ix) the adjusted efficiency ratio.

These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets, including related amortization, and/or certain gains or charges (such as, for the third quarter of 2024, merger and conversion expenses and the gain on the sale of the assets of the Company’s insurance agency), with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below under the caption “Non-GAAP Reconciliations”.

None of the non-GAAP financial information that the Company has included in this release or the accompanying presentation slides are intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

Non-GAAP Reconciliations

(Dollars in thousands, except per share data)	Three Months Ended															Nine Months Ended
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023			Sep 30, 2024			Sep 30, 2023
Adjusted Pre-Provision Net Revenue (“PPNR”)
Net income (GAAP)	$	72,455		$	38,846		$	39,409		$	28,124		$	41,833		$	150,710		$	116,554
Income taxes		24,924			9,666			9,912			3,787			10,766			44,502			28,722
Provision for credit losses (including unfunded commitments)		935			3,300			2,438			2,518			4,615			6,673			13,075
Pre-provision net revenue (non-GAAP)	$	98,314		$	51,812		$	51,759		$	34,429		$	57,214		$	201,885		$	158,351
Merger and conversion expense		11,273			—			—			—			—			11,273			—
Gain on extinguishment of debt		—			—			(56	)		(620	)		—			(56	)		—
Gain on sales of MSR		—			—			(3,472	)		(547	)		—			(3,472	)		—
Gain on sale of insurance agency		(53,349	)		—			—			—			—			(53,349	)		—
Losses on sales of securities (including impairments)		—			—			—			19,352			—			—			22,438
Adjusted pre-provision net revenue (non-GAAP)	$	56,238		$	51,812		$	48,231		$	52,614		$	57,214		$	156,281		$	180,789

Adjusted Net Income and Adjusted Tangible Net Income
Net income (GAAP)	$	72,455		$	38,846		$	39,409		$	28,124		$	41,833		$	150,710		$	116,554
Amortization of intangibles		1,160			1,186			1,212			1,274			1,311			3,558			4,106
Tax effect of adjustments noted above⁽¹⁾		(296	)		(233	)		(237	)		(240	)		(269	)		(909	)		(838	)
Tangible net income (non-GAAP)	$	73,319		$	39,799		$	40,384		$	29,158		$	42,875		$	153,359		$	119,822

Net income (GAAP)	$	72,455		$	38,846		$	39,409		$	28,124		$	41,833		$	150,710		$	116,554
Merger and conversion expense		11,273			—			—			—			—			11,273			—
Gain on extinguishment of debt		—			—			(56	)		(620	)		—			(56	)		—
Gain on sales of MSR		—			—			(3,472	)		(547	)		—			(3,472	)		—
Gain on sale of insurance agency		(53,349	)		—			—			—			—			(53,349	)		—
Losses on sales of securities (including impairments)		—			—			—			19,352			—			—			22,438
Tax effect of adjustments noted above⁽¹⁾		12,581			—			691			(3,422	)		—			13,482			(4,579	)
Adjusted net income (non-GAAP)	$	42,960		$	38,846		$	36,572		$	42,887		$	41,833		$	118,588		$	134,413
Amortization of intangibles		1,160			1,186			1,212			1,274			1,311			3,558			4,106
Tax effect of adjustments noted above⁽¹⁾		(296	)		(233	)		(237	)		(240	)		(269	)		(909	)		(838	)
Adjusted tangible net income (non-GAAP)	$	43,824		$	39,799		$	37,547		$	43,921		$	42,875		$	121,237		$	137,681
Tangible Assets and Tangible Shareholders’ Equity
Average shareholders’ equity (GAAP)	$	2,553,517		$	2,337,731		$	2,314,281		$	2,261,025		$	2,231,605		$	2,402,397		$	2,212,199
Average intangible assets		1,004,701			1,008,638			1,009,825			1,011,130			1,012,460			1,007,710			1,012,613
Average tangible shareholders’ equity (non-GAAP)	$	1,548,816		$	1,329,093		$	1,304,456		$	1,249,895		$	1,219,145		$	1,394,687		$	1,199,586

Average assets (GAAP)	$	17,681,596		$	17,371,369		$	17,203,013		$	17,195,840		$	17,235,413		$	17,421,570		$	17,244,029
Average intangible assets		1,004,701			1,008,638			1,009,825			1,011,130			1,012,460			1,007,710			1,012,613
Average tangible assets (non-GAAP)	$	16,676,895		$	16,362,731		$	16,193,188		$	16,184,710		$	16,222,953		$	16,413,860		$	16,231,416

Shareholders’ equity (GAAP)	$	2,658,078		$	2,354,701		$	2,322,350		$	2,297,383		$	2,233,323		$	2,658,078		$	2,233,323
Intangible assets		1,004,136			1,008,062			1,009,248			1,010,460			1,011,735			1,004,136			1,011,735
Tangible shareholders’ equity (non-GAAP)	$	1,653,942		$	1,346,639		$	1,313,102		$	1,286,923		$	1,221,588		$	1,653,942		$	1,221,588

Total assets (GAAP)	$	17,958,840		$	17,510,391		$	17,345,741		$	17,360,535		$	17,181,621		$	17,958,840		$	17,181,621
Intangible assets		1,004,136			1,008,062			1,009,248			1,010,460			1,011,735			1,004,136			1,011,735
Total tangible assets (non-GAAP)	$	16,954,704		$	16,502,329		$	16,336,493		$	16,350,075		$	16,169,886		$	16,954,704		$	16,169,886

Adjusted Performance Ratios
Return on average assets (GAAP)		1.63	%		0.90	%		0.92	%		0.65	%		0.96	%		1.16	%		0.90	%
Adjusted return on average assets (non-GAAP)		0.97			0.90			0.86			0.99			0.96			0.91			1.04
Return on average tangible assets (non-GAAP)		1.75			0.98			1.00			0.71			1.05			1.25			0.99
Pre-provision net revenue to average assets (non-GAAP)		2.21			1.20			1.21			0.79			1.32			1.55			1.23
Adjusted pre-provision net revenue to average assets (non-GAAP)		1.27			1.20			1.13			1.21			1.32			1.20			1.40
Adjusted return on average tangible assets (non-GAAP)		1.05			0.98			0.93			1.08			1.05			0.99			1.13
Return on average equity (GAAP)		11.29			6.68			6.85			4.93			7.44			8.38			7.04
Adjusted return on average equity (non-GAAP)		6.69			6.68			6.36			7.53			7.44			6.59			8.12
Return on average tangible equity (non-GAAP)		18.83			12.04			12.45			9.26			13.95			14.69			13.35
Adjusted return on average tangible equity (non-GAAP)		11.26			12.04			11.58			13.94			13.95			11.61			15.35

Adjusted Diluted Earnings Per Share
Average diluted shares outstanding		61,632,448			56,684,626			56,531,078			56,611,217			56,523,887			58,297,554			56,393,957

Diluted earnings per share (GAAP)	$	1.18		$	0.69		$	0.70		$	0.50		$	0.74		$	2.59		$	2.07
Adjusted diluted earnings per share (non-GAAP)	$	0.70		$	0.69		$	0.65		$	0.76		$	0.74		$	2.03		$	2.38

Tangible Book Value Per Share
Shares outstanding		63,564,028			56,367,924			56,304,860			56,142,207			56,140,713			63,564,028			56,140,713

Book value per share (GAAP)	$	41.82		$	41.77		$	41.25		$	40.92		$	39.78		$	41.82		$	39.78
Tangible book value per share (non-GAAP)	$	26.02		$	23.89		$	23.32		$	22.92		$	21.76		$	26.02		$	21.76

Tangible Common Equity Ratio
Shareholders’ equity to assets (GAAP)		14.80	%		13.45	%		13.39	%		13.23	%		13.00	%		14.80	%		13.00	%
Tangible common equity ratio (non-GAAP)		9.76	%		8.16	%		8.04	%		7.87	%		7.55	%		9.76	%		7.55	%
Adjusted Efficiency Ratio
Net interest income (FTE) (GAAP)	$	133,576		$	127,598		$	125,850		$	128,595		$	130,131		$	387,024		$	401,745

Total noninterest income (GAAP)	$	89,299		$	38,762		$	41,381		$	20,356		$	38,200		$	169,442		$	92,719
Gain on sales of MSR		—			—			3,472			547			—			3,472			—
Gain on extinguishment of debt		—			—			56			620			—			56			—
Gain on sale of insurance agency		53,349			—			—			—			—			53,349			—
Losses on sales of securities (including impairments)		—			—			—			(19,352	)		—			—			(22,438	)
Total adjusted noninterest income (non-GAAP)	$	35,950		$	38,762		$	37,853		$	38,541		$	38,200		$	112,565		$	115,157

Noninterest expense (GAAP)	$	121,983		$	111,976		$	112,912		$	111,880		$	108,369		$	346,871		$	327,742
Amortization of intangibles		1,160			1,186			1,212			1,274			1,311			3,558			4,106
Merger and conversion expense		11,273			—			—			—			—			11,273			—
Total adjusted noninterest expense (non-GAAP)	$	109,550		$	110,790		$	111,700		$	110,606		$	107,058		$	332,040		$	323,636

Efficiency ratio (GAAP)		54.73	%		67.31	%		67.52	%		75.11	%		64.38	%		62.33	%		66.28	%
Adjusted efficiency ratio (non-GAAP)		64.62	%		66.60	%		68.23	%		66.18	%		63.60	%		66.46	%		62.61	%

Adjusted Net Interest Income and Adjusted Net Interest Margin
Net interest income (FTE) (GAAP)	$	133,576		$	127,598		$	125,850		$	128,595		$	130,131		$	387,024		$	401,745
Net interest income collected on problem loans		642			(146	)		123			283			(820	)		619			(64	)
Accretion recognized on purchased loans		1,089			897			800			1,117			1,290			2,786			3,049
Adjustments to net interest income	$	1,731		$	751		$	923		$	1,400		$	470		$	3,405		$	2,985
Adjusted net interest income (FTE) (non-GAAP)	$	131,845		$	126,847		$	124,927		$	127,195		$	129,661		$	383,619		$	398,760

Net interest margin (GAAP)		3.36	%		3.31	%		3.30	%		3.33	%		3.36	%		3.32	%		3.49	%
Adjusted net interest margin (non-GAAP)		3.32	%		3.29	%		3.28	%		3.29	%		3.35	%		3.30	%		3.47	%

Adjusted Loan Yield
Loan interest income (FTE) (GAAP)	$	204,935		$	200,670		$	194,640		$	190,857		$	183,521		$	600,245		$	523,040
Net interest income collected on problem loans		642			(146	)		123			283			(820	)		619			(64	)
Accretion recognized on purchased loans		1,089			897			800			1,117			1,290			2,786			3,049
Adjusted loan interest income (FTE) (non-GAAP)	$	203,204		$	199,919		$	193,717		$	189,457		$	183,051		$	596,840		$	520,055

Loan yield (GAAP)		6.47	%		6.41	%		6.30	%		6.18	%		6.06	%		6.39	%		5.89	%
Adjusted loan yield (non-GAAP)		6.41	%		6.38	%		6.27	%		6.14	%		6.04	%		6.35	%		5.86	%

⁽¹⁾ Tax effect is calculated based on the respective legal entity’s appropriate federal and state tax rates (as applicable) for the period, and includes the estimated impact of both current and deferred tax expense. The tax effect of the discrete gain on sale of insurance agency was calculated based on an estimated tax rate of 25.8%.

