NewzIntel.com

Category: Intelligence

  • MIL-OSI Security: Pineville Woman Sentenced to Consecutive Life Sentences in Prison for Kidnapping, Murder of Pregnant Arkansas Woman and Unborn Child

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

    SPRINGFIELD, Mo. – A Pineville, Mo., woman was sentenced in federal court today for the kidnapping and murder of a pregnant Arkansas woman and her victim’s unborn child.

    Amber Waterman, 44, was sentenced by U.S. District Judge Stephen R. Bough to consecutive life sentences in federal prison without parole.

    On July 30, 2024, Amber Waterman pleaded guilty to one count of kidnapping resulting in death and one count of thereby causing the death of a child in utero. Waterman admitted that she kidnapped Ashley Bush in order to claim her unborn child, Valkyrie Willis, as her own. Waterman transported Ashley Bush from Maysville, Ark., to Pineville. The kidnapping resulted in the deaths of both Ashley Bush and Valkyrie Willis.

    Her husband, Jamie Waterman, 44, pleaded guilty today before U.S. Magistrate Judge David P. Rush to one count of being an accessory after the fact to the kidnapping resulting in death. Jamie Waterman admitted that he knew Amber Waterman had kidnapped Bush, causing the death of her unborn child, and provided assistance in order to hinder or prevent the apprehension, trial, and punishment of Amber Waterman.

    Amber Waterman, using a false name, contacted Bush, who was approximately 31 weeks pregnant, via Facebook. Amber Waterman pretended to help Bush obtain employment, suggesting she had a job opportunity for her. That prompted an in-person meeting between the two women on Oct. 28, 2022, at the Gravette, Ark., public library. They agreed to meet again on Oct. 31, 2022.

    On Oct. 31, 2022, at roughly 11:45 a.m., Bush met Amber Waterman at the Handi-Stop convenience store in Maysville, Ark. Under the pretext that Amber Waterman was taking her to meet a supervisor to further discuss employment, Bush got into a truck driven by Amber Waterman. Amber Waterman then kidnapped and abducted Bush, driving her from Maysville to the Waterman residence in Pineville.

    According to court documents, Amber Waterman led Jamie Waterman to Bush’s body. Jamie Waterman assisted in hiding and disposing of the body.

    At about 5 p.m. on Oct. 31, 2022, first responders reported to the Longview store in Pineville for an emergency call of a baby who was not breathing. Amber Waterman admitted that she claimed to first responders that she had given birth to the child in the truck while on the way to the hospital. But in reality, she admitted, the child was Bush’s child, who died in utero, as a result of Amber Waterman’s kidnapping that resulted in the death of Bush.

    An autopsy indicated that Bush died as a result of penetrating trauma of the torso and her death was classified as a homicide.

    Under federal statutes, Jamie Waterman is subject to a sentence of up to 15 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 defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

    This case is being prosecuted by Assistant U.S. Attorneys Stephanie L. Wan and James J. Kelleher. It was investigated by the FBI, the Benton County, Ark., Sheriff’s Department, and the McDonald County, Mo., Sheriff’s Department in conjunction with the U.S. Attorney’s Office in the Western District of Arkansas and the Benton County, Ark., Prosecuting Attorney’s Office.

    MIL Security OSI –

  • MIL-OSI Security: U.S. Attorney Announces 2024 District Election Officer

    Source: Office of United States Attorneys

    WILMINGTON, Del. – David C. Weiss, U.S. Attorney for the District of Delaware announced today that Assistant United States Attorney (AUSA) Shamoor Anis will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.  AUSA Anis has been appointed to serve as the District Election Officer (DEO) for the District of Delaware, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

    U.S. Attorney Weiss said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election.  Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence.  The Department of Justice will always work tirelessly to protect the integrity of the election process.”

    The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur.  The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).   

    U.S. Attorney Weiss additionally commented that, “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Anis will be on duty in this District while the polls are open.  He can be reached by the public at the following telephone number – 302-893-5213.”

    In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at 410-265-8080.

    Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at 800-253-3931.

    Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. 

    U.S. Attorney Weiss concluded, “Ensuring free and fair elections depends in large part on the assistance of the American electorate.  It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

    MIL Security OSI –

  • MIL-OSI Security: U.S. Attorney’s Office Announces Election Day Program

    Source: Office of United States Attorneys

    SCRANTON – United States Attorney Gerard M. Karam announced today that Criminal Division Chief Bruce D. Brandler, Assistant United States Attorneys (AUSA) Michael Consiglio, Geoffrey MacArthur, and James Buchanan will lead the efforts of this Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.

    Criminal Chief Brandler has been appointed to oversee and lead the District’s Election Day Program.  AUSAs Consiglio, Buchanan, and MacArthur will serve as the District Election Officers (DEO) for the Middle District of Pennsylvania in our Harrisburg, Scranton, and Williamsport Offices. In that capacity, they are responsible for overseeing the handling of election day complaints of voting rights concerns, threats of any kind to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

    “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election,” said U.S. Attorney Karam. “Similarly, election officials and staff must be able to serve without being subject to unlawful threats of any kind. The Department of Justice will always work tirelessly to protect the integrity of the election process.”

    The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of any kind directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).   

     “The right to vote is the cornerstone of American democracy, said U.S. Attorney Karam.  “We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.”

    In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, our DEOs will be on duty in this District while the polls are open. AUSA/DEO Consiglio can be reached by the public at the Harrisburg Office number: 717-221-4482; AUSA/DEO Buchanan can be reached at the Scranton Office number: 570-348-2800; and AUSA/DEO MacArthur can be reached at the Williamsport Office number: 570-326-1935.

    In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at 215-418-4000.

    Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/.

     Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

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    MIL Security OSI –

  • MIL-OSI Security: U.S. Attorney’s Office Announces Election Day Efforts for the November 2024 General Election

    Source: Office of United States Attorneys

    Jackson, Miss. – United States Attorney Todd Gee announced today that Assistant United States Attorneys (AUSAs) Bert Carraway and Samuel Goff will lead the efforts of his office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.  AUSAs Carraway and Goff have been appointed to serve as the District Election Officers (DEOs) for the Southern District of Mississippi, and in that capacity are responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

    United States Attorney Gee said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election. Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence. The Department of Justice will always work tirelessly to protect the integrity of the election process.”

    The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English). 

               United States Attorney Gee stated that: “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice. To respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSAs Bert Carraway and Samuel Goff will be on duty in this District while the polls are open.  They can be reached by the public at the following telephone numbers: 601-973-2826 or 601-973-2855.”

               In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at 601-948-5000.

               Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at 800-253-3931.

               United States Attorney Gee said, “Ensuring free and fair elections depends in large part on the assistance of the American electorate.  It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

               Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. 

    MIL Security OSI –

  • MIL-OSI Security: Suburban Chicago Man Sentenced to 18 Years in Prison for Trafficking Fentanyl and Attempting To Support ISIS

    Source: Office of United States Attorneys

    CHICAGO — A suburban Chicago man has been sentenced to 18 years in federal prison for trafficking fentanyl and attempting to provide material support to the Islamic State of Iraq and al-Sham, also known as ISIS.

    On three occasions in 2019, JASON BROWN provided $500 in cash to an individual with the understanding that the money would be wired to an ISIS soldier engaged in terrorist activity in Syria.  Unbeknownst to Brown, the individual to whom he provided the money was confidentially working with law enforcement, and the purported ISIS fighter was actually an undercover law enforcement officer.

    Also in 2019, Brown trafficked fentanyl and other drugs from California to the Chicago suburbs and illegally possessed several loaded handguns in furtherance of his drug trafficking activities.

    Brown, 42, of Lombard, Ill., pleaded guilty last year to one count of attempting to provide material support to ISIS, one count of distributing fentanyl, and one count of possessing a firearm in furtherance of a drug trafficking crime.  U.S. District Judge Mary M. Rowland imposed the sentence on Oct. 16, 2024, during a hearing in federal court in Chicago. Brown has been in law enforcement custody since his arrest in 2019.

    The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Matthew G. Olsen, Assistant Attorney General for National Security at the U.S. Department of Justice, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation Chicago Field Office, and Larry Snelling, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the Illinois State Police, U.S. Postal Inspection Service, U.S. Customs and Border Protection, Homeland Security Investigations, Lombard, Ill. Police Department, Addison, Ill. Police Department, and FBI Field Offices in Atlanta, Los Angeles, and San Diego.  The government was represented by Assistant U.S. Attorney Shawn McCarthy of the Northern District of Illinois and S. Elisa Poteat, Trial Attorney from the Justice Department’s National Security Division, Counterterrorism Section.

    MIL Security OSI –

  • MIL-OSI Security: Federal Trial Jury Convicts New Orleans Men for Using Stash House for Methamphetamine, Heroin, Fentanyl Distribution Conspiracy and Being Felons in Possession of Firearms

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

    NEW ORLEANS, LOUISIANA – A federal jury convicted TERENCE WILSON (“WILSON”), age 42, and TRAVIS ENCLADE (“ENCLADE”), age 42, both of New Orleans,  on October 9, 2024 for using a stash location in the 3500 block of Encampment Street in New Orleans to conspire to distribute methamphetamine, heroin, and fentanyl and, for being felons in possession of firearms.

    According to court documents and evidence presented at trial, WILSON and ENCLADE conspired together, and with others, to distribute methamphetamine, heroin, and fentanyl from August 2022 through October 12, 2022.  During this time, WILSON and ENCLADE engaged in multiple, near daily, hand-to-hand transactions with drug customers in the Hollygrove area. 

    In September 2022, law enforcement identified a residence being used by WILSON and ENCLADE as a stash house.  Both WILSON and ENCLADE regularly made short trips to the stash house, indicative of drug activities, and possessed access  keys.  When law enforcement executed a search warrant at the stash house, they seized over 534 grams of heroin and fentanyl, over 120 grams of fentanyl, and 363 grams of mostly pure methamphetamine.  Law enforcement also seized a Diamondback Model DB9, multicaliber pistol, a Palmetto State Armory Model PA-X9, multicaliber pistol and drug paraphernalia, including, vacuum seal bags, a plastic mixer bottle containing a brownish residue, digital scales with suspected drug residue, a mechanical press used to compress drugs into kilogram shaped packages for distribution, and bags of brown sugar, used as a cutting agent. 

    During a separate search of ENCLADE’s residence, law enforcement seized a stolen Ruger Model 57, 5.7 x 28-millimeter pistol.

    In Count 1, the jury convicted WILSON and ENCLADE of conspiracy to distribute and, possess with intent to distribute, 50 grams or more of methamphetamine, 40 grams or more of a fentanyl mixture, and 100 grams or more of heroin mixture.  With respect to Count 2, possession with intent to distribute 50 grams or more of methamphetamine, 40 grams or more of a fentanyl mixture and, 100 grams or more of a heroin mixture, the jury found WILSON guilty and ENCLADE not guilty.  The jury convicted WILSON and ENCLADE of being felons in possession of firearms in Counts 3 and 4.  The jury found WILSON and ENCLADE not guilty on Count 5, which charged possession of firearms in furtherance of a drug trafficking crime.

    For both Counts 1 and 2, WILSON faces a mandatory minimum sentence of 10 years and up to life imprisonment, a fine of up to $10,000,000, at least 5 years of supervised release.  For Count 1, ENCLADE faces a mandatory minimum sentence of 10 years and up to life imprisonment, a fine of up to $10,000,000, at least 5 years of supervised release. For being a felon in possession of firearms, WILSON and ENCLADE each face up to 10 years imprisonment, a fine of up to $250,000, and up to 3 years of supervised release. Additionally, for each count of conviction, both WILSON and ENCLADE face payment of a $100 mandatory special assessment fee.  Sentencing is set for January 21, 2025.

    This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  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.

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

    The case was investigated by the Drug Enforcement Administration, New Orleans Division, the Drug Enforcement Administration, Special Response Team, the Federal Bureau of Investigation, Special Response Team, the New Orleans Police Department, the Louisiana State Police, the Slidell Police Department, the St. Charles Parish Sheriff’s Office, the Jefferson Parish Sheriff’s Office, the Lafourche Parish Sheriff’s Office, the Gretna Major Crimes Task Force, and the Thibodeaux Police Department. Assistant United States Attorneys Rachal Cassagne and André Jones of the Narcotics Unit are in charge of the prosecution.

    MIL Security OSI –

  • MIL-OSI Security: New Orleans Man Sentenced for Cocaine Distribution and Possession Conspiracy

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

    NEW ORLEANS, LOUISIANA – DAVID HESTER (“HESTER”), age 35, a resident of New Orleans, was sentenced on October 16, 2024 after previously pleading guilty to conspiracy to distribute and, possess with intent to distribute, five hundred grams or more of cocaine hydrochloride, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(B), and 846.  HESTER was sentenced to eighty-eight (88) months imprisonment, four (4) years of supervised release, and a $100 mandatory special assessment fee.

    According to court documents, HESTER, and other co-conspirators, are responsible for the distribution of multi-kilogram quantities of cocaine, fentanyl, and heroin within the Eastern District of Louisiana.

    During the investigation, law enforcement, led by the Drug Enforcement Administration, seized seventy- one (71) kilograms of cocaine hydrochloride, twelve (12) kilograms of fentanyl, four and a half (4.5) kilograms of heroin, and nearly $1,200,000.00 in U.S. Currency and other seized property.

    This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.  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.

    This investigation was led by the Drug Enforcement Administration – New Orleans Field Division Office and was assisted by the Federal Bureau of Investigation, the United States Border Patrol, the Gretna Major Crimes Task Force, the Kenner Police Department, the Jefferson Parish Sheriff’s Office, the St. John’s Parish Sheriff’s Office, the Orleans Parish Sheriff’s Office, and the New Orleans Police Department.  The prosecution was handled by Assistant United States Attorney Lynn E. Schiffman of the Narcotics Unit.

    MIL Security OSI –

  • MIL-OSI Security: FBI Seeks Information on Fatal Shooting of Carlos Honable in Stockton, California

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

    SACRAMENTO—The FBI is seeking information leading to the identification, arrest, and conviction of those responsible for the homicide of Carlos Honable, who was fatally shot on July 5, 2024.

    A ‘Seeking Information’ poster, which contains images of the suspect vehicle and a sketch of one of the vehicle’s occupants, is below. These visuals, products of the collaborative investigation with the Stockton Police Department, are intended to aid in solving this homicide and seeking justice for the victim.

    On July 5, 2024, at approximately 5:30 p.m., officers with the Stockton Police Department responded to a report of a person shot on the 3800 block of Fairburn Way. The investigation revealed that a 31-year-old male victim was sitting inside his parked vehicle when the suspect vehicle, a gray Toyota Camry (2018 model or newer), pulled up next to him. Occupants of the vehicle fired at the victim, striking him numerous times, before fleeing the scene. The victim, Carlos Honable, was transported to a local hospital but succumbed to his injuries.

    Investigators produced a sketch of one of the vehicle’s occupants based on the information gathered during the investigation. The individual is described as a young Black male, approximately 5’6″, with a thin build, weighing between 120 and 140 pounds. He was reportedly wearing a gray hooded sweatshirt and dark-colored jeans at the time of the incident. He is considered armed and dangerous.

    If you have any information about this homicide and/or the occupants of the Toyota Camry, please contact the FBI Sacramento Field Office by calling 916-746-7000. You may also submit information online at tips.fbi.gov. You may remain anonymous.

    Link to FBI’s Most Wanted Release: FBI Seeks Information on Fatal Shooting of Carlos Honable in Stockton, California

    MIL Security OSI –

  • MIL-OSI Security: Avon, New York, Police Trainee Charged with Attempted Kidnapping, Cyberstalking, and Multiple Child Pornography Charges

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

    ROCHESTER, N.Y.-U.S. Attorney Trini E. Ross announced today that Casey Medina, 33, of Rochester, NY, was charged by criminal complaint with attempted kidnapping, distribution, receipt, and possession of child pornography, cyberstalking, and aiding and abetting. The charges carry a minimum penalty of five years in prison and a maximum of 20 years.

    Assistant U.S. Attorney Katelyn M. Hartford, who is handling the case, stated that in May 2024, the Onondaga County, NY, Sheriff’s Office was contacted by a 31-year-old female (victim), who reported that she had been receiving text messages from unknown numbers that included photographs depicting her face superimposed on various pornographic images made to appear as if she had been engaging in sexual acts. In addition, the victim reported being threatened by the unknown numbers, including being kidnapped, raped, sexually abused and/or killed. In August 2024, the victim indicated to investigators that the text messages in May occurred over the course of approximately 26 days, and, after short break, continued sporadically through June and July 2024. The victim stated that the messages were becoming very concerning, and she had no idea who they were coming from.

    Also in August 2024, law enforcement received a tip from an individual that he had communicated with another individual with username “crcdal” via social media. The other individual, later identified as Medina, was looking for someone to help to harass the victim. Medina provided the individual with the victim’s personal information, including her place of employment, home address, personal cell phone number, and a variety of photos. The individual provided law enforcement with several screenshots of communications with Medina, which included discussions of abducting, drugging, and raping the victim. An undercover law enforcement officer then began communicating with Media online, during which they also discussed abducting, drugging, and raping the victim.

    On August 22, 2024, Medina was an Avon Police Department trainee, and was arrested by the Onondaga County Sheriff’s Office at the Rural Police Training Academy in Livingston County on multiple state charges. Investigators executed a search warrant on Medina’s cell phone and recovered the communications discussing the abduction, drugging, and raping of the victim as well as images and videos of child pornography that Medina shared online.

    The complaint is the culmination of an investigation by the Onondaga County, NY, Sheriff’s Office, under the direction of Sheriff Tobias Shelley, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia.          

    The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

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    MIL Security OSI –

  • MIL-OSI Security: Lancaster Man Sentenced for COVID Relief Fraud

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

    BUFFALO, NY – U.S. Attorney Trini E. Ross announced today that Larry Jordan, 45, of Lancaster, NY, who was convicted of conspiracy to commit bank fraud and wire fraud for his participation in a scheme to file fraudulent loan applications seeking forgivable Paycheck Protection Program (PPP) loans, was sentenced to serve 18 months in prison by U.S. District Judge John L. Sinatra, Jr. Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, joined the announcement.

    According to court documents, between April and September 2020, Jordan and his brother Sutukh El a/k/a Curtis Jordan a/k/a Hugo Hurt a/k/a Hugo Hermes Hurtington, conspired to submit eight fraudulent PPP loan applications on behalf of companies they owned or controlled. Three of the applications were submitted to Evolve Bank & Trust and the other five were submitted to Lendio, a financial technology company based in Utah. The applications contained false statements about the 2019 payroll expenses of each company, which were used to calculate the amount of PPP funds to which the applicant-companies would be entitled. To corroborate the applications, Jordan and El submitted IRS forms, which had never been filed with the IRS, as well as fraudulent payroll registers that purported to identify the names, personal information, and salary of the employees identified on the PPP applications.

    For example, a PPP loan application was submitted on behalf of 5 Stems Inc to Evolve. The application represented that in 2019, 5 Stems Inc had 194 employees and an average monthly payroll of $242,133.33. In truth, 5 Stems Inc had nine employees in 2019 and paid those employees a total of approximately $57,380 for all of 2019. Evolve approved the application and funded a $605,200 loan. The money was deposited into an account controlled by defendant El. Some of the money was used for the defendants’ own investments, as well as personal expenses and home improvements.

    Sutukh El was previously convicted and is awaiting sentencing.

    This case was investigated by the Federal Deposit Insurance Corporation’s Office of Inspector General, the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection’s Office of the Inspector General, the Federal Housing Finance Agency’s Office of the Inspector General, the Federal Bureau of Investigation, and the Small Business Administration’s Office of Inspector General. Assistant U.S. Attorneys Charles Kruly and Grace Carducci for the Western District of New York and Trial Attorneys Ariel Glasner and Della Sentilles of the Criminal Division’s Fraud Section are prosecuting the case.

    Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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    MIL Security OSI –

  • MIL-OSI Security: Virginia Man Pleads Guilty to Interstate Threat

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

    Ahead of the Threat Podcast: Episode Zero

    Welcome to Ahead of the Threat, the FBI’s new podcast miniseries that brings together an FBI cyber executive and a private sector chief information security officer. Join Bryan Vorndran, assistant director of the FBI’s Cyber Division, and Jamil Farshchi, a strategic engagement advisor for the FBI who also works as an executive vice president and CISO of Equifax, as they discuss emerging cyber threats and the enduring importance of cybersecurity fundamentals. Featuring distinguished guests from the business world and government, Ahead of the Threat will confront some of the biggest questions in cyber: How will emerging technology impact corporate America? How can corporate boards be structured for cyber resilience? What does the FBI think about generative artificial intelligence? Listen to new episodes biweekly and stay Ahead of the Threat.

    Charity and Disaster Fraud

    Charity fraud scams can come in many forms: emails, social media posts, crowdfunding platforms, cold calls, etc. They are especially common after high-profile disasters. Always use caution and do your research when you’re looking to donate to charitable causes.

    RYAN JAMES WEDDING

    Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances; Conspiracy to Export Cocaine; Continuing Criminal Enterprise; Murder in Connection with a Continuing Criminal Enterprise and Drug Crime; Attempt to Commit…

    Capitol Violence

    The FBI is seeking to identify individuals involved in the violent activities that occurred at the U.S. Capitol and surrounding areas on January 6, 2021. View photos and related information here. If you have any information to provide, visit tips.fbi.gov or call 1-800-CALL-FBI.

    MIL Security OSI –

  • MIL-OSI Security: Neshoba County Man Sentenced to Over 11 Years in Prison for Shooting a Tribal Member on the Choctaw Indian Reservation

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

    Jackson, Miss.  – A Neshoba County man was sentenced to 138 months in federal prison for assault with intent to do bodily harm and use of a firearm during a crime of violence on the Choctaw Indian Reservation.

    According to court documents, in September 2022, Jessie James Clay, Jr., 42, used a handgun to shoot a tribal member, causing serious bodily injury, at a residence in the Pearl River Community of the Mississippi Band of Choctaw Indians.   

    Clay was indicted by a federal grand jury in January 2023, and he pled guilty on July 18, 2024.

    United States Attorney Todd W. Gee of the Southern District of Mississippi and Special Agent in Charge Robert Eikhoff of the Federal Bureau of Investigation made the announcement.

    The Choctaw Police Department and the Federal Bureau of Investigation investigated the case.

    Assistant U.S. Attorneys Kevin J. Payne and Brian K. Burns prosecuted the case.

    MIL Security OSI –

  • MIL-OSI USA: Congressman Dan Goldman Works to Protect Americans from Reckless Gun Dealers

    Source: United States House of Representatives – Congressman Dan Goldman (NY-10)

    Licensed Firearms Sellers Often Allowed to Continue Operating Despite Violating Federal Firearm License Law

    Lax Enforcement Has Put Guns in Hands of Domestic Abusers, Drug Traffickers, and Violent Felons

    Read the Bill Here

    Washington, DC – Congressman Dan Goldman (NY-10) joined Congresswoman Julia Brownley (CA-26) in introducing the ‘Protecting Americans from Reckless Gun Dealers Act,’ which would require the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to publish detailed annual reports on the number of gun dealers that have violated Federal Firearm License law and the outcomes of resulting disciplinary actions.

    “For far too long, negligent firearm dealers have been flouting existing law and flooding our streets with weapons of war, endangering our communities and fueling the gun violence public health crisis,” Congressman Dan Goldman said. “Any firearm dealer who knowingly allows a gun to fall into the wrong hands must face consequences, and I’m proud to join my colleagues in ensuring the ATF holds reckless licensed gun dealers accountable for their dangerous business practices.”

    While the ATF is charged with investigating and holding gun dealers who violate federal gun laws accountable, many gun dealers who violate the law continue to sell guns without having their Federal Firearm License revoked or without facing other disciplinary actions.

    In June 2021, the Biden Administration issued guidance ordering ATF inspectors to implement a zero-tolerance policy against licensed Federal firearm dealers who willfully sell to prohibited purchasers or sell guns without conducting background checks. As a result, the ATF revoked more firearm licenses in 2022 than in any year since 2008.

    The ‘Protecting Americans from Reckless Gun Dealers Act’ would require the ATF to annually report: 

    • The number of ATF inspections completed each month.

    • The number of federal firearm licenses revoked that year, including names and locations of gun dealers whose licenses have been revoked.

    • The number of federal firearm licenses not renewed in lieu of revocation that year, including names and locations of gun dealers whose licenses have not been renewed.

    • The number of federal firearms licensee inspections resulting in a Qualifying Violation for a revocation, regardless of inspection outcome.

    • The number of Inspections with Qualifying Violations where revocation was ultimately not pursued.

    • The number of non-revocation remedial actions taken by the ATF.

    Congressman Goldman is committed to holding gun dealers and manufacturers accountable for their role in perpetuating the gun violence epidemic.

    In January, the Congressman cosponsored the ‘Federal Firearm Licensee Act,’ which would modernize and strengthen the federal requirements for anyone who facilitates gun sales, including gun shops, gun shows, and websites. The legislation would update sections in the U.S. Code directed at federal firearms licensees (FFLs) that have not been updated in 30 years.

    In 2023, Goldman cosponsored the ‘Equal Justice for Victims of Gun Violence Act,’ which would ensure that victims of gun violence have their day in court, that negligent gun manufacturers are held liable when they disregard public safety, and that gun trace data can be accepted as evidence in court.

