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  • MIL-OSI: Check Point Software Reports Fourth Quarter and 2024 Full Year Results

    Source: GlobeNewswire (MIL-OSI)

    TEL AVIV, Israel, Jan. 30, 2025 (GLOBE NEWSWIRE) — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2024.

    Fourth Quarter 2024 Highlights

    • Calculated Billings* reached $959 million, an 11 percent increase year over year
    • Remaining Performance Obligation (RPO)**: $2.5 billion, a 12 percent increase year over year
    • Total Revenues: $704 million, a 6 percent increase year over year
    • Product, License & Subscription Revenues: $463 million, a 9 percent increase year over year
    • GAAP Operating Income: $254 million, representing 36 percent of revenues
    • Non-GAAP Operating Income: $306 million, representing 44 percent of revenues
    • GAAP EPS: $2.30, a 7 percent increase year over year
    • Non-GAAP EPS: $2.70, a 5 percent increase year over year

    Full Year 2024 Highlights

    • Calculated Billings* reached $2,658 million, a 9 percent increase year over year
    • Total Revenues: $2,565 million, a 6 percent increase year over year
    • Security Subscriptions Revenues: $1,104 million, a 13 percent increase year over year
    • GAAP EPS: $7.46, a 5 percent increase year over year
    • Non-GAAP EPS: $9.16, a 9 percent increase year over year

    “We delivered exceptional fourth quarter results, a wonderful way to transition into my new Executive Chairman role. The success in the quarter was underscored by strong 8 percent revenue growth in our core Quantum Force appliance business, our industry leading Harmony E-mail solution, and expanded adoption of the Infinity platform,” said, Gil Shwed, Founder and Chairman of the Board of Check Point Software. “I would like to thank Check Point’s customers, partners, and the Global Check Point Team for their contributions to our continued success. I look forward to Check Point achieving new heights under the leadership of our new Chief Executive Officer, Nadav Zafrir,” concluded, Mr. Shwed.

    “I would like to thank Gil and the Board for the opportunity to lead such an exemplary organization. 2024 was a successful year and provides a great springboard for 2025 and beyond,” stated Nadav Zafrir, Chief Executive Officer of Check Point Software. “My first one hundred days are focused on meeting with customers and partners to understand the key challenges they face in today’s unprecedented threat environment. From my conversations so far, I have become increasingly confident that Check Point is uniquely positioned to address the cybersecurity demands of enterprises worldwide. Check Point’s future is bright, and we are focused on driving market share expansion and taking growth to the next levels,” stated Mr. Zafrir.

    “After a successful fourth quarter and 2024, we are starting 2025 with an expanded executive team to balance our corporate and Go-To-Market leadership roles, and bring even more attention to customer facing functions,” said Nadav Zafrir, CEO of Check Point Software. Among the new roles joining the executive team is that of Chief Revenue Officer. Itai Greenberg will serve in this role, driving our global top-line revenue across our platform worldwide. He brings more than two decades of experience in product management and sales roles, having most recently served as Check Point’s Chief Strategy Officer and head of the Cloud and SASE businesses. Replacing Itai in the role of Chief Strategy Officer, we welcome Roi Karo to Check Point. Roi brings more than two decades of expertise in security, AI, and big data with a focus on strategy and planning.

    In conclusion, after three successful years as Check Point’s President, Rupal Hollenbeck has chosen to conclude her tenure at the end of the first quarter and will remain available to support the smooth transition of the new executive team members. “I want to thank Rupal for her incredible work and dedication over the last three years during which the Go-To-Market organizations composition, reach, and focus was transformed all around the world. We wish her all the best in her future endeavors,” said Nadav Zafrir, CEO of Check Point Software. “We welcome Itai and Roi into their new executive team roles. I am excited about the opportunities before us, and I am more confident than ever that the best of Check Point is yet to come,” concluded, Mr. Zafrir.

    Financial Highlights Commentary

    • Cash Balances, Marketable Securities & Short-Term Deposits: $2,784 million as of December 31, 2024, compared to $2,960 million as of December 31, 2023. The decrease in cash is primarily a result of $186 million net of cash consideration utilized for Cyberint Ltd. acquisition in 2024.
    • Share Repurchase Program: During the fourth quarter of 2024, the company repurchased approximately 1.7 million shares at a total cost of approximately $325 million. During full year 2024, we repurchased approximately 7.7 million shares at a total cost of approximately $1,300 million.
    • Cash Flow: Cash flow from operations was $1,059, which included $18 million of costs related to our currency hedging transactions, and acquisition-related costs were insignificant. This compares to $1,035 million in 2023, which included $39 million of costs related to our currency hedging transactions and $25 million in costs related to acquisitions.

    For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

    Conference Call and Webcast Information
    Check Point will host a conference call with the investment community on January 30, 2025, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast or replay, please visit the website www.checkpoint.com/ir.
    First Quarter 2025 Investor Conference Participation Schedule

    • Wolfe Research March Madness 1×1 Conference
      February 27, 2025, NY, NY – 1×1 meetings
    • Susquehanna Technology Conference
      February 27, 2025, NY, NY – 1×1 meetings
    • Raymond James 2025 Institutional Investor Conference
      March 3, 2025, Orlando, FL – Fireside & 1×1 meetings
    • Morgan Stanley 2025 Media, Telecommunications & Technology Conference
      March 4, 2025, SF, CA – Fireside & 1×1 meetings
    • Roth Capital Partners 37thAnnual Conference
      March 17-18, 2025, Dana Point, CA – 1×1 meetings

    Members of Check Point’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company’s web site. To hear these presentations and access the most updated information please visit the company’s web site at www.checkpoint.com/ir. The schedule is subject to change.

    Follow Check Point via:
    Twitter: http://www.twitter.com/checkpointsw
    Facebook: https://www.facebook.com/checkpointsoftware
    Blog: http://blog.checkpoint.com
    YouTube: http://www.youtube.com/user/CPGlobal
    LinkedIn: https://www.linkedin.com/company/check-point-software-technologies

    About Check Point Software Technologies Ltd.
    Check Point Software Technologies Ltd. (http://www.checkpoint.com) is a leading AI-powered, cloud-delivered cyber security platform provider protecting over 100,000 organizations worldwide. Check Point leverages the power of AI everywhere to enhance cyber security efficiency and accuracy through its Infinity Platform, with industry-leading catch rates enabling proactive threat anticipation and smarter, faster response times. The comprehensive platform includes cloud-delivered technologies consisting of Check Point Harmony to secure the workspace, Check Point CloudGuard to secure the cloud, Check Point Quantum to secure the network, and Check Point Infinity Core Services for collaborative security operations and services.

    Legal Notice Regarding Forward-Looking Statements
    This press release contains forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to our management transitions, expectations regarding our products and solutions, and our participation in investor conferences and Check Point Experience (CPX) events and other events during the first quarter of 2025. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; appointments and departures of our executive officers; and general market, political, economic, and business conditions, including acts of terrorism or war. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 2, 2024. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

    Use of Non-GAAP Financial Information
    In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of operating income, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets and acquisition related expenses and the related tax affects. Check Point’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures to assist the investment community to see the company “through the eyes of management,” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.

    * Calculated Billings is a measure that we defined as total revenues recognized in accordance with GAAP plus the change in Total Deferred Revenues during the period

    ** Remaining Performance Obligation (RPO) is a measure that represents the total value of non-cancellable contracted products and/or services that are yet to be recognized as Revenue as of the period

     
    CHECK POINT SOFTWARE TECHNOLOGIES LTD.
    CONSOLIDATED STATEMENT OF INCOME
     
    (Unaudited, in millions, except per share amounts)
           
      Three Months Ended   Year Ended
      December 31,   December 31,
      2024   2023   2024   2023
    Revenues:              
    Products and licenses $ 170.6   $ 158.3   $ 507.9   $ 497.4
    Security subscriptions   292.2     265.8     1,104.2     981.2
    Total revenues from products and security subscriptions   462.8     424.1     1,612.1     1,478.6
    Software updates and maintenance   240.9     239.4     952.9     936.1
    Total revenues   703.7     663.5     2,565.0     2,414.7
                   
    Operating expenses:              
    Cost of products and licenses   29.6     28.0     97.8     99.3
    Cost of security subscriptions   19.7     17.2     72.6     57.0
    Total cost of products and security subscriptions   49.3     45.2     170.4     156.3
    Cost of Software updates and maintenance   33.4     30.5     123.9     112.3
    Amortization of technology   7.6     5.8     25.0     14.0
    Total cost of revenues   90.3     81.5     319.3     282.6
                   
    Research and development   101.1     100.0     394.9     368.9
    Selling and marketing   232.1     200.5     862.9     747.1
    General and administrative   25.9     29.7     111.9     117.0
    Total operating expenses   449.4     411.7     1,689.0     1,515.6
                   
    Operating income   254.3     251.8     876.0     899.1
    Financial income, net   24.5     18.4     96.1     76.5
    Income before taxes on income   278.8     270.2     972.1     975.6
    Taxes on income (tax benefit)   21.3     21.0     126.4     135.3
    Net income $ 257.5   $ 249.2   $ 845.7   $ 840.3
                           
    Basic earnings per share $ 2.36   $ 2.19   $ 7.65   $ 7.19
    Number of shares used in computing basic earnings per share   109.2     114.0     110.6     116.9
                           
    Diluted earnings per share $ 2.30   $ 2.15   $ 7.46   $ 7.10
    Number of shares used in computing diluted earnings per share   112.1     115.9     113.4     118.3
     
     
    CHECK POINT SOFTWARE TECHNOLOGIES LTD.
    SELECTED FINANCIAL METRICS
     (Unaudited, in millions, except per share amounts)
             
        Three Months Ended   Year Ended
        December 31,   December 31,
        2024   2023   2024   2023
                     
    Revenues   $ 703.7   $ 663.5   $ 2,565.0   $ 2,414.7
    Non-GAAP operating income     306.4     308.6     1,097.5     1,079.1
    Non-GAAP net income     303.2     298.5     1,039.1     997.1
    Diluted Non-GAAP Earnings per share   $ 2.70   $ 2.57   $ 9.16   $ 8.42
    Number of shares used in computing diluted Non-GAAP Earnings per share     112.1     115.9     113.4     118.3
                             
     
    CHECK POINT SOFTWARE TECHNOLOGIES LTD.
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
    (Unaudited, in millions, except per share amounts)
             
        Three Months Ended   Year Ended
        December 31,   December 31,
          2024       2023       2024       2023  
                     
    GAAP operating income   $ 254.3     $ 251.8     $ 876.0     $ 899.1  
    Stock-based compensation (1)     29.8       39.9       149.7       145.3  
    Amortization of intangible assets and acquisition related expenses (2)     22.3       16.9       71.8       34.7  
    Non-GAAP operating income   $ 306.4     $ 308.6     $ 1,097.5     $ 1,079.1  
                     
    GAAP net income   $ 257.5     $ 249.2     $ 845.7     $ 840.3  
    Stock-based compensation (1)     29.8       39.9       149.7       145.3  
    Amortization of intangible assets and acquisition related expenses (2)     22.3       16.9       71.8       34.7  
    Taxes on the above items (3)     (6.4 )     (7.5 )     (28.1 )     (23.2 )
                                     
    Non-GAAP net income   $ 303.2     $ 298.5     $ 1,039.1     $ 997.1  
                     
    Diluted GAAP Earnings per share   $ 2.30     $ 2.15     $ 7.46     $ 7.10  
    Stock-based compensation (1)     0.26       0.34       1.32       1.23  
    Amortization of intangible assets and acquisition related expenses (2)     0.20       0.15       0.63       0.29  
    Taxes on the above items (3)     (0.06 )     (0.07 )     (0.25 )     (0.20 )
    Diluted Non-GAAP Earnings per share   $ 2.70     $ 2.57     $ 9.16     $ 8.42  
                     
    Number of shares used in computing diluted Non-GAAP Earnings per share     112.1       115.9       113.4       118.3  
                     
    (1) Stock-based compensation:                
    Cost of products and licenses   $ 0.1     $ 0.1     $ 0.4     $ 0.4  
    Cost of software updates and maintenance     2.0       2.4       8.2       7.3  
    Research and development     10.8       14.2       53.1       48.7  
    Selling and marketing     12.0       15.2       58.2       56.3  
    General and administrative     4.9       8.0       29.8       32.6  
          29.8       39.9       149.7       145.3  
                     
    (2) Amortization of intangible assets and acquisition related expenses:                
    Amortization of technology-cost of revenues     7.6       5.8       25.0       14.0  
    Research and development     1.7       2.0       6.5       7.0  
    Selling and marketing     13.0       9.1       40.3       13.7  
          22.3       16.9       71.8       34.7  
    (3) Taxes on the above items     (6.4 )     (7.5 )     (28.1 )     (23.2 )
    Total, net   $ 45.7     $ 49.3     $ 193.4     $ 156.8  
     
     
    CHECK POINT SOFTWARE TECHNOLOGIES LTD.
    CONDENSED CONSOLIDATED BALANCE SHEET DATA
     
    (In millions)
     
    ASSETS
               
          December 31,   December 31,
          2024
    (Unaudited)    		   2023
    (Audited)
    Current assets:          
    Cash and cash equivalents     $ 506.2   $ 537.7
    Marketable securities and short-term deposits       865.7     992.3
    Trade receivables, net       728.8     657.7
    Prepaid expenses and other current assets       92.7     70.0
    Total current assets       2,193.4     2,257.7
               
    Long-term assets:          
    Marketable securities       1,411.9     1,429.7
    Property and equipment, net       80.8     80.4
    Deferred tax asset, net       63.6     81.8
    Goodwill and other intangible assets, net       1,897.1     1,748.5
    Other assets       96.6     97.4
    Total long-term assets       3,550.0     3,437.8
               
    Total assets     $ 5,743.4   $ 5,695.5
     
               
    LIABILITIES AND
    SHAREHOLDERS’ EQUITY
               
    Current liabilities:          
    Deferred revenues     $ 1,471.3     $ 1,413.8  
    Trade payables and other accrued liabilities       472.9       502.3  
    Total current liabilities       1,944.2       1,916.1  
               
    Long-term liabilities:          
    Long-term deferred revenues       529.0       493.9  
    Income tax accrual       448.5       436.1  
    Other long-term liabilities       32.3       28.4  
            1,009.8       958.4  
               
    Total liabilities       2,954.0       2,874.5  
               
    Shareholders’ equity:          
    Share capital       0.8       0.8  
    Additional paid-in capital       3,052.8       2,732.5  
    Treasury shares at cost       (14,267.7 )     (13,041.2 )
    Accumulated other comprehensive gain (loss)       (10.3 )     (39.2 )
    Retained earnings       14,013.8       13,168.1  
    Total shareholders’ equity       2,789.4       2,821.0  
                       
    Total liabilities and shareholders’ equity     $ 5,743.4     $ 5,695.5  
    Total cash and cash equivalents, marketable securities, and short-term deposits     $ 2,783.8     $ 2,959.7  
     
     
    CHECK POINT SOFTWARE TECHNOLOGIES LTD.
    SELECTED CONSOLIDATED CASH FLOW DATA
     
    (Unaudited, in millions)
     
      Three Months Ended   Year Ended
      December 31,   December 31,
        2024       2023       2024       2023  
    Cash flow from operating activities:              
    Net income $ 257.5     $ 249.2     $ 845.7     $ 840.3  
    Adjustments to reconcile net income to net cash provided by operating activities:              
    Depreciation of property and equipment   6.3       5.7       24.0       23.1  
    Amortization of intangible assets   19.2       13.5       59.6       24.3  
    Stock-based compensation   29.8       39.9       149.7       145.3  
    Realized loss on marketable securities   –       –       –       6.7  
    Increase in trade and other receivables, net   (337.1 )     (324.3 )     (78.9 )     (61.0 )
    Increase in deferred revenues, trade payables and other accrued liabilities   273.0       270.6       59.7       65.5  
    Deferred income taxes, net   0.3       (18.8 )     (1.0 )     (9.5 )
    Net cash provided by operating activities   249.0       235.8       1,058.8       1,034.7  
                   
    Cash flow from investing activities:              
    Payment in conjunction with acquisitions, net of acquired cash   –       (3.8 )     (185.8 )     (458.8 )
    Investment in property and equipment   (6.5 )     (4.7 )     (24.2 )     (18.6 )
    Net cash used in investing activities   (6.5 )     (8.5 )     (210.0 )     (477.4 )
                   
    Cash flow from financing activities:              
    Proceeds from issuance of shares upon exercise of options   9.0       16.0       258.6       133.7  
    Purchase of treasury shares   (325.0 )     (313.2 )     (1,299.9 )     (1,287.6 )
    Payments related to shares withheld for taxes   (1.5 )     (1.2 )     (18.6 )     (11.0 )
    Net cash used in financing activities   (317.5 )     (298.4 )     (1,059.9 )     (1,164.9 )
                   
    Unrealized gain (loss) on marketable securities, net   (14.0 )     42.1       35.2       64.1  
                   
    Decrease in cash and cash equivalents, marketable securities, and short-term deposits   (89.0 )     (29.0 )     (175.9 )     (543.5 )
                   
    Cash and cash equivalents, marketable securities, and short-term deposits at the beginning of the period   2,872.8       2,988.7       2,959.7       3,503.2  
                   
    Cash and cash equivalents, marketable securities, and short-term deposits at the end of the period $ 2,783.8     $ 2,959.7     $ 2,783.8     $ 2,959.7  
     
       
    Investors: Kip E. Meintzer
    Check Point Software Technologies, Ltd.
    +1.650.628.2040
    ir@checkpoint.com    		 Media: Gil Messing
    Check Point Software Technologies, Ltd.
    +1.650.628.2260
    press@checkpoint.com

    The MIL Network –

  • MIL-OSI: Karolinska Development’s portfolio company Dilafor advances tafoxiparin following successful meetings with FDA and European regulatory authorities

    Source: GlobeNewswire (MIL-OSI)

    STOCKHOLM, SWEDEN – January 30, 2025. Karolinska Development AB (Nasdaq Stockholm: KDEV) today announces that its portfolio company Dilafor has successfully completed regulatory meetings with the U.S. Food and Drug Administration, FDA, and European Health Agencies, regarding the continued development of the company’s drug candidate tafoxiparin. The completed meetings mark the end of a comprehensive dialogue with regulatory authorities in the US and EU to reach an alignment between the authorities on designing pivotal clinical Phase 3 studies in Europe and the US to evaluate tafoxiparin as a new potential treatment for priming of labor.

    Dilafor has completed interactions with US and European authorities during 2023 – 2024 to achieve an alignment in the regulatory process ahead of the upcoming clinical phase 3 trials with the company’s drug candidate tafoxiparin, developed for priming of labor. Positive outcomes from scientific advice meetings with the FDA and the EMA, were followed by a Simultaneous National Scientific Advice, SNSA, including five key national EU authorities, in December 2024. The meetings resulted in an agreement on the overall study design; in particular the primary endpoint, inclusion criteria, and the performance of the study. Following this positive development, Dilafor will now finalize the detailed planning for pivotal Phase 3 studies in the US and Europe.

    “There is generally a lack of new product development in the obstetrical area, and tafoxiparin represents a new principle and mode of action compared to available therapies. The extensive interactions with regulatory bodies in the US and Europe have been extremely helpful and have led to an alignment on the design of a Phase 3 program. Along the way, the FDA has been clear that they share the view on tafoxiparin’s mode of action resulting in priming of labor,” says Lena Degling Wikingsson, CEO, Dilafor.

    Currently, more than 30 percent of term pregnant women are induced into labor. Existing interventions require fetal and maternal surveillance in hospital due to maternal and fetal high risk of complications, generating high healthcare costs. National guidance for labor induction have recently been revised to encourage delivery at 39 weeks of gestation in the US and at 40–41 weeks in Europe. The change in routines is supported by strong scientific publications and has been shown to reduce the risk of stillbirth, neonatal complications, operative deliveries leading to improved maternal and neonatal outcomes. The new guidance will lead to a further increase in the number of deliveries requiring labor induction. To reduce the constraints at the obstetrical clinics a new, safe home-based treatment option for labor priming may be a future solution.

    Tafoxiparins novel mechanism of action represents a potential breakthrough in obstetrical care by mimicking the natural priming of labor process. The drug candidate uniquely initiates both cervical ripening and myometrial remodeling over several days, initiating a spontaneous onset of labor leading to a vaginal delivery without traditional mechanical or pharmacological interventions. Tafoxiparin is the first drug developed for self-administration by the mother using a daily autoinjector at home, marking a possible improvement in quality of life for the pregnant woman and her family. Moreover, the tafoxiparin drug candidate has in Phase 2 studies demonstrated potential to reduce fetal and maternal complications and associated healthcare expenses.

    “We are seeing a clear trend towards earlier induction of labor in both Europe and the US as it has been shown to reduce infant mortality and the risk of complications during delivery radically. This is putting pressure on an already strained maternity care system with increased hospitalization. The aim of tafoxiparin is to enable treatment at home to start a natural process of labor priming resulting in spontaneous onset of labor,” says Viktor Drvota, CEO, Karolinska Development.

    Karolinska Development’s direct ownership in Dilafor amounts to 3% and indirect ownership interest via KDev Investment in Dilafor amounts to 29%.

    For further information, please contact:

    Viktor Drvota, CEO, Karolinska Development AB
    Phone: +46 73 982 52 02, e-mail: viktor.drvota@karolinskadevelopment.com 

    Johan Dighed, General Counsel and Deputy CEO, Karolinska Development AB
    Phone: +46 70 207 48 26, e-mail: johan.dighed@karolinskadevelopment.com

    TO THE EDITORS

    About Karolinska Development AB

    Karolinska Development AB (Nasdaq Stockholm: KDEV) is a Nordic life sciences investment company. The company focuses on identifying breakthrough medical innovations in the Nordic region that are developed by entrepreneurs and leadership teams. The Company invests in the creation and growth of companies that advance these assets into commercial products that are designed to make a difference to patient’s lives while providing an attractive return on investment to shareholders.

    Karolinska Development has access to world-class medical innovations at the Karolinska Institutet and other leading universities and research institutes in the Nordic region. The Company aims to build companies around scientists who are leaders in their fields, supported by experienced management teams and advisers, and co-funded by specialist international investors, to provide the greatest chance of success.

    Karolinska Development has a portfolio of eleven companies targeting opportunities in innovative treatment for life-threatening or serious debilitating diseases.

    The Company is led by an entrepreneurial team of investment professionals with a proven track record as company builders and with access to a strong global network.

    For more information, please visit www.karolinskadevelopment.com.

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  • MIL-OSI: SHELL PLC 4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    Source: GlobeNewswire (MIL-OSI)

                                 
    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS    		        
                                                         
     
    SUMMARY OF UNAUDITED RESULTS
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    928    4,291    474    -78 Income/(loss) attributable to Shell plc shareholders   16,093    19,359    -17
    3,661    6,028    7,306    -39 Adjusted Earnings A 23,716    28,250    -16
    14,281    16,005    16,335    -11 Adjusted EBITDA A 65,803    68,538    -4
    13,162    14,684    12,575    -10 Cash flow from operating activities   54,684    54,191    +1
    (4,431)   (3,857)   (5,657)     Cash flow from investing activities   (15,154)   (17,734)    
    8,731    10,827    6,918      Free cash flow G 39,530    36,457     
    6,924    4,950    7,113      Cash capital expenditure C 21,084    24,392     
    9,401    9,570    10,897    -2 Operating expenses F 36,918    39,960    -8
    9,138    8,864    10,565    +3 Underlying operating expenses F 35,707    39,201    -9
    11.3% 12.8% 12.8%   ROACE2 D 11.3% 12.8%  
    77,078    76,613    81,541      Total debt E 77,078    81,541     
    38,809    35,234    43,542      Net debt E 38,809    43,542     
    17.7% 15.7% 18.8%   Gearing E 17.7% 18.8%  
    2,815    2,801    2,827    +1 Oil and gas production available for sale (thousand boe/d)   2,836    2,791    +2
    0.15    0.69    0.07 -78 Basic earnings per share ($)   2.55    2.88    -11
    0.60    0.96    1.11    -38 Adjusted Earnings per share ($) B 3.76    4.20    -10
    0.3580    0.3440    0.3440    +4 Dividend per share ($)   1.3900    1.2935    +7

    1.Q4 on Q3 change

    2.Effective first quarter 2024, the definition has been amended and comparative information has been revised. See Reference D.

    Quarter Analysis1

    Income attributable to Shell plc shareholders, compared with the third quarter 2024, reflected higher exploration well write-offs, lower margins from crude and oil products trading and optimisation, lower Marketing margins and volumes, lower LNG trading and optimisation margins, lower realised oil prices, and unfavourable tax movements.

    Fourth quarter 2024 income attributable to Shell plc shareholders also included net impairment charges and reversals of $2.2 billion, and net losses related to sale of assets. These items are included in identified items amounting to a net loss of $2.8 billion in the quarter. This compares with identified items in the third quarter 2024 which amounted to a net loss of $1.3 billion.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for the above identified items.

    Cash flow from operating activities for the fourth quarter 2024 was $13.2 billion, and primarily driven by Adjusted EBITDA, and working capital inflows of $2.4 billion partly offset by tax payments of $2.9 billion, and outflows relating to the timing impact of payments relating to emission certificates and biofuel programmes of $1.4 billion. The working capital inflows mainly reflected accounts receivable and payable movements, and initial margin inflow.

    Cash flow from investing activities for the quarter was an outflow of $4.4 billion, and included cash capital expenditure of $6.9 billion, partly offset by net other investing cash inflows of $1.1 billion, and divestment proceeds of $0.8 billion.

    Net debt and Gearing: At the end of the fourth quarter 2024, net debt was $38.8 billion, compared with $35.2 billion at the end of the third quarter 2024, mainly reflecting lease additions of $5.4 billion, share buybacks, cash dividends paid to Shell plc shareholders, and interest payments, partly offset by free cash flow. Gearing was 17.7% at the end of the fourth quarter 2024, compared with 15.7% at the end of the third quarter 2024, mainly driven by higher net debt.

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    Shareholder distributions

    Total shareholder distributions in the quarter amounted to $5.7 billion comprising repurchases of shares of $3.6 billion and cash dividends paid to Shell plc shareholders of $2.1 billion. Dividends declared to Shell plc shareholders for the fourth quarter 2024 amount to $0.3580 per share. Shell has now completed $3.5 billion of share buybacks announced in the third quarter 2024 results announcement. Today, Shell announces a share buyback programme of $3.5 billion which is expected to be completed by the first quarter 2025 results announcement.

    Full Year Analysis1

    Income attributable to Shell plc shareholders, compared with the full year 2023, reflected lower LNG trading and optimisation margins, lower realised prices, lower refining margins, as well as lower trading and optimisation margins of power and pipeline gas in Renewables and Energy Solutions, partly offset by lower operating expenses, and higher realised Chemicals margins.

    By focusing the portfolio and simplifying the organisation, $3.1 billion of pre-tax structural cost reductions3 were delivered through 2024 compared with 2022 levels, with $2.1 billion in the full year 2024.

    Full year 2024 income attributable to Shell plc shareholders also included net impairment charges and reversals of $4.4 billion, reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures, unfavourable movements relating to an accounting mismatch due to fair value accounting of commodity derivatives, and charges related to redundancy and restructuring. These charges, reclassifications and movements are included in identified items amounting to a net loss of $7.4 billion. This compares with identified items in the full year 2023 which amounted to a net loss of $8.2 billion.

    Adjusted Earnings and Adjusted EBITDA2 for the full year 2024 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for identified items and the cost of supplies adjustment of positive $0.3 billion.

    Cash flow from operating activities for the full year 2024 was $54.7 billion, and primarily driven by Adjusted EBITDA, and working capital inflows of $2.1 billion, partly offset by tax payments of $12.0 billion.

    Cash flow from investing activities for the full year 2024 was an outflow of $15.2 billion and included cash capital expenditure of $21.1 billion, partly offset by divestment proceeds of $2.8 billion, and interest received of $2.4 billion.

    This Unaudited Condensed Financial Report, together with supplementary financial and operational disclosure for this quarter, is available at www.shell.com/investors 4 . Details of progress to date on the financial targets that were announced during Capital Markets Day in June 2023 is available at https://www.shell.com/progress-on-cmd24.html 4.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

    3.See Reference J.

    4.Not incorporated by reference.

    FOURTH QUARTER 2024 PORTFOLIO DEVELOPMENTS

    Upstream

    In October 2024, we announced the start of production of the floating production storage and offloading facility (FPSO) Marechal Duque de Caxias in the Mero field, in the pre-salt area of the Santos Basin, offshore Brazil. Also known as Mero-3, the FPSO has an operational capacity of 180,000 barrels of oil per day (Shell share 19.3%).

    In December 2024, we, along with Equinor ASA, announced the combination of our UK offshore oil and gas assets and expertise to form a new company which will be the UK North Sea’s biggest independent producer. On deal completion, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%). Completion of the transaction remains subject to approvals and is expected by the end of 2025.

    In December 2024, we announced a final investment decision (FID) on Bonga North, a deep-water project off the coast of Nigeria. Shell (55%) operates the Bonga field in partnership with Esso Exploration and Production Nigeria Ltd. (20%), Nigerian Agip Exploration Ltd. (12.5%), and TotalEnergies Exploration and Production Nigeria Ltd. (12.5%), on behalf of the Nigerian National Petroleum Company Limited.

    In January 2025, we announced the start of production at the Shell-operated Whale floating production facility in the Gulf of Mexico. The Whale development is owned by Shell (60%, operator) and Chevron U.S.A. Inc. (40%).

             Page 2

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    Chemicals and Products

    In January 2025, CNOOC and Shell Petrochemicals Company Limited (CSPC), a 50:50 joint venture between Shell and CNOOC Petrochemicals Investment Ltd, has taken a FID to expand its petrochemical complex in Daya Bay, Huizhou, south China.

    Renewables and Energy Solutions

    In October 2024, we signed an agreement to acquire a 100% equity stake in RISEC Holdings, LLC, which owns a 609-megawatt (MW) two-unit combined-cycle gas turbine power plant in Rhode Island, USA. The deal was completed in January 2025.

             Page 2

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    PERFORMANCE BY SEGMENT

                                                         
     
    INTEGRATED GAS        
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    1,744    2,631    1,733    -34 Segment earnings   9,590    7,058    +36
    (421)   (240)   (2,235)     Of which: Identified items A (1,800)   (6,861)    
    2,165    2,871    3,968    -25 Adjusted Earnings A 11,390    13,919    -18
    4,568    5,234    6,584    -13 Adjusted EBITDA A 20,978    23,773    -12
    4,391    3,623    3,597    +21 Cash flow from operating activities A 16,909    17,520    -3
    1,337    1,236    1,196      Cash capital expenditure C 4,766    4,196     
    116    136    113    -15 Liquids production available for sale (thousand b/d)   132    128    +2
    4,574    4,669    4,570    -2 Natural gas production available for sale (million scf/d)   4,769    4,700    +1
    905    941    901    -4 Total production available for sale (thousand boe/d)   954    939    +2
    7.06    7.50    7.06    -6 LNG liquefaction volumes (million tonnes)   29.09    28.29    +3
    15.50    17.04    18.09    -9 LNG sales volumes (million tonnes)   65.82    67.09    -2

    1.Q4 on Q3 change

    Integrated Gas includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. It includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary to deliver these to market. Integrated Gas also includes the marketing, trading and optimisation of LNG.

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected the net effect of lower contributions from trading and optimisation mainly driven by the comparative (non-cash) impact of expiring hedging contracts and slightly higher realised prices (decrease of $340 million), lower volumes (decrease of $283 million), and higher exploration well write-offs (increase of $275 million), partly offset by lower operating expenses (decrease of $97 million).

    Fourth quarter 2024 segment earnings also included impairment charges of $339 million and a loss of $96 million related to sale of assets, partly offset by favourable movements of $109 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These charges and favourable movements are part of identified items and compare with the third quarter 2024 which included unfavourable movements of $213 million due to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, net cash inflows related to derivatives of $120 million and working capital inflows of $114 million, partly offset by tax payments of $635 million.

    Total oil and gas production, compared with the third quarter 2024, decreased by 4% mainly due to planned maintenance in Pearl GTL (Qatar). LNG liquefaction volumes decreased by 6% mainly due to lower feedgas supply and fewer cargoes due to the timing of liftings.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, reflected the combined effect of lower contributions from trading and optimisation and lower realised prices (decrease of $3,819 million), partly offset by higher volumes (increase of $514 million), lower operating expenses (decrease of $478 million), and favourable deferred tax movements ($399 million).

    Full year 2024 segment earnings also included unfavourable movements of $1,088 million relating to an accounting mismatch due to fair value accounting of commodity derivatives, impairment charges of $363 million, and a net loss of $96 million related to sale of assets. These unfavourable movements and charges are part of identified items and compare with the full year 2023 which included unfavourable movements of $4,407 million due to the fair value accounting of commodity derivatives, and net impairment charges and reversals of $2,247 million. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

             Page 3

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the full year 2024 was primarily driven by Adjusted EBITDA, and working capital inflows of $467 million, partly offset by tax payments of $2,955 million and net cash outflows related to derivatives of $1,466 million.

    Total oil and gas production, compared with the full year 2023, increased by 2% mainly due to ramp-up of fields in Oman and Australia. LNG liquefaction volumes increased by 3% mainly due to lower maintenance in Australia.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

             Page 4

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                         
     
    UPSTREAM          
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    1,031    2,289    2,151    -55 Segment earnings   7,772    8,539    -9
    (651)   (153)   (909)     Of which: Identified items A (623)   (1,267)    
    1,682    2,443    3,060    -31 Adjusted Earnings A 8,395    9,806    -14
    7,676    7,871    7,872    -2 Adjusted EBITDA A 31,264    30,622    +2
    4,509    5,268    5,787    -14 Cash flow from operating activities A 21,244    21,450    -1
    2,076    1,974    2,436      Cash capital expenditure C 7,890    8,343     
    1,332    1,321    1,361    +1 Liquids production available for sale (thousand b/d)   1,320    1,325    —
    3,056    2,844    2,952    +7 Natural gas production available for sale (million scf/d)   2,964    2,754    +8
    1,859    1,811    1,870    +3 Total production available for sale (thousand boe/d)   1,831    1,800    +2

    1.Q4 on Q3 change

    The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to the market.

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected higher operating expenses (increase of $291 million), higher exploration well write-offs (increase of $283 million), unfavourable tax movements ($245 million) and lower realised liquids prices (decrease of $227 million), partly offset by higher volumes (increase of $370 million).

    Fourth quarter 2024 segment earnings also included a loss of $161 million related to the impact of the weakening Brazilian real on a deferred tax position, and net impairment charges and reversals of $152 million. These charges are part of identified items, and compare with the third quarter 2024 which included charges of $138 million related to redundancy and restructuring and charges of $104 million related to decommissioning provisions.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, partly offset by tax payments of $2,019 million and working capital outflows of $611 million.

    Total production, compared with the third quarter 2024, increased mainly due to new oil production and lower scheduled maintenance.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, reflected unfavourable tax movements ($1,289 million), lower realised prices (decrease of $949 million) and higher exploration well write-offs (increase of $541 million), partly offset by the comparative favourable impact of $962 million mainly relating to gas storage effects.

    Full year 2024 segment earnings also included a loss of $325 million related to the impact of the weakening Brazilian real on a deferred tax position, net impairment charges and reversals of $323 million and charges of $214 million related to redundancy and restructuring, partly offset by gains of $638 million related to the impact of inflationary adjustments in Argentina on a deferred tax position. These charges and gains are part of identified items, and compare with the full year 2023 which included net impairment charges and reversals of $642 million, and net charges of $295 million related to the impact of the weakening Argentine peso and strengthening Brazilian real on a deferred tax position.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the full year 2024 was primarily driven by Adjusted EBITDA, partly offset by tax payments of $7,851 million and the timing impact of dividends (net of profits) from joint ventures and associates of $946 million.

    Total production, compared with the full year 2023, increased mainly due to new oil production, partly offset by field decline.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

             Page 5

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                         
     
    MARKETING        
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    103    760    226    -86 Segment earnings2   1,894    3,058    -38
    (736)   (422)   (567)     Of which: Identified items2 A (1,991)   (254)    
    839    1,182    794    -29 Adjusted Earnings2 A 3,885    3,312    +17
    1,709    2,081    1,500    -18 Adjusted EBITDA2 A 7,476    6,337    +18
    1,363    2,722    1,767    -50 Cash flow from operating activities2 A 7,363    5,561    +32
    811    525    1,385      Cash capital expenditure2 C 2,445    5,790     
    2,795    2,945    2,997    -5 Marketing sales volumes (thousand b/d)2   2,843    3,045    -7

    1.Q4 on Q3 change

    2.Wholesale commercial fuels, previously reported in the Chemicals and Products segment, is reported in the Marketing segment (Mobility) with effect from Q1 2024. Comparative information for the Marketing segment and the Chemicals and Products segment has been revised.

    The Marketing segment comprises the Mobility, Lubricants, and Sectors and Decarbonisation businesses. The Mobility business operates Shell’s retail network including electric vehicle charging services and the Wholesale commercial fuels business which provides fuels for transport, industry and heating. The Lubricants business produces, markets and sells lubricants for road transport, and machinery used in manufacturing, mining, power generation, agriculture and construction. The Sectors and Decarbonisation business sells fuels, speciality products and services including low-carbon energy solutions to a broad range of commercial customers including the aviation, marine, and agricultural sectors.

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected lower Marketing margins (decrease of $395 million) mainly due to seasonal impact of lower volumes and lower Mobility unit margins as well as lower Sectors and Decarbonisation and Lubricants margins. These were partly offset by lower operating expenses (decrease of $118 million).

    Fourth quarter 2024 segment earnings also included impairment charges of $458 million, and net losses of $247 million related to sale of assets. These charges are part of identified items, and compare with the third quarter 2024 impairment charges of $179 million, charges of $98 million related to redundancy and restructuring, and net losses of $84 million related to sale of assets.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, working capital inflows of $845 million, and dividends (net of profits) from joint ventures and associates of $172 million. These inflows were partly offset by outflows relating to the timing impact of payments relating to emission certificates and biofuel programmes of $1,187 million and tax payments of $130 million.

    Marketing sales volumes (comprising hydrocarbon sales), compared with the third quarter 2024, decreased mainly due to seasonality.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, reflected higher Marketing margins (increase of $483 million) including higher unit margins in Lubricants and Mobility partly offset by lower Sectors and Decarbonisation margins. Segment earnings also reflected lower operating expenses (decrease of $449 million). These were partly offset by unfavourable tax movements ($157 million) and higher depreciation charges (increase of $142 million).

    Full year 2024 segment earnings also included impairment charges of $1,423 million mainly relating to an asset in the Netherlands, net losses of $386 million related to the sale of assets and charges of $215 million related to redundancy and restructuring. These charges are part of identified items and compare with the full year 2023 which included net impairment charges and reversals of $466 million, and charges of $113 million related to redundancy and restructuring partly offset by gains of $298 million related to indirect tax credits.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

    Cash flow from operating activities for the full year 2024 was primarily driven by Adjusted EBITDA, working capital inflows of $998 million, and dividends (net of profits) from joint ventures and associates of $262 million. These inflows

             Page 6

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    were partly offset by tax payments of $562 million, non-cash cost of supplies adjustment of $254 million, and outflows relating to the timing impact of payments relating to emission certificates and biofuel programmes of $221 million.

    Marketing sales volumes (comprising hydrocarbon sales), compared with the full year 2023, decreased mainly in Mobility including increased focus on value over volume.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

             Page 7

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                         
     
    CHEMICALS AND PRODUCTS        
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    (328)   341    (1,828)   -196 Segment earnings2   1,757    1,482    +19
    (99)   (122)   (1,857)     Of which: Identified items2 A (1,177)   (2,135)    
    (229)   463    29    -150 Adjusted Earnings2 A 2,934    3,617    -19
    475    1,240    670    -62 Adjusted EBITDA2 A 6,783    7,489    -9
    2,032    3,321    1,150    -39 Cash flow from operating activities2 A 7,253    7,513    -3
    1,392    761    986      Cash capital expenditure2 C 3,290    3,013     
    1,215    1,305    1,315    -7 Refinery processing intake (thousand b/d)   1,344    1,349    —
    2,926    3,015    2,588    -3 Chemicals sales volumes (thousand tonnes)   11,875    11,245    +6

    1.Q4 on Q3 change

    2.Wholesale commercial fuels, previously reported in the Chemicals and Products segment, is reported in the Marketing segment (Mobility) with effect from Q1 2024. Comparative information for the Marketing segment and the Chemicals and Products segment has been revised.

    The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries which turn crude oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use. The segment also includes the pipeline business, trading and optimisation of crude oil, oil products and petrochemicals, and Oil Sands activities (the extraction of bitumen from mined oil sands and its conversion into synthetic crude oil).

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected lower Products margins (decrease of $442 million) mainly driven by lower margins from trading and optimisation. Segment earnings also reflected lower Chemicals margins (decrease of $138 million) mainly due to lower realised prices. In addition, the fourth quarter 2024 reflected unfavourable tax movements ($67 million).

    Fourth quarter 2024 segment earnings also included net impairment charges and reversals of $224 million, partly offset by favourable deferred tax movements of $114 million. These charges and favourable movements are part of identified items, and compare with the third quarter 2024 which included charges of $101 million related to redundancy and restructuring, and net impairment charges and reversals of $92 million, partly offset by favourable movements of $95 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. In the fourth quarter 2024, Chemicals had negative Adjusted Earnings of $258 million and Products had positive Adjusted Earnings of $29 million.

    Cash flow from operating activities for the quarter was primarily driven by working capital inflows of $1,394 million, Adjusted EBITDA, net cash inflows relating to commodity derivatives of $230 million, dividends (net of profits) from joint ventures and associates of $139 million, and non-cash cost of supplies adjustment of $73 million. These inflows were partly offset by outflows relating to the timing impact of payments relating to emission certificates and biofuel programmes of $371 million.

    Chemicals manufacturing plant utilisation was 75% compared with 76% in the third quarter 2024.

    Refinery utilisation was 76% compared with 81% in the third quarter 2024, mainly due to higher planned maintenance.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, reflected lower Products margins (decrease of $1,832 million), mainly driven by lower refining margins, and unfavourable tax movements ($248 million). These were partly offset by lower operating expenses (decrease of $812 million) and higher Chemicals margins (increase of $602 million).

    Full year 2024 segment earnings also included net impairment charges and reversals of $1,176 million mainly relating to assets in Singapore, charges of $142 million related to redundancy and restructuring, and unfavourable movements of $86 million relating to an accounting mismatch due to fair value accounting of commodity derivatives, partly offset by favourable deferred tax movements of $114 million. These charges and movements are part of identified items, and compare with the full year 2023 which included net impairment charges and reversals of $2,195 million mainly relating to

             Page 8

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    the Chemicals assets in Singapore, and charges of $82 million related to redundancy and restructuring partly offset by favourable movements of $214 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. In the full year 2024, Chemicals had negative Adjusted Earnings of $432 million and Products had positive Adjusted Earnings of $3,366 million.

    Cash flow from operating activities for the full year 2024 was primarily driven by Adjusted EBITDA, working capital inflows of $524 million, dividends (net of profits) from joint ventures and associates of $304 million and net cash inflows relating to commodity derivatives of $219 million. These inflows were partly offset by cash outflows relating to legal provisions of $215 million, tax payments of $146 million, cash outflows relating to the timing impact of payments relating to emission certificates and biofuel programmes of $114 million, and non-cash cost of supplies adjustment of $109 million.

    Chemicals manufacturing plant utilisation was 76% compared with 68% in the full year 2023, mainly due to economic optimisation in the full year 2023. The increase was also driven by ramp-up of Shell Polymers Monaca and lower unplanned maintenance in the full year 2024.

    Refinery utilisation was 85% compared with 85% in the full year 2023.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

             Page 9

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                         
     
    RENEWABLES AND ENERGY SOLUTIONS        
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023 %¹   Reference 2024 2023 %
    (1,226)   (481)   (272)   -155 Segment earnings   (1,229)   3,089    -140
    (914)   (319)   (445)     Of which: Identified items A (732)   2,333     
    (311)   (162)   173    -92 Adjusted Earnings A (497)   756    -166
    (123)   (75)   253    -64 Adjusted EBITDA A (22)   1,481    -101
    850    (364)   (1,265)   +333 Cash flow from operating activities A 3,798    2,984    +27
    1,277    409    1,026      Cash capital expenditure C 2,549    2,681     
    76    79    68    -4 External power sales (terawatt hours)2   306    279    +10
    165    148    175    +11 Sales of pipeline gas to end-use customers (terawatt hours)3   652    738    -12

    1.Q4 on Q3 change

    2.Physical power sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders.

    3.Physical natural gas sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders. Excluding sales of natural gas by other segments and LNG sales.

    Renewables and Energy Solutions includes activities such as renewable power generation, the marketing and trading and optimisation of power and pipeline gas, as well as carbon credits, and digitally enabled customer solutions. It also includes the production and marketing of hydrogen, development of commercial carbon capture and storage hubs, investment in nature-based projects that avoid or reduce carbon emissions, and Shell Ventures, which invests in companies that work to accelerate the energy and mobility transformation.

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected unfavourable one-off tax movements ($107 million), and higher operating expenses (increase of $71 million).

    Fourth quarter 2024 segment earnings also included impairment charges of $996 million mainly relating to renewable generation assets in North America, partly offset by favourable movements of $50 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These charges and favourable movements are part of identified items and compare with the third quarter 2024 which included unfavourable movements of $279 million due to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. Most Renewables and Energy Solutions activities were loss-making in the fourth quarter 2024.

    Cash flow from operating activities for the quarter was primarily driven by net cash inflows related to derivatives of $533 million, and working capital inflows of $353 million, partly offset by Adjusted EBITDA.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, reflected lower margins (decrease of $1,719 million) mainly from trading and optimisation primarily in Europe due to lower volatility, partly offset by lower operating expenses (decrease of $632 million).

    Full year 2024 segment earnings also included net impairment charges and reversals of $1,085 million mainly relating to renewable generation assets in North America, partly offset by favourable movements of $300 million relating to an accounting mismatch due to fair value accounting of commodity derivatives and a net gain on sale of assets of $94 million. These net charges and favourable movements are part of identified items and compare with the full year 2023 which included favourable movements of $2,756 million due to the fair value accounting of commodity derivatives partly offset by net impairment charges and reversals of $669 million. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

    Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. Most Renewables and Energy Solutions activities were loss-making for the full year 2024, which was partly offset by positive Adjusted Earnings from trading and optimisation.

             Page 10

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    Cash flow from operating activities for the full year 2024 was primarily driven by net cash inflows related to derivatives of $3,012 million, and working capital inflows of $923 million, partly offset by tax payments of $457 million and Adjusted EBITDA.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

    Additional Growth Measures

                                                         
    Quarters     Full year
    Q4 2024 Q3 2024 Q4 2023 %¹     2024 2023 %
            Renewable power generation capacity (gigawatt):        
    3.4    3.4    2.5    — – In operation2   3.4    2.5    +34
    4.0    3.9    4.1    +2 – Under construction and/or committed for sale3   4.0    4.1    -1

    1.Q4 on Q3 change

    2.Shell’s equity share of renewable generation capacity post commercial operation date. It excludes Shell’s equity share of associates where information cannot be obtained.

    3.Shell’s equity share of renewable generation capacity under construction and/or committed for sale under long-term offtake agreements (PPA). It excludes Shell’s equity share of associates where information cannot be obtained.

                                             
     
    CORPORATE      
    Quarters $ million   Full year
    Q4 2024 Q3 2024 Q4 2023   Reference 2024 2023
    (335)   (647)   (629)   Segment earnings1   (2,992)   (2,944)  
    45    (3)   (19)   Of which: Identified items A (1,024)   (69)  
    (380)   (643)   (609)   Adjusted Earnings1 A (1,968)   (2,875)  
    (24)   (346)   (544)   Adjusted EBITDA1 A (675)   (1,164)  
    16    115    1,540    Cash flow from operating activities A (1,882)   (832)  

    1.From the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments.

    The Corporate segment covers the non-operating activities supporting Shell. It comprises Shell’s holdings and treasury organisation, headquarters and central functions, self-insurance activities and centrally managed longer-term innovation portfolio. All finance expense, income and related taxes are included in Corporate segment earnings rather than in the earnings of business segments.