Contacts:	For Media:	For Financials:
	John S. Oxford	James C. Mabry IV
	Senior Vice President	Executive Vice President
	Chief Marketing Officer	Chief Financial Officer
	(662) 680-1219	(662) 680-1281

The MIL Network –

January 24, 2025

MIL-OSI: First Busey Corporation Announces 2024 Third Quarter Earnings

Source: GlobeNewswire (MIL-OSI)

CHAMPAIGN, Ill., Oct. 22, 2024 (GLOBE NEWSWIRE) — First Busey Corporation (Nasdaq: BUSE)

Net Income of $32.0 million
Diluted EPS of $0.55

THIRD QUARTER 2024 HIGHLIGHTS

Adjusted net income¹ of $33.5 million, or $0.58 per diluted common share
Noninterest income of $36.0 million, or 30.5% of operating revenue¹
Record high quarterly revenue for the Wealth Management operating segment
Tangible book value per common share¹ of $18.19 at September 30, 2024, compared to $16.97 at June 30, 2024, and $15.07 at September 30, 2023, a year-over-year increase of 20.7%
Tangible common equity¹ increased to 8.96% of tangible assets at September 30, 2024, compared to 8.36% at June 30, 2024, and 7.06% at September 30, 2023
Announced transformative partnership with CrossFirst Bankshares

For additional information, please refer to the 3Q24 Earnings Investor Presentation.

MESSAGE FROM OUR CHAIRMAN & CEO

Third Quarter Financial Results

Net income for First Busey Corporation (“Busey,” “Company,” “we,” “us,” or “our”) was $32.0 million for the third quarter of 2024, or $0.55 per diluted common share, compared to $27.4 million, or $0.47 per diluted common share, for the second quarter of 2024, and $30.7 million, or $0.54 per diluted common share, for the third quarter of 2023. Adjusted net income¹, which excludes the impact of acquisition and restructuring expenses, was $33.5 million, or $0.58 per diluted common share, for the third quarter of 2024, compared to $29.0 million, or $0.50 per diluted common share, for the second quarter of 2024 and $30.7 million or $0.55 per diluted common share for the third quarter of 2023. Annualized return on average assets and annualized return on average tangible common equity¹ were 1.06% and 12.80%, respectively, for the third quarter of 2024. Annualized adjusted return on average assets¹ and annualized adjusted return on average tangible common equity¹ were 1.11% and 13.41%, respectively, for the third quarter of 2024.

Third quarter results included $0.8 million in net securities gains, nearly all of which were unrealized, as well as immaterial follow-on adjustments from the mortgage servicing rights sale previously announced in the first quarter of 2024. Excluding these items, adjusted noninterest income¹ was $35.1 million, or 29.9% of operating revenue¹, during the third quarter of 2024, compared to $33.9 million, or 29.1% of operating revenue, for the second quarter of 2024 and $31.3 million, or 28.7% of operating revenue, for the third quarter of 2023. Further adjusted net income¹ was $32.9 million for the third quarter of 2024 with these items excluded, equating to further adjusted earnings¹ of $0.57 per diluted common share.

Pre-provision net revenue¹ was $41.7 million for the third quarter of 2024, compared to $41.1 million for the second quarter of 2024 and $38.1 million for the third quarter of 2023. Pre-provision net revenue to average assets¹ was 1.38% for the third quarter of 2024, compared to 1.37% for the second quarter of 2024, and 1.24% for the third quarter of 2023. Adjusted pre-provision net revenue¹ was $44.1 million for the third quarter of 2024, compared to $42.6 million for the second quarter of 2024 and $40.5 million for the third quarter of 2023. Adjusted pre-provision net revenue to average assets¹ was 1.46% for the third quarter of 2024, compared to 1.42% for the second quarter of 2024 and 1.32% for the third quarter of 2023.

Our fee-based businesses continue to add revenue diversification. Total noninterest income was $36.0 million for the third quarter of 2024, compared to $33.8 million for the second quarter of 2024 and $31.0 million for the third quarter of 2023. Busey’s Wealth Management and FirsTech operating segments contributed $16.2 million and $5.6 million, respectively, to our noninterest income for the third quarter of 2024, representing 60.4% of noninterest income on a combined basis.

Busey views certain non-operating items, including acquisition-related expenses and restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for acquisition and restructuring expenses¹ were $1.9 million in the third quarter of 2024. Busey believes that its non-GAAP measures (which are identified with the endnote labeled as 1) facilitate the assessment of its financial results and peer comparability. For more information and a reconciliation of these non-GAAP measures in tabular form, see “Non-GAAP Financial Information“.

We remain deliberate in our efforts to prudently manage our expense base and operating efficiency given the economic outlook. Noninterest expense was $75.9 million in the third quarter of 2024, compared to $75.5 million in the second quarter of 2024 and $70.9 million in the third quarter of 2023. Adjusted core expense¹, which excludes the amortization of intangible assets and new markets tax credits, acquisition and restructuring expenses, and the provision for unfunded commitments, was $71.0 million in the third quarter of 2024, compared to $71.1 million in the second quarter of 2024 and $66.0 million in the third quarter of 2023. The year-over-year comparable period growth in adjusted core expense can be attributed primarily to the acquisition of M&M and general inflationary pressures on compensation and benefits and to a lesser extent certain other expense categories.

Quarterly pre-tax expense synergies resulting from our acquisition of Merchants and Manufacturers Bank Corporation (the “M&M acquisition”) are anticipated to be $1.6 million to $1.7 million per quarter when fully realized. Quarterly run-rate savings are projected to be achieved by the first quarter of 2025. During the third quarter of 2024, we achieved approximately 79% of the full quarterly savings. We expect to continue to prudently manage our expenses and to realize increased rates of M&M acquisition synergies during the final quarter of 2024.

Planned Partnership with CrossFirst

On August 26, 2024, Busey and CrossFirst Bankshares, Inc. (“CrossFirst”) entered into an agreement and plan of merger (the “merger agreement”) pursuant to which CrossFirst will merge with and into Busey (the “merger”) and CrossFirst’s wholly-owned subsidiary, CrossFirst Bank, will merge with and into Busey Bank. This partnership will create a premier commercial bank in the Midwest, Southwest, and Florida, with 77 full-service locations across 10 states—Arizona, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, New Mexico, Oklahoma, and Texas—and approximately $20 billion in combined assets, $17 billion in total deposits, $15 billion in total loans, and $14 billion in wealth assets under care.

Under the terms of the merger agreement, CrossFirst stockholders will have the right to receive for each share of CrossFirst common stock 0.6675 of a share of Busey’s common stock. Upon completion of the transaction, Busey’s stockholders will own approximately 63.5% of the combined company and CrossFirst’s stockholders will own approximately 36.5% of the combined company, on a fully-diluted basis. Busey common stock will continue to trade on the Nasdaq under the “BUSE” stock ticker symbol.

Completion of the merger is subject to customary closing conditions, including the approval of both Busey and CrossFirst stockholders and the regulatory approvals for the merger and the bank merger. With approvals, the parties expect to close the merger in the first or second quarter of 2025. The combined holding company will continue to operate under the First Busey Corporation name and the combined bank will operate under the Busey Bank name. It is anticipated that CrossFirst Bank will merge with and into Busey Bank in mid-2025. At the time of the bank merger, CrossFirst Bank locations will become banking centers of Busey Bank. In connection with the merger, Busey incurred one-time pretax acquisition-related expenses of $1.3 million during the third quarter of 2024.

For further details on the merger, see Busey’s Current Report on Form 8‑K announcing the merger, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 27, 2024.

Busey’s Conservative Banking Strategy

Busey’s financial strength is built on a long-term conservative operating approach. That focus will not change now or in the future.

The quality of our core deposit franchise is a critical value driver of our institution. Our granular deposit base continues to position us well, with core deposits¹ representing 96.5% of our deposits as of September 30, 2024. Our retail deposit base was comprised of more than 253,000 accounts with an average balance of $22 thousand and an average tenure of 16.7 years as of September 30, 2024. Our commercial deposit base was comprised of more than 33,000 accounts with an average balance of $97 thousand and an average tenure of 12.6 years as of September 30, 2024. We estimate that 29% of our deposits were uninsured and uncollateralized² as of September 30, 2024, and we have sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of our customers.

Asset quality remains strong by both Busey’s historical and current industry trends. Non-performing assets decreased to $8.3 million during the third quarter of 2024, representing 0.07% of total assets. Busey’s results for the third quarter of 2024 include an insignificant provision expense for credit losses and a $0.4 million provision expense for unfunded commitments. The allowance for credit losses was $85.0 million as of September 30, 2024, representing 1.09% of total portfolio loans outstanding, and providing coverage of 10.34 times our non-performing loan balance. Busey recorded net charge-offs of $0.2 million in the third quarter of 2024. As of September 30, 2024, our commercial real estate loan portfolio of investor-owned office properties within Central Business District³ areas was minimal at $2.1 million. Our credit performance continues to reflect our highly diversified, conservatively underwritten loan portfolio, which has been originated predominantly to established customers with tenured relationships with our company.

The strength of our balance sheet is also reflected in our capital foundation. In the third quarter of 2024, our Common Equity Tier 1 ratio⁴ was 13.78% and our Total Capital to Risk Weighted Assets ratio⁴ was 18.19%. Our regulatory capital ratios continue to provide a buffer of more than $580 million above levels required to be designated well-capitalized. Our Tangible Common Equity ratio¹ increased to 8.96% during the third quarter of 2024, compared to 8.36% for the second quarter of 2024 and 7.06% for the third quarter of 2023. Busey’s tangible book value per common share¹ increased to $18.19 at September 30, 2024, from $16.97 at June 30, 2024, and $15.07 at September 30, 2023, reflecting a 20.7% year-over-year increase. During the third quarter of 2024, we paid a common share dividend of $0.24.

Community Banking

In July 2024—based on their community involvement and academic achievements—Busey awarded 10 deserving students from across Busey’s footprint in Illinois, Missouri, Florida, and Indiana, a $2,500 scholarship to support their continuing education and bright futures. With 70 applications received, and a record number of eligible applicants, the students with the top scores, as determined by Busey’s Scholarship Committee, averaged a 4.16 GPA. Since the inception of the Busey Bank Bridge Scholarship program in 2022, Busey has awarded 30 scholarships to deserving students for a total $75,000. Full details on the scholarship’s eligibility criteria and application process can be found at https://www.busey.com/busey/busey-bank-bridge-scholarship.

As we build upon Busey’s forward momentum and our strategic growth plans, we are grateful for the opportunities to consistently earn the business of our customers, based on the contributions of our talented associates and the continued support of our loyal shareholders. With our strong capital position, an attractive core funding base, and a sound credit foundation, we remain confident that we are well positioned as we move into the final quarter of 2024 and into 2025. We are mindful of the evolving economic outlook and remain focused on balance sheet strength, profitability, and growth, in that order. The pending CrossFirst transaction fits with our acquisition strategy and we are excited to welcome our CrossFirst colleagues into the Busey family.