    Congressman Goldman has also cosponsored the ‘Default Proceed Sale Transparency Act’ to address the ‘Charleston Loophole,’ which allows some gun sales to be completed without a completed Federal Bureau of Investigation (FBI) background without a completed Federal Bureau of Investigation (FBI) background check.

    Congressman Goldman is a Vice Chair of the House Gun Violence Prevention Task Force and is Chair of the Dads Caucus Gun Violence Prevention Working Group.

    ###

    MIL OSI USA News –

  • MIL-OSI Security: Election Officers Named for Northern District of Ohio

    Source: Office of United States Attorneys

    CLEVELAND – United States Attorney Rebecca C. Lutzko has named two Assistant United States Attorneys (AUSAs) as District Election Officers for the U.S. Attorney’s Office (USAO) for the Northern District of Ohio.

    AUSAs Megan R. Miller and Ava R. Dustin will lead the USAO’s efforts to implement the Justice Department’s nationwide Election Day Program for the upcoming Nov. 5, 2024, general elections.

    These AUSAs will oversee the district’s handling of Election Day complaints in consultation with the Justice Department’s Civil Rights, Criminal, and National Security Divisions in Washington, D.C. The USAO for the Northern District of Ohio serves the 40 northern counties in the state. AUSA Miller covers the Northeastern counties of Ohio, while AUSA Dustin covers the Northwestern counties.

    Federal law protects against election-related crimes such as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for voters’ rights, to ensure that voters can vote free from interference, including intimidation and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act also protects the right of voters to mark their own ballot or to be assisted by a person of their choice, for example, if a voter needs assistance because of a disability or inability to read or write in English.

    “The right to vote is the cornerstone of American democracy. Every citizen must be able to vote without interference or discrimination, and to have that vote counted in a fair and free election. As it has for years, the Department of Justice will work tirelessly to protect the integrity of our nation’s election process,” said U.S. Attorney Lutzko for the Northern District of Ohio. “We encourage anyone who has specific information about voting-rights concerns, including access or intimidation-related issues, or specific information about fraudulent election activity, to please provide that information to the Department of Justice. Our goal is to ensure that those who wish to vote can freely exercise this right if they choose, and that those who seek to corrupt it are brought to justice.”

    The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    AUSAs Miller and Dustin will be on duty in the Northern District of Ohio while the polls are open Tuesday, Nov. 5. AUSA Miller can be reached at 216-338-4479 and AUSA Dustin at 419-215-5444 to respond to complaints of voting rights concerns or fraudulent election activity. They will ensure that such complaints are directed to the appropriate authorities.

    In addition, the FBI will have dedicated special agents, known as Election Crime Coordinators, available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The Election Crime Coordinator for the Cleveland Field Office is Special Agent Nicole Long, who can be reached at 312-835-2276.  Tips also may be submitted online at tips.fbi.gov.

    Complaints about possible violations of the federal voting rights laws may also be made directly to the Civil Rights Division in Washington at civilrights.justice.gov or by phone at 1-800-253-3931.

    In the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. Please note: State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. 

    MIL Security OSI –

  • MIL-OSI Security: Poplar Bluff Man Admits Recording His Rape of Minor

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

    CAPE GIRARDEAU – A man from Poplar Bluff, Missouri on Friday admitted recording his rape of a minor with an intellectual disability.

    Jason R. Hicks-Simpson, 46, pleaded guilty in U.S. District Court in Cape Girardeau to one count of sexual exploitation of a minor.

    The 17-year-old victim sought help from Hicks-Simpson’s girlfriend in getting the abuse to stop, according to the plea agreement. The girlfriend contacted the victim’s mother, who called the Poplar Bluff Police Department in March of 2024. The victim told investigators that Hicks-Simpson had been sexually abusing her since she was five, the plea says. She also said Hicks-Simpson threatened to kill her and her kittens if she did not keep it a secret.

    After his arrest, Hicks-Simpson told police that it had only happened once several months earlier. Investigators found videos dating back to May of 2023 on his phone, the plea says.

    Hicks-Simpson is scheduled to be sentenced Jan. 31, 2025. As part of the plea agreement, both sides have agreed to recommend 20 years in prison.

    The Poplar Bluff Police Department and the FBI investigated the case. Assistant U.S. Attorney Julie Hunter is prosecuting the case.

    This case was brought as 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 the Department of Justice Criminal Division’s Child Exploitation and Obscenity Section, 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 http://www.justice.gov/psc.

    MIL Security OSI –

  • MIL-OSI USA: Grassley Demands Explanation from Biden-Harris Admin on Failure to Vet Afghan Terrorist, Requests Watchdog Review

    US Senate News:

    Source: United States Senator for Iowa Chuck Grassley

    BUTLER COUNTY, IOWA – U.S. Sen. Chuck Grassley (R-Iowa) is pressing the Justice Department (DOJ), FBI and Homeland Security Department (DHS) for details on its vetting of an Afghan national arrested for plotting an Election Day terrorist attack.

    Grassley, who for years has raised concerns regarding Afghan vetting procedures, obtained and is following up on an unclassified I-94 immigration document revealing that derogatory information on the Afghan national, Nasir Ahmad Tawhedi, was referred for further assessment. Grassley is calling on DOJ, FBI and DHS to explain what actions were taken to investigate this derogatory information, and when.

    Grassley additionally wrote the DOJ Office of Inspector General (OIG) requesting it review the DOJ and FBI’s assessment, investigation and tracking of Afghan evacuees allowed entry into the United States as part of Operation Allies Refuge and Operations Allies Welcome.

    Grassley this morning discussed his oversight push, saying: “I hope you know I won’t stop fighting to protect Americans and to pursue accountability.” Listen to audio of Grassley HERE and read his letters below:

    -30-

    MIL OSI USA News –

  • MIL-OSI USA: Senator Johnson, Chairman Steil Demand Classified Briefings on Potential Foreign Influence in U.S. Elections

    US Senate News:

    Source: United States Senator for Wisconsin Ron Johnson
    WASHINGTON – On Thursday, U.S. Sen. Ron Johnson (R-Wis.) and U.S. Congressman Bryan Steil (R-Wis.) sent letters to the U.S. Treasury Department, the Federal Bureau of Investigation (FBI), and the Director of National Intelligence (DNI) requesting information on potential election interference through fraudulent donations by foreign actors. In the letter to Treasury, Chairman Steil and Ranking Member Johnson requested Suspicious Activity Reports related to ActBlue. They also requested that all three agencies provide classified briefings on the matter.
    Excerpts from the letters read:
    “As Chairman of the Committee on House Administration (“CHA”) and as the Ranking Member of the Senate Permanent Subcommittee on Investigations (“PSI”), both with broad oversight of our nation’s federal elections, we write to you to raise an urgent concern regarding potential illicit election funding by foreign actors.”
    “CHA has been investigating claims that foreign actors, primarily from Iran, Russia, Venezuela, and China, may be using ActBlue to launder illicit money into U.S. political campaigns. The investigation has indicated that these actors may be exploiting existing U.S. donors by making straw donations without their knowledge.”
    Read the full letters here.
    Background:
    On April 17, 2023, Ranking Member Ron Johnson wrote to the Federal Election Commission (“FEC”) regarding a video posted online by the O’Keefe Media Group on March 28, 2023 alleging that political donations are being made in large amounts to certain political groups without the donors’ knowledge. The FEC refused to confirm or deny whether it is investigating this matter.
    On October 31, 2023, following reports that ActBlue was accepting political contributions without a card verification value (CVV), Chairman Steil sent a letter demanding answers on ActBlue’s practices, questioning if they are complying with federal campaign finance laws and preventing foreign and illegal contributions.
    On November 27, 2023, ActBlue responded to Chairman Steil’s letter saying it did not require a CVV in order to contribute on their website.
    On September 6, 2024, Chairman Steil introduced H.R. 9488, the Secure Handling of Internet Electronic Donations (SHIELD) Act. The legislation prohibits political committees from accepting an online contribution unless the contributor provides the CVV and billing address associated with the card and from accepting online contributions from prepaid cards. It also adopts a top legislative recommendation from the FEC to prohibit individuals from knowingly aiding or abetting a person making a contribution in the name of another person.
    On September 11, 2024, the SHIELD Act passed the Committee on House Administration by a voice-vote.
    On September 18, 2024, Chairman Steil sent letters to the Attorneys General from Texas, Virginia, Arkansas, Florida, and Missouri, updating them on the Committee’s investigation into ActBlue, a major democratic fundraising platform. Along with the letter, the Attorneys General received the data and evidence that the Committee has collected over the course of almost a year. 

    MIL OSI USA News –

  • MIL-OSI Security: Half-Brothers Sentenced for Murdering their Sister and her Family, Including Three Children, in their Tijuana Home

    Source: Office of United States Attorneys

    SAN DIEGO – Half-brothers Christopher Baltezar Hernandez and Victor Armondo Aguilar were sentenced in federal court today to six consecutive life terms and 45 years, respectively, for the premeditated execution of their sister, her three children – ages 9, 8 and 4 – and her significant other in their Tijuana home. The siblings had been involved in a bitter dispute over property prior to the murder.

    “I cannot understand how one can point a gun in front of a child’s face and pull the trigger,” U.S. District Judge Linda Lopez told the defendants during the sentencing hearing. She described the murders as “horrific,” “completely incomprehensible,” and “cold, intentional, planned, calculated, and callous.”

    Aguilar, of Tijuana, pleaded guilty in October 2023 and Hernandez, of Fresno, California, pleaded guilty in December 2023, each to a single count of conspiring to murder a U.S. citizen in a foreign country and five counts of stalking resulting in death. The half-brothers are U.S. citizens. The sister and her children were also U.S. citizens; the significant other was a Mexican national.

    According to their plea agreements, on December 3, 2021, the day of the murders, Hernandez traveled from Fresno to Tijuana through San Diego, armed with an assault rifle, .223 caliber ammunition, and two revolver speed loaders. Hernandez met up with Aguilar in Tijuana, where they acquired a revolver.

    The half-brothers, armed with the firearms and wearing dark clothes and gloves, went to the victims’ residence in Tijuana. According to the plea agreements, which identified the victims by their initials, the defendants first shot and killed the sister, J.H., and her eight-year-old daughter, A.M.M., in the kitchen. The significant other, G.M.V., was shot and killed in a bedroom while he attempted to shield the other two children. The bedroom door was forced open and nine-year-old A.M. and four-year-old S.M. were each shot in the head.

    “Borders do not shield criminals from justice when Americans are victimized abroad,” said U.S. Attorney Tara McGrath. “These executioners were charged, convicted, and held to account in a U.S. court. The Department of Justice will continue to use every available tool to protect Americans from harm at home and abroad.”

    “Jealousy and greed led to one family’s devastating loss of five loved ones,” said FBI San Diego Special Agent in Charge Stacey Moy. “Hernandez’s and Aguilar’s well-deserved prison sentences reflect their total disregard for human life. While their imprisonment will never bring back these lives, we hope it offers some peace to the victims’ family. The FBI, alongside our local and international law enforcement partners, remains dedicated to seeking justice and will not hesitate to hold accountable those involved in violent crimes, whether in the United States or abroad.”

    While there were likely multiple motivations for the murders, the primary reason was a dispute over the ownership of numerous properties in Mexico. According to court documents, in the months leading up to the murders, the sister retained an attorney to help in the property dispute, which prompted Hernandez to text her: “We already know about the lawyer.” Hernandez asked, “You think you can just fuck us over and nothing will happen?” Hernandez then mentioned J.H.’s attorney’s name and that he had the attorney “in are[sic] hands.” Hernandez continued to say, “Fuck you and all your family” and, “The truth is I’m not fucking around. You thought you were going to make a dumbass out of me but no. You’re not going to have anything.” Hernandez then challenged J.H. to “…try me and see how much you can handle because with me you’re not going to be able to finish it.”

    Hernandez had a long history of threats against his sister and her children. In May 2019, J.H. called 911 stating Hernandez was threatening to shoot her and her kids in the head. Hernandez and J.H. had the same parents; Aguilar and J.H. were half-siblings. It’s unclear if J.H. and her significant other were married.

    According to the plea agreements, the murders occurred after months of meticulous and obsessive planning and premeditation. Hernandez and Aguilar had researched the victims’ address and the surrounding area online more than 200 times. Hernandez also bought the parts and built a fully functional .223 caliber assault rifle. The week before, Hernandez researched “ar15 jam clearing” and “ar15 room clearing” and watched ten different videos related to tactical firearms training. Hernandez also researched how to build a hidden compartment in his Toyota Corolla and discussed contingency plans with others, among other preparatory steps. The day before the murders, Hernandez bought a pair of revolver speed loaders, and on the day of the murders, Hernandez and Aguilar acquired a revolver in Tijuana, Mexico.

    Aguilar searched for and listened to a podcast related to homicide investigations just hours before the murders. Minutes before the murders, Hernandez removed the SIM card from his phone, and returned it about a half-hour after the murders.

    Following the murders, Hernandez researched numerous news articles about the killings and searched, “does the fbi investigate murders.” Hernandez and Aguilar also deleted their location and messaging history.

    This case is being prosecuted by Assistant U.S. Attorneys Mario Peia, Matthew Brehm and Fred Sheppard.

    DEFENDANTS                                             Case Number 22cr778-LL                              

    Christopher Baltezar Hernandez                    Age: 27                                   Fresno, CA

    Victor Armondo Aguilar                                Age: 22                                   Tijuana, MX

    SUMMARY OF CHARGES

    Conspiracy to Murder – Title 18, U.S.C., Section 1117

    Maximum penalty: Life in prison

    Stalking Resulting in Death – Title 18, U.S.C., Section 2261A

    Maximum penalty: Life in prison

    INVESTIGATING AGENCIES

    Federal Bureau of Investigation

    San Diego County Sheriff’s Department

    MIL Security OSI –

  • MIL-OSI Security: Statement of United States Attorney Clare E. Connors Regarding November 2024 General Election

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

    HONOLULU – United States Attorney Clare E. Connors announced today that Assistant United States Attorney (AUSA) Michael Nammar will lead the efforts of her Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election. AUSA Nammar has been appointed to serve as the District Election Officer (DEO) for the District of Hawaii, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

    “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election,” said United States Attorney Connors. “Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence. The Department of Justice will always work tirelessly to protect the integrity of the election process.”

    The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud. The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).

    United States Attorney Connors stated that: “The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Nammar will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: 808-541-2850.”

    In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 808-566-4300.

    Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at 800-253-3931.

    United States Attorney Connors said, “Ensuring free and fair elections depends in large part on the assistance of the American electorate. It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

    Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.

    MIL Security OSI –

  • MIL-OSI Europe: Press release – Press conference: rapporteur Victor Negrescu on the EU budget 2025

    Source: European Parliament

    The rapporteur for the 2025 EU budget will hold a press conference on Wednesday at 13:30 following the plenary vote on the EP’s stance on the EU budget for 2025.

    Who? Victor Negrescu (S&D, Romania), general rapporteur for the EU budget 2025 (for section III – Commission)

    When? Wednesday, 23 October, 13:30

    Where? DAPHNÉ CARUANA GALIZIA ROOM – STRASBOURG – WEISS N-1/201

    Journalists online wishing to actively participate and ask questions, please connect via Interactio by using this: https://ep.interactio.eu/uw5m-71vf-mi2k

    You can also follow the press conference online via webstreaming.

    Parliament is set to vote on Wednesday for a budget that focuses on improving people’s lives, boosting competitiveness, and addressing current challenges.

    In their draft position, to be debated in plenary on Tuesday and voted on by MEPs on Wednesday, the Budget Committee set the overall level of appropriations for the 2025 draft budget at almost €201 billion in commitment appropriations, and at €153.5 billion in payment appropriations. MEPs increased funding for programmes vital in addressing health challenges, helping young people, supporting agriculture, boosting climate action, managing migration and security needs, and strengthening EU support for neighbouring regions amidst global geopolitical and humanitarian crises.

    Details are available in the press release on the recent vote on the budgetary figures (7 October) and in the corresponding budgetary resolution adopted a week later (14 October).

    Information for the media – Use Interactio to ask questions

    Interactio is only supported on iPad (with the Safari browser) and Mac/Windows (with the Google Chrome browser).

    When connecting, enter your name and the media you are representing in the first name / last name fields.

    For better sound quality, use headphones and a microphone. Interpretation is only possible for interventions with video.

    Journalists who have never used Interactio before are asked to connect 30 minutes before the start of the press conference to perform a connection test. IT assistance can be provided if necessary.

    When connected, open the chat window (upper right corner) to be able to see the service messages.

    For more details, check the connection guidelines and recommendations for remote speakers.

    MIL OSI Europe News –

  • MIL-OSI: Lloyds Bank PLC: 2024 Q3 Interim Management Statement

    Source: GlobeNewswire (MIL-OSI)

    LONDON, Oct. 23, 2024 (GLOBE NEWSWIRE) —

    Lloyds Bank plc
    Q3 2024 Interim Management Statement
    23 October 2024

    Member of the Lloyds Banking Group

    FINANCIAL REVIEW

    Income statement

    The Group’s profit before tax for the first nine months of 2024 was £3,927 million, 27 per cent lower than the same period in 2023. This was driven by lower net interest income and higher operating expenses, partly offset by a lower impairment charge. Profit after tax was £2,727 million (nine months to 30 September 2023 £3,975 million).

    Total income for the first nine months of 2024 was £12,613 million, a decrease of 8 per cent on the same period in 2023. Within this, net interest income of £9,378 million was 10 per cent lower on the prior year, driven by a lower margin. The lower margin reflected anticipated headwinds due to deposit churn and asset margin compression, particularly in the mortgage book as it refinances in a lower margin environment. These factors were partially offset by benefits from higher structural hedge earnings as balances are reinvested in the higher rate environment.

    Other income amounted to £3,235 million in the nine months to 30 September 2024 compared to £3,268 million in the same period in 2023, with improved UK Motor Finance performance, reflecting growth following the acquisition of Tusker in the first quarter of 2023, increased fleet size and higher average rental value, partially offset by the impact of changes to commission arrangements with Scottish Widows.

    Operating expenses of £8,392 million were 13 per cent higher than in the prior year. This includes the impacts of higher operating lease depreciation, largely as a result of fleet growth, the depreciation of higher value vehicles and declines in used electric car prices, alongside higher ongoing strategic investment, accelerated severance charges and inflationary pressure. It also includes c.£0.1 billion relating to the sector-wide change in the charging approach for the Bank of England Levy taken in the first quarter. In the nine months to 30 September 2024, the Group recognised remediation costs of £118 million (nine months to 30 September 2023: £127 million), largely in relation to pre-existing programmes, with no further charges in respect of the FCA review of historical motor finance commission arrangements. The FCA confirmed in September 2024 its intention to set out next steps in its review in May 2025, including its assessment of the outcome of the Judicial Review and Court of Appeal decisions involving other market participants; the Group will assess the impact, if any, of these decisions.

    The impairment charge was £294 million compared with a £881 million charge in the nine months to 30 September 2023. The decrease reflects a larger credit from improvements to the Group’s economic outlook in the first half of the year, notably house price growth and through changes to the severe downside scenario methodology. The charge also benefitted from strong portfolio performance, a large debt sale write-back, and a release in Commercial Banking from loss rates used in the model. Asset quality remains strong with resilient credit performance.

    Balance sheet

    Total assets were £4,207 million higher at £609,612 million at 30 September 2024 compared to £605,405 million at 31 December 2023. Financial assets at amortised cost were £15,406 million higher at £503,477 million compared to £488,071 million at 31 December 2023 with increases in reverse repurchase agreements of £11,128 million and loans and advances to customers of £7,355 million, partly offset by a reduction in loans and advances to banks of £2,919 million. The increase in reverse repurchase agreements and the decrease in cash and balances at central banks by £17,984 million to £39,925 million reflected a change in the mix of liquidity holdings. The increase in loans and advances to customers included growth in UK mortgages, UK Retail unsecured loans, credit cards and the European retail business, partly offset by government-backed lending repayments in Commercial Banking. Financial assets at fair value through other comprehensive income were £5,032 million higher reflecting a change in the mix of liquidity holdings. Other assets increased by £1,864 million to £28,925 million, driven by higher settlement balances and higher operating lease assets reflecting continued motor finance growth.

    Total liabilities were £4,390 million higher at £569,364 million compared to £564,974 million at 31 December 2023. Customer deposits at £446,311 million have increased by £4,358 million since the end of 2023, driven by inflows to limited withdrawal and fixed term savings products, partly offset by a reduction in current account balances and an expected significant outflow in Commercial Banking. In addition, repurchase agreements at £41,370 million have increased by £3,668 million since the end of 2023. Debt securities in issue at amortised cost decreased by £7,369 million to £45,080 million at 30 September 2024. Amounts due to fellow Lloyds Banking Group undertakings increased by £1,510 million to £4,442 million at 30 September 2024. Other liabilities increased by £3,042 million to £12,926 million, driven by higher settlement balances.

    Total equity was £40,248 million at 30 September 2024 was broadly stable compared to £40,431 million at 31 December 2023, with the profit for the period largely offset by interim dividends of £3.4 billion, pension revaluations and movements in the cash flow hedging reserve.

    FINANCIAL REVIEW (continued)

    Capital

    The Group’s common equity tier 1 (CET1) capital ratio reduced to 13.6 per cent at 30 September 2024 (31 December 2023: 14.4 per cent). This largely reflected profit for the period, offset by the payment of interim ordinary dividends, the accrual for foreseeable ordinary dividends and an increase in risk-weighted assets.

    The Group’s total capital ratio reduced to 19.8 per cent (31 December 2023: 20.5 per cent). The issuance of AT1 and Tier 2 capital instruments was more than offset by the reduction in CET1 capital, the reduction in eligible provisions recognised through Tier 2 capital, the impact of regulatory amortisation and foreign exchange on Tier 2 capital instruments and the increase in risk-weighted assets.

    Risk-weighted assets have increased by £2,350 million to £184,910 million at 30 September 2024 (31 December 2023: £182,560 million). This reflects the impact of Retail lending growth, Retail secured CRD IV model updates and other movements, partly offset by optimisation including capital efficient securitisation activity.

    The Group’s UK leverage ratio reduced to 5.3 per cent (31 December 2023: 5.6 per cent). This reflected both the reduction in the total tier 1 capital position and an increase in the leverage exposure measure, principally related to the increase in securities financing transactions and other balance sheet movements.

     
    CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
     
      Nine
    months ended
    30 Sep
    2024
    £m    		     Nine
    months ended
    30 Sep
    2023
    £m    		  
           
    Net interest income 9,378     10,432  
    Other income 3,235     3,268  
    Total income 12,613     13,700  
    Operating expenses (8,392 )   (7,457 )
    Impairment (294 )   (881 )
    Profit before tax 3,927     5,362  
    Tax expense (1,200 )   (1,387 )
    Profit for the period 2,727     3,975  
           
    Profit attributable to ordinary shareholders 2,454     3,708  
    Profit attributable to other equity holders 256     249  
    Profit attributable to equity holders 2,710     3,957  
    Profit attributable to non-controlling interests 17     18  
    Profit for the period 2,727     3,975  
     
    CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
     
      At 30 Sep
    2024
    £m    		     At 31 Dec
    2023
    £m    		  
               
    Assets          
    Cash and balances at central banks 39,925     57,909  
    Financial assets at fair value through profit or loss 1,990     1,862  
    Derivative financial instruments 2,926     3,165  
    Loans and advances to banks 5,891     8,810  
    Loans and advances to customers 440,479     433,124  
    Reverse repurchase agreements 43,879     32,751  
    Debt securities 12,569     12,546  
    Due from fellow Lloyds Banking Group undertakings 659     840  
    Financial assets at amortised cost 503,477     488,071  
    Financial assets at fair value through other comprehensive income 32,369     27,337  
    Other assets 28,925     27,061  
    Total assets 609,612     605,405  
               
    Liabilities          
    Deposits from banks 3,474     3,557  
    Customer deposits 446,311     441,953  
    Repurchase agreements 41,370     37,702  
    Due to fellow Lloyds Banking Group undertakings 4,442     2,932  
    Financial liabilities at fair value through profit or loss 4,964     5,255  
    Derivative financial instruments 3,583     4,307  
    Debt securities in issue at amortised cost 45,080     52,449  
    Other liabilities 12,926     9,884  
    Subordinated liabilities 7,214     6,935  
    Total liabilities 569,364     564,974  
               
    Equity          
    Share capital 1,574     1,574  
    Share premium account 600     600  
    Other reserves 2,904     2,395  
    Retained profits 29,667     30,786  
    Ordinary shareholders’ equity 34,745     35,355  
    Other equity instruments 5,428     5,018  
    Non-controlling interests 75     58  
    Total equity 40,248     40,431  
    Total equity and liabilities 609,612     605,405  
    ADDITIONAL FINANCIAL INFORMATION
     

    1.  Basis of presentation

    This release covers the results of Lloyds Bank plc together with its subsidiaries (the Group) for the nine months ended 30 September 2024.

    Accounting policies

    The accounting policies are consistent with those applied by the Group in its 2023 Annual Report and Accounts

    2.  Capital

    The Group’s Q3 2024 Interim Pillar 3 Disclosures can be found at http://www.lloydsbankinggroup.com/investors/financial-downloads.html.

    3.  UK economic assumptions

    Base case and MES economic assumptions

    The Group’s base case scenario is for a slow expansion in GDP and a modest rise in the unemployment rate alongside small gains in residential and commercial property prices. Following a reduction in inflationary pressures, cuts in UK Bank Rate are expected to continue during 2024 and 2025. Risks around this base case economic view lie in both directions and are largely captured by the generation of alternative economic scenarios.