    Quarter Analysis1

    Segment earnings, compared with the third quarter 2024, reflected favourable tax movements and favourable currency exchange rate effects.

    Adjusted EBITDA2 was mainly driven by favourable currency exchange rate effects.

    Full Year Analysis1

    Segment earnings, compared with the full year 2023, were primarily driven by favourable tax movements, favourable net interest movements and favourable currency exchange rate effects.

    Full year 2024 segment earnings also included reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures resulting in unfavourable movements of $1,122 million. These reclassifications are included in identified items.

    Adjusted EBITDA2 was mainly driven by favourable currency exchange rate effects and lower operating expenses.

    1.All earnings amounts are shown post-tax, unless stated otherwise.

    2.Adjusted EBITDA is without taxation.

             Page 11

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    PRELIMINARY RESERVES UPDATE

    When final volumes are reported in the 2024 Annual Report and Accounts and 2024 Form 20-F, Shell expects that SEC proved oil and gas reserves additions before taking into account production will be approximately 0.9 billion boe, and that 2024 production will be approximately 1.1 billion boe. As a result, total proved reserves on an SEC basis are expected to be approximately 9.6 billion boe1, 2, 3. Acquisitions and divestments of 2024 reserves are expected to account for a net increase of approximately 0.05 billion boe.

    The proved Reserves Replacement Ratio on an SEC basis is expected to be 85% for the year (106% without debooking Groundbirch because of the low average AECO price in 2024) and 108% for the 3-year average. Excluding the impact of acquisitions and divestments, the proved Reserves Replacement Ratio is expected to be 80% (102% without debooking Groundbirch) for the year and 68% for the 3-year average.

    Further information will be provided in the 2024 Annual Report and Accounts and 2024 Form 20-F.

    1.Pursuant to our 2017 agreement with Canadian Natural Resources Limited, our remaining mining interest and associated synthetic crude oil reserves will be swapped for an additional 10% interest in the Scotford upgrader and Quest CCS project. The transaction is expected to close by the end of the first quarter 2025, subject to regulatory approvals. The associated proved reserves at December 31, 2024 are 0.7 billion barrels (of which 50% attributable to non-controlling interest).

    2.On January 16, 2024, we announced an agreement to sell our Nigerian onshore subsidiary The Shell Petroleum Development Company of Nigeria Limited (SPDC) which holds a 30% interest in the SPDC JV to Renaissance, subject to various conditions. As of December 31, 2024, we had proved reserves of 0.5 billion boe in SPDC.

    3.In December 2024, we, along with Equinor ASA, announced the combination of our UK offshore oil and gas assets and expertise to form a new company which will be the UK North Sea’s biggest independent producer. On deal completion, the new independent producer will be jointly owned by Equinor (50%) and Shell (50%) and 0.16 billion boe (as of December 31, 2024) of Shell’s proved reserves will be contributed to the new joint venture alongside proved reserves contributed by Equinor. Subsequently, Shell will report 50% of the proved reserves of the new joint venture as part of Shell’s share of proved reserves from joint ventures and associates.

             Page 12

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    OUTLOOK FOR THE FIRST QUARTER 2025

    Full year 2024 cash capital expenditure was $21 billion. Our cash capital expenditure range for the full year 2025 is expected to be lower than our 2024 range, with more guidance to come at the Capital Markets Day 2025.

    Integrated Gas production is expected to be approximately 930 – 990 thousand boe/d. First quarter 2025 outlook reflects Pearl GTL back in operation after a major turnaround. LNG liquefaction volumes are expected to be approximately 6.6 – 7.2 million tonnes.

    Upstream production is expected to be approximately 1,750 – 1,950 thousand boe/d.

    Marketing sales volumes are expected to be approximately 2,500 – 3,000 thousand b/d.

    Refinery utilisation is expected to be approximately 80% – 88%. Chemicals manufacturing plant utilisation is expected to be approximately 78% – 86%.

    Corporate Adjusted Earnings were a net expense of $380 million1 for the fourth quarter 2024. Corporate Adjusted Earnings2 are expected to be a net expense of approximately $400 – $600 million in the first quarter 2025.

    1.From the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments.

    2.For the definition of Adjusted Earnings and the most comparable GAAP measure please see reference A.

    FORTHCOMING EVENTS

               
     
    Date Event
    February 25, 2025 Shell LNG Outlook 2025 publication
       
    March 25, 2025 Publication of Annual Report and Accounts and filing of Form 20-F for the year ended December 31, 2024
    March 25, 2025 Capital Markets Day 2025
    May 2, 2025 First quarter 2025 results and dividends
    May 20, 2025 Annual General Meeting
    July 31, 2025 Second quarter 2025 results and dividends
    October 30, 2025 Third quarter 2025 results and dividends

             Page 13

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       
     
    CONSOLIDATED STATEMENT OF INCOME    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    66,281    71,089    78,732    Revenue1 284,312    316,620   
    (156)   933    768    Share of profit/(loss) of joint ventures and associates 2,993    3,725   
    683    440    631    Interest and other income/(expenses)2 1,724    2,838   
    66,807    72,462    80,131    Total revenue and other income/(expenses) 289,029    323,183   
    43,610    48,225    54,745    Purchases 188,120    212,883   
    5,839    6,138    6,807    Production and manufacturing expenses 23,379    25,240   
    3,231    3,139    3,621    Selling, distribution and administrative expenses 12,439    13,433   
    331    294    469    Research and development 1,099    1,287   
    861    305    467    Exploration 2,411    1,750   
    7,520    5,916    11,221    Depreciation, depletion and amortisation2 26,872    31,290   
    1,213    1,174    1,166    Interest expense 4,787    4,673   
    62,605    65,190    78,496    Total expenditure 259,107    290,556   
    4,205    7,270    1,635    Income/(loss) before taxation 29,922    32,627   
    3,164    2,879    1,099    Taxation charge/(credit)2 13,401    12,991   
    1,041    4,391    536    Income/(loss) for the period 16,521    19,636   
    113    100    62    Income/(loss) attributable to non-controlling interest 427    277   
    928    4,291    474    Income/(loss) attributable to Shell plc shareholders 16,093    19,359   
    0.15    0.69    0.07    Basic earnings per share ($)3 2.55    2.88   
    0.15    0.68    0.07    Diluted earnings per share ($)3 2.53    2.85   

    1.See Note 2 “Segment information”.

    2.See Note 8 “Other notes to the unaudited Condensed Consolidated Financial Statements”.

    3.See Note 4 “Earnings per share”.

                                       
     
    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    1,041    4,391    536    Income/(loss) for the period 16,521    19,636   
          Other comprehensive income/(loss) net of tax:    
          Items that may be reclassified to income in later periods:    
    (4,899)   2,947    2,571    – Currency translation differences1 (3,248)   1,397   
    (11)   35    29    – Debt instruments remeasurements 5    41   
    224    (75)   11    – Cash flow hedging gains/(losses) 216    71   
    —    —    —    – Net investment hedging gains/(losses) —    (44)  
    (50)   (2)   (53)   – Deferred cost of hedging (73)   (148)  
    (91)   35    135    – Share of other comprehensive income/(loss) of joint ventures and associates (118)   18   
    (4,827)   2,940    2,692    Total (3,217)   1,335   
          Items that are not reclassified to income in later periods:    
    239    419    (1,207)   – Retirement benefits remeasurements 1,407    (1,083)  
    (50)   80    (84)   – Equity instruments remeasurements 28    (99)  
    46    (53)   (186)   – Share of other comprehensive income/(loss) of joint ventures and associates 47    (201)  
    235    446    (1,477)   Total 1,482    (1,383)  
    (4,592)   3,386    1,215    Other comprehensive income/(loss) for the period (1,735)   (48)  
    (3,552)   7,777    1,750    Comprehensive income/(loss) for the period 14,786    19,588   
    50    177    96    Comprehensive income/(loss) attributable to non-controlling interest 407    312   
    (3,602)   7,600    1,654    Comprehensive income/(loss) attributable to Shell plc shareholders 14,379    19,276   

    1.See Note 8 “Other notes to the unaudited Condensed Consolidated Financial Statements”.

             Page 14

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                     
     
    CONDENSED CONSOLIDATED BALANCE SHEET
    $ million    
      December 31, 2024 December 31, 2023
    Assets    
    Non-current assets    
    Goodwill 16,032    16,660   
    Other intangible assets 9,480    10,253   
    Property, plant and equipment 185,219    194,835   
    Joint ventures and associates 23,445    24,457   
    Investments in securities 2,255    3,246   
    Deferred tax 6,857    6,454   
    Retirement benefits1 10,003    9,151   
    Trade and other receivables 6,018    6,298   
    Derivative financial instruments² 374    801   
      259,681    272,155   
    Current assets    
    Inventories 23,426    26,019   
    Trade and other receivables 45,860    53,273   
    Derivative financial instruments² 9,673    15,098   
    Cash and cash equivalents 39,110    38,774   
      118,069    133,164   
    Assets classified as held for sale1 9,857    951   
      127,926    134,115   
    Total assets 387,607    406,270   
    Liabilities    
    Non-current liabilities    
    Debt 65,448    71,610   
    Trade and other payables 3,290    3,103   
    Derivative financial instruments² 2,185    2,301   
    Deferred tax 13,505    15,347   
    Retirement benefits1 6,752    7,549   
    Decommissioning and other provisions 21,227    22,531   
      112,408    122,441   
    Current liabilities    
    Debt 11,630    9,931   
    Trade and other payables 60,693    68,237   
    Derivative financial instruments² 7,391    9,529   
    Income taxes payable 4,648    3,422   
    Decommissioning and other provisions 4,469    4,041   
      88,831    95,160   
    Liabilities directly associated with assets classified as held for sale1 6,203    307   
      95,034    95,467   
    Total liabilities 207,442    217,908   
    Equity attributable to Shell plc shareholders 178,303    186,607   
    Non-controlling interest 1,861    1,755   
    Total equity 180,165    188,362   
    Total liabilities and equity 387,607    406,270   

    1.    See Note 8 “Other notes to the unaudited Condensed Consolidated Financial Statements”.

    2.    See Note 7 “Derivative financial instruments and debt excluding lease liabilities”.

             Page 15

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                         
     
    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
      Equity attributable to Shell plc shareholders      
    $ million Share capital1 Shares held in trust Other reserves² Retained earnings Total Non-controlling interest   Total equity
    At January 1, 2024 544    (997)   21,145    165,915    186,607    1,755      188,362   
    Comprehensive income/(loss) for the period —    —    (1,715)   16,093    14,378    407      14,785   
    Transfer from other comprehensive income —    —    193    (193)   —    —      —   
    Dividends³ —    —    —    (8,669)   (8,669)   (308)     (8,976)  
    Repurchases of shares4 (34)   —    34    (14,057)   (14,057)   —      (14,057)  
    Share-based compensation —    194    109    (354)   (52)   —      (52)  
    Other changes —    —    —    96    96    7      103   
    At December 31, 2024 510    (804)   19,766    158,832    178,303    1,861      180,165   
    At January 1, 2023 584    (726)   21,132    169,482    190,472    2,125      192,597   
    Comprehensive income/(loss) for the period —    —    (83)   19,359    19,276    312      19,588   
    Transfer from other comprehensive income —    —    (112)   112    —    —      —   
    Dividends3 —    —    —    (8,389)   (8,389)   (764)     (9,153)  
    Repurchases of shares4 (40)   —    40    (14,571)   (14,571)   —      (14,571)  
    Share-based compensation —    (271)   168    (85)   (188)   —      (188)  
    Other changes —    —    —    7    7    82      89   
    At December 31, 2023 544    (997)   21,145    165,915    186,607    1,755      188,362   

    1.    See Note 5 “Share capital”.

    2.    See Note 6 “Other reserves”.

    3.    The amount charged to retained earnings is based on prevailing exchange rates on payment date.

    4.     Includes shares committed to repurchase under an irrevocable contract and repurchases subject to settlement at the end of the quarter.

             Page 16

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                             
     
    CONSOLIDATED STATEMENT OF CASH FLOWS    
    Quarters $ million Full year
    Q4 2024   Q3 2024 Q4 2023   2024 2023
    4,205      7,270    1,635    Income before taxation for the period 29,922    32,627   
            Adjustment for:    
    665      554    571    – Interest expense (net) 2,415    2,360   
    7,520      5,916    11,221    – Depreciation, depletion and amortisation1 26,872    31,290   
    649      150    243    – Exploration well write-offs 1,622    868   
    288      154    (222)   – Net (gains)/losses on sale and revaluation of non-current assets and businesses 288    (246)  
    156      (933)   (768)   – Share of (profit)/loss of joint ventures and associates (2,993)   (3,725)  
    1,241      860    1,145    – Dividends received from joint ventures and associates 3,632    3,674   
    131      2,705    4,088    – (Increase)/decrease in inventories 1,273    6,325   
    751      4,057    (704)   – (Increase)/decrease in current receivables 6,578    12,401   
    1,524      (4,096)   (701)   – Increase/(decrease) in current payables2 (5,789)   (11,581)  
    111      735    328    – Derivative financial instruments 2,484    (5,723)  
    (58)     125    (68)   – Retirement benefits (326)   (37)  
    (256)     359    430    – Decommissioning and other provisions2 (828)   220   
    (856)     (144)   (1,021)   – Other1 1,536    (550)  
    (2,910)     (3,028)   (3,604)   Tax paid (12,002)   (13,712)  
    13,162      14,684    12,575    Cash flow from operating activities 54,684    54,191   
    (6,486)     (4,690)   (6,960)      Capital expenditure (19,601)   (22,993)  
    (421)     (222)   (109)      Investments in joint ventures and associates (1,404)   (1,202)  
    (17)     (38)   (44)      Investments in equity securities (80)   (197)  
    (6,924)     (4,950)   (7,113)   Cash capital expenditure (21,084)   (24,392)  
    493      94    540    Proceeds from sale of property, plant and equipment and businesses 1,621    2,565   
    305      94    49    Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans 590    474   
    6      6    24    Proceeds from sale of equity securities 582    51   
    581      593    568    Interest received 2,399    2,124   
    1,762      1,074    960    Other investing cash inflows1 4,576    4,269   
    (655)     (769)   (685)   Other investing cash outflows (3,838)   (2,825)  
    (4,431)     (3,857)   (5,657)   Cash flow from investing activities (15,154)   (17,734)  
    65      (89)   (27)   Net increase/(decrease) in debt with maturity period within three months (310)   (211)  
            Other debt:    
    (13)     78    64    – New borrowings 363    1,029   
    (2,664)     (1,322)   (4,054)   – Repayments (9,672)   (10,650)  
    (1,379)     (979)   (1,366)   Interest paid (4,557)   (4,441)  
    (833)     652    702    Derivative financial instruments (594)   723   
    (10)     —    (1)   Change in non-controlling interest (15)   (22)  
            Cash dividends paid to:    
    (2,114)     (2,167)   (2,201)   – Shell plc shareholders (8,668)   (8,393)  
    (53)     (92)   (128)   – Non-controlling interest (295)   (764)  
    (3,579)     (3,537)   (3,977)   Repurchases of shares (13,898)   (14,617)  
    (309)     6    (714)   Shares held in trust: net sales/(purchases) and dividends received (789)   (889)  
    (10,889)     (7,452)   (11,703)   Cash flow from financing activities (38,434)   (38,235)  
    (985)     729    529    Effects of exchange rate changes on cash and cash equivalents (761)   306   
    (3,142)     4,105    (4,256)   Increase/(decrease) in cash and cash equivalents 336    (1,472)  
    42,252      38,148    43,031    Cash and cash equivalents at beginning of period 38,774    40,246   
    39,110      42,252    38,774    Cash and cash equivalents at end of period 39,110    38,774   

    1.See Note 8 “Other notes to the unaudited Condensed Consolidated Financial Statements”.

    2.To further enhance consistency between working capital and the Balance Sheet and the Statement of Cash Flows, from January 1, 2024, onwards movements in current other provisions are recognised in ‘Decommissioning and other provisions’ instead of ‘Increase/(decrease) in current payables’. Comparatives for the fourth quarter 2023 and the full year 2023 have been reclassified accordingly by $653 million and $693 million respectively to conform with current period presentation.

             Page 17

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    1. Basis of preparation

    These unaudited Condensed Consolidated Financial Statements of Shell plc (“the Company”) and its subsidiaries (collectively referred to as “Shell”) have been prepared on the basis of the same accounting principles as those used in the Company’s Annual Report and Accounts (pages 244 to 316) for the year ended December 31, 2023, as filed with the Registrar of Companies for England and Wales and as filed with the Autoriteit Financiële Markten (the Netherlands) and Form 20-F (pages 217 to 290) for the year ended December 31, 2023, as filed with the US Securities and Exchange Commission, and should be read in conjunction with these filings.

    The financial information presented in the unaudited Condensed Consolidated Financial Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended December 31, 2023, were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell’s Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act. The statutory accounts for the year ended December 31, 2024, will be delivered to the Registrar of Companies for England and Wales in due course.

    2. Segment information

    Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. Sales between segments are based on prices generally equivalent to commercially available prices.

    From the first quarter 2024, Wholesale commercial fuels forms part of Mobility with inclusion in the Marketing segment (previously Chemicals and Products segment). The change in segmentation reflects the increasing alignment between the economic characteristics of Wholesale commercial fuels and other Mobility businesses, and is consistent with changes in the information provided to the Chief Operating Decision Maker. Prior period comparatives have been revised to conform with current year presentation with an offsetting impact between the Marketing and the Chemicals and Products segment (see below). Also, from the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments (see below).

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    REVENUE AND CCS EARNINGS BY SEGMENT    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
          Third-party revenue    
    9,294    9,748    10,437    Integrated Gas 37,290    37,645   
    1,652    1,605    1,263    Upstream 6,606    6,475   
    27,524    30,519    31,761    Marketing2 120,088    130,560   
    19,992    22,608    24,957    Chemicals and Products2 90,918    97,079   
    7,808    6,599    10,302    Renewables and Energy Solutions 29,366    44,819   
    10    10    11    Corporate 43    42   
    66,281    71,089    78,732    Total third-party revenue1 284,312    316,620   
          Inter-segment revenue    
    2,024    2,131    2,614    Integrated Gas 8,715    11,560   
    9,931    9,618    10,948    Upstream 39,939    41,230   
    984    1,235    1,243    Marketing2 4,937    5,299   
    8,656    9,564    10,163    Chemicals and Products2 38,381    42,816   
    1,879    1,131    1,567    Renewables and Energy Solutions 4,971    4,707   
    —    —    —    Corporate —    —   
          CCS earnings    
    1,744    2,631    1,733    Integrated Gas 9,590    7,058   
    1,031    2,289    2,151    Upstream 7,772    8,539   
    103    760    226    Marketing2 1,894    3,058   
    (328)   341    (1,828)   Chemicals and Products2 1,757    1,482   
    (1,226)   (481)   (272)   Renewables and Energy Solutions (1,229)   3,089   
    (335)   (647)   (629)   Corporate3 (2,992)   (2,944)  
    989    4,894    1,381    Total CCS earnings4 16,792    20,281   

    1.Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives.

    2.From January 1, 2024, onwards Wholesale commercial fuels has been reallocated from the Chemicals and Products segment to the Marketing segment. Comparatives for the fourth quarter 2023 and the full year 2023 have been reclassified accordingly, by $5,332 million and $21,702 million respectively for Third-party revenue and by $82 million and $104 million respectively for CCS earnings to conform with current period presentation. For Inter-segment revenue the reallocation and revision of comparative figures for the fourth quarter 2023 and the full year 2023 led to an increase in inter-segment revenue in the Marketing segment of $1,058 million and $4,675 million respectively and an increase in the Chemicals and Products segment of $9,553 million and $40,564 million respectively.

    3.From January 1, 2024, onwards costs for Shell’s centrally managed longer-term innovation portfolio are reported as part of the Corporate segment. Prior period comparatives for Corporate for the fourth quarter 2023 and the full year 2023 have been revised by $43 million and $133 million respectively, with a net offsetting impact in all other segments to conform with current period presentation.

    4.See Note 3 “Reconciliation of income for the period to CCS Earnings, Operating expenses and Total Debt”.

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    Cash capital expenditure is a measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.

                                       
     
    CASH CAPITAL EXPENDITURE BY SEGMENT
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
          Capital expenditure    
    1,123    1,090    1,034    Integrated Gas 4,095    3,491   
    2,205    1,998    2,547    Upstream 7,738    8,249   
    798    488    1,383    Marketing1 2,357    5,741   
    1,121    748    983    Chemicals and Products1 2,943    2,928   
    1,214    327    932    Renewables and Energy Solutions 2,338    2,314   
    25    39    81    Corporate 129    270   
    6,486    4,690    6,960    Total capital expenditure 19,601    22,993   
          Add: Investments in joint ventures and associates    
    214    147    162    Integrated Gas 671    705   
    (117)   (37)   (111)   Upstream 150    94   
    13    37    2    Marketing 88    49   
    271    13    2    Chemicals and Products 347    84   
    36    59    56    Renewables and Energy Solutions 138    261   
    4    3    (2)   Corporate 9    9   
    421    222    109    Total investments in joint ventures and associates 1,404    1,202   
          Add: Investments in equity securities    
    —    —    —    Integrated Gas —    —   
    (11)   12    —    Upstream 1    —   
    —    —    —    Marketing —    —   
    —    —    —    Chemicals and Products —    2   
    28    23    38    Renewables and Energy Solutions 73    106   
    —    3    6    Corporate 6    89   
    17    38    44    Total investments in equity securities 80    197   
          Cash capital expenditure    
    1,337    1,236    1,196    Integrated Gas 4,766    4,196   
    2,076    1,974    2,436    Upstream 7,890    8,343   
    811    525    1,385    Marketing1 2,445    5,790   
    1,392    761    986    Chemicals and Products1 3,290    3,013   
    1,277    409    1,026    Renewables and Energy Solutions 2,549    2,681   
    30    45    85    Corporate 144    368   
    6,924    4,950    7,113    Total Cash capital expenditure 21,084    24,392   

    1.From January 1, 2024, onwards Wholesale commercial fuels has been reallocated from the Chemicals and Products segment to the Marketing segment. Comparatives for the fourth quarter 2023 and the full year 2023 have been reclassified accordingly by $46 million and $178 million respectively for capital expenditure and cash capital expenditure to conform with current period presentation.

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    3. Reconciliation of income for the period to CCS Earnings, Operating expenses and Total Debt

                                       
     
    RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    928    4,291    474    Income/(loss) attributable to Shell plc shareholders 16,093    19,359   
    113    100    62    Income/(loss) attributable to non-controlling interest 427    277   
    1,041    4,391    536    Income/(loss) for the period 16,521    19,636   
          Current cost of supplies adjustment:    
    (84)   668    1,089    Purchases 389    815   
    23    (162)   (263)   Taxation (91)   (203)  
    9    (2)   19    Share of profit/(loss) of joint ventures and associates (26)   33   
    (52)   503    846    Current cost of supplies adjustment 272    645   
          Of which:    
    (45)   477    811    Attributable to Shell plc shareholders 257    650
    (7)   26    34    Attributable to non-controlling interest 14    (5)
    989    4,894    1,381    CCS earnings 16,792    20,281   
          Of which:    
    883    4,768    1,285    CCS earnings attributable to Shell plc shareholders 16,351    20,008   
    106    126    97    CCS earnings attributable to non-controlling interest 442    273   
                                       
     
    RECONCILIATION OF OPERATING EXPENSES    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    5,839    6,138    6,807    Production and manufacturing expenses 23,379    25,240   
    3,231    3,139    3,621    Selling, distribution and administrative expenses 12,439    13,433   
    331    294    469    Research and development 1,099    1,287   
    9,401    9,570    10,897    Operating expenses 36,918    39,960   
                                       
     
    RECONCILIATION OF TOTAL DEBT    
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    December 31, 2024 September 30, 2024 December 31, 2023   December 31, 2024 December 31, 2023
    11,630    12,015    9,931    Current debt 11,630    9,931   
    65,448    64,597    71,610    Non-current debt 65,448    71,610   
    77,078    76,613    81,541    Total debt 77,078    81,541   

    4. Earnings per share

                                       
     
    EARNINGS PER SHARE
    Quarters   Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    928    4,291    474    Income/(loss) attributable to Shell plc shareholders ($ million) 16,093    19,359   
               
          Weighted average number of shares used as the basis for determining:    
    6,148.4    6,256.5    6,558.3    Basic earnings per share (million) 6,299.6    6,733.5   
    6,213.9    6,320.9    6,631.1    Diluted earnings per share (million) 6,363.7    6,799.8   

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    5. Share capital

                             
     
    ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH
      Number of shares   Nominal value
    ($ million)
    At January 1, 2024 6,524,109,049      544     
    Repurchases of shares (409,077,891)     (34)    
    At December 31, 2024 6,115,031,158      510     
    At January 1, 2023 7,003,503,393      584     
    Repurchases of shares (479,394,344)     (40)    
    At December 31, 2023 6,524,109,049      544     

    At Shell plc’s Annual General Meeting on May 21, 2024, the Board was authorised to allot ordinary shares in Shell plc, and to grant rights to subscribe for, or to convert, any security into ordinary shares in Shell plc, up to an aggregate nominal amount of approximately €150 million (representing approximately 2,147 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 20, 2025, or the end of the Annual General Meeting to be held in 2025, unless previously renewed, revoked or varied by Shell plc in a general meeting.

    6. Other reserves

                                             
     
    OTHER RESERVES
    $ million Merger reserve Share premium reserve Capital redemption reserve Share plan reserve Accumulated other comprehensive income Total
    At January 1, 2024 37,298    154    236    1,308    (17,851)   21,145   
    Other comprehensive income/(loss) attributable to Shell plc shareholders —    —    —    —    (1,715)   (1,715)  
    Transfer from other comprehensive income —    —    —    —    193    193   
    Repurchases of shares —    —    34    —    —    34   
    Share-based compensation —    —    —    109    —    109   
    At December 31, 2024 37,298    154    270    1,416    (19,373)   19,766   
    At January 1, 2023 37,298    154    196    1,140    (17,656)   21,132   
    Other comprehensive income/(loss) attributable to Shell plc shareholders —    —    —    —    (83)   (83)  
    Transfer from other comprehensive income —    —    —    —    (112)   (112)  
    Repurchases of shares —    —    40    —    —    40   
    Share-based compensation —    —    —    168    —    168   
    At December 31, 2023 37,298    154    236    1,308    (17,851)   21,145   

    The merger reserve and share premium reserve were established as a consequence of Shell plc (formerly Royal Dutch Shell plc) becoming the single parent company of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company, p.l.c., now The Shell Transport and Trading Company Limited, in 2005. The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc. The capital redemption reserve was established in connection with repurchases of shares of Shell plc. The share plan reserve is in respect of equity-settled share-based compensation plans.

    7. Derivative financial instruments and debt excluding lease liabilities

    As disclosed in the Consolidated Financial Statements for the year ended December 31, 2023, presented in the Annual Report and Accounts and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at December 31, 2024, are consistent with those used in the year ended December 31, 2023, though the carrying amounts of derivative financial instruments have changed since that

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    date. The movement of the derivative financial instruments between December 31, 2023 and December 31, 2024 is a decrease of $5,425 million for the current assets and a decrease of $2,138 million for the current liabilities.

    The table below provides the comparison of the fair value with the carrying amount of debt excluding lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.

                     
     
    DEBT EXCLUDING LEASE LIABILITIES
    $ million December 31, 2024 December 31, 2023
    Carrying amount1 48,376    53,832   
    Fair value2 44,119    50,866   

    1.    Shell issued no debt under the US shelf or under the Euro medium-term note programmes during the year 2024.

    2.     Mainly determined from the prices quoted for these securities.

    8. Other notes to the unaudited Condensed Consolidated Financial Statements

    Consolidated Statement of Income

    Interest and other income

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    683    440    631    Interest and other income/(expenses) 1,724    2,838   
          Of which:    
    548    619    595    Interest income 2,372    2,313   
    25    4    14    Dividend income (from investments in equity securities) 83    49   
    (288)   (154)   222    Net gains/(losses) on sales and revaluation of non-current assets and businesses (288)   257   
    267    (189)   (398)   Net foreign exchange gains/(losses) on financing activities (1,025)   (458)  
    131    159    199    Other 582    677   

    Depreciation, depletion and amortisation

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    7,520    5,916    11,221    Depreciation, depletion and amortisation 26,872    31,290   
          Of which:    
    5,829 5,578 5,986 Depreciation 22,703    23,106   
    1,797 340 5,508 Impairments 4,502    8,947   
    (106) (2) (273) Impairment reversals (333)   (762)  

    Impairments recognised in the fourth quarter 2024 of $2,659 million pre-tax ($2,245 million post-tax), of which $1,797 million recognised in depreciation, depletion and amortisation and $863 million recognised in share of profit of joint ventures and associates, mainly relate to Renewables and Energy Solutions ($1,068 million pre-tax; $1,000 million post-tax), Integrated Gas ($532 million pre-tax; $345 million post-tax), Marketing ($495 million pre-tax; $459 million post-tax), Chemicals and Products ($315 million pre-tax; $247 million post-tax) and Upstream ($248 million pre-tax; $194 million post-tax). The impairment in Renewables and Energy Solutions was principally triggered by a portfolio choice regarding renewable generation assets in North America. The impairments in other segments relate to various smaller impairments.

    Impairments recognised in the third quarter 2024 of $340 million pre-tax ($290 million post-tax) mainly relate to various

    assets in Marketing and Chemicals and Products.

    Impairments recognised in the fourth quarter 2023 of $5,508 million pre-tax ($4,044 million post-tax) relate to various

    assets in Chemicals and Products ($2,490 million), Upstream ($1,161 million), Integrated Gas ($873 million), Renewables

    and Energy Solutions ($614 million) and Marketing ($370 million).

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    Taxation charge/credit

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    3,164    2,879    1,099    Taxation charge/(credit) 13,401    12,991   
          Of which:    
    3,125 2,834 1,099 Income tax excluding Pillar Two income tax 13,150    12,991   
    39 45 — Income tax related to Pillar Two income tax 251    —

    On June 20, 2023, the UK substantively enacted Pillar Two Model Rules, effective as from January 1, 2024.

    As required by IAS 12 Income Taxes, Shell has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.

    Consolidated Statement of Comprehensive Income

    Currency translation differences

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    (4,899)   2,947    2,571    Currency translation differences (3,248)   1,397   
          Of which:    
    (5,028) 2,912 2,578 Recognised in Other comprehensive income (4,504)   1,396   
    129 35 (7) (Gain)/loss reclassified to profit or loss 1,256    1

    Condensed Consolidated Balance Sheet

    Retirement benefits

                     
     
    $ million    
      December 31, 2024 December 31, 2023
    Non-current assets    
    Retirement benefits 10,003    9,151   
    Non-current liabilities    
    Retirement benefits 6,752    7,549   
    Surplus/(deficit) 3,251    1,602   

    Amounts recognised in the Balance Sheet in relation to defined benefit plans include both plan assets and obligations that are presented on a net basis on a plan-by-plan basis. The change in the net retirement benefit asset as at December 31, 2024, is mainly driven by an increase of the market yield on high-quality corporate bonds in the USA, the UK and Eurozone since December 31, 2023, partly offset by losses on plan assets.

    Assets classified as held for sale

                       
       
    $ million      
      December 31, 2024 December 31, 2023  
    Assets classified as held for sale 9,857    951     
    Liabilities directly associated with assets classified as held for sale 6,203    307     

    Assets classified as held for sale and associated liabilities at December 31, 2024 principally relate to Shell’s UK offshore oil and gas assets in Upstream, mining interests in Canada in Chemicals and Products and an energy and chemicals park in Chemicals and Products in Singapore. Upon completion of the sale, Shell’s UK offshore assets will be derecognised in exchange for a 50% interest in a newly formed joint venture.

    The major classes of assets and liabilities classified as held for sale at December 31, 2024, are Property, plant and equipment ($8,283 million; December 31, 2023: $250 million), Inventories ($1,180 million; December 31, 2023:

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    $463 million), Decommissioning and other provisions ($3,053 million; December 31, 2023: $75 million), deferred tax liabilities ($2,042 million; December 31, 2023: nil) and Debt ($624 million; December 31, 2023: $84 million).

    Consolidated Statement of Cash Flows

    Cash flow from operating activities – Other

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    (856)   (144)   (1,021)   Other 1,536    (550)  

    ‘Cash flow from operating activities – Other’ for the fourth quarter 2024 includes $1,447 million of net outflows (third quarter 2024: $432 million net inflows; fourth quarter 2023: $875 million net outflows) due to the timing of payments relating to emission certificates and biofuel programmes in Europe and North America and $672 million in relation to reversal of currency exchange losses on Cash and cash equivalents (third quarter 2024: $539 million gains; fourth quarter 2023: $398 million gains).

    Cash flow from investing activities – Other investing cash inflows

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    1,762    1,074    960    Other investing cash inflows 4,576    4,269   

    ‘Cash flow from investing activities – Other investing cash inflows’ for the fourth quarter 2024 mainly relates to the sale of pension-related debt securities and repayments of short-term loans.

    9. Post-balance sheet events

    On January 23, 2025, Shell announced changes to the Executive Committee. In line with the company’s ongoing transformation, Shell will continue to evolve its structure to enable Shell’s strategy to deliver more value with less emissions. As a result, Trading and Supply will move up to the Executive Committee and out of the Downstream, Renewables and Energy Solutions directorate with effect from April 1, 2025. These changes will not affect Shell’s financial reporting segments.

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    ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES

    A.Adjusted Earnings, Adjusted earnings before interest, taxes, depreciation and amortisation (“Adjusted EBITDA”) and Cash flow from operating activities

    The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest.

    We define “Adjusted EBITDA” as “Income/(loss) for the period” adjusted for current cost of supplies; identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. All items include the non-controlling interest component. Management uses this measure to evaluate Shell’s performance in the period and over time.

                                       
         
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    928    4,291    474    Income/(loss) attributable to Shell plc shareholders 16,093    19,359   
    113    100    62    Income/(loss) attributable to non-controlling interest 427    277   
    (45)   477    811    Add: Current cost of supplies adjustment attributable to Shell plc shareholders 257    650   
    (7)   26    34    Add: Current cost of supplies adjustment attributable to non-controlling interest 14    (5)  
    989    4,894    1,381    CCS earnings 16,792    20,281   
                                                   
     
    Q4 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    CCS earnings 989 1,744 1,031 103 (328) (1,226) (335)
    Less: Identified items (2,778) (421) (651) (736) (99) (914) 45
    Less: CCS earnings attributable to non-controlling interest 106            
    Add: Identified items attributable to non-controlling interest —            
    Adjusted Earnings 3,661            
    Add: Non-controlling interest 106            
    Adjusted Earnings plus non-controlling interest 3,766 2,165 1,682 839 (229) (311) (380)
    Add: Taxation charge/(credit) excluding tax impact of identified items 3,371 635 2,618 266 (198) 97 (46)
    Add: Depreciation, depletion and amortisation excluding impairments 5,829 1,440 2,803 587 896 96 8
    Add: Exploration well write-offs 649 277 372        
    Add: Interest expense excluding identified items 1,213 54 201 17 16 2 923
    Less: Interest income 548 3 — — 10 7 529
    Adjusted EBITDA 14,281 4,568 7,676 1,709 475 (123) (24)
    Less: Current cost of supplies adjustment before taxation (75)     (2) (73)    
    Joint ventures and associates (dividends received less profit) 451 110 (22) 172 139 51 —
    Derivative financial instruments 319 120 (28) (8) 230 533 (527)
    Taxation paid (2,910) (635) (2,019) (130) 36 (41) (120)
    Other (1,461) 114 (486) (1,227) (313) 77 375
    (Increase)/decrease in working capital 2,407 114 (611) 845 1,394 353 312
    Cash flow from operating activities 13,162 4,391 4,509 1,363 2,032 850 16

             Page 26

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Q3 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    CCS earnings 4,894 2,631 2,289 760 341 (481) (647)
    Less: Identified items (1,259) (240) (153) (422) (122) (319) (3)
    Less: CCS earnings attributable to non-controlling interest 126            
    Add: Identified items attributable to non-controlling interest —            
    Adjusted Earnings 6,028            
    Add: Non-controlling interest 126            
    Adjusted Earnings plus non-controlling interest 6,153 2,871 2,443 1,182 463 (162) (643)
    Add: Taxation charge/(credit) excluding tax impact of identified items 3,571 949 2,413 322 (73) (1) (39)
    Add: Depreciation, depletion and amortisation excluding impairments 5,578 1,369 2,691 564 862 86 6
    Add: Exploration well write-offs 150 2 148 — — — —
    Add: Interest expense excluding identified items 1,173 49 183 13 14 2 912
    Less: Interest income 619 5 8 — 25 — 581
    Adjusted EBITDA 16,005 5,234 7,871 2,081 1,240 (75) (346)
    Less: Current cost of supplies adjustment before taxation 665     334 331    
    Joint ventures and associates (dividends received less profit) (62) (146) (90) 51 63 61 —
    Derivative financial instruments 133 (373) 47 98 88 (106) 380
    Taxation paid (3,028) (814) (2,074) (241) 23 (33) 112
    Other (365) (32) (406) 275 107 (75) (234)
    (Increase)/decrease in working capital 2,665 (247) (78) 792 2,131 (136) 204
    Cash flow from operating activities 14,684 3,623 5,268 2,722 3,321 (364) 115
                                                   
     
    Q4 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    CCS earnings 1,381 1,733 2,151 226 (1,828) (272) (629)
    Less: Identified items (6,033) (2,235) (909) (567) (1,857) (445) (19)
    Less: CCS earnings attributable to non-controlling interest 97            
    Add: Identified items attributable to non-controlling interest (11)            
    Adjusted Earnings 7,306            
    Add: Non-controlling interest 108            
    Adjusted Earnings plus non-controlling interest 7,414 3,968 3,060 794 29 173 (609)
    Add: Taxation charge/(credit) excluding tax impact of identified items 2,121 1,065 1,560 128 (271) (4) (358)
    Add: Depreciation, depletion and amortisation excluding impairments 5,986 1,457 2,951 569 915 89 6
    Add: Exploration well write-offs 243 63 180 — — — —
    Add: Interest expense excluding identified items 1,165 36 135 10 21 1 961
    Less: Interest income 595 4 14 1 24 7 544
    Adjusted EBITDA 16,335 6,584 7,872 1,500 670 253 (544)
    Less: Current cost of supplies adjustment before taxation 1,109     572 537    
    Joint ventures and associates (dividends received less profit) 246 208 (250) 32 225 29 1
    Derivative financial instruments (1,030) (1,596) 52 4 293 (268) 487
    Taxation paid (3,604) (731) (2,015) (282) (270) (413) 108
    Other (947) (229) 388 (508) (422) 146 (322)
    (Increase)/decrease in working capital 2,683 (639) (260) 1,593 1,191 (1,012) 1,810
    Cash flow from operating activities 12,575 3,597 5,787 1,767 1,150 (1,265) 1,540

             Page 27

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Full year 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    CCS earnings 16,792 9,590 7,772 1,894 1,757 (1,229) (2,992)
    Less: Identified items (7,347) (1,800) (623) (1,991) (1,177) (732) (1,024)
    Less: CCS earnings attributable to non-controlling interest 442            
    Add: Identified items attributable to non-controlling interest 18            
    Adjusted Earnings 23,716            
    Add: Non-controlling interest 424            
    Adjusted Earnings plus non-controlling interest 24,139 11,390 8,395 3,885 2,934 (497) (1,968)
    Add: Taxation charge/(credit) excluding tax impact of identified items 15,013 3,520 9,865 1,305 364 87 (128)
    Add: Depreciation, depletion and amortisation excluding impairments 22,703 5,594 10,971 2,235 3,495 383 25
    Add: Exploration well write-offs 1,622 291 1,331        
    Add: Interest expense excluding identified items 4,697 189 720 52 70 6 3,660
    Less: Interest income 2,372 8 18 1 79 2 2,265
    Adjusted EBITDA 65,803 20,978 31,264 7,476 6,783 (22) (675)
    Less: Current cost of supplies adjustment before taxation 363     254 109    
    Joint ventures and associates (dividends received less profit) (328) (137) (946) 262 304 190 —
    Derivative financial instruments 1,472 (1,466) 24 59 219 3,012 (376)
    Taxation paid (12,002) (2,955) (7,851) (562) (146) (457) (31)
    Other (1,961) 23 (1,464) (616) (321) 152 264
    (Increase)/decrease in working capital 2,062 467 216 998 524 923 (1,065)
    Cash flow from operating activities 54,684 16,909 21,244 7,363 7,253 3,798 (1,882)
                                                   
     
    Full year 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    CCS earnings 20,281 7,058 8,539 3,058 1,482 3,089 (2,944)
    Less: Identified items (8,252) (6,861) (1,267) (254) (2,135) 2,333 (69)
    Less: CCS earnings attributable to non-controlling interest 273            
    Add: Identified items attributable to non-controlling interest (11)            
    Adjusted Earnings 28,250            
    Add: Non-controlling interest 284            
    Adjusted Earnings plus non-controlling interest 28,534 13,919 9,806 3,312 3,617 756 (2,875)
    Add: Taxation charge/(credit) excluding tax impact of identified items 13,674 3,837 8,280 936 287 341 (8)
    Add: Depreciation, depletion and amortisation excluding impairments 23,106 5,756 11,309 2,048 3,582 392 19
    Add: Exploration well write-offs 867 121 746 — — — —
    Add: Interest expense excluding identified items 4,669 146 507 50 60 4 3,902
    Less: Interest income 2,313 6 27 9 57 12 2,201
    Adjusted EBITDA 68,538 23,773 30,622 6,337 7,489 1,481 (1,164)
    Less: Current cost of supplies adjustment before taxation 848     478 370    
    Joint ventures and associates (dividends received less profit) 79 241 (692) 117 310 102 3
    Derivative financial instruments (6,142) (4,668) 51 (14) 518 (1,988) (41)
    Taxation paid (13,712) (3,574) (8,470) (760) (467) (762) 322
    Other (865) (313) (142) (486) (138) 450 (237)
    (Increase)/decrease in working capital 7,145 2,061 82 845 172 3,701 284
    Cash flow from operating activities 54,191 17,520 21,450 5,561 7,513 2,984 (832)

    Identified Items

    Identified items comprise: divestment gains and losses, impairments, redundancy and restructuring, provisions for onerous contracts, fair value accounting of commodity derivatives and certain gas contracts and the impact of exchange rate movements and inflationary adjustments on certain deferred tax balances, and other items. Identified items in the tables below are presented on a net basis.

             Page 28

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Q4 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Identified items included in Income/(loss) before taxation              
    Divestment gains/(losses) (288) (99) (66) (216) 42 51 —
    Impairment reversals/(impairments) (2,554) (523) (183) (493) (288) (1,065) (1)
    Redundancy and restructuring (175) (27) (62) (70) (5) (11) (1)
    Provisions for onerous contracts — — — — — — —
    Fair value accounting of commodity derivatives and certain gas contracts 209 136 (14) 58 (38) 67 —
    Other (200) — (165) (33) (2) — —
    Total identified items included in Income/(loss) before taxation (3,008) (514) (491) (753) (291) (958) (2)
    Less: total identified items included in Taxation charge/(credit) (230) (92) 160 (17) (191) (43) (47)
    Identified items included in Income/(loss) for the period              
    Divestment gains/(losses) (321) (96) (51) (247) 33 40 —
    Impairment reversals/(impairments) (2,170) (339) (152) (458) (224) (996) (1)
    Redundancy and restructuring (115) (16) (34) (52) (3) (8) (1)
    Provisions for onerous contracts — — — — — — —
    Fair value accounting of commodity derivatives and certain gas contracts 184 109 (4) 46 (17) 50 —
    Impact of exchange rate movements and inflationary adjustments on tax balances (210) (57) (199) — — — 46
    Other (147) (22) (212) (25) 113 — —
    Impact on CCS earnings (2,778) (421) (651) (736) (99) (914) 45
    Impact on CCS earnings attributable to non-controlling interest — — — — — — —
    Impact on CCS earnings attributable to Shell plc shareholders (2,778) (421) (651) (736) (99) (914) 45

             Page 29

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Q3 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Identified items included in Income/(loss) before taxation              
    Divestment gains/(losses) (154) 1 (2) (110) (19) (20) (3)
    Impairment reversals/(impairments) (338) (6) (3) (195) (120) (14) —
    Redundancy and restructuring (552) (69) (189) (136) (141) (26) 10
    Provisions for onerous contracts (7) — — (7) — — —
    Fair value accounting of commodity derivatives and certain gas contracts (602) (252) (13) (78) 126 (385) —
    Other1 (136) — (141) (1) (11) 16 —
    Total identified items included in Income/(loss) before taxation (1,789) (327) (348) (526) (165) (430) 7
    Less: total identified items included in Taxation charge/(credit) (530) (87) (195) (104) (43) (111) 10
    Identified items included in Income/(loss) for the period              
    Divestment gains/(losses) (129) 1 (6) (84) (15) (23) (2)
    Impairment reversals/(impairments) (288) (4) (2) (179) (92) (10) —
    Redundancy and restructuring (397) (48) (138) (98) (101) (19) 7
    Provisions for onerous contracts (5) — — (5) — — —
    Fair value accounting of commodity derivatives and certain gas contracts (456) (213) (3) (56) 95 (279) —
    Impact of exchange rate movements and inflationary adjustments on tax balances 120 24 104 — — — (8)
    Other (105) — (108) — (8) 12 —
    Impact on CCS earnings (1,259) (240) (153) (422) (122) (319) (3)
    Impact on CCS earnings attributable to non-controlling interest — — — — — — —
    Impact on CCS earnings attributable to Shell plc shareholders (1,259) (240) (153) (422) (122) (319) (3)

             Page 30

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Q4 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Identified items included in Income/(loss) before taxation              
    Divestment gains/(losses) 222 (21) 134 (30) (33) 168 5
    Impairment reversals/(impairments) (5,348) (873) (988) (460) (2,391) (636) —
    Redundancy and restructuring (275) (1) (11) (128) (102) (31) (2)
    Provisions for onerous contracts — — — — — — —
    Fair value accounting of commodity derivatives and certain gas contracts (1,357) (1,708) 60 (47) 199 138 —
    Other (33) 57 (170) 2 77 — —
    Total identified items included in Income/(loss) before taxation (6,792) (2,545) (974) (664) (2,250) (361) 2
    Less: total identified items included in Taxation charge/(credit) (759) (309) (65) (96) (394) 84 22
    Identified items included in Income/(loss) for the period              
    Divestment gains/(losses) 227 (13) 128 (23) (26) 158 3
    Impairment reversals/(impairments) (3,935) (547) (454) (415) (1,968) (551) —
    Redundancy and restructuring (206) — (6) (96) (78) (24) (1)
    Provisions for onerous contracts — — — — — — —
    Fair value accounting of commodity derivatives and certain gas contracts (1,336) (1,587) 21 (34) 138 125 —
    Impact of exchange rate movements and inflationary adjustments on tax balances (363) 31 (373) — — — (21)
    Other (419) (119) (225) 2 77 (154) —
    Impact on CCS earnings (6,033) (2,235) (909) (567) (1,857) (445) (19)
    Impact on CCS earnings attributable to non-controlling interest (11) — — (11) — — —
    Impact on CCS earnings attributable to Shell plc shareholders (6,022) (2,235) (909) (556) (1,857) (445) (19)

             Page 31

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Full year 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Identified items included in Income/(loss) before taxation              
    Divestment gains/(losses) (288) (100) 89 (400) 6 119 (3)
    Impairment reversals/(impairments) (5,051) (555) (362) (1,747) (1,205) (1,181) (1)
    Redundancy and restructuring (1,012) (106) (320) (296) (195) (97) 2
    Provisions for onerous contracts (24) (3) (14) (7) — — —
    Fair value accounting of commodity derivatives and certain gas contracts (1,012) (1,286) (58) 49 (117) 399 —
    Other1 (1,481) (126) (436) (1) 146 39 (1,103)
    Total identified items included in Income/(loss) before taxation (8,867) (2,176) (1,100) (2,402) (1,364) (720) (1,105)
    Less: total identified items included in Taxation charge/(credit) (1,521) (376) (477) (411) (187) 12 (81)
    Identified items included in Income/(loss) for the period              
    Divestment gains/(losses) (319) (96) 67 (386) 4 94 (2)
    Impairment reversals/(impairments) (4,371) (363) (323) (1,423) (1,176) (1,085) (1)
    Redundancy and restructuring (712) (71) (214) (215) (142) (71) 1
    Provisions for onerous contracts (19) (3) (11) (5) — — —
    Fair value accounting of commodity derivatives and certain gas contracts (849) (1,088) (14) 40 (86) 300 —
    Impact of exchange rate movements and inflationary adjustments on tax balances 363 (49) 313 — — — 99
    Other1 (1,440) (130) (440) (1) 223 30 (1,122)
    Impact on CCS earnings (7,347) (1,800) (623) (1,991) (1,177) (732) (1,024)
    Impact on CCS earnings attributable to non-controlling interest 18 — — — 18 — —
    Impact on CCS earnings attributable to Shell plc shareholders (7,365) (1,800) (623) (1,991) (1,195) (732) (1,024)

    1.Corporate includes reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures resulting in unfavourable movements of $1,122 million. These currency translation differences were previously recognised in other comprehensive income and accumulated in equity as part of accumulated other comprehensive income.