		Van A. Dukeman
		Chairman and Chief Executive Officer
		First Busey Corporation


SELECTED FINANCIAL HIGHLIGHTS *(unaudited)*
(dollars in thousands, except per share amounts)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
EARNINGS & PER SHARE AMOUNTS
Net income	$	32,004		$	27,357		$	30,666		$	85,586		$	96,816
Diluted earnings per common share		0.55			0.47			0.54			1.49			1.72
Cash dividends paid per share		0.24			0.24			0.24			0.72			0.72
Pre-provision net revenue^{1, 2}		41,744			41,051			38,139			129,168			125,593
Operating revenue²		117,688			116,311			109,084			343,676			336,146

Net income by operating segment:
Banking		33,221			26,697			31,189			86,410			98,689
FirsTech		(61	)		28			317			53			505
Wealth Management		5,618			5,561			4,781			16,177			14,571

AVERAGE BALANCES
Cash and cash equivalents	$	502,127		$	346,381		$	252,730		$	480,979		$	237,370
Investment securities		2,666,269			2,737,313			3,148,759			2,769,862			3,254,054
Loans held for sale		11,539			9,353			2,267			8,585			1,955
Portfolio loans		7,869,798			8,010,636			7,834,285			7,826,741			7,767,378
Interest-earning assets		10,936,611			10,993,907			11,118,167			10,976,660			11,142,780
Total assets		12,007,702			12,089,692			12,202,783			12,040,414			12,225,232

Noninterest-bearing deposits		2,706,858			2,816,293			2,925,244			2,743,777			3,082,884
Interest-bearing deposits		7,296,921			7,251,582			7,217,463			7,292,884			6,886,277
Total deposits		10,003,779			10,067,875			10,142,707			10,036,661			9,969,161

Federal funds purchased and securities sold under agreements to repurchase		132,688			144,370			190,112			151,835			207,014
Interest-bearing liabilities		7,731,459			7,725,832			7,864,355			7,762,867			7,748,218
Total liabilities		10,643,325			10,757,877			10,994,376			10,716,295			11,029,374
Stockholders’ equity – common		1,364,377			1,331,815			1,208,407			1,324,119			1,195,858
Tangible common equity²		994,657			955,591			850,382			957,788			835,204

PERFORMANCE RATIOS
Pre-provision net revenue to average assets^{1, 2, 3}		1.38	%		1.37	%		1.24	%		1.43	%		1.37	%
Return on average assets³		1.06	%		0.91	%		1.00	%		0.95	%		1.06	%
Return on average common equity³		9.33	%		8.26	%		10.07	%		8.63	%		10.82	%
Return on average tangible common equity^{2, 3}		12.80	%		11.51	%		14.31	%		11.94	%		15.50	%
Net interest margin^2, 4		3.02	%		3.03	%		2.80	%		2.94	%		2.93	%
Efficiency ratio²		62.15	%		62.32	%		62.38	%		60.87	%		59.97	%
Adjusted noninterest income to operating revenue²		29.86	%		29.13	%		28.69	%		29.95	%		27.91	%

NON-GAAP FINANCIAL INFORMATION
Adjusted pre-provision net revenue^1, 2	$	44,104		$	42,617		$	40,491		$	125,359		$	132,067
Adjusted net income²		33,533			29,016			30,730			89,080			96,889
Adjusted diluted earnings per share²		0.58			0.50			0.55			1.55			1.72
Adjusted pre-provision net revenue to average assets^{2, 3}		1.46	%		1.42	%		1.32	%		1.39	%		1.44	%
Adjusted return on average assets^{2, 3}		1.11	%		0.97	%		1.00	%		0.99	%		1.06	%
Adjusted return on average tangible common equity^{2, 3}		13.41	%		12.21	%		14.34	%		12.42	%		15.51	%
Adjusted net interest margin^2, 4		2.97	%		3.00	%		2.79	%		2.92	%		2.91	%
Adjusted efficiency ratio²		60.50	%		60.57	%		62.31	%		60.91	%		59.95	%

___________________________________________

Net interest income plus noninterest income, excluding securities gains and losses, less noninterest expense.
See “Non-GAAP Financial Information” for reconciliation.
For quarterly periods, measures are annualized.
On a tax-equivalent basis, assuming a federal income tax rate of 21%.


CONDENSED CONSOLIDATED BALANCE SHEETS *(unaudited)*
(dollars in thousands, except per share amounts)

	As of
	September 30, 2024			June 30, 2024			September 30, 2023
ASSETS
Cash and cash equivalents	$	553,709		$	285,269		$	337,919
Debt securities available for sale		1,818,117			1,829,896			2,182,841
Debt securities held to maturity		838,883			851,261			882,614
Equity securities		10,315			9,618			8,782
Loans held for sale		11,523			11,286			3,051

Commercial loans		5,631,281			5,799,214			5,824,800
Retail real estate and retail other loans		2,177,816			2,199,698			2,031,360
Portfolio loans		7,809,097			7,998,912			7,856,160

Allowance for credit losses		(84,981	)		(85,226	)		(91,710	)
Premises and equipment		120,279			121,647			122,538
Right of use asset		11,100			11,137			11,500
Goodwill and other intangible assets, net		368,249			370,580			356,343
Other assets		530,548			567,036			588,212
Total assets	$	11,986,839		$	11,971,416		$	12,258,250

LIABILITIES & STOCKHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing deposits	$	2,683,543		$	2,832,776		$	2,918,574
Interest-bearing checking, savings, and money market deposits		5,739,773			5,619,470			5,747,136
Time deposits		1,519,925			1,523,889			1,666,652
Total deposits		9,943,241			9,976,135			10,332,362

Securities sold under agreements to repurchase		128,429			140,283			183,702
Short-term borrowings		—			—			12,000
Long-term debt		227,482			227,245			243,666
Junior subordinated debt owed to unconsolidated trusts		74,754			74,693			71,946
Lease liability		11,470			11,469			11,783
Other liabilities		198,579			207,781			212,633
Total liabilities		10,583,955			10,637,606			11,068,092

Stockholders’ equity
Retained earnings		279,868			261,820			224,698
Accumulated other comprehensive income (loss)		(170,913	)		(220,326	)		(290,730	)
Other¹		1,293,929			1,292,316			1,256,190
Total stockholders’ equity		1,402,884			1,333,810			1,190,158
Total liabilities & stockholders’ equity	$	11,986,839		$	11,971,416		$	12,258,250

SHARE AND PER SHARE AMOUNTS
Book value per common share	$	24.67		$	23.50		$	21.51
Tangible book value per common share²	$	18.19		$	16.97		$	15.07
Ending number of common shares outstanding		56,872,241			56,746,937			55,342,017

___________________________________________

Net balance of common stock ($0.001 par value), additional paid-in capital, and treasury stock.
See “Non-GAAP Financial Information” for reconciliation.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME *(unaudited)*
(dollars in thousands, except per share amounts)

	Three Months Ended									Nine Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
INTEREST INCOME
Interest and fees on loans	$	111,336		$	109,641		$	99,844		$	320,302		$	284,423
Interest and dividends on investment securities		18,072			19,173			21,234			57,182			62,360
Other interest income		5,092			3,027			1,591			14,590			3,890
Total interest income	$	134,500		$	131,841		$	122,669		$	392,074		$	350,673

INTEREST EXPENSE
Deposits	$	46,634		$	43,709		$	37,068		$	134,311		$	78,576
Federal funds purchased and securities sold under agreements to repurchase		981			1,040			1,327			3,393			3,772
Short-term borrowings		26			418			1,964			676			12,527
Long-term debt		3,181			3,181			3,528			9,767			10,631
Junior subordinated debt owed to unconsolidated trusts		1,137			1,059			991			3,185			2,849
Total interest expense	$	51,959		$	49,407		$	44,878		$	151,332		$	108,355

Net interest income	$	82,541		$	82,434		$	77,791		$	240,742		$	242,318
Provision for credit losses		2			2,277			364			7,317			1,944
Net interest income after provision for credit losses	$	82,539		$	80,157		$	77,427		$	233,425		$	240,374

NONINTEREST INCOME
Wealth management fees	$	15,378		$	15,917		$	14,235		$	46,844		$	43,594
Fees for customer services		8,168			7,798			7,502			23,022			21,560
Payment technology solutions		5,265			5,915			5,226			16,889			15,772
Mortgage revenue		355			478			311			1,579			871
Income on bank owned life insurance		1,189			1,442			1,001			4,050			3,682
Realized net gains (losses) on the sale of mortgage servicing rights		(18	)		277			—			7,724			—
Net securities gains (losses)		822			(353	)		(285	)		(5,906	)		(2,960	)
Other noninterest income		4,792			2,327			3,018			10,550			8,349
Total noninterest income	$	35,951		$	33,801		$	31,008		$	104,752		$	90,868

NONINTEREST EXPENSE
Salaries, wages, and employee benefits	$	44,593		$	43,478		$	39,677		$	130,161		$	119,867
Data processing expense		6,910			7,100			5,930			20,560			17,472
Net occupancy expense of premises		4,633			4,590			4,594			13,943			13,896
Furniture and equipment expense		1,647			1,695			1,638			5,155			5,065
Professional fees		3,118			2,495			1,542			7,866			4,573
Amortization of intangible assets		2,548			2,629			2,555			7,586			7,953
Interchange expense		1,352			1,733			1,786			4,696			5,509
FDIC insurance		1,413			1,460			1,475			4,273			4,483
Other noninterest expense		9,712			10,357			11,748			27,992			31,735
Total noninterest expense	$	75,926		$	75,537		$	70,945		$	222,232		$	210,553

Income before income taxes	$	42,564		$	38,421		$	37,490		$	115,945		$	120,689
Income taxes		10,560			11,064			6,824			30,359			23,873
Net income	$	32,004		$	27,357		$	30,666		$	85,586		$	96,816

SHARE AND PER SHARE AMOUNTS
Basic earnings per common share	$	0.56		$	0.48		$	0.55		$	1.52		$	1.75
Diluted earnings per common share	$	0.55		$	0.47		$	0.54		$	1.49		$	1.72
Average common shares outstanding		57,033,359			56,919,025			55,486,700			56,458,430			55,441,980
Diluted average common shares outstanding		57,967,848			57,853,231			56,315,492			57,411,299			56,230,624

BALANCE SHEET STRENGTH

Our balance sheet remains a source of strength. Total assets were $11.99 billion as of September 30, 2024, compared to $11.97 billion as of June 30, 2024, and $12.26 billion as of September 30, 2023.

We remain steadfast in our conservative approach to underwriting and disciplined approach to pricing, particularly given our outlook for the economy in the coming quarters, and this approach has impacted loan growth as predicted. Portfolio loans totaled $7.81 billion at September 30, 2024, compared to $8.00 billion at June 30, 2024, and $7.86 billion at September 30, 2023.

Average portfolio loans were $7.87 billion for the third quarter of 2024, compared to $8.01 billion for the second quarter of 2024 and $7.83 billion for the third quarter of 2023. Average interest-earning assets were $10.94 billion for the third quarter of 2024, compared to $10.99 billion for the second quarter of 2024, and $11.12 billion for the third quarter of 2023.

Total deposits were $9.94 billion at September 30, 2024, compared to $9.98 billion at June 30, 2024, and $10.33 billion at September 30, 2023. Average deposits were $10.00 billion for the third quarter of 2024, compared to $10.07 billion for the second quarter of 2024 and $10.14 billion for the third quarter of 2023. Deposit fluctuations over the last several quarters were driven by a number of elements, including (1) seasonal factors, including ordinary course public fund flows and fluctuations in the normal course of business operations of certain core commercial customers, (2) the macroeconomic environment, including prevailing interest rates and inflationary pressures, (3) depositors moving some funds to accounts at competitors offering above-market rates, and (4) deposits moving within the Busey ecosystem between deposit accounts and our wealth management group. Core deposits¹ accounted for 96.5% of total deposits as of September 30, 2024. Cost of deposits was 1.85% in the third quarter of 2024, which represents an increase of 10 basis points from the second quarter of 2024. Excluding time deposits, Busey’s cost of deposits was 1.50% in the third quarter of 2024, an increase of 14 basis points from the second quarter of 2024. Non-maturity deposit cost of funds has increased as Busey Bank continues to offer savings account specials to customers with larger account balances, with the intention of migrating maturing CDs to these managed rate products. Pressure on non-interest bearing deposits along with some elevated balances of higher rate seasonal business and public funds accounts also contributed to increases in overall deposit funding cost during the quarter. Spot rates on total deposit costs, including noninterest bearing deposits, increased by 5 basis points from 1.75% at June 30, 2024, to 1.80% at September 30, 2024. Spot rates on interest bearing deposits increased by 1 basis point from 2.45% at June 30, 2024 to 2.46% at September 30, 2024.

There were no short term borrowings as of September 30 or June 30, 2024, compared to $12.0 million at September 30, 2023. We had no borrowings from the Federal Home Loan Bank (“FHLB”) at the end of the third quarter of 2024, the second quarter of 2024, or the third quarter of 2023. We have sufficient on- and off-balance sheet liquidity⁵ to manage deposit fluctuations and the liquidity needs of our customers. As of September 30, 2024, our available sources of on- and off-balance sheet liquidity totaled $6.37 billion. We have executed various deposit campaigns to attract term funding and savings accounts at a lower rate than our marginal cost of funds. New certificate of deposit production in the third quarter of 2024 had a weighted average term of 8.1 months at a rate of 4.18%, 67 basis points below our average marginal wholesale equivalent-term funding cost during the quarter. Furthermore, our balance sheet liquidity profile continues to be aided by the cash flows we expect from our relatively short-duration securities portfolio. Those cash flows were approximately $81.1 million in the third quarter of 2024. For the remainder of 2024, cash flows from our securities portfolio are expected to be approximately $97.1 million with a current book yield of 2.18%.