    The Group has taken into account the latest available information at the reporting date in defining its base case scenario and generating alternative economic scenarios. The scenarios include forecasts for key variables as of the third quarter of 2024. Actuals for this period, or restatements of past data, may have since emerged prior to publication and have not been included, including specifically in the Quarterly National Accounts release of 30 September 2024. The Group’s approach to generating alternative economic scenarios is set out in detail in note 19 to the financial statements for the year ended 31 December 2023. For September 2024, the Group continues to judge it appropriate to include a non-modelled severe downside scenario for ECL calculations as explained in note 12 of the Group’s 2024 Half-Year news release.

    UK economic assumptions – base case scenario by quarter

    Key quarterly assumptions made by the Group in the base case scenario are shown below. Gross domestic product is presented quarter-on-quarter. House price growth, commercial real estate price growth and CPI inflation are presented year-on-year, i.e. from the equivalent quarter in the previous year. Unemployment rate and UK Bank Rate are presented as at the end of each quarter.

    At 30 September 2024 First
    quarter
    2024
    %    		   Second
    quarter
    2024
    %    		   Third
    quarter
    2024
    %    		   Fourth
    quarter
    2024
    %    		 First
    quarter
    2025
    %    		 Second
    quarter
    2025
    %    		 Third
    quarter
    2025
    %    		 Fourth
    quarter
    2025
    %
                     
    Gross domestic product 0.7   0.6   0.3   0.3 0.3 0.3 0.4 0.4
    Unemployment rate 4.3   4.2   4.3   4.5 4.6 4.7 4.8 4.8
    House price growth 0.4   1.8   5.3   3.1 3.2 3.6 2.4 2.0
    Commercial real estate price growth (5.3 ) (4.7 ) (2.5 ) 0.3 1.4 1.9 1.6 1.7
    UK Bank Rate 5.25   5.25   5.00   4.75 4.50 4.25 4.00 4.00
    CPI inflation 3.5   2.1   2.1   2.7 2.4 2.9 2.7 2.3
                           

    ADDITIONAL FINANCIAL INFORMATION (continued)

    3.  UK economic assumptions (continued)

    UK economic assumptions – scenarios by year

    Key annual assumptions made by the Group are shown below. Gross domestic product and CPI inflation are presented as an annual change, house price growth and commercial real estate price growth are presented as the growth in the respective indices within the period. Unemployment rate and UK Bank Rate are averages for the period.

    At 30 September 2024 2024
    %    		   2025
    %    		   2026
    %    		   2027
    %    		   2028
    %    		   2024-2028
    average
    %
                 
    Upside            
    Gross domestic product 1.2   2.4   1.9   1.5   1.4   1.7  
    Unemployment rate 4.2   3.3   2.8   2.7   2.8   3.1  
    House price growth 3.5   4.6   7.1   6.4   5.1   5.3  
    Commercial real estate price growth 1.6   9.0   4.2   1.8   0.7   3.4  
    UK Bank Rate 5.06   5.08   5.16   5.34   5.58   5.24  
    CPI inflation 2.6   2.7   2.4   2.8   2.8   2.7  
                 
    Base case            
    Gross domestic product 1.1   1.3   1.5   1.5   1.5   1.4  
    Unemployment rate 4.3   4.7   4.7   4.5   4.5   4.5  
    House price growth 3.1   2.0   1.0   1.5   2.1   2.0  
    Commercial real estate price growth 0.3   1.7   2.1   0.7   0.3   1.0  
    UK Bank Rate 5.06   4.19   3.63   3.50   3.50   3.98  
    CPI inflation 2.6   2.6   2.1   2.2   2.1   2.3  
                 
    Downside            
    Gross domestic product 1.0   (0.3 ) 0.4   1.3   1.5   0.8  
    Unemployment rate 4.4   6.5   7.3   7.3   7.1   6.5  
    House price growth 2.9   (0.2 ) (6.1 ) (5.8 ) (2.9 ) (2.5 )
    Commercial real estate price growth (0.7 ) (6.2 ) (1.7 ) (1.9 ) (1.9 ) (2.5 )
    UK Bank Rate 5.06   3.11   1.48   0.96   0.65   2.25  
    CPI inflation 2.6   2.6   1.9   1.5   1.1   2.0  
                 
    Severe downside            
    Gross domestic product 0.9   (2.0 ) (0.1 ) 1.1   1.4   0.2  
    Unemployment rate 4.6   8.6   9.9   9.9   9.7   8.5  
    House price growth 2.3   (2.5 ) (13.5 ) (12.6 ) (8.3 ) (7.1 )
    Commercial real estate price growth (2.7 ) (16.5 ) (6.5 ) (6.5 ) (5.1 ) (7.6 )
    UK Bank Rate – modelled 5.06   1.83   0.23   0.06   0.02   1.44  
    UK Bank Rate – adjusted1 5.13   3.67   2.55   2.16   1.88   3.08  
    CPI inflation – modelled 2.6   2.6   1.5   0.7   0.1   1.5  
    CPI inflation – adjusted1 2.6   3.5   1.8   1.3   0.9   2.0  
                 
    Probability-weighted            
    Gross domestic product 1.1   0.8   1.1   1.4   1.4   1.2  
    Unemployment rate 4.3   5.2   5.4   5.3   5.3   5.1  
    House price growth 3.1   1.7   (0.7 ) (0.6 ) 0.5   0.8  
    Commercial real estate price growth 0.1   (0.3 ) 0.7   (0.5 ) (0.8 ) (0.1 )
    UK Bank Rate – modelled 5.06   3.90   3.10   2.95   2.92   3.59  
    UK Bank Rate – adjusted1 5.07   4.08   3.33   3.15   3.11   3.75  
    CPI inflation – modelled 2.6   2.6   2.0   2.0   1.8   2.2  
    CPI inflation – adjusted1 2.6   2.7   2.1   2.1   1.9   2.3  
                             

    1 The adjustment to UK Bank Rate and CPI inflation in the severe downside is considered to better reflect the risks to the Group’s base case view in an economic environment where the risks of supply and demand shocks are seen as more balanced.

    ADDITIONAL FINANCIAL INFORMATION (continued)

    4.  Loans and advances to customers and expected credit loss allowance

    At 30 September 2024 Stage 1
    £m    		     Stage 2
    £m    		     Stage 3
    £m    		     POCI
    £m    		     Total
    £m    		     Stage 2
    as % of
    total    		   Stage 3
    as % of
    total
                               
    Loans and advances to customers
                               
    UK mortgages 271,138     28,389     4,545     6,949     311,021     9.1   1.5
    Credit cards 13,429     2,620     262     –     16,311     16.1   1.6
    Loans and overdrafts 8,839     1,374     173     –     10,386     13.2   1.7
    UK Motor Finance 14,390     2,314     119     –     16,823     13.8   0.7
    Other 16,702     513     150     –     17,365     3.0   0.9
    Retail 324,498     35,210     5,249     6,949     371,906     9.5   1.4
    Small and Medium Businesses 26,393     3,430     1,303     –     31,126     11.0   4.2
    Corporate and Institutional Banking 37,564     2,306     637     –     40,507     5.7   1.6
    Commercial Banking 63,957     5,736     1,940     –     71,633     8.0   2.7
    Other1 260     –     –     –     260     –   –
    Total gross lending 388,715     40,946     7,189     6,949     443,799     9.2   1.6
    ECL allowance on drawn balances (764 )   (1,228 )   (1,106 )   (222 )   (3,320 )        
    Net balance sheet carrying value 387,951     39,718     6,083     6,727     440,479          
                               
    Customer related ECL allowance (drawn and undrawn)
                               
    UK mortgages 86     321     339     222     968          
    Credit cards 207     351     129     –     687          
    Loans and overdrafts 170     242     111     –     523          
    UK Motor Finance2 169     105     68     –     342          
    Other 15     18     42     –     75          
    Retail 647     1,037     689     222     2,595          
    Small and Medium Businesses 138     190     160     –     488          
    Corporate and Institutional Banking 126     125     259     –     510          
    Commercial Banking 264     315     419     –     998          
    Other –     –     –     –     –          
    Total 911     1,352     1,108     222     3,593          
                               
    Customer related ECL allowance (drawn and undrawn) as a percentage of loans and advances to customers
                               
    UK mortgages –     1.1     7.5     3.2     0.3          
    Credit cards 1.5     13.4     49.2     –     4.2          
    Loans and overdrafts 1.9     17.6     64.2     –     5.0          
    UK Motor Finance 1.2     4.5     57.1     –     2.0          
    Other 0.1     3.5     28.0     –     0.4          
    Retail 0.2     2.9     13.1     3.2     0.7          
    Small and Medium Businesses 0.5     5.5     12.3     –     1.6          
    Corporate and Institutional Banking 0.3     5.4     40.7     –     1.3          
    Commercial Banking 0.4     5.5     21.6     –     1.4          
    Other –     –     –     –     –          
    Total 0.2     3.3     15.4     3.2     0.8          
                                         

    1 Contains central fair value hedge accounting adjustments.

    2 UK Motor Finance includes £170 million relating to provisions against residual values of vehicles subject to finance leases.

    FORWARD-LOOKING STATEMENTS

    This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Lloyds Bank plc together with its subsidiaries (the Lloyds Bank Group) and its current goals and expectations. Statements that are not historical or current facts, including statements about the Lloyds Bank Group’s or its directors’ and/or management’s beliefs and expectations, are forward-looking statements. Words such as, without limitation, ‘believes’, ‘achieves’, ‘anticipates’, ‘estimates’, ‘expects’, ‘targets’, ‘should’, ‘intends’, ‘aims’, ‘projects’, ‘plans’, ‘potential’, ‘will’, ‘would’, ‘could’, ‘considered’, ‘likely’, ‘may’, ‘seek’, ‘estimate’, ‘probability’, ‘goal’, ‘objective’, ‘deliver’, ‘endeavour’, ‘prospects’, ‘optimistic’ and similar expressions or variations on these expressions are intended to identify forward-looking statements. These statements concern or may affect future matters, including but not limited to: projections or expectations of the Lloyds Bank Group’s future financial position, including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Lloyds Bank Group’s future financial performance; the level and extent of future impairments and write-downs; the Lloyds Bank Group’s ESG targets and/or commitments; statements of plans, objectives or goals of the Lloyds Bank Group or its management and other statements that are not historical fact and statements of assumptions underlying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, targets, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward-looking statements include, but are not limited to: general economic and business conditions in the UK and internationally; acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; the conflicts in the Middle East; the tensions between China and Taiwan; political instability including as a result of any UK general election; market related risks, trends and developments; changes in client and consumer behaviour and demand; exposure to counterparty risk; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Lloyds Bank Group’s or Lloyds Banking Group plc’s credit ratings; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of the Lloyds Bank Group’s securities; tightening of monetary policy in jurisdictions in which the Lloyds Bank Group operates; natural pandemic and other disasters; risks concerning borrower and counterparty credit quality; risks affecting defined benefit pension schemes; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Lloyds Bank Group; risks associated with the Lloyds Bank Group’s compliance with a wide range of laws and regulations; assessment related to resolution planning requirements; risks related to regulatory actions which may be taken in the event of a bank or Lloyds Bank Group or Lloyds Banking Group failure; exposure to legal, regulatory or competition proceedings, investigations or complaints; failure to comply with anti-money laundering, counter terrorist financing, anti-bribery and sanctions regulations; failure to prevent or detect any illegal or improper activities; operational risks including risks as a result of the failure of third party suppliers; conduct risk; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; technological failure; inadequate or failed internal or external processes or systems; risks relating to ESG matters, such as climate change (and achieving climate change ambitions) and decarbonisation, including the Lloyds Bank Group’s or the Lloyds Banking Group’s ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, and human rights issues; the impact of competitive conditions; failure to attract, retain and develop high calibre talent; the ability to achieve strategic objectives; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; and assumptions and estimates that form the basis of the Lloyds Bank Group’s financial statements. A number of these influences and factors are beyond the Lloyds Bank Group’s control. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Bank plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC’s website at http://www.sec.gov, for a discussion of certain factors and risks. Lloyds Bank plc may also make or disclose written and/or oral forward-looking statements in other written materials and in oral statements made by the directors, officers or employees of Lloyds Bank plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward-looking statements contained in this document are made as of today’s date, and the Lloyds Bank Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document whether as a result of new information, future events or otherwise. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

    CONTACTS

    For further information please contact:

    INVESTORS AND ANALYSTS

    Douglas Radcliffe
    Group Investor Relations Director
    020 7356 1571
    douglas.radcliffe@lloydsbanking.com

    Nora Thoden
    Director of Investor Relations – ESG
    020 7356 2334
    nora.thoden@lloydsbanking.com

    Tom Grantham
    Investor Relations Senior Manager
    07851 440 091
    thomas.grantham@lloydsbanking.com

    Sarah Robson
    Investor Relations Senior Manager
    07494 513 983
    sarah.robson2@lloydsbanking.com

    CORPORATE AFFAIRS

    Grant Ringshaw
    External Relations Director
    020 7356 2362
    grant.ringshaw@lloydsbanking.com

    Matt Smith
    Head of Media Relations
    07788 352 487
    matt.smith@lloydsbanking.com

    Copies of this News Release may be obtained from:
    Investor Relations, Lloyds Banking Group plc, 25 Gresham Street, London EC2V 7HN
    The statement can also be found on the Group’s website – http://www.lloydsbankinggroup.com

    Registered office: Lloyds Bank plc, 25 Gresham Street, London EC2V 7HN
    Registered in England No. 2065

    This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit http://www.rns.com.

    The MIL Network –

  • MIL-OSI: The Pet Hazard Decking Your Halls: truInsights into Foreign Body Ingestion & Holiday Decor

    Source: GlobeNewswire (MIL-OSI)

    SEATTLE, Oct. 23, 2024 (GLOBE NEWSWIRE) — Tis the season for holiday decor. But all those haunted Halloween decorations, Thanksgiving centerpieces and Christmas ornaments present a hidden danger pet parents need to watch out for.

    In 2023 alone, pet medical insurance company Trupanion (Nasdaq: TRUP) received more than 24,000 foreign body ingestion claims. Foreign body ingestion (FBI) is a painful, sometimes deadly, and costly condition that happens when a pet eats something they can’t pass through their gastrointestinal system without veterinary help.

    “Keep a close eye on your pets during the holiday season,” says veterinarian and Trupanion General Manager, Dr. Stephen Rose, BVSc (Hons1) M Infotech CVA ACVCHM. “And if you suspect your pet ate something they shouldn’t have, don’t risk it—reach out to your veterinarian to have them examined to be sure. It’s better to be safe than sorry in these instances.”

    Foreign Body Ingestion: By the Numbers

    In 2023, Trupanion paid 24,305 foreign body ingestion claims. The average claim was $878, while the highest claim was $27,403.

    Amongst Trupanion’s current population of insured pets, 7% of dogs and 3% of cats have had an FBI claim. Puppies and kittens have the most FBI claims of any age group by far. Pets under 1 year of age claim 322% more than adults and senior pets. Adult pets claim 34% more than senior pets.

    Top 5 Dog Breeds Claiming

    • Doberman Pinscher
    • Maltese
    • Boston Terrier
    • Shih Tzu
    • German Pointer

    Top 5 Cat Breeds Claiming

    • Persian
    • Bengal
    • Russian Blue
    • Sphynx
    • Siberian

    The Science & Medicine of Foreign Body Ingestion

    When a pet eats a foreign object that they can’t pass through their gastrointestinal system, it can become lodged anywhere along the GI Tract and cause a variety of symptoms from vomiting and diarrhea to obstruction, organ damage, and even death.

    Early signs and symptoms of foreign body ingestion are vomiting, diarrhea, lethargy, refusal of food or loss of appetite, whining, restlessness, pain in the belly, straining to defecate or being unable to fully vacate the bowels.

    If these symptoms are observed, it’s recommended that the pet is seen by a veterinarian as quickly as possible so that they can be evaluated for foreign body ingestion.

    During the examination, the vet may perform diagnostic imaging such as x-rays to see if a foreign object can be seen, or use a substance called Barium which when swallowed, illuminates on the radiographs to show if there is a blockage somewhere along the GI tract, and can help track the foreign material.

    Surgery is often needed to safely remove foreign objects from the GI tract to prevent further damage. The vet may also support with IV fluids, prescribing pain and/or nausea medications, inducing vomiting, performing bloodwork to check organ function, as well as observation while the pet passes the object.

    Prognosis is based on many factors such as what the pet ingested, how long the object has been stuck in the GI tract, where in the tract the object is stuck, and how healthy the pet is otherwise.

    Early intervention is always better. If too much time passes before treatment, the pet’s health may continue to decline, and if the blockage is an intestinal or stomach obstruction, the blood flow to organs can be affected, which can result in permanent damage or necrosis of those tissues. In these cases, just a few hours can mean the difference between life or death.

    Keeping Your Pets Safe During the Holidays

    Common items that pets ingest that result in foreign body ingestion include clothing (often socks and underwear), sticks, bones, corn cobs, champagne corks, food packaging and wrappers, dental floss, hair elastics, and toy stuffing or squeakers.

    During the holidays, the big ones to watch out for are decorations like tinsel, garlands, ribbons, and string. In fact, there is a specific type of very dangerous foreign body ingestion called a Linear Foreign Body, where things like strings or ribbons get lodged anywhere from the tongue down the esophagus and into the stomach and intestines. These linear foreign objects can cause the intestines to bunch and slice through the tissues as the body tries to expel them.

    “Keep a close eye on your pets during the holiday season,” says veterinarian and Trupanion General Manager, Dr. Stephen Rose, BVSc (Hons1) M Infotech CVA ACVCHM. “There’s a lot going on—a lot of distractions for pet parents, and a lot of objects around the house this time of year that look like toys to our pets, so it’s vital to remain vigilant. On special occasions, ensure you’re cleaning up wrapping paper, bows, and ribbons after opening gifts, and when entertaining, keep pets contained and out of the kitchen so they don’t have access to food and bones, and to prevent guests from feeding them things they shouldn’t eat. And if you suspect your pet ate something they shouldn’t have, don’t risk it—reach out to your veterinarian to have them examined to be sure. It’s better to be safe than sorry in these instances.”

    More Foreign Body Ingestion Safety Tips

    • Provide gates and pens to control what areas pet have access to
    • Check toys regularly to ensure they’re still intact
    • Dispose of toys that are coming apart to prevent ingestion of stuffing, strings and squeakers
    • Keep laundry room doors closed to prevent access to laundry baskets and detergent pods
    • Keep bathroom and bedroom doors closed to prevent access to garbage cans and other debris

    About truInsights

    truInsights is a data focused initiative introduced by Trupanion and designed to deliver valuable health-related data and insights to pet parents, veterinarians and pet lovers alike. With over 20 years of pet health data, Trupanion has explored its veterinary invoice data from nearly two million pets and provides details on data trends, as well as prevention tips for keeping our pets safe.

    About Trupanion

    Trupanion is a leader in medical insurance for cats and dogs throughout the United States, Canada, Europe, Puerto Rico and Australia with over 1,000,000 pets currently enrolled. For over two decades, Trupanion has given pet owners peace of mind so they can focus on their pet’s recovery, not financial stress. Trupanion is committed to providing pet parents with the highest value in pet medical insurance with unlimited payouts for the life of their pets. With its patented process, Trupanion is the only North American provider with the technology to pay veterinarians directly in seconds at the time of checkout. Trupanion is listed on NASDAQ under the symbol “TRUP”. The company was founded in 2000 and is headquartered in Seattle, WA. Trupanion policies are issued, in the United States, by its wholly-owned insurance entity American Pet Insurance Company and, in Canada, by Accelerant Insurance Company of Canada. Trupanion Australia is a partnership between Trupanion and Hollard Insurance Company. Policies are sold and administered by Trupanion Managers USA, Inc. (CA license No. 0G22803, NPN 9588590). For more information, please visit trupanion.com.

    Contacts:

    Media: Trupanion Corporate Communications

    Corporate.communications@trupanion.com

    The MIL Network –

  • MIL-OSI: Clinical ink Announces the Promotion of John Pappadakis to Chief Commercial Officer and Megan Petrylak to Chief Operating Officer

    Source: GlobeNewswire (MIL-OSI)

    Winston Salem, NC, Oct. 23, 2024 (GLOBE NEWSWIRE) — Clinical ink, a global life science technology company, announces the promotion of John Pappadakis from EVP, Global Business Development to Chief Commercial Officer and Megan Petrylak from EVP, Clinical Operations to Chief Operating Officer. Jonathan Goldman MD, CEO of Clinical ink commented: “I am delighted to announce the promotion of two of our most seasoned and experienced executives.  With John Pappadakis as CCO, and Megan Petrylak as COO, Clinical ink has the ideal leadership team to drive us to the next phase of growth.  Our unwavering focus on quality and innovation make us the partner of choice for our biopharmaceutical partners and the patients they serve.”

    John Pappadakis, Chief Commercial Officer

    John Pappadakis has 34 years of experience in sales and marketing leadership roles within the pharma industry. His career includes commercial and R&D positions at Oracle and IMS Health, following positions of increasing seniority at Pfizer and Parke-Davis where he launched over 30 new molecular entities.

    As Clinical ink’s EVP, Global Business Development, John devised an innovative go-to-market strategy centered around the addition of scientific and medical expertise, and the incorporation of new FDA requirements into the Clinical ink technology platform.  His vision inspired the creation of the company’s newest integrated cardiometabolic product, GlucoseReady™.  Under his leadership, the company recruited a world-class commercial team and demonstrated record levels of key BD metrics.

    As Chief Commercial Officer, John will further diversify Clinical ink’s customer base with the addition of new large, medium and small biopharmaceutical companies, whilst solidifying the company’s CRO relationships and other industry alliances.  His plans include the deepening of the therapeutic area focus on cardiometabolic, CNS, immunology and oncology, the introduction of an end-to-end decentralized/digital health platform centered around eCOA and EDCXtra™, as well as new licensing-based business models.  Moving forward, John will be announcing novel and transformative AI-driven clinical trial innovations.

    Megan Petrylak, Chief Operating Officer

    Megan Petrylak has over 14 years of clinical trial experience in senior operational leadership roles. She has particularly focused on driving successful outcomes in phase 1-3 clinical trials for a wide range of global biopharmaceutical and CRO customers. Prior to her 6 year tenure at Clinical ink, Megan served as Director of Project Delivery at Worldwide Clinical Trials. Prior to that role, she headed Bioclinica’s centers for imaging and eClinical project management.

    As EVP, Clinical Operations, Megan oversaw Clinical ink’s entire customer, site, and patient-facing operations function.  She augmented the team with deep expertise in data management and data quality, mandating a quality-first culture. This resulted in impressive increases in customer satisfaction, complemented by significant reductions in all study build and execution metrics and excellent quality outcomes.  In addition, Megan’s team successfully launched new products including GlucoseReady™ and EDCXtra™ and has developed a range of industry partnerships including TransPerfect for translations and eClinical Solutions for complex data solutions.  Her deep subject matter expertise in eCOA and data management has been recognized at numerous industry consortia and she has served as an expert speaker at meetings such as the Society of Clinical Data Management.

    In her new role as Chief Operating Officer, Megan will oversee significant growth in Clinical ink’s revenue, broadening the customer base and expanding the range of integrated solutions. Her plans include upscaling the team to support the planned growth in revenue and margin profile, aided by automation of key operational and data processes. Megan will continue to prioritize quality to drive operational excellence and ensure exceptional delivery to clients.  

    About Clinical ink

    Clinical ink is the global life science company bringing data, technology, and patient-centric research together. Our deep therapeutic-area expertise, coupled with behavioral science, eDC/Direct Data Capture, eCOA, eConsent, telehealth, and digital biomarkers advancement (including the use of Continuous Glucose Monitoring for detection of hypoglycemia), support the next generation of clinical trials and ultimately, the clinical management of patients.

    The MIL Network –

  • MIL-OSI Russia: Financial news: 10/23/2024, 10-41 the values of the lower limit of the repo price corridor, the rollover rate and the range of interest rate risk assessment of the CIAN security (CIAN-addr) were changed.

    Translation. Region: Russian Federation –

    Source: Moscow Exchange – Moscow Exchange –

    10/23/2024

    10:41

    In accordance with the Methodology for determining the risk parameters of the stock market and deposit market of Moscow Exchange PJSC by NCO NCC (JSC), on 10/23/2024, 10:41 (Moscow time), the values of the lower limit of the repo price corridor with settlement code Y0/Y1Dt (up to -20.0%), the transfer rate and the range of interest rate risk assessment (up to -1.06 rubles, equivalent to a rate of 85.64%) of the CIAN security (CIAN-addr) were changed.

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

    https://www.moex.com/n74225

    MIL OSI Russia News –

  • MIL-OSI Security: U.S. Attorney’s Office, FBI Prepared to Handle Complaints of Voting Rights Concerns, Election Fraud

    Source: Office of United States Attorneys

    PROVIDENCE, RI – United States Attorney Zachary A. Cunha announced today that Assistant United States Attorney (AUSA) Amy R. Romero will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election.  AUSA Romero has been appointed to serve as the District Election Officer (DEO) for the District of Rhode Island, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington.