             Page 32

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Full year 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Identified items included in Income/(loss) before taxation              
    Divestment gains/(losses) 257 (22) 209 1 (46) 109 5
    Impairment reversals/(impairments) (8,300) (3,147) (1,187) (509) (2,690) (767) —
    Redundancy and restructuring (329) (1) (21) (150) (106) (32) (18)
    Provisions for onerous contracts (24) — — — (24) — —
    Fair value accounting of commodity derivatives and certain gas contracts (419) (4,755) 447 20 276 3,593 —
    Other 82 32 (615) 300 (43) 408 —
    Total identified items included in Income/(loss) before taxation (8,732) (7,892) (1,166) (339) (2,632) 3,311 (14)
    Less: total identified items included in Taxation charge/(credit) (481) (1,031) 100 (85) (497) 978 55
    Identified items included in Income/(loss) for the period              
    Divestment gains/(losses) 277 (14) 208 1 (35) 113 3
    Impairment reversals/(impairments) (6,219) (2,247) (642) (466) (2,195) (669) —
    Redundancy and restructuring (241) — (9) (113) (82) (24) (12)
    Provisions for onerous contracts (18) — — — (18) — —
    Fair value accounting of commodity derivatives and certain gas contracts (1,284) (4,407) 127 26 214 2,756 —
    Impact of exchange rate movements and inflationary adjustments on tax balances (355) — (295) — — — (60)
    Other (412) (193) (656) 298 (19) 158 —
    Impact on CCS earnings (8,252) (6,861) (1,267) (254) (2,135) 2,333 (69)
    Impact on CCS earnings attributable to non-controlling interest (11) — — (11) — — —
    Impact on CCS earnings attributable to Shell plc shareholders (8,240) (6,861) (1,267) (242) (2,135) 2,333 (69)

    The identified items categories above may include after-tax impacts of identified items of joint ventures and associates which are fully reported within “Share of profit/(loss) of joint ventures and associates” in the Consolidated Statement of Income, and fully reported as identified items included in Income/(loss) before taxation in the table above. Identified items related to subsidiaries are consolidated and reported across appropriate lines of the Consolidated Statement of Income. Only pre-tax identified items reported by subsidiaries are taken into account in the calculation of underlying operating expenses (Reference F).

    Provisions for onerous contracts: Provisions for onerous contracts that relate to businesses that Shell has exited or to redundant assets or assets that cannot be used.

    Fair value accounting of commodity derivatives and certain gas contracts: In the ordinary course of business, Shell enters into contracts to supply or purchase oil and gas products, as well as power and environmental products. Shell also enters into contracts for tolling, pipeline and storage capacity. Derivative contracts are entered into for mitigation of resulting economic exposures (generally price exposure) and these derivative contracts are carried at period-end market price (fair value), with movements in fair value recognised in income for the period. Supply and purchase contracts entered into for operational purposes, as well as contracts for tolling, pipeline and storage capacity, are, by contrast, recognised when the transaction occurs; furthermore, inventory is carried at historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply or purchase transaction is recognised in a different period, or (b) the inventory is measured on a different basis. In addition, certain contracts are, due to pricing or delivery conditions, deemed to contain embedded derivatives or written options and are also required to be carried at fair value even though they are entered into for operational purposes. The accounting impacts are reported as identified items.

    Impact of exchange rate movements and inflationary adjustments on tax balances represents the impact on tax balances of exchange rate movements and inflationary adjustments arising on (a) the conversion to dollars of the local currency tax base of non-monetary assets and liabilities, as well as losses (this primarily impacts the Upstream and Integrated Gas segments) and (b) the conversion of dollar-denominated inter-segment loans to local currency, leading to taxable exchange rate gains or losses (this primarily impacts the Corporate segment).

    Other identified items represent other credits or charges that based on Shell management’s assessment hinder the comparative understanding of Shell’s financial results from period to period.

             Page 33

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    B.    Adjusted Earnings per share

    Adjusted Earnings per share is calculated as Adjusted Earnings (see Reference A), divided by the weighted average number of shares used as the basis for basic earnings per share (see Note 4).

    C.    Cash capital expenditure

    Cash capital expenditure represents cash spent on maintaining and developing assets as well as on investments in the period. Management regularly monitors this measure as a key lever to delivering sustainable cash flows. Cash capital expenditure is the sum of the following lines from the Consolidated Statement of Cash Flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities.

    See Note 2 “Segment information” for the reconciliation of cash capital expenditure.

    D.    Capital employed and Return on average capital employed

    Return on average capital employed (“ROACE”) measures the efficiency of Shell’s utilisation of the capital that it employs. Effective first quarter 2024, the definition of capital employed has been amended to reflect the deduction of cash and cash equivalents. In addition, the numerator applied to ROACE on an Adjusted Earnings plus non-controlling interest basis has been amended to remove interest on cash and cash equivalents for consistency with the revised capital employed definition. Comparative information has been revised to reflect the updated definition. Also, the presentation of ROACE on a net income basis has been discontinued, as this measure is not routinely used by management in assessing the efficiency of capital employed.

    The measure refers to Capital employed which consists of total equity, current debt, and non-current debt reduced by cash and cash equivalents.

    Management believes that the updated methodology better reflects Shell’s approach to managing capital employed, including the management of cash and cash equivalents alongside total debt and equity as part of the financial framework.

    In this calculation, the sum of Adjusted Earnings (see Reference A) plus non-controlling interest (NCI) excluding identified items for the current and previous three quarters, adjusted for after-tax interest expense and after-tax interest income, is expressed as a percentage of the average capital employed excluding cash and cash equivalents for the same period.

                           
     
    $ million Quarters
      Q4 2024 Q3 2024 Q4 2023
    Current debt 9,931 10,119 9,001
    Non-current debt 71,610 72,028 74,794
    Total equity 188,362 192,943 192,597
    Less: Cash and cash equivalents (38,774) (43,031) (40,246)
    Capital employed – opening 231,128 232,059 236,146
    Current debt 11,630 12,015 9,931
    Non-current debt 65,448 64,597 71,610
    Total equity 180,165 189,538 188,362
    Less: Cash and cash equivalents (39,110) (42,252) (38,774)
    Capital employed – closing 218,132 223,898 231,128
    Capital employed – average 224,630 227,979 233,637

             Page 34

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                           
     
    $ million Quarters
      Q4 2024 Q3 2024 Q4 2023
    Adjusted Earnings – current and previous three quarters (Reference A) 23,716 27,361 28,250
    Add: Income/(loss) attributable to NCI – current and previous three quarters 427 376 277
    Add: Current cost of supplies adjustment attributable to NCI – current and previous three quarters 14 56 (5)
    Less: Identified items attributable to NCI (Reference A) – current and previous three quarters 18 7 (11)
    Adjusted Earnings plus NCI excluding identified items – current and previous three quarters 24,139 27,787 28,534
    Add: Interest expense after tax – current and previous three quarters 2,701 2,698 2,728
    Less: Interest income after tax on cash and cash equivalents – current and previous three quarters 1,389 1,392 1,287
    Adjusted Earnings plus NCI excluding identified items before interest expense and interest income – current and previous three quarters 25,452 29,093 29,975
    Capital employed – average 224,630 227,979 233,637
    ROACE on an Adjusted Earnings plus NCI basis 11.3% 12.8% 12.8%

    E.    Net debt and gearing

    Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risk relating to debt, and associated collateral balances. Management considers this adjustment useful because it reduces the volatility of net debt caused by fluctuations in foreign exchange and interest rates, and eliminates the potential impact of related collateral payments or receipts. Debt-related derivative financial instruments are a subset of the derivative financial instrument assets and liabilities presented on the balance sheet. Collateral balances are reported under “Trade and other receivables” or “Trade and other payables” as appropriate.

    Gearing is a measure of Shell’s capital structure and is defined as net debt (total debt less cash and cash equivalents) as a percentage of total capital (net debt plus total equity).

                           
     
    $ million  
      December 31, 2024 September 30, 2024 December 31, 2023
    Current debt 11,630    12,015    9,931   
    Non-current debt 65,448    64,597    71,610   
    Total debt 77,078    76,613    81,541   
    Of which lease liabilities 28,702    25,590    27,709   
    Add: Debt-related derivative financial instruments: net liability/(asset) 2,469    1,694    1,835   
    Add: Collateral on debt-related derivatives: net liability/(asset) (1,628)   (821)   (1,060)  
    Less: Cash and cash equivalents (39,110)   (42,252)   (38,774)  
    Net debt 38,809    35,234    43,542   
    Total equity 180,165    189,538    188,362   
    Total capital 218,974    224,772    231,902   
    Gearing 17.7  % 15.7  % 18.8  %

    F.    Operating expenses and Underlying operating expenses

    Operating expenses

    Operating expenses is a measure of Shell’s cost management performance, comprising the following items from the Consolidated Statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses.

             Page 35

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                                   
     
    Q4 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Production and manufacturing expenses 5,839 982 2,470 270 1,632 480 5
    Selling, distribution and administrative expenses 3,231 39 96 2,258 471 241 126
    Research and development 331 40 69 73 46 37 66
    Operating expenses 9,401 1,061 2,635 2,602 2,149 757 196
                                                   
     
    Q3 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Production and manufacturing expenses 6,138 1,164 2,394 367 1,766 453 (6)
    Selling, distribution and administrative expenses 3,139 (1) (39) 2,408 453 209 110
    Research and development 294 27 75 55 34 22 81
    Operating expenses 9,570 1,190 2,430 2,830 2,253 684 185
                                                   
     
    Q4 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Production and manufacturing expenses 6,807 1,187 2,595 433 1,815 732 44
    Selling, distribution and administrative expenses1 3,621 39 109 2,520 530 271 153
    Research and development1 469 42 102 67 52 93 112
    Operating expenses 10,897 1,268 2,806 3,021 2,397 1,096 309
                                                   
     
    Full year 2024 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Production and manufacturing expenses 23,379 4,153 9,351 1,322 6,605 1,934 14
    Selling, distribution and administrative expenses 12,439 164 176 9,149 1,637 887 426
    Research and development 1,099 125 263 209 151 94 257
    Operating expenses 36,918 4,441 9,791 10,681 8,392 2,915 698
                                                   
     
    Full year 2023 $ million
      Total Integrated Gas Upstream Marketing Chemicals and Products Renewables and Energy Solutions Corporate
    Production and manufacturing expenses 25,240 4,529 9,186 1,463 7,394 2,610 58
    Selling, distribution and administrative expenses1 13,433 154 325 9,426 2,023 1,058 446
    Research and development1 1,287 126 318 252 181 96 314
    Operating expenses 39,960 4,808 9,829 11,141 9,598 3,763 818

    1.From the first quarter 2024, Wholesale commercial fuels forms part of Mobility with inclusion in the Marketing segment (previously Chemicals and Products segment). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact between Marketing and Chemicals and Products segments (see Note 2). Also, from the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments (see Note 2).

    Underlying operating expenses

    Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors.

             Page 36

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

                                       
         
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    9,401    9,570    10,897    Operating expenses 36,918    39,960   
    (174)   (552)   (274)   Redundancy and restructuring (charges)/reversal (1,009)   (325)  
    (88)   (154)   (58)   (Provisions)/reversal (454)   (434)  
    —    —    —    Other 252    —   
    (262)   (706)   (332)   Total identified items (1,210)   (758)  
    9,138    8,864    10,565    Underlying operating expenses 35,707    39,201   

    G.    Free cash flow and Organic free cash flow

    Free cash flow is used to evaluate cash available for financing activities, including dividend payments and debt servicing, after investment in maintaining and growing the business. It is defined as the sum of “Cash flow from operating activities” and “Cash flow from investing activities”.

    Cash flows from acquisition and divestment activities are removed from Free cash flow to arrive at the Organic free cash flow, a measure used by management to evaluate the generation of free cash flow without these activities.

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    13,162    14,684    12,575    Cash flow from operating activities 54,684    54,191   
    (4,431)   (3,857)   (5,657)   Cash flow from investing activities (15,154)   (17,734)  
    8,731    10,827    6,918    Free cash flow 39,530    36,457   
    805    194    612    Less: Divestment proceeds (Reference I) 2,793    3,091   
    1    —    —    Add: Tax paid on divestments (reported under “Other investing cash outflows”) 1    —   
    525    —    206    Add: Cash outflows related to inorganic capital expenditure1 776    2,522   
    8,453    10,633    6,511    Organic free cash flow2 37,514    35,888   

    1.Cash outflows related to inorganic capital expenditure includes portfolio actions which expand Shell’s activities through acquisitions and restructuring activities as reported in capital expenditure lines in the Consolidated Statement of Cash Flows.

    2.Free cash flow less divestment proceeds, adding back outflows related to inorganic expenditure.

    H.    Cash flow from operating activities and cash flow from operating activities excluding working capital movements

    Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.

    Cash flow from operating activities excluding working capital movements is a measure used by Shell to analyse its operating cash generation over time excluding the timing effects of changes in inventories and operating receivables and payables from period to period.

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    13,162    14,684    12,575    Cash flow from operating activities 54,684    54,191   
    131    2,705    4,088    (Increase)/decrease in inventories 1,273    6,325   
    751    4,057    (704)   (Increase)/decrease in current receivables 6,578    12,401   
    1,524    (4,096)   (701)   Increase/(decrease) in current payables1 (5,789)   (11,581)  
    2,407    2,665    2,683    (Increase)/decrease in working capital 2,062    7,145   
    10,755    12,019    9,891    Cash flow from operating activities excluding working capital movements 52,622    47,052   

    1.To further enhance consistency between working capital and the Balance Sheet and the Statement of Cash Flows, from January 1, 2024, onwards movements in current other provisions are recognised in ‘Decommissioning and other provisions’ instead of ‘Increase/(decrease) in current payables’. Comparatives for the fourth quarter 2023 and the full year 2023 have been reclassified accordingly by $653 million and $693 million respectively to conform with current period presentation.

             Page 37

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    I.    Divestment proceeds

    Divestment proceeds represent cash received from divestment activities in the period. Management regularly monitors this measure as a key lever to deliver free cash flow.

                                       
     
    Quarters $ million Full year
    Q4 2024 Q3 2024 Q4 2023   2024 2023
    493    94 540 Proceeds from sale of property, plant and equipment and businesses 1,621 2,565
    305    94 49 Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans 590 474
    6    6 24 Proceeds from sale of equity securities 582 51
    805    194 612 Divestment proceeds 2,793 3,091

    J.    Structural cost reduction

    The structural cost reduction target is used for the purpose of demonstrating how management drives cost discipline across the entire organisation, simplifying our processes and portfolio, and streamlining the way we work.

    Structural cost reduction describes the decrease in underlying operating expenses as a result of operational efficiencies, divestments, workforce reductions and other cost-saving measures that are expected to be sustainable compared with 2022 levels.

    The total change between periods in underlying operating expenses will reflect both structural cost reductions and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations.

    Structural cost reductions are stewarded internally to support management’s oversight of spending over time. 2025 target reflects annualised saving achieved by end-2025.

                           
     
    $ million
      2024 2023 Total1
    Underlying Operating expenses current year 35,707    39,201     
    Underlying Operating expenses previous year 39,201    39,456     
    Total decrease in Underlying operating expenses (3,494)   (255)   (3,749)  
    Of which:      
    Structural cost reduction (2,132)   (987)   (3,119)  
    (Decrease)/Increase of underlying operating expenses except structural cost reduction (1,362)   732    (630)  

    1.Structural cost reductions up to 2024 compared with 2022.

             Page 38

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

    CAUTIONARY STATEMENT

    All amounts shown throughout this Unaudited Condensed Financial Report are unaudited. All peak production figures in Portfolio Developments are quoted at 100% expected production. The numbers presented throughout this Unaudited Condensed Financial Report may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures, due to rounding.

    The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this Unaudited Condensed Financial Report, “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this Unaudited Condensed Financial Report, refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

    Forward-Looking Statements

    This Unaudited Condensed Financial Report contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; “anticipate”; “believe”; “commit”; “commitment”; “could”; “estimate”; “expect”; “goals”; “intend”; “may”; “milestones”; “objectives”; “outlook”; “plan”; “probably”; “project”; “risks”; “schedule”; “seek”; “should”; “target”; “will”; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this Unaudited Condensed Financial Report, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak, regional conflicts, such as the Russia-Ukraine war, and a significant cyber security breach; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this Unaudited Condensed Financial Report are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2023 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this Unaudited Condensed Financial Report and should be considered by the reader. Each forward-looking statement speaks only as of the date of this Unaudited Condensed Financial Report, January 30, 2025. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this Unaudited Condensed Financial Report.

    Shell’s Net Carbon Intensity

    Also, in this Unaudited Condensed Financial Report we may refer to Shell’s “Net Carbon Intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “Net Carbon Intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

    Shell’s Net-Zero Emissions Target

    Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and NCI targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target, as this target is currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

    Forward-Looking Non-GAAP measures

    This Unaudited Condensed Financial Report may contain certain forward-looking non-GAAP measures such as cash capital expenditure and divestments. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.

    The contents of websites referred to in this Unaudited Condensed Financial Report do not form part of this Unaudited Condensed Financial Report.

    We may have used certain terms, such as resources, in this Unaudited Condensed Financial Report that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

    This Unaudited Condensed Financial Report contains inside information.

    January 30, 2025

             Page 39

    SHELL PLC
    4th QUARTER 2024 AND FULL YEAR UNAUDITED RESULTS

         
    The information in this Unaudited Condensed Financial Report reflects the unaudited consolidated financial position and results of Shell plc. Company No. 4366849, Registered Office: Shell Centre, London, SE1 7NA, England, UK.

    Contacts:

    – Sean Ashley, Company Secretary

    – Media: International +44 (0) 207 934 5550; USA +1 832 337 4355

    LEI number of Shell plc: 21380068P1DRHMJ8KU70

    Classification: Inside Information

             Page 40

    The MIL Network –

  • MIL-OSI: Shell plc publishes fourth quarter 2024 press release

    Source: GlobeNewswire (MIL-OSI)

    London, January 30, 2025

    “2024 was another year of strong financial performance across Shell. Despite the lower earnings this quarter, cash delivery remained solid and we generated free cash flow of $40 billion across the year, higher than 2023, in a lower price environment. Our continued focus on simplification helped to deliver over $3 billion in structural cost reductions since 2022, meeting our target ahead of schedule, whilst also making significant progress against all our other financial targets1.

    Today, we announce a 4% increase in our dividends and another $3.5 billion buyback programme, making this the 13th consecutive quarter of at least $3 billion of buybacks, all whilst further strengthening our balance sheet this year to position us well for the future.

    We will outline the next steps in our strategy to deliver more value with less emissions at our Capital Markets Day in March.”

    Shell plc Chief Executive Officer, Wael Sawan


    SOLID CASH FLOW GENERATION; RESILIENT DISTRIBUTIONS

    • Robust CFFO of $13.2 billion in Q4 2024, with CFFO of $54.7 billion and free cash flow of $39.5 billion for the full year 2024. $22.6 billion distributed to shareholders in 2024, representing 41% of CFFO generated.
    • Q4 2024 Adjusted Earnings2 of $3.7 billion reflect lower prices and margins, higher exploration well write-offs, and the non-cash impact of expiring hedging contracts on LNG trading and optimisation results.
    • Structural cost reductions of $3.1 billion achieved since 2022, meeting the 2023 Capital Markets Day (CMD23) target a year early, with significant progress against the other CMD23 financial targets1.
    • Focus on disciplined capital allocation drove down 2024 cash capex to $21.1 billion; our cash capex range for the full year 2025 is expected to be lower than our 2024 range, with more guidance to come at the Capital Markets Day in March.
    • Increasing dividend per share by 4% to $0.358 for the fourth quarter, while commencing a $3.5 billion share buyback programme, expected to be completed by Q1 2025 results announcement. 
    $ million2 Adj. Earnings Adj. EBITDA CFFO Cash capex
    Integrated Gas 2,165 4,568 4,391 1,337
    Upstream 1,682 7,676 4,509 2,076
    Marketing 839 1,709 1,363 811
    Chemicals & Products3 (229) 475 2,032 1,392
    Renewables & Energy Solutions (311) (123) 850 1,277
    Corporate (380) (24) 16 30
    Less: Non-controlling interest (NCI) 106      
    Shell Q4 2024 3,661 14,281 13,162 6,924
    Q3 2024 6,028 16,005 14,684 4,950
    FY 2024 23,716 65,803 54,684 21,084
    FY 2023 28,250 68,538 54,191 24,392

    1Progress to date on the financial targets that were announced during Capital Markets Day in June 2023 is available at www.shell.com/2024-progress-on-cmd23.html.

    2Income/(loss) attributable to shareholders for Q4 2024 is $0.9 billion. Reconciliation of non-GAAP measures can be found in the unaudited results, available at www.shell.com/investors.

    3Chemicals & Products Adjusted Earnings at a subsegment level are as follows – Chemicals $(0.3) billion and Products $0.0 billion.

    • CFFO of $13.2 billion for Q4 2024 includes a working capital inflow of $2.4 billion. CFFO reflects tax payments of $2.9 billion, and a $1.4 billion outflow1 related to the timing impact of payments for emissions certificates and biofuel programmes.
    • Net debt increased by $3.6 billion over the quarter to $38.8 billion, reflecting the recognition of the LNG Canada pipeline lease liability. Net debt at the end of 2024 was $4.7 billion lower than at the beginning of the year.
    $ billion2 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024
    Divestment proceeds 0.6 1.0 0.8 0.2 0.8
    Free cash flow 6.9 9.8 10.2 10.8 8.7
    Net debt 43.5 40.5 38.3 35.2 38.8


    1 Includes payments for the Brennstoffemissionshandelsgesetz (Fuel Emissions Trading Act), excludes the payment of German Mineral Oil Taxes.

    2 Reconciliation of non-GAAP measures can be found in the unaudited results, available at www.shell.com/investors.

    Q4 2024 FINANCIAL PERFORMANCE DRIVERS

    INTEGRATED GAS

    Key data Q3 2024 Q4 2024 Q1 2025 outlook
    Realised liquids price ($/bbl) 63 63 —
    Realised gas price ($/thousand scf) 7.9 8.1 —
    Production (kboe/d) 941 905 930 – 990
    LNG liquefaction volumes (MT) 7.5 7.1 6.6 – 7.2
    LNG sales volumes (MT) 17.0 15.5 —
    • Adjusted Earnings reflect lower trading and optimisation results driven by the (non-cash) impact of expiring hedging contracts, and lower volumes due to Pearl GTL turnaround, lower feedgas supply and lower liftings (timing) versus Q3 2024.
    • Q1 2025 production outlook reflects Pearl GTL being back in operation; LNG liquefaction volumes outlook is impacted by lower feedgas supply.

    UPSTREAM

    Key data Q3 2024 Q4 2024 Q1 2025 outlook
    Realised liquids price ($/bbl) 75 71 —
    Realised gas price ($/thousand scf) 6.6 7.0 —
    Liquids production (kboe/d) 1,321 1,332 —
    Gas production (million scf/d) 2,844 3,056 —
    Total production (kboe/d) 1,811 1,859 1,750 – 1,950
    • Adjusted Earnings reflect higher volumes, offset by lower prices, above-average well write-offs, and higher year-end opex.
    • First production achieved from Mero-3 and Whale (January), and FID taken on Bonga North, supporting portfolio longevity.

    MARKETING

    Key data Q3 2024 Q4 2024 Q1 2025 outlook
    Marketing sales volumes (kb/d) 2,945 2,795 2,500 – 3,000
    Mobility (kb/d) 2,119 2,041 —
    Lubricants (kb/d) 81 77 —
    Sectors & Decarbonisation (kb/d) 745 678 —

    Wholesale commercial fuels, previously reported in the Chemicals & Products segment, is reported in the Marketing segment (Mobility) with effect from Q1 2024.
    Comparative information for the Marketing segment and the Chemicals & Products segment has been revised.

    • Adjusted Earnings in Q4 2024 reflect the seasonal impact of lower volumes and lower Mobility margins.
    • 2024 full year Adjusted Earnings were $3.9 billion, up $0.6 billion from 2023, driven by improved margins and lower opex.

    CHEMICALS & PRODUCTS

    Key data Q3 2024 Q4 2024 Q1 2025 outlook1
    Refinery processing intake (kb/d) 1,305 1,215 —
    Chemicals sales volumes (kT) 3,015 2,926 —
    Refinery utilisation (%) 81 76 80 – 88
    Chemicals manufacturing plant utilisation (%) 76 75 78 – 86
    Global indicative refining margin ($/bbl) 5.5 5.5 —
    Global indicative chemical margin ($/t) 164 138 —

    1Oil sands production: In Q1 2025, Shell’s remaining interest in the Canadian oil sands is expected to be swapped for an additional 10% interest in the Scotford upgrader and Quest CCS projects.

    Wholesale commercial fuels, previously reported in the Chemicals & Products segment, is reported in the Marketing segment (Mobility) with effect from Q1 2024.
    Comparative information for the Marketing segment and the Chemicals & Products segment has been revised.

    • Adjusted Earnings reflect significantly lower contribution from trading and optimisation, including seasonality effects, and continued weak chemicals margin environment.

    RENEWABLES & ENERGY SOLUTIONS

    Key data Q3 2024 Q4 2024
    External power sales (TWh) 79 76
    Sales of pipeline gas to end-use customers (TWh) 148 165
    Renewables power generation capacity (GW)* 7.3 7.4
    • in operation (GW)
    		 3.4 3.4
    • under construction and/or committed for sale (GW)
    		 3.9 4.0

      *Excludes Shell’s equity share of associates where information cannot be obtained.

    • Adjusted Earnings were lower than in Q3 2024, largely driven by one-off tax charges in the quarter.
    • Acquired a 609 MW combined-cycle gas turbine power plant in Rhode Island, USA.

    Renewables and Energy Solutions includes activities such as renewable power generation, the marketing and trading and optimisation of power and pipeline gas, as well as carbon credits, and digitally enabled customer solutions. It also includes the production and marketing of hydrogen, development of commercial carbon capture and storage hubs, investment in nature-based projects that avoid or reduce carbon emissions, and Shell Ventures, which invests in companies that work to accelerate the energy and mobility transformation.

    CORPORATE

    Key data Q3 2024 Q4 2024 Q1 2025 outlook
    Adjusted Earnings ($ billion) (0.6) (0.4) (0.6) – (0.4)

    2024 FULL YEAR

    $ billion Adj. Earnings CFFO excl. WC CFFO Cash capex Free cash flow
    FY 2024 23.7 52.6 54.7 21.1 39.5
    FY 2023 28.3 47.1 54.2 24.4 36.5
    Operational performance FY 2023 FY 2024 % change
    Oil and gas production (kboe/d) 2,791 2,836 2%
    LNG liquefaction volumes (MT) 28.3 29.1 3%
    Marketing sales volumes (kb/d) 3,045 2,843 (7)%
    Refinery processing intake (kb/d) 1,349 1,344 (0)%
    Chemicals sales volumes (kT) 11,245 11,875 6%
    Macro indicators FY 2023 FY 2024 % change
    Brent ($/bbl) 83 81 (2)%
    Henry Hub ($/MMBtu) 2.5 2.2 (13)%
    EU TTF ($/MMBtu) 13.0 11.0 (16)%
    Indicative refining margin ($/bbl) 12.5 7.7 (38)%
    Indicative chemicals margin ($/t) 133 152 14%

    UPCOMING INVESTOR EVENTS

    February 25, 2025 Shell LNG Outlook 2025 publication
    March 25, 2025 Capital Markets Day 2025
    May 2, 2025 First quarter 2025 results and dividends
    May 20, 2025 Annual General Meeting
    July 31, 2025 Second quarter 2025 results and dividends
    October 30, 2025 Third quarter 2025 results and dividends

    USEFUL LINKS

    Results materials Q4 2024

    Quarterly Databook Q4 2024

    Webcast registration Q4 2024

    Dividend announcement Q4 2024

    ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES

    This announcement includes certain measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP) such as IFRS, including Adjusted Earnings, Adjusted EBITDA, CFFO excluding working capital movements, Cash capital expenditure, free cash flow, Divestment proceeds and Net debt. This information, along with comparable GAAP measures, is useful to investors because it provides a basis for measuring Shell plc’s operating performance and ability to retire debt and invest in new business opportunities. Shell plc’s management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating the business performance.

    This announcement may contain certain forward-looking non-GAAP measures for cash capital expenditure and divestments. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile the non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are estimated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.

    CAUTIONARY STATEMENT

    The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

    This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; “anticipate”; “believe”; “commit”; “commitment”; “could”; “estimate”; “expect”; “goals”; “intend”; “may”; “milestones”; “objectives”; “outlook”; “plan”; “probably”; “project”; “risks”; “schedule”; “seek”; “should”; “target”; “will”; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak, regional conflicts, such as the Russia-Ukraine war, and a significant cyber security breach; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2023 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, January 30, 2025. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

    All amounts shown throughout this announcement are unaudited. The numbers presented throughout this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures, due to rounding.

    Shell’s Net Carbon Intensity

    Also, in this announcement we may refer to Shell’s “Net Carbon Intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “Net Carbon Intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

    Shell’s Net-Zero Emissions Target

    Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and NCI targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target, as this target is currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

    The content of websites referred to in this announcement does not form part of this announcement.

    We may have used certain terms, such as resources, in this announcement that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

    The financial information presented in this announcement does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended December 31, 2023 were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell’s Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act. The statutory accounts for the year ended December 31, 2024 will be delivered to the Registrar of Companies for England and Wales in due course.

    The information in this announcement does not constitute the unaudited condensed consolidated financial statements which are contained in Shell’s fourth quarter 2024 and full year 2024 unaudited results available on www.shell.com/investors.

    CONTACTS

    • Media: International +44 207 934 5550; USA +1 832 337 4355

    The MIL Network –

  • MIL-OSI China: Chinese satellite enterprises provide expanded, improved global services

    Source: China State Council Information Office

    Chinese space companies have been expanding their satellite services, including communication, navigation and remote sensing, while also accelerating the deployment of satellite constellations in pursuit of better services.

    At the start of 2025, China Great Wall Industry Corporation (CGWIC), which offers commercial launch and satellite in-orbit delivery services, completed the delivery of an intelligent remote sensing satellite, known as IRSS-1, to an Omani company.

    Launched on Nov. 11, 2024, this one-meter resolution satellite weighs 95 kilograms and has a design life of five years. It will be used for surveys of land and forests, as well as urban planning and disaster monitoring.

    The successful delivery of the satellite will play an important role in improving Oman’s remote sensing satellite application capabilities, the CGWIC said.

    WIDE REMOTE SENSING COVERAGE

    Users from around the world who log on to the website of Chang Guang Satellite Technology Co., Ltd, can browse satellite images captured by the company’s Jilin-1 satellite constellation.

    The Jilin-1 constellation, which had its first group of satellites launched back in October 2015, now features more than 117 satellites and is capable of observing any point on the globe about 40 times a day, according to Huang Jian, head of Chang Guang’s overseas business data application.

    The Jilin-1 constellation can cover the world six times a year and the entire China 24 times annually, and so can provide frequent updates of satellite images of any location, Huang said, while adding that this capability supports the company’s overseas business expansion.

    Chang Guang has been cooperating with more than 130 overseas users in providing services regarding land surveys, urban building investigations, agriculture and forestry.

    In response to disasters and emergencies, the company has recently provided satellite images of fires and floods in different parts of the world, following a request from the United Nations.

    Notably, the company is planning a new constellation consisting of 200 satellites, according to Xuan Ming, chairman and general manager of Chang Guang. This new constellation will have a spatial resolution of 20 centimeters and can cover the entire globe once a day.

    Its temporal resolution, combined with the contribution of the Jilin-1 constellation, will make it possible to revisit any point on Earth within approximately three minutes.

    EFFICIENT COMMUNICATION NETWORKS

    The commercialization of China’s aerospace sector started in 2014, when the country’s State Council, in a guideline, encouraged private capital to participate in the construction of national civil space infrastructure.

    Founded in 2018, Geespace is a science and technology innovation enterprise under the Chinese automaker Geely. It currently operates 30 satellites in three orbital planes, thereby achieving 24-hour coverage of 90 percent of the world, and provides satellite communication services to overseas users.

    These satellites are part of the Geesatcom constellation. The low-orbit communication constellation can enable direct satellite connection for automotive autonomous driving, intelligent internet connection, smartphones and other consumer electronic products.

    Geesatcom in June 2024 completed its first commercial deployment test in the Middle East. It will cooperate with a number of global operators in switching on a worldwide commercial application.

    Through a combination of Geesatcom and its ground system, Geespace provides global medium-and-low-speed satellite communication operations, satellite-based high-precision positioning services and a satellite remote sensing AI service, according to Wan Yang, founder of Geespace.

    In the future, Geespace expects to provide access to its satellite application services to clients in both Southeast Asia and Africa.

    Another Chinese commercial satellite constellation, Spacesail, will provide satellite communication services to Brazil and broadband internet access for that country’s remote and under-served regions from 2026.

    Spacesail is a low Earth orbit mega-constellation with full frequency bands and a multi-layer and multi-orbit design. Its commercial network construction was officially launched on Aug. 6, 2024.

    The market for connecting smartphones directly to satellites has become increasingly promising. “Except for the North Pole and South Pole, almost any location on Earth, including oceans, deserts and remote mountainous regions where traditional communications are difficult to achieve, will enjoy a stable network connection — with smartphones directly connected to satellites,” said Wang.

    By the end of June 2024, 546 commercial space enterprises were registered and effectively operating in China, China Space Foundation Secretary General Wang Cheng said in November last year at the 15th China International Aviation and Aerospace Exhibition (Airshow China) in Zhuhai, south China’s Guangdong Province.

    This booming development of Chinese commercial satellite companies was firmly supported by a series of related policies.

    China has issued both a medium- and long-term development plan for civil space infrastructure for the period from 2015 to 2025, aiming to support and regulate the development of its commercial space industry.

    The country is also mapping a development plan for civil space infrastructure from 2026 to 2035, according to Li Guoping, chief engineer at the China National Space Administration (CNSA).

    MIL OSI China News –

  • MIL-OSI: Nokia Corporation Financial Report for Q4 and full year 2024

    Source: GlobeNewswire (MIL-OSI)

    Nokia Corporation
    Financial Statement Release
    30 January 2025 at 08:00 EET

    Nokia Corporation Financial Report for Q4 and full year 2024

    Strong Q4 growth and profitability as market trends improve

    • Q4 net sales increased 9% y-o-y in constant currency (10% reported). Network Infrastructure net sales grew strongly with all units contributing, Nokia Technologies grew significantly and Cloud and Network Services also grew in Q4.
    • Comparable gross margin in Q4 increased by 250bps y-o-y to 47.2% (reported increased 280bps to 46.1%), with a strong contribution from Nokia Technologies along with smaller contributions from other businesses.
    • Q4 comparable operating margin increased 380bps y-o-y to 19.1% (reported up 540bps to 15.3%), mainly due to higher gross margin, continued cost control and higher contribution from Nokia Technologies.
    • Q4 comparable diluted EPS for the period of EUR 0.18; reported diluted EPS for the period of EUR 0.15.
    • Q4 free cash flow of EUR 0.05 billion, net cash balance of EUR 4.9 billion.
    • Full year 2024 net sales declined 9% in both reported and constant currency, of which 7 percentage points was related to India. Comparable operating profit was EUR 2.6 billion (reported EUR 2.0 billion).
    • Full year comparable diluted EPS of EUR 0.39; reported diluted EPS of 0.23.
    • Board proposes dividend authorization of EUR 0.14 per share.
    • Nokia issues full year 2025 outlook on an organic basis. Nokia expects comparable operating profit of between EUR 1.9 billion and 2.4 billion and free cash flow conversion from comparable operating profit of between 50% and 80%.

    This is a summary of the Nokia Corporation Financial report for Q4 and full year 2024 published today. Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group’s financial information as well as on Nokia’s outlook. The detailed, segment-level discussion will be available in the complete financial report hosted at www.nokia.com/financials. A video interview summarizing the key points of our Q4 results will also be published on the website. Investors should not solely rely on summaries of Nokia’s financial reports and should also review the complete reports with tables.

    PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q4 AND FULL YEAR 2024 RESULTS

    In the following quote, net sales growth rates are on a constant currency basis
    We saw a strong finish to 2024 with 9% net sales growth year-on-year in Q4. I am optimistic that the improving market trends we are now seeing will persist into 2025. Alongside the net sales growth, we saw excellent profitability in Q4 with a comparable operating margin of 19.1%. This meant our full year comparable operating profit was EUR 2.6 billion, at the mid-point of our guidance of EUR 2.3 to 2.9 billion.

    All business groups delivered a strong operational performance in the quarter. Net sales growth in Network Infrastructure accelerated to 17%, with IP Networks growing 24%, Fixed Networks 16% and Optical Networks 7%. This reflected a strong recovery in demand from communication service providers, notably in North America.

    Mobile Networks net sales stabilized with continued resilience in gross margin. We also secured many important deals, winning 18 000 additional base station sites, since the start of 2024 on a net basis. This was achieved while maintaining our commercial and pricing discipline to protect our gross margins.

    Cloud and Network Services returned to 7% net sales growth in the quarter, despite a headwind of 4 percentage points from a prior business disposal, and its operating margin improved over the full year. Both Core Networks and Enterprise Campus Edge grew strongly. The fourth quarter saw the acquisition of Rapid’s technology assets. This will bolster our R&D capacity in Network as Code and increase our developer access. Taken together with our autonomous networks application suite, we are accelerating our efforts to help operators fully automate and monetize their networks.

    Nokia Technologies had an extremely active quarter. We signed a deal with Transsion, a previously unlicensed mobile devices vendor, along with multimedia deals with HP and Samsung, as well as many other smaller deals. Our annual net sales run-rate increased to approximately between EUR 1.3 and 1.4 billion in Q4, progressing towards our mid-term EUR 1.4 to 1.5 billion target.

    We delivered a strong cash performance throughout 2024, ending with full year free cash flow of EUR 2.0 billion. This means we continue to have a strong balance sheet supporting our business with net cash of EUR 4.9 billion at the end of the year, even after returning EUR 1.4 billion to shareholders through dividend and share buybacks. The Board is proposing an increase in the dividend to EUR 0.14 per share in respect of the financial year 2024. We also continue to execute against our outstanding share buyback program to offset any dilution from the equity component of our pending Infinera acquisition. Going forward, our target remains to maintain a net cash position of between 10-15% of annual net sales.

    Q4 also saw further progress in efforts to expand our presence in the data center market. We signed important deals with Microsoft and Nscale for our data center switching products, along with announcing partnerships with both Kyndryl and Lenovo. We are now stepping up our investments to broaden our addressable market in data center IP networking. We will invest up to an additional EUR 100 million in annual operating expenses with a view to driving incremental net sales of EUR 1 billion by 2028. In the short-term this will moderate the pace of operating margin expansion in Network Infrastructure, but we anticipate a strong return on investment considering the momentum we already have today in the market.

    Looking further ahead into 2025, we expect the improved trends we have seen in Network Infrastructure in the second half of this year, to sustain and drive strong growth. Cloud and Network Services is also expected to grow with strong 5G Core momentum and growth in our Enterprise Campus Edge business. End markets in Mobile Networks are improving and we currently assume largely stable net sales. Nokia Technologies is expected to deliver approximately EUR 1.1 billion of operating profit.

    At the Nokia level, we currently estimate we will deliver comparable operating profit of between EUR 1.9 and 2.4 billion in 2025. We also target free cash flow conversion from comparable operating profit of between 50% and 80%. Excluding the one-time items that benefited 2024 by over EUR 700 million which were mostly in the first half of the year, this guidance would imply a strong improvement in our comparable operating profit in 2025 despite select increased investments.

    Given the market volatility in 2024, our results demonstrate the responsiveness and capacity of the Nokia team to execute in all market conditions. I thank the whole Nokia team for their commitment, hard work and drive which made these results possible.

    FINANCIAL RESULTS

    EUR million (except for EPS in EUR) Q4’24 Q4’23 YoY change Constant currency YoY change Q1-Q4’24 Q1-Q4’23 YoY change Constant currency YoY change
    Reported results                
    Net sales 5 983 5 416 10% 9% 19 220 21 138 (9)% (9)%
    Gross margin % 46.1% 43.3% 280bps   46.1% 40.4% 570bps  
    Research and development expenses (1 136) (1 080) 5%   (4 512) (4 277) 5%  
    Selling, general and administrative expenses (789) (774) 2%   (2 890) (2 878) 0%  
    Operating profit 917 534 72%   1 999 1 661 20%  
    Operating margin % 15.3% 9.9% 540bps   10.4% 7.9% 250bps  
    Profit/(loss) from continuing operations 746 (51)     1 711 649 164%  
    Profit/(loss) from discontinued operations 67 18 272%   (427) 30    
    Profit/(loss) for the period 813 (33)     1 284 679 89%  
    EPS for the period, diluted 0.15 (0.01)     0.23 0.12 92%  
    Net cash and interest-bearing financial investments 4 854 4 323 12%   4 854 4 323 12%  
    Comparable results                
    Net sales 5 983 5 416 10% 9% 19 220 21 138 (9)% (9)%
    Gross margin % 47.2% 44.7% 250bps   47.1% 41.1% 600bps  
    Research and development expenses (1 129) (1 023) 10%   (4 298) (4 143) 4%  
    Selling, general and administrative expenses (638) (615) 4%   (2 423) (2 448) (1)%  
    Operating profit 1 142 830 38%   2 619 2 337 12%  
    Operating margin % 19.1% 15.3% 380bps   13.6% 11.1% 250bps  
    Profit for the period 977 555 76%   2 175 1 590 37%  
    EPS for the period, diluted 0.18 0.10 80%   0.39 0.28 39%  
    ROIC(1) 13.0% 9.9% 310bps   13.0% 9.9% 310bps  

    1 Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to the Alternative performance measures section in Nokia Corporation Financial Report for Q4 and full year 2024 for details.

    Business group results Network
    Infrastructure    		 Mobile
    Networks    		 Cloud and Network Services Nokia
    Technologies    		 Group Common and Other
    EUR million Q4’24 Q4’23 Q4’24 Q4’23 Q4’24 Q4’23 Q4’24 Q4’23 Q4’24 Q4’23
    Net sales 2 031 1 712 2 431 2 450 1 054 977 463 251 6 25
    YoY change 19%   (1)%   8%   84%   (76)%  
    Constant currency YoY change 17%   (2)%   7%   85%   (76)%  
    Gross margin % 45.4% 44.7% 38.1% 38.3% 48.1% 47.6% 99.8% 100.0%    
    Operating profit/(loss) 398 264 187 281 236 223 356 169 (35) (106)
    Operating margin % 19.6% 15.4% 7.7% 11.5% 22.4% 22.8% 76.9% 67.3%    

    SHAREHOLDER DISTRIBUTION

    Dividend

    The Board of Directors proposes that the Annual General Meeting 2025 authorizes the Board to resolve on the distribution of an aggregate maximum of EUR 0.14 per share to be paid in respect of the financial year 2024. The authorization would be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in four installments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a justified reason.

    Under the current authorization by the Annual General Meeting held on 3 April 2024, the Board of Directors may resolve on the distribution of an aggregate maximum of EUR 0.13 per share to be paid in respect of financial year 2023. The authorization will be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in four installments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a justified reason.

    On 30 January 2025, the Board resolved to distribute a dividend of EUR 0.03 per share. The dividend record date is 4 February 2025 and the dividend will be paid on 13 February 2025. The actual dividend payment date outside Finland will be determined by the practices of the intermediary banks transferring the dividend payments.

    Following this announced distribution of the fourth installment and executed payments of the previous installments, the Board has no remaining distribution authorization.

    Share buyback programs

    In January 2024, Nokia’s Board of Directors initiated a share buyback program to repurchase shares to return up to EUR 600 million of cash to shareholders in tranches over a period of two years. The share buyback execution started on 20 March 2024. On 19 July 2024, Nokia’s Board of Directors decided to accelerate the timeframe for the share buyback program with the aim of completing the full EUR 600 million program by the end of the year instead of the initial two year timeframe. The program was completed on 21 November 2024 and the repurchased 157 646 220 shares were canceled on 4 December 2024.

    On 27 June 2024, Nokia announced its intention to acquire Infinera in a transaction that valued Infinera at US$1.7 billion equity value with up to 30% of the consideration to be paid in Nokia American depositary shares (“ADSs”), depending on the elections of Infinera shareholders. To offset the dilution from the transaction to Nokia shareholders, on 22 November 2024 Nokia announced a new share buyback program targeting to repurchase 150 million shares for an aggregate purchase price not exceeding EUR 900 million. Under this share buyback program, by 31 December 2024, Nokia had repurchased 19 186 046 of its own shares at an average price per share of approximately EUR 4.14.

    OUTLOOK

      Full Year 2025
    Comparable operating profit(1) EUR 1.9 billion to EUR 2.4 billion (excluding any impact from pending Infinera acquisition)
    Free cash flow(1) 50% to 80% conversion from comparable operating profit (excluding any impact from pending Infinera acquisition)

    1Please refer to Alternative performance measures section in Nokia Corporation Financial Report for Q4 and full year 2024 for a full explanation of how these terms are defined.

    The outlook, long-term targets and all of the underlying outlook assumptions described below are forward-looking statements subject to a number of risks and uncertainties as described or referred to in the Risk Factors section later in this report. release.

    Along with Nokia’s official outlook targets provided above, Nokia provides the below additional assumptions that support the group level financial outlook. Considering the pending Infinera acquisition along with the transfer of Managed Services from Cloud and Network Services to Mobile Networks (further details of this transfer are included in the Additional Topics section), Nokia is not currently providing assumptions by business group as it did previously.

      Full year 2025
    Group Common and Other operating expenses approximately
    EUR 400 million
    Comparable financial income and expenses Positive EUR 50 to 150 million
    Comparable income tax rate ~25%
    Cash outflows related to income taxes EUR 450 million
    Capital Expenditures EUR 550 million

    2026 TARGETS

    Nokia’s current targets for its existing perimeter of the business for 2026 are outlined below. This does not consider pending acquisitions. Nokia sees further opportunities to increase margins beyond 2026 and believes an operating margin of 14% remains achievable over the longer term.

    Net sales Grow faster than the market
    Comparable operating margin(1) ≥ 13%
    Free cash flow(1) 55% to 85% conversion from comparable operating profit

    1 Please refer to Alternative Performance measures section in Nokia Corporation Financial Report for Q4 and full year 2024 for a full explanation of how these terms are defined.

    The comparable operating margin target for Nokia group is built on the following assumptions by business group for 2026:

    Network Infrastructure 13 – 16% operating margin
    Mobile Networks 6 – 9% operating margin
    Cloud and Network Services 7 – 10% operating margin
    Nokia Technologies Operating profit more than EUR 1.1 billion
    Group common and other Approximately EUR 300 million of operating expenses

    ADDITIONAL TOPICS

    Progress on Infinera acquisition
    On 27 June 2024, Nokia announced a definitive agreement under which Nokia will acquire Infinera, a global supplier of innovative open optical networking solutions and advanced optical semiconductors. The acquisition process continues to proceed as expected. On 13 September 2024, the applicable waiting period under the US pre-merger review expired and the Department of Justice decided not to investigate the planned transaction. On 1 October 2024, Infinera shareholders approved the planned acquisition. On 7 October 2024, Nokia and Infinera received approval from the Committee on Foreign Investment in the United States (CFIUS). During the fourth quarter Nokia received many of the outstanding required approvals for the deal. At this point approval from the European Union and Taiwan, along with contractual closing conditions, are the major items outstanding to proceed to closing. Assuming the current target timelines, Nokia and Infinera now expect the deal to close during the first quarter of 2025.