ASSET QUALITY

Credit quality continues to be strong. Loans 30-89 days past due totaled $10.1 million as of September 30, 2024, compared to $23.5 million as of June 30, 2024, and $5.9 million as of September 30, 2023. The decrease in loans that were 30-89 days past due is primarily attributable to a single commercial real estate loan in the second quarter that is no longer past due as of September 30, 2024. Non-performing loans were $8.2 million as of September 30, 2024, compared to $9.1 million as of June 30, 2024, and $12.0 million as of September 30, 2023. Continued disciplined credit management resulted in non-performing loans as a percentage of portfolio loans of 0.11% as of both September 30, 2024, and June 30, 2024, and 0.15% as of September 30, 2023. Non-performing assets were 0.07% of total assets for the third quarter of 2024, compared to 0.08% for the second quarter of 2024 and 0.10% for the third quarter of 2023. Our total classified assets were $89.0 million at September 30, 2024, compared to $95.8 million at June 30, 2024, and $59.6 million at September 30, 2023. Our ratio of classified assets to estimated bank Tier 1 capital⁴ and reserves remains low by historical standards, at 5.9% as of September 30, 2024, compared to 6.4% as of June 30, 2024, and 4.1% as of September 30, 2023.

Net charge-offs were $0.2 million for the third quarter of 2024, compared to $9.9 million for the second quarter of 2024, and $0.3 million for the third quarter of 2023. Charge-offs in the second quarter of 2024 were primarily in connection with a single commercial and industrial credit relationship that also experienced a partial charge-off during the first quarter of 2024. The allowance as a percentage of portfolio loans was 1.09% as of September 30, 2024, compared to 1.07% as of June 30, 2024, and 1.17% as of September 30, 2023. The ratio was impacted in 2024 by the acquisition of M&M’s Life Equity Loan^® portfolio, as Busey did not record an allowance for credit loss for these loans due to no expected credit loss at default, as permitted under the practical expedient provided within the Accounting Standards Codification 326-20-35-6. The allowance coverage for non-performing loans was 10.34 times as of September 30, 2024, compared to 9.36 times as of June 30, 2024, and 7.64 times as of September 30, 2023.

Busey maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment.


ASSET QUALITY *(unaudited)*
(dollars in thousands)

	As of
	September 30, 2024			June 30, 2024			September 30, 2023
Total assets	$	11,986,839		$	11,971,416		$	12,258,250
Portfolio loans		7,809,097			7,998,912			7,856,160
Loans 30 – 89 days past due		10,141			23,463			5,934
Non-performing loans:
Non-accrual loans		8,192			8,393			11,298
Loans 90+ days past due and still accruing		25			712			709
Non-performing loans	$	8,217		$	9,105		$	12,007
Non-performing loans, segregated by geography:
Illinois / Indiana	$	3,981		$	5,793		$	7,951
Missouri		3,530			3,089			3,747
Florida		706			222			309
Other non-performing assets		64			90			96
Non-performing assets	$	8,281		$	9,195		$	12,103

Allowance for credit losses	$	84,981		$	85,226		$	91,710

RATIOS
Non-performing loans to portfolio loans		0.11	%		0.11	%		0.15	%
Non-performing assets to total assets		0.07	%		0.08	%		0.10	%
Non-performing assets to portfolio loans and other non-performing assets		0.11	%		0.11	%		0.15	%
Allowance for credit losses to portfolio loans		1.09	%		1.07	%		1.17	%
Coverage ratio of the allowance for credit losses to non-performing loans	10.34 x			9.36 x			7.64 x

NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE) *(unaudited)*
(dollars in thousands)

	Three Months Ended						Nine Months Ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Net charge-offs (recoveries)	$	247	$	9,856	$	293	$	15,319	$	1,842
Provision expense (release)		2		2,277		364		7,317		1,944

NET INTEREST MARGIN AND NET INTEREST INCOME

Net interest margin¹ was 3.02% for the third quarter of 2024, compared to 3.03% for the second quarter of 2024 and 2.80% for the third quarter of 2023. Excluding purchase accounting accretion, adjusted net interest margin¹ was 2.97% for the third quarter of 2024, compared to 3.00% in the second quarter of 2024 and 2.79% in the third quarter of 2023. Net interest income was $82.5 million in the third quarter of 2024, compared to $82.4 million in the second quarter of 2024 and $77.8 million in the third quarter of 2023.

After raising federal funds rates by a total of 525 basis points between March 2022 and July 2023, the Federal Open Market Committee (“FOMC”) lowered rates by 50 basis points in September 2024. In anticipation of the FOMC pivot to an easing cycle, we limited our exposure to term funding structures and intentionally priced savings specials to encourage maturing CD balances to migrate to managed rate non-maturity products. During September we began lowering rates on special priced deposit accounts and other managed rate products to benefit from the FOMC rate cuts. In addition, approximately 6% of our deposit portfolio is indexed and immediately repriced with the rate cuts by the FOMC. With our short duration CD balances comprising only 15% of the deposit funding base, we also have the ability to quickly reprice the book at lower market rates. We continue to offer CD specials with shorter term structures as well as offering attractive premium savings rates to encourage rotation of maturing CD deposits into nimble pricing products. Components of the 1 basis point decrease in net interest margin¹ during the third quarter of 2024 include:

Increased cash and securities portfolio yield contributed +3 basis points
Increased loan portfolio and held for sale loan yields contributed +2 basis points
Increased purchase accounting contributed +2 basis points
Reduced borrowing expense +2 basis points
Reduced time deposit funding costs contributed +1 basis point
Increased non-maturity deposit funding costs contributed -11 basis points

Based on our most recent Asset Liability Management Committee (“ALCO”) model, a +100 basis point parallel rate shock is expected to increase net interest income by 2.1% over the subsequent twelve-month period. Busey continues to evaluate off-balance sheet hedging and balance sheet restructuring strategies as well as embedding rate protection in our asset originations to provide stabilization to net interest income in lower rate environments. Time deposit and savings specials have provided funding flows, and we had excess earning cash during the third quarter of 2024. Since the onset of the current FOMC tightening cycle that began in the first quarter of 2022, our cumulative interest-bearing non-maturity deposit beta peaked at 41%. Our total deposit beta for the completed tightening cycle was 34%. Deposit betas were calculated based on an average federal funds rate of 5.43% during the third quarter of 2024. The average federal funds rate decreased by 7 basis points compared to the average rate of 5.50% in the second quarter of 2024.

NONINTEREST INCOME

Noninterest income was $36.0 million for the third quarter of 2024, as compared to $33.8 million for the second quarter of 2024 and $31.0 million for the third quarter of 2023. Excluding the impact of net securities gains and losses and immaterial follow-on adjustments from the previously announced mortgage servicing rights sale, adjusted noninterest income¹ was $35.1 million, or 29.9% of operating revenue¹, during the third quarter of 2024, $33.9 million, or 29.1% of operating revenue, for the second quarter of 2024, and $31.3 million, or 28.7% of operating revenue, for the third quarter of 2023.

Consolidated wealth management fees were $15.4 million for the third quarter of 2024, compared to $15.9 million for the second quarter of 2024 and $14.2 million for the third quarter of 2023. Wealth management fees for the third quarter of 2024 declined by 3.4% compared to the second quarter of 2024 primarily based on seasonal tax preparation fees. On a segment basis, Wealth Management generated $16.2 million in revenue during the third quarter of 2024, a 12.7% increase over revenue of $14.4 million for the third quarter of 2023. Approximately $0.8 million of revenue attributed to the wealth segment is reported on a consolidated basis as part of other noninterest income. Third quarter of 2024 results marked a new record high reported quarterly revenue for the Wealth Management operating segment. The Wealth Management operating segment generated net income of $5.6 million in both the third quarter of 2024 and the second quarter of 2024, compared to $4.8 million in the third quarter of 2023. Busey’s Wealth Management division ended the third quarter of 2024 with $13.69 billion in assets under care, compared to $13.02 billion at the end of the second quarter of 2024 and $11.55 billion at the end of the third quarter of 2023. Our portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets and has outperformed its blended benchmark⁶ over the last three and five years.

Payment technology solutions revenue was $5.3 million for the third quarter of 2024, compared to $5.9 million for the second quarter of 2024 and $5.2 million for the third quarter of 2023. Excluding intracompany eliminations, the FirsTech operating segment generated revenue of $5.6 million during the third quarter of 2024, compared to $6.2 million in the second quarter of 2024 and $5.7 million in the third quarter of 2023.

Noninterest income generated from our Wealth Management and FirsTech operating segments comprised 60.4% of our total noninterest income for the quarter ended September 30, 2024, providing a balance to spread-based revenue from traditional banking activities.

Fees for customer services were $8.2 million for the third quarter of 2024, compared to $7.8 million in the second quarter of 2024 and $7.5 million in the third quarter of 2023.

Net securities gains were $0.8 million for the third quarter of 2024, comprised primarily of unrealized gains on equity securities.

Other noninterest income was $4.8 million in the third quarter of 2024, compared to $2.3 million in the second quarter of 2024 and $3.0 million in the third quarter of 2023. Revenue associated with certain wealth management activities reported as other noninterest income on a consolidated basis was $0.8 million for the third quarter of 2024, compared to $0.2 million for the second quarter of 2024 and $0.1 million for the third quarter of 2023. Fluctuations in other noninterest income are primarily attributable to increases in venture capital investments, referral fees, and swap origination fees, partially offset by decreases in commercial loan sales gains. Increases for the year also reflect the addition of Life Equity Loan^® servicing income beginning in the second quarter of 2024.

OPERATING EFFICIENCY

Noninterest expense was $75.9 million in the third quarter of 2024, compared to $75.5 million in the second quarter of 2024 and $70.9 million for the third quarter of 2023. The efficiency ratio¹ was 62.1% for the third quarter of 2024, compared to 62.3% for the second quarter of 2024, and 62.4% for the third quarter of 2023. Adjusted core expense¹ was $71.0 million in the third quarter of 2024, compared to $71.1 million in the second quarter of 2024 and $66.0 million in the third quarter of 2023. The adjusted core efficiency ratio¹ was 60.2% for the third quarter of 2024, compared to 60.9% for the second quarter of 2024, and 60.2% for the third quarter of 2023. We expect to continue to prudently manage our expenses and to realize increased rates of M&M acquisition synergies during the final quarter of 2024.

Noteworthy components of noninterest expense are as follows:

Salaries, wages, and employee benefits expenses were $44.6 million in the third quarter of 2024, compared to $43.5 million in the second quarter of 2024 and $39.7 million in the third quarter of 2023. Busey recorded $0.1 million of non-operating salaries, wages, and employee benefit expenses in the third quarter of 2024, compared to $1.1 million in the second quarter of 2024 and none in the third quarter of 2023. The increase in the third quarter of 2024 over the second quarter of 2024 was primarily attributable to performance metrics tied to bonus and equity compensation. Our associate-base consisted of 1,510 full-time equivalents as of September 30, 2024, compared to 1,520 as of June 30, 2024, and 1,484 as of September 30, 2023. The increase in our associate-base in the second quarter of 2024 was largely due to the M&M acquisition.
Data processing expense was $6.9 million in the third quarter of 2024, compared to $7.1 million in the second quarter of 2024 and $5.9 million in the third quarter of 2023. Busey recorded $0.1 million of non-operating data processing expenses in the third quarter of 2024, compared to $0.3 million in the second quarter of 2024 and none in the third quarter of 2023. Busey has continued to make investments in technology enhancements and has also experienced inflation-driven price increases.
Professional fees were $3.1 million in the third quarter of 2024, compared to $2.5 million in the second quarter of 2024 and $1.5 million in the third quarter of 2023. Busey recorded $1.4 million of non-operating professional fees in the third quarter of 2024, as compared to $0.4 million in the second quarter of 2024 and $0.1 million in the third quarter of 2023.
Other noninterest expense was $9.7 million for the third quarter of 2024, compared to $10.4 million in the second quarter of 2024 and $11.7 million in the third quarter of 2023. Busey recorded $0.4 million of non-operating costs in other noninterest expense in the third quarter of 2024, compared to $0.3 million in the second quarter of 2024 and none in the third quarter of 2023. In connection with Busey’s adoption of ASU 2023-02 on January 1, 2024, Busey began recording amortization of New Markets Tax Credits as income tax expense instead of other operating expense, which resulted in a decrease to other operating expenses of $2.3 million compared to the third quarter of 2023. Other items contributing to the fluctuations in other noninterest expense included the provision for unfunded commitments, mortgage servicing rights valuation expenses, fixed asset impairment, marketing, business development, and expenses related to recruiting and onboarding.