    United States Attorney Cunha said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted in a fair and free election.  Similarly, election officials and staff must be able to serve without being subject to unlawful threats of violence.  The Department of Justice will always work tirelessly to protect the integrity of the election process.”

     The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud.  The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.

    Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice.  The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).   

    United States Attorney Cunha stated that: “The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise can exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Romero will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: (401) 709-5068.”

    In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at (401) 272-8310.

    Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, DC by complaint form at https://civilrights.justice.gov/ or by phone at 800-253-3931.

    United States Attorney Cunha said, “Ensuring free and fair elections depends in large part on the assistance of the American electorate.  It is important that those who have specific information about voting rights concerns or election fraud make that information available to the Department of Justice.”

    Please note, however, in the case of a crime of violence or intimidation, please call 911 immediately and before contacting federal authorities.  State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency. 

    View United States Attorney Cunha’s Election Day Program public service announcement at https://www.youtube.com/watch?v=Lw02Lr2DyCA&t=16s

    ###

    MIL Security OSI –

  • MIL-OSI Russia: Financial news: 10/23/2024, 11-34 the values of the lower limit of the repo price corridor, the rollover rate and the range of interest rate risk assessment of the CIAN security (CIAN-addr) were changed.

    Translation. Region: Russian Federation –

    Source: Moscow Exchange – Moscow Exchange –

    10/23/2024

    11:34

    In accordance with the Methodology for determining the risk parameters of the stock market and deposit market of Moscow Exchange PJSC by NCO NCC (JSC) on 10/23/2024, 11:34 (Moscow time), the values of the lower limit of the repo price corridor with settlement code Y0/Y1Dt (up to -20.0%), the transfer rate and the range of interest rate risk assessment (up to -1.36 rubles, equivalent to a rate of 104.28%) of the CIAN security (CIAN-addr) were changed.

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

    https://www.moex.com/n74229

    MIL OSI Russia News –

  • MIL-OSI: Waterstone Financial, Inc. Announces Results of Operations for the Quarter and Nine Months Ended September 30, 2024

    Source: GlobeNewswire (MIL-OSI)

    WAUWATOSA, Wis., Oct. 22, 2024 (GLOBE NEWSWIRE) — Waterstone Financial, Inc. (NASDAQ: WSBF), holding company for WaterStone Bank, reported net income of $4.7 million, or $0.26 per diluted share, for the quarter ended September 30, 2024, compared to net income of $3.3 million, or $0.16 per diluted share for the quarter ended September 30, 2023. Net income per diluted share was $0.72 for the nine months ended September 30, 2024, compared to net income per diluted share of $0.46 for the nine months ended September 30, 2023.

    “The Community Banking segment achieved growth in its loan and core deposit (excluding brokered deposits) balances,” said William Bruss, Chief Executive Officer of Waterstone Financial, Inc. “We continue to maintain strong asset quality metrics and remain in a net recovery position, resulting in a negative provision during the quarter. While the decrease in our wholesale borrowing rate during the quarter captures a portion of the benefit from the 50 bps cut in the Federal Funds rate during September, the competitive retail funding environment remains a headwind. The Mortgage Banking segment experienced a decrease in fundings; however, it remained profitable due in large part to our continued focus on cost control. Waterstone Financial, Inc. remained active in share repurchases and once again declared a dividend, as we are committed to shareholder returns.” 

    Highlights of the Quarter Ended September 30, 2024

    Waterstone Financial, Inc. (Consolidated)

     ● Consolidated net income of Waterstone Financial, Inc. totaled $4.7 million for the quarter ended September 30, 2024, compared to net income of $3.3 million for the quarter ended September 30, 2023.
    ● Consolidated return on average assets was 0.83% for the quarter ended September 30, 2024, compared to 0.58% for the quarter ended September 30, 2023.
    ● Consolidated return on average equity was 5.55% for the quarter ended September 30, 2024, and 3.63% for the quarter ended September 30, 2023.
    ● Dividends declared during the quarter ended September 30, 2024, totaled $0.15 per common share.
    ● During the quarter ended September 30, 2024, we repurchased approximately 71,000 shares at a cost (including the federal excise tax) of $979,000, or $13.75 per share.
    ● Nonperforming assets as a percentage of total assets was 0.25% at September 30, 2024, 0.25% at June 30, 2024, and 0.20% at September 30, 2023.  
    ● Past due loans as a percentage of total loans was 0.63% at September 30, 2024, 0.76% at June 30, 2024, and 0.53% at September 30, 2023. 
    ● Book value per share was $17.58 at September 30, 2024 and $16.94 at December 31, 2023. 

    Community Banking Segment

    ● Pre-tax income totaled $5.6 million for the quarter ended September 30, 2024, which represents a $14,000, or 0.2%, decrease compared to $5.7 million for the quarter ended September 30, 2023.
    ● Net interest income totaled $12.3 million for the quarter ended September 30, 2024, which represents a $181,000, or 1.5%, decrease compared to $12.4 million for the quarter ended September 30, 2023.
    ● Average loans held for investment totaled $1.69 billion during the quarter ended September 30, 2024, which represents an increase of $60.9 million, or 3.7%, compared to $1.63 billion for the quarter ended September 30, 2023. The increase was primarily due to increases in the construction, commercial real estate, and over four family mortgages. Average loans held for investment increased $19.7 million compared to $1.67 billion for the quarter ended June 30, 2024. The increase was primarily due to increases in construction and over four family mortgages.
    ● Net interest margin decreased 13 basis points to 2.13% for the quarter ended September 30, 2024, compared to 2.26% for the quarter ended September 30, 2023, which was a result of an increase in weighted average cost of deposits and borrowings as the federal funds rate increases resulted in increased funding rates. Net interest margin increased 12 basis points compared to 2.01% for the quarter ended June 30, 2024, primarily driven by an increase in weighted average yield on loans receivable and held for sale.     
    ● Past due loans at the community banking segment totaled $8.0 million at September 30, 2024, $9.3 million at June 30, 2024, and $6.7 million at September 30, 2023.
    ● The segment had a negative provision for credit losses related to funded loans of $218,000 for the quarter ended September 30, 2024, compared to a provision for credit losses related to funded loans of $206,000 for the quarter ended September 30, 2023. The current quarter decrease was primarily due to a decrease in historical loss rates, net recoveries for the period, and improvements in certain internal asset quality metrics offset by an adjustment in the qualitative factors primarily related to increases in economic risks related to commercial real estate loans during the quarter. The negative provision for credit losses related to unfunded loan commitments was $84,000 for the quarter ended September 30, 2024, compared to a provision for credit losses related to unfunded loan commitments of $239,000 for the quarter ended September 30, 2023. The negative provision for credit losses related to unfunded loan commitments for the quarter ended September 30, 2024, was due primarily to a decrease of loans that are currently waiting to be funded compared to the prior quarter end.  
    ● The efficiency ratio, a non-GAAP ratio, was 60.35% for the quarter ended September 30, 2024, compared to 54.43% for the quarter ended September 30, 2023.
    ● Average deposits (excluding escrow accounts) totaled $1.25 billion during the quarter ended September 30, 2024, an increase of $47.9 million, or 4.0%, compared to $1.20 billion during the quarter ended September 30, 2023. Average deposits increased $27.6 million, or 9.1% annualized, compared to $1.22 billion for the quarter ended June 30, 2024.  The increases were primarily due to an increase in certificates of deposit balances.  The segment had $2.0 million in brokered certificate of deposits at September 30, 2024.

    Mortgage Banking Segment

     ● Pre-tax income totaled $144,000 for the quarter ended September 30, 2024, compared to $2.1 million of pre-tax loss for the quarter ended September 30, 2023.
    ● Loan originations decreased $38.8 million, or 6.5%, to $558.7 million during the quarter ended September 30, 2024, compared to $597.6 million during the quarter ended September 30, 2023. Origination volume relative to purchase activity accounted for 88.9% of originations for the quarter ended September 30, 2024, compared to 95.4% of total originations for the quarter ended September 30, 2023.
    ● Mortgage banking non-interest income decreased $66,000, or 0.3%, to $21.4 million for the quarter ended September 30, 2024, compared to $21.5 million for the quarter ended September 30, 2023.
    ● Gross margin on loans sold totaled 3.83% for the quarter ended September 30, 2024, compared to 3.62% for the quarter ended September 30, 2023.  
    ● Total compensation, payroll taxes and other employee benefits decreased $1.3 million, or 7.3%, to $15.9 million during the quarter ended September 30, 2024, compared to $17.2 million during the quarter ended September 30, 2023. The decrease primarily related to decreased salary expense and incentives expense driven by reduced employee headcount and a decrease in new branches added over the past year.


    About Waterstone Financial, Inc.

    Waterstone Financial, Inc. is the savings and loan holding company for WaterStone Bank. WaterStone Bank was established in 1921 and offers a full suite of personal and business banking products. The Bank has branches in Wauwatosa/State St, Brookfield, Fox Point/North Shore, Franklin/Hales Corners, Germantown/Menomonee Falls, Greenfield/Loomis Rd, Milwaukee/Oklahoma Ave, Oak Creek/27th St, Oak Creek/Howell Ave, Oconomowoc/Lake Country, Pewaukee, Waukesha, West Allis/Greenfield Ave, and West Allis/National Ave, Wisconsin. WaterStone Bank is the parent company to Waterstone Mortgage, which has the ability to lend in 48 states. For more information about WaterStone Bank, go to http://www.wsbonline.com.

    Forward-Looking Statements

    This press release contains statements or information that may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding expected financial and operating activities and results that are preceded by, followed by, or that include words such as “may,” “expects,” “anticipates,” “estimates” or “believes.” Any such statements are based upon current expectations that involve a number of risks and uncertainties and are subject to important factors that could cause actual results to differ materially from those anticipated by the forward-looking statements. Factors that might cause such a difference include changes in interest rates; demand for products and services; the degree of competition by traditional and nontraditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and other factors, including risk factors referenced in Item 1A. Risk Factors in Waterstone’s most recent Annual Report on Form 10-K and as may be described from time to time in Waterstone’s subsequent SEC filings, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect only Waterstone’s belief as of the date of this press release.

    Non-GAAP Financial Measures 

    Management uses non-GAAP financial information in its analysis of the Company’s performance. Management believes that this non-GAAP measure provides a greater understanding of ongoing operations and enhance comparability of results of operations with prior periods. The Company’s management believes that investors may use this non-GAAP measure to analyze the Company’s financial performance without the impact of unusual items or events that may obscure trends in the Company’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in this measure and that different companies might calculate this measure differently. 

    Contact: Mark R. Gerke
    Chief Financial Officer
    414-459-4012
    markgerke@wsbonline.com

     WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF INCOME

    (Unaudited)  
       For The Three Months Ended September 30,   For The Nine Months Ended September 30,
      2024     2023   2024     2023
      (In Thousands, except per share amounts)
    Interest income:                          
    Loans $ 26,590     $ 23,825   $ 76,675     $ 65,860
    Mortgage-related securities   1,137       1,060     3,360       2,972
    Debt securities, federal funds sold and short-term investments   1,464       1,492     4,081       3,682
    Total interest income   29,191       26,377     84,116       72,514
    Interest expense:                          
    Deposits   10,477       7,442     29,163       17,485
    Borrowings   7,197       6,946     21,620       16,570
    Total interest expense   17,674       14,388     50,783       34,055
    Net interest income   11,517       11,989     33,333       38,459
    Provision (credit) for credit losses   (377 )     445     (535 )     1,091
    Net interest income after provision (credit) for loan losses   11,894       11,544     33,868       37,368
    Noninterest income:                          
    Service charges on loans and deposits   545       450     1,434       1,491
    Increase in cash surrender value of life insurance   410       334     1,562       1,373
    Mortgage banking income   21,294       21,172     66,200       59,856
    Other   303       274     1,101       1,589
    Total noninterest income   22,552       22,230     70,297       64,309
    Noninterest expenses:                          
    Compensation, payroll taxes, and other employee benefits   21,017       21,588     62,655       64,035
    Occupancy, office furniture, and equipment   1,857       1,993     5,994       6,302
    Advertising   926       916     2,827       2,749
    Data processing   1,297       1,229     3,745       3,441
    Communications   232       243     698       719
    Professional fees   569       745     2,070       1,779
    Real estate owned   –       1     14       3
    Loan processing expense   697       722     2,604       2,672
    Other   1,965       2,584     5,762       8,350
    Total noninterest expenses   28,560       30,021     86,369       90,050
    Income before income taxes   5,886       3,753     17,796       11,627
    Income tax expense   1,158       500     4,318       2,212
    Net income $ 4,728     $ 3,253   $ 13,478     $ 9,415
    Income per share:                          
    Basic $ 0.26     $ 0.16   $ 0.72     $ 0.46
    Diluted $ 0.26     $ 0.16   $ 0.72     $ 0.46
    Weighted average shares outstanding:                          
    Basic   18,350       19,998     18,631       20,420
    Diluted   18,445       20,022     18,677       20,473
    WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
       September 30,     December 31,  
      2024     2023  
      (Unaudited)          
    Assets (In Thousands, except per share amounts)  
    Cash $ 35,770     $ 30,667  
    Federal funds sold   5,359       5,493  
    Interest-earning deposits in other financial institutions and other short-term investments   278       261  
    Cash and cash equivalents   41,407       36,421  
    Securities available for sale (at fair value)   213,164       204,907  
    Loans held for sale (at fair value)   155,846       164,993  
    Loans receivable   1,695,403       1,664,215  
    Less: Allowance for credit losses (“ACL”) – loans   18,198       18,549  
    Loans receivable, net   1,677,205       1,645,666  
                   
    Office properties and equipment, net   19,450       19,995  
    Federal Home Loan Bank stock (at cost)   21,681       20,880  
    Cash surrender value of life insurance   69,601       67,859  
    Real estate owned, net   145       254  
    Prepaid expenses and other assets   45,837       52,414  
    Total assets $ 2,244,336     $ 2,213,389  
                   
    Liabilities and Shareholders’ Equity              
    Liabilities:              
    Demand deposits $ 180,449     $ 187,107  
    Money market and savings deposits   279,188       273,233  
    Time deposits   804,204       730,284  
    Total deposits   1,263,841       1,190,624  
                   
    Borrowings   560,127       611,054  
    Advance payments by borrowers for taxes   27,847       6,607  
    Other liabilities   50,519       61,048  
    Total liabilities   1,902,334       1,869,333  
                   
    Shareholders’ equity:              
    Preferred stock   –       –  
    Common stock   194       203  
    Additional paid-in capital   92,789       103,908  
    Retained earnings   274,748       269,606  
    Unearned ESOP shares   (10,979 )     (11,869 )
    Accumulated other comprehensive loss, net of taxes   (14,750 )     (17,792 )
    Total shareholders’ equity   342,002       344,056  
    Total liabilities and shareholders’ equity $ 2,244,336     $ 2,213,389  
                   
    Share Information              
    Shares outstanding   19,457       20,315  
    Book value per share $ 17.58     $ 16.94  
     WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

    SUMMARY OF KEY QUARTERLY FINANCIAL DATA

    (Unaudited)
       At or For the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
      (Dollars in Thousands, except per share amounts)  
    Condensed Results of Operations:                                      
    Net interest income $ 11,517     $ 10,679     $ 11,137     $ 11,756     $ 11,989  
    Provision (credit) for credit losses   (377 )     (225 )     67       (435 )     445  
    Total noninterest income   22,552       26,497       21,248       16,876       22,230  
    Total noninterest expense   28,560       30,259       27,550       29,662       30,021  
    Income (loss) before income taxes (benefit)   5,886       7,142       4,768       (595 )     3,753  
    Income tax expense (benefit)   1,158       1,430       1,730       (555 )     500  
    Net income (loss) $ 4,728     $ 5,712     $ 3,038     $ (40 )   $ 3,253  
    Income (loss) per share – basic $ 0.26     $ 0.31     $ 0.16     $ (0.00 )   $ 0.16  
    Income (loss) per share – diluted $ 0.26     $ 0.31     $ 0.16     $ (0.00 )   $ 0.16  
    Dividends declared per common share $ 0.15     $ 0.15     $ 0.15     $ 0.15     $ 0.15  
                                           
    Performance Ratios (annualized):                                      
    Return on average assets – QTD   0.83 %     1.02 %     0.56 %     -0.01 %     0.58 %
    Return on average equity – QTD   5.55 %     6.84 %     3.56 %     -0.05 %     3.63 %
    Net interest margin – QTD   2.13 %     2.01 %     2.15 %     2.25 %     2.26 %
                                           
    Return on average assets – YTD   0.81 %     0.79 %     0.56 %     0.44 %     0.59 %
    Return on average equity – YTD   5.30 %     5.17 %     3.56 %     2.62 %     3.46 %
    Net interest margin – YTD   2.09 %     2.08 %     2.15 %     2.46 %     2.53 %
                                           
    Asset Quality Ratios:                                      
    Past due loans to total loans   0.63 %     0.76 %     0.64 %     0.68 %     0.53 %
    Nonaccrual loans to total loans   0.32 %     0.33 %     0.29 %     0.29 %     0.25 %
    Nonperforming assets to total assets   0.25 %     0.25 %     0.23 %     0.23 %     0.20 %
    Allowance for credit losses – loans to loans receivable   1.07 %     1.10 %     1.11 %     1.11 %     1.12 %
     WATERSTONE FINANCIAL, INC. AND SUBSIDIARIES

    SUMMARY OF QUARTERLY AVERAGE BALANCES AND YIELD/COSTS

    (Unaudited)
       At or For the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
    Average balances (Dollars in Thousands)  
    Interest-earning assets                                      
    Loans receivable and held for sale $ 1,870,627     $ 1,859,608     $ 1,805,102     $ 1,797,988     $ 1,797,233  
    Mortgage related securities   170,221       171,895       172,077       172,863       174,202  
    Debt securities, federal funds sold and short-term investments   115,270       107,992       110,431       106,504       132,935  
    Total interest-earning assets   2,156,118       2,139,495       2,087,610       2,077,355       2,104,370  
    Noninterest-earning assets   104,600       104,019       103,815       105,073       105,714  
    Total assets $ 2,260,718     $ 2,243,514     $ 2,191,425     $ 2,182,428     $ 2,210,084  
                                           
    Interest-bearing liabilities                                      
    Demand accounts $ 89,334     $ 91,300     $ 87,393     $ 91,868     $ 90,623  
    Money market, savings, and escrow accounts   304,116       293,483       281,171       302,121       306,806  
    Certificates of deposit   786,228       758,252       739,543       735,418       719,708  
    Total interest-bearing deposits   1,179,678       1,143,035       1,108,107       1,129,407       1,117,137  
    Borrowings   600,570       622,771       602,724       549,210       584,764  
    Total interest-bearing liabilities   1,780,248       1,765,806       1,710,831       1,678,617       1,701,901  
    Noninterest-bearing demand deposits   91,532       93,637       92,129       102,261       106,042  
    Noninterest-bearing liabilities   49,787       48,315       45,484       56,859       46,805  
    Total liabilities   1,921,567       1,907,758       1,848,444       1,837,737       1,854,748  
    Equity   339,151       335,756       342,981       344,691       355,336  
    Total liabilities and equity $ 2,260,718     $ 2,243,514     $ 2,191,425     $ 2,182,428     $ 2,210,084  
                                           
    Average Yield/Costs (annualized)                                      
    Loans receivable and held for sale   5.65 %     5.54 %     5.46 %     5.36 %     5.26 %
    Mortgage related securities   2.66 %     2.63 %     2.57 %     2.48 %     2.41 %
    Debt securities, federal funds sold and short-term investments   5.05 %     4.82 %     4.82 %     4.94 %     4.45 %
    Total interest-earning assets   5.39 %     5.27 %     5.18 %     5.10 %     4.97 %
                                           
    Demand accounts   0.11 %     0.11 %     0.11 %     0.11 %     0.11 %
    Money market and savings accounts   1.94 %     1.89 %     1.79 %     1.64 %     1.54 %
    Certificates of deposit   4.54 %     4.41 %     4.19 %     3.76 %     3.43 %
    Total interest-bearing deposits   3.53 %     3.42 %     3.26 %     2.90 %     2.64 %
    Borrowings   4.77 %     4.92 %     4.54 %     4.83 %     4.71 %
    Total interest-bearing liabilities   3.95 %     3.95 %     3.71 %     3.53 %     3.35 %
    COMMUNITY BANKING SEGMENT

    SUMMARY OF KEY QUARTERLY FINANCIAL DATA

    (Unaudited)
       At or For the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
      (Dollars in Thousands)  
    Condensed Results of Operations:                                      
    Net interest income $ 12,250     $ 11,234     $ 11,598     $ 12,056     $ 12,431  
    Provision (credit) for credit losses   (302 )     (279 )     105       (550 )     445  
    Total noninterest income   1,227       1,491       990       894       966  
    Noninterest expenses:                                      
    Compensation, payroll taxes, and other employee benefits   5,326       5,116       5,360       5,397       4,618  
    Occupancy, office furniture and equipment   904       983       1,000       916       852  
    Advertising   311       229       174       363       200  
    Data processing   720       687       693       626       672  
    Communications   80       72       65       75       70  
    Professional fees   190       177       208       186       176  
    Real estate owned   –       1       13       1       1  
    Loan processing expense   –       –       –       –       –  
    Other   602       672       691       628       703  
    Total noninterest expense   8,133       7,937       8,204       8,192       7,292  
    Income before income taxes   5,646       5,067       4,279       5,308       5,660  
    Income tax expense   941       718       1,639       1,234       1,121  
    Net income $ 4,705     $ 4,349     $ 2,640     $ 4,074     $ 4,539  
                                           
    Efficiency ratio – QTD (non-GAAP)   60.35 %     62.37 %     65.17 %     63.26 %     54.43 %
    Efficiency ratio – YTD (non-GAAP)   62.58 %     63.77 %     65.17 %     56.86 %     54.94 %
     MORTGAGE BANKING SEGMENT

    SUMMARY OF KEY QUARTERLY FINANCIAL DATA

    (Unaudited)
      At or For the Three Months Ended  
      September 30,     June 30,     March 31,     December 31,     September 30,  
      2024     2024     2024     2023     2023  
      (Dollars in Thousands)  
    Condensed Results of Operations:                                      
    Net interest loss $ (760 )   $ (552 )   $ (541 )   $ (367 )   $ (550 )
    Provision (credit) for credit losses   (75 )     54       (38 )     115       –  
    Total noninterest income   21,386       25,081       20,328       16,028       21,452  
    Noninterest expenses:                                      
    Compensation, payroll taxes, and other employee benefits   15,930       16,886       14,756       14,881       17,186  
    Occupancy, office furniture and equipment   953       1,046       1,108       1,105       1,141  
    Advertising   615       758       740       667       716  
    Data processing   570       549       508       583       551  
    Communications   152       168       161       194       173  
    Professional fees   379       569       520       704       564  
    Real estate owned   –       –       –       –       –  
    Loan processing expense   697       861       1,046       756       722  
    Other   1,261       1,641       617       2,701       1,935  
    Total noninterest expense   20,557       22,478       19,456       21,591       22,988  
    Income (loss) before income taxes (benefit)   144       1,997       369       (6,045 )     (2,086 )
    Income tax expense (benefit)   194       684       71       (1,827 )     (657 )
    Net (loss) income $ (50 )   $ 1,313     $ 298     $ (4,218 )   $ (1,429 )
                                           
    Efficiency ratio – QTD (non-GAAP)   99.67 %     91.64 %     98.33 %     137.86 %     109.98 %
    Efficiency ratio – YTD (non-GAAP)   96.23 %     94.62 %     98.33 %     116.99 %     111.63 %
                                           
    Loan originations $ 558,729     $ 634,109     $ 485,109     $ 458,363     $ 597,562  
    Purchase   88.9 %     92.7 %     93.0 %     95.7 %     95.4 %
    Refinance   11.1 %     7.3 %     7.0 %     4.3 %     4.6 %
    Gross margin on loans sold(1)   3.83 %     3.93 %     4.10 %     3.51 %     3.62 %

    (1) Gross margin on loans sold equals mortgage banking income (excluding the change in interest rate lock value) divided by total loan originations.

    The MIL Network –

  • MIL-OSI: Enphase Energy Reports Financial Results for the Third Quarter of 2024

    Source: GlobeNewswire (MIL-OSI)

    FREMONT, Calif., Oct. 22, 2024 (GLOBE NEWSWIRE) — Enphase Energy, Inc. (NASDAQ: ENPH), a global energy technology company and the world’s leading supplier of microinverter-based solar and battery systems, announced today financial results for the third quarter of 2024, which included the summary below from its President and CEO, Badri Kothandaraman.

    We reported quarterly revenue of $380.9 million in the third quarter of 2024, along with 48.1% for non-GAAP gross margin. We shipped 1,731,768 microinverters, or approximately 730.0 megawatts DC, and 172.9 megawatt hours of IQ® Batteries.