    Nokia exercised NSB call option to simplify ownership structure in China

    Nokia and its joint venture partner China Huaxin have been together reviewing the future ownership structure of Nokia Shanghai Bell (NSB). Following those discussions, Nokia exercised its call option, outlined in NSB’s shareholders’ agreement, to initiate the process to become the sole shareholder by purchasing China Huaxin’s approximately 50% share in NSB. This will allow Nokia to simplify its ownership structure in China while Nokia remains committed to continue serving the local market.
    Since the creation of the joint venture Nokia has recorded a liability on its balance sheet based on the estimated future cash settlement to acquire China Huaxin’s ownership interest. The execution of the call option is subject to completing required steps under the shareholders’ agreement.

    Managed Services business transferred from Cloud and Network Services into Mobile Networks in 2025
    Nokia has moved its Managed Services business into Mobile Networks (MN), effective 1 January 2025. The Managed Services business provides outsourced network management of multi-vendor RAN networks for operators and since 2021 has been part of our Cloud and Network Services (CNS) business group. Considering CNS is increasingly transitioning towards cloud-native software sales, ‘as-a-service’ product offerings and helping customers to monetize networks through API’s, Nokia believes that this business is more aligned and fits better with its MN business. Based on 2024 results, this change is expected to lead to a transfer of approximately EUR 430 million of net sales and approximately EUR 40 million of comparable operating profit from CNS to MN. Nokia will provide recast financial information for 2024 for MN and CNS reflecting this change prior to Nokia’s Q1 financial results.

    RISK FACTORS

    Nokia and its businesses are exposed to a number of risks and uncertainties which include but are not limited to:

    • Competitive intensity, which is expected to continue at a high level as some competitors seek to take share;
    • Changes in customer network investments related to their ability to monetize the network;
    • Our ability to ensure competitiveness of our product roadmaps and costs through additional R&D investments;
    • Our ability to procure certain standard components and the costs thereof, such as semiconductors;
    • Disturbance in the global supply chain;
    • Impact of inflation, increased global macro-uncertainty, major currency fluctuations, changes in tariffs and higher interest rates;
    • Potential economic impact and disruption of global pandemics;
    • War or other geopolitical conflicts, disruptions and potential costs thereof;
    • Other macroeconomic, industry and competitive developments;
    • Timing and value of new, renewed and existing patent licensing agreements with licensees;
    • Results in brand and technology licensing; costs to protect and enforce our intellectual property rights; on-going litigation with respect to licensing and regulatory landscape for patent licensing;
    • The outcomes of on-going and potential disputes and litigation;
    • Our ability to execute, complete, successfully integrate and realize the expected benefits from our ongoing transactions;
    • Timing of completions and acceptances of certain projects;
    • Our product and regional mix;
    • Uncertainty in forecasting income tax expenses and cash outflows, over the long-term, as they are also subject to possible changes due to business mix, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reforms in various countries and OECD initiatives;
    • Our ability to utilize our Finnish deferred tax assets and their recognition on our balance sheet;
    • Our ability to meet our sustainability and other ESG targets, including our targets relating to greenhouse gas emissions;

    as well the risk factors specified under Forward-looking statements of this release, and our 2023 annual report on Form 20-F published on 29 February 2024 under Operating and financial review and prospects-Risk factors.

    FORWARD-LOOKING STATEMENTS

    Certain statements herein that are not historical facts are forward-looking statements. These forward-looking statements reflect Nokia’s current expectations and views of future developments and include statements regarding: A) expectations, plans, benefits or outlook related to our strategies, projects, programs, product launches, growth management, licenses, sustainability and other ESG targets, operational key performance indicators and decisions on market exits; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of potential global pandemics, geopolitical conflicts and the general or regional macroeconomic conditions on our businesses, our supply chain, the timing of market changes or turning points in demand and our customers’ businesses) and any future dividends and other distributions of profit; C) expectations and targets regarding financial performance and results of operations, including market share, prices, net sales, income, margins, cash flows, cost savings, the timing of receivables, operating expenses, provisions, impairments, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions, competitiveness, revenue generation in any specific region, and licensing income and payments; D) ability to execute, expectations, plans or benefits related to our ongoing transactions, investments and changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions; and F) any statements preceded by or including “anticipate”, “continue”, “believe”, “envisage”, “expect”, “aim”, “will”, “target”, “may”, “would”, “see”, “plan” or similar expressions. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from such statements. These statements are based on management’s best assumptions and beliefs in light of the information currently available to them. These forward-looking statements are only predictions based upon our current expectations and views of future events and developments and are subject to risks and uncertainties that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Factors, including risks and uncertainties that could cause these differences, include those risks and uncertainties identified in the Risk Factors above.

    ANALYST WEBCAST

    • Nokia’s webcast will begin on 30 January 2025 at 11.30 a.m. Finnish time (EET). The webcast will last approximately 60 minutes.
    • The webcast will be a presentation followed by a Q&A session. Presentation slides will be available for download at www.nokia.com/financials.
    • A link to the webcast will be available at www.nokia.com/financials.
    • Media representatives can listen in via the link, or alternatively call +1-412-317-5619.

    FINANCIAL CALENDAR

    • Nokia plans to publish its “Nokia in 2024” annual report, which includes the review by the Board of Directors and the audited annual accounts, during the week starting on 10 March 2025.
    • Nokia plans to publish its first quarter 2025 results on 24 April 2025.
    • Nokia’s Annual General Meeting 2025 is planned to be held on 29 April 2025.
    • Nokia plans to publish its second quarter and half year 2025 results on 24 July 2025.
    • Nokia plans to publish its third quarter and January-September 2025 results on 23 October 2025.

    About Nokia

    At Nokia, we create technology that helps the world act together.

    As a B2B technology innovation leader, we are pioneering networks that sense, think and act by leveraging our work across mobile, fixed and cloud networks. In addition, we create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.

    With truly open architectures that seamlessly integrate into any ecosystem, our high-performance networks create new opportunities for monetization and scale. Service providers, enterprises and partners worldwide trust Nokia to deliver secure, reliable and sustainable networks today – and work with us to create the digital services and applications of the future.

    Inquiries:

    Nokia
    Communications
    Phone: +358 10 448 4900
    Email: press.services@nokia.com
    Maria Vaismaa, Global Head of External Communications

    Nokia
    Investor Relations
    Phone: +358 931 580 507
    Email: investor.relations@nokia.com

    Attachment

    The MIL Network –

  • MIL-OSI Security: FBI Washington Field Office Statement on Aviation Incident at Ronald Reagan Washington National Airport

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

    The FBI Washington Field Office’s National Capital Response Squad is responding to an aviation incident at Ronald Reagan Washington National Airport in support of our law enforcement and public safety partners. Please direct questions to the National Transportation Safety Board.

    MIL Security OSI –

  • MIL-OSI Security: Repeat and Dangerous Sex Offender Sentenced to 20 Years in Prison After Traveling from Arkansas to Albany to Sexually Abuse 11 Year Old

    Source: Office of United States Attorneys

    ALBANY, NEW YORK – Kyle Biswell, age 39, of Prairie Grove, Arkansas, was sentenced today to 20 years in prison, to be followed by a life term of supervised release, after a federal judge determined that he is a repeat and dangerous sex offender against minors. United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.

    In July 2024, Biswell pled guilty to interstate travel with intent to engage in illicit sexual conduct and transportation of child pornography.  After his plea, the United States Attorney’s Office, the U.S. Probation Office, and the FBI obtained evidence that Biswell had previously sexually abused an infant, which established that Biswell is a repeat and dangerous sex offender against minors – significantly enhancing his sentencing range under the U.S. Sentencing Guidelines.  Faced with the evidence amassed by the government, Biswell informed the prosecution that he would waive an evidentiary hearing and his objection to being sentenced as a repeat and dangerous sex offender against minors in exchange for an agreed-upon sentence of 20 years’ incarceration and a life term of supervised release. 

    According to the plea agreement and documents submitted to the Court, Biswell admitted that between January and April 2023, he communicated with an individual he believed was the mother of an 11-year-old girl through an internet-based social networking application and using his cellular phone.  Over the course of those communications, Biswell expressed his interest in engaging in sexual contact and impregnating the 11-year-old and ultimately purchased airfare to travel from his home in Arkansas to Albany, with the intent to engage in illicit sexual contact with the child on April 8, 2023.  Upon his arrival in the Capital Region on April 8, 2023, Biswell was arrested by FBI agents and admitted that he had traveled from Arkansas to Albany for the purpose of engaging in sexual acts with a child he believed to be 11 years old.  Biswell further admitted that he brought child pornography with him on his cell phone.  The cell phone was subsequently searched by the FBI and found to contain numerous videos and images depicting child pornography, including several videos depicting the sexual abuse and rape of children under the age of 5.   

    In sentencing Biswell today, United States District Judge Anne M. Nardacci found that he had previously engaged in oral-to-genital contact with an infant, making him a repeat and dangerous sex offender against minors.  In addition to a 20-year term of incarceration and a lifetime of supervised release, Judge Nardacci imposed restitution in the amount of $9,000 and a special assessment of $200.  When Biswell is released from prison, he will be required to register as a sex offender. 

    The FBI investigated the case.  Assistant U.S. Attorney Benjamin S. Clark prosecuted the case as part of Project Safe Childhood. 

    Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).  Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.

    MIL Security OSI –

  • MIL-OSI USA: Reed Announces Committee Leadership Assignments for 119th Congress

    US Senate News:

    Source: United States Senator for Rhode Island Jack Reed
    WASHINGTON, DC – Today, after the Senate Appropriations Committee fully organized, U.S. Senator Jack Reed (D-RI) announced his full slate of committee and subcommittee assignments for the 119th Congress. 
    Senator Reed will continue serving on four ‘A’ committees: Armed Services; Appropriations; Banking, Housing, and Urban Affairs; and the Select Committee on Intelligence.  These assignments include two of the three ‘Super A’ Committees: Armed Services and Appropriations.
    Senator Reed will serve as Ranking Member of the Senate Armed Services Committee (SASC) and as the Ranking Member of the Appropriations Subcommittee on Financial Services and General Government (FSGG), which has jurisdiction over a diverse group of agencies responsible for regulating the financial and telecommunications industries; collecting taxes and providing taxpayer assistance; providing small business assistance; overseeing the White House and judicial branch operations, and the District of Columbia; construction and management of federal buildings; and overseeing the Federal workforce.
    With these assignments, Reed is well-positioned to deliver for Rhode Island while overseeing the U.S. Department of Defense and federal spending decisions through the appropriations process.
    “These key committee posts help me fix our roads and bridges, strengthen our economy, deliver for Rhode Island, and chart a responsible fiscal path.  My new assignment on the Financial Services and General Government Subcommittee provides another tool to support small business growth, expand economic opportunity, boost Rhode Island’s broadband connections, and ensure the health and safety of our financial markets,” said Reed.  “As Congress grapples with a range of complex challenges, I will do everything in my power to help lower prices for working families and ensure Rhode Islanders’ needs are met.  I will continue to be a relentless advocate for our state and focus on the issues that Rhode Islanders care about.  And I will promote and uphold the constitutional role of Congress, including Congress’s power of the purse. ”
    ARMED SERVICES COMMITTEE
    Senator Reed is the Ranking Member of the powerful Senate Armed Services Committee, which is responsible for overseeing the U.S. Department of Defense (DOD), military services operating across the domains of land, sea, air, cyberspace, and space, and all DOD agencies, including their budgets and policies, and national security aspects of nuclear energy.  Each year, SASC is tasked with producing and passing the National Defense Authorization Act (NDAA).
    In 2024, under Reed’s leadership as SASC Chairman, Congress passed the fiscal year 2025 National Defense Authorization Act (NDAA), which authorized $883.7 billion for the U.S. Department of Defense (DOD) and the national security programs of the U.S. Department of Energy.  The NDAA offers a blueprint to equip, supply, and train U.S. forces; provide for military families; and strengthen oversight of the Defense Department and military programs. The defense industry is a high-tech sector that contributes to Rhode Island’s economic growth, generates good-paying jobs, and has been a resilient segment of the state’s economy. According to the latest Rhode Island data, the defense industry generated over $4.3 billion in annual economic impact for Rhode Island and a total employment share of 6.2 percent of the state’s workforce.
    In addition to his leadership on the Armed Services Committee, Reed is also a member of the Appropriations Subcommittee on Defense, which provides him with additional oversight responsibilities in determining how defense dollars are spent.
    APPROPRIATIONS COMMITTEE
    Senator Reed will continue to serve as Rhode Island’s only member of the powerful Appropriations Committee, which controls the funding of the federal government.
    Senator Reed is the third most senior Democrat on the Appropriations Committee.  He works tirelessly to direct federal funding to the Ocean State to create jobs, strengthen infrastructure, and support economic and community development initiatives.
    Senator Reed will give up his leadership post on the Subcommittee on the Legislative Branch in order to help lead the Financial Services and General Government Subcommittee. 
    The FSGG subcommittee drafts the spending plan and oversees annual funding for financial-related agencies including the U.S. Department of Treasury; the Securities and Exchange Commission (SEC); and the Internal Revenue Service (IRS).  It is responsible for funding the Executive Office of the President and federal election security initiatives.  The panel also has jurisdiction over two dozen key agencies and programs that have a direct impact on Rhode Island, including:
    – The U.S. Small Business Administration (SBA), which supports local entrepreneurs and small businesses with outreach and loans and also provides loans following federally-declared disasters.
    – The Federal Trade Commission (FTC), which helps ensure competition in broad sectors of the economy and helps protect consumers from false advertising and business practices.
    – The Federal Communications Commission (FCC), which has jurisdiction over telecommunications and broadband matters.
    – The Office of National Drug Control Policy (ONDCP), which provides funding for High Intensity Drug Trafficking Areas nationwide and to Rhode Island.
    – The Federal Election Commission (FEC), with has jurisdiction over federal campaign finance laws.
    – The General Services Administration (GSA), which manages federal properties in Rhode Island and nationwide.
    – The Community Development Financial Institutions (CDFI) Fund which provides hundreds of millions annually to generate economic growth in local communities and provide access to credit and technical assistance to underserved areas.
    Additionally, Senator Reed will serve on five other Appropriations Subcommittees: Commerce, Justice, Science, and Related Agencies (CJS); Defense; Labor, Health and Human Services, Education, and Related Agencies (Labor-H); Military Construction, Veterans Affairs, and Related Agencies (MilCon-VA); and Transportation, Housing, and Urban Development (THUD).
    BANKING, HOUSING & URBAN AFFAIRS
    A champion of affordable housing, consumer protection, and mass-transit, Senator Reed will continue serving as a key member of the Banking, Housing & Urban Affairs Committee, which has broad oversight over our nation’s financial institutions, capital markets, consumer finance, monetary policy, and housing and mass-transit programs. 
    Senator Reed is the most senior Democratic member of the panel, but Senate rules dictate that members may only serve atop one full committee at a time.
    Senator Reed has used his Banking Committee post to author Wall Street reform and consumer protection laws, including his ‘warrants law,’ which forced the return of over $10 billion dollars to taxpayers.  He also successfully urged the U.S. Securities and Exchange Commission (SEC) to focus greater attention on climate risk disclosures for public companies.  The committee also oversees federal housing policy and authorizes mass-transit investments, and Senator Reed used his role on the committee led to create two affordable housing funds: the Housing Trust Fund and the Capital Magnet Fund.
    It was Senator Reed’s leadership on the Banking, Housing, and Urban Affairs Committee, coupled with his work on the Appropriations Committee, that earned him a spot as one of twenty members of the bipartisan working group that was tasked with developing the CARES Act (Public Law No. 116-136).  Senator Reed was the driving force behind the successful effort to create the $150 billion Coronavirus Relief Fund (CRF) in the CARES Act and successfully secured a small state minimum of $1.25 billion in the law.  Senator Reed continues to play an active role in pushing legislation to direct additional federal funds to states and local governments to help save lives and address the economic impact caused by the pandemic.
    As America faces an affordable housing crisis, which worsened during the pandemic, Senator Reed will play a key role in providing relief for renters and homeowners, and helping to revitalize communities by expanding the supply of affordable housing. Reed will also use his seat on this committee to boost mass-transit infrastructure in order to help connect communities and more Americans to jobs and economic opportunity.
    Senator Reed will serve on three key Banking subcommittees: Economic Policy; Financial Institutions and Consumer Protection; and Securities, Insurance, and Investment.
    INTELLIGENCE COMMITTEE
    By virtue of his leadership of the Senate Armed Services Committee, Reed is also an ex officio member of the high-profile Senate Select Committee on Intelligence, which oversees the U.S. Intelligence Community.  As an ex officio member of the panel, Senator Reed regularly participates in open and closed-door briefings and hearings with top intelligence officials from the Office of the Director of National Intelligence (ODNI), the Central Intelligence Agency (CIA), the Defense Intelligence Agency (DIA), and the National Security Agency (NSA), but he does not vote in committee.
    The Intelligence Committee was established in 1976 to oversee the range of civilian and military agencies and departments that make up the U.S. Intelligence Community, and has wide influence over U.S. national security and foreign policy.
    The President of the United States is required by law to ensure that the Intelligence Committee is kept “fully and currently informed” of intelligence activities.  As a result, U.S. intelligence agencies must notify the Committee of its activities, including covert actions.

    MIL OSI USA News –

  • MIL-OSI Security: Knife assault on woman on Rocky Boy’s Indian Reservation sends Box Elder man to prison for more than five years

    Source: Office of United States Attorneys

    GREAT FALLS — A Box Elder man who admitted to assaulting a woman by cutting her face with a knife during an argument on the Rocky Boy’s Indian Reservation was sentenced today to five years and seven months in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said today.

    The defendant, Colten Tyrone Small, also known as Colton Swan, 22, pleaded guilty in September 2024 to assault with a dangerous weapon and assault resulting in serious bodily injury.

    Chief U.S. District Judge Brian M. Morris presided.

    In court documents, the government alleged that in the early morning hours of May 3, 2023, Small punched the victim, identified as Jane Doe, in the face while he held a butcher knife in a residence in Box Elder, on the Rocky Boy’s Reservation. A witness to the assault told law enforcement that Small sliced Doe’s face in the residence. Small and Doe argued, and the fight got more aggressive. After Small cut Doe’s face, the witness beat up Small. There was some fentanyl and alcohol use occurring at the time. Doe was treated at Northern Montana Hospital in Havre for facial injuries from the knife.

    The U.S. Attorney’s Office prosecuted the case. The FBI and Rocky Boy’s Law Enforcement conducted the investigation.

    XXX

    MIL Security OSI –

  • MIL-OSI: Sound Financial Bancorp, Inc. Q4 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    SEATTLE, Jan. 29, 2025 (GLOBE NEWSWIRE) —  Sound Financial Bancorp, Inc. (the “Company”) (Nasdaq: SFBC), the holding company for Sound Community Bank (the “Bank”), today reported net income of $1.9 million for the quarter ended December 31, 2024, or $0.74 diluted earnings per share, as compared to net income of $1.2 million, or $0.45 diluted earnings per share, for the quarter ended September 30, 2024, and $1.2 million, or $0.47 diluted earnings per share, for the quarter ended December 31, 2023. The Company also announced today that its Board of Directors declared a cash dividend on the Company’s common stock of $0.19 per share, payable on February 26, 2025 to stockholders of record as of the close of business on February 12, 2025.

    Comments from the President and Chief Executive Officer  
     
    “The Bank ended the year with many positives, including a 15-basis-point increase in net interest margin compared to the third quarter of 2024. This was largely due to our significant progress in reducing deposit costs, which fell by 16 basis points,” remarked Laurie Stewart, President and Chief Executive Officer. “Additionally, nonperforming loans decreased by 11.8% from the third quarter, and for the first time in more than a decade, we have no OREO,” concluded Ms. Stewart.

    “Notable progress was made in reducing funding costs during the quarter and in controlling expenses throughout the entire year. We hope to continue this momentum in 2025. Our staff across the company played an important role in these accomplishments by focusing on client relationships and increasing efficiencies through technological improvements,” explained Wes Ochs, Executive Vice President and Chief Financial Officer.

    Mr. Ochs continued, “We ended the year with the same balance sheet strategy that we used to close out 2023, which helped reduce the Bank’s asset size below $1 billion. This strategy is intended to provide the Bank with additional operational flexibility and continued cost savings in 2025.”
    Q4 2024 Financial Performance
    Total assets decreased $107.3 million or 9.7% to $993.6 million at December 31, 2024, from $1.10 billion at September 30, 2024, and decreased $1.6 million or 0.2% from $995.2 million at December 31, 2023.     Net interest income increased $347 thousand or 4.4% to $8.2 million for the quarter ended December 31, 2024, from $7.9 million for the quarter ended September 30, 2024, and increased $653 thousand or 8.6% from $7.6 million for the quarter ended December 31, 2023.
       
        Net interest margin (“NIM”), annualized, was 3.13% for the quarter ended December 31, 2024, compared to 2.98% for the quarter ended September 30, 2024 and 3.04% for the quarter ended December 31, 2023.
    Loans held-for-portfolio decreased $1.6 million or 0.2% to $900.2 million at December 31, 2024, compared to $901.7 million at September 30, 2024, and increased $5.7 million or 0.6% from $894.5 million at December 31, 2023.    
        A $14 thousand provision for credit losses was recorded for the quarter ended December 31, 2024, compared to an $8 thousand provision and a $27 thousand release of provision for credit losses for the quarters ended September 30, 2024 and December 31, 2023, respectively. At December 31, 2024, the allowance for credit losses on loans to total loans outstanding was 0.94%, compared to 0.95% at September 30, 2024 and 0.98% December 31, 2023.
    Total deposits decreased $92.4 million or 9.9% to $837.8 million at December 31, 2024, from $930.2 million at September 30, 2024, and increased $11.3 million or 1.4% from $826.5 million at December 31, 2023. Noninterest-bearing deposits increased $2.8 million or 2.2% to $132.5 million at December 31, 2024 compared to $129.7 million at September 30, 2024, and increased $5.8 million or 4.6% compared to $126.7 million at December 31, 2023.    
        Total noninterest income decreased $75 thousand or 6.1% to $1.2 million for the quarter ended December 31, 2024, compared to the quarter ended September 30, 2024, and increased $94 thousand or 8.8% compared to the quarter ended December 31, 2023.
    The loans-to-deposits ratio was 108% at December 31, 2024, compared to 97% at September 30, 2024 and 108% at December 31, 2023.    
        Total noninterest expense decreased $621 thousand or 8.1% to $7.1 million for the quarter ended December 31, 2024, compared to the quarter ended September 30, 2024, and decreased $248 thousand or 3.4% compared to the quarter ended December 31, 2023.
    Total nonperforming loans decreased $998 thousand or 11.8% to $7.5 million at December 31, 2024, from $8.5 million at September 30, 2024, and increased $3.9 million or 110.7% from $3.6 million at December 31, 2023. Nonperforming loans to total loans was 0.83% and the allowance for credit losses on loans to total nonperforming loans was 113.46% at December 31, 2024.    
        The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as “well-capitalized” at December 31, 2024.
           

    Operating Results

    Net interest income increased $347 thousand, or 4.4%, to $8.2 million for the quarter ended December 31, 2024, compared to $7.9 million for the quarter ended September 30, 2024, and increased $653 thousand, or 8.6%, from $7.6 million for the quarter ended December 31, 2023.The increase from the prior quarter was primarily the result of lower funding costs and an increase in average yield on loans receivable and investments, partially offset by a decrease in the average balance and yield on interest-bearing cash. The increase in net interest income compared to the same quarter one year ago was primarily due to a higher average yield on interest-earning assets, particularly loans receivable and investments, and an increase in the average balances of both loans receivable and interest-bearing cash, partially offset by a lower average yield on interest-bearing cash and higher funding costs.

    Interest income decreased $102 thousand, or 0.7%, to $14.7 million for the quarter ended December 31, 2024, compared to $14.8 million for the quarter ended September 30, 2024, and increased $1.4 million, or 10.5%, from $13.3 million for the quarter ended December 31, 2023. The decrease from the prior quarter was primarily due to a lower average balance of interest-bearing cash, and a 59 basis point decline in the average yield on interest-bearing cash, offset by a seven basis point increase in the average loan yield and a 16 basis point increase in the average yield on investments. The increase in interest income compared to the same quarter last year was due primarily to higher average balances of loans and interest-bearing cash, a 37 basis point increase in the average yield on loans, and a 43 basis point increase in the average yield on investments, partially offset by a decline in the average balance of investments and a 59 basis point decline in the average yield on interest-bearing cash.

    Interest income on loans increased $194 thousand, or 1.5%, to $13.1 million for the quarter ended December 31, 2024, compared to $12.9 million for the quarter ended September 30, 2024, and increased $1.0 million, or 8.6%, from $12.0 million for the quarter ended December 31, 2023. The average balance of total loans was $900.8 million for the quarter ended December 31, 2024, up from $898.6 million for the quarter ended September 30, 2024 and $884.7 million for the quarter ended December 31, 2023. The average yield on total loans was 5.77% for the quarter ended December 31, 2024, up from 5.70% for the quarter ended September 30, 2024 and 5.40% for the quarter ended December 31, 2023. The increase in the average loan yield during the current quarter, compared to both the prior quarter and the fourth quarter of 2023, was primarily due to the origination of new loans at higher interest rates. Additionally, variable-rate loans resetting to higher rates contributed to the increase in average yield compared to the prior quarters. The increase in the average balance during the current quarter compared to the prior quarter was primarily due to growth in commercial and multifamily loans, manufactured housing loans and floating home loans. This was partially offset by a decline in construction and land loans and commercial business loans. The average balances for one-to-four family loans, home equity loans, and other consumer loans remained relatively flat from the third quarter of 2024. The increase in the average balance of loans during the current quarter compared to the fourth quarter of 2023 was primarily due to loan growth across all categories, except for one-to-four family loans, construction and land loans, commercial business loans, and other consumer loans, with the largest decrease being in construction and land loans.

    Interest income on investments was $132 thousand for both the quarters ended December 31, 2024 and September 30, 2024, and $129 thousand for the quarter ended December 31, 2023. Interest income on interest-bearing cash decreased $296 thousand to $1.5 million for the quarter ended December 31, 2024, compared to $1.8 million for the quarter ended September 30, 2024, and increased $359 thousand from $1.2 million for the quarter ended December 31, 2023. The decrease from the prior quarter was due to decreases in the average yield and average balance of interest-bearing cash. The increase from the same quarter in the prior year was a result of a higher average balance, partially offset by a lower average yield.

    Interest expense decreased $449 thousand, or 6.4%, to $6.5 million for the quarter ended December 31, 2024, from $7.0 million for the quarter ended September 30, 2024, and increased $746 thousand, or 12.9%, from $5.8 million for the quarter ended December 31, 2023. The decrease in interest expense during the current quarter from the prior quarter was primarily the result of average balance decreases of $3.8 million in demand and NOW accounts, $2.3 million in certificate accounts and $9.5 million in FHLB advances, as well as lower average rates paid on all categories of interest-bearing deposits, partially offset by a $10.2 million increase in the average balance of savings and money market accounts. The increase in interest expense during the current quarter from the same quarter a year ago was primarily the result of a $91.9 million increase in the average balance of savings and money market accounts and a $1.3 million increase in the average balance of certificate accounts, as well as higher average rates paid on savings and money market accounts. This was partially offset by a $25.3 million decrease in the average balance of demand and NOW accounts and a $9.6 million decrease in the average balance of FHLB advances. The average cost of deposits was 2.58% for the quarter ended December 31, 2024, down from 2.74% for the quarter ended September 30, 2024 and up from 2.38% for the quarter ended December 31, 2023. The average cost of FHLB advances was 4.31% for the quarter ended December 31, 2024, down from 4.32% for the quarter ended September 30, 2024, and up from 4.26% for the quarter ended December 31, 2023.

    NIM (annualized) was 3.13% for the quarter ended December 31, 2024, up from 2.98% for the quarter ended September 30, 2024 and 3.04% for the quarter ended December 31, 2023. The increase in NIM from the prior quarter was the result of lower cost of funding, partially offset by a decrease in interest income on interest-earning assets. The increase in NIM from the quarter one year ago was primarily due to an increase in interest income on interest-earning assets, driven by the higher average balance in loans and interest-bearing cash and a higher yield earned on loans and investments, partially offset by a higher average balance of and cost of savings and money market accounts.

    A provision for credit losses of $14 thousand was recorded for the quarter ended December 31, 2024, consisting of a release of provision for credit losses on loans of $73 thousand and a provision for credit losses on unfunded loan commitments of $87 thousand. This compared to a provision for credit losses of $8 thousand for the quarter ended September 30, 2024, consisting of a provision for credit losses on loans of $106 thousand and a release of provision for credit losses on unfunded loan commitments of $98 thousand, and a release of provision for credit losses of $27 thousand for the quarter ended December 31, 2023, consisting of a provision for credit losses on loans of $337 thousand and a release of the provision for credit losses on unfunded loan commitments of $364 thousand. The increase in the provision for credit losses for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 resulted primarily from an additional qualitative adjustment related to our loan review, additional enhancements to the loss model related to how we adjust for the qualitative component, including the utilization of a scorecard to drive managements analysis, and growth in our unfunded construction loan portfolio, which has a higher loss rate than our other loan portfolios. These increases were offset by lower reserves in both our floating home sub-segment of other consumer loans within our quantitative analysis and in our qualitative analysis related to market conditions and value of underlying collateral, as economic conditions have improved. Expected loss estimates consider various factors, such as market conditions, borrower-specific information, projected delinquencies, and the impact of economic conditions on borrowers’ ability to repay.

    Noninterest income decreased $75 thousand, or 6.1%, to $1.2 million for the quarter ended December 31, 2024, compared to the quarter ended September 30, 2024, and increased $94 thousand, or 8.8%, compared to the quarter ended December 31, 2023. The decrease from the prior quarter was primarily related to a $24 thousand downward adjustment in fair value of mortgage servicing rights and a $59 thousand decrease in earnings from bank-owned life insurance (“BOLI”), both influenced by fluctuating market interest rates. These decreases were partially offset by an increase of $13 thousand in net gain on sale of loans due to higher sales volume in the fourth quarter of 2024, and a $7 thousand increase in gain on disposal of assets due to insurance claims exceeding the book value on the replacement of stolen laptops in the second quarter of 2024. The increase in noninterest income from the same quarter of 2023 was primarily due an $43 thousand increase in service charges and fee income primarily due to increases in late fees on loans, higher interchange income and income related to a new, multi-year agreement with our credit card provider that was effective in 2024, a late fee on one commercial loan and higher specialty deposit fees due to fewer reversals of fees in 2024, a $173 thousand increase in the fair value adjustment on mortgage servicing rights due to changes in prepayment speeds, servicing costs, and discount rate, and a $7 thousand increase in gain on disposal of assets as noted above. These increases were partially offset by a $95 thousand decrease in earnings on BOLI due to market rate fluctuations, and a $23 thousand decrease in net gain on sale of loans due to fewer loans sold, and an $11 thousand decrease in mortgage servicing income as a result of the portfolio paying down at a faster rate than we are replacing the loans. Loans sold during the quarter ended December 31, 2024, totaled $3.5 million, compared to $2.4 million and $4.5 million of loans sold during the quarters ended September 30, 2024 and December 31, 2023, respectively.

    Noninterest expense decreased $621 thousand, or 8.1%, to $7.1 million for the quarter ended December 31, 2024, compared to the quarter ended September 30, 2024, and decreased $248 thousand, or 3.4%, from the quarter ended December 31, 2023. The decrease from the quarter ended September 30, 2024 was primarily a result of lower salaries and benefits and operations expenses, partially offset by higher data processing expense. Salaries and benefits decreased $549 thousand primarily due to lower incentive compensation, lower retirement plan expense due to fluctuating market rates, lower medical expense due to higher medical costs during the third quarter of 2024, and lower salaries expense, as well as higher deferred salaries due to higher loan production. Operations expense decreased $211 thousand primarily due to a reversal of state and local tax expense related to higher estimated tax payments made than actual tax due, and lower operational losses in the current quarter as the prior quarter included the charge-off of a fraudulently obtained loan. This was partially offset by an $165 thousand increase in data processing expenses, reflecting new technology implementation costs. Compared to same quarter in 2023, the decrease in noninterest expense was primarily due to lower operations expenses, occupancy expenses and data processing expenses, which were partially offset by a $118 thousand increase in salaries and benefits costs. Operations expenses decreased due to reduction in loan originations costs, office expenses, operational losses, charitable contributions and state and local taxes, partially offset by higher professional fees primarily related to costs for future FDIC Improvement Act implementation. Data processing expenses decreased due to lower costs related to our core processor, while occupancy expenses decreased primarily due to fully amortized leasehold improvements. The increase in salaries and benefits compared to the same quarter last year reflected higher incentive compensation, lower deferred salaries, higher medical expenses due primarily to a change in insurance providers, and a higher contribution to our employee stock ownership plan due to the increase in value of our stock in 2024. This was partially offset by lower retirement plan expenses due to fluctuating market rates and lower salaries from a restructuring of positions at the end of 2023.

    Balance Sheet Review, Capital Management and Credit Quality

    Assets at December 31, 2024 totaled $993.6 million, down from $1.10 billion at September 30, 2024 and $995.22 million at December 31, 2023. The decrease in total assets from September 30, 2024 was primarily due to decreases in cash and cash equivalents and loans held-for-portfolio. The decrease from one year ago was primarily a result of lower balances of cash and cash equivalents and investment securities, offset by an increase in loans held-for-portfolio.

    Cash and cash equivalents decreased $105.3 million, or 70.7%, to $43.6 million at December 31, 2024, compared to $148.9 million at September 30, 2024, and decreased $6.0 million, or 12.2%, from $49.7 million at December 31, 2023. The decrease from the prior quarter was primarily due to higher deposit withdrawals, as well as the strategic decision to sell reciprocal deposits at the end of the year. Cash and cash equivalents decreased from one year ago primarily due to the increase in loans held-for-portfolio and the payoff of one FHLB borrowing, partially offset by an increase in deposits.

    Investment securities decreased $251 thousand, or 2.5%, to $9.9 million at December 31, 2024, compared to $10.2 million at September 30, 2024, and decreased $533 thousand, or 5.1%, from $10.5 million at December 31, 2023. Held-to-maturity securities totaled $2.1 million at both December 31, 2024 and September 30, 2024, and totaled $2.2 million at December 31, 2023. Available-for-sale securities totaled $7.8 million at December 31, 2024, compared to $8.0 million at September 30, 2024 and $8.3 million at December 31, 2023.

    Loans held-for-portfolio were $900.2 million at December 31, 2024, compared to $901.7 million at September 30, 2024 and $894.5 million at December 31, 2023.

    Nonperforming assets (“NPAs”), which are comprised of nonaccrual loans (including nonperforming modified loans), other real estate owned (“OREO”) and other repossessed assets, decreased $1.1 million, or 12.9%, to $7.5 million at December 31, 2024, from $8.6 million at September 30, 2024 and increased $3.4 million, or 81.3%, from $4.1 million at December 31, 2023. The decrease in NPAs from September 30, 2024 was primarily due to the payoff of seven loans totaling $1.2 million, one loan totaling $76 thousand returning to accrual status, and sale of one other real estate owned property for $115 thousand for a small net gain on sale, partially offset by the addition of seven loans totaling $326 thousand to nonaccrual. The increase in NPAs from one year ago was primarily due to the placement of an additional $9.3 million of loans on nonaccrual status, which included a $3.7 million matured commercial real estate loan where the borrower is in the process of securing financing from another lender, and a $2.4 million floating home loan, all of which are well secured. These additions were partially offset by payoffs totaling $4.2 million, the return of $784 thousand of loans to accrual status, charge-offs of $142 thousand, the sale of two other real estate owned properties for $685 thousand, and normal loan payments.

    NPAs to total assets were 0.75%, 0.78% and 0.42% at December 31, 2024, September 30, 2024 and December 31, 2023, respectively. The allowance for credit losses on loans to total loans outstanding was 0.94% at December 31, 2024, compared to 0.95% at September 30, 2024 and 0.98% at December 31, 2023. Net loan charge-offs for the fourth quarter of 2024 totaled $13 thousand, compared to $14 thousand for the third quarter of 2024, and $15 thousand for the fourth quarter of 2023.

    The following table summarizes our NPAs at the dates indicated (dollars in thousands):

      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Nonperforming Loans:                  
    One-to-four family $ 537     $ 745     $ 822     $ 835     $ 1,108  
    Home equity loans   298       338       342       83       84  
    Commercial and multifamily   3,734       4,719       5,161       4,747       —  
    Construction and land   24       25       28       29       —  
    Manufactured homes   521       230       136       166       228  
    Floating homes   2,363       2,377       2,417       3,192       —  
    Commercial business   11       23       —       —       2,135  
    Other consumer   3       32       3       1       1  
    Total nonperforming loans   7,491       8,489       8,909       9,053       3,556  
    OREO and Other Repossessed Assets:                  
    Commercial and multifamily   —       —       —       575       575  
    Manufactured homes   —       115       115       115       —  
    Total OREO and repossessed assets   —       115       115       690       575  
    Total NPAs $ 7,491     $ 8,604     $ 9,024     $ 9,743     $ 4,131  
                       
    Percentage of Nonperforming Loans:                  
    One-to-four family   7.3 %     8.7 %     9.1 %     8.5 %     26.9 %
    Home equity loans   4.0       3.9       3.8       0.9       2.0  
    Commercial and multifamily   49.8       54.8       57.2       48.7       —  
    Construction and land   0.3       0.3       0.3       0.3       —  
    Manufactured homes   7.0       2.7       1.5       1.7       5.5  
    Floating homes   31.5       27.6       26.8       32.8       —  
    Commercial business   0.1       0.3       —       —       51.7  
    Other consumer   —       0.4       —       —       —  
    Total nonperforming loans   100.0       98.7       98.7       92.9       86.1  
    Percentage of OREO and Other Repossessed Assets:                  
    Commercial and multifamily   —       —       —       5.9       13.9  
    Manufactured homes   —       1.3       1.3       1.2       —  
    Total OREO and repossessed assets   —       1.3       1.3       7.1       13.9  
    Total NPAs   100.0 %     100.0 %     100.0 %     100.0 %     100.0 %

    The following table summarizes the allowance for credit losses at the dates and for the periods indicated (dollars in thousands, unaudited):

      At or For the Quarter Ended:
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Allowance for Credit Losses on Loans                  
    Balance at beginning of period $ 8,585     $ 8,493     $ 8,598     $ 8,760     $ 8,438  
    (Release of) provision for credit losses during the period   (73 )     106       (88 )     (106 )     337  
    Net charge-offs during the period   (13 )     (14 )     (17 )     (56 )     (15 )
    Balance at end of period $ 8,499     $ 8,585     $ 8,493     $ 8,598     $ 8,760  
    Allowance for Credit Losses on Unfunded Loan Commitments                  
    Balance at beginning of period $ 147     $ 245     $ 266     $ 193     $ 557  
    Provision for (release of) provision for credit losses during the period   87       (98 )     (21 )     73       (364 )
    Balance at end of period   234       147       245       266       193  
    Allowance for Credit Losses $ 8,733     $ 8,732     $ 8,738     $ 8,864     $ 8,953  
    Allowance for credit losses on loans to total loans   0.94 %     0.95 %     0.96 %     0.96 %     0.98 %
    Allowance for credit losses to total loans   0.97 %     0.97 %     0.98 %     0.99 %     1.00 %
    Allowance for credit losses on loans to total nonperforming loans   113.46 %     101.13 %     95.33 %     94.97 %     246.34 %
    Allowance for credit losses to total nonperforming loans   116.58 %     102.86 %     98.08 %     97.91 %     251.77 %

    Total deposits decreased $92.4 million, or 9.9%, to $837.8 million at December 31, 2024, from $930.2 million at September 30, 2024 and increased $11.3 million, or 1.4%, from $826.5 million at December 31, 2023. The decrease in total deposits compared to the prior quarter-end was primarily a result of the movement of reciprocal deposits off balance sheet for strategic objectives at year-end, followed by the return of those deposits to our balance sheet in the first quarter of 2025, and a decrease in one high cost money market depositor relationship as part of our strategic decision to decrease our overall cost of funds. Noninterest-bearing deposits increased $2.8 million, or 2.2%, to $132.5 million at December 31, 2024, compared to $129.7 million at September 30, 2024 and increased $5.8 million, or 4.6%, from $126.7 million at December 31, 2023. Noninterest-bearing deposits represented 15.8%, 14.0% and 15.3% of total deposits at December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

    FHLB advances totaled $25.0 million at December 31, 2024, compared to $40.0 million at both September 30, 2024, and December 31, 2023. The decrease from both prior dated was due to the repayment of a $15.0 million FHLB advance that matured in November 2024. FHLB advances are primarily used to support organic loan growth and to maintain liquidity ratios in line with our asset/liability objectives. FHLB advances outstanding at December 31, 2024 had maturities ranging from early 2026 through early 2028. Subordinated notes, net totaled $11.8 million at each of December 31, 2024, September 30, 2024 and December 31, 2023.

    Stockholders’ equity totaled $103.7 million at December 31, 2024, an increase of $1.4 million, or 1.4%, from $102.2 million at September 30, 2024, and an increase of $3.0 million, or 3.0%, from $100.7 million at December 31, 2023. The increase in stockholders’ equity from September 30, 2024 was primarily the result of $1.9 million of net income earned during the current quarter, $98 thousand in share-based compensation, and $19 thousand in common stock options exercised, partially offset by a $122 thousand increase in accumulated other comprehensive loss, net of tax and the payment of $486 thousand in cash dividends to the Company’s stockholders.

    Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, which is headquartered in Seattle, Washington and has full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one loan production office located in the Madison Park neighborhood of Seattle. For more information, please visit www.soundcb.com.

    Forward-Looking Statements Disclaimer

    When used in this press release and in documents filed or furnished by Sound Financial Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s other press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors listed below or because of other factors that we cannot foresee that could cause our actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made.

    Factors which could cause actual results to differ materially, include, but are not limited to: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 and the effects of inflation or deflation, a recession or slowed economic growth, as well as supply chain disruptions; changes in the interest rate environment, including increases and decreases in the Board of Governors of the Federal Reserve System (the Federal Reserve) benchmark rate and the 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; 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; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; secondary market conditions for loans;expectations regarding key growth initiatives and strategic priorities; environmental, social and governance goals and targets; results of examinations of the Company or the Bank by their regulators; increased competition; changes in management’s business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on our third-party vendors; the potential imposition of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sector; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with or furnished to the SEC, which are available at www.soundcb.com and on the SEC’s website at www.sec.gov. The risks inherent in these factors could cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company and could negatively affect the Company’s operating and stock performance.

    The Company does not undertake—and specifically disclaims any obligation—to revise any forward-looking statement to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statement.

    CONSOLIDATED INCOME STATEMENTS
    (Dollars in thousands, unaudited)
        For the Quarter Ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Interest income   $ 14,736     $ 14,838   $ 14,039     $ 13,760     $ 13,337  
    Interest expense     6,516       6,965     6,591       6,300       5,770  
    Net interest income     8,220       7,873     7,448       7,460       7,567  
    Provision for (release of) credit losses     14       8     (109 )     (33 )     (27 )
    Net interest income after provision for (release of) credit losses     8,206       7,865     7,557       7,493       7,594  
    Noninterest income:                    
    Service charges and fee income     619       628     761       612       576  
    Earnings on bank-owned life insurance     127       186     134       177       222  
    Mortgage servicing income     277       280     279       282       288  
    Fair value adjustment on mortgage servicing rights     77       101     (116 )     (65 )     (96 )
    Net gain on sale of loans     53       40     74       90       76  
    Other income     7       —     30       —       —  
    Total noninterest income     1,160       1,235     1,162       1,096       1,066  
    Noninterest expense:                    
    Salaries and benefits     3,920       4,469     4,658       4,543       3,802  
    Operations     1,329       1,540     1,569       1,457       1,537  
    Regulatory assessments     189       189     220       189       198  
    Occupancy     409       414     397       444       458  
    Data processing     1,232       1,067     910       1,017       1,311  
    Net (gain) loss on OREO and repossessed assets     (21 )     —     (17 )     6       —  
    Total noninterest expense     7,058       7,679     7,737       7,656       7,306  
    Income before provision for income taxes     2,308       1,421     982       933       1,354  
    Provision for income taxes     389       267     187       163       143  
    Net income   $ 1,919     $ 1,154   $ 795     $ 770     $ 1,211  
    CONSOLIDATED INCOME STATEMENTS
    (Dollars in thousands, unaudited)
         
        For theYear Ended December 31
          2024       2023  
    Interest income   $ 57,374     $ 50,609  
    Interest expense     26,372       16,759  
    Net interest income     31,002       33,850  
    (Release of) provision for credit losses     (120 )     (273 )
    Net interest income after (release of) provision for credit losses     31,122       34,123  
    Noninterest income:        
    Service charges and fee income     2,620       2,527  
    Earnings on bank-owned life insurance     625       1,179  
    Mortgage servicing income     1,118       1,179  
    Fair value adjustment on mortgage servicing rights     (4 )     (219 )
    Net gain on sale of loans     258       340  
    Other income     38       —  
    Total noninterest income     4,655       5,006  
    Noninterest expense:        
    Salaries and benefits     17,590       17,135  
    Operations     5,894       6,095  
    Regulatory assessments     787       688  
    Occupancy     1,665       1,810  
    Data processing     4,226       4,388  
    Net (gain) loss on OREO and repossessed assets     (31 )     13  
    Total noninterest expense     30,131       30,129  
    Income before provision for income taxes     5,646       9,000  
    Provision for income taxes     1,006       1,561  
    Net income   $ 4,640     $ 7,439  
    CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, unaudited)
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    ASSETS                    
    Cash and cash equivalents   $ 43,641     $ 148,930     $ 135,111     $ 137,977     $ 49,690  
    Available-for-sale securities, at fair value     7,790       8,032       7,996       8,115       8,287  
    Held-to-maturity securities, at amortized cost     2,130       2,139       2,147       2,157       2,166  
    Loans held-for-sale     487       65       257       351       603  
    Loans held-for-portfolio     900,171       901,733       889,274       897,877       894,478  
    Allowance for credit losses – loans     (8,499 )     (8,585 )     (8,493 )     (8,598 )     (8,760 )
    Total loans held-for-portfolio, net     891,672       893,148       880,781       889,279       885,718  
    Accrued interest receivable     3,471       3,705       3,413       3,617       3,452  
    Bank-owned life insurance, net     22,490       22,363       22,172       22,037       21,860  
    Other real estate owned (“OREO”) and other repossessed assets, net     —       115       115       690       575  
    Mortgage servicing rights, at fair value     4,769       4,665       4,540       4,612       4,632  
    Federal Home Loan Bank (“FHLB”) stock, at cost     1,730       2,405       2,406       2,406       2,396  
    Premises and equipment, net     4,697       4,807       4,906       6,685       5,240  
    Right-of-use assets     3,725       3,779       4,020       4,259       4,496  
    Other assets     7,031       6,777       6,995       4,500       6,106  
    TOTAL ASSETS   $ 993,633     $ 1,100,930     $ 1,074,859     $ 1,086,685     $ 995,221  
    LIABILITIES                    
    Interest-bearing deposits   $ 705,267     $ 800,480     $ 781,854     $ 788,217     $ 699,813  
    Noninterest-bearing deposits     132,532       129,717       124,915       128,666       126,726  
    Total deposits     837,799       930,197       906,769       916,883       826,539  
    Borrowings     25,000       40,000       40,000       40,000       40,000  
    Accrued interest payable     765       908       760       719       817  
    Lease liabilities     4,013       4,079       4,328       4,576       4,821  
    Other liabilities     9,371       9,711       9,105       9,578       9,563  
    Advance payments from borrowers for taxes and insurance     1,260       2,047       812       2,209       1,110  
    Subordinated notes, net     11,759       11,749       11,738       11,728       11,717  
    TOTAL LIABILITIES     889,967       998,691       973,512       985,693       894,567  
    STOCKHOLDERS’ EQUITY:                    
    Common stock     25       25       25       25       25  
    Additional paid-in capital     28,413       28,296       28,198       28,110       27,990  
    Retained earnings     76,272       74,840       74,173       73,907       73,627  
    Accumulated other comprehensive loss, net of tax     (1,044 )     (922 )     (1,049 )     (1,050 )     (988 )
    TOTAL STOCKHOLDERS’ EQUITY     103,666       102,239       101,347       100,992       100,654  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 993,633     $ 1,100,930     $ 1,074,859     $ 1,086,685     $ 995,221  
    KEY FINANCIAL RATIOS
    (unaudited)
        For the Quarter Ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Annualized return on average assets   0.70 %   0.42 %   0.30 %   0.29 %   0.46 %
    Annualized return on average equity   7.40 %   4.50 %   3.17 %   3.06 %   4.78 %
    Annualized net interest margin(1)   3.13 %   2.98 %   2.92 %   2.95 %   3.04 %
    Annualized efficiency ratio(2)   75.25 %   84.31 %   89.86 %   89.48 %   84.63 %

    (1)   Net interest income divided by average interest earning assets.
    (2)   Noninterest expense divided by total revenue (net interest income and noninterest income).