Busey’s effective tax rate for the third quarter of 2024 was 24.8%, which was lower than the combined federal and state statutory rate of approximately 28.0% due to the impact of tax exempt interest income, such as municipal bond interest, bank owned life insurance income, and investments in various federal and state tax credits.

Effective tax rates were higher in 2024, compared to 2023, due to the adoption of ASU 2023-02 in January 2024. Upon adoption of ASU 2023-02 Busey elected to use the proportional amortization method of accounting for equity investments made primarily for the purpose of receiving income tax credits. The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense as opposed to being presented on a gross basis on the income statement as a component of noninterest expense and income tax expense.

CAPITAL STRENGTH

Busey’s strong capital levels, coupled with its earnings, have allowed the Company to provide a steady return to its stockholders through dividends. On October 25, 2024, Busey will pay a cash dividend of $0.24 per common share to stockholders of record as of October 18, 2024. Busey has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

As of September 30, 2024, Busey continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. Busey’s Common Equity Tier 1 ratio is estimated⁴ to be 13.78% at September 30, 2024, compared to 13.20% at June 30, 2024, and 12.52% at September 30, 2023. Our Total Capital to Risk Weighted Assets ratio is estimated⁴ to be 18.19% at September 30, 2024, compared to 17.50% at June 30, 2024, and 16.72% at September 30, 2023.

Busey’s tangible common equity¹ was $1.04 billion at September 30, 2024, compared to $970.9 million at June 30, 2024, and $841.2 million at September 30, 2023. Tangible common equity¹ represented 8.96% of tangible assets at September 30, 2024, compared to 8.36% at June 30, 2024, and 7.06% at September 30, 2023. Busey’s tangible book value per common share¹ increased to $18.19 at September 30, 2024, from $16.97 at June 30, 2024, and $15.07 at September 30, 2023, reflecting a 20.7% year-over-year increase. The ratios of tangible common equity to tangible assets¹ and tangible book value per common share have been impacted by the fair value adjustment of Busey’s securities portfolio as a result of the current rate environment, which is reflected in the accumulated other comprehensive income (loss) component of shareholder’s equity.

THIRD QUARTER EARNINGS INVESTOR PRESENTATION

For additional information on Busey’s financial condition and operating results, please refer to the Q3 2024 Earnings Investor Presentation furnished via Form 8-K on October 22, 2024, in connection with this earnings release.

CORPORATE PROFILE

As of September 30, 2024, First Busey Corporation (Nasdaq: BUSE) was an $11.99 billion financial holding company headquartered in Champaign, Illinois.

Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $11.95 billion as of September 30, 2024, and is headquartered in Champaign, Illinois. Busey Bank currently has 62 banking centers, with 21 in Central Illinois markets, 17 in suburban Chicago markets, 20 in the St. Louis Metropolitan Statistical Area, three in Southwest Florida, and one in Indianapolis. More information about Busey Bank can be found at busey.com.

Through Busey’s Wealth Management division, the Company provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Assets under care totaled $13.69 billion as of September 30, 2024. More information about Busey’s Wealth Management services can be found at busey.com/wealth-management.

Busey Bank’s wholly-owned subsidiary, FirsTech, specializes in the evolving financial technology needs of small and medium-sized businesses, highly regulated enterprise industries, and financial institutions. FirsTech provides comprehensive and innovative payment technology solutions, including online, mobile, and voice-recognition bill payments; money and data movement; merchant services; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments at retail agents. Additionally, FirsTech simplifies client workflows through integrations enabling support with billing, reconciliation, bill reminders, and treasury services. More information about FirsTech can be found at firstechpayments.com.

For the first time, Busey was named among the World’s Best Banks for 2024 by Forbes, earning a spot on the list among 68 U.S. banks and 403 banks worldwide. Additionally, Busey Bank was honored to be named among America’s Best Banks by Forbes magazine for the third consecutive year. Ranked 40th overall in 2024, Busey was the second-ranked bank headquartered in Illinois of the six that made this year’s list and the highest-ranked bank of those with more than $10 billion in assets. Busey is humbled to be named among the 2023 Best Banks to Work For by American Banker, the 2023 Best Places to Work in Money Management by Pensions and Investments, the 2024 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2024 Best Places to Work in Indiana by the Indiana Chamber of Commerce, and the 2024 Best Companies to Work For in Florida by Florida Trend magazine. We are honored to be consistently recognized globally, nationally and locally for our engaged culture of integrity and commitment to community development.

For more information about us, visit busey.com.

Category: Financial
Source: First Busey Corporation

Contacts:

Jeffrey D. Jones, Chief Financial Officer
217-365-4130

NON-GAAP FINANCIAL INFORMATION

This earnings release contains certain financial information determined by methods other than GAAP. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to Busey’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on Busey’s performance over time.

Below is a reconciliation to what management believes to be the most directly comparable GAAP financial measures—specifically, net interest income, total noninterest income, net security gains and losses, and total noninterest expense in the case of pre-provision net revenue, adjusted pre-provision net revenue, pre-provision net revenue to average assets, and adjusted pre-provision net revenue to average assets; net income in the case of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, average tangible common equity, return on average tangible common equity, adjusted return on average tangible common equity; net income and net security gains and losses in the case of further adjusted net income and further adjusted diluted earnings per share; net interest income in the case of adjusted net interest income and adjusted net interest margin; net interest income, total noninterest income, and total noninterest expense in the case of adjusted noninterest income, adjusted noninterest expense, noninterest expense excluding non-operating adjustments, adjusted core expense, efficiency ratio, adjusted efficiency ratio, and adjusted core efficiency ratio; net interest income, total noninterest income, net securities gains and losses, and net gains and losses on the sale of mortgage servicing rights in the case of operating revenue and adjusted noninterest income to operating revenue; total assets and goodwill and other intangible assets in the case of tangible assets; total stockholders’ equity in the case of tangible book value per common share; total assets and total stockholders’ equity in the case of tangible common equity and tangible common equity to tangible assets; and total deposits in the case of core deposits and core deposits to total deposits.

These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for operating results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates, estimated federal income tax rates, or effective tax rates, as noted with the tables below.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Pre-Provision Net Revenue, Adjusted Pre-Provision Net Revenue, Pre-Provision Net Revenue to Average Assets, and Adjusted Pre-Provision Net Revenue to Average Assets
(dollars in thousands)

		Three Months Ended									Nine Months Ended
		September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
PRE-PROVISION NET REVENUE
Net interest income		$	82,541		$	82,434		$	77,791		$	240,742		$	242,318
Total noninterest income			35,951			33,801			31,008			104,752			90,868
Net security (gains) losses			(822	)		353			285			5,906			2,960
Total noninterest expense			(75,926	)		(75,537	)		(70,945	)		(222,232	)		(210,553	)
Pre-provision net revenue			41,744			41,051			38,139			129,168			125,593
Non-GAAP adjustments:
Acquisition and restructuring expenses			1,935			2,212			79			4,555			91
Provision for unfunded commitments			407			(369	)		13			(640	)		(357	)
Amortization of New Markets Tax Credits			—			—			2,260			—			6,740
Realized (gain) loss on the sale of mortgage service rights			18			(277	)		—			(7,724	)		—
Adjusted pre-provision net revenue		$	44,104		$	42,617		$	40,491		$	125,359		$	132,067

Pre-provision net revenue, annualized	[a]	$	166,069		$	165,106		$	151,312		$	172,538		$	167,917
Adjusted pre-provision net revenue, annualized	[b]		175,457			171,405			160,644			167,450			176,573
Average total assets	[c]		12,007,702			12,089,692			12,202,783			12,040,414			12,225,232

Reported: Pre-provision net revenue to average total assets¹	[a÷c]		1.38	%		1.37	%		1.24	%		1.43	%		1.37	%
Adjusted: Pre-provision net revenue to average total assets¹	[b÷c]		1.46	%		1.42	%		1.32	%		1.39	%		1.44	%

___________________________________________

Annualized measure.


Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Return on Average Assets, Average Tangible Common Equity, Return on Average Tangible Common Equity, and Adjusted Return on Average Tangible Common Equity
(dollars in thousands, except per share amounts)

		Three Months Ended									Nine Months Ended
		September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
NET INCOME ADJUSTED FOR NON-OPERATING ITEMS
Net income	[a]	$	32,004		$	27,357		$	30,666		$	85,586		$	96,816
Non-GAAP adjustments for non-operating expenses:
Acquisition expenses:
Salaries, wages, and employee benefits			73			1,137			—			1,210			—
Data processing			90			344			—			534			—
Professional fees, occupancy, furniture and fixtures, and other			1,772			731			79			2,688			91
Restructuring expenses:
Salaries, wages, and employee benefits			—			—			—			123			—
Acquisition and restructuring expenses			1,935			2,212			79			4,555			91
Related tax benefit¹			(406	)		(553	)		(15	)		(1,061	)		(18	)
Adjusted net income	[b]	$	33,533		$	29,016		$	30,730		$	89,080		$	96,889

DILUTED EARNINGS PER SHARE
Diluted average common shares outstanding	[c]		57,967,848			57,853,231			56,315,492			57,411,299			56,230,624

Reported: Diluted earnings per share	[a÷c]	$	0.55		$	0.47		$	0.54		$	1.49		$	1.72
Adjusted: Diluted earnings per share	[b÷c]	$	0.58		$	0.50		$	0.55		$	1.55		$	1.72

RETURN ON AVERAGE ASSETS
Net income, annualized	[d]	$	127,320		$	110,029		$	121,664		$	114,323		$	129,443
Adjusted net income, annualized	[e]		133,403			116,702			121,918			118,990			129,540
Average total assets	[f]		12,007,702			12,089,692			12,202,783			12,040,414			12,225,232

Reported: Return on average assets²	[d÷f]		1.06	%		0.91	%		1.00	%		0.95	%		1.06	%
Adjusted: Return on average assets²	[e÷f]		1.11	%		0.97	%		1.00	%		0.99	%		1.06	%

RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Average common equity		$	1,364,377		$	1,331,815		$	1,208,407		$	1,324,119		$	1,195,858
Average goodwill and other intangible assets, net			(369,720	)		(376,224	)		(358,025	)		(366,331	)		(360,654	)
Average tangible common equity	[g]	$	994,657		$	955,591		$	850,382		$	957,788		$	835,204

Reported: Return on average tangible common equity²	[d÷g]		12.80	%		11.51	%		14.31	%		11.94	%		15.50	%
Adjusted: Return on average tangible common equity²	[e÷g]		13.41	%		12.21	%		14.34	%		12.42	%		15.51	%

___________________________________________

Year-to-date tax benefits were calculated by multiplying year-to-date acquisition and restructuring expenses by the effective income tax rate for each year-to-date period, which for 2024 excludes a one-time deferred tax valuation adjustment resulting from a change in Illinois apportionment rate due to recently enacted regulations and deductibility of certain acquisition expenses. Tax rates used in these calculations were 23.3% and 19.8% for the nine months ended September 30, 2024 and 2023, respectively. Quarterly tax benefits were calculated as the year-to-date tax benefit amounts less the sum of amounts applied to previous quarters during the year, equating to tax rates of 21.0%, 25.0%, and 19.7% for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
Annualized measure.