    Financial highlights for the third quarter of 2024 are listed below:

    • Quarterly revenue of $380.9 million
    • GAAP gross margin of 46.8%; non-GAAP gross margin of 48.1% with net IRA benefit
    • Non-GAAP gross margin of 38.9%, excluding net IRA benefit of 9.2%
    • GAAP operating income of $49.8 million; non-GAAP operating income of $101.4 million
    • GAAP net income of $45.8 million; non-GAAP net income of $88.4 million
    • GAAP diluted earnings per share of $0.33, non-GAAP diluted earnings per share of $0.65
    • Free cash flow of $161.6 million; ending cash, cash equivalents, and marketable securities of $1.77 billion

    Our revenue and earnings for the third quarter of 2024 are provided below, compared with the prior quarter:

    (In thousands, except per share and percentage data)

      GAAP   Non-GAAP
      Q3 2024   Q2 2024   Q3 2023   Q3 2024   Q2 2024   Q3 2023
    Revenue $ 380,873     $ 303,458     $ 551,082     $ 380,873     $ 303,458     $ 551,082  
    Gross margin   46.8 %     45.2 %     47.5 %     48.1 %     47.1 %     48.4 %
    Operating expenses $ 128,383     $ 135,367     $ 144,024     $ 81,612     $ 81,706     $ 99,027  
    Operating income $ 49,788     $ 1,799     $ 117,989     $ 101,411     $ 61,080     $ 167,593  
    Net income $ 45,762     $ 10,833     $ 113,953     $ 88,402     $ 58,824     $ 141,849  
    Basic EPS $ 0.34     $ 0.08     $ 0.84     $ 0.65     $ 0.43     $ 1.04  
    Diluted EPS $ 0.33     $ 0.08     $ 0.80     $ 0.65     $ 0.43     $ 1.02  
                                                   

    Total revenue for the third quarter of 2024 was $380.9 million, compared to $303.5 million in the second quarter of 2024. Our revenue in the United States for the third quarter of 2024 increased approximately 43%, compared to the second quarter of 2024. The increase was due to higher shipments to distributors as inventory returned to normal levels. Our revenue in Europe decreased approximately 15% for the third quarter of 2024, compared to the second quarter of 2024. The decline in revenue was the result of a further softening in European demand.

    Our non-GAAP gross margin was 48.1% in the third quarter of 2024, compared to 47.1% in the second quarter of 2024. Our non-GAAP gross margin, excluding net IRA benefit, was 38.9% in the third quarter of 2024, compared to 41.0% in the second quarter of 2024.

    Our non-GAAP operating expenses were $81.6 million in the third quarter of 2024, compared to $81.7 million in the second quarter of 2024. Our non-GAAP operating income was $101.4 million in the third quarter of 2024, compared to $61.1 million in the second quarter of 2024.

    We exited the third quarter of 2024 with $1.77 billion in cash, cash equivalents, and marketable securities and generated $170.1 million in cash flow from operations in the third quarter of 2024. Our capital expenditures were $8.5 million in the third quarter of 2024, compared to $9.6 million in the second quarter of 2024.

    In the third quarter of 2024, we repurchased 434,947 shares of our common stock at an average price of $114.48 per share for a total of approximately $49.8 million. We also spent approximately $6.3 million dollars by withholding shares to cover taxes for employee stock vesting that reduced the diluted shares by 59,607 shares.

    We shipped 172.9 megawatt hours of IQ Batteries in the third quarter of 2024, compared to 120.2 megawatt hours in the second quarter of 2024. We are now shipping our third generation of IQ Batteries, the IQ® Battery 5P™, to the United States, Puerto Rico, Mexico, Canada, Australia, the United Kingdom, Italy, France, the Netherlands, Luxembourg, and Belgium. More than 9,000 installers worldwide are certified to install our IQ Batteries, compared to more than 7,400 installers worldwide in the second quarter of 2024.

    During the third quarter of 2024, we shipped approximately 1,176,000 microinverters from our contract manufacturing facilities in the United States that we booked for 45X production tax credits. We began shipping IQ8HC™ Microinverters with higher domestic content, produced at our contract manufacturing facilities in the United States. We expect to begin shipping our commercial microinverters, and batteries with higher domestic content, produced at our United States contract manufacturing facilities in the fourth quarter of 2024.

    During the third quarter of 2024, we launched AI-based software that is designed to optimize energy use by integrating solar and consumption forecasting with electricity tariff. This is intended to help consumers maximize savings as energy markets become increasingly complex, such as with dynamic electricity rates in parts of Europe and NEM 3.0 in California. We are gearing up to launch our second-generation IQ® EV charger, the 3-Phase IQ Battery with backup, and the IQ® Balcony Solar Kit all for the European market – pushing the boundaries of innovation. Finally, our fourth-generation energy system, featuring the IQ® Meter Collar, 10 kWh IQ Battery, and enhanced IQ® Combiner, is expected to debut in the United States in early 2025, targeting a substantial reduction in installation costs.

    BUSINESS HIGHLIGHTS

    On Oct. 16, 2024, Enphase Energy announced that it started shipping IQ8™ Microinverters to support newer, high-powered solar panels in select countries and territories, including the Netherlands, Austria, New Caledonia, and Malta.

    On Oct. 9, 2024, Enphase Energy announced that it is expanding its support for grid services programs – or virtual power plants (VPPs) – in New Hampshire, North Carolina, and California, powered by the new IQ Battery 5P.

    On Oct. 3, 2024, Enphase Energy announced the launch of its IQ8X™ Microinverters in Australia, and that all IQ8 Microinverters activated starting Oct. 1, 2024 in Australia come with an industry-leading 25-year limited warranty, currently the longest standard residential warranty in the Australian market.

    On Sept. 24, 2024, Enphase Energy announced the launch of its most powerful Enphase® Energy System™ to-date, featuring the new IQ Battery 5P and IQ8 Microinverters, for customers in India.

    On Sept. 16, 2024, Enphase Energy announced that it started shipping the IQ Battery 5P in Belgium. Enphase also introduced IQ® Energy Management, its new AI-based energy management software to enable support for dynamic electricity rates and the integration of third-party EV chargers and heat pumps in Belgium.

    On Sept. 10, 2024, Enphase Energy announced initial shipments of IQ8HC Microinverters supplied from contract manufacturing facilities in the United States with higher domestic content than previous models. The microinverters have SKUs with a “DOM” suffix, indicating the increased amount of domestic content.

    On Sept. 4, 2024, Enphase Energy announced a solution for expanding legacy net energy metering (NEM) solar energy systems in California without penalty using new Enphase Energy Systems configurations with IQ® Microinverters, IQ Batteries, and Enphase Power Control.

    On Aug. 27, 2024, Enphase Energy announced the availability of pre-orders for IQ Battery 5Ps produced in the United States. Pre-orders are also available for IQ8HC Microinverters, IQ8P-3P™ Microinverters, and IQ8X Microinverters produced in the United States with higher domestic content.

    On Aug. 19, 2024, Enphase Energy announced that it started shipping the IQ Battery 5P in the Netherlands. Enphase also introduced IQ Energy Management, its new energy management software to enable support for dynamic electricity rates and the integration of third-party EV chargers and heat pumps in the Netherlands.

    On Aug. 8, 2024, Enphase Energy announced the launch of its new North American Charging Standard (NACS) connectors for its entire line of IQ EV Chargers. NACS connectors and charger ports have recently become the industry standard embraced by several major automakers for electric vehicles (EVs).

    On Aug. 5, 2024, Enphase Energy announced that it started shipping IQ8P™ and IQ8HC Microinverters to support newer, high-powered solar panels in select countries throughout the Caribbean.

    On Aug. 1, 2024, Enphase Energy announced that it started shipping IQ8 Microinverters to support newer, high-powered solar modules in select countries throughout Europe, including France, Germany, Spain, Bulgaria, Estonia, Slovakia, and Croatia.

    FOURTH QUARTER 2024 FINANCIAL OUTLOOK

    For the fourth quarter of 2024, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

    • Revenue to be within a range of $360.0 million to $400.0 million, which includes shipments of 140 to 160 megawatt hours of IQ Batteries
    • GAAP gross margin to be within a range of 47.0% to 50.0% with net IRA benefit
    • Non-GAAP gross margin to be within a range of 49.0% to 52.0% with net IRA benefit and 39.0% to 42.0% excluding net IRA benefit. Non-GAAP gross margin excludes stock-based compensation expense and acquisition related amortization
    • Net IRA benefit to be within a range of $38.0 million to $41.0 million based on estimated shipments of 1,300,000 units of U.S. manufactured microinverters
    • GAAP operating expenses to be within a range of $135.0 million to $139.0 million
    • Non-GAAP operating expenses to be within a range of $81.0 million to $85.0 million, excluding $54.0 million estimated for stock-based compensation expense, acquisition related expenses and amortization

    For 2024, GAAP and non-GAAP annualized effective tax rate with IRA benefit, excluding discrete items, is expected to be within a range of 17.0% to 19.0%.

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    Use of non-GAAP Financial Measures

    Enphase Energy has presented certain non-GAAP financial measures in this press release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. Non-GAAP financial measures presented by Enphase Energy include non-GAAP gross profit, gross margin, operating expenses, income from operations, net income, net income per share (basic and diluted), net IRA benefit, and free cash flow.

    These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Enphase Energy’s results of operations as determined in accordance with GAAP. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Enphase Energy uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase Energy believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

    As presented in the “Reconciliation of Non-GAAP Financial Measures” tables below, each of the non-GAAP financial measures excludes one or more of the following items for purposes of calculating non-GAAP financial measures to facilitate an evaluation of Enphase Energy’s current operating performance and a comparison to its past operating performance:

    Stock-based compensation expense. Enphase Energy excludes stock-based compensation expense from its non-GAAP measures primarily because they are non-cash in nature. Moreover, the impact of this expense is significantly affected by Enphase Energy’s stock price at the time of an award over which management has limited to no control.

    Acquisition related expenses and amortization. This item represents expenses incurred related to Enphase Energy’s business acquisitions, which are non-recurring in nature, and amortization of acquired intangible assets, which is a non-cash expense. Acquisition related expenses and amortization of acquired intangible assets are not reflective of Enphase Energy’s ongoing financial performance.

    Restructuring and asset impairment charges. Enphase Energy excludes restructuring and asset impairment charges due to the nature of the expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of fees paid for cash-based severance costs and asset write-downs of property and equipment and acquired intangible assets, and other contract termination costs resulting from restructuring initiatives.

    Non-cash interest expense. This item consists primarily of amortization of debt issuance costs and accretion of debt discount because these expenses do not represent a cash outflow for Enphase Energy except in the period the financing was secured and such amortization expense is not reflective of Enphase Energy’s ongoing financial performance.

    Non-GAAP income tax adjustment. This item represents the amount adjusted to Enphase Energy’s GAAP tax provision or benefit to exclude the income tax effects of GAAP adjustments such as stock-based compensation, amortization of purchased intangibles, and other non-recurring items that are not reflective of Enphase Energy ongoing financial performance.

    Non-GAAP net income per share, diluted. Enphase Energy excludes the dilutive effect of in-the-money portion of convertible senior notes as they are covered by convertible note hedge transactions that reduce potential dilution to our common stock upon conversion of the Notes due 2025, Notes due 2026, and Notes due 2028, and includes the dilutive effect of employee’s stock-based awards and the dilutive effect of warrants. Enphase Energy believes these adjustments provide useful supplemental information to the ongoing financial performance.

    Net IRA benefit. This item represents the advanced manufacturing production tax credit (AMPTC) from the IRA for manufacturing microinverters in the United States, partially offset by the incremental manufacturing cost incurred in the United States relative to manufacturing in Mexico, India, and China. The AMPTC is accounted for by Enphase Energy as an income-based government grants that reduces cost of revenues in the condensed consolidated statements of operations.

    Free cash flow. This item represents net cash flows from operating activities less purchases of property and equipment.

    Conference Call Information

    Enphase Energy will host a conference call for analysts and investors to discuss its third quarter 2024 results and fourth quarter 2024 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). The call is open to the public by dialing (833) 634-5018. A live webcast of the conference call will also be accessible from the “Investor Relations” section of Enphase Energy’s website at https://investor.enphase.com. Following the webcast, an archived version will be available on the website for approximately one year. In addition, an audio replay of the conference call will be available by calling (877) 344-7529; replay access code 2677879, beginning approximately one hour after the call.

    Forward-Looking Statements

    This press release contains forward-looking statements, including statements related to Enphase Energy’s expectations as to its fourth quarter of 2024 financial outlook, including revenue, shipments of IQ Batteries by megawatt hours, gross margin with net IRA benefit and excluding net IRA benefit, estimated shipments of U.S. manufactured microinverters, operating expenses, and annualized effective tax rate with IRA benefit; its expectations regarding the expected net IRA benefit; its expectations on the timing and introduction of new products and updates to existing products; its expectations for global capacity of microinverters; its ability to support grid services in new locations; the ability of its AI-based software to help consumers maximize savings as energy markets become increasingly complex; and the capabilities, advantages, features, and performance of its technology and products. These forward-looking statements are based on Enphase Energy’s current expectations and inherently involve significant risks and uncertainties. Enphase Energy’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of certain risks and uncertainties including those risks described in more detail in its most recently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and other documents on file with the SEC from time to time and available on the SEC’s website at http://www.sec.gov. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations, except as required by law.

    A copy of this press release can be found on the investor relations page of Enphase Energy’s website at https://investor.enphase.com.

    About Enphase Energy, Inc.

    Enphase Energy, a global energy technology company based in Fremont, CA, is the world’s leading supplier of microinverter-based solar and battery systems that enable people to harness the sun to make, use, save, and sell their own power—and control it all with a smart mobile app. The company revolutionized the solar industry with its microinverter-based technology and builds all-in-one solar, battery, and software solutions. Enphase has shipped approximately 78.0 million microinverters, and over 4.5 million Enphase-based systems have been deployed in more than 160 countries. For more information, visit https://enphase.com/.

    © 2024 Enphase Energy, Inc. All rights reserved. Enphase Energy, Enphase, the “e” logo, IQ, IQ8, and certain other marks listed at https://enphase.com/trademark-usage-guidelines are trademarks or service marks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

    Contact:

    Zach Freedman
    Enphase Energy, Inc.
    Investor Relations
    ir@enphaseenergy.com

    ENPHASE ENERGY, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
    (Unaudited)
     
      Three Months Ended Nine Months Ended
      September 30,
    2024    		   June 30,
    2024    		   September 30,
    2023    		   September 30,
    2024    		   September 30,
    2023
    Net revenues $ 380,873     $ 303,458     $ 551,082     $ 947,670     $ 1,988,216  
    Cost of revenues   202,702       166,292       289,069       516,825       1,076,490  
    Gross profit   178,171       137,166       262,013       430,845       911,726  
    Operating expenses:                  
    Research and development   47,843       48,871       54,873       150,925       172,045  
    Sales and marketing   49,671       51,775       55,357       154,753       178,383  
    General and administrative   30,192       33,550       33,794       98,924       104,456  
    Restructuring and asset impairment charges   677       1,171       —       3,755       870  
    Total operating expenses   128,383       135,367       144,024       408,357       455,754  
    Income from operations   49,788       1,799       117,989       22,488       455,972  
    Other income, net                  
    Interest income   19,977       19,203       19,669       58,889       49,235  
    Interest expense   (2,237 )     (2,220 )     (2,196 )     (6,653 )     (6,571 )
    Other income (expense), net   (16,785 )     (7,566 )     1,883       (24,264 )     2,276  
    Total other income, net   955       9,417       19,356       27,972       44,940  
    Income before income taxes   50,743       11,216       137,345       50,460       500,912  
    Income tax provision   (4,981 )     (383 )     (23,392 )     (9,962 )     (82,895 )
    Net income $ 45,762     $ 10,833     $ 113,953     $ 40,498     $ 418,017  
    Net income per share:                  
    Basic $ 0.34     $ 0.08     $ 0.84     $ 0.30     $ 3.06  
    Diluted $ 0.33     $ 0.08     $ 0.80     $ 0.30     $ 2.92  
    Shares used in per share calculation:                  
    Basic   135,329       135,646       136,165       135,621       136,491  
    Diluted   139,914       136,123       143,863       136,236       145,081  
                                           
    ENPHASE ENERGY, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)
     
      September 30, 
    2024    		   December 31, 
    2023
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 256,325   $ 288,748
    Marketable securities   1,510,299     1,406,286
    Accounts receivable, net   232,225     445,959
    Inventory   158,837     213,595
    Prepaid expenses and other assets   203,195     88,930
    Total current assets   2,360,881     2,443,518
    Property and equipment, net   148,444     168,244
    Operating lease, right of use asset, net   28,120     19,887
    Intangible assets, net   51,152     68,536
    Goodwill   214,292     214,562
    Other assets   185,448     215,895
    Deferred tax assets, net   275,854     252,370
    Total assets $ 3,264,191   $ 3,383,012
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities:      
    Accounts payable $ 112,417   $ 116,164
    Accrued liabilities   189,819     261,919
    Deferred revenues, current   129,556     118,300
    Warranty obligations, current   35,755     36,066
    Debt, current   99,931     —
    Total current liabilities   567,478     532,449
    Long-term liabilities:      
    Deferred revenues, non-current   354,210     369,172
    Warranty obligations, non-current   148,477     153,021
    Other liabilities   62,392     51,008
    Debt, non-current   1,200,261     1,293,738
    Total liabilities   2,332,818     2,399,388
    Total stockholders’ equity   931,373     983,624
    Total liabilities and stockholders’ equity $ 3,264,191   $ 3,383,012
               
    ENPHASE ENERGY, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
     
      Three Months Ended   Nine Months Ended
      September 30, 
    2024    		   June 30, 
    2024    		   September 30, 
    2023    		   September 30, 
    2024    		   September 30, 
    2023
    Cash flows from operating activities:                  
    Net income $ 45,762     $ 10,833     $ 113,953     $ 40,498     $ 418,017  
    Adjustments to reconcile net income to net cash provided by operating activities:                  
    Depreciation and amortization   20,103       20,484       19,448       60,724       53,867  
    Net amortization (accretion) of premium (discount) on marketable securities   (2,904 )     (1,030 )     5,094       (1,109 )     (12,611 )
    Provision for doubtful accounts   2,704       1,897       653       4,471       1,282  
    Asset impairment   17,568       6,241       903       24,141       903  
    Non-cash interest expense   2,173       2,157       2,114       6,462       6,254  
    Net loss (gain) from change in fair value of debt securities   741       1,931       (1,910 )     1,730       (5,408 )
    Stock-based compensation   45,940       52,757       43,814       159,530       157,635  
    Deferred income taxes   (5,276 )     (14,076 )     (11,499 )     (27,644 )     (38,295 )
    Changes in operating assets and liabilities:                  
    Accounts receivable   49,414       82,183       (34,752 )     208,956       (118,249 )
    Inventory   17,231       31,825       (8,003 )     54,758       (24,406 )
    Prepaid expenses and other assets   (64,149 )     (42,810 )     (15,383 )     (117,856 )     (57,376 )
    Accounts payable, accrued and other liabilities   32,088       (23,944 )     9,903       (58,140 )     117,128  
    Warranty obligations   7,053       15       8,151       (4,855 )     57,420  
    Deferred revenues   1,690       (1,401 )     13,369       (5,265 )     105,169  
    Net cash provided by operating activities   170,138       127,062       145,855       346,401       661,330  
    Cash flows from investing activities:                  
    Purchases of property and equipment   (8,533 )     (9,636 )     (23,848 )     (25,540 )     (90,326 )
    Purchases of marketable securities   (319,190 )     (300,053 )     (470,766 )     (1,091,511 )     (1,743,674 )
    Maturities and sale of marketable securities   215,241       282,063       494,804       994,677       1,406,608  
    Investments in private companies   —       —       (15,000 )     —       (15,000 )
    Net cash used in investing activities   (112,482 )     (27,626 )     (14,810 )     (122,374 )     (442,392 )
    Cash flows from financing activities:                  
    Partial settlement of convertible notes   (5 )     —       —       (7 )     —  
    Repurchase of common stock   (49,794 )     (99,908 )     (110,000 )     (191,698 )     (310,000 )
    Proceeds from issuance of common stock under employee equity plans   14       6,769       719       7,969       1,315  
    Payment of withholding taxes related to net share settlement of equity awards   (6,286 )     (7,473 )     (8,465 )     (73,801 )     (93,100 )
    Net cash used in financing activities   (56,071 )     (100,612 )     (117,746 )     (257,537 )     (401,785 )
    Effect of exchange rate changes on cash and cash equivalents   2,638       (374 )     (1,900 )     1,087       (322 )
    Net increase (decrease) in cash and cash equivalents   4,223       (1,550 )     11,399       (32,423 )     (183,169 )
    Cash and cash equivalents—Beginning of period   252,102       253,652       278,676       288,748       473,244  
    Cash and cash equivalents —End of period $ 256,325     $ 252,102     $ 290,075     $ 256,325     $ 290,075  
                                           
    ENPHASE ENERGY, INC.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    (In thousands, except per share data and percentages)
    (Unaudited)
     
      Three Months Ended   Nine Months Ended
      September 30, 
    2024    		   June 30, 
    2024    		   September 30, 
    2023    		   September 30, 
    2024    		   September 30, 
    2023
    Gross profit (GAAP) $ 178,171     $ 137,166     $ 262,013     $ 430,845     $ 911,726  
    Stock-based compensation   2,948       3,730       2,708       10,860       9,775  
    Acquisition related amortization   1,904       1,890       1,899       5,685       5,686  
    Gross profit (Non-GAAP) $ 183,023     $ 142,786     $ 266,620     $ 447,390     $ 927,187  
                       
    Gross margin (GAAP)   46.8 %     45.2 %     47.5 %     45.5 %     45.9 %
    Stock-based compensation   0.8       1.3       0.6       1.1       0.5  
    Acquisition related amortization   0.5       0.6       0.3       0.6       0.2  
    Gross margin (Non-GAAP)   48.1 %     47.1 %     48.4 %     47.2 %     46.6 %
                       
    Operating expenses (GAAP) $ 128,383     $ 135,367     $ 144,024     $ 408,357     $ 455,754  
    Stock-based compensation(1)   (42,992 )     (49,027 )     (41,106 )     (148,670 )     (147,860 )
    Acquisition related expenses and amortization   (3,102 )     (3,463 )     (3,891 )     (10,027 )     (11,429 )
    Restructuring and asset impairment charges   (677 )     (1,171 )     —       (3,755 )     (901 )
    Operating expenses (Non-GAAP) $ 81,612     $ 81,706     $ 99,027     $ 245,905     $ 295,564  
                       
    (1)Includes stock-based compensation as follows:                  
    Research and development $ 19,790     $ 20,210     $ 19,285     $ 64,550     $ 64,528  
    Sales and marketing   14,237       16,784       13,297       49,199       49,231  
    General and administrative   8,965       12,033       8,524       34,921       34,101  
    Total $ 42,992     $ 49,027     $ 41,106     $ 148,670     $ 147,860  
                       
    Income from operations (GAAP) $ 49,788     $ 1,799     $ 117,989     $ 22,488     $ 455,972  
    Stock-based compensation   45,940       52,757       43,814       159,530       157,635  
    Acquisition related expenses and amortization   5,006       5,353       5,790       15,712       17,115  
    Restructuring and asset impairment charges   677       1,171       —       3,755       901  
    Income from operations (Non-GAAP) $ 101,411     $ 61,080     $ 167,593     $ 201,485     $ 631,623  
                       
    Net income (GAAP) $ 45,762     $ 10,833     $ 113,953     $ 40,498     $ 418,017  
    Stock-based compensation   45,940       52,757       43,814       159,530       157,635  
    Acquisition related expenses and amortization   5,006       5,353       5,790       15,712       17,115  
    Restructuring and asset impairment charges   677       1,171       —       3,755       901  
    Non-cash interest expense   2,173       2,157       2,114       6,462       6,254  
    Non-GAAP income tax adjustment   (11,156 )     (13,447 )     (23,822 )     (30,775 )     (61,413 )
    Net income (Non-GAAP) $ 88,402     $ 58,824     $ 141,849     $ 195,182     $ 538,509  
                       
    Net income per share, basic (GAAP) $ 0.34     $ 0.08     $ 0.84     $ 0.30     $ 3.06  
    Stock-based compensation   0.34       0.39       0.32       1.17       1.15  
    Acquisition related expenses and amortization   0.04       0.04       0.04       0.12       0.13  
    Restructuring and asset impairment charges   0.01       0.01       —       0.03       0.01  
    Non-cash interest expense   0.02       0.02       0.02       0.05       0.04  
    Non-GAAP income tax adjustment   (0.10 )     (0.11 )     (0.18 )     (0.23 )     (0.44 )
    Net income per share, basic (Non-GAAP) $ 0.65     $ 0.43     $ 1.04     $ 1.44     $ 3.95  
                       
    Shares used in basic per share calculation GAAP and Non-GAAP   135,329       135,646       136,165       135,621       136,491  
                       
    Net income per share, diluted (GAAP) $ 0.33     $ 0.08     $ 0.80     $ 0.30     $ 2.92  
    Stock-based compensation   0.33       0.38       0.32       1.17       1.17  
    Acquisition related expenses and amortization   0.04       0.04       0.04       0.12       0.12  
    Restructuring and asset impairment charges   0.01       0.01       —       0.03       0.01  
    Non-cash interest expense   0.02       0.02       0.02       0.05       0.04  
    Non-GAAP income tax adjustment   (0.08 )     (0.10 )     (0.16 )     (0.24 )     (0.40 )
    Net income per share, diluted (Non-GAAP)(2) $ 0.65     $ 0.43     $ 1.02     $ 1.43     $ 3.86  
                       
    Shares used in diluted per share calculation GAAP   139,914       136,123       143,863       136,236       145,081  
    Shares used in diluted per share calculation Non-GAAP   135,839       136,123       138,535       136,236       139,753  
                       
    Income-based government grants (GAAP) $ 46,552     $ 24,329     $ 18,532     $ 89,498     $ 20,583  
    Incremental cost for manufacturing in U.S.   (11,396 )     (5,950 )     (4,085 )     (22,228 )     (4,491 )
    Net IRA benefit (Non-GAAP) $ 35,156     $ 18,379     $ 14,447     $ 67,270     $ 16,092  
                       
    Net cash provided by operating activities (GAAP) $ 170,138     $ 127,062     $ 145,855     $ 346,401     $ 661,330  
    Purchases of property and equipment   (8,533 )     (9,636 )     (23,848 )     (25,540 )     (90,326 )
    Free cash flow (Non-GAAP) $ 161,605     $ 117,426     $ 122,007     $ 320,861     $ 571,004  
                                           

    (2) Calculation of non-GAAP diluted net income per share for the three and nine months ended September 30, 2023 excludes convertible Notes due 2023 interest expense, net of tax of less than $0.1 million from non-GAAP net income.