    PER COMMON SHARE DATA
    (unaudited)
        At or For the Quarter Ended
        December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
    Basic earnings per share   $ 0.75   $ 0.45   $ 0.31   $ 0.30   $ 0.47
    Diluted earnings per share   $ 0.74   $ 0.45   $ 0.31   $ 0.30   $ 0.47
    Weighted-average basic shares outstanding     2,547,210     2,544,233     2,540,538     2,539,213     2,542,175
    Weighted-average diluted shares outstanding     2,578,771     2,569,368     2,559,015     2,556,958     2,560,656
    Common shares outstanding at period-end     2,564,907     2,564,095     2,557,284     2,558,546     2,549,427
    Book value per share   $ 40.42   $ 39.87   $ 39.63   $ 39.47   $ 39.48

    AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID
    (Dollars in thousands, unaudited)

    The following tables present, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Income and yields on tax-exempt obligations have not been computed on a tax equivalent basis. All average balances are daily average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield for the period they have been on nonaccrual (dollars in thousands).

      Three Months Ended
      December 31, 2024   September 30, 2024   December 31, 2023
      Average Outstanding Balance   Interest Earned/
    Paid    		   Yield/
    Rate    		   Average Outstanding Balance   Interest Earned/
    Paid    		   Yield/
    Rate    		   Average Outstanding Balance   Interest Earned/
    Paid    		   Yield/
    Rate
    Interest-Earning Assets:                                  
    Loans receivable $ 900,832     $ 13,070   5.77 %   $ 898,570     $ 12,876   5.70 %   $ 884,677     $ 12,033   5.40 %
    Interest-earning cash   130,412       1,534   4.68 %     138,240       1,830   5.27 %     88,401       1,175   5.27 %
    Investments   13,263       132   3.96 %     13,806       132   3.80 %     14,479       129   3.53 %
    Total interest-earning assets $ 1,044,507       14,736   5.61 %     1,050,616     $ 14,838   5.62 %   $ 987,557       13,337   5.36 %
    Interest-Bearing Liabilities:                                  
    Savings and money market accounts $ 350,495       2,476   2.81 %   $ 340,281       2,688   3.14 %   $ 258,583       1,586   2.43 %
    Demand and NOW accounts   144,470       128   0.35 %     148,252       151   0.41 %     169,816       149   0.35 %
    Certificate accounts   301,293       3,413   4.51 %     303,632       3,524   4.62 %     300,042       3,436   4.54 %
    Subordinated notes   11,756       168   5.69 %     11,745       168   5.69 %     11,714       168   5.69 %
    Borrowings   30,546       331   4.31 %     40,000       434   4.32 %     40,109       431   4.26 %
    Total interest-bearing liabilities $ 838,560       6,516   3.09 %   $ 843,910       6,965   3.28 %   $ 780,264       5,770   2.93 %
    Net interest income/spread     $ 8,220   2.52 %       $ 7,873   2.34 %       $ 7,567   2.42 %
    Net interest margin         3.13 %           2.98 %           3.04 %
                                       
    Ratio of interest-earning assets to interest-bearing liabilities   125 %             124 %             127 %        
    Noninterest-bearing deposits $ 130,476             $ 132,762             $ 134,857          
    Total deposits   926,734     $ 6,017   2.58 %     924,927     $ 6,363   2.74 %     863,298     $ 5,171   2.38 %
    Total funding(1)   969,036       6,516   2.68 %     976,672       6,965   2.84 %     915,121       5,770   2.50 %

    (1)   Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

      Year Ended
      December 31, 2024   December 31, 2023
      Average
    Outstanding Balance    		   Interest Earned/Paid   Yield/Rate   Average
    Outstanding Balance    		   Interest Earned/Paid   Yield/Rate
    Interest-Earning Assets:                      
    Loans receivable $ 896,690     $ 50,499   5.63 %   $ 870,227     $ 46,470   5.34 %
    Interest-earning cash   124,259       6,367   5.12 %     74,708       3,621   4.85 %
    Investments   12,468       508   4.07 %     13,661       518   3.79 %
    Total interest-earning assets $ 1,033,417       57,374   5.55 %   $ 958,596       50,609   5.28 %
    Interest-Bearing Liabilities:                      
    Savings and money market accounts $ 319,314       9,145   2.86 %   $ 194,810       2,783   1.43 %
    Demand and NOW accounts   151,528       568   0.37 %     204,922       736   0.36 %
    Certificate accounts   309,441       14,363   4.64 %     280,238       10,617   3.79 %
    Subordinated notes   11,740       672   5.72 %     11,698       672   5.74 %
    Borrowings   37,623       1,624   4.32 %     43,977       1,951   4.44 %
    Total interest-bearing liabilities $ 829,646       26,372   3.18 %   $ 735,645       16,759   2.28 %
    Net interest income/spread     $ 31,002   2.37 %       $ 33,850   3.00 %
    Net interest margin         3.00 %           3.53 %
                           
    Ratio of interest-earning assets to interest-bearing liabilities   125 %             130 %        
    Noninterest-bearing deposits $ 131,141             $ 154,448          
    Total deposits   911,424     $ 24,076   2.64 %     834,418     $ 14,136   1.69 %
    Total funding(1)   960,787       26,372   2.74 %     890,093       16,759   1.88 %

    (1)   Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

    LOANS
    (Dollars in thousands, unaudited)
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Real estate loans:                    
    One-to-four family   $ 269,684     $ 271,702     $ 268,488     $ 279,213     $ 279,448  
    Home equity     26,686       25,199       26,185       24,380       23,073  
    Commercial and multifamily     371,516       358,587       342,632       324,483       315,280  
    Construction and land     73,077       85,724       96,962       111,726       126,758  
    Total real estate loans     740,963       741,212       734,267       739,802       744,559  
    Consumer Loans:                    
    Manufactured homes     41,128       40,371       38,953       37,583       36,193  
    Floating homes     86,411       86,155       81,622       84,237       75,108  
    Other consumer     17,720       18,266       18,422       18,847       19,612  
    Total consumer loans     145,259       144,792       138,997       140,667       130,913  
    Commercial business loans     15,605       17,481       17,860       19,075       20,688  
    Total loans     901,827       903,485       891,124       899,544       896,160  
    Less:                    
    Premiums     718       736       754       808       829  
    Deferred fees, net     (2,374 )     (2,488 )     (2,604 )     (2,475 )     (2,511 )
    Allowance for credit losses – loans     (8,499 )     (8,585 )     (8,493 )     (8,598 )     (8,760 )
    Total loans held-for-portfolio, net   $ 891,672     $ 893,148     $ 880,781     $ 889,279     $ 885,718  
    DEPOSITS
    (Dollars in thousands, unaudited)
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Noninterest-bearing demand   $ 132,532   $ 129,717   $ 124,915   $ 128,666   $ 126,726
    Interest-bearing demand     142,126     148,740     152,829     159,178     168,346
    Savings     61,252     61,455     63,368     65,723     69,461
    Money market(1)     206,067     285,655     253,873     241,976     154,044
    Certificates     295,822     304,630     311,784     321,340     307,962
    Total deposits   $ 837,799   $ 930,197   $ 906,769   $ 916,883   $ 826,539

    (1)   Includes $5.0 million of brokered deposits at December 31, 2023. 

    CREDIT QUALITY DATA
    (Dollars in thousands, unaudited)
        At or For the Quarter Ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Total nonperforming loans   $ 7,491     $ 8,489     $ 8,909     $ 9,053     $ 3,556  
    OREO and other repossessed assets     —       115       115       690       575  
    Total nonperforming assets   $ 7,491     $ 8,604     $ 9,024     $ 9,743     $ 4,131  
    Net charge-offs during the quarter   $ (13 )   $ (14 )   $ (17 )   $ (56 )   $ (15 )
    Provision for (release of) credit losses during the quarter     14       8       (109 )     (33 )     (27 )
    Allowance for credit losses – loans     8,499       8,585       8,493       8,598       8,760  
    Allowance for credit losses – loans to total loans     0.94 %     0.95 %     0.96 %     0.96 %     0.98 %
    Allowance for credit losses – loans to total nonperforming loans     113.46 %     101.13 %     95.33 %     94.97 %     246.34 %
    Nonperforming loans to total loans     0.83 %     0.94 %     1.00 %     1.01 %     0.40 %
    Nonperforming assets to total assets     0.75 %     0.78 %     0.84 %     0.90 %     0.42 %
    OTHER STATISTICS
    (Dollars in thousands, unaudited)
        At or For the Quarter Ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
                         
    Total loans to total deposits     107.64 %     97.13 %     98.27 %     98.11 %     108.42 %
    Noninterest-bearing deposits to total deposits     15.82 %     13.95 %     13.78 %     14.03 %     15.33 %
                         
    Average total assets for the quarter   $ 1,089,067     $ 1,095,404     $ 1,070,579     $ 1,062,036     $ 1,033,985  
    Average total equity for the quarter   $ 103,181     $ 102,059     $ 100,961     $ 101,292     $ 100,612  

    Contact

    Financial:    
    Wes Ochs      
    Executive Vice President/CFO    
    (206) 436-8587      
           
    Media:    
    Laurie Stewart      
    President/CEO    
    (206) 436-1495      
           

    The MIL Network –

  • MIL-OSI Security: Union County Man Sentenced To 57 Months In Prison For Stolen Vehicles Conspiracy

    Source: Office of United States Attorneys

    NEWARK, N.J. – A Union County, New Jersey man was sentenced to 57 months in prison for his role in a conspiracy to receive, retitle, and “re-VIN” stolen vehicles, Acting U.S. Attorney Vikas Khanna announced.

    Nathaniel Bell, 27, of Linden, New Jersey, previously pleaded guilty before Senior U.S. District Judge Stanley R. Chesler to a seven-count information charging him with one count of conspiracy to receive stolen vehicles, five counts of altering or removing motor vehicle identification numbers (VINs) and one count of transportation of stolen vehicles.

    According to documents filed in this case and statements made in court:

    Bell was the leader of a criminal conspiracy that obtained stolen vehicles from New Jersey, New York, Florida, and other states, obtained fraudulent titles for the stolen vehicles, and altered vehicle identification numbers to conceal the fact that the vehicles were stolen. Bell and his co-conspirators then sold the stolen cars to dealerships or individual purchasers so they could make a profit. In at least two instances, the co-conspirators sold a stolen car to an individual purchaser and then stole it back so they could sell it again. Bell also knowingly altered or removed the VIN numbers on five vehicles and knowingly transported a stolen vehicle between New York and New Jersey.

    In addition to the prison term, Judge Chesler sentenced Bell to three years of supervised release and ordered him to pay restitution.

    Bell’s co-conspirators, Johnathan Tanksley, 31, of Orange; L’Hubermane Felix, 25, of Miami, Florida; and Dayanna Sarango-Hidalgo, 29, of Newark, have all pleaded guilty to conspiracy to receive stolen vehicles. Felix was previously sentenced to 24 months in prison. Tanksley and Sarango-Hidalgo await sentencing.

    Acting U.S. Attorney Khanna credited special agents of the FBI, under the direction of Acting Special Agent in Charge Terence G. Reilly in Newark, with the investigation that led to the sentencing. He also thanked the New Jersey State Police Auto Theft Task Force; the Port Authority of New York and New Jersey; the New Jersey Motor Vehicle Commission; the Union County Prosecutor’s Office; the National Insurance Crime Bureau; the Jersey City Police Department; the Belleville Police Department; the Rahway Police Department; the Linden Police Department; the Roselle Police Department; the Eatontown Police Department; the Freehold Police Department; the Elizabeth Police Department; the Miami Police Department (Florida); the Florida Highway Patrol; Florida Fish and Wildlife Conservation Commission; the Howard County Police Department (Maryland); the New York Police Department; the Nassau County Police Department (New York); the Georgia Department of Revenue; the New Jersey Division of Criminal Justice; the Deputy Attorney General’s Office; the FBI Miami Office; the FBI Cleveland Office; and the FBI Milwaukee Office

    The government is represented by Assistant U.S. Attorney Lauren Kober of the Organized Crimes/Gangs Unit in Newark.

                                                                 ###

    Defense counsel: Jason F. Orlando 

    MIL Security OSI –

  • MIL-OSI Security: Rochester Man Pleads Guilty for His Role in $250 Million Feeding Our Future Fraud Scheme

    Source: Office of United States Attorneys

    MINNEAPOLIS – A Rochester man pleaded guilty for his role in the $250 million fraud scheme that exploited a federally-funded child nutrition program during the COVID-19 pandemic, announced Acting U.S. Attorney Lisa D. Kirkpatrick.

    According to court documents, from approximately October 2020 through January 2022, Sharmake Jama, 37, knowingly participated in a scheme to defraud a federal child nutrition program designed to provide free meals to children in need. Rather than feed children, the defendants took advantage of the COVID-19 pandemic—and the resulting program changes—to enrich themselves by fraudulently misappropriating millions of dollars in federal child nutrition program funds.

    According to court documents, in September 2020, Jama and Aimee Bock applied for Jama’s Brava Restaurant to be enrolled in the Federal Child Nutrition Program under the sponsorship of Bock’s non-profit, Feeding Our Future. Jama enrolled in the Federal Child Nutrition Program after he first prepared application paperwork at the direction of Salim Said, the co-owner of Safari Restaurant in Minneapolis, which was another business involved in the scheme to defraud the food program.

    From late 2020 through 2021, Jama and other conspirators claimed Brava Restaurant was serving approximately 2,000 to 3,000 daily breakfasts and lunches to children, for which they fraudulently claimed and received millions of dollars in federal child nutrition program funds. To accomplish his scheme, Jama and his co-conspirators submitted fake attendance rosters purporting to list the names of children who purportedly received their food at sites. These rosters were fraudulent in that the names on them were fake or did not correctly reflect the number of children that were fed.

    According to his plea agreement entered today, Jama claimed Brava Restaurant had served more than 1.7 million meals in Rochester as part of the Federal Child Nutrition Program in a little over one year, a number substantially higher than the actual number of meals served. Based on these fraudulent claims, Feeding Our Future paid out over $5.3 million in federal child nutrition program reimbursements for meals purportedly served to children by the defendant and his co-conspirators. Jama knew his receipt of such funds was fraudulent because he and other conspirators intentionally submitted inflated meal counts. Jama’s Brava Restaurant ultimately received $4.3 million directly from Feeding Our Future and over $900,000 from Safari Restaurant, co-owned by Salim Said.

    As part of their scheme, Jama and his conspirators coordinated the establishment of shell companies through which they received and dispersed funds from the federal child nutrition program. Specifically, on January 7, 2021, Salim Said paid to register six different shell companies with the state of Minnesota for Jama and others. Salim Said paid to register Mumu LLC for Jama. In 2021, Jama deposited at least $872,230—almost all of which was misappropriated Federal Child Nutrition Program funds—into his Mumu LLC bank accounts.

    Jama used federal child nutrition funds to pay for personal expenditures unrelated to feeding children, including at least $88,000 for a 2021 GMC Sierra 3500 Denali 4WD Crew Cab truck and over $500,000 toward real estate in Rochester, Minnesota, and Rosemount, Minnesota.

    Jama pleaded guilty today in U.S. District Court before Chief Judge Patrick J. Schiltz to one count of wire fraud and one count of money laundering. His sentencing hearing will be scheduled at a later date.

    The case is the result of an investigation by the FBI, IRS – Criminal Investigations, and the U.S. Postal Inspection Service.

    Assistant U.S. Attorneys Matthew S. Ebert, Joseph H. Thompson, and Harry M. Jacobs are prosecuting the case. Assistant U.S. Attorney Craig Baune is handling the seizure and forfeiture of assets.

    MIL Security OSI –

  • MIL-OSI Security: Mescalero Man Pleads Guilty to Sexual Abuse of a Minor

    Source: Office of United States Attorneys

    ALBUQUERQUE – A Mescalero man pleaded guilty to sexually assaulting a teen 20 years his junior.

    According to court documents, Thomas Lee Chaffins, 35, an enrolled member of Mescalero Apache Tribe, admitted to sexually assaulting a 15-year-old girl on September 27, 2024, in Otero County, New Mexico, on the Mescalero Apache Indian Reservation.

    Chaffins will remain detained pending sentencing, which has not yet been scheduled. At sentencing, Chaffins faces up to 15 years in prison.

    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 Las Cruces Resident Agency of the FBI’s Albuquerque Field Office investigated this case with assistance from the Bureau of Indian Affairs. Assistant United States Attorneys Matilda McCarthy Villalobos and Alyson Hehr are prosecuting the case.

    # # #

    MIL Security OSI –

  • MIL-OSI Security: U.S. Attorney’s Office Secures Sentences for Two Santa Fe Men for Fentanyl and Methamphetamine Trafficking

    Source: Office of United States Attorneys

    ALBUQUERQUE – Two Santa Fe men were sentenced to federal prison for their roles in a fentanyl and methamphetamine trafficking operation that utilized social media to advertise and distribute drugs.

    According to court documents, the Santa Fe Police Department (SFPD) and the FBI began investigating a fentanyl-based drug-trafficking organization in the fall of 2020. During the investigation, officers uncovered the defendants, Mario Guizar-Anchondo and Werni Lopez-Perez, social media activity advertising the sale of fentanyl and methamphetamine.

    In December 2021, SFPD officers encountered Guizar-Anchondo and Lopez-Perez twice.

    • December 4, 2021: SFPD responded to a report of suspected drug activity involving Lopez-Perez in a white Ford F-150 truck. A search of the vehicle resulted in the discovery of a loaded firearm, over $18,000 in cash, 635 grams of methamphetamine, 40 grams of fentanyl pills, and drug paraphernalia.
    • December 30, 2021: SFPD officers stopped the same Ford F-150 truck, this time driven by Guizar-Anchondo with Lopez-Perez as the passenger. A search of the vehicle, authorized by federal and state warrants, revealed approximately 1,730 grams of methamphetamine, 32,000 fentanyl pills, five loaded firearms, and additional drug paraphernalia.

    Despite the ongoing investigation, Guizar-Anchondo and Lopez-Perez continued to advertise fentanyl pills for sale on social media platforms. These posts depicted baggies of fentanyl pills similar to those recovered from the vehicle.

    Lopez-Perez and Guizar-Anchondo both pled guilty to one count each of possession with intent to distribute fentanyl and possessing a firearm in furtherance of a drug trafficking crime. Lopez-Perez was sentenced to 80 months in prison, while Guizar-Anchondo was sentenced to 108 months.

    Upon their release from prison, Lopez-Perez and Guizar-Anchondo will be subject to 3 years of supervised release.

    There is no parole in the federal system.

    U.S. Attorney Alexander M.M. Uballez and Raul Bujanda, Special Agent in Charge of the Federal Bureau of Investigation’s Albuquerque Field Office, made the announcement today.

    The Santa Fe Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from the Santa Fe Police Department. The United States Attorney’s Office is prosecuting the case.

    # # #

    MIL Security OSI –

  • MIL-OSI Security: Federal Grand Jury Indicts Man for Allegedly Attempting To Extort Money From Chicago Restaurateur

    Source: Office of United States Attorneys

    CHICAGO — A federal grand jury has indicted a man for allegedly threatening and assaulting a Chicago restaurateur to collect a debt the man claimed he was owed.

    An indictment returned Monday in U.S. District Court in Chicago charges JAWAD FAKROUNE, also known as “Angelino Escobar” or “Anjelino Escobar,” 45, of Morocco, with extortion.  Arraignment is scheduled for Feb. 5, 2025, at 10:30 a.m., before U.S. District Judge Manish S. Shah.

    In 2023 and 2024, Fakroune privately loaned approximately $405,000 to the restaurateur to start a new restaurant in the Lincoln Park neighborhood of Chicago, according to a criminal complaint previously filed in the case. The restaurateur repaid a portion of the loan, but in November 2024 Fakroune and the restaurateur engaged in a dispute regarding the amount of money still owed, the complaint states. On the evening of Nov. 25, 2024, Fakroune went to the restaurant, threatened the restaurateur over the manner and nature of the repayments, and claimed that $1.5 million was still owed, the complaint states.  Fakroune then choked, kicked, and punched the restaurateur, while continuing to demand money and threatening the restaurateur’s life and the lives of his family members, the complaint states.

    The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, and Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation Chicago Field Office.  The government is represented by Assistant U.S. Attorneys Sean Hennessy and Richard M. Rothblatt.

    The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

    MIL Security OSI –

  • MIL-OSI Security: Previously Convicted Felon Found with a ‘Ghost Gun’ Is Sentenced to 57 Months in Prison for Illegal Possession of a Firearm

    Source: Office of United States Attorneys

                WASHINGTON — Alonte Wilkinson, 31, of Washington D.C., was sentenced today in U.S. District Court to 57 months in federal prison for illegal possession of a firearm, a “ghost gun” that was recovered after he was stopped by police on suspicion of shoplifting from a CVS in Southwest Washington D.C.

                The sentence was announced by U.S. Attorney Edward R. Martin Jr., FBI Special Agent in Charge Sean Ryan of the Washington Field Office Criminal and Cyber Division, and Chief Pamela Smith of the Metropolitan Police Department (MPD).

                Wilkinson pleaded guilty on October 23, 2024, to unlawful possession of a firearm and ammunition by a felon. In addition to the 57-month prison term, U.S. District Court Judge Reggie B. Walton ordered Wilkinson to serve three years of supervised release.

                According to court documents on January 17, 2024, about 5 p.m., MPD officers were conducting a retail theft operation at the CVS on the 1100 block of 4th Street SW. At 5:18 p.m., Wilkinson and another man entered the store. At 5:22 p.m., two CVS employees took note of Wilkinson and the other man exiting the store without paying for their items. The officers stopped the pair as they walked northbound on 4th Street SW.

                MPD officers searched both men. One of the officers recovered a firearm from Wilkinson’s right jacket pocket. Wilkinson claimed he had a license to carry a concealed weapon, but that he did not have the license in his possession. The firearm recovered from the Wilkinson was a Glock 27 .40 caliber pistol with one live round in the chamber, and 12 more rounds in the magazine. The serial number on the pistol was obliterated and rendered unreadable. A check of the D.C. Gun Registry database revealed that Wilkinson did not have a license to carry a firearm nor was the firearm in his possession registered to him, given the obliterated serial number.

                A criminal history search confirmed that Wilkinson was a felon, having been previously convicted for a firearms offense in 2019 for which he was sentenced to prison for more than one year.

                This case was investigated by the FBI Washington Field Office and the Metropolitan Police Department. It was prosecuted by Assistant United States Attorney Emory Cole.

    24cr0058

    MIL Security OSI –

  • MIL-OSI Security: Browning man sentenced to more than three years in prison for burning woman with hot knife on Blackfeet Indian Reservation

    Source: Office of United States Attorneys

    GREAT FALLS — A Browning man who admitted to burning a woman on the hand with a hot knife in a residence on the Blackfeet Indian Reservation was sentenced today to three years and five months in prison, to be followed by three years of supervised release, U.S. Attorney Jesse Laslovich said.

    The defendant, Dale Ray Racine, 32, pleaded guilty in September 2024 to assault with a dangerous weapon.

    Chief U.S. District Judge Brian M. Morris presided.

    The government alleged in court documents that in the early morning hours of Feb. 14, 2024, Racine was drinking at a residence in Browning. The victim, Jane Doe, also was present. At some point, Racine placed a knife in a wood stove until it was red hot. Racine removed the knife from the fire and burned Doe with it. Doe reported to law enforcement and medical providers that Racine was trying to brand her neck. Doe held up her hand to stop the branding, at which point Racine intentionally burned her hand. Doe was treated for second-degree burns to her hand. Racine committed the assault one month after having been released from federal prison and while on supervision for an assault he committed in 2021 in which he repeatedly struck a man in the head with a metal pipe.

    The U.S. Attorney’s Office prosecuted the case. The Blackfeet Law Enforcement Services and FBI, with assistance from the U.S. Marshals Service, investigated the case.

    XXX

    MIL Security OSI –

  • MIL-OSI Security: Taos Pueblo Man Pleads Guilty to Multiple Counts of Child Sexual Abuse

    Source: Office of United States Attorneys

    ALBUQUERQUE – A Taos Pueblo man pleaded guilty in federal court today to three counts of sexual abuse of children.

    According to court documents, Ben John Martinez, 76, an enrolled member of Taos Pueblo, admitted to exploiting his traditional roles in Taos Pueblo to sexually assault minors during traditional ceremonies and at his home on Taos Pueblo between 2001 and 2010. Martinez used his position to gain unsupervised access to children including John Doe, Jane Doe 1, and Jane Doe 2 as well as other currently known victims as described in the plea agreement.

    Martinez was taken into custody pending sentencing, which has not yet been scheduled. At sentencing, Martinez faces 15-40 years imprisonment.

    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 Santa Fe Resident Agency of the FBI Albuquerque Field Office investigated this case with assistance from the Taos Pueblo Department of Public Safety. Assistant United States Attorney Brittany J. DuChaussee is prosecuting the caseas part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit Justice.gov/PSC.

    The FBI continues to investigate Martinez’s involvement in crimes against other victims.  If you have reason to believe you or someone you know may be a victim, please call the FBI at (505) 889-1300 or Chief Summer Mirabal of the Taos Pueblo Department of Public Safety at (575) 741-0764.

    # # #

    MIL Security OSI –

  • MIL-OSI Security: Previously Convicted Felon Sentenced to 36 Months in Federal Prison for Illegal Possession of a Stolen Firearm

    Source: Office of United States Attorneys

                WASHINGTON – Darren Patterson, 31, a previously convicted felon from Washington D.C., was sentenced in U.S. District Court today to 36 months in federal prison in connection with an April 2024 incident in which he attempted to flee from police in his car, struck several vehicles, drove his vehicle into a fence, and crashed into a tree. At his arrest, Patterson was found to be in possession of more than 70 grams of crack cocaine and in illegal possession of a stolen Glock 47 that had been outfitted to fire as a machine gun.

                The sentence was announced by U.S. Attorney Edward R. Martin Jr., FBI Special Agent in Charge Sean Ryan of the Washington Field Office Criminal and Cyber Division, and Chief Pamela Smith of the Metropolitan Police Department.

                Patterson pleaded guilty on July 25, 2024, to unlawful possession of a firearm and ammunition by a felon. In addition to the 36-month prison term, U.S. District Court Loren L. AliKhan ordered Patterson to serve three years of supervised release.

                According to court documents, on April 13, 2024, members of the MPD’s Fifth District Crime Suppression Team (CST) were patrolling in the 1000 block 16th Street, NE. The officers approached a sedan parked on the block and observed a black firearm in plain view in between the feet of Patterson, who was seated behind the wheel. Officers attempted to stop Patterson for further investigation, but Patterson attempted to flee. He reversed the car, causing it to strike another vehicle that was parked behind it. Officers again attempted to stop Patterson, at which point he drove forward, struck a second parked vehicle, and then drove onto the public sidewalk. Patterson then crashed the car into a private fence before driving the car into a tree, which finally stopped him. 

                During a search of the car, MPD officers recovered a stolen Glock 47 that had one round in the chamber, and 19 rounds in the magazine. The stolen firearm was outfitted with a “giggle switch” that allowed it to be operated as a fully automatic machine gun.

                In a search of Patterson, officers recovered crack cocaine – 13 grams of a white rock-like substance in his pocket, 58.5 grams of a white rock-like substance on the ground where Patterson was arrested – and $2,030 from his person.

                Patterson previously had been convicted of being a felon in possession of a firearm (prior conviction); possession with intent to distribute marijuana; and attempted possession with intent to distribute a controlled substance.

                This case was investigated by the Metropolitan Police Department. It is being prosecuted by Assistant U.S. Attorneys Emory Cole, Meredith Mayer-Dempsey, and Jared English.

    24cr204

    MIL Security OSI –

  • MIL-OSI Security: Brooklyn Man Charged with Sexual Exploitation of a Child

    Source: Office of United States Attorneys

    Earlier today, an indictment was unsealed charging Ramel Warner with sexual exploitation of a child.  The defendant was arrested this morning and arraigned before Magistrate Judge Vera M. Scanlon. He was detained pending trial.

    John J. Durham, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.

    “As alleged, while babysitting a seven-year-old boy, the defendant horrifically abused him, filmed the acts and subsequently distributed it on the dark web,” stated United States Attorney Durham.  “Our Office will continue to work tirelessly with our law enforcement partners to bring to justice anyone who abuses children.”

    Mr. Durham expressed his appreciation to the New York City Police Department for their assistance on the case.

    “Ramel Warner is alleged to have used his access to a young child, while babysitting him at his own home, to film himself sexually assaulting the child. Warner’s alleged actions are unconscionable, and we believe there may be more victims. We ask anyone with information regarding his actions to please come forward, so that we can further investigate and aid his victims.  The FBI is committed to ensuring the safety of children and holding their abusers accountable in the criminal justice system,” stated FBI Assistant Director in Charge Dennehy.

    As set forth in court filings, in approximately 2022, the defendant raped the young son of a family friend in the child’s own home when he was supposed to be babysitting him.  The defendant recorded six videos of his sexual abuse of the child, one of which was over four minutes long.  The videos the defendant created depict him anally penetrating the child and performing oral sex on him.  Those videos were subsequently distributed on the dark web.

    The government believes the defendant has worked at afterschool programs in Brooklyn public schools, including a dance group for minor children operating out of a Brooklyn middle school. Anyone with information about sexual exploitation by the defendant should contact the FBI at RWarnerCase@fbi.gov.

    This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.

    The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a minimum sentence of 15 years and a maximum sentence of 30 years.

    The government’s case is being prosecuted by the Office’s General Crimes Section.  Assistant United States Attorney Vincent Chiappini is in charge of the prosecution.

    The Defendant:

    Ramel Warner
    Age: 23
    Brooklyn, New York

    E.D.N.Y. Docket No. 25-CR-32

    MIL Security OSI –

  • MIL-OSI Security: Grand Jury Returns Seven Indictments

    Source: Office of United States Attorneys

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

    LAS VEGAS MAN CHARGED WITH COCAINE TRAFFICKING AND ILLEGAL FIREARMS POSSESSION

    Enrique Rodriquez possessed over 5 kilograms of cocaine

    Enrique Rodriguez, 41, Las Vegas, Nevada, is charged with distributing cocaine, possessing cocaine intended for distribution, possessing a firearm as a felon, and possessing a firearm in furtherance of a drug trafficking crime. The indictment alleges that on June 6, 2024, Rodriguez distributed 500 grams or more of cocaine. The indictment also alleges that on January 16, 2025, Rodriquez possessed 5 kilograms or more of cocaine intended for distribution, illegally possessed a firearm as a felon, and possessed the firearm to further a drug trafficking crime. 

    If convicted, Rodriguez faces a mandatory minimum penalty of 5 years in prison and a maximum penalty of 40 years in prison for the count charging distribution of over 500 grams of cocaine. The count involving 5 kilograms or more of cocaine carries a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison. The felon in possession charge carries a maximum penalty of 15 years in prison. The charge of possessing a firearm in furtherance of a drug trafficking crime carries a mandatory minimum penalty of 5 years in prison and a maximum penalty of life.

    The charges against Rodriguez are the result of an investigation conducted by the Drug Enforcement Administration in Madison and Milwaukee, the Federal Bureau of Investigation, the ATF Madison Crime Gun Task Force, Wisconsin Department of Justice Division of Criminal Investigation, the Dane County Sheriff’s Office, and the Madison Police Department. The ATF Madison Crime Gun Task Force consists of federal agents from ATF and Task Force Officers (TFOs) from local agencies including the Dane County and Clark County Sheriff’s Offices and the Fitchburg, Madison, Sun Prairie, and La Crosse Police Departments. Assistant U.S. Attorney Steven P. Anderson is handling the case.

    MARSHALL MAN CHARGED WITH DRUG AND GUN CRIMES

    Deontrae C. McIntosh, 21, Marshall, Wisconsin, is charged with distributing cocaine, heroin, and fentanyl; possessing cocaine and fentanyl intended for distribution; possessing a firearm and ammunition as a felon; and possessing a firearm in connection with a drug trafficking crime.

    The indictment alleges that McIntosh distributed cocaine on September 23, 2024, and on September 27, 2024. The indictment alleges that McIntosh distributed cocaine and heroin on October 4, 2024. The indictment further alleges that on November 6, 2024, McIntosh distributed cocaine and fentanyl, possessed cocaine and fentanyl intended for distribution, and possessed a loaded Glock 23, 40 caliber semi-automatic handgun as a felon and in furtherance of a drug trafficking crime. 

    If convicted, McIntosh faces a maximum penalty of 20 years in prison on each drug charge. The felon in possession charge carries a maximum penalty of 15 years in prison. If convicted of possessing a firearm in furtherance of a drug trafficking crime, McIntosh faces a penalty of not less than 5 years in prison with a maximum of life in prison.

    The charges against McIntosh are the result of an investigation conducted by the Dane County Narcotics Task Force and the ATF Madison Crime Gun Task Force. U.S. Attorney Timothy M. O’Shea is handling the case.

    CHIPPEWA FALLS MAN CHARGED WITH TRAFFICKING METHAMPHETAMINE AND FENTANYL

    Jason Barnard, 39, Chippewa Falls, Wisconsin, is charged with distributing methamphetamine and fentanyl and with possessing methamphetamine and fentanyl intended for distribution. The indictment alleges that on October 6, 2024, Barnard distributed a mixture of fentanyl and methamphetamine. The indictment further alleges that Barnard distributed 50 grams or more of methamphetamine. Finally, the indictment alleges that on December 6, 2024, Barnard possessed 500 grams or more of methamphetamine and 40 grams or more of fentanyl, all intended for distribution.

    If convicted of the charge involving 50 grams or more of methamphetamine or 40 grams or more of fentanyl, Barnard faces a minimum penalty of 5 years in prison and a maximum penalty of 40 years in prison. If convicted of the charge involving 500 grams or more of methamphetamine, Barnard faces a minimum penalty of 10 years and a maximum penalty of life in prison. The other distribution charge carries a maximum penalty of 20 years in prison.

    The charges against Barnard are the result of an investigation conducted by the West Central Drug Enforcement Task Force, Wisconsin Department of Justice Division of Criminal Investigation, and the U.S. Drug Enforcement Administration. Assistant U.S. Attorney Robert Anderson is handling the case.

    WAUSAU MAN CHARGED WITH COCAINE TRAFFICKING AND ILLEGALLY POSSESSING FIREARMS

    Johntay L. Johnson, 39, Wausau, Wisconsin, is charged with maintaining a drug involved premise, distributing cocaine, and possessing firearms as a felon. The indictment alleges that between December 19, 2023, and November 21, 2024, Johnson used his residence in Wausau to store, manufacture, and distribute illegal drugs. The indictment further alleges that Johnson distributed cocaine on nine occasions in 2024 and possessed three firearms as a felon on September 10, 2024.

    If convicted of the drug counts, Johnson faces a maximum penalty of 20 years in prison on each count. If convicted of the felon in possession count, Johnson faces a maximum penalty of 15 years in prison. 

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

    SUN PRAIRIE MAN CHARGED WITH ILLEGALLY POSSESSING FIREARM AND AMMUNITION

    Cashius Carter, 20, Sun Prairie, Wisconsin, is charged with possessing a firearm and ammunition as a felon. The indictment alleges that Carter possessed a loaded Glock 9mm handgun and Federal 9mm ammunition between June 21, 2024, and September 26, 2024.  

    If convicted, Carter faces a maximum penalty of 15 years in prison.

    The charge against him is the result of an investigation conducted by the Fitchburg Police Department and the ATF Madison Crime Gun Task Force. Assistant U.S. Attorney Corey Stephan is handling the case.

    FITCHBURG MAN CHARGED WITH ILLEGALLY POSSESSING FIREARM

    Malcolm Whiteside, 29, Fitchburg, Wisconsin, is charged with possessing a firearm as a felon. The indictment alleges that Whiteside possessed a loaded Glock Model 27 pistol on August 12, 2024. 

    If convicted, Whiteside faces a maximum penalty of 15 years in prison.

    The charge against Whiteside is the result of an investigation conducted by the Monona Police Department, Madison Police Department, Wisconsin State Patrol, and the ATF Madison Crime Gun Task Force. Assistant U.S. Attorney Chadwick M. Elgersma is handling the case.

    MADISON MAN CHARGED WITH DRUG CRIMES

    Gregory P. Robinson, 41, Madison, Wisconsin, is charged with distributing cocaine, possessing cocaine and fentanyl intended for distribution, and maintaining a drug trafficking place. The indictment alleges that Robinson distributed cocaine on four occasions in June 2024. The indictment also alleges that on June 25, 2024, Robinson possessed cocaine, 400 grams or more of a mixture containing fentanyl and cocaine, and 40 grams or more of fentanyl, all intended for distribution. Finally, the indictment alleges that Robinson maintained a drug trafficking place from June 13, 2024, to June 25,2024.

    If convicted of the charge involving 400 grams or more, Robinson faces a minimum penalty of 10 years in prison and a maximum of life in prison. If convicted of the charge involving 40 grams or more, Robinson faces a minimum penalty of 5 years and a maximum penalty of 40 years in prison. The distribution charges, the possession of cocaine charge, and the maintaining a drug trafficking place charge all carry maximum penalties of 20 years in prison.

    The charges against Robinson are the result of an investigation conducted by the Dane County Narcotics Task Force, the Madison Police Department, and the ATF Madison Crime Gun Task Force. Assistant U.S. Attorney Colleen Lennon is handling the case.

    CHIPPEWA FALLS MAN CHARGED WITH TRAFFICKING METHAMPHETAMINE

    Leroy T. McNamara, 61, Chippewa Falls, Wisconsin, is charged with distributing methamphetamine. The indictment alleges that McNamera distributed 50 grams or more of methamphetamine on July 8, 2024, and July 24, 2024.

    If convicted, McNamara faces a mandatory minimum penalty of five years in prison and a maximum penalty of 40 years in prison on each charge.

    The charges against McNamara are the result of an investigation conducted by the West Central Drug Task Force and the Chippewa County Sheriff’s Office. Assistant U.S. Attorney Megan Stelljes is handling the case.

    MIL Security OSI –

  • MIL-OSI Security: Multi-Convicted Felon Sentenced to More Than Five Years in Federal Prison for Illegally Possessing Ammunition

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

    LOS ANGELES – A Los Angeles-area man with multiple prior felony convictions has been sentenced to 63 months in federal prison for illegally possessing ammunition during an incident last year in which pointed a firearm at a victim and also threatened to shoot the victim’s dog, the Justice Department announced today.

    Edward Conway, 47, who was a transient at the time of the offense, was sentenced Monday afternoon by United States District Judge Percy Anderson. Conway pleaded guilty in October 2024 to one count of being a felon in possession of ammunition.

    According to court documents, on February 25, 2024, Conway held a gun to the head of his ex-girlfriend’s cousin, demanding that the victim get Conway’s ex-girlfriend on the phone. Conway also threatened to shoot the man’s dog if he didn’t cooperate.

    During the incident, Conway pointed to a camera on the man’s house and demanded that the victim turn the camera off. When the victim told Conway he was unable to do so, Conway fired his gun at the camera, pushed his gun into the victim’s back and pinned him to a car while continuing to threaten him.

    When Conway shot toward the camera, a child was taking shelter from the commotion in a house adjacent to where Conway fired the gun, prosecutors wrote in a sentencing memorandum. Investigators recovered a 9mm caliber shell casing from the scene.

    After shooting at the camera, Conway fled the scene on foot, but he was later arrested by officers with the Los Angeles Police Department.

    Earlier that same day, Conway harassed and strangled his ex-girlfriend outside of a grocery store in Los Angeles, then proceeded to throw her car keys onto a neighboring apartment, preventing her from escaping him, according to the sentencing memo.  As a result of this conduct, Conway was convicted of felony domestic violence and sentenced to 60 days in custody.

    Conway is not legally permitted to possess ammunition because of his criminal history, which includes felony convictions in Los Angeles Superior Court for second-degree robbery, being a felon in possession of a firearm, and assault with a deadly weapon.

    The FBI and the Los Angeles Police Department investigated this matter. 

    Assistant United States Attorney Mirelle N. Raza of the General Crimes Section prosecuted this case.

    MIL Security OSI –

  • MIL-OSI USA: Senator Coons, colleagues introduce bipartisan legislation to support firefighters with service-related cancers

    US Senate News:

    Source: United States Senator for Delaware Christopher Coons

    WASHINGTON – U.S. Senators Chris Coons (D-Del.), Amy Klobuchar (D-Minn.) and Kevin Cramer (R-N.D.) reintroduced the Honoring Our Fallen Heroes Act. This bipartisan legislation, which passed unanimously out of the Senate Judiciary Committee last year, would expand federal support for the families of firefighters and other first responders who pass away or become permanently disabled from service-related cancers. The Public Safety Officer Benefits (PSOB) program—which provides benefits to first responders injured in the line of duty and to their families—currently extends protection to first responders suffering from a narrow list of injuries and illnesses. This bill would expand PSOB coverage to more first responders and their families.

    “Firefighters face many life-threatening health risks. Not all of them move as swiftly as a heart attack, but families are no less deserving of benefits if they lose their loved ones to cancers they were exposed to the line of duty,” said Senator Coons. “We need to close this loophole in the PSOB program so that the families of firefighters and first responders who lost their lives due to service-related cancers or face severe disabilities receive the benefits they deserve.”

    “As we are seeing in California and throughout the country, our firefighters put their lives on the line every day to keep us safe, often exposing themselves to carcinogens that can have lethal long-term effects. It’s unacceptable that firefighters who succumb to cancer from work-related exposure or become permanently and totally disabled don’t receive the same treatment as others who die in the line of duty,” said Senator Klobuchar. “Our bipartisan legislation will honor the memory and sacrifice of St. Paul Fire Department Captain Mike Paidar and so many others who risk their lives in service of their communities.”

    “Our first responders epitomize courage and selfless sacrifice, confronting both the immediate perils of their duty and lingering health risks associated with their service,” said Senator Cramer. “The exposure to dangerous carcinogens happens on our behalf. When these heroes make the ultimate sacrifice, their families should not bear these burdens alone.”

    The Honoring our Fallen Heroes Act would expand access to federal support for the families of firefighters and first responders who pass away from cancer caused by carcinogenic exposure during their service. The bill would also extend disability benefits in cases where these first responders become permanently and totally disabled due to cancer.

    This legislation was introduced in honor of Michael Paidar, a fire captain who died in 2020 of an aggressive form of Acute Myeloid Leukemia. In 2021, after strong advocacy from the Paidar family, the Minnesota Department of Public Safety awarded line-of-duty benefits to Captain Paidar’s widow, Julie. This was the first time that Minnesota’s state PSOB program provided a firefighter’s family with benefits for cancer incurred in the line of duty. The Honoring Our Fallen Heroes Act would ensure that firefighters and other first responders across the country are eligible to receive similar benefits under the federal PSOB program. 

    In addition to Senators Coons, Klobuchar, and Cramer, this bill is also co-sponsored by Senators Alex Padilla (D-Calif.), Adam Schiff (D-Calif.), Jim Banks (R-Ind.), John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn.), John Cornyn (R-Texas), Ted Cruz (R-Texas), Tammy Duckworth (D-Ill.), Dick Durbin (D-Ill.), John Fetterman (D-Pa.), Deb Fischer (R-Neb.), Lindsey Graham (R-S.C.), Mazie Hirono (D-Hawaii), John Hoeven (R-N.D.), Jim Justice (R-W.Va.), Mark Kelly (D-Ariz.), Ed Markey (D-Mass.), Mike Rounds (R-S.D.), Jeanne Shaheen (D-N.H.), Tim Sheehy (R-Mont.), Tina Smith (D-Minn.), Mark Warner (D-Va.), Elizabeth Warren (D-Mass.), Peter Welch (D-Vt.), Sheldon Whitehouse (D-R.I.), and Ron Wyden (D-Ore.).

    The legislation is endorsed by the International Association of Fire Fighters (IAFF), Association of State Criminal Investigative Agencies (ASCIA), Congressional Fire Services Institute (CFSI), Federal Law Enforcement Officers Association (FLEOA), Fraternal Order of Police (FOP), International Association of Fire Chiefs (IAFC), Major County Sheriffs of America (MCSA), Metropolitan Fire Chiefs Association (Metro Chiefs), National Association of Police Organizations (NAPO), National Fallen Firefighters Foundation (NFFF), National Fire Protection Association (NFPA), National Narcotics Officers’ Associations Coalition (NNOAC), National Volunteer Fire Council (NVFC), and the Sergeants Benevolent Association of the NYPD. 

    A full list of endorsement quotes is available here.

    Senator Coons has long-advocated for firefighters and first responders’ health, benefits, safety, and well-being. He worked to pass the bipartisan Fire Grants and Safety Act, which was signed into law by President Biden in 2023, and helps local fire departments access funding for training, personnel, and equipment—all of which are especially in demand from small and volunteer fire departments. He also cosponsored the Protecting America’s First Responders Act, which was signed into law in 2021, and improved the PSOB program by allowing benefit amounts to be calculated based on the date of the award and account for cost of living increases. In 2022, he introduced the Fighting Post-Traumatic Stress Disorder Act, a bipartisan bill to promote mental health programs for America’s first responders, who often face long-term effects from providing life-saving services in moments of crisis.

    MIL OSI USA News –

  • MIL-OSI: National Fuel Reports First Quarter Earnings

    Source: GlobeNewswire (MIL-OSI)

    WILLIAMSVILLE, N.Y., Jan. 29, 2025 (GLOBE NEWSWIRE) — National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the first quarter of its 2025 fiscal year.

    FISCAL 2025 FIRST QUARTER SUMMARY

    • GAAP net income of $45.0 million (or $0.49 per share), which includes $104.6 million in non-cash, after-tax impairment charges in the Exploration & Production segment, compared to GAAP net income of $133.0 million (or $1.44 per share) in the prior year.
    • Adjusted operating results of $151.9 million (or $1.66 per share), an increase of 14%, or $16.7 million ($0.20 per share), compared to the prior year. See non-GAAP reconciliation on page 2.
    • Pipeline & Storage segment net income increased $8.4 million, or 35%, compared to the prior year, primarily due to the settlement of the Supply Corporation rate case, which led to increased rates effective February 1, 2024.
    • Utility segment net income increased $5.9 million, or 22%, compared to the prior year driven by a three-year settlement of a rate proceeding in the Company’s New York jurisdiction, which led to increased rates starting October 1, 2024.
    • E&P segment adjusted operating results increased $2.6 million, or 5%, compared to the prior year, supported by hedging-related gains, which more than offset the $0.08 per MMBtu decrease in the weighted average natural gas price compared to the prior year.
    • The Company repurchased $34 million of common stock during the quarter, which brings the total amount repurchased to $99 million, or 1.7 million shares, under the $200 million share buyback program, authorized in March 2024.
    • The Company is increasing its guidance for fiscal 2025 adjusted earnings per share to a range of $6.50 to $7.00 as a result of higher forecasted natural gas prices and ongoing improvements in the outlook for each segment.

    MANAGEMENT COMMENTS

    David P. Bauer, President and CEO of National Fuel Gas Company, stated: “Fiscal 2025 is off to a great start for National Fuel, with each business contributing to our strong consolidated adjusted operating results.