Further Adjusted Net Income and Further Adjusted Diluted Earnings Per Share
(dollars in thousands, except per share amounts)

		Three Months Ended									Nine Months Ended
		September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Adjusted net income¹	[a]	$	33,533		$	29,016		$	30,730		$	89,080		$	96,889
Further non-GAAP adjustments:
Net securities (gains) losses			(822	)		353			285			5,906			2,960
Realized net (gains) losses on the sale of mortgage servicing rights			18			(277	)		—			(7,724	)		—
Tax effect for further non-GAAP adjustments²			199			(19	)		(52	)		453			(585	)
Tax effected further non-GAAP adjustments³			(605	)		57			233			(1,365	)		2,375
Further adjusted net income³	[b]	$	32,928		$	29,073		$	30,963		$	87,715		$	99,264
One-time deferred tax valuation adjustment⁴			—			1,446			—			1,446			—
Further adjusted net income, excluding one-time deferred tax valuation adjustment³	[c]	$	32,928		$	30,519		$	30,963		$	89,161		$	99,264

Diluted average common shares outstanding	[d]		57,967,848			57,853,231			56,315,492			57,411,299			56,230,624

Adjusted: Diluted earnings per share	[a÷d]	$	0.58		$	0.50		$	0.55		$	1.55		$	1.72
Further Adjusted: Diluted earnings per share³	[b÷d]	$	0.57		$	0.50		$	0.55		$	1.53		$	1.77
Further Adjusted, excluding one-time deferred tax valuation adjustment: Diluted earnings per share³	[c÷d]	$	0.57		$	0.53		$	0.55		$	1.55		$	1.77

___________________________________________

Adjusted net income is a non-GAAP measure. See the table on the previous page for a reconciliation to the nearest GAAP measure.
Tax effects for further non-GAAP adjustments were calculated by multiplying further non-GAAP adjustments by the effective income tax rate for each period. For the nine months ended September 30, 2024, the rate that we used excluded a one-time deferred tax valuation adjustment resulting from a change in Illinois apportionment rate due to recently enacted regulations. Effective income tax rates that we used to calculate the tax effect were 24.8%, 25.0%, and 18.2% for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively, and were 24.9% and 19.8% for the nine months ended September 30, 2024 and 2023, respectively.
Tax-effected measure.
An estimated one-time deferred tax valuation adjustment of $1.4 million resulted from a change to our Illinois apportionment rate due to recently enacted regulations.


Adjusted Net Interest Income and Adjusted Net Interest Margin
(dollars in thousands)

		Three Months Ended									Nine Months Ended
		September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net interest income		$	82,541		$	82,434		$	77,791		$	240,742		$	242,318
Non-GAAP adjustments:
Tax-equivalent adjustment¹			396			402			553			1,247			1,672
Tax-equivalent net interest income			82,937			82,836			78,344			241,989			243,990
Purchase accounting accretion related to business combinations			(1,338	)		(812	)		(277	)		(2,354	)		(1,093	)
Adjusted net interest income		$	81,599		$	82,024		$	78,067		$	239,635		$	242,897

Tax-equivalent net interest income, annualized	[a]	$	329,945		$	333,165		$	310,821		$	323,241		$	326,214
Adjusted net interest income, annualized	[b]		324,622			329,899			309,722			320,096			324,752
Average interest-earning assets	[c]		10,936,611			10,993,907			11,118,167			10,976,660			11,142,780

Reported: Net interest margin²	[a÷c]		3.02	%		3.03	%		2.80	%		2.94	%		2.93	%
Adjusted: Net interest margin²	[b÷c]		2.97	%		3.00	%		2.79	%		2.92	%		2.91	%

___________________________________________

Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
Annualized measure.


Adjusted Noninterest Income, Operating Revenue, Adjusted Noninterest Income to Operating Revenue, Noninterest Expense Excluding Amortization of Intangible Assets, Adjusted Noninterest Expense, Adjusted Core Expense, Noninterest Expense Excluding Non-Operating Adjustments, Efficiency Ratio, Adjusted Efficiency Ratio, and Adjusted Core Efficiency Ratio
(dollars in thousands)

		Three Months Ended									Nine Months Ended
		September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net interest income	[a]	$	82,541		$	82,434		$	77,791		$	240,742		$	242,318
Non-GAAP adjustments:
Tax-equivalent adjustment¹			396			402			553			1,247			1,672
Tax-equivalent net interest income	[b]		82,937			82,836			78,344			241,989			243,990

Total noninterest income			35,951			33,801			31,008			104,752			90,868
Non-GAAP adjustments:
Net security (gains) losses			(822	)		353			285			5,906			2,960
Noninterest income excluding net securities gains and losses	[c]		35,129			34,154			31,293			110,658			93,828
Further adjustments:
Realized net (gains) losses on the sale of mortgage servicing rights			18			(277	)		—			(7,724	)		—
Adjusted noninterest income	[d]	$	35,147		$	33,877		$	31,293		$	102,934		$	93,828

Tax-equivalent revenue	[e = b+c]	$	118,066		$	116,990		$	109,637		$	352,647		$	337,818
Adjusted tax-equivalent revenue	[f = b+d]		118,084			116,713			109,637			344,923			337,818
Operating revenue	[g = a+d]		117,688			116,311			109,084			343,676			336,146

Adjusted noninterest income to operating revenue	[d÷g]		29.86	%		29.13	%		28.69	%		29.95	%		27.91	%

Total noninterest expense		$	75,926		$	75,537		$	70,945		$	222,232		$	210,553
Non-GAAP adjustments:
Amortization of intangible assets	[h]		(2,548	)		(2,629	)		(2,555	)		(7,586	)		(7,953	)
Noninterest expense excluding amortization of intangible assets	[i]		73,378			72,908			68,390			214,646			202,600
Non-operating adjustments:
Salaries, wages, and employee benefits			(73	)		(1,137	)		—			(1,333	)		—
Data processing			(90	)		(344	)		—			(534	)		—
Professional fees, occupancy, furniture and fixtures, and other			(1,772	)		(731	)		(79	)		(2,688	)		(91	)
Adjusted noninterest expense	[j]		71,443			70,696			68,311			210,091			202,509
Provision for unfunded commitments			(407	)		369			(13	)		640			357
Amortization of New Markets Tax Credits			—			—			(2,260	)		—			(6,740	)
Adjusted core expense	[k]	$	71,036		$	71,065		$	66,038		$	210,731		$	196,126

Noninterest expense, excluding non-operating adjustments	[j-h]	$	73,991		$	73,325		$	70,866		$	217,677		$	210,462

Reported: Efficiency ratio	[i÷e]		62.15	%		62.32	%		62.38	%		60.87	%		59.97	%
Adjusted: Efficiency ratio	[j÷f]		60.50	%		60.57	%		62.31	%		60.91	%		59.95	%
Adjusted: Core efficiency ratio	[k÷f]		60.16	%		60.89	%		60.23	%		61.10	%		58.06	%

___________________________________________

Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.


Tangible Book Value and Tangible Book Value Per Common Share
(dollars in thousands, except per share amounts)

		As of
		September 30, 2024			June 30, 2024			September 30, 2023
Total stockholders’ equity		$	1,402,884		$	1,333,810		$	1,190,158
Non-GAAP adjustments:
Goodwill and other intangible assets, net			(368,249	)		(370,580	)		(356,343	)
Tangible book value	[a]	$	1,034,635		$	963,230		$	833,815

Ending number of common shares outstanding	[b]		56,872,241			56,746,937			55,342,017

Tangible book value per common share	[a÷b]	$	18.19		$	16.97		$	15.07


Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets
(dollars in thousands)

		As of
		September 30, 2024			June 30, 2024			September 30, 2023
Total assets		$	11,986,839		$	11,971,416		$	12,258,250
Non-GAAP adjustments:
Goodwill and other intangible assets, net			(368,249	)		(370,580	)		(356,343	)
Tax effect of other intangible assets¹			7,178			7,687			7,354
Tangible assets²	[a]	$	11,625,768		$	11,608,523		$	11,909,261

Total stockholders’ equity		$	1,402,884		$	1,333,810		$	1,190,158
Non-GAAP adjustments:
Goodwill and other intangible assets, net			(368,249	)		(370,580	)		(356,343	)
Tax effect of other intangible assets¹			7,178			7,687			7,354
Tangible common equity²	[b]	$	1,041,813		$	970,917		$	841,169

Tangible common equity to tangible assets²	[b÷a]		8.96	%		8.36	%		7.06	%

___________________________________________

Net of estimated deferred tax liability, calculated using the estimated statutory tax rate of 28%.
Tax-effected measure.


Core Deposits, Core Deposits to Total Deposits, and Portfolio Loans to Core Deposits
(dollars in thousands)

		As of
		September 30, 2024			June 30, 2024			September 30, 2023
Portfolio loans	[a]	$	7,809,097		$	7,998,912		$	7,856,160

Total deposits	[b]	$	9,943,241		$	9,976,135		$	10,332,362
Non-GAAP adjustments:
Brokered deposits, excluding brokered time deposits of $250,000 or more			(13,089	)		(43,089	)		(6,055	)
Time deposits of $250,000 or more			(338,808	)		(314,461	)		(350,276	)
Core deposits	[c]	$	9,591,344		$	9,618,585		$	9,976,031

RATIOS
Core deposits to total deposits	[c÷b]		96.46	%		96.42	%		96.55	%
Portfolio loans to core deposits	[a÷c]		81.42	%		83.16	%		78.75	%

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Busey’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” “position,” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and Busey undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) risks related to the proposed transaction with CrossFirst, including (i) the possibility that the proposed transaction will not close when expected or at all because required regulatory, stockholder, or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); (ii) the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Busey and CrossFirst do business; (iii) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (iv) diversion of management’s attention from ongoing business operations and opportunities; (v) the possibility that Busey may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all, and to successfully integrate CrossFirst’s operations with those of Busey or that such integration may be more difficult, time consuming or costly than expected; (vi) revenues following the proposed transaction may be lower than expected; and (vii) shareholder litigation that could prevent or delay the closing of the proposed transaction or otherwise negatively impact our business and operations; (2) the strength of the local, state, national, and international economy (including effects of inflationary pressures and supply chain constraints); (3) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics, or other adverse external events that could cause economic deterioration or instability in credit markets (including Russia’s invasion of Ukraine and the conflict in the Middle East); (4) changes in state and federal laws, regulations, and governmental policies concerning Busey’s general business (including changes in response to the failures of other banks or as a result of the upcoming 2024 presidential election); (5) changes in accounting policies and practices; (6) changes in interest rates and prepayment rates of Busey’s assets (including the impact of sustained elevated interest rates); (7) increased competition in the financial services sector (including from non-bank competitors such as credit unions and fintech companies) and the inability to attract new customers; (8) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (9) the loss of key executives or associates; (10) changes in consumer spending; (11) unexpected results of other transactions (including the acquisition of M&M); (12) unexpected outcomes of existing or new litigation, investigations, or inquiries involving Busey (including with respect to Busey’s Illinois franchise taxes); (13) fluctuations in the value of securities held in Busey’s securities portfolio; (14) concentrations within Busey’s loan portfolio (including commercial real estate loans), large loans to certain borrowers, and large deposits from certain clients; (15) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (16) the level of non-performing assets on Busey’s balance sheets; (17) interruptions involving information technology and communications systems or third-party servicers; (18) breaches or failures of information security controls or cybersecurity-related incidents; and (19) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Additional information concerning Busey and its business, including additional factors that could materially affect Busey’s financial results, is included in Busey’s filings with the Securities and Exchange Commission.

ADDITIONAL INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT

Busey has filed a registration statement on Form S‑4 with the SEC to register the shares of Busey’s common stock that will be issued to CrossFirst stockholders in connection with the proposed transaction. The registration statement includes a preliminary joint proxy statement of Busey and CrossFirst, which also constitutes a prospectus of Busey. The definitive joint proxy statement/prospectus will be sent to the stockholders of each of Busey and CrossFirst seeking certain approvals related to the proposed transaction. INVESTORS AND SECURITY HOLDERS OF BUSEY AND CROSSFIRST AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S‑4 AND THE JOINT PROXY STATEMENT/PROSPECTUS TO BE INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S‑4 WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BUSEY, CROSSFIRST, AND THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copies of these documents, as well as other relevant documents filed with the SEC containing information about Busey and CrossFirst, without charge, at the SEC’s website (http://www.sec.gov). Copies of documents filed with the SEC by Busey will be made available free of charge in the “SEC Filings” section of Busey’s website, https://ir.busey.com. Copies of documents filed with the SEC by CrossFirst will be made available free of charge in the “Investor Relations” section of CrossFirst’s website, https://investors.crossfirstbankshares.com.