    This press release was published by a CLEAR® Verified individual.

    The MIL Network –

  • MIL-OSI: National Bank Holdings Corporation Announces Third Quarter 2024 Financial Results and Increase to Quarterly Dividend

    Source: GlobeNewswire (MIL-OSI)

    DENVER, Oct. 22, 2024 (GLOBE NEWSWIRE) — National Bank Holdings Corporation (NYSE: NBHC) reported:

                                   
        For the quarter(1)   For the year(1)
        3Q24   2Q24   3Q23   2024   2023
    Net income ($000’s)   $ 33,105     $ 26,135     $ 36,087     $ 90,631     $ 108,927  
    Earnings per share – diluted   $ 0.86     $ 0.68     $ 0.94     $ 2.36     $ 2.85  
    Return on average assets     1.32 %     1.06 %     1.46 %     1.22 %     1.50 %
    Return on average tangible assets(2)     1.43 %     1.17 %     1.58 %     1.33 %     1.61 %
    Return on average equity     10.33 %     8.46 %     12.26 %     9.70 %     12.71 %
    Return on average tangible common equity(2)     14.84 %     12.44 %     18.38 %     14.14 %     18.81 %

                                                          

    (1 )   Ratios are annualized.
    (2 )   See non-GAAP reconciliations below.
           

    In announcing these results, Chief Executive Officer Tim Laney shared, “We delivered quarterly earnings of $0.86 per diluted share and a return on average tangible common equity of 14.84%. On the strength of our balance sheet, capital position and earnings, we are pleased to announce a 3.6% increase in our quarterly dividend to $0.29 per share. During the quarter, our disciplined approach to loan and deposit pricing drove 11 basis points of net interest margin expansion to 3.87%. Our teams delivered solid quarterly growth in our core banking fees, and we continued to leverage our diverse revenue streams across our franchise resulting in meaningful year-to-date fee income growth.”

    Mr. Laney added, “We continue to remain vigilant in monitoring our loan portfolio, delivering the lowest non-performing loan ratio since early 2023. Our teams adhere to prudent, disciplined approaches that limit concentrations in our loan book and our depositor base, and we regularly perform robust stress testing on our loan portfolio. We enter the fourth quarter from a position of strength and stability and expect to finish the year strong. We believe our Common Equity Tier 1 capital ratio of 12.88%, ample liquidity position, and diversified funding sources provide optionality for future growth.”

    Third Quarter 2024 Results
    (All comparisons refer to the second quarter of 2024, except as noted)

    Net income increased $7.0 million or 26.7% to $33.1 million or $0.86 per diluted share, compared to $26.1 million or $0.68 per diluted share. The quarter’s increase was driven by net interest income and fee income growth. Included in the prior quarter was $3.9 million of impairment related to venture capital investments. Fully taxable equivalent pre-provision net revenue increased $7.5 million or 20.6% to $43.7 million. The return on average tangible assets increased 26 basis points to 1.43%, and the return on average tangible common equity increased 240 basis points to 14.84%.

    Net Interest Income
    Fully taxable equivalent net interest income increased $4.2 million to $89.5 million, driven by a $74.7 million increase in average interest earning assets, a 12 basis point increase in average loan yields and one extra day in the quarter. The fully taxable equivalent net interest margin widened 11 basis points to 3.87%, driven by a 13 basis point increase in earning asset yields which was partially offset by a two basis point increase in the cost of funds.

    Loans
    Loans totaled $7.7 billion at September 30, 2024, consistent with the prior quarter. We generated quarterly loan fundings totaling $359.3 million, led by commercial loan fundings of $219.1 million. The average interest rate on the third quarter’s loan originations was 8.5%.

    Asset Quality and Provision for Credit Losses
    The Company recorded $2.0 million of provision expense for credit losses, compared to $2.8 million in the prior quarter. The current quarter’s provision expense was primarily driven by higher reserve requirements from changes in the CECL model’s underlying economic forecast. Annualized net charge-offs decreased four basis points to 0.18% of average total loans and included the resolution of one previously reserved credit during the quarter. Non-performing loans decreased three basis points to 0.31% of total loans at September 30, 2024, and non-performing assets decreased four basis points to 0.32% of total loans and OREO at September 30, 2024. The allowance for credit losses as a percentage of loans totaled 1.23% at September 30, 2024, compared to 1.25% in the prior quarter.

    Deposits
    Average total deposits increased $21.3 million to $8.4 billion during the third quarter 2024. The loan to deposit ratio totaled 90.8% at September 30, 2024. Average transaction deposits (defined as total deposits less time deposits) totaled $7.4 billion, consistent with the prior quarter. The mix of transaction deposits to total deposits was 88% at September 30, 2024, consistent with June 30, 2024.

    Non-Interest Income
    Non-interest income increased $4.4 million to $18.4 million driven by increases in our diversified sources of fee revenue. Service charges increased $0.6 million, swap fee income increased $0.3 million and trust fee income increased $0.1 million. These increases were partially offset by a $0.3 million decrease in mortgage banking income. Included in the prior quarter was $3.9 million of impairment related to venture capital investments.

    Non-Interest Expense
    Non-interest expense totaled $64.2 million during the third quarter, compared to $63.1 million in the prior quarter. Salaries and benefits increased $0.4 million driven by one additional payroll day in the quarter. Professional fees increased $0.4 million and data processing increased $0.3 million driven by our continued investments in technology. These increases were partially offset by a decrease in occupancy and equipment of $0.4 million. The fully taxable equivalent efficiency ratio, excluding other intangible assets amortization, improved 387 basis points to 57.7% for the third quarter.

    Income tax expense increased $1.2 million to $6.8 million, compared to $5.6 million in the prior quarter, due to the third quarter’s higher pre-tax income. The effective tax rate was 17.0%, compared to 17.7% for the second quarter.

    Capital
    Capital ratios continue to be strong and in excess of federal bank regulatory agency “well capitalized” thresholds. The tier 1 leverage ratio totaled 10.44%, and the common equity tier 1 capital ratio totaled 12.88% at September 30, 2024. Shareholders’ equity totaled $1.3 billion at September 30, 2024, increasing $44.4 million. The third quarter’s net income drove $22.2 million of growth in retained earnings, and changes in the interest rate environment led to a $17.9 million improvement in accumulated other comprehensive loss.

    Common book value per share increased $1.09 to $34.01 at September 30, 2024. Tangible common book value per share increased $1.17 to $24.91 as this quarter’s earnings and a decrease in accumulated other comprehensive loss outpaced the quarterly dividend.

    Dividend Announcement
    The quarterly cash dividend will increase 3.6% from $0.28 per share to $0.29 per share. The dividend will be payable on December 13, 2024 to shareholders of record at the close of business on November 29, 2024. This is the eighth consecutive semiannual increase to the quarterly dividend since early 2021.

    Year-Over-Year Review
    (All comparisons refer to the first nine months of 2023, except as noted)

    Net income totaled $90.6 million, or $2.36 per diluted share, compared to net income of $108.9 million, or $2.85 per diluted share, for the first nine months of 2023. The decrease over the same period prior year was largely driven by lower net interest income, due to an increase in cost of funds outpacing the increase in interest income. Partially offsetting this decrease was a 4.7% increase in non-interest income driven by our diversified sources of fee revenue. Fully taxable equivalent pre-provision net revenue totaled $120.5 million, compared to $144.9 million. The return on average tangible assets totaled 1.33%, compared to 1.61%, and the return on average tangible common equity was 14.14%, compared to 18.81%.

    Fully taxable equivalent net interest income totaled $260.5 million, compared to $276.9 million. Average earning assets increased $165.0 million, including average loan growth of $296.4 million, which was partially offset by a decrease in average investment securities of $70.2 million. The fully taxable equivalent net interest margin narrowed 32 basis points to 3.80%, as the increase in earning asset yields was more than offset by an increase in the cost of funds. Average interest bearing liabilities increased $555.3 million due to higher deposit balances, and the cost of funds totaled 2.31%, compared to 1.40% in the same period prior year.

    Loans outstanding totaled $7.7 billion, increasing $236.1 million or 3.2%. New loan fundings over the trailing twelve months totaled $1.5 billion, led by commercial loan fundings of $1.0 billion.  

    The Company recorded $4.8 million of provision expense for credit losses for the first nine months of 2024, compared to provision expense of $3.7 million in the same period prior year. Annualized net charge-offs totaled 0.13% of average total loans during the first nine months of 2024, compared to 0.02% of average total loans during the first nine months of 2023. Non-performing loans decreased 13 basis points to 0.31% of total loans at September 30, 2024, and non-performing assets decreased 17 basis points to 0.32% of total loans and OREO at September 30, 2024. The allowance for credit losses as a percentage of loans totaled 1.23% at September 30, 2024, compared to 1.25% at September 30, 2023.

    Average total deposits increased $418.6 million or 5.3% to $8.3 billion, and average transaction deposits increased $369.2 million or 5.3%. The mix of transaction deposits to total deposits was 88%, consistent with September 30, 2023.

    Non-interest income totaled $50.1 million, an increase of $2.3 million or 4.7%, driven by increases in our diversified sources of fee revenue. Other non-interest income increased $5.2 million, or 63.6%, and included increases in SBA loan income, trust income, Cambr income and swap fee income. Mortgage banking income decreased $2.7 million as the sustained higher-interest rate environment has lowered mortgage volume.

    Non-interest expense totaled $190.1 million, an increase of $10.2 million or 5.7%, largely due to ongoing investments in technology. Salaries and benefits increased $7.6 million, occupancy and equipment increased $2.4 million and data processing increased $2.3 million. Other intangible assets amortization increased $0.6 million due to our Cambr acquisition in April of 2023. These increases were partially offset by a decrease of $2.5 million in professional fees.

    Income tax expense totaled $19.9 million, a decrease of $7.9 million from the same period prior year, driven by lower pre-tax income. The effective tax rate was 18.0% for the first nine months of 2024, compared to 20.3%.

    Conference Call
    Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Wednesday, October 23, 2024. Interested parties may listen to this call by dialing (888) 204-4368 using the participant passcode of 3279876 and asking for the NBHC Q3 2024 Earnings Call. The earnings release and a link to the replay of the call will be available on the Company’s website at http://www.nationalbankholdings.com by visiting the investor relations area.

    About National Bank Holdings Corporation
    National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise, delivering high quality client service and committed to stakeholder results. Through its bank subsidiaries, NBH Bank and Bank of Jackson Hole Trust, National Bank Holdings Corporation operates a network of over 90 banking centers, serving individual consumers, small, medium and large businesses, and government and non-profit entities. Its banking centers are located in its core footprint of Colorado, the greater Kansas City region, Utah, Wyoming, Texas, New Mexico and Idaho. Its comprehensive residential mortgage banking group primarily serves the bank’s core footprint. Its trust and wealth management business is operated in its core footprint under the Bank of Jackson Hole Trust charter. NBH Bank operates under a single state charter through the following brand names as divisions of NBH Bank: in Colorado, Community Banks of Colorado and Community Banks Mortgage; in Kansas and Missouri, Bank Midwest and Bank Midwest Mortgage; in Texas, Utah, New Mexico and Idaho, Hillcrest Bank and Hillcrest Bank Mortgage; and in Wyoming, Bank of Jackson Hole and Bank of Jackson Hole Mortgage. Additional information about National Bank Holdings Corporation can be found at http://www.nationalbankholdings.com. 

    For more information visit: cobnks.com, bankmw.com, hillcrestbank.com, bankofjacksonhole.com, or nbhbank.com, or connect with any of our brands on LinkedIn.

    About Non-GAAP Financial Measures
    Certain of the financial measures and ratios we present, including “tangible assets,” “return on average tangible assets,” “tangible common equity,” “return on average tangible common equity,” “tangible common book value per share,” “tangible common book value, excluding accumulated other comprehensive loss, net of tax,” “tangible common book value per share, excluding accumulated other comprehensive loss, net of tax,” “tangible common equity to tangible assets,” “non-interest expense excluding other intangible assets amortization,” “efficiency ratio excluding other intangible assets amortization,” “net income excluding the impact of other intangible assets amortization expense, after tax,” “pre-provision net revenue,” and “fully taxable equivalent” metrics, are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP). We refer to these financial measures and ratios as “non-GAAP financial measures.” We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

    These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and you should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

    Forward-Looking Statements
    This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as “anticipate,” “believe,” “can,” “would,” “should,” “could,” “may,” “predict,” “seek,” “potential,” “will,” “estimate,” “target,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” or similar expressions that relate to the Company’s strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the “Risk Factors” referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following factors: the impact of potential regulatory changes to capital requirements, treatment of investment securities and FDIC deposit insurance levels and costs; our ability to execute our business strategy, including our digital strategy, as well as changes in our business strategy or development plans; business and economic conditions; effects of any potential government shutdowns; economic, market, operational, liquidity, credit and interest rate risks associated with the Company’s business, including increased competition for deposits due to prevailing market interest rates and banking sector volatility; effects of any changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as interest rate, securities market and monetary supply fluctuations; changes in the economy or supply-demand imbalances affecting local real estate values; changes in consumer spending, borrowings and savings habits; changes in the fair value of our investment securities due to market conditions outside of our control; financial or reputational impacts associated with the increased prevalence of fraud or other financial crimes; with respect to our mortgage business, the inability to negotiate fees with investors for the purchase of our loans or our obligation to indemnify purchasers or repurchase related loans if the loans fail to meet certain criteria, or higher rate of delinquencies and defaults as a result of the geographic concentration of our servicing portfolio; the Company’s ability to identify potential candidates for, obtain regulatory approval for, and consummate, integrate and realize operating efficiencies from, acquisitions, consolidations and other expansion opportunities; our ability to integrate acquisitions or consolidations and to achieve synergies, operating efficiencies and/or other expected benefits within expected timeframes, or at all, or within expected cost projections, and to preserve the goodwill of acquired financial institutions; the Company’s ability to realize anticipated benefits from enhancements or updates to its core operating systems from time to time without significant change in client service or risk to the Company’s control environment; the Company’s dependence on information technology and telecommunications systems of third-party service providers and the risk of systems failures, interruptions or breaches of security, including those that could result in disclosure or misuse of confidential or proprietary client or other information; the Company’s ability to achieve organic loan and deposit growth and the competition for, and composition of, such growth; changes in sources and uses of funds; increased competition in the financial services industry; regulatory and financial impacts associated with the Company growing to over $10 billion in consolidated assets; increases in claims and litigation related to our fiduciary responsibilities in connection with our trust and wealth management business; the effect of changes in accounting policies and practices as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; the share price of the Company’s stock; the Company’s ability to realize deferred tax assets or the need for a valuation allowance, or the effects of changes in tax laws on our deferred tax assets; the effects of tax legislation, including the potential of future increases to prevailing tax rules, or challenges to our positions; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments, including, but not limited to, changes in regulation that affect the fees that we charge, the resolution of legal proceedings or regulatory or other government inquiries, and the results of regulatory examinations, reviews or other inquiries, and changes in regulations that apply to us as a Colorado state-chartered bank and a Wyoming state-chartered bank; technological changes, including with respect to the advancement of artificial intelligence; the timely development and acceptance of new products and services, including in the digital technology space our digital solution 2UniFi; changes in our management personnel and the Company’s continued ability to attract, hire and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from our bank subsidiaries; changes in estimates of future credit reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; financial, reputational, or strategic risks associated with our investments in financial technology companies and initiatives; widespread natural and other disasters, pandemics, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically; a cybersecurity incident, data breach or a failure of a key information technology system; impact of reputational risk; other risks and uncertainties listed from time to time in the Company’s reports and documents filed with the Securities and Exchange Commission; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

    Contacts:
    Analysts/Institutional Investors:
    Emily Gooden, Chief Accounting Officer and Investor Relations Director, (720) 554-6640, ir@nationalbankholdings.com
    Nicole Van Denabeele, Chief Financial Officer, (720) 529-3370, ir@nationalbankholdings.com

    Media:
    Jody Soper, Chief Marketing Officer, (303) 784-5925, Jody.Soper@nbhbank.com 

    NATIONAL BANK HOLDINGS CORPORATION
    FINANCIAL SUMMARY
    Consolidated Statements of Operations (Unaudited)
    (Dollars in thousands, except share and per share data)

                                 
      For the three months ended   For the nine months ended
      September 30,       June 30,       September 30,       September 30,       September 30, 
      2024   2024   2023   2024   2023
    Total interest and dividend income $ 138,003   $ 132,447   $ 126,110   $ 402,182   $ 360,712
    Total interest expense   50,350     48,873     38,333     146,925     88,262
    Net interest income   87,653     83,574     87,777     255,257     272,450
    Taxable equivalent adjustment   1,816     1,711     1,575     5,220     4,432
    Net interest income FTE(1)   89,469     85,285     89,352     260,477     276,882
    Provision expense for credit losses   2,000     2,776     1,125     4,776     3,725
    Net interest income after provision for credit losses FTE(1)   87,469     82,509     88,227     255,701     273,157
    Non-interest income:                            
    Service charges   4,912     4,295     4,849     13,598     13,394
    Bank card fees   4,832     4,882     4,993     14,292     14,721
    Mortgage banking income   2,981     3,296     4,688     8,932     11,614
    Other non-interest income   5,664     1,556     4,835     13,290     8,124
    Total non-interest income   18,389     14,029     19,365     50,112     47,853
    Non-interest expense:                            
    Salaries and benefits   37,331     36,933     35,027     110,784     103,231
    Occupancy and equipment   9,697     10,120     9,167     29,758     27,366
    Professional fees   2,111     1,706     2,215     5,463     7,951
    Data processing   4,398     4,117     3,546     12,581     10,257
    Other non-interest expense   8,648     8,222     8,640     25,523     25,693
    Other intangible assets amortization   1,977     1,977     2,008     5,962     5,378
    Total non-interest expense   64,162     63,075     60,603     190,071     179,876
                                 
    Income before income taxes FTE(1)   41,696     33,463     46,989     115,742     141,134
    Taxable equivalent adjustment   1,816     1,711     1,575     5,220     4,432
    Income before income taxes   39,880     31,752     45,414     110,522     136,702
    Income tax expense   6,775     5,617     9,327     19,891     27,775
    Net income $ 33,105   $ 26,135   $ 36,087   $ 90,631   $ 108,927
    Earnings per share – basic $ 0.86   $ 0.68   $ 0.95   $ 2.37   $ 2.87
    Earnings per share – diluted   0.86     0.68     0.94     2.36     2.85

                                                          

    (1 )      Net interest income is presented on a GAAP basis and fully taxable equivalent (FTE) basis, as the Company believes this non-GAAP measure is the preferred industry measurement for this item. The FTE adjustment is for the tax benefit on certain tax exempt loans using the federal tax rate of 21% for each period presented.
           

    NATIONAL BANK HOLDINGS CORPORATION
    Consolidated Statements of Financial Condition (Unaudited)
    (Dollars in thousands, except share and per share data)

                           
      September 30, 2024   June 30, 2024      December 31, 2023   September 30, 2023
    ASSETS                      
    Cash and cash equivalents $ 180,796     $ 144,993     $ 190,826     $ 291,291  
    Investment securities available-for-sale   708,987       691,076       628,829       620,445  
    Investment securities held-to-maturity   538,157       554,686       585,052       600,501  
    Non-marketable securities   72,353       72,987       90,477       87,817  
    Loans   7,714,495       7,722,153       7,698,758       7,478,438  
    Allowance for credit losses   (95,047 )     (96,457 )     (97,947 )     (93,446 )
    Loans, net   7,619,448       7,625,696       7,600,811       7,384,992  
    Loans held for sale   16,765       18,787       18,854       19,048  
    Other real estate owned   1,432       1,526       4,088       3,416  
    Premises and equipment, net   191,889       177,456       162,733       153,553  
    Goodwill   306,043       306,043       306,043       306,043  
    Intangible assets, net   60,390       62,356       66,025       68,283  
    Other assets   297,023       315,245       297,326       330,894  
    Total assets $ 9,993,283     $ 9,970,851     $ 9,951,064     $ 9,866,283  
    LIABILITIES AND SHAREHOLDERS’ EQUITY                      
    Liabilities:                      
    Non-interest bearing demand deposits $ 2,268,801     $ 2,229,432     $ 2,361,367     $ 2,483,174  
    Interest bearing demand deposits   1,407,667       1,420,942       1,480,042       1,358,445  
    Savings and money market   3,768,211       3,703,810       3,367,012       3,314,895  
    Total transaction deposits   7,444,679       7,354,184       7,208,421       7,156,514  
    Time deposits   1,052,449       1,022,741       981,970       992,494  
    Total deposits   8,497,128       8,376,925       8,190,391       8,149,008  
    Securities sold under agreements to repurchase   19,517       19,465       19,627       20,273  
    Long-term debt   54,433       54,356       54,200       54,123  
    Federal Home Loan Bank advances   —       35,000       340,000       316,770  
    Other liabilities   130,208       237,461       134,039       162,524  
    Total liabilities   8,701,286       8,723,207       8,738,257       8,702,698  
    Shareholders’ equity:                      
    Common stock   515       515       515       515  
    Additional paid in capital   1,164,395       1,161,804       1,162,269       1,160,706  
    Retained earnings   491,849       469,630       433,126       410,243  
    Treasury stock   (302,277 )     (303,880 )     (306,702 )     (307,026 )
    Accumulated other comprehensive loss, net of tax   (62,485 )     (80,425 )     (76,401 )     (100,853 )
    Total shareholders’ equity   1,291,997       1,247,644       1,212,807       1,163,585  
    Total liabilities and shareholders’ equity $ 9,993,283     $ 9,970,851     $ 9,951,064     $ 9,866,283  
    SHARE DATA                      
    Average basic shares outstanding   38,277,042       38,210,869       38,013,791       37,990,659  
    Average diluted shares outstanding   38,495,091       38,372,777       38,162,538       38,134,338  
    Ending shares outstanding   37,988,364       37,899,453       37,784,851       37,739,776  
    Common book value per share $ 34.01     $ 32.92     $ 32.10     $ 30.83  
    Tangible common book value per share(1) (non-GAAP)   24.91       23.74       22.77       21.43  
    Tangible common book value per share, excluding accumulated other comprehensive loss(1) (non-GAAP)   26.56       25.86       24.79       24.10  
    CAPITAL RATIOS                      
    Average equity to average assets   12.80 %     12.57 %     11.97 %     11.93 %
    Tangible common equity to tangible assets(1)   9.81 %     9.35 %     8.96 %     8.50 %
    Tier 1 leverage ratio   10.44 %     10.20 %     9.74 %     9.56 %
    Common equity tier 1 risk-based capital ratio   12.88 %     12.41 %     11.89 %     11.61 %
    Tier 1 risk-based capital ratio   12.88 %     12.41 %     11.89 %     11.61 %
    Total risk-based capital ratio   14.79 %     14.32 %     13.80 %     13.49 %

                                                          

    (1 )      Represents a non-GAAP financial measure. See non-GAAP reconciliations below.
           