    “In our regulated segments, we are delivering on our long-term growth outlook, with adjusted earnings per share in the quarter increasing approximately 30% compared to the prior year. The recent approval of our rate case settlement in our New York utility jurisdiction, which extends through 2027, combined with the ongoing benefits from ratemaking activity in our Pennsylvania utility territory and at Supply Corporation, gives us further confidence in our 7% to 10% earnings growth projections over the next three years. Furthermore, our integrated upstream and gathering operations in the Eastern Development Area (“EDA”) continue to exceed expectations, with the combination of strong operational execution and our highly-prolific assets. This differentiated ability to drive capital efficiency improvements alongside a rising price outlook for natural gas positions these businesses to deliver strong results in the coming years. We expect that these tailwinds will contribute to rising free cash flow across the system and deliver significant value to National Fuel shareholders.”

    RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

           
      Three Months Ended
      December 31,
    (in thousands except per share amounts) 2024   2023
    Reported GAAP Earnings $ 44,986     $ 133,020  
    Items impacting comparability:      
    Impairment of assets (E&P)   141,802       —  
    Tax impact of impairment of assets   (37,169 )     —  
    Unrealized (gain) loss on derivative asset (E&P)   349       4,198  
    Tax impact of unrealized (gain) loss on derivative asset   (94 )     (1,151 )
    Unrealized (gain) loss on other investments (Corporate / All Other)   2,617       (1,049 )
    Tax impact of unrealized (gain) loss on other investments   (550 )     220  
    Adjusted Operating Results $ 151,941     $ 135,238  
           
    Reported GAAP Earnings Per Share $ 0.49     $ 1.44  
    Items impacting comparability:      
    Impairment of assets, net of tax (E&P)   1.14       —  
    Unrealized (gain) loss on derivative asset, net of tax (E&P)   —       0.03  
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)   0.02       (0.01 )
    Rounding   0.01       —  
    Adjusted Operating Results Per Share $ 1.66     $ 1.46  
                   

    FISCAL 2025 GUIDANCE UPDATE

    National Fuel is increasing its guidance for fiscal 2025 adjusted earnings per share, which are now expected to be within a range of $6.50 to $7.00. This updated range incorporates better than expected results in the first quarter along with the anticipated impact of higher natural gas prices and higher production in the Exploration and Production segment for the remainder of the fiscal year. The Company is now assuming NYMEX natural gas prices will average $3.50 per MMBtu for the remaining nine months of fiscal 2025, an increase of $0.70 from the $2.80 per MMBtu assumed in previous guidance. This updated natural gas price projection approximates the current NYMEX forward curve at this time, however; given the continued volatility in NYMEX natural gas prices, the Company is providing the following sensitivities to its adjusted operating results guidance range:

    NYMEX Assumption 
    Remaining 9 months 
    ($/MMBtu)    		 Fiscal 2025 
    Adjusted Earnings 
    Per Share Sensitivities
    $3.00 $6.15 – $6.65
    $3.50 $6.50 – $7.00
    $4.00 $6.90 – $7.40

    The Company’s production guidance for fiscal 2025 is now expected to be in the range of 410 to 425 Bcfe, an increase of 7.5 Bcfe, or 2%, at the midpoint compared to previous guidance. The revised production guidance is principally a result of ongoing improvements in Seneca’s well results and additional operational efficiencies in the highly prolific EDA. This is also expected to result in increased Gathering segment revenue, relative to the Company’s prior projections, and as a result the Company has increased the midpoint of its guidance range by $5 million. While the Company’s guidance does not incorporate any future price-related curtailments, with 87% of its projected fiscal 2025 production linked to firm sales contracts, Seneca has limited exposure to in-basin markets. Further, 71% of expected production for the balance of the fiscal year is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price, both of which provide price certainty for that production.

    Additionally, as a result of operational improvements, the Company is revising Seneca’s capital expenditure guidance range downward to $495 million to $515 million, or $505 million at the midpoint, which is a $5 million decrease from the midpoint of the Company’s previous guidance.

    The Company’s other fiscal 2025 guidance assumptions remain largely unchanged and are detailed in the table on page 7.

    DISCUSSION OF FIRST QUARTER RESULTS BY SEGMENT

    The following earnings discussion of each operating segment for the quarter ended December 31, 2024 is summarized in a tabular form on pages 8 and 9 of this report. It may be helpful to refer to those tables while reviewing this discussion.

    Note that management defines adjusted operating results as reported GAAP earnings adjusted for items impacting comparability, and adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

    Upstream Business

    Exploration and Production Segment

    The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania.

      Three Months Ended
      December 31,
    (in thousands) 2024   2023   Variance
    GAAP Earnings $ (46,777 )   $ 52,483   $ (99,260 )
    Impairment of assets, net of tax   104,633       —     104,633  
    Unrealized (gain) loss on derivative asset, net of tax   255       3,047     (2,792 )
    Adjusted Operating Results $ 58,111     $ 55,530   $ 2,581  
               
    Adjusted EBITDA $ 156,645     $ 159,970   $ (3,325 )
                         

    Seneca’s first quarter GAAP earnings decreased $99.3 million versus the prior year. This was driven by non-cash, pre-tax impairment charges of $141.8 million ($104.6 million after-tax), the majority of which is related to a “ceiling test” impairment which required Seneca to write-down the book value of its reserves under the full cost method of accounting. For purposes of the ceiling test, the 12-month average of first day of the month pricing for NYMEX natural gas for the period ended December 31, 2024 was $2.13 per MMBtu.

    Excluding impairments, as well as the net impact of unrealized losses related to reductions in the fair value of contingent consideration received in connection with the June 2022 divestiture of Seneca’s California assets (see table above), Seneca’s adjusted operating results increased $2.6 million primarily due to higher realized natural gas prices after the impact of hedging and lower per unit operating expenses, partially offset by lower natural gas production.

    During the first quarter, Seneca produced 97.7 Bcf of natural gas, a decrease of 3.0 Bcf, or 3%, from the prior year. Compared to the preceding fourth quarter of fiscal 2024, production in the first quarter is higher by 5.8 Bcf, or 6%. Early in the quarter, Seneca curtailed approximately 1 Bcf of production due to low in-basin pricing. Production in the quarter was lower than the prior year largely due to the timing of turn in line dates for new wells between fiscal years.

    Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.53 per Mcf, an increase of $0.02 per Mcf from the prior year. Seneca recorded hedging gains of $29.7 million, or an uplift of $0.30 per Mcf, during the quarter, which more than offset a $0.08 per Mcf decrease in pre-hedge natural gas price realizations versus the prior year.

    On a per unit basis, first quarter Lease Operating Expense (“LOE”) was $0.67 per Mcf, consistent with the prior year. LOE included $55.0 million ($0.56 per Mcf) for gathering and compression services from the Company’s Gathering segment to connect Seneca’s production to sales points along interstate pipelines. General and Administrative Expense (“G&A”) was $0.20 per Mcf, an increase of $0.02 per Mcf compared to the prior year driven by the combination of higher personnel costs and modestly lower production. Depreciation, Depletion and Amortization Expense (“DD&A”) was $0.65 per Mcf, a decrease of $0.06 per Mcf from the prior year largely due to ceiling test impairments recorded in the third and fourth quarters of fiscal 2024 that lowered Seneca’s full cost pool depletable base.

    Midstream Businesses

    Pipeline and Storage Segment

    The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

      Three Months Ended
      December 31,
    (in thousands) 2024   2023   Variance
    GAAP Earnings $ 32,454   $ 24,055   $ 8,399
               
    Adjusted EBITDA $ 70,953   $ 59,142   $ 11,811
                     

    The Pipeline and Storage segment’s first quarter GAAP earnings increased $8.4 million versus the prior year primarily due to higher operating revenues, partly offset by higher operation and maintenance (“O&M”) expense.

    The increase in operating revenues of $12.2 million, or 13%, was primarily attributable to an increase in Supply Corporation’s transportation and storage rates effective February 1, 2024, in accordance with its rate settlement, which was approved in fiscal 2024. O&M expense increased $1.1 million primarily due to higher pipeline integrity and labor-related costs.

    Gathering Segment

    The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system.

      Three Months Ended
      December 31,
    (in thousands) 2024   2023   Variance
    GAAP Earnings $ 27,145   $ 28,825   $ (1,680 )
               
    Adjusted EBITDA $ 51,936   $ 53,061   $ (1,125 )
                       

    The Gathering segment’s first quarter GAAP earnings decreased $1.7 million versus the prior year due to lower operating revenues and higher DD&A expense.

    Operating revenues decreased $1.5 million, or 2%, primarily due to a decrease in throughput from Seneca. DD&A expense increased $1.1 million primarily due to higher average depreciable plant in service compared to the prior year.

    Downstream Business

    Utility Segment

    The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution Corporation”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.

      Three Months Ended
      December 31,
    (in thousands) 2024   2023   Variance
    GAAP Earnings $ 32,499   $ 26,551   $ 5,948
               
    Adjusted EBITDA $ 60,665   $ 53,366   $ 7,299
                     

    The Utility segment’s first quarter GAAP earnings increased $5.9 million, or 22%, primarily as a result of the implementation of the recent rate case order in the Utility’s New York jurisdiction.

    For the quarter, customer margin (operating revenues less purchased gas sold) increased $9.1 million, primarily due to the aforementioned rate case in Distribution Corporation’s New York jurisdiction, for which a settlement became effective October 1, 2024. Other income, which was also impacted by the rate settlement, increased $4.0 million. This was in large part due to the recognition of non-service pension and post-retirement benefit income that is offset with a corresponding reduction in new base rates and as a result, has no effect on net income.

    O&M expense increased by $1.6 million, primarily driven by higher personnel costs, partially offset by a reduction related to amortizations of certain regulatory assets as a result of the New York rate settlement. DD&A expense increased $0.8 million primarily due to higher average depreciable plant in service compared to the prior year. Interest expense increased $2.3 million primarily due to a higher average amount of net borrowings.

    Corporate and All Other

    The Company’s operations that are included in Corporate and All Other generated a combined net loss of $0.3 million in the current-year first quarter, which was $1.4 million lower than combined earnings of $1.1 million in the prior-year first quarter. The reduction in earnings during the quarter was primarily driven by unrealized losses recorded on investment securities that fund non-qualified retirement benefit plans.

    EARNINGS TELECONFERENCE

    A conference call to discuss the results will be held on Thursday, January 30, 2025, at 9 a.m. ET. All participants must pre-register to join this conference using the Participant Registration link. A webcast link to the conference call will be provided under the Events Calendar on the NFG Investor Relations website at investor.nationalfuelgas.com. A replay will be available following the call through the end of the day, Thursday, February 6, 2025. To access the replay, dial 1-866-813-9403 and provide Access Code 245940.

    National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. Additional information about National Fuel is available at www.nationalfuel.com.

    Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: impairments under the SEC’s full cost ceiling test for natural gas reserves; changes in the price of natural gas; changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, water availability and disposal or recycling opportunities of used water, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; the Company’s ability to complete strategic transactions; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company’s workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES 

    GUIDANCE SUMMARY

    As discussed on page 2, the Company is revising its adjusted earnings per share guidance for fiscal 2025. Additional details on the Company’s forecast assumptions and business segment guidance are outlined in the table below.

    The revised adjusted earnings per share guidance range excludes certain items that impacted the comparability of adjusted operating results during the three months ended December 31, 2024, including: (1) the after tax impairment of assets, which reduced earnings by $1.14 per share; (2) after-tax unrealized losses on a derivative asset, which reduced earnings by less than $0.01 per share; and (3) after-tax unrealized losses on other investments, which reduced earnings by $0.02 per share. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the nine months ending September 30, 2025, the amounts of these and other potential adjustments and charges, including ceiling test impairments, are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

      Previous FY 2025 Guidance   Updated FY 2025 Guidance
           
    Consolidated Adjusted Earnings per Share $5.50 to $6.00   $6.50 to $7.00
    Consolidated Effective Tax Rate ~ 24.5 – 25%   ~ 25%
           
    Capital Expenditures(Millions)      
    Exploration and Production $495 – $525   $495 – $515
    Pipeline and Storage $130 – $150   $130 – $150
    Gathering $95 – $110   $95 – $110
    Utility $165 – $185   $165 – $185
    Consolidated Capital Expenditures $885 – $970   $885 – $960
           
    Exploration and Production Segment Guidance      
           
    Commodity Price Assumptions*      
    NYMEX natural gas price $2.80 /MMBtu   $3.50 /MMBtu
    Appalachian basin spot price $2.00 /MMBtu   $2.90 /MMBtu
           
    Realized natural gas prices, after hedging ($/Mcf) $2.47 – $2.51   $2.77 – $2.81
           
    Production (Bcf) 400 to 420   410 to 425
           
    E&P Operating Costs($/Mcf)      
    LOE $0.68 – $0.70   $0.68 – $0.70
    G&A $0.18 – $0.19   $0.18 – $0.19
    DD&A $0.65 – $0.69   $0.63 – $0.67
           
    Other Business Segment Guidance(Millions)      
    Gathering Segment Revenues $245 – $255   $250 – $260
    Pipeline and Storage Segment Revenues $415 – $435   $415 – $435
           

    * Commodity price assumptions are for the remaining nine months of the fiscal year.

    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
    QUARTER ENDED DECEMBER 31, 2024
    (Unaudited)
                           
      Upstream   Midstream   Downstream        
                           
      Exploration &   Pipeline &           Corporate /    
    (Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
                           
    First quarter 2024 GAAP earnings $ 52,483     $ 24,055     $ 28,825     $ 26,551     $ 1,106     $ 133,020  
    Items impacting comparability:                      
    Unrealized (gain) loss on derivative asset   4,198                       4,198  
    Tax impact of unrealized (gain) loss on derivative asset   (1,151 )                     (1,151 )
    Unrealized (gain) loss on other investments                   (1,049 )     (1,049 )
    Tax impact of unrealized (gain) loss on other investments                   220       220  
    First quarter 2024 adjusted operating results   55,530       24,055       28,825       26,551       277       135,238  
    Drivers of adjusted operating results**                      
    Upstream Revenues                      
    Higher (lower) natural gas production   (6,016 )                     (6,016 )
    Higher (lower) realized natural gas prices, after hedging   1,885                       1,885  
    Midstream Revenues                      
    Higher (lower) operating revenues       9,637       (1,151 )             8,486  
    Downstream Margins***                      
    Impact of usage and weather               (325 )         (325 )
    Impact of new rates in New York               7,865           7,865  
    Operating Expenses                      
    Lower (higher) lease operating and transportation expenses   1,133                       1,133  
    Lower (higher) operating expenses       (856 )         (1,244 )         (2,100 )
    Lower (higher) depreciation / depletion   6,842           (835 )     (624 )         5,383  
    Other Income (Expense)                      
    Higher (lower) other income   (1,680 )             3,176       1,686       3,182  
    (Higher) lower interest expense               (1,785 )         (1,785 )
    Income Taxes                      
    Lower (higher) income tax expense / effective tax rate   (8 )     (488 )     443       (584 )     205       (432 )
    All other / rounding   425       106       (137 )     (531 )     (436 )     (573 )
    First quarter 2025 adjusted operating results   58,111       32,454       27,145       32,499       1,732       151,941  
    Items impacting comparability:                      
    Impairment of assets   (141,802 )                     (141,802 )
    Tax impact of impairment of assets   37,169                       37,169  
    Unrealized gain (loss) on derivative asset   (349 )                     (349 )
    Tax impact of unrealized gain (loss) on derivative asset   94                       94  
    Unrealized gain (loss) on other investments                   (2,617 )     (2,617 )
    Tax impact of unrealized gain (loss) on other investments                   550       550  
    First quarter 2025 GAAP earnings $ (46,777 )   $ 32,454     $ 27,145     $ 32,499     $ (335 )   $ 44,986  
                           
    * Amounts do not reflect intercompany eliminations.           
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
     
    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
    QUARTER ENDED DECEMBER 31, 2024
    (Unaudited)
                           
      Upstream   Midstream   Downstream        
                           
      Exploration &   Pipeline &           Corporate /    
      Production   Storage   Gathering   Utility   All Other   Consolidated*
                           
    First quarter 2024 GAAP earnings per share $ 0.57     $ 0.26     $ 0.31     $ 0.29     $ 0.01     $ 1.44  
    Items impacting comparability:                      
    Unrealized (gain) loss on derivative asset, net of tax   0.03                       0.03  
    Unrealized (gain) loss on other investments, net of tax                   (0.01 )     (0.01 )
    First quarter 2024 adjusted operating results per share   0.60       0.26       0.31       0.29       —       1.46  
    Drivers of adjusted operating results**                      
    Upstream Revenues                      
    Higher (lower) natural gas production   (0.07 )                     (0.07 )
    Higher (lower) realized natural gas prices, after hedging   0.02                       0.02  
    Midstream Revenues                      
    Higher (lower) operating revenues       0.11       (0.01 )             0.10  
    Downstream Margins***                      
    Impact of usage and weather               —           —  
    Impact of new rates in New York               0.09           0.09  
    Operating Expenses                      
    Lower (higher) lease operating and transportation expenses   0.01                       0.01  
    Lower (higher) operating expenses       (0.01 )         (0.01 )         (0.02 )
    Lower (higher) depreciation / depletion   0.08           (0.01 )     (0.01 )         0.06  
    Other Income (Expense)                      
    Higher (lower) other income   (0.02 )             0.03       0.02       0.03  
    (Higher) lower interest expense               (0.02 )         (0.02 )
    Income Taxes                      
    Lower (higher) income tax expense / effective tax rate   —       (0.01 )     —       (0.01 )     —       (0.02 )
    All other / rounding   0.02       —       0.01       —       (0.01 )     0.02  
    First quarter 2025 adjusted operating results per share   0.64       0.35       0.30       0.36       0.01       1.66  
    Items impacting comparability:                      
    Impairment of assets, net of tax   (1.14 )                     (1.14 )
    Unrealized gain (loss) on derivative asset, net of tax   —                       —  
    Unrealized gain (loss) on other investments, net of tax                   (0.02 )     (0.02 )
    Rounding   (0.01 )                     (0.01 )
    First quarter 2025 GAAP earnings per share $ (0.51 )   $ 0.35     $ 0.30     $ 0.36     $ (0.01 )   $ 0.49  
                           
    * Amounts do not reflect intercompany eliminations.           
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
           
    (Thousands of Dollars, except per share amounts)      
      Three Months Ended
      December 31,
      (Unaudited)
    SUMMARY OF OPERATIONS 2024   2023
    Operating Revenues:      
    Utility Revenues $ 228,424     $ 201,920  
    Exploration and Production and Other Revenues   248,860       254,019  
    Pipeline and Storage and Gathering Revenues   72,198       69,422  
        549,482       525,361  
    Operating Expenses:      
    Purchased Gas   65,337       56,552  
    Operation and Maintenance:      
    Utility   55,244       53,705  
    Exploration and Production and Other   33,541       34,826  
    Pipeline and Storage and Gathering   35,941       34,962  
    Property, Franchise and Other Taxes   22,056       22,416  
    Depreciation, Depletion and Amortization   109,370       115,790  
    Impairment of Assets   141,802       —  
        463,291       318,251  
           
    Operating Income   86,191       207,110  
           
    Other Income (Expense):      
    Other Income (Deductions)   7,720       3,732  
    Interest Expense on Long-Term Debt   (33,362 )     (28,462 )
    Other Interest Expense   (4,381 )     (6,273 )
           
    Income Before Income Taxes   56,168       176,107  
           
    Income Tax Expense   11,182       43,087  
           
    Net Income Available for Common Stock $ 44,986     $ 133,020  
           
    Earnings Per Common Share      
    Basic $ 0.50     $ 1.45  
    Diluted $ 0.49     $ 1.44  
           
    Weighted Average Common Shares:      
    Used in Basic Calculation   90,777,446       91,910,244  
    Used in Diluted Calculation   91,434,741       92,442,145  
                   
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
       
      December 31,   September 30,
    (Thousands of Dollars) 2024   2024
    ASSETS      
    Property, Plant and Equipment $ 14,675,281     $ 14,524,798  
    Less – Accumulated Depreciation, Depletion and Amortization   7,393,477       7,185,593  
    Net Property, Plant and Equipment   7,281,804       7,339,205  
    Current Assets:      
    Cash and Temporary Cash Investments   48,694       38,222  
    Receivables – Net   202,821       127,222  
    Unbilled Revenue   57,117       15,521  
    Gas Stored Underground   24,725       35,055  
    Materials and Supplies – at average cost   47,820       47,670  
    Other Current Assets   83,435       92,229  
    Total Current Assets   464,612       355,919  
    Other Assets:      
    Recoverable Future Taxes   83,740       80,084  
    Unamortized Debt Expense   5,206       5,604  
    Other Regulatory Assets   106,386       108,022  
    Deferred Charges   68,952       69,662  
    Other Investments   71,493       81,705  
    Goodwill   5,476       5,476  
    Prepaid Pension and Post-Retirement Benefit Costs   185,224       180,230  
    Fair Value of Derivative Financial Instruments   20,695       87,905  
    Other   7,860       5,958  
    Total Other Assets   555,032       624,646  
    Total Assets $ 8,301,448     $ 8,319,770  
    CAPITALIZATION AND LIABILITIES      
    Capitalization:      
    Comprehensive Shareholders’ Equity      
    Common Stock, $1 Par Value Authorized – 200,000,000 Shares; Issued and      
    Outstanding – 90,612,955 Shares and 91,005,993 Shares, Respectively $ 90,613     $ 91,006  
    Paid in Capital   1,039,705       1,045,487  
    Earnings Reinvested in the Business   1,698,648       1,727,326  
    Accumulated Other Comprehensive Loss   (76,153 )     (15,476 )
    Total Comprehensive Shareholders’ Equity   2,752,813       2,848,343  
    Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs   2,189,421       2,188,243  
    Total Capitalization   4,942,234       5,036,586  
    Current and Accrued Liabilities:      
    Notes Payable to Banks and Commercial Paper   200,000       90,700  
    Current Portion of Long-Term Debt   500,000       500,000  
    Accounts Payable   120,991       165,068  
    Amounts Payable to Customers   42,587       42,720  
    Dividends Payable   46,671       46,872  
    Interest Payable on Long-Term Debt   44,376       27,247  
    Customer Advances   15,295       19,373  
    Customer Security Deposits   36,091       36,265  
    Other Accruals and Current Liabilities   172,409       162,903  
    Fair Value of Derivative Financial Instruments   20,893       4,744  
    Total Current and Accrued Liabilities   1,199,313       1,095,892  
    Other Liabilities:      
    Deferred Income Taxes   1,089,394       1,111,165  
    Taxes Refundable to Customers   303,344       305,645  
    Cost of Removal Regulatory Liability   296,660       292,477  
    Other Regulatory Liabilities   147,561       151,452  
    Other Post-Retirement Liabilities   3,476       3,511  
    Asset Retirement Obligations   199,310       203,006  
    Other Liabilities   120,156       120,036  
    Total Other Liabilities   2,159,901       2,187,292  
    Commitments and Contingencies   —       —  
    Total Capitalization and Liabilities $ 8,301,448     $ 8,319,770  
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
      Three Months Ended
      December 31,
    (Thousands of Dollars) 2024   2023
           
    Operating Activities:      
    Net Income Available for Common Stock $ 44,986     $ 133,020  
    Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:      
    Impairment of Assets   141,802       —  
    Depreciation, Depletion and Amortization   109,370       115,790  
    Deferred Income Taxes   (5,385 )     38,362  
    Stock-Based Compensation   4,705       4,660  
    Other   7,146       8,041  
    Change in:      
    Receivables and Unbilled Revenue   (115,165 )     (58,459 )
    Gas Stored Underground and Materials and Supplies   10,180       6,915  
    Other Current Assets   8,814       892  
    Accounts Payable   9,703       (3,355 )
    Amounts Payable to Customers   (133 )     1,013  
    Customer Advances   (4,078 )     2,083  
    Customer Security Deposits   (174 )     2,079  
    Other Accruals and Current Liabilities   21,266       28,612  
    Other Assets   (3,892 )     (6,306 )
    Other Liabilities   (9,057 )     (2,403 )
    Net Cash Provided by Operating Activities $ 220,088     $ 270,944  
           
    Investing Activities:      
    Capital Expenditures $ (240,427 )   $ (246,938 )
    Other   5,878       (920 )
    Net Cash Used in Investing Activities $ (234,549 )   $ (247,858 )
           
    Financing Activities:      
    Changes in Notes Payable to Banks and Commercial Paper   109,300       12,500  
    Shares Repurchased Under Repurchase Plan   (33,524 )     —  
    Dividends Paid on Common Stock   (46,872 )     (45,451 )
    Net Repurchases of Common Stock Under Stock and Benefit Plans   (3,971 )     (3,897 )
    Net Cash Provided by (Used in) Financing Activities $ 24,933     $ (36,848 )
           
    Net Increase (Decrease) in Cash and Cash Equivalents   10,472       (13,762 )
    Cash and Cash Equivalents at Beginning of Period   38,222       55,447  
    Cash and Cash Equivalents at December 31 $ 48,694     $ 41,685  
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
               
    UPSTREAM BUSINESS
               
               
      Three Months Ended
    (Thousands of Dollars, except per share amounts) December 31,
    EXPLORATION AND PRODUCTION SEGMENT 2024   2023   Variance
    Total Operating Revenues $ 248,860     $ 254,019     $ (5,159 )
    Operating Expenses:          
    Operation and Maintenance:          
    General and Administrative Expense   19,326       17,793       1,533  
    Lease Operating and Transportation Expense   65,640       67,074       (1,434 )
    All Other Operation and Maintenance Expense   3,867       5,544       (1,677 )
    Property, Franchise and Other Taxes   3,382       3,638       (256 )
    Depreciation, Depletion and Amortization   63,304       71,965       (8,661 )
    Impairment of Assets   141,802       —       141,802  
        297,321       166,014       131,307  
               
    Operating Income (Loss)   (48,461 )     88,005       (136,466 )
               
    Other Income (Expense):          
    Non-Service Pension and Post-Retirement Benefit Credit   37       100       (63 )
    Interest and Other Income (Deductions)   272       (1,513 )     1,785  
    Interest Expense   (15,200 )     (15,268 )     68  
    Income (Loss) Before Income Taxes   (63,352 )     71,324       (134,676 )
    Income Tax Expense (Benefit)   (16,575 )     18,841       (35,416 )
    Net Income (Loss) $ (46,777 )   $ 52,483     $ (99,260 )
    Net Income (Loss) Per Share (Diluted) $ (0.51 )   $ 0.57     $ (1.08 )
               
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
               
    MIDSTREAM BUSINESSES
               
      Three Months Ended
    (Thousands of Dollars, except per share amounts) December 31,
    PIPELINE AND STORAGE SEGMENT 2024   2023   Variance
    Revenues from External Customers $ 68,750     $ 64,826     $ 3,924  
    Intersegment Revenues   37,862       29,587       8,275  
    Total Operating Revenues   106,612       94,413       12,199  
    Operating Expenses:          
    Purchased Gas   (42 )     601       (643 )
    Operation and Maintenance   27,034       25,950       1,084  
    Property, Franchise and Other Taxes   8,667       8,720       (53 )
    Depreciation, Depletion and Amortization   18,585       18,213       372  
        54,244       53,484       760  
               
    Operating Income   52,368       40,929       11,439  
               
    Other Income (Expense):          
    Non-Service Pension and Post-Retirement Benefit Credit   952       1,257       (305 )
    Interest and Other Income   2,040       1,931       109  
    Interest Expense   (11,729 )     (11,725 )     (4 )
    Income Before Income Taxes   43,631       32,392       11,239  
    Income Tax Expense   11,177       8,337       2,840  
    Net Income $ 32,454     $ 24,055     $ 8,399  
    Net Income Per Share (Diluted) $ 0.35     $ 0.26     $ 0.09  
               
               
      Three Months Ended
      December 31,
    GATHERING SEGMENT 2024   2023   Variance
    Revenues from External Customers $ 3,448     $ 4,596     $ (1,148 )
    Intersegment Revenues   57,683       57,992       (309 )
    Total Operating Revenues   61,131       62,588       (1,457 )
    Operating Expenses:          
    Operation and Maintenance   9,429       9,504       (75 )
    Property, Franchise and Other Taxes   (234 )     23       (257 )
    Depreciation, Depletion and Amortization   10,515       9,458       1,057  
        19,710       18,985       725  
               
    Operating Income   41,421       43,603       (2,182 )
               
    Other Income (Expense):          
    Non-Service Pension and Post-Retirement Benefit Credit   —       9       (9 )
    Interest and Other Income   58       73       (15 )
    Interest Expense   (4,210 )     (3,729 )     (481 )
    Income Before Income Taxes   37,269       39,956       (2,687 )
    Income Tax Expense   10,124       11,131       (1,007 )
    Net Income $ 27,145     $ 28,825     $ (1,680 )
    Net Income Per Share (Diluted) $ 0.30     $ 0.31     $ (0.01 )
               
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
               
    DOWNSTREAM BUSINESS
               
               
      Three Months Ended
    (Thousands of Dollars, except per share amounts) December 31,
    UTILITY SEGMENT 2024   2023   Variance
    Revenues from External Customers $ 228,424     $ 201,920     $ 26,504  
    Intersegment Revenues   85       87       (2 )
    Total Operating Revenues   228,509       202,007       26,502  
    Operating Expenses:          
    Purchased Gas   101,473       84,051       17,422  
    Operation and Maintenance   56,260       54,684       1,576  
    Property, Franchise and Other Taxes   10,111       9,906       205  
    Depreciation, Depletion and Amortization   16,827       16,037       790  
        184,671       164,678       19,993  
               
    Operating Income   43,838       37,329       6,509  
               
    Other Income (Expense):          
    Non-Service Pension and Post-Retirement Benefit Credit   5,871       470       5,401  
    Interest and Other Income   528       1,911       (1,383 )
    Interest Expense   (10,716 )     (8,457 )     (2,259 )
    Income Before Income Taxes   39,521       31,253       8,268  
    Income Tax Expense   7,022       4,702       2,320  
    Net Income $ 32,499     $ 26,551     $ 5,948  
    Net Income Per Share (Diluted) $ 0.36     $ 0.29     $ 0.07  
               
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
               
      Three Months Ended
    (Thousands of Dollars, except per share amounts) December 31,
    ALL OTHER 2024   2023   Variance
    Total Operating Revenues $ —     $ —     $ —  
    Operating Expenses:          
    Operation and Maintenance   —       —       —  
        —       —       —  
               
    Operating Income   —       —       —  
    Other Income (Expense):          
    Interest and Other Income (Deductions)   (136 )     (77 )     (59 )
    Interest Expense   (116 )     (81 )     (35 )
    Loss before Income Taxes   (252 )     (158 )     (94 )
    Income Tax Benefit   (59 )     (37 )     (22 )
    Net Loss $ (193 )   $ (121 )   $ (72 )
    Net Loss Per Share (Diluted) $ —     $ —     $ —  
       
      Three Months Ended
      December 31,
    CORPORATE 2024   2023   Variance
    Revenues from External Customers $ —     $ —     $ —  
    Intersegment Revenues   1,341       1,285       56  
    Total Operating Revenues   1,341       1,285       56  
    Operating Expenses:          
    Operation and Maintenance   4,047       3,795       252  
    Property, Franchise and Other Taxes   130       129       1  
    Depreciation, Depletion and Amortization   139       117       22  
        4,316       4,041       275  
               
    Operating Loss   (2,975 )     (2,756 )     (219 )
    Other Income (Expense):          
    Non-Service Pension and Post-Retirement Benefit Costs   (212 )     (387 )     175  
    Interest and Other Income   41,061       41,030       31  
    Interest Expense on Long-Term Debt   (33,362 )     (28,462 )     (4,900 )
    Other Interest Expense   (5,161 )     (8,085 )     2,924  
    Income (Loss) before Income Taxes   (649 )     1,340       (1,989 )
    Income Tax Expense (Benefit)   (507 )     113       (620 )
    Net Income (Loss) $ (142 )   $ 1,227     $ (1,369 )
    Net Income (Loss) Per Share (Diluted) $ (0.01 )   $ 0.01     $ (0.02 )
               
               
      Three Months Ended
      December 31,
    INTERSEGMENT ELIMINATIONS 2024   2023   Variance
    Intersegment Revenues $ (96,971 )   $ (88,951 )   $ (8,020 )
    Operating Expenses:          
    Purchased Gas   (36,094 )     (28,100 )     (7,994 )
    Operation and Maintenance   (60,877 )     (60,851 )     (26 )
        (96,971 )     (88,951 )     (8,020 )
    Operating Income   —       —       —  
    Other Income (Expense):          
    Interest and Other Deductions   (42,751 )     (41,072 )     (1,679 )
    Interest Expense   42,751       41,072       1,679  
    Net Income $ —     $ —     $ —  
    Net Income Per Share (Diluted) $ —     $ —     $ —  
                           
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    SEGMENT INFORMATION (Continued)
    (Thousands of Dollars)
               
      Three Months Ended
      December 31,
      (Unaudited)
              Increase
      2024   2023   (Decrease)
               
    Capital Expenditures:          
    Exploration and Production $ 122,602 (1)(2) $ 160,957 (3)(4) $ (38,355 )
    Pipeline and Storage   19,792 (1)(2)   24,554 (3)(4)   (4,762 )
    Gathering   13,027 (1)(2)   19,569 (3)(4)   (6,542 )
    Utility   36,430 (1)(2)   30,510 (3)(4)   5,920  
    Total Reportable Segments   191,851     235,590     (43,739 )
    All Other   —     —     —  
    Corporate   204     61     143  
    Total Capital Expenditures $ 192,055   $ 235,651   $ (43,596 )
                       

     

    (1) Capital expenditures for the quarter ended December 31, 2024, include accounts payable and accrued liabilities related to capital expenditures of $56.3 million, $4.4 million, $6.0 million, and $4.9 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at December 31, 2024, since they represent non-cash investing activities at that date.
       
    (2) Capital expenditures for the quarter ended December 31, 2024, exclude capital expenditures of $63.3 million, $14.4 million, $21.7 million and $20.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2024 and paid during the quarter ended December 31, 2024. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2024, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at December 31, 2024.
       
    (3) Capital expenditures for the quarter ended December 31, 2023, include accounts payable and accrued liabilities related to capital expenditures of $74.9 million, $5.5 million, $11.1 million, and $6.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were excluded from the Consolidated Statement of Cash Flows at December 31, 2023, since they represented non-cash investing activities at that date.
       
    (4) Capital expenditures for the quarter ended December 31, 2023, exclude capital expenditures of $43.2 million, $31.8 million, $20.6 million and $13.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2023 and paid during the quarter ended December 31, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2023, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at December 31, 2023.
       
    DEGREE DAYS                  
                  Percent Colder
                  (Warmer) Than:
    Three Months Ended December 31, Normal   2024   2023   Normal (1)   Last Year (1)
    Buffalo, NY 2,253   1,884   1,858   (16.4)   1.4
    Erie, PA 1,894   1,697   1,664   (10.4)   2.0
                       
    (1) Percents compare actual 2024 degree days to normal degree days and actual 2024 degree days to actual 2023 degree days.
                       
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
    EXPLORATION AND PRODUCTION INFORMATION
               
               
      Three Months Ended
      December 31,
              Increase
      2024   2023   (Decrease)
               
    Gas Production/Prices:          
    Production (MMcf)          
    Appalachia   97,717     100,757     (3,040 )
               
    Average Prices (Per Mcf)          
    Weighted Average $ 2.23   $ 2.31   $ (0.08 )
    Weighted Average after Hedging   2.53     2.51     0.02  
               
    Selected Operating Performance Statistics:          
    General and Administrative Expense per Mcf (1) $ 0.20   $ 0.18   $ 0.02  
    Lease Operating and Transportation Expense per Mcf (1)(2) $ 0.67   $ 0.67   $ —  
    Depreciation, Depletion and Amortization per Mcf (1) $ 0.65   $ 0.71   $ (0.06 )
               
    (1)  Refer to page 13 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
     
    (2)  Amounts include transportation expense of $0.57 and $0.56 per Mcf for the three months ended December 31, 2024 and December 31, 2023, respectively.
               
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
               
               
               
    Pipeline and Storage Throughput – (millions of cubic feet – MMcf)
               
      Three Months Ended
      December 31,
              Increase
      2024   2023   (Decrease)
    Firm Transportation – Affiliated 31,870   31,495   375  
    Firm Transportation – Non-Affiliated 171,012   168,606   2,406  
    Interruptible Transportation 62   118   (56 )
      202,944   200,219   2,725  
               
    Gathering Volume – (MMcf)          
      Three Months Ended
      December 31,
              Increase
      2024   2023   (Decrease)
    Gathered Volume 120,961   124,261   (3,300 )
               
               
    Utility Throughput – (MMcf)          
      Three Months Ended
      December 31,
              Increase
      2024   2023   (Decrease)
    Retail Sales:          
    Residential Sales 18,476   17,982   494  
    Commercial Sales 2,919   2,800   119  
    Industrial Sales 199   138   61  
      21,594   20,920   674  
    Transportation 16,942   17,528   (586 )
      38,536   38,448   88  
               

    NATIONAL FUEL GAS COMPANY 
    AND SUBSIDIARIES 
    NON-GAAP FINANCIAL MEASURES

    In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding adjusted operating results, adjusted EBITDA and free cash flow, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company’s ongoing operating results or liquidity and for comparing the Company’s financial performance to other companies. The Company’s management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

    Management defines adjusted operating results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel’s reported GAAP earnings to adjusted operating results for the three months ended December 31, 2024 and 2023:

      Three Months Ended
      December 31,
    (in thousands except per share amounts) 2024   2023
    Reported GAAP Earnings $ 44,986     $ 133,020  
    Items impacting comparability:      
    Impairment of assets (E&P)   141,802       —  
    Tax impact of impairment of assets   (37,169 )     —  
    Unrealized (gain) loss on derivative asset (E&P)   349       4,198  
    Tax impact of unrealized (gain) loss on derivative asset   (94 )     (1,151 )
    Unrealized (gain) loss on other investments (Corporate / All Other)   2,617       (1,049 )
    Tax impact of unrealized (gain) loss on other investments   (550 )     220  
    Adjusted Operating Results $ 151,941     $ 135,238  
           
    Reported GAAP Earnings Per Share $ 0.49     $ 1.44  
    Items impacting comparability:      
    Impairment of assets, net of tax (E&P)   1.14       —  
    Unrealized (gain) loss on derivative asset, net of tax (E&P)   —       0.03  
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)   0.02       (0.01 )
    Rounding   0.01       —  
    Adjusted Operating Results Per Share $ 1.66     $ 1.46  
                   

    Management defines adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel’s reported GAAP earnings to adjusted EBITDA for the three months ended December 31, 2024 and 2023:

      Three Months Ended
      December 31,
    (in thousands) 2024   2023
    Reported GAAP Earnings $ 44,986     $ 133,020  
    Depreciation, Depletion and Amortization   109,370       115,790  
    Other (Income) Deductions   (7,720 )     (3,732 )
    Interest Expense   37,743       34,735  
    Income Taxes   11,182       43,087  
    Impairment of Assets   141,802       —  
    Adjusted EBITDA $ 337,363     $ 322,900  
           
    Adjusted EBITDA by Segment      
    Pipeline and Storage Adjusted EBITDA $ 70,953     $ 59,142  
    Gathering Adjusted EBITDA   51,936       53,061  
    Total Midstream Businesses Adjusted EBITDA   122,889       112,203  
    Exploration and Production Adjusted EBITDA   156,645       159,970  
    Utility Adjusted EBITDA   60,665       53,366  
    Corporate and All Other Adjusted EBITDA   (2,836 )     (2,639 )
    Total Adjusted EBITDA $ 337,363     $ 322,900  
                   
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    NON-GAAP FINANCIAL MEASURES
    SEGMENT ADJUSTED EBITDA
       
      Three Months Ended
      December 31,
    (in thousands) 2024   2023
    Exploration and Production Segment      
    Reported GAAP Earnings $ (46,777 )   $ 52,483  
    Depreciation, Depletion and Amortization   63,304       71,965  
    Other (Income) Deductions   (309 )     1,413  
    Interest Expense   15,200       15,268  
    Income Taxes   (16,575 )     18,841  
    Impairment of Assets   141,802       —  
    Adjusted EBITDA $ 156,645     $ 159,970  
           
    Pipeline and Storage Segment      
    Reported GAAP Earnings $ 32,454     $ 24,055  
    Depreciation, Depletion and Amortization   18,585       18,213  
    Other (Income) Deductions   (2,992 )     (3,188 )
    Interest Expense   11,729       11,725  
    Income Taxes   11,177       8,337  
    Adjusted EBITDA $ 70,953     $ 59,142  
           
    Gathering Segment      
    Reported GAAP Earnings $ 27,145     $ 28,825  
    Depreciation, Depletion and Amortization   10,515       9,458  
    Other (Income) Deductions   (58 )     (82 )
    Interest Expense   4,210       3,729  
    Income Taxes   10,124       11,131  
    Adjusted EBITDA $ 51,936     $ 53,061  
           
    Utility Segment      
    Reported GAAP Earnings $ 32,499     $ 26,551  
    Depreciation, Depletion and Amortization   16,827       16,037  
    Other (Income) Deductions   (6,399 )     (2,381 )
    Interest Expense   10,716       8,457  
    Income Taxes   7,022       4,702  
    Adjusted EBITDA $ 60,665     $ 53,366  
           
    Corporate and All Other      
    Reported GAAP Earnings $ (335 )   $ 1,106  
    Depreciation, Depletion and Amortization   139       117  
    Other (Income) Deductions   2,038       506  
    Interest Expense   (4,112 )     (4,444 )
    Income Taxes   (566 )     76  
    Adjusted EBITDA $ (2,836 )   $ (2,639 )
                   

    Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. The Company is unable to provide a reconciliation of any projected free cash flow measure to its comparable GAAP financial measure without unreasonable efforts. This is due to an inability to calculate the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.

    The MIL Network –

  • MIL-OSI Security: One Defendant Pleads Guilty And Two Others Charged With Fraudulently Obtaining $59 Million In Public Benefits And Laundering Proceeds To China

    Source: Office of United States Attorneys

    HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Bruce Jin, age 60, pleaded guilty before United States District Court Judge Jennifer P. Wilson to one count of conspiracy to commit wire fraud and one count of conspiracy to launder monetary instruments in the amount of approximately $59 million. The United States Attorney’s Office also announced that Jin was charged with those offenses in August 2023, along with Brian R. Cleland, age 71, and Carlos A. Grijalva, age 59. All three defendants are residents of the Los Angeles, California area. The indictment also contains additional wire fraud charges against Cleland and Jin individually.

    According to Acting United States Attorney John C. Gurganus, the indictment alleges that Cleland, Jin, and Grijalva, along with other unnamed coconspirators, conspired to obtain state unemployment compensation funds, and other public funds, through fraudulent means. The indictment alleges that the defendants and others entered into a series of agreements to make it appear as if they were operating legitimate businesses selling masks and other COVID19 personal protective equipment. In reality, the funds that the defendants obtained and laundered through their companies were derived from fraudulently obtained state unemployment compensation (“UC”) benefits. The indictment alleges that Economic Impact Payments, or “stimulus payments,” were also obtained through fraudulent means.

    According to the indictment, unnamed members of the conspiracy, including some believed to be located in China, established thousands of accounts at banks across the United States using the personal identifying information (“PII”) of identity theft victims. From there, fraudulent UC claims were generated and paid to these accounts, including accounts in the names of people residing in the Middle District of Pennsylvania. The indictment alleges that these fraudulent UC claims were also generated by fraudsters based in China. As a result of this fraudulent activity, millions of dollars in fraudulent UC payments were made by Pennsylvania, Virginia, Florida, and other states.

    After UC funds were paid out, they were then transferred from identity theft victims’ accounts to companies controlled by Cleland, Jin, and Grijalva. For instance, Jin, through companies that he controlled known as Ample International and Jin Commerce, allegedly received over $12 million in UC funds from the accounts of identity theft victims.  In addition, the defendants are alleged to have used ACH processing—a type of electronic bank-to-bank transfer—to obtain over $45 million in fraudulent funds from the accounts of identity theft victims. This money mostly went from the accounts of identity theft victims to companies controlled by Cleland and Grijalva, including MexUS Service, Group Mex USA, CCB Group, GC Accounting, and CLECO. After that, Cleland and Grijalva transferred over $30 million to Jin’s companies and over $6 million to a company controlled by an associate of Jin who is referred to in the indictment as COCONSPIRATOR 1. That associate’s company is known in the indictment as COMPANY 1.

    After Jin received the fraudulent funds, either from identity theft victims’ accounts or from Cleland and Grijalva through ACH processing, he then made international wire transfers totaling over $35 million to a bank account in China associated with a company known in the indictment as COMPANY 2. COMPANY 2 is controlled by an individual known in the indictment as COCONSPIRATOR 2, who, like COMPANY 2, is allegedly located in China. Jin also transferred over $2 million directly to COCONSPIRATOR 2.

    The indictment also contains forfeiture allegations seeking over $59 million in US currency, as well as the contents of three bank accounts belonging to COMPANY 1 and a property in Honolulu, Hawaii that was purchased by COCONSPIRATOR 1 using funds connected to the charged offenses.

    During his guilty plea, Bruce Jin admitted to the conduct that he is alleged to have engaged in with Cleland, Grijalva, and COCONSPIRATOR 2, as described above.

    Jin has been detained since his arrest in August 2023. Cleland and Grijalva have been released pending trial on conditions. Cleland and Grijalva have both pleaded not guilty to the charged offenses and are scheduled for trial in May 2025.

    “The Department of Justice is committed to identifying and punishing those who defrauded pandemic-era benefits programs, regardless of where they are located,” said Mandy Riedel, Director, COVID-19 Fraud Enforcement. “I commend the hard work of the prosecutors and investigators in the Middle District of Pennsylvania who doggedly pursued these organized overseas criminals to seek justice and the return of stolen tax payer funds.”

    “Bruce Jin and his co-defendants engaged in an unemployment insurance (UI) fraud scheme that targeted multiple state workforce agencies, including the Pennsylvania Department of Labor and Industry,” stated Syreeta Scott, Special Agent-in-Charge of the Mid-Atlantic Region, U.S. Department of Labor, Office of Inspector General. “Jin conspired to file fraudulent UI claims in the names of identity theft victims who were not entitled to such benefits. We will continue to work with our law enforcement partners to protect the integrity of the UI system from those who seek to exploit this critical benefit program.”

    “The millions of dollars fraudulently obtained in this case were meant to support struggling Americans, not to be funneled overseas,” said Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia. “The FBI is grateful for the ongoing collaboration of our partners as we work to hold accountable those who commit such egregious and complex financial crimes.”

    The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Labor, Office of Inspector General. Assistant U.S. Attorney Ravi Romel Sharma is prosecuting the case. 

    The U.S. Attorney General has established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

    The maximum penalty under federal law for wire fraud and conspiracy to commit wire fraud is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty for conspiracy to commit money laundering is also 20 years of imprisonment, a term of supervised release following imprisonment, and a fine.

    A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

    Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

    # # #

    MIL Security OSI –

  • MIL-OSI Security: Lead Defendants Plead Guilty to RICO Conspiracy to Transport, Hire, and Harbor Unauthorized Workers

    Source: Office of United States Attorneys

    Criminal Enterprise Employed Unauthorized Workers at Dozens of Mexican Restaurants Across the Midwest

    KANSAS CITY, Mo. – Seven defendants, including an owner, president, chief financial officer, and controller of a Joplin, Mo., corporation, have pleaded guilty in federal court to their roles in a racketeering conspiracy to transport, hire, and harbor undocumented workers in several Midwestern states.

    “This case sends a clear and unequivocal message: employing unauthorized workers will not be tolerated and will be met with severe consequences,” said Mark Zito, HSI Kansas City Special Agent in Charge. “Our investigation uncovered a blatant and systemic disregard for our nation’s employment laws. Those who engage in such unlawful practices not only undermine the integrity of our labor market but also exploit vulnerable individuals. HSI Kansas City is relentless in our pursuit to dismantle these illegal operations and hold violators accountable to the fullest extent of the law. If you break the law, you will face the full force of our investigation and prosecution.”

    Jose Luis Bravo, 54, of Claremore, Oklahoma; Jose Guadalupe Razo, 54, of Carl Junction, Mo.; Anthony Edward Doll, 46, and Miguel Tarin-Martinez, 46, both of Joplin, Mo.; Alejandro Castillo-Ramirez, 43, a citizen of Mexico; Jaime Ramirez-Ceja, 46, a citizen of Mexico; and Veronica Razo de Lara, 50, of Great Bend, Kansas, have pleaded guilty before U.S. District Judge Roseann A. Ketchmark.