PARTICIPANTS IN SOLICITATION

Busey, CrossFirst, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the SEC. Information regarding Busey’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on April 12, 2024, and certain other documents filed by Busey with the SEC. Information regarding CrossFirst’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 26, 2024, and certain other documents filed by CrossFirst with the SEC. Other information regarding the participants in the solicitation of proxies in respect of the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed or to be filed with the SEC when they become available. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

END NOTES

1	Represents a non-GAAP financial measure. For a reconciliation to the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”), see “Non-GAAP Financial Information.”
2	Estimated uninsured and uncollateralized deposits consist of account balances in excess of the $250 thousand FDIC insurance limit, less intercompany accounts and collateralized accounts (including preferred deposits).
3	Central Business District areas within Busey’s footprint include downtown St. Louis, downtown Indianapolis, and downtown Chicago.
4	Capital amounts and ratios for the third quarter of 2024 are not yet finalized and are subject to change.
5	On- and off-balance sheet liquidity is comprised of cash and cash equivalents, debt securities excluding those pledged as collateral, brokered deposits, and Busey’s borrowing capacity through its revolving credit facility, the FHLB, the Federal Reserve Bank, and federal funds purchased lines.
6	The blended benchmark consists of 60% MSCI All Country World Index and 40% Bloomberg Intermediate US Government/Credit Total Return Index.

The MIL Network –

January 24, 2025

MIL-OSI Security: Maryland Man Charged with Attempting to Provide Material Support to ISIS

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

Baltimore, Maryland – Michael Sam Teekaye, Jr., age 21, of Hanover, Maryland has been charged by criminal complaint with attempting to provide material support to a designated foreign terrorist organization, in violation of 18 U.S.C. § 2339B. The defendant has been detained since his arrest on October 14, 2024, and had an initial appearance before Magistrate Judge Erin Aslan on October 15, 2024.

The charges were announced by Erek L. Barron, U.S. Attorney for the District of Maryland and Special Agent in Charge William J. DelBagno of the Federal Bureau of Investigation, Baltimore Field Office.

According to the affidavit in support of the complaint, between March and April 2023, Teekaye had multiple conversations with an Undercover Officer (“UCO”) in which he told the UCO that he wanted to travel to Africa to join and fight for ISIS. Teekaye also told the UCO that his “plan B” was to carry out an attack in the United States against people who support Israel. On three occasions in May and June 2024, Teekaye purchased ammunition and range time at a shooting range in Severn, Maryland, which he later told the UCO was partly in order to “train.” In July 2024, Teekaye attempted to purchase a Kalashnikov K-9 9mm rifle, but the purchase was denied because Teekaye was on probation in a state criminal case.

In conversations with the UCO between August and October 2024, Teekaye told the UCO that he was in contact with a Somali ISIS fighter regarding his plans to travel to Somalia to join ISIS. Teekaye explained that he would fly first to Turkey, then travel to Ethiopia and cross the border into Somalia. Teekaye sent the UCO screenshots of an Ethiopian e-Visa he had obtained from the ISIS fighter. On October 4, 2024, Teekaye told the UCO that he received airline tickets from the ISIS fighter. He also sent the UCO screenshots of his travel itinerary showing that he would depart from Baltimore Washington International Airport (BWI) on October 14, 2024 and fly to Istanbul, Turkey with a layover in London.

On October 10, 2024, Teekaye sent the UCO a photo of himself wearing a black mask and holding a large machete, along with the caption “Abdullah the islamophobe slayer.” On October 11, 2024, the UCO asked whether Teekaye was “sure” he wanted to join ISIS. Teekaye responded, “I am sure I did a lot of research and had to accept something’s [sic] that they are the only group that has the most true and sincere intentions.”

On October 14, 2024, FBI agents arrested Teekaye at BWI after he had checked in for his flight and proceeded through security. Following his arrest, Teekaye made the following unprovoked statements, among others: “I’ll just get out in 20 years and do something here. Okay? Okay? It will never stop. Jihad will never stop. . . . I’ll be like 40 when I get out, then I’ll just do it. I don’t care. It will never stop. Jihad will never stop. I’ll come and I’ll kill your soldiers. I’ll kill you, and I’ll kill . . . .” While making these statements, Teekaye began kicking one of the arresting agents.

A complaint is not a finding of guilt. All defendants charged by complaint are presumed innocent unless and until proven guilty at some later criminal proceeding. If convicted, Teekaye faces a maximum sentence of 20 years in federal prison for attempting to provide material support to a designated foreign terrorist organization. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Barron commended the FBI’s Baltimore Field Office for its outstanding work in the investigation and praised the FBI’s Joint Terrorism Task Force along with the FBI’s Newark and Richmond Field Offices, and the New York City Police Department (NYPD), for their valuable assistance. Mr. Barron would like to thank the NYPD’s Intelligence Division under the leadership of Deputy Commissioner Rebecca Weiner, Assistant Chief John Hart, and Deputy Chief Fernando Guimaraes. Mr. Barron thanked Assistant U.S. Attorneys Christina Hoffman and P. Michael Cunningham, who are prosecuting this case. Mr. Barron also thanked the Department of Justice’s National Security Division for their assistance.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit http://www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach. To report a Maryland-based hate crime, contact the FBI Baltimore field office at (410) 265-8080 or http://www.tips.fbi.gov.

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MIL Security OSI –

January 24, 2025

MIL-OSI Security: Oklahoma Man Sentenced to 30 Years in Prison for Child Exploitation Crime

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

CHARLESTON, W.Va. – Jerrod Lee Sharp, 41, of Ponca City, Oklahoma, was sentenced on Monday, October 21, 2024, to 30 years in prison, to be followed by a lifetime of supervised release, for attempted enticement of a minor. Sharp must also register as a sex offender.

According to court documents and statements made in court, on July 17, 2022, Sharp began messaging a woman located in West Virginia whom he believed to be the mother of two minor girls. Sharp repeatedly stated in his messages to the woman that he wished to engage in sexual relations with both girls, and that he wished to travel to West Virginia to meet them.

Sharp exchanged over 1,600 messages with the woman. On July 30, 2023, Sharp flew from Oklahoma to Charleston, West Virginia, where he planned to meet the woman and the two minor girls. Upon his arrival in Charleston, Sharp was arrested by law enforcement officers.

United States Attorney Will Thompson made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI) West Virginia Human Trafficking and Child Exploitation Task Force and the West Virginia State Police.

United States District Judge Joseph Robert Goodwin imposed the sentence. Assistant United States Attorneys Jennifer Rada Herrald and Francesca C. Rollo prosecuted the case.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:23-cr-126.

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MIL Security OSI –

January 24, 2025

MIL-OSI Security: Former Montgomery County Restaurant Owner Sentenced to 21 Months’ Imprisonment for PPP and RRF Loan Fraud

Source: Office of United States Attorneys

PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Giuseppina “Josephine” Leone, 62, of North Wales, Pennsylvania, was sentenced today by United States District Court Judge Gerald A. McHugh to 21 months in prison, one year of supervised release, a $50,000 fine and $300 special assessment for pandemic program fraud. The Court denied the defendant’s request for a non-custodial sentence. The defendant has also paid full restitution in the amount of $972,861.75.

Leone was charged by indictment on May 16, 2024, with three counts of wire fraud for making false representations in documents relating to the Paycheck Protection Program (“PPP”) and Restaurant Revitalization Fund (“RRF”) program, which provided emergency financial assistance to business owners suffering the economic effects of the COVID-19 pandemic. She pleaded guilty to those charges on May 23.

Leone and her husband were owners of Ristorante San Marco (“RSM”), an Italian restaurant located in Ambler, Pa. Leone and her husband executed an Agreement for Sale of Real Property dated October 20, 2019, listing themselves as the “Sellers” of the RSM property and a third party as the “Buyer” for a purchase price of $1,575,000. Subsequently, on or about March 18, 2020, Leone posted on the restaurant’s Facebook page informing the public that RSM would be temporarily closed due to the COVID-19 pandemic. RSM remained closed and never reopened.

Despite the restaurant not being in operation in April 2020, Leone submitted a fraudulent application for a PPP loan in the amount of $138,000. This application misrepresented that RSM, which had been closed for approximately a month, had 17 employees, and would use the loan for payroll and other operating expenses. The fraudulent application was approved, and the loan funds were deposited into RSM’s bank account later that month. The loan was subsequently forgiven based on further misrepresentations by Leone.

In January 2021, while the restaurant was still not in operation, Leone submitted another fraudulent application for a PPP loan, this time seeking $120,000. The application made similar misrepresentations and was approved, resulting in the requested funds being deposited into RSM’s bank account in February 2021. Again, the PPP loan was forgiven due to misrepresentations by Leone.

Finally, Leone defrauded another COVID-19 relief program. While RSM was still not in operation in May 2021, Leone submitted a fraudulent application for a grant under the RRF program, requesting $699,196 for restaurant operations. This RRF application mispresented that RSM, which had not been operating since March 2020, was in operation and that the money would be used to pay employee wages. As a result of this deception, the request was approved, and the funds were deposited into RSM’s bank account later in May 2021. One month later, in June 2021, Leone closed on the sale of RSM. Nonetheless, over a year later, Leone misrepresented to the federal government that the RRF funds had been used for eligible purposes, even though RSM was never reopened by Leone.

“PPP and the other covid relief programs were meant to provide emergency aid to businesses and employees financially flattened by the pandemic,” said U.S. Attorney Romero. “My office and our partners won’t stand for opportunists like Mrs. Leone thinking they can defraud the federal government, pocket taxpayers’ money, and get away with it. We’ll continue to aggressively pursue and prosecute anyone foolish enough to do so.”

The case was investigated by the Small Business Administration Office of Inspector General, the FBI, and Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Angella Middleton.

MIL Security OSI –

January 24, 2025

MIL-OSI Security: U.S. Attorney’s Office Announces Guilty Plea of Fruitland Woman in Knife-Assault Case

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

ALBUQUERQUE – A Fruitland woman pleaded guilty in federal court to two counts of felony assault for assaulting and seriously injuring another woman with a pocketknife.

According to court documents, on February 21, 2024, Richelle R. Upshaw, 24, an enrolled member of the Navajo Nation, assaulted Jane Doe with a knife (considered a “dangerous weapon” under federal law), and that assault resulted in serious bodily injury to Doe’s head and face.

At sentencing, Upshaw faces up to 20 years in prison. Upon her release from prison, Upshaw will be subject to up to three years of supervised release. She must also make criminal restitution to the victim of her stabbing.

U.S. Attorney Alexander M.M. Uballez, and Raul Bujanda, Special Agent in Charge of the FBI Albuquerque Field Office, made the announcement today.

The Farmington Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from Navajo Nation Department of Investigation and Department of Criminal Investigations. Assistant United States Attorney Zachary C. Jones is prosecuting the case.

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MIL Security OSI –

January 24, 2025

MIL-OSI Security: New Orleans Man Sentenced for Distributing Quantities of Fentanyl, Heroin, Cocaine, Marijuana, and Firearm Possession in Furtherance of Drug Trafficking

Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)

NEW ORLEANS, LOUISIANA – ROLAND ROBINSON (“ROBINSON”), age 44, of New Orleans was sentenced on October 15, 2024, after previously pleading guilty to distribution of fentanyl and, possession with intent to distribute, fentanyl, cocaine, heroin, and marijuana. Specifically, ROBINSON was sentenced on each of 4 charged counts to 60 months imprisonment. As to the charge of possession of a firearm in furtherance of a drug trafficking crime, ROBINSON was sentenced to 60 months to run consecutive to any other sentence. ROBINSON was also sentenced to four years of supervised release and payment of a $500 mandatory special assessment fee.

ROBINSON distributed fentanyl and possessed with intent to distribute fentanyl, cocaine, heroin, and marijuana within the New Orleans area. During this time, ROBINSON also possessed firearms in furtherance of his drug trafficking crimes.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

This case was investigated by the Federal Bureau of Investigation, the New Orleans Police Department, and the Jefferson Parish Sheriff’s Office. The prosecution was handled by Assistant United States Attorney Lynn E. Schiffman of the Narcotics Unit.