    NATIONAL BANK HOLDINGS CORPORATION
    Loan Portfolio
    (Dollars in thousands)

    Period End Loan Balances by Type

                             
              September 30, 2024       September 30, 2024
              vs. June 30, 2024       vs. September 30, 2023
      September 30, 2024   June 30, 2024   % Change   September 30, 2023   % Change
    Originated:                        
    Commercial:                        
    Commercial and industrial $ 1,894,830   $ 1,906,095   (0.6 )%   $ 1,784,188   6.2 %
    Municipal and non-profit   1,096,843     1,063,706   3.1 %     1,012,967   8.3 %
    Owner-occupied commercial real estate   949,330     921,122   3.1 %     827,679   14.7 %
    Food and agribusiness   257,743     248,401   3.8 %     258,609   (0.3 )%
    Total commercial   4,198,746     4,139,324   1.4 %     3,883,443   8.1 %
    Commercial real estate non-owner occupied   1,113,796     1,116,424   (0.2 )%     1,026,133   8.5 %
    Residential real estate   933,644     923,313   1.1 %     897,804   4.0 %
    Consumer   13,600     14,385   (5.5 )%     16,700   (18.6 )%
    Total originated   6,259,786     6,193,446   1.1 %     5,824,080   7.5 %
                             
    Acquired:                        
    Commercial:                        
    Commercial and industrial   116,683     124,104   (6.0 )%     156,012   (25.2 )%
    Municipal and non-profit   282     288   (2.1 )%     305   (7.5 )%
    Owner-occupied commercial real estate   221,928     232,890   (4.7 )%     247,701   (10.4 )%
    Food and agribusiness   43,733     48,061   (9.0 )%     61,551   (28.9 )%
    Total commercial   382,626     405,343   (5.6 )%     465,569   (17.8 )%
    Commercial real estate non-owner occupied   720,384     752,040   (4.2 )%     787,926   (8.6 )%
    Residential real estate   349,916     369,003   (5.2 )%     398,187   (12.1 )%
    Consumer   1,783     2,321   (23.2 )%     2,676   (33.4 )%
    Total acquired   1,454,709     1,528,707   (4.8 )%     1,654,358   (12.1 )%
    Total loans $ 7,714,495   $ 7,722,153   (0.1 )%   $ 7,478,438   3.2 %
                                 

    Loan Fundings(1)

                                 
      Third quarter   Second quarter   First quarter   Fourth quarter   Third quarter
      2024   2024   2024   2023   2023
    Commercial:                            
    Commercial and industrial $ 93,711   $ 241,910   $ 53,978     $ 135,954   $ 89,297
    Municipal and non-profit   35,677     28,785     14,564       79,650     18,657
    Owner occupied commercial real estate   70,517     102,615     35,128       75,631     67,322
    Food and agribusiness   19,205     11,040     (7,204 )     10,646     16,191
    Total commercial   219,110     384,350     96,466       301,881     191,467
    Commercial real estate non-owner occupied   91,809     83,184     73,789       107,738     88,434
    Residential real estate   47,322     36,124     29,468       48,925     42,514
    Consumer   1,010     1,547     234       1,849     1,689
    Total $ 359,251   $ 505,205   $ 199,957     $ 460,393   $ 324,104

                                                          

    (1 )      Loan fundings are defined as closed end funded loans and net fundings under revolving lines of credit. Net fundings (paydowns) under revolving lines of credit were $16,302, $19,281, ($59,523), $16,954 and ($12,877) for the periods noted in the table above, respectively.
           

    NATIONAL BANK HOLDINGS CORPORATION
    Summary of Net Interest Margin
    (Dollars in thousands)

                                                           
        For the three months ended   For the three months ended   For the three months ended
        September 30, 2024   June 30, 2024   September 30, 2023
        Average               Average      Average               Average      Average               Average
        balance   Interest   rate   balance   Interest   rate   balance   Interest   rate
    Interest earning assets:                                                      
    Originated loans FTE(1)(2)   $ 6,251,827     $ 108,403     6.90 %   $ 6,074,199     $ 101,794     6.74 %   $ 5,803,157     $ 92,813     6.35 %
    Acquired loans     1,487,002       22,660     6.06 %     1,541,576       23,464     6.12 %     1,671,595       26,115     6.20 %
    Loans held for sale     18,078       319     7.02 %     16,862       318     7.59 %     22,154       383     6.86 %
    Investment securities available-for-sale     790,268       5,132     2.60 %     802,830       5,101     2.54 %     761,892       3,783     1.99 %
    Investment securities held-to-maturity     548,120       2,344     1.71 %     564,818       2,419     1.71 %     611,712       2,685     1.76 %
    Other securities     26,213       405     6.18 %     25,093       377     6.01 %     39,115       701     7.17 %
    Interest earning deposits     70,946       556     3.12 %     92,388       685     2.98 %     130,239       1,205     3.67 %
    Total interest earning assets FTE(2)   $ 9,192,454     $ 139,819     6.05 %   $ 9,117,766     $ 134,158     5.92 %   $ 9,039,864     $ 127,685     5.60 %
    Cash and due from banks   $ 86,887                 $ 100,165                 $ 104,308              
    Other assets     777,758                   771,475                   737,568              
    Allowance for credit losses     (96,369 )                 (97,741 )                 (92,831 )            
    Total assets   $ 9,960,730                 $ 9,891,665                 $ 9,788,909              
    Interest bearing liabilities:                                                      
    Interest bearing demand, savings and money market deposits   $ 5,134,650     $ 40,146     3.11 %   $ 5,109,924     $ 39,681     3.12 %   $ 4,535,183     $ 27,211     2.38 %
    Time deposits     1,039,563       9,220     3.53 %     1,015,371       8,536     3.38 %     992,755       6,212     2.48 %
    Securities sold under agreements to repurchase     17,146       5     0.12 %     17,449       5     0.12 %     19,288       6     0.12 %
    Long-term debt     54,383       519     3.80 %     54,307       518     3.84 %     54,074       519     3.81 %
    Federal Home Loan Bank advances     32,641       460     5.61 %     9,505       133     5.63 %     316,723       4,385     5.49 %
    Total interest bearing liabilities   $ 6,278,383     $ 50,350     3.19 %   $ 6,206,556     $ 48,873     3.17 %   $ 5,918,023     $ 38,333     2.57 %
    Demand deposits   $ 2,226,807                 $ 2,254,454                 $ 2,553,619              
    Other liabilities     180,667                   187,499                   149,068              
    Total liabilities     8,685,857                   8,648,509                   8,620,710              
    Shareholders’ equity     1,274,873                   1,243,156                   1,168,199              
    Total liabilities and shareholders’ equity   $ 9,960,730                 $ 9,891,665                 $ 9,788,909              
    Net interest income FTE(2)         $ 89,469               $ 85,285               $ 89,352      
    Interest rate spread FTE(2)                 2.86 %                 2.75 %                 3.03 %
    Net interest earning assets   $ 2,914,071                 $ 2,911,210                 $ 3,121,841              
    Net interest margin FTE(2)                 3.87 %                 3.76 %                 3.92 %
    Average transaction deposits   $ 7,361,457                 $ 7,364,378                 $ 7,088,802              
    Average total deposits     8,401,020                   8,379,749                   8,081,557              
    Ratio of average interest earning assets to average interest bearing liabilities     146.41 %                 146.91 %                 152.75 %            

                                                          

    (1 )      Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
    (2 )      Presented on a fully taxable equivalent basis using the statutory tax rate of 21%. The tax equivalent adjustments included above are $1,816, $1,711 and $1,575 for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
           

    NATIONAL BANK HOLDINGS CORPORATION
    Summary of Net Interest Margin
    (Dollars in thousands)

                                   
      For the nine months ended September 30, 2024   For the nine months ended September 30, 2023
      Average              Average   Average              Average
      balance   Interest   rate   balance   Interest   rate
    Interest earning assets:                              
    Originated loans FTE(1)(2) $ 6,124,757     $ 311,112   6.79 %   $ 5,656,309     $ 258,528   6.11 %
    Acquired loans   1,546,482       70,413   6.08 %     1,718,523       79,526   6.19 %
    Loans held for sale   15,661       862   7.35 %     23,494       1,189   6.77 %
    Investment securities available-for-sale   781,454       14,336   2.45 %     786,087       11,655   1.98 %
    Investment securities held-to-maturity   563,975       7,277   1.72 %     629,507       8,364   1.77 %
    Other securities   28,771       1,398   6.48 %     46,480       2,513   7.21 %
    Interest earning deposits   84,920       2,004   3.15 %     120,633       3,369   3.73 %
    Total interest earning assets FTE(2) $ 9,146,020     $ 407,402   5.95 %   $ 8,981,033     $ 365,144   5.44 %
    Cash and due from banks $ 96,510               $ 110,902            
    Other assets   768,521                 724,305            
    Allowance for credit losses   (97,327 )               (91,110 )          
    Total assets $ 9,913,724               $ 9,725,130            
    Interest bearing liabilities:                              
    Interest bearing demand, savings and money market deposits $ 5,064,386     $ 116,240   3.07 %   $ 4,197,603     $ 55,070   1.75 %
    Time deposits   1,015,081       25,340   3.33 %     965,750       14,545   2.01 %
    Securities sold under agreements to repurchase   17,839       16   0.12 %     19,863       17   0.11 %
    Long-term debt   54,307       1,555   3.82 %     53,997       1,555   3.85 %
    Federal Home Loan Bank advances   89,918       3,774   5.61 %     449,060       17,075   5.08 %
    Total interest bearing liabilities $ 6,241,531     $ 146,925   3.14 %   $ 5,686,273     $ 88,262   2.08 %
    Demand deposits $ 2,253,986               $ 2,751,537            
    Other liabilities   170,005                 141,110            
    Total liabilities   8,665,522                 8,578,920            
    Shareholders’ equity   1,248,202                 1,146,210            
    Total liabilities and shareholders’ equity $ 9,913,724               $ 9,725,130            
    Net interest income FTE(2)       $ 260,477             $ 276,882    
    Interest rate spread FTE(2)             2.81 %               3.36 %
    Net interest earning assets $ 2,904,489               $ 3,294,760            
    Net interest margin FTE(2)             3.80 %               4.12 %
    Average transaction deposits $ 7,318,372               $ 6,949,140            
    Average total deposits   8,333,453                 7,914,890            
    Ratio of average interest earning assets to average interest bearing liabilities   146.53 %               157.94 %          

                                                          

    (1 )      Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.
    (2 )      Presented on a fully taxable equivalent basis using the statutory tax rate of 21%. The tax equivalent adjustments included above are $5,220 and $4,432 for the nine months ended September 30, 2024 and September 30, 2023, respectively.
           

    NATIONAL BANK HOLDINGS CORPORATION
    Allowance for Credit Losses and Asset Quality
    (Dollars in thousands)

    Allowance for Credit Losses Analysis

                     
      As of and for the three months ended
      September 30, 2024   June 30, 2024   September 30, 2023
    Beginning allowance for credit losses $ 96,457     $ 97,607     $ 92,581  
    Charge-offs   (3,505 )     (4,605 )     (540 )
    Recoveries   95       499       280  
    Provision expense for credit losses   2,000       2,956       1,125  
    Ending allowance for credit losses (“ACL”) $ 95,047     $ 96,457     $ 93,446  
    Ratio of annualized net charge-offs to average total loans during the period   0.18 %     0.22 %     0.01 %
    Ratio of ACL to total loans outstanding at period end   1.23 %     1.25 %     1.25 %
    Ratio of ACL to total non-performing loans at period end   403.68 %     370.18 %     281.36 %
    Total loans $ 7,714,495     $ 7,722,153     $ 7,478,438  
    Average total loans during the period   7,714,765       7,582,506       7,443,869  
    Total non-performing loans   23,545       26,057       33,212  
                           

    Past Due and Non-accrual Loans

                     
      September 30, 2024   June 30, 2024   September 30, 2023
    Loans 30-89 days past due and still accruing interest $ 31,253     $ 27,159     $ 8,144  
    Loans 90 days past due and still accruing interest   9,509       3,498       154  
    Non-accrual loans   23,545       26,057       33,212  
    Total past due and non-accrual loans $ 64,307     $ 56,714     $ 41,510  
    Total 90 days past due and still accruing interest and non-accrual loans to total loans   0.43 %     0.38 %     0.45 %
                           

    Asset Quality Data

                     
      September 30, 2024   June 30, 2024   September 30, 2023
    Non-performing loans $ 23,545     $ 26,057     $ 33,212  
    OREO   1,432       1,526       3,416  
    Total non-performing assets $ 24,977     $ 27,583     $ 36,628  
    Total non-performing loans to total loans   0.31 %     0.34 %     0.44 %
    Total non-performing assets to total loans and OREO   0.32 %     0.36 %     0.49 %
                           

    NATIONAL BANK HOLDINGS CORPORATION
    Key Metrics(1)

                                 
      As of and for the three months ended   As of and for the nine months ended
      September 30,    June 30,    September 30,    September 30,    September 30, 
      2024   2024   2023   2024   2023
    Return on average assets   1.32 %     1.06 %     1.46 %     1.22 %     1.50 %
    Return on average tangible assets(2)   1.43 %     1.17 %     1.58 %     1.33 %     1.61 %
    Return on average equity   10.33 %     8.46 %     12.26 %     9.70 %     12.71 %
    Return on average tangible common equity(2)   14.84 %     12.44 %     18.38 %     14.14 %     18.81 %
    Loan to deposit ratio (end of period)   90.79 %     92.18 %     91.77 %     90.79 %     91.77 %
    Non-interest bearing deposits to total deposits (end of period)   26.70 %     26.61 %     30.47 %     26.70 %     30.47 %
    Net interest margin(3)   3.79 %     3.69 %     3.85 %     3.73 %     4.06 %
    Net interest margin FTE(2)(3)   3.87 %     3.76 %     3.92 %     3.80 %     4.12 %
    Interest rate spread FTE(4)   2.86 %     2.75 %     3.03 %     2.81 %     3.36 %
    Yield on earning assets(5)   5.97 %     5.84 %     5.53 %     5.87 %     5.37 %
    Yield on earning assets FTE(2)(5)   6.05 %     5.92 %     5.60 %     5.95 %     5.44 %
    Cost of interest bearing liabilities   3.19 %     3.17 %     2.57 %     3.14 %     2.08 %
    Cost of deposits   2.34 %     2.31 %     1.64 %     2.27 %     1.18 %
    Non-interest income to total revenue FTE(9)   17.05 %     14.13 %     17.81 %     16.13 %     14.74 %
    Non-interest expense to average assets   2.56 %     2.56 %     2.46 %     2.56 %     2.47 %
    Efficiency ratio   60.51 %     64.62 %     56.56 %     62.24 %     56.16 %
    Efficiency ratio excluding other intangible assets amortization FTE(2)   57.65 %     61.52 %     53.90 %     59.28 %     53.74 %
    Pre-provision net revenue $ 41,880     $ 34,528     $ 46,539     $ 115,298     $ 140,427  
    Pre-provision net revenue FTE(2)   43,696       36,239       48,114       120,518       144,859  
                                 
    Total Loans Asset Quality Data(6)(7)(8)                            
    Non-performing loans to total loans   0.31 %     0.34 %     0.44 %     0.31 %     0.44 %
    Non-performing assets to total loans and OREO   0.32 %     0.36 %     0.49 %     0.32 %     0.49 %
    Allowance for credit losses to total loans   1.23 %     1.25 %     1.25 %     1.23 %     1.33 %
    Allowance for credit losses to non-performing loans   403.68 %     370.18 %     281.36 %     403.68 %     281.36 %
    Net charge-offs to average loans   0.18 %     0.22 %     0.01 %     0.13 %     0.02 %

                                                          

    (1 )      Ratios are annualized.
    (2 )      Ratio represents non-GAAP financial measure. See non-GAAP reconciliations below.
    (3 )   Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.
    (4 )      Interest rate spread represents the difference between the weighted average yield on interest earning assets, including FTE income, and the weighted average cost of interest bearing liabilities. Ratio represents a non-GAAP financial measure.
    (5 )   Interest earning assets include assets that earn interest/accretion or dividends. Any market value adjustments on investment securities or loans are excluded from interest earning assets.
    (6 )   Non-performing loans consist of non-accruing loans and modified loans on non-accrual.
    (7 )   Non-performing assets include non-performing loans and other real estate owned.
    (8 )   Total loans are net of unearned discounts and fees.
    (9 )   Non-interest income to total revenue represents non-interest income divided by the sum of net interest income FTE and non-interest income. Ratio represents a non-GAAP financial measure.
           

    NATIONAL BANK HOLDINGS CORPORATION
    NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
    (Dollars in thousands, except share and per share data)

    Tangible Common Book Value Ratios

                             
        September 30, 2024   June 30, 2024      December 31, 2023   September 30, 2023
    Total shareholders’ equity   $ 1,291,997     $ 1,247,644     $ 1,212,807     $ 1,163,585  
    Less: goodwill and other intangible assets, net     (358,754 )     (360,732 )     (364,716 )     (366,724 )
    Add: deferred tax liability related to goodwill     13,203       12,871       12,208       11,876  
    Tangible common equity (non-GAAP)   $ 946,446     $ 899,783     $ 860,299     $ 808,737  
                             
    Total assets   $ 9,993,283     $ 9,970,851     $ 9,951,064     $ 9,866,283  
    Less: goodwill and other intangible assets, net     (358,754 )     (360,732 )     (364,716 )     (366,724 )
    Add: deferred tax liability related to goodwill     13,203       12,871       12,208       11,876  
    Tangible assets (non-GAAP)   $ 9,647,732     $ 9,622,990     $ 9,598,556     $ 9,511,435  
                             
    Tangible common equity to tangible assets calculations:                        
    Total shareholders’ equity to total assets     12.93 %     12.51 %     12.19 %     11.79 %
    Less: impact of goodwill and other intangible assets, net     (3.12 )%     (3.16 )%     (3.23 )%     (3.29 )%
    Tangible common equity to tangible assets (non-GAAP)     9.81 %     9.35 %     8.96 %     8.50 %
                             
    Tangible common book value per share calculations:                        
    Tangible common equity (non-GAAP)   $ 946,446     $ 899,783     $ 860,299     $ 808,737  
    Divided by: ending shares outstanding     37,988,364       37,899,453       37,784,851       37,739,776  
    Tangible common book value per share (non-GAAP)   $ 24.91     $ 23.74     $ 22.77     $ 21.43  
                             
    Tangible common book value per share, excluding accumulated other comprehensive loss calculations:                        
    Tangible common equity (non-GAAP)   $ 946,446     $ 899,783     $ 860,299     $ 808,737  
    Accumulated other comprehensive loss, net of tax     62,485       80,425       76,401       100,853  
    Tangible common book value, excluding accumulated other comprehensive loss, net of tax (non-GAAP)     1,008,931       980,208       936,700       909,590  
    Divided by: ending shares outstanding     37,988,364       37,899,453       37,784,851       37,739,776  
    Tangible common book value per share, excluding accumulated other comprehensive loss, net of tax (non-GAAP)   $ 26.56     $ 25.86     $ 24.79     $ 24.10  
                                     

    NATIONAL BANK HOLDINGS CORPORATION
    (Dollars in thousands, except share and per share data)
    Return on Average Tangible Assets and Return on Average Tangible Equity

                                   
        As of and for the three months ended   As of and for the nine months ended
        September 30,       June 30,       September 30,       September 30,       September 30, 
        2024      2024      2023      2024      2023
    Net income   $ 33,105     $ 26,135     $ 36,087     $ 90,631     $ 108,927  
    Add: impact of other intangible assets amortization expense, after tax     1,517       1,516       1,541       4,575       4,128  
    Net income excluding the impact of other intangible assets amortization expense, after tax (non-GAAP)   $ 34,622     $ 27,651     $ 37,628     $ 95,206     $ 113,055  
                                   
    Average assets   $ 9,960,730     $ 9,891,665     $ 9,788,909     $ 9,913,724     $ 9,725,130  
    Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill     (346,757 )     (349,030 )     (356,083 )     (348,717 )     (342,826 )
    Average tangible assets (non-GAAP)   $ 9,613,973     $ 9,542,635     $ 9,432,826     $ 9,565,007     $ 9,382,304  
                                   
    Average shareholders’ equity   $ 1,274,873     $ 1,243,156     $ 1,168,199     $ 1,248,202     $ 1,146,210  
    Less: average goodwill and other intangible assets, net of deferred tax liability related to goodwill     (346,757 )     (349,030 )     (356,083 )     (348,717 )     (342,826 )
    Average tangible common equity (non-GAAP)   $ 928,116     $ 894,126     $ 812,116     $ 899,485     $ 803,384  
                                   
    Return on average assets     1.32 %     1.06 %     1.46 %     1.22 %     1.50 %
    Return on average tangible assets (non-GAAP)     1.43 %     1.17 %     1.58 %     1.33 %     1.61 %
    Return on average equity     10.33 %     8.46 %     12.26 %     9.70 %     12.71 %
    Return on average tangible common equity (non-GAAP)     14.84 %     12.44 %     18.38 %     14.14 %     18.81 %
                                             

    Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin

                                   
        As of and for the three months ended   As of and for the nine months ended
        September 30,    June 30,    September 30,    September 30,    September 30, 
        2024   2024   2023   2024   2023
    Interest income   $ 138,003        $ 132,447        $ 126,110        $ 402,182     $ 360,712  
    Add: impact of taxable equivalent adjustment     1,816       1,711       1,575       5,220       4,432  
    Interest income FTE (non-GAAP)   $ 139,819     $ 134,158     $ 127,685     $ 407,402     $ 365,144  
                                   
    Net interest income   $ 87,653     $ 83,574     $ 87,777     $ 255,257     $ 272,450  
    Add: impact of taxable equivalent adjustment     1,816       1,711       1,575       5,220       4,432  
    Net interest income FTE (non-GAAP)   $ 89,469     $ 85,285     $ 89,352     $ 260,477     $ 276,882  
                                   
    Average earning assets   $ 9,192,454     $ 9,117,766     $ 9,039,864     $ 9,146,020     $ 8,981,033  
    Yield on earning assets     5.97 %     5.84 %     5.53 %     5.87 %     5.37 %
    Yield on earning assets FTE (non-GAAP)     6.05 %     5.92 %     5.60 %     5.95 %     5.44 %
    Net interest margin     3.79 %     3.69 %     3.85 %     3.73 %     4.06 %
    Net interest margin FTE (non-GAAP)     3.87 %     3.76 %     3.92 %     3.80 %     4.12 %
                                             

    Efficiency Ratio and Pre-Provision Net Revenue

                                   
        As of and for the three months ended   As of and for the nine months ended
           September 30,       June 30,       September 30,       September 30,       September 30, 
           2024      2024      2023      2024      2023
    Net interest income   $ 87,653     $ 83,574     $ 87,777     $ 255,257     $ 272,450  
    Add: impact of taxable equivalent adjustment     1,816       1,711       1,575       5,220       4,432  
    Net interest income FTE (non-GAAP)   $ 89,469     $ 85,285     $ 89,352     $ 260,477     $ 276,882  
                                   
    Non-interest income   $ 18,389     $ 14,029     $ 19,365     $ 50,112     $ 47,853  
                                   
    Non-interest expense   $ 64,162     $ 63,075     $ 60,603     $ 190,071     $ 179,876  
    Less: other intangible assets amortization     (1,977 )     (1,977 )     (2,008 )     (5,962 )     (5,378 )
    Non-interest expense excluding other intangible assets amortization (non-GAAP)   $ 62,185     $ 61,098     $ 58,595     $ 184,109     $ 174,498  
                                   
    Efficiency ratio     60.51 %     64.62 %     56.56 %     62.24 %     56.16 %
    Efficiency ratio excluding other intangible assets amortization FTE (non-GAAP)     57.65 %     61.52 %     53.90 %     59.28 %     53.74 %
    Pre-provision net revenue (non-GAAP)   $ 41,880     $ 34,528     $ 46,539     $ 115,298     $ 140,427  
    Pre-provision net revenue, FTE (non-GAAP)     43,696       36,239       48,114       120,518       144,859  

    The MIL Network –

  • MIL-OSI: Orrstown Financial Services, Inc. Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    • Orrstown Financial Services, Inc. (“Orrstown” or the “Company”) closed the merger of equals transaction with Codorus Valley Bancorp, Inc. (“Codorus”) on July 1, 2024, creating a premier Pennsylvania and Maryland community bank; as a result, the Company’s results for the three months ended September 30, 2024 reflect the combined operating results of the combined companies;
    • Codorus contributed, after fair value purchase accounting adjustments, approximately $2.2 billion in total assets, $1.6 billion in loans, and $1.9 billion in deposits at July 1, 2024;
    • Net loss of $7.9 million, or $0.41 per diluted share, for the three months ended September 30, 2024 compared to net income of $7.7 million, or $0.73 per diluted share, for the three months ended June 30, 2024, reflecting the impact of $17.0 million in expenses related to the merger, $15.5 million of provision for credit losses on non-purchase credit deteriorated (“PCD”) loans and $4.8 million for the previously announced executive retirement, net of taxes, collectively the “non-recurring charges”;
    • Excluding the impact of the non-recurring charges, net income and diluted earnings per share, respectively, were $21.4 million(1) and $1.11(1) for the third quarter of 2024 compared to net income and diluted earnings per share of $8.7 million(1) and $0.83(1), respectively, as adjusted for the impact of $1.1 million in merger-related expenses, net of taxes, recorded for the second quarter of 2024;
    • Net interest margin, on a tax equivalent basis, was 4.14% in the third quarter of 2024 compared to 3.54% in the second quarter of 2024; the net accretion impact of purchase accounting marks on loans, deposits and borrowings was $5.8 million of net interest income, which represents 52 basis points of net interest margin;
    • Noninterest income increased by $5.1 million to $12.4 million in the three months ended September 30, 2024 compared to $7.2 million in the three months ended June 30, 2024; continued strength in wealth management and swap fee generation by commercial teams are driving fee income growth;
    • Return on average assets for the three months ended September 30, 2024 was (0.57)% compared to 0.97% for the three months ended June 30, 2024; excluding the non-recurring charges, return on average assets was 1.55%(1) for the three months ended September 30, 2024 compared to 1.09%(1) for the three months ended June 30, 2024, excluding merger-related expenses;
    • Return on average equity for the three months ended September 30, 2024 was (5.85)% compared to 11.41% for the three months ended June 30, 2024; excluding the non-recurring charges, return on average equity was 15.85%(1) for the three months ended September 30, 2024 compared to 12.88%(1) for the three months ended June 30, 2024, excluding merger related expenses;
    • The provision for credit losses was $13.7 million for the three months ended September 30, 2024 compared to $812 thousand for the three months ended June 30, 2024; the provision for credit losses on non-PCD loans for the three months ended September 30, 2024 was $15.5 million; excluding the impact of the merger, the provision for credit losses for the three months ended September 30, 2024 was a reversal of $1.8 million;
    • At September 30, 2024, nonaccrual loans totaled $26.9 million, an increase of $18.5 million from $8.4 million at June 30, 2024; non-accrual loans acquired from Codorus totaled $12.8 million;
    • Tangible book value per common share(1) decreased to $21.12 per share at September 30, 2024 compared to $24.08 per share at June 30, 2024; this decrease was primarily due to the impact of loan marks associated with the merger and the net loss incurred for the third quarter of 2024;
    • The Board of Directors declared a cash dividend of $0.23 per common share, payable November 12, 2024, to shareholders of record as of November 5, 2024.