    Each defendant admitted they were part of a RICO (racketeer influenced and corrupt organizations) conspiracy from Jan. 1, 2018, to Aug. 10, 2021, that transported and employed Mexican, Guatemalan, and El Salvadoran nationals who were not authorized to live or work in the United States. Conspirators also harbored and encouraged the unauthorized workers to remain and reside in the United States by providing them with housing and, in certain circumstances, fraudulent identification documentation.

    Bravo is the partial owner of Specialty Foods Distribution, a corporation based in Joplin. Specialty Foods Distribution is a wholesale Mexican food products and restaurant supply company. Razo is the president of Specialty Foods Distribution; Doll is the chief financial officer; Tarin-Martinez is the controller.

    Bravo, Razo, Doll, and Tarin-Martinez created and maintained a network of restaurants operating under multiple LLCs in Missouri, Arkansas, Kansas, and Oklahoma that were serviced by Specialty Foods Distribution. The defendants conspired to staff these restaurants with unauthorized workers. Castillo-Ramirez, Ramirez-Ceja, and Razo de Lara managed three of the enterprise-affiliated restaurants that employed unauthorized workers.  By utilizing unauthorized workers — a workforce not available to law-abiding business owners — the defendants obtained an unfair and illegal competitive business advantage.

    In addition to transporting, harboring, and hiring unauthorized workers, the racketeering activity involved evasive and fraudulent actions. Specifically, to maintain high levels of unauthorized employees at the enterprise-affiliated restaurants, the defendants kept certain unauthorized workers off official payroll records; required certain unauthorized workers to work at times when federal officials were unlikely to conduct inspections; failed to collect or maintain complete and accurate Form I-9 documentation; falsely attested to the accuracy of information on Form I-9 documentation; submitted inaccurate wage and hour reports to state officials; and facilitated fraudulent identification documentation being produced, transported, and provided to unauthorized workers.

    Bravo specifically admitted that, as part of the RICO conspiracy, he facilitated the production and transportation of two fraudulent U.S. permanent resident cards from Claremore to Butler, Mo., as well as personally transported three unauthorized workers from  Claremore to the state of Kansas. Bavo has agreed to forfeit to the government approximately $5.7 million, comprising the forfeiture of proceeds he obtained from the RICO enterprise as well as property that afforded a source of influence over the RICO enterprise. The forfeiture agreement involves liquidation of five financial accounts; the government obtaining cash in lieu of Bravo’s interest in 12 real properties; and the government obtaining cash in lieu of Bravo’s interest in portions of 24 individual companies or corporations, including a portion of SFD, which Bravo admitted afforded a source of influence over the RICO enterprise.

    Razo specifically admitted that he conspired to harbor five unauthorized workers at enterprise-affiliated restaurants in Great Bend, and encouraged and induced three unauthorized workers at SFD to reside in the United States in violation of the law. Razo has agreed to forfeiture in the form of liquidation of one bank account and a money judgment in the amount of approximately $130,700, representing the proceeds he obtained from the RICO enterprise.

    Doll specifically admitted to encouraging unauthorized workers to reside in the United States by conspiring to create a Missouri LLC for the purpose of opening a new restaurant where certain unauthorized workers could gain employment, and conspiring to harbor unauthorized workers by taking steps to ensure unauthorized workers did not utilize established timeclock payroll systems at certain enterprise-affiliated restaurants. Doll has agreed to forfeiture in the form of liquidation of two bank accounts and a money judgment in the amount of approximately $132,300, representing the proceeds he obtained from the RICO enterprise.

    Tarin-Martinez specifically admitted to encouraging unauthorized workers to reside in the United States in violation of the law in Springfield, Mo., and in Pittsburg, Kan. Tarin-Martinez has agreed to forfeiture in the form of a money judgment in the amount of approximately $23,094, representing the proceeds he obtained from the RICO enterprise.

    Castillo-Ramirez specifically admitted to harboring two unauthorized workers at an enterprise-affiliated restaurant in Augusta, Kan. Castillo-Ramirez also admitted to encouraging the two unauthorized workers to reside in the United States in violation of the law by providing the unauthorized workers with employment, keeping them out of the established payroll system, and paying them in cash or by local check.

    Ramirez-Ceja specifically admitted to encouraging two unauthorized workers to reside in the United States in violation of the law by providing the workers with employment at an enterprise-affiliated restaurant in Lebanon, Mo., allowing the unauthorized workers to utilize fraudulent identification documents, and providing the unauthorized workers with housing. Additionally, Ramirez-Ceja admitted to making false attestations on two Form I-9 documents.

    Razo de Lara specifically admitted to conspiring to harbor four unauthorized workers at an enterprise-affiliated restaurant in Great Bend. As part of the conspiracy, Razo de Lara agreed to keep unauthorized workers out of the established payroll system, pay the unauthorized workers in cash, and have certain unauthorized workers complete work at times when federal agents were unlikely to inspect the restaurant.

    Under federal statutes, each of these defendants is subject to a sentence of up to 20 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.

    This case is being prosecuted by Assistant U.S. Attorneys Rudolph R. Rhodes IV, Leigh Farmakidis, and Nicholas Heberle. It was investigated by Homeland Security Investigations with assistance from IRS-Criminal Investigations, Kansas Bureau of Investigation, Kansas Department of Labor, Kansas Department of Revenue, Kansas Highway Patrol, and Missouri State Highway Patrol.

    MIL Security OSI –

  • MIL-OSI Security: U.S. Attorney Michael F. Easley, Jr. Announces Departure

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

    Tenure Marked by Violent Crime Declines, White Collar Fraud Crackdown, Dismantling Drug Traffickers, and Expansion of Civil Rights

    RALEIGH, N.C. – U.S. Attorney Michael F. Easley, Jr., announced today that he is stepping down on Monday, February 3, 2025, after leading the Office since November 2021. President Joseph Biden nominated Easley on September 28, 2021, and the U.S. Senate unanimously confirmed him on November 21, 2021. He was officially sworn in on November 26, 2021.  

    “It has been the highest honor to serve as the top federal law enforcement official for Eastern North Carolina – a place I was born, raised, and am proud to call home,” said Easley. “The men and women of the Eastern District are among the hardest working in the nation – steadfast in the mission to keep America safe.  Together, we helped drive down violent crime, turbocharged white-collar prosecutions, protected civil rights, and stemmed the tide of narcotics into our communities.  We did it through partnering, shoulder to shoulder, with local law enforcement and community leaders to solve our region’s most challenging problems.  I extend my heartfelt appreciation to the prosecutors, judges, law enforcement, and staff who give so much to see justice done every day.”

    “U.S. Attorney Easley is the kind of partner every sheriff hopes for – sharp, decisive, and committed to results.  He didn’t just talk about law enforcement partnerships; he made them real, partnering with sheriffs for solutions and backing them up with action.  Under his leadership, we made real progress— violent crime down, overdose deaths falling, and tighter collaboration.  Easley set a new gold standard for what it means to lead in federal law enforcement,” said Eddie Caldwell, Executive Vice President and General Counsel of the North Carolina Sheriffs Association.

    “We are deeply grateful for the years that U.S. Attorney Easley served at the helm of the Eastern District of North Carolina. His leadership, particularly through collaborative efforts, like the VCAP initiative, played a critical role in prosecuting violent offenders. His work has significantly contributed to our goal of making Raleigh one of the safest cities in the nation. He will be greatly missed,” said Raleigh Police Chief Estella Patterson.

    Expansion of Resources to Make Communities Safer

    U.S. Attorney Easley fought to significantly expand investigative and prosecutorial resources in the District, including a nearly 17% increase in prosecutors and new legal support staff and investigators. Much of the new personnel were allocated through a competitive national application process, with no district in the nation receiving more new prosecutors than the Eastern District of North Carolina (EDNC). The Office’s productivity and strong law enforcement partnerships also led the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to add an additional team of agents to partner on violent crime reduction across the District.

    Easley and his Project Safe Neighborhoods (PSN) team also worked with Department of Justice (DOJ) leadership to have Raleigh named a National Public Safety Partnership Site (PSP). The program aims to lower crime rates and improve quality of life through intensive training and technical assistance (TTA) to enhance gun violence investigations, constitutional policing, community engagement, crime analysis, and the use of technology in crime reduction.

    Driving Down Violent Crime and Dismantling Drug Traffickers

    Throughout his tenure, Easley and his team have led the charge to combat violent crime and drug trafficking in the District by launching a Violent Crime Action Plan (VCAP) with formal coordination sites in Raleigh, Fayetteville, Wilmington, Rocky Mount, New Bern, and the Albemarle Region. The VCAP strategy built deeper ties and sustained partnerships with law enforcement, with VCAP sites showing double-digit percentage declines in homicides since 2022, for example, Raleigh (↓37%), Fayetteville (↓39%), Wilmington (↓15%), and Rocky Mount (↓67%).

    VCAP is a collaboration between the U.S. Attorney’s Office and local police departments, sheriff’s offices, and district attorney’s offices to identify and prosecute the most significant drivers of violence, specifically targeting shooters and the gunrunners who arm them.  Notable cases include the 20-year sentence for a Crabtree Valley Mall robbery and the carjacking, the sentencing of a Crips Gang member for multi-state gun trafficking; the indictment of two Sampson County men allegedly responsible for a quintuple murder, the prosecution of gang members with fully-automatic machine guns; and gun smuggling to Mexico.

    VCAP provides a forum for structured inter-agency coordination, intelligence-led policing, and deployment of federal Task Force Officers to bring federal technology to address local gun violence.

    In 2022, 2023, and 2024, EDNC prosecuted over 850 individuals for firearms offenses and took over 750 guns off the streets.

    In addition to VCAP, Easley revamped the Office’s Organized Crime & Drug Enforcement Task Force (OCDETF) by expanding the use of federal wiretaps, embedding federal agents alongside prosecutors, and increasing financial investigations. During Easley’s tenure, the Office achieved a #1 national rank for the number of OCDETF cases and #1 for the number of OCDETF defendants convicted of violence. Easley encouraged partners to prioritize national-scale cases with strong local impact, dismantling the trafficking, distribution, and money laundering pillars of criminal enterprises.

    OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Notable cases include the 75-year sentence of a national leader of the Pagan’s Motorcycle Club for narcotics trafficking and violence; the indictment of 16 members of the Hell’s Angels and Red Devils motorcycle gangs as part of an alleged violent criminal enterprise; the 40-year sentence for a narcotics trafficker operating from a daycare; the prosecution of the leader of white supremacist organization for armed drug trafficking; the  35-year sentence of a violent Fayetteville fentanyl trafficker; the conviction of a Raleigh Police officer for drug trafficking; the conviction of two fentanyl traffickers with ties to the Sinaloa Cartel; the conviction of a Rocky Mount Blood Gang leader for drug trafficking and COVID-19 fraud; the 40-year sentence of a drug trafficker linked to the murder, dismemberment and disposal of a confidential informant;  the prosecution of a former Wayne County Sheriff’s deputy for drug trafficking and bid-rigging; and the 50-year sentence of a violent Sampson County Blood Gang leader for armed drug trafficking.

    Attacking the Fentanyl Epidemic

    Easley also prioritized the prosecution of cases involving counterfeit pills and overdose deaths arising from fentanyl poisoning. An Elizabeth City man was sentenced to 20 years for trafficking heroin and fentanyl after causing an overdose death, a Raleigh man received a 15-year sentence after assisting in the distribution of fentanyl that killed a young woman, and a Snapchat fentanyl trafficker whose counterfeit pills led to an overdose death received 13 years in prison.

    To help local law enforcement get justice for victims of fentanyl poisoning and their families, Easley launched Overdose Death Investigation Trainings to train more than 200 law enforcement officers and prosecutors across the District on building fentanyl death cases.

    Easley also worked to reduce demand for opioids through outreach and education through the Heroin Education Action Team (HEAT), including educational events in local communities and schools.  The team launched a powerful new educational video to teach students and communities about the dangers.

    Protecting America’s National Security, Sensitive Technology, and Cybersecurity

    Under Easley’s leadership, the Office prioritized national security cases involving domestic and international terrorism, international cybercriminals, and protecting sensitive technology from foreign adversaries.  The prosecutions included a man accused of attempting to join ISIS and convictions against five members of a white supremacist plot to attack the energy grid, an anti-government bombmaker teaching how to target law enforcement, and a U.S. Army Major convicted of shipping guns to Ghana.  The Office also extradited and pursued a groundbreaking case against one of the FBI’s most wanted cybercriminals responsible for tens of millions of dollars in losses from widescale ransomware attacks, including on a hospital.

    Easley also built deeper ties with the DOJ’s National Security Division and the Department of Commerce Bureau of Industry & Security to launch a Disruptive Technology Strike Force (DTSF) cell to protect innovation in the Research Triangle’s high-tech sector. The DTSF partners with law enforcement and industry to protect advanced technology from unlawful acquisition by foreign adversaries. As home to the Research Triangle Park, world-class research institutions, and some of the Department of Defense’s largest installations, the EDNC hosts critical technology that malign foreign actors seek to obtain. The Raleigh DTSF cell is only one of fifteen in the country.  

    Surge in White Collar Fraud and Corruption Enforcement

    Under Easley’s leadership, the Office saw a significant surge in white-collar enforcement, with white-collar caseloads increasing 115% in a year.  Cases included the prosecution of a former Morgan Stanley financial advisor who defrauded investors in a multimillion-dollar Ponzi scheme, an ENT doctor sentenced to 25 years for defrauding Medicaid, a man who laundered $40mm in narco-linked crypto, and a plant manager who dumped tens of thousands of gallons of toxic waste into the Cape Fear River. The Office also prosecuted a $15-million-dollar COVID fraud scheme involving more than 20 businesses and individuals.

    These cases arose from the launch of dedicated working groups focused on Securities Fraud, Money Laundering, Public Health, Environmental Crimes, and other priority areas. The Office also launched an annual Economic Crimes Summit to build deeper ties with investigators across about 30 different agencies.

    Easley also launched an Illicit Finance Task Force with the Treasury Department to combat transnational money laundering by targeting third-party money launders and money-transmitting businesses utilizing cryptocurrency, banking, and brokerages to run dirty money through the American financial system.

    Expanding Civil Rights Enforcement

    Easley launched the Office’s first dedicated Civil Rights Team to enhance the Office’s civil rights enforcement. The team includes dedicated coordinators in both the Civil and Criminal Divisions and a designated Human Trafficking Coordinator. The Civil Rights Initiative emphasizes community engagement and law enforcement training.

    As a part of the effort, the Office trained more than 200 officers in de-escalation, use of force, and community engagement strategies. The Office also hosted multiple outreach events through its United Against Hate Initiative to build stronger relationships between law enforcement and the community and to educate communities on how to identify and report hate crimes.

    Easley also launched two human trafficking task forces – one in the Raleigh-Cary area and one in Southeastern North Carolina – to bring together law enforcement and community resources to share intelligence and investigative leads, provide specialized training, and promote greater public-private coordination to rescue and stabilize victims.

    Strong Civil Practice

    For the past three years, the EDNC’s Civil Division has ranked in the top 10 among large districts in the number of cases filed or responded to per AUSA. The Division has consistently ranked #1 in the Fourth Circuit for Affirmative Civil Rights and Affirmative Fraud cases and has ranked in the top five nationally compared to other large districts.  EDNC’s Financial Litigation Program (FLP), responsible for collecting debts owed to the U.S. Government, collected over $58 million in the last three fiscal years.

    About U.S. Attorney Easley

    Prior to his appointment as the U.S. Attorney, Easley was a partner at a large international law firm focused on internal investigations and trial court work in state and federal courts.  

    Born in Southport, North Carolina, Easley attended the University of North Carolina, where he graduated Phi Beta Kappa with honors and distinction in political science. He later received his law degree with honors from the University of North Carolina School of Law.

    MIL Security OSI –

  • MIL-OSI: Brookline Bancorp Announces Fourth Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    Net Income of $17.5 million, EPS of $0.20

    Operating Earnings of $20.7 million, Operating EPS of $0.23

    Quarterly Dividend of $0.135

    BOSTON, Jan. 29, 2025 (GLOBE NEWSWIRE) — Brookline Bancorp, Inc. (NASDAQ: BRKL) (the “Company”) today announced net income of $17.5 million, or $0.20 per basic and diluted share, and excluding $3.4 million of merger-related charges, operating earnings after tax (non-GAAP) of $20.7 million, or $0.23 per basic and diluted share for the fourth quarter of 2024, compared to net income and operating earnings after tax (non-GAAP) of $20.1 million, or $0.23 per basic and diluted share, for the third quarter of 2024, and $22.9 million, or $0.26 per basic and diluted share, for the fourth quarter of 2023.

    For the year ended December 31, 2024, the Company reported net income of $68.7 million, or $0.77 per basic and diluted share, compared to $75.0 million, or $0.85 per basic and diluted share, for the year ended December 31, 2023. For the year ended December 31, 2024, the Company reported operating earnings after tax (non-GAAP) of $72.4 million, or $0.81 per basic and diluted share, compared to $92.9 million, or $1.05 per basic and diluted share, for the year ended December 31, 2023.

    Paul Perrault, Chairman and Chief Executive Officer, commented on the Company’s performance, “Brookline Bancorp had an excellent year in 2024. We finished the year with solid deposit and loan growth and are well positioned as we look forward to 2025. We are looking forward to 2025 and our recently announced strategic merger with Berkshire Hills Bancorp. I would like to recognize the contributions of our employees in contributing to our growth and success in 2024. Our employees exemplify the Brookline Bancorp culture of providing excellent customer service.”

    BALANCE SHEET

    Total assets at December 31, 2024 increased $228.6 million to $11.9 billion from $11.7 billion at September 30, 2024, and increased $523.1 million from $11.4 billion at December 31, 2023. At December 31, 2024, total loans and leases were $9.8 billion, representing an increase of $24.1 million from September 30, 2024, and an increase of $137.7 million from December 31, 2023.

    Total investment securities at December 31, 2024 increased $39.6 million to $895.0 million from $855.4 million at September 30, 2024, and decreased $21.6 million from $916.6 million at December 31, 2023. Total cash and cash equivalents at December 31, 2024 increased $135.8 million to $543.7 million from $407.9 million at September 30, 2024, and increased $410.6 million from $133.0 million at December 31, 2023. As of December 31, 2024, total investment securities and total cash and cash equivalents represented 12.1 percent of total assets, compared to 10.8 percent and 9.2 percent as of September 30, 2024 and December 31, 2023, respectively.

    Total deposits at December 31, 2024 increased $169.4 million to $8.9 billion from $8.7 billion at September 30, 2024, consisting of a $115.9 million increase in customer deposits and a $53.4 million increase in brokered deposits. Total deposits increased $353.5 million from $8.5 billion at December 31, 2023, primarily driven by growth in customer deposits.

    Total borrowed funds at December 31, 2024 increased $22.3 million to $1.5 billion from September 30, 2024, and increased $143.2 million from $1.4 billion at December 31, 2023.

    The ratio of stockholders’ equity to total assets was 10.26 percent at December 31, 2024, as compared to 10.54 percent at September 30, 2024, and 10.53 percent at December 31, 2023. The ratio of tangible stockholders’ equity to tangible assets (non-GAAP) was 8.27 percent at December 31, 2024, as compared to 8.50 percent at September 30, 2024, and 8.39 percent at December 31, 2023. Tangible book value per common share (non-GAAP) decreased $0.08 from $10.89 at September 30, 2024 to $10.81 at December 31, 2024, and increased $0.31 from $10.50 at December 31, 2023.

    NET INTEREST INCOME

    Net interest income increased $2.0 million to $85.0 million during the fourth quarter of 2024 from $83.0 million for the quarter ended September 30, 2024. The net interest margin increased 5 basis points to 3.12 percent for the three months ended December 31, 2024 from 3.07 percent for the three months ended September 30, 2024, primarily driven by lower funding costs partially offset by lower yields on loans and leases.

    NON-INTEREST INCOME

    Total non-interest income for the quarter ended December 31, 2024 increased $0.2 million to $6.6 million from $6.3 million for the quarter ended September 30, 2024. The increase was primarily driven by an increase of $1.1 million in loan level derivative income, net, partially offset by a decline of $0.8 million in mark to market on interest rate swaps.

    PROVISION FOR CREDIT LOSSES

    The Company recorded a provision for credit losses of $4.1 million for the quarter ended December 31, 2024, compared to $4.8 million for the quarter ended September 30, 2024. The decrease in the provision was largely driven by improving economic forecasts and stabilization in the volume of adversely graded credits.

    Total net charge-offs for the fourth quarter of 2024 were $7.3 million, compared to $3.8 million in the third quarter of 2024. The $7.3 million in net charge-offs was driven by one large $5.1 million charge-off in equipment financing which was previously reserved for. The ratio of net loan and lease charge-offs to average loans and leases on an annualized basis increased to 30 basis points for the fourth quarter of 2024 from 16 basis points for the third quarter of 2024.

    The allowance for loan and lease losses represented 1.28 percent of total loans and leases at December 31, 2024, compared to 1.31 percent at September 30, 2024, and 1.22 percent at December 31, 2023. The decrease in the ratio was driven by a reduction in specific reserves due to charge-offs in the quarter.

    ASSET QUALITY

    The ratio of total nonperforming loans and leases to total loans and leases was 0.71 percent at December 31, 2024 as compared to 0.73 percent at September 30, 2024. Total nonaccrual loans and leases decreased $1.9 million to $69.3 million at December 31, 2024 from $71.2 million at September 30, 2024. The ratio of nonperforming assets to total assets was 0.59 percent at December 31, 2024 as compared to 0.62 percent at September 30, 2024. Total nonperforming assets decreased $2.4 million to $70.5 million at December 31, 2024 from $72.8 million at September 30, 2024.

    NON-INTEREST EXPENSE

    Non-interest expense for the quarter ended December 31, 2024 increased $5.8 million to $63.7 million from $57.9 million for the quarter ended September 30, 2024. The increase was primarily driven by an increase of $3.4 million in merger and acquisition expense, and an increase of $2.1 million in compensation and employee benefits expense.

    PROVISION FOR INCOME TAXES

    The effective tax rate was 26.4 percent and 25.1 percent for the three and twelve months ended December 31, 2024 compared to 24.7 percent for the three months ended September 30, 2024 and 19.9 percent and 20.1 percent for the three and twelve months ended December 31, 2023.

    RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

    The annualized return on average assets decreased to 0.61 percent during the fourth quarter of 2024 compared to 0.70 percent for the third quarter of 2024; and was 0.60 percent for the year ended December 31, 2024, compared to 0.67 percent for the year ended December 31, 2023.

    The annualized return on average tangible stockholders’ equity (non-GAAP) decreased to 7.21 percent during the fourth quarter of 2024 compared to 8.44 percent for the third quarter of 2024; and was 7.24 percent for the year ended December 31, 2024 compared to 8.36 percent for the year ended December 31, 2023.

    DIVIDEND DECLARED

    The Company’s Board of Directors approved a dividend of $0.135 per share for the quarter ended December 31, 2024. The dividend will be paid on February 28, 2025 to stockholders of record on February 14, 2025.

    PROPOSED TRANSACTION WITH BERKSHIRE HILLS BANCORP, INC.

    On December 16, 2024, the Company, Berkshire Hills Bancorp, Inc. (“Berkshire”), and Commerce Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Berkshire formed solely to facilitate the merger (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brookline, with Brookline as the surviving entity, and immediately thereafter, Brookline will merge with and into Berkshire, with Berkshire as the surviving entity (collectively, the “Merger”). As a result of the Merger, the separate corporate existence of the Company will cease, and Berkshire will continue as the surviving corporation. Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of Company common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. Holders of Company common stock will receive cash in lieu of fractional shares of Berkshire common stock. As a result of the proposed transaction and a $100 million common stock offering by Berkshire to support the proposed transaction, Berkshire stockholders will own approximately 51%, Brookline stockholders will own approximately 45%, and investors in new shares will own approximately 4% of the outstanding shares of the combined company. The proposed transaction is expected to close by the end of the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and the Company stockholders.

    CONFERENCE CALL

    The Company will conduct a conference call/webcast at 1:30 PM Eastern Time on Thursday, January 30, 2025 to discuss the results for the quarter, business highlights and outlook. A copy of the Earnings Presentation is available on the Company’s website, www.brooklinebancorp.com. To listen to the call and view the Company’s Earnings Presentation, please join the call via https://events.q4inc.com/attendee/129324302. To listen to the call without access to the slides, please dial 833-470-1428 (United States) or 404-975-4839 (internationally) and ask for the Brookline Bancorp, Inc. call (Access Code 138268). A recording of the call will be available for one week following the call on the Company’s website under “Investor Relations” or by dialing 866-813-9403 (United States) or 929-458-6194 (internationally) and entering the passcode: 646121.

    ABOUT BROOKLINE BANCORP, INC.

    Brookline Bancorp, Inc., a bank holding company with approximately $11.9 billion in assets and branch locations in eastern Massachusetts, Rhode Island and the Lower Hudson Valley of New York State, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and PCSB Bank. The Company provides commercial and retail banking services and cash management and investment services to customers throughout Central New England and the Lower Hudson Valley of New York State. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com and www.pcsb.com.

    FORWARD-LOOKING STATEMENTS

    Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (“SEC”), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters, including statements regarding the Company’s business, credit quality, financial condition, liquidity and results of operations. Forward-looking statements may differ, possibly materially, from what is included in this press release due to factors and future developments that are uncertain and beyond the scope of the Company’s control. These include, but are not limited to, the occurrence of any event, change or other circumstances that could give rise to the right of the Company or Berkshire to terminate the merger agreement; the outcome of any legal proceedings that may be instituted against Berkshire or Company; delays in completing the proposed transaction with Berkshire; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction) or stockholder approvals, or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all, including the ability of Berkshire and the Company to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the impact of certain restrictions during the pendency of the proposed transaction on the parties’ ability to pursue certain business opportunities and strategic transactions; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; changes in interest rates; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements. Forward-looking statements involve risks and uncertainties which are difficult to predict. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the SEC. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

    BASIS OF PRESENTATION

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

    NON-GAAP FINANCIAL MEASURES

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

    INVESTOR RELATIONS:

    Contact: Carl M. Carlson
    Brookline Bancorp, Inc.
    Co-President and Chief Financial and Strategy Officer
    (617) 425-5331
    carl.carlson@brkl.com
     
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Selected Financial Highlights (Unaudited)
     
      At and for the Three Months Ended At and for the Twelve
    Months Ended
      December 31,
    2024    		 September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
      (Dollars In Thousands Except per Share Data)
    Earnings Data:              
    Net interest income $ 84,988   $ 83,008   $ 80,001   $ 81,588   $ 83,555   $ 329,585   $ 339,711  
    Provision for credit losses on loans   4,141     4,832     5,607     7,423     3,851     22,003     37,868  
    Provision (credit) for credit losses on investments   (104 )   (172 )   (39 )   (44 )   (76 )   (359 )   339  
    Non-interest income   6,587     6,348     6,396     6,284     8,027     25,615     31,934  
    Non-interest expense   63,719     57,948     59,184     61,014     59,244     241,865     239,524  
    Income before provision for income taxes   23,819     26,748     21,645     19,479     28,563     91,691     93,914  
    Net income   17,536     20,142     16,372     14,665     22,888     68,715     74,999  
                   
    Performance Ratios:              
    Net interest margin (1)   3.12 %   3.07 %   3.00 %   3.06 %   3.15 %   3.06 %   3.24 %
    Interest-rate spread (1)   2.35 %   2.26 %   2.14 %   2.21 %   2.39 %   2.24 %   2.50 %
    Return on average assets (annualized)   0.61 %   0.70 %   0.57 %   0.51 %   0.81 %   0.60 %   0.67 %
    Return on average tangible assets (annualized) (non-GAAP)   0.62 %   0.72 %   0.59 %   0.53 %   0.83 %   0.61 %   0.69 %
    Return on average stockholders’ equity (annualized)   5.69 %   6.63 %   5.49 %   4.88 %   7.82 %   5.67 %   6.42 %
    Return on average tangible stockholders’ equity (annualized) (non-GAAP)   7.21 %   8.44 %   7.04 %   6.26 %   10.12 %   7.24 %   8.36 %
    Efficiency ratio (2)   69.58 %   64.85 %   68.50 %   69.44 %   64.69 %   68.09 %   64.45 %
                   
    Per Common Share Data:              
    Net income — Basic $ 0.20   $ 0.23   $ 0.18   $ 0.16   $ 0.26   $ 0.77   $ 0.85  
    Net income — Diluted   0.20     0.23     0.18     0.16     0.26     0.77     0.85  
    Cash dividends declared   0.135     0.135     0.135     0.135     0.135     0.540     0.540  
    Book value per share (end of period)   13.71     13.81     13.48     13.43     13.48     13.71     13.48  
    Tangible book value per common share (end of period) (non-GAAP)   10.81     10.89     10.53     10.47     10.50     10.81     10.50  
    Stock price (end of period)   11.80     10.09     8.35     9.96     10.91     11.80     10.91  
                   
    Balance Sheet:              
    Total assets $ 11,905,326   $ 11,676,721   $ 11,635,292   $ 11,542,731   $ 11,382,256   $ 11,905,326   $ 11,382,256  
    Total loans and leases   9,779,288     9,755,236     9,721,137     9,655,086     9,641,589     9,779,288     9,641,589  
    Total deposits   8,901,644     8,732,271     8,737,036     8,718,653     8,548,125     8,901,644     8,548,125  
    Total stockholders’ equity   1,221,939     1,230,362     1,198,480     1,194,231     1,198,644     1,221,939     1,198,644  
                   
    Asset Quality:              
    Nonperforming assets $ 70,452   $ 72,821   $ 62,683   $ 42,489   $ 45,324   $ 70,452   $ 45,324  
    Nonperforming assets as a percentage of total assets   0.59 %   0.62 %   0.54 %   0.37 %   0.40 %   0.59 %   0.40 %
    Allowance for loan and lease losses $ 125,083   $ 127,316   $ 121,750   $ 120,124   $ 117,522   $ 125,083   $ 117,522  
    Allowance for loan and lease losses as a percentage of total loans and leases   1.28 %   1.31 %   1.25 %   1.24 %   1.22 %   1.28 %   1.22 %
    Net loan and lease charge-offs $ 7,252   $ 3,808   $ 8,387   $ 8,781   $ 7,141   $ 28,228   $ 19,663  
    Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.30 %   0.16 %   0.35 %   0.36 %   0.30 %   0.29 %   0.21 %
                   
    Capital Ratios:              
    Stockholders’ equity to total assets   10.26 %   10.54 %   10.30 %   10.35 %   10.53 %   10.26 %   10.53 %
    Tangible stockholders’ equity to tangible assets (non-GAAP)   8.27 %   8.50 %   8.23 %   8.25 %   8.39 %   8.27 %   8.39 %
                   
    (1) Calculated on a fully tax-equivalent basis.
    (2) Calculated as non-interest expense as a percentage of net interest income plus non-interest income.
                   
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets (Unaudited)
     
      December 31,
    2024    		 September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023
    ASSETS (In Thousands Except Share Data)
    Cash and due from banks $ 64,673   $ 82,168   $ 60,067   $ 45,708   $ 34,514  
    Short-term investments   478,997     325,721     283,017     256,178     98,513  
    Total cash and cash equivalents   543,670     407,889     343,084     301,886     133,027  
    Investment securities available-for-sale   895,034     855,391     856,439     865,798     916,601  
    Total investment securities   895,034     855,391     856,439     865,798     916,601  
    Allowance for investment security losses   (82 )   (186 )   (359 )   (398 )   (441 )
    Net investment securities   894,952     855,205     856,080     865,400     916,160  
    Loans and leases held-for-sale   —     —     —     6,717     —  
    Loans and leases:          
    Commercial real estate loans   5,716,114     5,779,290     5,782,111     5,755,239     5,764,529  
    Commercial loans and leases   2,506,664     2,453,038     2,443,530     2,416,904     2,399,668  
    Consumer loans   1,556,510     1,522,908     1,495,496     1,482,943     1,477,392  
    Total loans and leases   9,779,288     9,755,236     9,721,137     9,655,086     9,641,589  
    Allowance for loan and lease losses   (125,083 )   (127,316 )   (121,750 )   (120,124 )   (117,522 )
    Net loans and leases   9,654,205     9,627,920     9,599,387     9,534,962     9,524,067  
    Restricted equity securities   83,155     82,675     78,963     74,709     77,595  
    Premises and equipment, net of accumulated depreciation   86,781     86,925     88,378     89,707     89,853  
    Right-of-use asset operating leases   43,527     41,934     35,691     33,133     30,863  
    Deferred tax asset   56,620     50,827     60,032     60,484     56,952  
    Goodwill   241,222     241,222     241,222     241,222     241,222  
    Identified intangible assets, net of accumulated amortization   17,461     19,162     20,830     22,499     24,207  
    Other real estate owned and repossessed assets   1,103     1,579     1,974     1,817     1,694  
    Other assets   282,630     261,383     309,651     310,195     286,616  
    Total assets $ 11,905,326   $ 11,676,721   $ 11,635,292   $ 11,542,731   $ 11,382,256  
    LIABILITIES AND STOCKHOLDERS’ EQUITY          
    Deposits:          
    Demand checking accounts $ 1,692,394   $ 1,681,858   $ 1,638,378   $ 1,629,371   $ 1,678,406  
    NOW accounts   617,246     637,374     647,370     654,748     661,863  
    Savings accounts   1,721,247     1,736,989     1,735,857     1,727,893     1,669,018  
    Money market accounts   2,116,360     2,041,185     2,073,557     2,065,569     2,082,810  
    Certificate of deposit accounts   1,885,444     1,819,353     1,718,414     1,670,147     1,574,855  
    Brokered deposit accounts   868,953     815,512     923,460     970,925     881,173  
    Total deposits   8,901,644     8,732,271     8,737,036     8,718,653     8,548,125  
    Borrowed funds:          
    Advances from the FHLB   1,355,926     1,345,003     1,265,079     1,150,153     1,223,226  
    Subordinated debentures and notes   84,328     84,293     84,258     84,223     84,188  
    Other borrowed funds   79,592     68,251     80,125     127,505     69,256  
    Total borrowed funds   1,519,846     1,497,547     1,429,462     1,361,881     1,376,670  
    Operating lease liabilities   44,785     43,266     37,102     34,235     31,998  
    Mortgagors’ escrow accounts   15,875     14,456     17,117     16,245     17,239  
    Reserve for unfunded credits   5,981     6,859     11,400     15,807     19,767  
    Accrued expenses and other liabilities   195,256     151,960     204,695     201,679     189,813  
    Total liabilities   10,683,387     10,446,359     10,436,812     10,348,500     10,183,612  
    Stockholders’ equity:          
    Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, 96,998,075 shares issued, and 96,998,075 shares issued, respectively   970     970     970     970     970  
    Additional paid-in capital   902,584     901,562     904,775     903,726     902,659  
    Retained earnings   458,943     453,555     445,560     441,285     438,722  
    Accumulated other comprehensive income   (52,882 )   (38,081 )   (61,693 )   (60,841 )   (52,798 )
    Treasury stock, at cost;          
    7,019,384 shares, 7,015,843 shares, 7,373,009 shares, 7,354,399 shares, and 7,354,399 shares, respectively   (87,676 )   (87,644 )   (91,132 )   (90,909 )   (90,909 )
    Total stockholders’ equity   1,221,939     1,230,362     1,198,480     1,194,231     1,198,644  
    Total liabilities and stockholders’ equity $ 11,905,326   $ 11,676,721   $ 11,635,292   $ 11,542,731   $ 11,382,256  
               
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Consolidated Statements of Income (Unaudited)
     
      Three Months Ended
      December 31,
    2024    		 September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023
      (In Thousands Except Share Data)
    Interest and dividend income:          
    Loans and leases $ 147,436   $ 149,643   $ 145,585   $ 145,265   $ 142,948  
    Debt securities   6,421     6,473     6,480     6,878     6,945  
    Restricted equity securities   1,460     1,458     1,376     1,492     1,333  
    Short-term investments   2,830     1,986     1,914     1,824     1,093  
    Total interest and dividend income   158,147     159,560     155,355     155,459     152,319  
    Interest expense:          
    Deposits   56,562     59,796     59,721     56,884     54,034  
    Borrowed funds   16,597     16,756     15,633     16,987     14,730  
    Total interest expense   73,159     76,552     75,354     73,871     68,764  
    Net interest income   84,988     83,008     80,001     81,588     83,555  
    Provision for credit losses on loans   4,141     4,832     5,607     7,423     3,851  
    Credit for credit losses on investments   (104 )   (172 )   (39 )   (44 )   (76 )
    Net interest income after provision for credit losses   80,951     78,348     74,433     74,209     79,780  
    Non-interest income:          
    Deposit fees   2,297     2,353     3,001     2,897     3,064  
    Loan fees   439     464     702     789     515  
    Loan level derivative income, net   1,115     —     106     437     778  
    Gain on sales of loans and leases   406     415     130     —     410  
    Other   2,330     3,116     2,457     2,161     3,260  
    Total non-interest income   6,587     6,348     6,396     6,284     8,027  
    Non-interest expense:          
    Compensation and employee benefits   37,202     35,130     34,762     36,629     35,401  
    Occupancy   5,393     5,343     5,551     5,769     5,127  
    Equipment and data processing   6,780     6,831     6,732     7,031     7,245  
    Professional services   1,345     2,143     1,745     1,900     1,442  
    FDIC insurance   2,017     2,118     2,025     1,884     1,839  
    Advertising and marketing   1,303     859     1,504     1,574     758  
    Amortization of identified intangible assets   1,701     1,668     1,669     1,708     1,965  
    Merger and restructuring expense   3,378     —     823     —     —  
    Other   4,600     3,856     4,373     4,519     5,467  
    Total non-interest expense   63,719     57,948     59,184     61,014     59,244  
    Income before provision for income taxes   23,819     26,748     21,645     19,479     28,563  
    Provision for income taxes   6,283     6,606     5,273     4,814     5,675  
    Net income $ 17,536   $ 20,142   $ 16,372   $ 14,665   $ 22,888  
    Earnings per common share:          
    Basic $ 0.20   $ 0.23   $ 0.18   $ 0.16   $ 0.26  
    Diluted $ 0.20   $ 0.23   $ 0.18   $ 0.16   $ 0.26  
    Weighted average common shares outstanding during the period:        
    Basic   89,098,443     89,033,463     88,904,692     88,894,577     88,867,159  
    Diluted   89,483,964     89,319,611     89,222,315     89,181,508     89,035,505  
    Dividends paid per common share $ 0.135   $ 0.135   $ 0.135   $ 0.135   $ 0.135  
               
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Consolidated Statements of Income (Unaudited)
       
      Twelve Months Ended December 31,
      2024 2023
      (In Thousands Except Share Data)
    Interest and dividend income:    
    Loans and leases $ 587,929   $ 533,739
    Debt securities   26,252     29,648
    Restricted equity securities   5,786     5,571
    Short-term investments   8,554     8,329
    Total interest and dividend income   628,521     577,287
    Interest expense:    
    Deposits   232,963     175,665
    Borrowed funds   65,973     61,911
    Total interest expense   298,936     237,576
    Net interest income   329,585     339,711
    Provision for credit losses on loans   22,003     37,868
    (Credit) provision for credit losses on investments   (359 )   339
    Net interest income after provision for credit losses   307,941     301,504
    Non-interest income:    
    Deposit fees   10,548     11,611
    Loan fees   2,394     2,036
    Loan level derivative income, net   1,658     3,890
    Gain on investment securities, net   —     1,704
    Gain on sales of loans and leases   951     2,581
    Other   10,064     10,112
    Total non-interest income   25,615     31,934
    Non-interest expense:    
    Compensation and employee benefits   143,723     138,895
    Occupancy   22,056     20,203
    Equipment and data processing   27,374     27,004
    Professional services   7,133     7,226
    FDIC insurance   8,044     7,844
    Advertising and marketing   5,240     4,724
    Amortization of identified intangible assets   6,746     7,840
    Merger and restructuring expense   4,201     7,411
    Other   17,348     18,377
    Total non-interest expense   241,865     239,524
    Income before provision for income taxes   91,691     93,914
    Provision for income taxes   22,976     18,915
    Net income $ 68,715   $ 74,999
    Earnings per common share:    
    Basic $ 0.77   $ 0.85
    Diluted $ 0.77   $ 0.85
    Weighted average common shares outstanding during the period:  
    Basic   88,983,248     88,230,681
    Diluted   89,302,304     88,450,646
    Dividends paid per common share $ 0.540   $ 0.540
         
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Asset Quality Analysis (Unaudited)
     
      At and for the Three Months Ended
      December 31,
    2024    		 September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023
      (Dollars in Thousands)
    NONPERFORMING ASSETS:          
    Loans and leases accounted for on a nonaccrual basis:          
    Commercial real estate mortgage $ 11,525   $ 11,595   $ 11,659   $ 18,394   $ 19,608  
    Multi-family mortgage   6,596     1,751     —     —     —  
    Construction   —     —     —     —     —  
    Total commercial real estate loans   18,121     13,346     11,659     18,394     19,608  
               
    Commercial   14,676     15,734     16,636     3,096     3,886  
    Equipment financing   31,509     37,223     27,128     13,668     14,984  
    Total commercial loans and leases   46,185     52,957     43,764     16,764     18,870  
               
    Residential mortgage   3,999     3,862     4,495     4,563     4,292  
    Home equity   1,043     1,076     790     950     860  
    Other consumer   1     1     1     1     —  
    Total consumer loans   5,043     4,939     5,286     5,514     5,152  
               
    Total nonaccrual loans and leases   69,349     71,242     60,709     40,672     43,630  
               
    Other real estate owned   700     780     780     780     780  
    Other repossessed assets   403     799     1,194     1,037     914  
    Total nonperforming assets $ 70,452   $ 72,821   $ 62,683   $ 42,489   $ 45,324  
               
    Loans and leases past due greater than 90 days and still accruing $ 811   $ 16,091   $ 4,994   $ 363   $ 228  
               
    Nonperforming loans and leases as a percentage of total loans and leases   0.71 %   0.73 %   0.62 %   0.42 %   0.45 %
    Nonperforming assets as a percentage of total assets   0.59 %   0.62 %   0.54 %   0.37 %   0.40 %
               
    PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES:      
    Allowance for loan and lease losses at beginning of period $ 127,316   $ 121,750   $ 120,124   $ 117,522   $ 119,081  
    Charge-offs   (8,414 )   (4,183 )   (8,823 )   (5,390 )   (7,722 )
    Recoveries   1,162     375     436     309     581  
    Net charge-offs   (7,252 )   (3,808 )   (8,387 )   (5,081 )   (7,141 )
    Provision for loan and lease losses excluding unfunded commitments *   5,019     9,374     10,013     7,683     5,582  
    Allowance for loan and lease losses at end of period $ 125,083   $ 127,316   $ 121,750   $ 120,124   $ 117,522  
               
    Allowance for loan and lease losses as a percentage of total loans and leases   1.28 %   1.31 %   1.25 %   1.24 %   1.22 %
               
    NET CHARGE-OFFS:          
    Commercial real estate loans $ —   $ —   $ 3,819   $ 606   $ 1,087  
    Commercial loans and leases **   7,257     3,797     4,571     8,179     6,061  
    Consumer loans   (5 )   11     (3 )   (4 )   (7 )
    Total net charge-offs $ 7,252   $ 3,808   $ 8,387   $ 8,781   $ 7,141  
               
    Net loan and lease charge-offs as a percentage of average loans and leases (annualized)   0.30 %   0.16 %   0.35 %   0.36 %   0.30 %
               
    *Provision for loan and lease losses does not include (credit) provision of $(0.9 million), $(4.5 million), $(4.4 million), $(0.3 million), and $(1.7 million) for credit losses on unfunded commitments during the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively.
    ** The balance at March 31, 2024 includes a $3.7 million charge-off on a letter of credit which impacted the provision.
               