MIL Security OSI –

January 24, 2025

MIL-OSI USA: Justice Department Announces Murder-For-Hire Charges Against Islamic Revolutionary Guard Corps Brigadier General and Former Intelligence Officer and Members of an Iranian Intelligence Network

Source: US State Government of Utah

Ruhollah Bazghandi, an OFAC-Sanctioned Brigadier General in the IRGC and Former IRGC Intelligence Organization Counterintelligence Chief, and Members of His Iran-Based Network, Contracted Members of an Eastern European Organized Crime Group to Murder a U.

Note: View the superseding indictment here.

The Justice Department announced today the unsealing of a superseding indictment containing murder-for-hire, money-laundering, and sanctions evasion charges against Ruhollah Bazghandi, also known as Roohollah Azimi; Fnu Lnu, also known as Haj Taher, Haj Taher; Hossein Sedighi; and Seyed Mohammad Forouzan, all of Iran.

“The Justice Department has now charged eight individuals, including an Iranian military official, for their efforts to silence and kill a U.S. citizen because of her criticism of the Iranian regime,” said Attorney General Merrick B. Garland. “We will not tolerate efforts by an authoritarian regime like Iran to undermine the fundamental rights guaranteed to every American. Three of the defendants charged in this horrific plot are now in U.S. custody, and we will never stop working to identify, find, and bring to justice all those who endanger the safety of the American people.”

“Today’s indictment exposes the full extent of Iran’s plot to silence an American journalist for criticizing the Iranian regime,” said FBI Director Christopher Wray. “According to the charges, a brigadier general in the Islamic Revolutionary Guard Corps and a former Iranian intelligence officer, working with a network of conspirators, planned to kill a dissident living in New York City. The FBI’s investigation led to the disruption of this plot as one of the conspirators was allegedly on their way to murder the victim in New York. As these charges show, the FBI will work with our partners here and abroad to hold accountable those who target Americans.”

“Today’s indictment makes plain that the Iranian regime for years has been behind a violent campaign to stalk, intimidate, and arrange the killing of an American dissident on U.S. soil for bravely speaking up for the rights of the Iranian people,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department is committed to exposing and holding accountable those in Tehran who believe they can hide their hand in carrying out such reprehensible activities.”

“As alleged, for years, the Government of Iran has attempted to assassinate, on U.S. soil, a U.S. citizen of Iranian origin who is a prominent critic of the Iranian regime,” said U.S. Attorney Damian Williams for the Southern District of New York. “In January 2023, we unsealed charges alleging that members of an Eastern European crime group engaged in a plot to murder this victim. As we allege, that group was not acting alone. Today, we hold their Iranian masters to account, and allege that these Iran-based co-conspirators, including a Brigadier General in the Islamic Revolutionary Guard Corps, directed the murder plot. By charging these Iran-based defendants, we seek to strike another public blow at the heart of the Government of Iran’s efforts to execute the victim — as well as its lethal targeting, intimidation, and repression of other Iranian dissidents critical of the regime in the U.S. and abroad.”

As detailed in the superseding indictment, Bazghandi, Haj Taher, Sedighi, and Forouzan contracted members of an Eastern European criminal organization, including Rafat Amirov, also known as Farkhaddin Mirzoev, Pᴎᴍ, and Rome; Polad Omarov, also known as Araz Aliyev, Polad Qaqa, and Haci Qaqa; and Zialat Mamedov, also known as Ziko, to murder a U.S. citizen of Iranian origin in New York City who has publicly opposed the Iranian government and who has previously been the target of similar plots by the Iranian government. Amirov, Omarov, and Mamedov previously were arrested on charges contained in underlying indictments. Amirov and Omarov are in custody in the United States, pending trial; Mamedov was extradited from the Czech Republic to the Republic of Georgia to face charges there. Bazghandi, Haj Taher, Sedighi, and Forouzan, all of whom are based in Iran, remain at large. The case is pending before U.S. District Judge Colleen McMahon for the Southern District of New York.

According to the allegations contained in the superseding indictment, other court filings, and statements made during court proceedings, Bazghandi, who resides in Iran, is an IRGC Brigadier General and has previously served as chief of an IRGC Intelligence Organization (IRGC-IO) counterintelligence office. In April 2023, the U.S. Secretary of State designated IRGC-IO as a Specially Designated Global Terrorist under Executive Order 14078, for hostage-taking and the wrongful detention of U.S. nationals abroad. On the same date, the Treasury Department sanctioned Bazghandi in connection with his involvement with the detention of foreign prisoners held in Iran. Bazghandi was designated by the Treasury Department a second time in June 2023, this time under Executive Order 13224, for his participation in IRGC-IO’s lethal targeting operations. Haj Taher, Sedighi, and Forouzan (collectively with Bazghandi, the Bazghandi Network), each of whom resides in Iran, also have connections to the Government of Iran.

The Bazghandi Network contracted Amirov, Omarov, Mamedov, and Khalid Mehdiyev to murder, on U.S. soil, a victim residing in New York City. The victim is a journalist, author, and human rights activist who has publicized the Government of Iran’s human rights abuses and suppression of political expression, including in connection with continuing protests against the regime across Iran. As recently as 2020 and 2021, Iranian intelligence officials and assets plotted to kidnap the victim from within the United States for rendition to Iran in an effort to silence the victim’s criticism of the regime. That plot was disrupted and exposed by the FBI and led to the filing of federal kidnapping conspiracy and other charges in the Southern District of New York against several participants in the plot in United States v. Farahani, et al.

Since at least July 2022, the Bazghandi Network tasked members of the organization with assassinating the victim. The organization’s participation in the murder-for-hire plot was directed by Amirov, who resided in Iran and who was tasked with targeting the victim by individuals in Iran. On approximately July 13, 2022, Amirov forwarded targeting information — which Amirov had received from individuals in Iran — about the victim and the victim’s residence to Omarov. Omarov, in turn, together with Mamedov, directed and collaborated with Mehdiyev, who was residing in Yonkers, New York, to carry out the plot against the victim. Mehdiyev’s participation in the plot was disrupted when he was arrested near the victim’s home on or about July 28, 2022, while in possession of the assault rifle, along with 66 rounds of ammunition, approximately $1,100 in cash, and a black ski mask.

In January 2023, Amirov, Omarov, and Mamedov were arrested overseas. On Jan. 27, 2023, they were charged publicly for their roles in the plot to assassinate the victim. Nevertheless, in the months that followed, members of the Bazghandi Network continued to target the victim. For example, in or about March 2023, Haj Taher searched for information about the victim’s family members and Sedighi saved an image of the victim’s residence. As recently as on or about May 1, 2023, Bazghandi conducted an internet search, in Farsi, for, “a person in the house of [the victim] movie,” and, on the same date, watched a video with the title, “A video of the arrested gunman in front of [the victim]’s home in New York received by [the victim’s employer].”

Bazghandi, Haj Taher, Sedighi, and Forouzan, have been charged with murder-for-hire, which carries a maximum penalty of 10 years in prison; conspiracy to commit murder-for-hire, which carries a maximum penalty of 10 years in prison; conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison; and conspiring to violate the International Emergency Economic Powers Act and sanctions against the Government of Iran, which carries a maximum penalty of 20 years in prison.

Amirov, Omarov, and Mamedov have also been charged with murder-for-hire, conspiracy to commit murder-for-hire, and conspiracy to commit money laundering. In addition, Amirov, Omarov, and Mamedov were charged with attempted murder in aid of racketeering, which carries a maximum penalty of 10 years in prison and possession and use of a firearm in connection with the attempted murder, which carries a maximum penalty of life in prison and a mandatory minimum penalty of five years in prison. If convicted, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI investigated the case. The Justice Department’s Office of International Affairs assisted with the extradition of Mamedov.

Assistant U.S. Attorneys Michael D. Lockard, Jacob H. Gutwillig, and Matthew J.C. Hellman for the Southern District of New York, Trial Attorneys Christopher Rigali and Leslie Esbrook of the National Security Division’s Counterintelligence and Export Control Section, and Trial Attorney Dmitriy Slavin of the National Security Division’s Counterterrorism Section are prosecuting the case.

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

MIL OSI USA News –

January 24, 2025

MIL-OSI USA: Two South Carolina Men Plead Guilty to Hate Crimes, Conspiracy and Other Charges for Bias-Motivated Armed Robberies Targeting Hispanic Victims

Source: US State Government of Utah

Two South Carolina men pleaded guilty in U.S. District Court in Columbia, South Carolina, to federal hate crime and other charges in connection with a string of racially-motivated armed robberies targeting Hispanic victims.

According to court documents, beginning in January 2021 and continuing through February 2021, Charles Antonio Clippard, 27, and Michael Joseph Knox, 29, both of Columbia, conspired to target people the defendants identified as Mexican or Hispanic at places of public accommodation, including gas stations and grocery stores. After identifying these targets, the defendants would rob their victims at gunpoint. The defendants targeted their victims because of their victims’ race and national origin.

Both defendants admitted their involvement in a Jan. 22, 2021, armed robbery in which the defendants followed their victims from a grocery store and restaurant to their home and then robbed the victims at gunpoint, stealing cash and a cellphone. They also admitted their involvement in a Jan. 30, 2021, armed robbery and carjacking targeting a Hispanic victim after following him from a gas station to his home. The defendants admitted their involvement in another Jan. 30, 2021, armed robbery in which they targeted a Hispanic victim, followed him from a gas station to his home and then robbed him and others at gunpoint after following him into his home. In total, the defendants pleaded to three hate crime charges, one count of carjacking, one count of conspiracy and two firearms charges. Two other co-conspirators, Gabriel Brunson, 21, and Sierra Fletcher, 34, both of Columbia, previously pleaded guilty to hate crime, conspiracy and firearm offenses.

“These defendants targeted Hispanic victims for violent acts of armed robbery because of their race, national origin and perceived vulnerability,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Every person, regardless of their race or national origin, is entitled to the full protection of the law, and no person should have to fear for their lives or property because of their race or ethnicity. The Justice Department will continue to protect all Americans and will vigorously prosecute those who commit bias-motivated crimes.”

“While these defendants sparked fear for an entire community by targeting members of our Hispanic community, today’s hearing sends a louder message: we will not tolerate bias-based crimes in South Carolina,” said U.S. Attorney Adair Ford Boroughs for the District of South Carolina. “The Justice Department will continue to relentlessly protect and enforce the civil rights of everyone in South Carolina.”

“These defendants used violent acts of armed robbery to purposely target Hispanic victims simply because of their race,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “We hope the guilty plea by these two defendants serves notice that violence borne from hate will never be tolerated in our communities. The FBI remains steadfast in its mission to uphold the Constitution and protect the civil rights of everyone, fairly and equally.”

“Clippard and Knox egregiously sought to exploit and intimidate their victims based on their Hispanic ethnicity,” said Special Agent in Charge Steve Jensen of the FBI Columbia Field Office. “Their violent robberies instilled fear in their victims and innocent working people within the Hispanic community. These criminal acts have no place in our society, and we are committed to ensuring the safety of all individuals, regardless of their background.”

The defendants face a mandatory minimum penalty of 14 years in prison for the firearms offenses, a maximum penalty of 10 years in prison on each hate crime count and a maximum penalty of 15 years in prison on the carjacking count. The plea agreements require both defendants to pay restitution to all victims. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI Columbia Field Office investigated the case, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Columbia Police Department, Town of Lexington Police Department and Richland County Sheriff’s Department.

Assistant U.S. Attorneys Ben Garner and E. Elizabeth Major for the District of South Carolina and Trial Attorneys Katherine McCallister and Andrew Manns of the Civil Rights Division’s Criminal Section are prosecuting the case.

MIL OSI USA News –

January 24, 2025

MIL-OSI Security: Justice Department Announces Murder-For-Hire Charges Against Islamic Revolutionary Guard Corps Brigadier General and Former Intelligence Officer and Members of an Iranian Intelligence Network

Source: United States Attorneys General 13