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Average Yields / Costs (Unaudited)
     
      Three Months Ended
      December 31, 2024 September 30, 2024 December 31, 2023
      Average
    Balance    		 Interest (1) Average
    Yield/
    Cost    		 Average
    Balance    		 Interest (1) Average
    Yield/
    Cost    		 Average
    Balance    		 Interest (1) Average
    Yield/
    Cost
      (Dollars in Thousands)
    Assets:                  
    Interest-earning assets:                  
    Investments:                  
    Debt securities (2) $ 856,065 $ 6,463 3.02 % $ 853,924 $ 6,516 3.05 % $ 876,350 $ 6,986 3.19 %
    Restricted equity securities (2)   75,879   1,459 7.69 %   75,225   1,459 7.76 %   67,567   1,334 7.90 %
    Short-term investments   236,784   2,830 4.78 %   145,838   1,986 5.44 %   85,790   1,093 5.09 %
    Total investments   1,168,728   10,752 3.68 %   1,074,987   9,961 3.71 %   1,029,707   9,413 3.66 %
    Loans and Leases:                  
    Commercial real estate loans (3)   5,752,591   81,195 5.52 %   5,772,456   83,412 5.65 %   5,727,930   81,653 5.58 %
    Commercial loans (3)   1,170,295   19,750 6.61 %   1,079,084   18,440 6.69 %   969,603   16,296 6.58 %
    Equipment financing (3)   1,310,143   26,295 8.03 %   1,353,649   26,884 7.94 %   1,347,589   25,211 7.48 %
    Consumer loans (3)   1,529,654   20,881 5.44 %   1,505,095   21,123 5.60 %   1,475,580   19,888 5.37 %
    Total loans and leases   9,762,683   148,121 6.07 %   9,710,284   149,859 6.17 %   9,520,702   143,048 6.01 %
    Total interest-earning assets   10,931,411   158,873 5.81 %   10,785,271   159,820 5.93 %   10,550,409   152,461 5.78 %
    Non-interest-earning assets   649,161       666,067       721,532    
    Total assets $ 11,580,572     $ 11,451,338     $ 11,271,941    
                       
    Liabilities and Stockholders’ Equity:                  
    Interest-bearing liabilities:                  
    Deposits:                  
    NOW accounts $ 630,408   1,056 0.67 % $ 639,561   1,115 0.69 % $ 657,134   1,146 0.69 %
    Savings accounts   1,741,355   10,896 2.49 %   1,738,756   12,098 2.77 %   1,658,144   10,684 2.56 %
    Money market accounts   2,083,033   13,856 2.65 %   2,038,048   15,466 3.02 %   2,140,225   16,239 3.01 %
    Certificates of deposit   1,857,483   20,691 4.43 %   1,768,026   20,054 4.51 %   1,530,772   14,517 3.76 %
    Brokered deposit accounts   797,910   10,063 5.02 %   841,067   11,063 5.23 %   880,604   11,448 5.16 %
    Total interest-bearing deposits   7,110,189   56,562 3.16 %   7,025,458   59,796 3.39 %   6,866,879   54,034 3.12 %
    Borrowings:                  
    Advances from the FHLB   1,144,157   13,958 4.77 %   1,139,049   14,366 4.94 %   965,846   11,943 4.84 %
    Subordinated debentures and notes   84,311   1,944 9.22 %   84,276   1,378 6.54 %   84,170   1,381 6.56 %
    Other borrowed funds   65,947   695 4.20 %   53,102   1,012 7.58 %   136,566   1,406 4.09 %
    Total borrowings   1,294,415   16,597 5.02 %   1,276,427   16,756 5.14 %   1,186,582   14,730 4.86 %
    Total interest-bearing liabilities   8,404,604   73,159 3.46 %   8,301,885   76,552 3.67 %   8,053,461   68,764 3.39 %
    Non-interest-bearing liabilities:                  
    Demand checking accounts   1,693,138       1,669,092       1,723,849    
    Other non-interest-bearing liabilities   250,303       264,324       323,855    
    Total liabilities   10,348,045       10,235,301       10,101,165    
    Stockholders’ equity   1,232,527       1,216,037       1,170,776    
    Total liabilities and equity $ 11,580,572     $ 11,451,338     $ 11,271,941    
    Net interest income (tax-equivalent basis) /Interest-rate spread (4)     85,714 2.35 %     83,268 2.26 %     83,697 2.39 %
    Less adjustment of tax-exempt income     726       260       142  
    Net interest income   $ 84,988     $ 83,008     $ 83,555  
    Net interest margin (5)     3.12 %     3.07 %     3.15 %
                       
    (1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
    (2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
    (3) Loans on nonaccrual status are included in the average balances.
    (4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
                       
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Average Yields / Costs (Unaudited)
     
      Twelve Months Ended
      December 31, 2024 December 31, 2023
      Average
    Balance    		 Interest (1) Average
    Yield/
    Cost    		 Average
    Balance    		 Interest (1) Average
    Yield/
    Cost
      (Dollars in Thousands)
    Assets:            
    Interest-earning assets:            
    Investments:            
    Debt securities (2) $ 862,381 $ 26,416 3.06 % $ 947,782 $ 29,891 3.15 %
    Restricted equity securities (2)   74,788   5,786 7.74 %   72,264   5,572 7.71 %
    Short-term investments   164,445   8,554 5.20 %   158,718   8,329 5.25 %
    Total investments   1,101,614   40,756 3.70 %   1,178,764   43,792 3.72 %
    Loans and Leases:            
    Commercial real estate loans (3)   5,760,432   327,221 5.59 %   5,654,385   307,652 5.37 %
    Commercial loans (3)   1,086,460   73,369 6.65 %   929,077   59,110 6.28 %
    Equipment financing (3)   1,352,993   106,329 7.86 %   1,277,224   92,112 7.21 %
    Consumer loans (3)   1,501,626   82,273 5.47 %   1,470,677   75,098 5.10 %
    Total loans and leases   9,701,511   589,192 6.07 %   9,331,363   533,972 5.72 %
    Total interest-earning assets   10,803,125   629,948 5.83 %   10,510,127   577,764 5.50 %
    Non-interest-earning assets   670,299       704,244    
    Total assets $ 11,473,424     $ 11,214,371    
                 
    Liabilities and Stockholders’ Equity:            
    Interest-bearing liabilities:            
    Deposits:            
    NOW accounts $ 650,225   4,543 0.70 % $ 720,572   4,275 0.59 %
    Savings accounts   1,726,504   46,220 2.68 %   1,439,293   27,974 1.94 %
    Money market accounts   2,056,066   60,796 2.96 %   2,205,430   58,153 2.64 %
    Certificates of deposit   1,737,697   76,134 4.38 %   1,428,727   44,122 3.09 %
    Brokered deposit accounts   873,182   45,270 5.18 %   819,419   41,141 5.02 %
    Total interest-bearing deposits   7,043,674   232,963 3.31 %   6,613,441   175,665 2.66 %
    Borrowings:            
    Advances from the FHLB   1,124,432   55,851 4.89 %   1,092,996   52,467 4.73 %
    Subordinated debentures and notes   84,258   6,074 7.21 %   84,116   5,476 6.51 %
    Other borrowed funds   78,859   4,048 5.13 %   124,793   3,968 3.18 %
    Total borrowings   1,287,549   65,973 5.04 %   1,301,905   61,911 4.69 %
    Total interest-bearing liabilities   8,331,223   298,936 3.59 %   7,915,346   237,576 3.00 %
    Non-interest-bearing liabilities:            
    Demand checking accounts   1,657,922       1,823,759    
    Other non-interest-bearing liabilities   273,243       307,160    
    Total liabilities   10,262,388       10,046,265    
    Stockholders’ equity   1,211,036       1,168,106    
    Total liabilities and equity $ 11,473,424     $ 11,214,371    
    Net interest income (tax-equivalent basis) /Interest-rate spread (4)     331,012 2.24 %     340,188 2.50 %
    Less adjustment of tax-exempt income     1,427       477  
    Net interest income   $ 329,585     $ 339,711  
    Net interest margin (5)     3.06 %     3.24 %
                 
    (1) Tax-exempt income on debt securities, equity securities and revenue bonds included in commercial real estate loans is included on a tax-equivalent basis.
    (2) Average balances include unrealized gains (losses) on investment securities. Dividend payments may not be consistent and average yield on equity securities may vary from month to month.
    (3) Loans on nonaccrual status are included in the average balances.
    (4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
                 
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Non-GAAP Financial Information (Unaudited)
             
          At and for the Three Months Ended
    December 31,    		 At and for the Twelve Months Ended
    December 31,
            2024 2023 2024 2023
    Reconciliation Table – Non-GAAP Financial Information   (Dollars in Thousands Except Share Data)
                 
    Reported Pretax Income     $ 23,819   $ 28,563   $ 91,691   $ 93,914  
    Less:              
    Security gains   —     —     —     1,704  
    Add:              
    Day 1 PCSB CECL provision         —     —     —     16,744  
    Merger and acquisition expenses     3,378     —     4,201     7,411  
    Operating Pretax income   $ 27,197   $ 28,563   $ 95,892   $ 116,365  
    Effective tax rate     23.9 %   19.9 %   24.5 %   20.1 %
    Provision for income tax     6,511     5,675     23,480     23,437  
    Operating earnings after tax       $ 20,686   $ 22,888   $ 72,412   $ 92,928  
                   
    Operating earnings per common share:            
    Basic       $ 0.23   $ 0.26   $ 0.81   $ 1.05  
    Diluted       $ 0.23   $ 0.26   $ 0.81   $ 1.05  
                   
    Weighted average common shares outstanding during the period:          
    Basic         89,098,443     88,867,159     88,983,248     88,230,681  
    Diluted         89,483,964     89,035,505     89,302,304     88,450,646  
                   
                   
    Return on average assets *       0.61 %   0.81 %   0.60 %   0.67 %
    Less:              
    Security gains (after-tax) *       — %   — %   — %   0.01 %
    Add:              
    Day 1 PCSB CECL provision (after-tax) *     — %   — %   — %   0.12 %
    Merger and acquisition expenses (after-tax) *     0.09 %   — %   0.03 %   0.05 %
    Operating return on average assets *       0.70 %   0.81 %   0.63 %   0.83 %
                   
                   
    Return on average tangible assets *       0.62 %   0.83 %   0.61 %   0.69 %
    Less:              
    Security gains (after-tax) *       — %   — %   — %   0.01 %
    Add:              
    Day 1 PCSB CECL provision (after-tax) *     — %   — %   — %   0.12 %
    Merger and acquisition expenses (after-tax) *     0.09 %   — %   0.03 %   0.05 %
    Operating return on average tangible assets *       0.71 %   0.83 %   0.64 %   0.85 %
                   
                   
    Return on average stockholders’ equity *       5.69 %   7.82 %   5.67 %   6.42 %
    Less:              
    Security gains (after-tax) *       — %   — %   — %   0.12 %
    Add:              
    Day 1 PCSB CECL provision (after-tax) *     — %   — %   — %   1.14 %
    Merger and acquisition expenses (after-tax) *     0.83 %   — %   0.26 %   0.51 %
    Operating return on average stockholders’ equity *     6.52 %   7.82 %   5.93 %   7.95 %
                   
                   
    Return on average tangible stockholders’ equity *     7.21 %   10.12 %   7.24 %   8.36 %
    Less:              
    Security gains (after-tax) *       — %   — %   — %   0.15 %
    Add:              
    Day 1 PCSB CECL provision (after-tax) *     — %   — %   — %   1.49 %
    Merger and acquisition expenses (after-tax) *     1.06 %   — %   0.33 %   0.66 %
    Operating return on average tangible stockholders’ equity *     8.27 %   10.12 %   7.57 %   10.36 %
    * Ratios at and for the three months ended are annualized.          
                   
    BROOKLINE BANCORP, INC. AND SUBSIDIARIES
    Non-GAAP Financial Information (Unaudited)
     
      At and for the Three Months Ended At and for the Twelve
    Months Ended
      December 31,
    2024    		 September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023    		 December 31,
    2024    		 December 31,
    2023
      (Dollars in Thousands)
                   
    Net income, as reported $ 17,536   $ 20,142   $ 16,372   $ 14,665   $ 22,888   $ 68,715   $ 74,999  
                   
    Average total assets $ 11,580,572   $ 11,451,338   $ 11,453,394   $ 11,417,185   $ 11,271,941   $ 11,473,424   $ 11,214,371  
    Less: Average goodwill and average identified intangible assets, net   259,496     261,188     262,859     264,536     266,225     262,011     270,637  
    Average tangible assets $ 11,321,076   $ 11,190,150   $ 11,190,535   $ 11,152,649   $ 11,005,716   $ 11,211,413   $ 10,943,734  
                   
    Return on average tangible assets (annualized)   0.62 %   0.72 %   0.59 %   0.53 %   0.83 %   0.61 %   0.69 %
                   
    Average total stockholders’ equity $ 1,232,527   $ 1,216,037   $ 1,193,385   $ 1,201,904   $ 1,170,776   $ 1,211,036   $ 1,168,106  
    Less: Average goodwill and average identified intangible assets, net   259,496     261,188     262,859     264,536     266,225     262,011     270,637  
    Average tangible stockholders’ equity $ 973,031   $ 954,849   $ 930,526   $ 937,368   $ 904,551   $ 949,025   $ 897,469  
                   
    Return on average tangible stockholders’ equity (annualized)   7.21 %   8.44 %   7.04 %   6.26 %   10.12 %   7.24 %   8.36 %
                   
    Total stockholders’ equity $ 1,221,939   $ 1,230,362   $ 1,198,480   $ 1,194,231   $ 1,198,644   $ 1,221,939   $ 1,198,644  
    Less:              
    Goodwill   241,222     241,222     241,222     241,222     241,222     241,222     241,222  
    Identified intangible assets, net   17,461     19,162     20,830     22,499     24,207     17,461     24,207  
    Tangible stockholders’ equity $ 963,256   $ 969,978   $ 936,428   $ 930,510   $ 933,215   $ 963,256   $ 933,215  
                   
    Total assets $ 11,905,326   $ 11,676,721   $ 11,635,292   $ 11,542,731   $ 11,382,256   $ 11,905,326   $ 11,382,256  
    Less:              
    Goodwill   241,222     241,222     241,222     241,222     241,222     241,222     241,222  
    Identified intangible assets, net   17,461     19,162     20,830     22,499     24,207     17,461     24,207  
    Tangible assets $ 11,646,643   $ 11,416,337   $ 11,373,240   $ 11,279,010   $ 11,116,827   $ 11,646,643   $ 11,116,827  
                   
    Tangible stockholders’ equity to tangible assets   8.27 %   8.50 %   8.23 %   8.25 %   8.39 %   8.27 %   8.39 %
                   
    Tangible stockholders’ equity $ 963,256   $ 969,978   $ 936,428   $ 930,510   $ 933,215   $ 963,256   $ 933,215  
                   
    Number of common shares issued   96,998,075     96,998,075     96,998,075     96,998,075     96,998,075     96,998,075     96,998,075  
    Less:              
    Treasury shares   7,019,384     7,015,843     7,373,009     7,354,399     7,354,399     7,019,384     7,354,399  
    Unvested restricted shares   880,248     883,789     713,443     749,099     749,099     880,248     749,099  
    Number of common shares outstanding   89,098,443     89,098,443     88,911,623     88,894,577     88,894,577     89,098,443     88,894,577  
                   
    Tangible book value per common share $ 10.81   $ 10.89   $ 10.53   $ 10.47   $ 10.50   $ 10.81   $ 10.50  

    PDF available: http://ml.globenewswire.com/Resource/Download/396afece-df5e-4cc5-a637-0706599b2b0d

    The MIL Network –

  • MIL-OSI: NorthEast Community Bancorp, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    WHITE PLAINS, N.Y., Jan. 29, 2025 (GLOBE NEWSWIRE) — NorthEast Community Bancorp, Inc. (Nasdaq: NECB) (the “Company”), the parent holding company of NorthEast Community Bank (the “Bank”), generated net income of $10.9 million, or $0.83 per basic share and $0.80 per diluted share, for the fourth quarter ended December 31, 2024 compared to net income of $12.1 million, or $0.82 per basic and diluted share, for the fourth quarter ended December 31, 2023. In addition, the Company generated net income of $47.8 million, or $3.64 per basic share and $3.58 per diluted share, for the year ended December 31, 2024 compared to net income of $46.3 million, or $3.32 per basic share and diluted share, for the year ended December 31, 2023.

    Kenneth A. Martinek, Chairman of the Board and Chief Executive Officer, stated “We are pleased to report another quarter of strong earnings due to the strong performance of our loan portfolio.   Despite the challenging high interest rate environment during 2023 that continued into most of 2024, loan demand remained strong with originations and outstanding commitments remaining robust. As has been in the past, construction lending in high demand-high absorption areas continues to be our focus.”

    Highlights for the fourth quarter and the year ended December 31, 2024 are as follows:

    • Performance metrics continue to be strong with a return on average total assets ratio of 2.19%, a return on average shareholders’ equity ratio of 13.80%, and an efficiency ratio of 38.99% for the quarter ended December 31, 2024. For the year ended December 31, 2024, the Company generated a return on average total assets ratio of 2.50%, a return on average shareholders’ equity ratio of 15.83%, and an efficiency ratio of 37.00%.
    • Net interest income increased by $91,000 and $5.6 million, or 0.4% and 5.8%, respectively, for the quarter and year ended December 31, 2024 compared to the same periods in 2023.
    • Our net loans receivable increased by $227.0 million, or 14.3%, to $1.8 billion at December 31, 2024 compared to $1.6 billion at December 31, 2023.

    Balance Sheet Summary

    Total assets increased $246.2 million, or 14.0%, to $2.0 billion at December 31, 2024, from $1.8 billion at December 31, 2023. The increase in assets was primarily due to increases in net loans of $227.0 million, cash and cash equivalents of $9.6 million, equity securities of $3.9 million, real estate owned of $3.7 million, and other assets of $3.3 million.

    Cash and cash equivalents increased $9.6 million, or 14.0%, to $78.3 million at December 31, 2024 from $68.7 million at December 31, 2023. The increase in cash and cash equivalents was a result of an increase in deposits of $270.3 million, partially offset by a decrease in borrowings of $64.0 million, an increase of $227.0 million in net loans, dividends to shareholders of $8.7 million, and stock repurchases of $2.4 million.

    Equity securities increased $3.9 million, or 21.5%, to $22.0 million at December 31, 2024 from $18.1 million at December 31, 2023. The increase in equity securities was attributable to the purchase of $4.0 million in equity securities during the second half of 2024, offset by market depreciation of $109,000 due to market interest rate volatility during the year ended December 31, 2024.

    Securities held-to-maturity decreased $1.2 million, or 7.8%, to $14.6 million at December 31, 2024 from $15.9 million at December 31, 2023 due to $1.2 million in maturities and pay-downs of various investment securities, partially offset by a decrease of $10,000 in the allowance for credit losses for held-to-maturity securities.

    Loans, net of the allowance for credit losses, increased $227.0 million, or 14.3%, to $1.8 billion at December 31, 2024 from $1.6 billion at December 31, 2023. The increase in loans, net of the allowance for credit losses, was primarily due to loan originations of $656.0 million during the year ended December 31, 2024, consisting primarily of $573.8 million in construction loans with respect to which approximately 36.3% of the funds were disbursed at loan closings, with the remaining funds to be disbursed over the terms of the construction loans. In addition, during the year ended December 31, 2024, we originated $54.9 million in commercial and industrial loans, $14.0 million in non-residential loans, $12.6 million in multi-family loans, and $600,000 in mixed-use loans. We also originated $9.2 million in letters of credit.

    Loan originations during the year ended December 31, 2024 resulted in a net increase of $206.8 million in construction loans, $8.6 million in commercial and industrial loans, $8.3 million in non-residential loans, $7.7 million in multi-family loans, and $409,000 in consumer loans. The increase in our loan portfolio was partially offset by decreases of $3.1 million in mixed-use loans and $1.8 million in residential loans, coupled with normal pay-downs and principal reductions.

    The allowance for credit losses related to loans decreased to $4.8 million as of December 31, 2024, from $5.1 million as of December 31, 2023. The decrease in the allowance for credit losses related to loans was due to charge-offs totaling $347,000, offset by provision for credit losses totaling $84,000.  

    Premises and equipment decreased $647,000, or 2.5%, to $24.8 million at December 31, 2024 from $25.5 million at December 31, 2023 primarily due to the depreciation of fixed assets.

    Investments in Federal Home Loan Bank stock decreased $532,000, or 57.3%, to $397,000 at December 31, 2024 from $929,000 at December 31, 2023. The decrease was due primarily to the mandatory redemption of Federal Home Loan Bank stock totaling $630,000 in connection with the maturity of $14.0 million in advances in 2024, offset by purchases of Federal Home Loan Bank stock totaling $98,000 due to the growth of our mortgage loan portfolio.

    Bank owned life insurance (“BOLI”) increased $656,000, or 2.6%, to $25.7 million at December 31, 2024 from $25.1 million at December 31, 2023 due to increases in the BOLI cash value.

    Accrued interest receivable increased $1.2 million, or 9.5%, to $13.5 million at December 31, 2024 from $12.3 million at December 31, 2023 due to an increase in the loan portfolio.

    Real estate owned increased $3.7 million, or 251.6%, to $5.1 million at December 31, 2024 from $1.5 million at December 31, 2023 due to foreclosure of a property, with a book value of $4.4 million, located in the Bronx, New York, offset by charge-offs totaling $689,000 resulting from a decrease in the estimated fair value of a foreclosed property located in Pittsburgh, Pennsylvania.

    Right of use assets — operating decreased $565,000, or 12.4%, to $4.0 million at December 31, 2024 from $4.6 million at December 31, 2023, primarily due to amortization.

    Other assets increased $3.3 million, or 40.5%, to $11.3 million at December 31, 2024 from $8.0 million at December 31, 2023 due to increases of $2.8 million in tax assets, $476,000 in suspense accounts, and $6,000 in miscellaneous assets, partially offset by decreases of $40,000 in prepaid expenses and $2,000 in securities receivables.

    Total deposits increased $270.3 million, or 19.3%, to $1.7 billion at December 31, 2024 from $1.4 billion at December 31, 2023. The increase in deposits was primarily due to the Bank offering competitive interest rates to attract deposits. This resulted in a shift in deposits whereby certificates of deposit increased $239.7 million, or 31.5%, and NOW/money market accounts increased $98.0 million, or 67.4%, partially offset by decreases in savings account balances of $54.3 million, or 28.2%, and non-interest bearing demand deposits of $14.7 million, or 4.9%.

    Federal Reserve Bank borrowings of $50.0 million at December 31, 2023 and Federal Home Loan Bank advances of $14.0 million at December 31, 2023 were paid-off during the year ended December 31, 2024.

    Advance payments by borrowers for taxes and insurance decreased $402,000, or 19.9%, to $1.6 million at December 31, 2024 from $2.0 million at December 31, 2023 due primarily to real estate tax payments for borrowers.

    Lease liability – operating decreased $517,000, or 11.2%, to $4.1 million at December 31, 2024 from $4.6 million at December 31, 2023, primarily due to amortization.

    Accounts payable and accrued expenses increased $972,000, or 7.2%, to $14.5 million at December 31, 2024 from $13.6 million at December 31, 2023 due primarily to increases in dividends payable and other payables of $856,000 and deferred compensation of $729,000, partially offset by decreases in accrued interest expense of $102,000, suspense account for loan closings of $99,000, and accrued expense of $79,000. The allowance for credit losses for off-balance sheet commitments decreased $333,000, or 32.1%, to $704,000 at December 31, 2024 from $1.0 million at December 31, 2023.

    Stockholders’ equity increased $39.7 million, or 14.2% to $319.1 million at December 31, 2024, from $279.3 million at December 31, 2023. The increase in stockholders’ equity was due to net income of $47.8 million for the year ended December 31, 2024, the amortization expense of $2.0 million relating to restricted stock and stock options granted under the Company’s 2022 Equity Incentive Plan, an increase of $1.3 million in earned employee stock ownership plan shares coupled with a reduction of $475,000 in unearned employee stock ownership plan shares, and an exercise of stock options totaling $14,000, partially offset by dividends paid and declared of $8.7 million, stock repurchases and stock repurchase excise taxes totaling $2.5 million, awarding restricted stock totaling $725,000. and $93,000 in other comprehensive income.

    Results of Operations for the Quarter Ended December 31, 2024 and 2023

    Net Interest Income

    Net interest income was $25.3 million for the quarter ended December 31, 2024, as compared to $25.2 million for the quarter ended December 31, 2023. The increase in net interest income of $92,000, or 0.4%, was primarily due to an increase in interest income that exceeded an increase in interest expense.

    The increase in interest income is attributable to increases in the average balances of loans, interest-bearing deposits, and investment securities, partially offset by a decrease in the average balances of FHLB stock. However, the Federal Reserve’s decrease of interest rates starting in September 2024 impacted the yield on our interest earning assets.

    The increase in market interest rates in 2023 that continued until September 2024 also caused an increase in our interest expense. As a result, the increase in interest expense for the quarter ended December 31, 2024 was due to an increase in the cost of funds on our deposits. The increase in interest expense was also due to an increase in the average balances on our certificates of deposits and our interest-bearing demand deposits, offset by a decrease in the average balances on our savings and club deposits and our borrowed money.

    Total interest and dividend income increased $3.3 million, or 9.0%, to $40.5 million for the quarter ended December 31, 2024 from $37.1 million for the quarter ended December 31, 2023. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $249.5 million, or 15.0%, to $1.9 billion for the quarter ended December 31, 2024 from $1.7 billion for the quarter ended December 31, 2023, partially offset by a decrease in the yield on interest earning assets by 47 basis points from 8.93% for the quarter ended December 31, 2023 to 8.46% for the quarter ended December 31, 2024.

    Interest expense increased $3.3 million, or 27.3%, to $15.2 million for the quarter ended December 31, 2024 from $11.9 million for the quarter ended December 31, 2023. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 20 basis points from 4.14% for the quarter ended December 31, 2023 to 4.34% for the quarter ended December 31, 2024 and an increase in average interest bearing liabilities of  $247.3 million, or 21.5%, to $1.4 billion for the quarter ended December 31, 2024 from $1.2 billion for the quarter ended December 31, 2023.

    Our net interest margin decreased 77 basis points, or 12.7%, to 5.29% for the quarter ended December 31, 2024 compared to 6.06% for the quarter ended December 31, 2023. The decrease in the net interest margin was due to an increase in the cost of funds on interest-bearing liabilities and a decrease in the yield on interest-earning assets.

    Credit Loss Expense

    The Company recorded a credit loss expense of $26,000 for the quarter ended December 31, 2024 compared to a credit loss expense of $205,000 for the quarter ended December 31, 2023. The credit loss expense of $26,000 for the quarter ended December 31, 2024 was comprised of credit loss expense for loans of $230,000 due to charge-offs of $232,000 in unpaid overdrafts in our demand deposit accounts, offset by credit loss expense reduction for off-balance sheet commitments of $204,000 primarily attributable to a decrease in the aggregate unfunded off-balance sheet commitments.

    The credit loss expense of $205,000 for the three months ended December 31, 2023 was comprised of credit loss expense for loans of $352,000 and credit loss expense for held-to-maturity investment securities of $6,000, partially offset by credit loss expense reduction for off-balance sheet commitments of $153,000.

    With respect to the allowance for credit losses for loans, we charged-off $232,000 during the quarter ended December 31, 2024 as compared to charge-offs of $27,000 during the quarter ended December 31, 2023. The charge-offs during both periods were against various unpaid overdrafts in our demand deposit accounts.

    We recorded no recoveries from previously charged-off loans during the quarter ended December 31, 2024 and 2023.

    Non-Interest Income

    Non-interest income for the quarter ended December 31, 2024 was $149,000 compared to non-interest income of $1.4 million for the quarter ended December 31, 2023. The decrease of $1.2 million, or 89.2%, in total non-interest income was primarily due to decreases of $1.2 million in unrealized gain (loss) on equity securities, $115,000 in investment advisory fees, and $12,000 in miscellaneous other non-interest income, partially offset by increases of $40,000 from sale/disposition of fixed assets, $14,000 in BOLI income, and $11,000 in other loan fees and service charges.

    The increase in unrealized gain (loss) on equity securities was due to an unrealized loss of $554,000 on equity securities during the quarter ended December 31, 2024 compared to an unrealized gain of $621,000 on equity securities during the quarter ended December 31, 2023. The unrealized loss of $554,000 on equity securities during the quarter ended December 31, 2024 was due to market interest rate volatility during the quarter ended December 31, 2024.

    The decrease in investment advisory fees was due to the disposition in January 2024 of the Bank’s assets relating to the Harbor West Wealth Management Group. As a result of the transaction, the Bank no longer generates investment advisory fees.

    Regarding the sale/disposition of fixed assets, we recorded gains of $22,000 during the quarter ended December 31, 2024 compared to losses of $18,000 during the quarter ended December 31, 2023.  

    The increase in BOLI income of $14,000 was due to an increase in the yield on BOLI assets.

    The increase of $11,000 in other loan fees and service charges was due to an increase of $24,000 in ATM/debit card/ACH fees and an increase of $2,000 in deposit account fees, partially offset by a decrease of $15,000 in other loan fees and loan servicing fees.

    Non-Interest Expense

    Non-interest expense increased $688,000, or 7.5%, to $9.9 million for the quarter ended December 31, 2024 from $9.2 million for the quarter ended December 31, 2023. The increase resulted primarily from increases of $444,000 in salaries and employee benefits, $163,000 in real estate owned expense, $108,000 in outside data processing expense, $79,000 in other operating expense, $18,000 in equipment expense, $7,000 in occupancy expense, and $7,000 in advertising expense, partially offset by a decrease of $138,000 in loss on the disposition of the Bank’s assets relating to the Harbor West Wealth Management Group.

    Income Taxes

    We recorded income tax expense of $4.6 million and $5.1 million for the quarter ended December 31, 2024 and 2023, respectively. For the quarter ended December 31, 2024, we had approximately $205,000 in tax exempt income, compared to approximately $190,000 in tax exempt income for the quarter ended December 31, 2023. Our effective income tax rates were 29.5% for the quarter ended December 31, 2024 and 2023, respectively.

    Results of Operations for the Year Ended December 31, 2024 and 2023

    Net Interest Income

    Net interest income was $102.8 million for the year ended December 31, 2024 as compared to $97.2 million for the year ended December 31, 2023. The increase in net interest income of $5.6 million, or 5.8%, was primarily due to an increase in interest income that exceeded an increase in interest expense.

    The increase in interest income is attributable to increases in loans and interest-bearing deposits, partially offset by decreases in investment securities and FHLB stock. The increase in interest income is also attributable to the Federal Reserve’s interest rate increases during 2023 that continued until September 2024. However, the Federal Reserve’s decrease of interest rates starting in September 2024 impacted the yield on our interest earning assets.

    The increase in market interest rates in 2023 that continued until September 2024 also caused an increase in our interest expense. As a result, the increase in interest expense for the year ended December 31, 2024 was due to an increase in the cost of funds on our deposits and borrowed money. The increase in interest expense was also due to increases in the average balances on our certificates of deposits, our interest-bearing demand deposits, and our borrowed money, offset by a decrease in the average balance of our savings and club deposits.

    Total interest and dividend income increased $27.5 million, or 20.8%, to $160.0 million for the year ended December 31, 2024 from $132.5 million for the year ended December 31, 2023. The increase in interest and dividend income was due to an increase in the average balance of interest earning assets of $312.3 million, or 20.6%, to $1.8 billion for the year ended December 31, 2024 from $1.5 billion for the year ended December 31, 2023 and an increase in the yield on interest earning assets by two basis points from 8.73% for the year ended December 31, 2023 to 8.75% for the year ended December 31, 2024.

    Interest expense increased $21.9 million, or 62.1%, to $57.2 million for the year ended December 31, 2024 from $35.3 million for the year ended December 31, 2023. The increase in interest expense was due to an increase in the cost of interest bearing liabilities by 77 basis points from 3.58% for the year ended December 31, 2023 to 4.35% for the year ended December 31, 2024, and an increase in average interest bearing liabilities of $328.9 million, or 33.3%, to $1.3 billion for the year ended December 31, 2024 from $986.3 million for the year ended December 31, 2023.

    Net interest margin decreased 79 basis points, or 12.3%, for the year ended December 31, 2024 to 5.62% compared to 6.41% for the year ended December 31, 2023.

    Credit Loss Expense

    The Company recorded a credit loss expense reduction totaling $260,000 for the year ended December 31, 2024 compared to a credit loss expense totaling $972,000 for the year ended December 31, 2023. The credit loss expense reduction of $260,000 for the year ended December 31, 2024 was comprised of a credit loss expense reduction for off-balance sheet commitments of $334,000 and a credit loss expense reduction for held-to-maturity investment securities of $10,000, offset by a credit loss expense for loans of $84,000.

    The credit loss expense reduction for off-balance sheet commitments of $334,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $157.6 million in the level of off-balance sheet commitments. The credit loss expense reduction for held-to-maturity investment securities of $10,000 for the year ended December 31, 2024 was primarily attributed to a reduction of $708,000 in the level of applicable held-to-maturity investment securities.

    The credit loss expense for loans of $84,000 for the year ended December 31, 2024 was primarily attributed to charge-offs totaling $347,000, partially offset by favorable trends in the economy.  

    The credit loss expense of $972,000 for the year ended December 31, 2023 was comprised of credit loss expense for loans of $1.5 million and credit loss expense for held-to-maturity investment securities of $5,000, partially offset by a credit loss expense reduction for off-balance sheet commitments of $548,000.

    We charged-off $347,000 during the year ended December 31, 2024 as compared to charge-offs of $313,000 during the year ended December 31, 2023. The charge-offs of $347,000 during the year ended December 31, 2024 were against various unpaid overdrafts in our demand deposit accounts. The charge-offs of $312,000 during the year ended December 31, 2023 were comprised of a charge-off of $159,000 related to three performing construction loans on the same project whereby we sold the loans to a third-party at a loss of $159,000. The remaining charge-offs of $153,000 for the 2023 period were against various unpaid overdrafts in our demand deposit accounts.

    We recorded no recoveries from previously charged-off loans during the year ended December 31, 2024 and 2023.

    Non-Interest Income

    Non-interest income for the year ended December 31, 2024 was $2.8 million compared to non-interest income of $3.7 million for the year ended December 31, 2023. The decrease of $960,000, or 25.6%, in total non-interest income was primarily due to decreases of $458,000 in investment advisory fees, $403,000 in unrealized gains (losses) on equity securities, and $357,000 in BOLI income, partially offset by increases of $207,000 in other loan fees and service charges, $40,000 from sale/disposition of fixed assets, and $11,000 in miscellaneous other non-interest income.

    The decrease in investment advisory fees was due to the disposition in January 2024 of the Bank’s assets relating to the Harbor West Wealth Management Group. As a result of the transaction, the Bank no longer generates investment advisory fees. The decrease in unrealized gain (loss) on equity securities was due to an unrealized loss of $109,000 on equity securities during the year ended December 31, 2024 compared to an unrealized gain of $294,000 on equity securities during the year ended December 31, 2023. The unrealized loss of $109,000 on equity securities during the 2024 period was due to market interest rate volatility during the year ended December 31, 2024.

    The decrease in BOLI income was primarily due to two death claims totaling $1.8 million on BOLI policies that resulted in additional BOLI income of $404,000 in the year ended December 31, 2023.

    The increase of $207,000 in other loan fees and service charges was due to increases of $148,000 in other loan fees and loan servicing fees, $51,000 in ATM/debit card/ACH fees, and $7,000 in deposit account fees.

    Regarding the sale/disposition of fixed assets, we recorded gains of $22,000 during the year ended December 31, 2024 compared to losses of $18,000 during the year ended December 31, 2023.

    Non-Interest Expense

    Non-interest expense increased $3.8 million, or 10.9%, to $39.1 million for the year ended December 31, 2024 from $35.2 million for the year ended December 31, 2023. The increase resulted primarily from increases of $2.1 million in salaries and employee benefits, $879,000 in other operating expense, $638,000 in real estate owned expense, $394,000 in outside data processing expense, and $233,000 in occupancy expense, partially offset by decreases of $165,000 in equipment expense, $138,000 in loss on the disposition of the Bank’s assets relating to the Harbor West Wealth Management Group, and $103,000 in advertising expense.

    Income Taxes

    We recorded income tax expense of $19.0 million and $18.5 million for the year ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, we had approximately $802,000 in tax exempt income, compared to approximately $1.1 million in tax exempt income for the year ended December 31, 2023. The decrease in tax exempt income was due to two death claims totaling $1.8 million on BOLI policies during the year ended December 31, 2023. Our effective income tax rates were 28.4% and 28.5% for the year ended December 31, 2024 and 2023, respectively.

    Asset Quality

    Non-performing assets were $5.1 million at December 31, 2024 compared to $5.8 million at December 31, 2023.   At December 31, 2023, we had two non-performing construction loans totaling $4.4 million secured by the same project located in the Bronx, New York. We successfully foreclosed on these two loans on October 21, 2024 and the balances were transferred to foreclosed real estate. As a result, at December 31, 2024, we had two non-performing assets consisting of two foreclosed properties, with one foreclosed property totaling $4.4 million located in the Bronx, New York and one foreclosed property totaling $767,000 located in Pittsburgh, Pennsylvania.

    Our ratio of non-performing assets to total assets remained low at 0.25% at December 31, 2024 as compared to 0.33% at December 31, 2023.

    The Company’s allowance for credit losses related to loans was $4.8 million, or 0.27% of total loans as of December 31, 2024, compared to $5.1 million, or 0.32% of total loans, as of December 31, 2023. Based on a review of the loans that were in the loan portfolio at December 31, 2024, management believes that the allowance for credit losses related to loans is maintained at a level that represents its best estimate of inherent losses in the loan portfolio that were both probable and reasonably estimable.

    In addition, at December 31, 2024, the Company’s allowance for credit losses related to off-balance sheet commitments totaled $704,000 and the allowance for credit losses related to held-to-maturity debt securities totaled $126,000.

    Capital

    The Company’s total stockholders’ equity to assets ratio was 15.87% as of December 31, 2024.   At December 31, 2024, the Company had the ability to borrow $834.7 million from the Federal Reserve Bank of New York, $18.2 million from the Federal Home Loan Bank of New York and $8.0 million from Atlantic Community Bankers Bank.

    The Bank’s capital position remains strong relative to current regulatory requirements and the Bank is considered a well-capitalized institution under the Prompt Corrective Action framework. As of December 31, 2024, the Bank had a tier 1 leverage capital ratio of 14.76% and a total risk-based capital ratio of 14.04%.

    The Company completed its first stock repurchase program on April 14, 2023 whereby the Company repurchased 1,637,794 shares, or 10%, of the Company’s issued and outstanding common stock. The cost of the stock repurchase program totaled $23.0 million, including commission costs and Federal excise taxes.   Of the total shares repurchased under this program, 957,275 of such shares were repurchased during 2023 at a total cost of $13.7 million, including commission costs and Federal excise taxes.

    The Company commenced its second stock repurchase program on May 30, 2023 whereby the Company will repurchase 1,509,218, or 10%, of the Company’s issued and outstanding common stock. As of December 31, 2024, the Company had repurchased 1,091,174 shares of common stock under its second repurchase program, at a cost of $17.2 million, including commission costs and Federal excise taxes.

    About NorthEast Community Bancorp

    NorthEast Community Bancorp, headquartered at 325 Hamilton Avenue, White Plains, New York 10601, is the holding company for NorthEast Community Bank, which conducts business through its eleven branch offices located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts and three loan production offices located in New City, New York, White Plains, New York, and Danvers, Massachusetts. For more information about NorthEast Community Bancorp and NorthEast Community Bank, please visit www.necb.com.

    Forward Looking Statement

    This press release contains certain forward-looking statements. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause actual results to differ materially from expected results include, but are not limited to, changes in market interest rates, regional and national economic conditions (including higher inflation and its impact on regional and national economic conditions), legislative and regulatory changes, monetary and fiscal policies of the United States government, including policies of the United States Treasury and the Federal Reserve Board, the quality and composition of the loan or investment portfolios, demand for loan products, decreases in deposit levels necessitating increased borrowing to fund loans and securities, competition, demand for financial services in NorthEast Community Bank’s market area, changes in the real estate market values in NorthEast Community Bank’s market area, the impact of failures or disruptions in or breaches of the Company’s operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns, and changes in relevant accounting principles and guidelines. Additionally, other risks and uncertainties may be described in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission (the “SEC”), which are available through the SEC’s website located at www.sec.gov. These risks and uncertainties should be considered in evaluating any forward-looking statements and undue reliance should not be placed on such statements. Except as required by applicable law or regulation, the Company does not undertake, and specifically disclaims any obligation, to release publicly the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

       
    CONTACT: Kenneth A. Martinek
      Chairman and Chief Executive Officer
       
    PHONE: (914) 684-2500
       
     
    NORTHEAST COMMUNITY BANCORP, INC.
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (Unaudited)
           
        December 31,   December 31,
           2024       2023 
        (In thousands, except share
        and per share amounts)
    ASSETS            
    Cash and amounts due from depository institutions   $ 13,700     $ 13,394  
    Interest-bearing deposits     64,559       55,277  
    Total cash and cash equivalents     78,259       68,671  
    Certificates of deposit     100       100  
    Equity securities     21,994       18,102  
    Securities held-to-maturity ( net of allowance for credit losses of $126 and $136, respectively )     14,616       15,860  
    Loans receivable     1,813,647       1,586,721  
    Deferred loan (fees) costs, net     (49 )     176  
    Allowance for credit losses     (4,830 )     (5,093 )
    Net loans     1,808,768       1,581,804  
    Premises and equipment, net     24,805       25,452  
    Investments in restricted stock, at cost     397       929  
    Bank owned life insurance     25,738       25,082  
    Accrued interest receivable     13,481       12,311  
    Real estate owned     5,120       1,456  
    Property held for investment     1,370       1,407  
    Right of Use Assets – Operating     4,001       4,566  
    Right of Use Assets – Financing     347       351  
    Other assets     11,302       8,044  
    Total assets   $ 2,010,298     $ 1,764,135  
    LIABILITIES AND STOCKHOLDERS’ EQUITY              
    Liabilities:              
    Deposits:              
    Non-interest bearing   $ 287,135     $ 300,184  
    Interest bearing     1,383,240       1,099,852  
    Total deposits     1,670,375       1,400,036  
    Advance payments by borrowers for taxes and insurance     1,618       2,020  
    Borrowings     –       64,000  
    Lease Liability – Operating     4,108       4,625  
    Lease Liability – Financing     609       571  
    Accounts payable and accrued expenses     14,530       13,558  
    Total liabilities     1,691,240       1,484,810  
                   
    Stockholders’ equity:              
    Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding   $ —     $ —  
    Common stock, $0.01 par value; 75,000,000 shares authorized; 14,016,254 shares and 14,144,856 shares outstanding, respectively     140       142  
    Additional paid-in capital     110,091       109,924  
    Unearned Employee Stock Ownership Plan (“ESOP”) shares     (6,088 )     (6,563 )
    Retained earnings     214,691       175,505  
    Accumulated other comprehensive income     224       317  
    Total stockholders’ equity     319,058       279,325  
    Total liabilities and stockholders’ equity   $ 2,010,298     $ 1,764,135  
                 
    NORTHEAST COMMUNITY BANCORP, INC.
    CONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
     
                             
        Quarter Ended December 31,   Year Ended December 31,
         2024    2023   2024    2023
                    (In thousands, except per share amounts)
    INTEREST INCOME:                        
    Loans   $ 39,081     $ 35,660     $ 153,902     $ 127,486  
    Interest-earning deposits     1,144       1,257       5,202       4,143  
    Securities     247       209       909       859  
    Total Interest Income     40,472       37,126       160,013       132,488  
    INTEREST EXPENSE:                        
    Deposits     15,160       11,131       55,619       34,181  
    Borrowings     5       779       1,564       1,078  
    Financing lease     9       10       38       38  
    Total Interest Expense     15,174       11,920       57,221       35,297  
    Net Interest Income     25,298       25,206       102,792       97,191  
    Provision for (reversal of) credit loss     26       205       (260 )     972  
    Net Interest Income after Provision for (Reversal of) Credit Loss     25,272       25,001       103,052       96,219  
    NON-INTEREST INCOME:                        
    Other loan fees and service charges     485       474       2,098       1,891  
    Gain (loss) on disposition of equipment     22       (18 )     22       (18 )
    Earnings on bank owned life insurance     170       156       656       1,013  
    Investment advisory fees     –       115       –       458  
    Realized and unrealized (loss) gain on equity securities     (554 )     621       (109 )     294  
    Other     26       38       116       105  
    Total Non-Interest Income     149       1,386       2,783       3,743  
    NON-INTEREST EXPENSES:                        
    Salaries and employee benefits     5,204       4,760       20,942       18,839  
    Occupancy expense     712       705       2,828       2,595  
    Equipment     229       211       890       1,055  
    Outside data processing     680       572       2,604       2,210  
    Advertising     108       101       418       521  
    Loss on disposition of business     –       138       –       138  
    Real estate owned expense     204       41       731       93  
    Other     2,785       2,706       10,649       9,770  
    Total Non-Interest Expenses     9,922       9,234       39,062       35,221  
    INCOME BEFORE PROVISION FOR INCOME TAXES     15,499       17,153       66,773       64,741  
    PROVISION FOR INCOME TAXES     4,566       5,052       18,982       18,465  
    NET INCOME   $ 10,933     $ 12,101     $ 47,791     $ 46,276  
                             
    NORTHEAST COMMUNITY BANCORP, INC.
    SELECTED CONSOLIDATED FINANCIAL DATA
    (Unaudited)
                  
        Quarter Ended December 31,   Year Ended December 31,  
         2024     2023     2024    2023  
        (In thousands, except per share amounts)   (In thousands, except per share amounts)  
    Per share data:                              
    Earnings per share – basic   $ 0.83     $ 0.82     $ 3.64     $ 3.32    
    Earnings per share – diluted     0.80       0.82       3.58       3.32    
    Weighted average shares outstanding – basic     13,132       14,720       13,136       13,930    
    Weighted average shares outstanding – diluted     13,582       14,778       13,359       13,936    
    Performance ratios/data:                          
    Return on average total assets     2.19 %     2.77 %     2.50 %     2.90 %  
    Return on average shareholders’ equity     13.80 %     17.49 %     15.83 %     17.09 %  
    Net interest income   $ 25,298     $ 25,206     $ 102,792     $ 97,191    
    Net interest margin     5.29 %     6.06 %     5.62 %     6.41 %  
    Efficiency ratio     38.99 %     34.72 %     37.00 %     34.90 %  
    Net charge-off ratio     0.05 %     0.01 %     0.02 %     0.02 %  
                               
    Loan portfolio composition:                December 31, 2024
    		    December 31, 2023
    		  
    One-to-four family               $ 3,472     $ 5,252    
    Multi-family                 206,606       198,927    
    Mixed-use                 26,571       29,643    
    Total residential real estate                 236,649       233,822    
    Non-residential real estate                 29,446       21,130    
    Construction                 1,426,167       1,219,413    
    Commercial and industrial                 119,736       111,116    
    Consumer                 1,649       1,240    
    Gross loans                 1,813,647       1,586,721    
    Deferred loan (fees) costs, net                 (49 )     176    
    Total loans               $ 1,813,598     $ 1,586,897    
    Asset quality data:                          
    Loans past due over 90 days and still accruing               $ –     $ –    
    Non-accrual loans                 –       4,385    
    OREO property                 5,120       1,456    
    Total non-performing assets               $ 5,120     $ 5,841    
                               
    Allowance for credit losses to total loans                 0.27 %     0.32 %  
    Allowance for credit losses to non-performing loans                 0.00 %     116.15 %  
    Non-performing loans to total loans                 0.00 %     0.28 %  
    Non-performing assets to total assets                 0.25 %     0.33 %  
                               
    Bank’s Regulatory Capital ratios:                          
    Total capital to risk-weighted assets                 13.92 %     13.43 %  
    Common equity tier 1 capital to risk-weighted assets                 13.65 %     13.10 %  
    Tier 1 capital to risk-weighted assets                 13.65 %     13.10 %  
    Tier 1 leverage ratio                 14.44 %     14.43 %  
                                   
    NORTHEAST COMMUNITY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (Unaudited)
                       
        Quarter Ended December 31, 2024   Quarter Ended December 31, 2023
        Average   Interest   Average   Average   Interest   Average
         Balance    and dividend    Yield    Balance    and dividend    Yield
        (In thousands, except yield/cost information)   (In thousands, except yield/cost information)
    Loan receivable gross   $ 1,784,920     $ 39,081     8.76 %   $ 1,545,446     $ 35,660     9.23 %
    Securities     36,817       232     2.52 %     33,124       188     2.27 %
    Federal Home Loan Bank stock     455       15     13.19 %     929       21     9.04 %
    Other interest-earning assets     90,279       1,144     5.07 %     83,436       1,257     6.03 %
    Total interest-earning assets     1,912,471       40,472     8.46 %     1,662,935       37,126     8.93 %
    Allowance for credit losses     (4,833 )                 (4,771 )            
    Non-interest-earning assets     92,422                   87,557              
    Total assets   $ 2,000,060                 $ 1,745,721              
                                         
    Interest-bearing demand deposit   $ 233,112     $ 2,198     3.77 %   $ 118,691     $ 1,026     3.46 %
    Savings and club accounts     137,295       767     2.23 %     206,120       1,404     2.72 %
    Certificates of deposit     1,026,433       12,195     4.75 %     758,928       8,701     4.59 %
    Total interest-bearing deposits     1,396,840       15,160     4.34 %     1,083,739       11,131     4.11 %
    Borrowed money     1,293       14     4.33 %     67,049       789     4.71 %
    Total interest-bearing liabilities     1,398,133       15,174     4.34 %     1,150,788       11,920     4.14 %
    Non-interest-bearing demand deposit     263,711                   298,739              
    Other non-interest-bearing liabilities     21,428                   19,449              
    Total liabilities     1,683,272                   1,468,976              
    Equity     316,788                   276,745              
    Total liabilities and equity   $ 2,000,060                 $ 1,745,721              
                                         
    Net interest income / interest spread         $ 25,298     4.12 %         $ 25,206     4.79 %
    Net interest rate margin                 5.29 %                 6.06 %
    Net interest earning assets   $ 514,338                 $ 512,147              
    Average interest-earning assets to interest-bearing liabilities     136.79 %                 144.50 %            
     
    NORTHEAST COMMUNITY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (Unaudited)
                       
        Year Ended December 31, 2024   Year Ended December 31, 2023
        Average   Interest   Average   Average   Interest   Average
           Balance      and dividend      Yield   Balance      and dividend      Yield
        (In thousands, except yield/cost information)   (In thousands, except yield/cost information)
    Loan receivable gross   $ 1,701,079     $ 153,902     9.05 %   $ 1,401,492     $ 127,486     9.10 %
    Securities     34,765       839     2.41 %     37,819       777     2.05 %
    Federal Home Loan Bank stock     677       70     10.34 %     984       82     8.33 %
    Other interest-earning assets     92,610       5,202     5.62 %     76,542       4,143     5.41 %
    Total interest-earning assets     1,829,131       160,013     8.75 %     1,516,837       132,488     8.73 %
    Allowance for credit losses     (4,940 )                 (4,676 )            
    Non-interest-earning assets     90,675                   84,287              
    Total assets   $ 1,914,866                 $ 1,596,448              
                                         
    Interest-bearing demand deposit   $ 209,993     $ 8,498     4.05 %   $ 93,426     $ 2,459     2.63 %
    Savings and club accounts     154,430       3,799     2.46 %     248,755       6,777     2.72 %
    Certificates of deposit     917,665       43,322     4.72 %     615,124       24,945     4.06 %
    Total interest-bearing deposits     1,282,088       55,619     4.34 %     957,305       34,181     3.57 %
    Borrowed money     33,117       1,602     4.84 %     29,007       1,116     3.85 %
    Total interest-bearing liabilities     1,315,205       57,221     4.35 %     986,312       35,297     3.58 %
    Non-interest-bearing demand deposit     277,957                   322,185              
    Other non-interest-bearing liabilities     19,739                   17,139              
    Total liabilities     1,612,901                   1,325,636              
    Equity     301,965                   270,812              
    Total liabilities and equity   $ 1,914,866                 $ 1,596,448              
                                         
    Net interest income / interest spread         $ 102,792     4.40 %         $ 97,191     5.15 %
    Net interest rate margin                 5.62 %                 6.41 %
    Net interest earning assets   $ 513,926                 $ 530,525              
    Average interest-earning assets to interest-bearing liabilities     139.08 %                 153.79 %            

    The MIL Network –