    (1) Non-GAAP measure. See Appendix A for additional information.

    HARRISBURG, Pa., Oct. 22, 2024 (GLOBE NEWSWIRE) — Orrstown Financial Services, Inc. (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended September 30, 2024. Net loss totaled $7.9 million for the three months ended September 30, 2024, compared to net income of $7.7 million for the three months ended June 30, 2024 and $9.0 million for the three months ended September 30, 2023. Diluted loss per share was $0.41 for the three months ended September 30, 2024, compared to diluted earnings per share of $0.73 for the three months ended June 30, 2024 and $0.87 for the three months ended September 30, 2023. For the third quarter of 2024, excluding the impact from the non-recurring charges, net of taxes, net income and diluted earnings per share were $21.4 million(1) and $1.11(1), respectively. For the second quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $8.7 million(1) and $0.83(1), respectively.

    “While the results for the quarter reflected the impact of certain non-recurring charges, the core income generated by the business demonstrates the significant opportunities afforded by the additional scale and synergies created by the merger. Our core earnings were strong. We already have taken significant steps to achieve the cost savings announced in December, which we are on target to achieve in full in the defined timeline. Our system conversion in scheduled for completion in November 2024, at which time we expect further expense savings to be realized. We believe we are well on our way to improving our client experience, expanding and deepening our community presence, and enhancing shareholder value,” commented Thomas R. Quinn, Jr., President and Chief Executive Officer.

    DISCUSSION OF RESULTS

    Merger Update

    The Company acquired Codorus and its wholly-owned bank subsidiary PeoplesBank, A Codorus Valley Company on July 1, 2024. The merger and acquisition method of accounting was used to account for the transaction with the Company as the acquirer. The Company recorded the assets and liabilities of Codorus at their respective fair values as of July 1, 2024. The transaction was valued at approximately $234 million and expanded the Bank’s footprint into the York, Pennsylvania market while increasing its market penetration in its existing markets.

    At the time of the merger, Codorus contributed, after fair value purchase accounting adjustments, approximately $2.2 billion in assets, $1.6 billion in loans, $326.7 million in investment securities and $1.9 billion in deposits. The excess of the merger consideration over the fair value of net Codorus assets resulted in goodwill of $51.9 million. The merger led to a 12% dilution in our tangible book value per share which was $21.12 at September 30, 2024 compared to $24.08 at June 30, 2024. The principal cause of the dilution was the impact of the associated purchase accounting marks on loans. The Company’s tangible common equity ratio at September 30, 2024 was 7.5%. The loan fair value adjustments are expected to accrete back through income and capital as the loans mature and should lead to earnings per share and capital accretion moving forward. The fair value of assets and liabilities are subject to refinement for up to one year after the acquisition date as allowable under U.S. Generally Accepted Accounting Principles.

    The Company incurred expenses of $32.5 million and $34.3 million for the three and nine months ended September 30, 2023, respectively, related to merger costs and an increased allowance for credit losses on non-PCD portion of the loans assumed from Codorus.

    The Company’s financial results for any periods ended prior to July 1, 2024 reflect Orrstown’s results only on a standalone basis. As a result of this factor and the below listed adjustments related to the merger, the Company’s financial results for the third quarter of 2024 may not be directly comparable to prior reported periods.

    Balance Sheet

    Loans

    Loans held for investment increased by $1.7 billion from June 30, 2024 to September 30, 2024 as $1.6 billion of loans, net of purchase accounting marks, were assumed in the merger with Codorus.

    Investment Securities

    Investment securities, all of which are classified as available-for-sale, increased by $297.7 million to $826.8 million at September 30, 2024 from $529.1 million at June 30, 2024. Investments with a fair value of $326.7 million were assumed in the merger with Codorus. During the third quarter of 2024, investment securities totaling $162.7 million were sold from the portfolio acquired from Codorus. The portfolio was restructured to align the interest rate risk and credit profile for the combined balance sheet. Most of these proceeds were reinvested in investment securities as purchases of $140.4 million were made in the three months ended September 30, 2024. These purchases were partially offset by paydowns of investment securities of $20.6 million and two calls totaling $5.0 million. The overall duration of the Company’s investment securities portfolio was 4.6 years at September 30, 2024 compared to 4.2 years at June 30, 2024. See Appendix B for a summary of the Bank’s investment securities at September 30, 2024, highlighting their concentrations, credit ratings and credit enhancement levels.

    Deposits

    During the third quarter of 2024, deposits increased by $2.0 billion to approximately $4.7 billion at September 30, 2024 compared to $2.7 billion at June 30, 2024. Deposits of $1.9 billion were assumed in the merger. At September 30, 2024, deposits that are uninsured and not collateralized totaled $692.6 million, or 15% of total deposits compared to $422.3 million, or 16% of total deposits at June 30, 2024. The Bank’s loan-to-deposit ratio decreased slightly to 86% at September 30, 2024 from 87% at June 30, 2024.

    Borrowings

    The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings were $115.4 million at September 30, 2024 and $115.0 million at June 30, 2024. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed on a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.0 billion at September 30, 2024. The Bank’s FHLB borrowing capacity at September 30, 2024 was not inclusive of Codorus, which will be reflected in the fourth quarter.

    The Company assumed $31.0 million aggregate principal amount of subordinated debentures and $10.3 million aggregate amount of trust preferred securities from Codorus in the merger. Fair value adjustments of $5.1 million were recorded on July 1, 2024 which reduced the amounts recorded on the balance sheet.

    Income Statement

    Net Interest Income and Margin

    Net interest income was $51.7 million for the three months ended September 30, 2024 compared to $26.1 million for the three months ended June 30, 2024. The net interest margin, on a tax equivalent basis, increased to 4.14% in the third quarter of 2024 from 3.54% in the second quarter of 2024. The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, deposits and borrowings of $5.8 million, which represents 52 basis points of net interest margin. Funding costs show signs of stabilizing.

    Several components of the net interest margin increased primarily as the result of the assets and liabilities assumed in the merger with Codorus.

    Interest income on loans, on a tax equivalent basis, increased by $35.2 million to $70.8 million for the three months ended September 30, 2024 compared to $35.7 million for the three months ended June 30, 2024.

    Interest income on investment securities, on a tax equivalent basis, was $10.1 million for the third quarter of 2024 compared to $6.1 million in the second quarter of 2024.

    Interest expense, on a tax equivalent basis, increased by $14.1 million to $31.3 million for the three months ended September 30, 2024 compared to $17.2 million for the three months ended June 30, 2024. Average interest-bearing deposits increased by $1.6 billion during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. Average borrowings increased by $35.8 million during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. Interest expense includes $0.4 million and $0 of amortization of purchase accounting marks for the three months ended September 30, 2024 and June 30, 2024, respectively.

    Provision for Credit Losses

    The Company recorded a provision for credit losses of $13.7 million for the three months ended September 30, 2024 compared to $0.8 million for the three months ended June 30, 2024. The allowance for credit losses (“ACL”) on loans increased to $49.6 million at September 30, 2024 from $29.9 million at June 30, 2024. The increase in the ACL was primarily due to the addition of $21.4 million of reserves as a result of the merger. This increase was made up of $15.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $5.9 million for PCD loans which was recognized through retained earnings. The provision for credit losses for the three months ended September 30, 2024 included a provision reversal of $1.8 million due to changes in qualitative factors, a change in the peer group utilized for the calculation and a reduction in the required reserve for unfunded commitments. The ACL to total loans was 1.25% at September 30, 2024 compared to 1.27% at June 30, 2024. Net charge-offs were $0.3 million for the three months ended September 30, 2024 compared to net charge-offs of $0.1 million for the three months ended June 30, 2024.

    As a result of the merger, classified loans increased by $56.8 million to $105.5 million at September 30, 2024 from $48.7 million at June 30, 2024. Non-accrual loans increased by $18.5 million to $26.9 million at September 30, 2024 from $8.4 million at June 30, 2024 due primarily to the assumption of $12.8 million of non-accrual loans from Codorus. Nonaccrual loans to total loans increased to 0.68% at September 30, 2024 compared to 0.36% at June 30, 2024 and decreased from 1.11% at December 31, 2023. Management believes the ACL to be adequate based on current asset quality metrics and economic conditions.

    Noninterest Income

    Noninterest income increased by $5.1 million to $12.4 million in the three months ended September 30, 2024 compared to $7.2 million in the three months ended June 30, 2024 primarily due to the merger.

    Wealth management income increased to $5.0 million in the three months ended September 30, 2024 compared to $3.3 million for the three months ended June 30, 2024. The strong sales efforts, organic growth and stock market performance have collectively driven exceptional wealth results throughout the year. As a result of the merger, assets under management increased to approximately $3.2 billion at September 30, 2024 from $2.1 billion at June 30, 2024.

    During the third quarter of 2024, the Company recorded swap fee income of $0.5 million compared to $0.4 million in the three months ended June 30, 2024. Swap fee generation has been strong, but fluctuates based on market conditions and client demand.

    Noninterest Expenses

    Noninterest expenses increased by $37.7 million to $60.3 million in the three months ended September 30, 2024 from $22.6 million in the three months ended June 30, 2024 primarily due to the merger.

    For the three months ended September 30, 2024, merger-related expenses totaled $17.0 million, an increase of $15.9 million, compared to $1.1 million for the three months ended June 30, 2024. The increase is due to primarily to employee separation costs, vendor contract terminations, and professional fees incurred during the third quarter of 2024. The Company will incur additional merger-related expenses from the operational and technology processes to combine systems and services of both companies, which is expected to be completed in November 2024.

    Salaries and benefits expense increased by $14.0 million to $27.2 million for the three months ended September 30, 2024 compared to $13.2 million for the three months ended June 30, 2024. The three months ended September 30, 2024 includes $4.8 million of expenses associated with the retirement of an executive.

    Intangible asset amortization increased to $2.5 million for the three months ended September 30, 2024 compared to $0.2 million for the three months ended June 30, 2024. This increase is due to the amortization expense recognized on the core deposit intangible of $35.9 million and wealth customer relationship intangible of $10.4 million established on July 1, 2024 from the merger.

    Taxes other than income increased to $0.5 million in the three months ended September 30, 2024 compared to less than $0.1 million in the three months ended June 30, 2024. This increase reflects the tax credits recognized on the contributions during the second quarter of 2024.

    There was $257 thousand of restructuring expenses recognized in the three months ended September 30, 2024 associated with previously announced branch closures.

    Income Taxes

    The Company’s effective tax rate for the third quarter of 2024 was 20.1% compared to 21.2% for the second quarter of 2024. The Company’s effective tax rate for the three months ended September 30, 2024 is less than the 21% federal statutory rate primarily due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits partially offset by the disallowed portion of interest expense against earnings in association with the Bank’s tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the impact of nondeductible merger-related costs. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

    Capital

    Shareholders’ equity totaled $516.2 million at September 30, 2024, an increase of $237.8 million from $278.4 million at June 30, 2024. The increase was primarily attributable to the equity assumed in the merger, net of purchase accounting adjustments, partially offset by a net loss of $7.9 million and dividends paid of $4.4 million.

    Tangible book value per share(1) decreased to $21.12 per share at September 30, 2024 from $24.08 per share at June 30, 2024 due to the purchase accounting adjustments associated with the merger.

    The Company’s tangible common equity ratio decreased to 7.5% at September 30, 2024 from 8.1% at June 30, 2024 due to purchase accounting marks and a net loss recorded during the third quarter of 2024. The Company’s total risk-based capital ratio was 12.5% at September 30, 2024 compared to 13.3% at June 30, 2024. The Company’s Tier 1 leverage ratio was 8.0% at September 30, 2024 compared to 8.9% at June 30, 2024. The loan fair value adjustments are expected to accrete back through income and capital as the loans mature and should lead to earnings per share and capital accretion moving forward.

    At September 30, 2024, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

    (1) Non-GAAP measure. See Appendix A for additional information.

    Investor Relations Contact:
    Neelesh Kalani
    Executive Vice President, Chief Financial Officer
    Phone (717) 510-7097
    FINANCIAL HIGHLIGHTS (Unaudited)              
                   
                   
      Three Months Ended   Nine Months Ended
      September 30,   September 30,   September 30,   September 30,
    (In thousands)   2024       2023       2024       2023  
                   
    Profitability for the period:              
    Net interest income $ 51,697     $ 26,219     $ 104,681     $ 78,888  
    Provision for credit losses   13,681       136       14,791       1,264  
    Noninterest income   12,386       5,925       26,188       19,161  
    Noninterest expenses   60,299       20,447       105,407       61,451  
    (Loss) income before income tax (benefit) expense   (9,897 )     11,561       10,671       35,334  
    Income tax (benefit) expense   (1,994 )     2,535       2,305       7,314  
    Net (loss) income available to common shareholders $ (7,903 )   $ 9,026     $ 8,366     $ 28,020  
                   
    Financial ratios:              
    Return on average assets (1) (0.57)%     1.18 %     0.28 %     1.25 %
    Return on average assets, adjusted (1) (2) (3)   1.55 %     1.18 %     1.33 %     1.25 %
    Return on average equity (1) (5.85)%     14.42 %     3.10 %     15.51 %
    Return on average equity, adjusted (1) (2) (3)   15.85 %     14.42 %     14.59 %     15.51 %
    Net interest margin (1)   4.14 %     3.73 %     3.88 %     3.83 %
    Efficiency ratio   94.1 %     63.6 %     80.5 %     62.7 %
    Efficiency ratio, adjusted (2) (3)   60.2 %     63.6 %     62.6 %     62.7 %
    (Loss) income per common share:              
    Basic $ (0.41 )   $ 0.87     $ 0.63     $ 2.71  
    Basic, adjusted (2) (3) $ 1.12     $ 0.87     $ 2.96     $ 2.71  
    Diluted $ (0.41 )   $ 0.87     $ 0.62     $ 2.68  
    Diluted, adjusted (2) (3) $ 1.11     $ 0.87     $ 2.93     $ 2.68  
                   
    Average equity to average assets   9.75 %     8.18 %     9.13 %     8.09 %
                   
    (1) Annualized for the three and nine months ended September 30, 2024 and 2023.
    (2) Ratio for the three and nine months ended September 30, 2024 has been adjusted for the non-recurring charges.
    (3) Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
    FINANCIAL HIGHLIGHTS (Unaudited)      
    (continued)      
      September 30,   December 31,
    (Dollars in thousands, except per share amounts)   2024       2023  
    At period-end:      
    Total assets $ 5,470,589     $ 3,064,240  
    Loans, net of allowance for credit losses   3,931,807       2,269,611  
    Loans held-for-sale, at fair value   3,561       5,816  
    Securities available for sale, at fair value   826,828       513,519  
    Total deposits   4,650,853       2,558,814  
    FHLB advances and other borrowings and Securities sold under agreements to repurchase   137,310       147,285  
    Subordinated notes and trust preferred debt   68,510       32,093  
    Shareholders’ equity   516,206       265,056  
           
    Credit quality and capital ratios (1):      
    Allowance for credit losses to total loans   1.25 %     1.25 %
    Total nonaccrual loans to total loans   0.68 %     1.11 %
    Nonperforming assets to total assets   0.49 %     0.83 %
    Allowance for credit losses to nonaccrual loans   184 %     112 %
    Total risk-based capital:      
    Orrstown Financial Services, Inc.   12.5 %     13.0 %
    Orrstown Bank   12.3 %     12.8 %
    Tier 1 risk-based capital:      
    Orrstown Financial Services, Inc.   10.0 %     10.8 %
    Orrstown Bank   11.1 %     11.6 %
    Tier 1 common equity risk-based capital:      
    Orrstown Financial Services, Inc.   9.8 %     10.8 %
    Orrstown Bank   11.1 %     11.6 %
    Tier 1 leverage capital:      
    Orrstown Financial Services, Inc.   8.0 %     8.9 %
    Orrstown Bank   8.8 %     9.5 %
           
    Book value per common share $ 26.65     $ 24.98  
           
    (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard.
    CONSOLIDATED BALANCE SHEETS (Unaudited)      
           
    (Dollars in thousands, except per share amounts) September 30, 2024   December 31, 2023
    Assets      
    Cash and due from banks $ 65,064     $ 32,586  
    Interest-bearing deposits with banks   171,716       32,575  
    Cash and cash equivalents   236,780       65,161  
    Restricted investments in bank stocks   20,247       11,992  
    Securities available for sale (amortized cost of $845,869 and $549,089 at September 30, 2024 and December 31, 2023, respectively)   826,828       513,519  
    Loans held for sale, at fair value   3,561       5,816  
    Loans   3,981,437       2,298,313  
    Less: Allowance for credit losses   (49,630 )     (28,702 )
    Net loans   3,931,807       2,269,611  
    Premises and equipment, net   49,839       29,393  
    Cash surrender value of life insurance   142,895       73,204  
    Goodwill   70,655       18,724  
    Other intangible assets, net   46,144       2,414  
    Accrued interest receivable   20,562       13,630  
    Deferred tax assets, net   38,517       22,017  
    Other assets   82,754       38,759  
    Total assets $ 5,470,589     $ 3,064,240  
           
    Liabilities      
    Deposits:      
    Noninterest-bearing $ 815,404     $ 430,959  
    Interest-bearing   3,835,449       2,127,855  
    Total deposits   4,650,853       2,558,814  
    Securities sold under agreements to repurchase and federal funds purchased   21,932       9,785  
    FHLB advances and other borrowings   115,378       137,500  
    Subordinated notes and trust preferred debt   68,510       32,093  
    Other liabilities   97,710       60,992  
    Total liabilities   4,954,383       2,799,184  
           
    Shareholders’ Equity      
    Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding   —       —  
    Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,723,217 shares issued and 19,373,354 outstanding at September 30, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023   1,027       583  
    Additional paid—in capital   422,177       189,027  
    Retained earnings   117,311       117,667  
    Accumulated other comprehensive loss   (15,888 )     (28,476 )
    Treasury stock— 349,863 and 592,209 shares, at cost at September 30, 2024 and December 31, 2023, respectively   (8,421 )     (13,745 )
    Total shareholders’ equity   516,206       265,056  
    Total liabilities and shareholders’ equity $ 5,470,589     $ 3,064,240  
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,   September 30,   September 30,
    (Dollars in thousands, except per share amounts)     2024       2023       2024     2023  
    Interest income                
    Loans   $ 70,647     $ 32,738     $ 142,417   $ 92,685  
    Investment securities – taxable     9,005       4,459       18,588     13,244  
    Investment securities – tax-exempt     883       861       2,641     2,591  
    Short-term investments     2,452       633       5,272     1,349  
    Total interest income     82,987       38,691       168,918     109,869  
    Interest expense                
    Deposits     28,603       10,582       57,384     25,392  
    Securities sold under agreements to repurchase and federal funds purchased     96       31       148     84  
    FHLB advances and other borrowings     1,154       1,354       3,780     3,992  
    Subordinated notes and trust preferred debt     1,437       505       2,925     1,513  
    Total interest expense     31,290       12,472       64,237     30,981  
    Net interest income     51,697       26,219       104,681     78,888  
    Provision for credit losses     13,681       136       14,791     1,264  
    Net interest income after provision for credit losses     38,016       26,083       89,890     77,624  
    Noninterest income                
    Service charges     2,360       1,260       4,843     3,668  
    Interchange income     1,779       963       3,651     2,921  
    Swap fee income     505       255       1,079     451  
    Wealth management income     5,037       2,826       11,451     8,395  
    Mortgage banking activities     491       (142 )     1,318     448  
    Investment securities gains (losses)     271       2       254     (8 )
    Other income     1,943       761       3,592     3,286  
    Total noninterest income     12,386       5,925       26,188     19,161  
    Noninterest expenses                
    Salaries and employee benefits     27,190       12,885       54,137     38,135  
    Occupancy, furniture and equipment     4,333       2,460       9,677     7,059  
    Data processing     2,046       1,248       4,548     3,666  
    Advertising and bank promotions     537       332       1,709     1,656  
    FDIC insurance     862       477       1,722     1,500  
    Professional services     1,119       965       2,551     2,203  
    Taxes other than income     503       387       1,046     847  
    Intangible asset amortization     2,464       228       2,904     717  
    Merger-related expenses     16,977       —       18,784     —  
    Restructuring expenses     257       —       257     —  
    Other operating expenses     4,011       1,465       8,072     5,668  
    Total noninterest expenses     60,299       20,447       105,407     61,451  
    (Loss) income before income tax (benefit) expense     (9,897 )     11,561       10,671     35,334  
    Income tax (benefit) expense     (1,994 )     2,535       2,305     7,314  
    Net (loss) income   $ (7,903 )   $ 9,026     $ 8,366   $ 28,020  
    continued
                     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,   September 30,   September 30,
          2024       2023       2024     2023  
    Share information:                
    Basic (loss) earnings per share   $ (0.41 )   $ 0.87     $ 0.63   $ 2.71  
    Diluted (loss) earnings per share   $ (0.41 )   $ 0.87     $ 0.62   $ 2.68  
    Dividends paid per share   $ 0.23     $ 0.20     $ 0.63   $ 0.60  
    Weighted average shares – basic     19,088       10,319       13,298     10,346  
    Weighted average shares – diluted     19,226       10,405       13,441     10,440  
    ANALYSIS OF NET INTEREST INCOME        
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)    
      Three Months Ended
      9/30/2024   6/30/2024   3/31/2024   12/31/2023   9/30/2023
          Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-
     (In Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent
     thousands) Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate
    Assets                                                          
    Federal funds sold & interest-bearing bank balances $ 184,465   $ 2,452     5.29 %   $ 142,868   $ 1,864     5.25 %   $ 74,523   $ 956     5.16 %   $ 37,873   $ 460     4.82 %   $ 57,778   $ 633     4.35 %
    Investment securities (1)(2)   849,700     10,123     4.77       538,451     6,114     4.54       519,851     5,694     4.39       508,891     5,890     4.63       521,234     5,548     4.26  
    Loans (1)(3)(4)(5)   3,989,259     70,849     7.07       2,324,942     35,690     6.17       2,308,103     36,382     6.34       2,286,678     34,055     5.91       2,256,727     32,878     5.78  
    Total interest-earning assets   5,023,424     83,424     6.61       3,006,261     43,668     5.84       2,902,477     43,032     5.96       2,833,442     40,405     5.67       2,835,739     39,059     5.47  
    Other assets   491,719             204,863             196,295             204,382             200,447        
    Total assets $ 5,515,143           $ 3,211,124           $ 3,098,772           $ 3,037,824           $ 3,036,186        
    Liabilities and Shareholders’ Equity                                                
    Interest-bearing demand deposits $ 2,554,743     16,165     2.52     $ 1,649,753     10,118     2.47     $ 1,570,622     9,192     2.35     $ 1,543,575     8,333     2.14     $ 1,541,728     7,476     1.92  
    Savings deposits   283,337     148     0.21       165,467     140     0.34       170,005     144     0.34       178,351     153     0.34       190,817     164     0.34  
    Time deposits   1,014,628     12,290     4.82       481,721     5,007     4.18       428,443     4,180     3.92       392,085     3,632     3.67       357,194     2,942     3.27  
    Total interest-bearing deposits   3,852,708     28,603     2.95       2,296,941     15,265     2.67       2,169,070     13,516     2.51       2,114,011     12,118     2.27       2,089,739     10,582     2.01  
    Securities sold under agreements to repurchase and federal funds purchased   23,075     96     1.66       13,412     27     0.81       12,010     25     0.85       13,874     30     0.85       15,006     31     0.83  
    FHLB advances and other borrowings   115,388     1,154     3.98       115,000     1,152     4.03       137,505     1,474     4.31       127,843     1,358     4.21       128,131     1,354     4.19  
    Subordinated notes and trust preferred debt   68,399     1,437     8.36       32,118     734     9.19       32,100     754     9.45       32,083     504     6.29       32,066     505     6.29  
    Total interest-bearing liabilities   4,059,570     31,290     3.07       2,457,471     17,178     2.81       2,350,685     15,769     2.70       2,287,811     14,010     2.43       2,264,942     12,472     2.19  
    Noninterest-bearing demand deposits   807,886             423,037             417,469             441,695             468,628        
    Other liabilities   110,017             57,828             62,329             59,876             54,353        
    Total liabilities   4,977,473             2,938,336             2,830,483             2,789,382             2,787,923        
    Shareholders’ equity   537,670             272,788             268,289             248,442             248,263        
    Total $ 5,515,143           $ 3,211,124           $ 3,098,772           $ 3,037,824           $ 3,036,186        
    Taxable-equivalent net interest income / net interest spread       52,134     3.55 %         26,490     3.02 %         27,263     3.26 %         26,395     3.24 %         26,587     3.29 %
    Taxable-equivalent net interest margin         4.14 %           3.54 %           3.77 %           3.71 %           3.73 %
    Taxable-equivalent adjustment       (437 )             (387 )             (382 )             (377 )             (368 )    
    Net interest income     $ 51,697             $ 26,103             $ 26,881             $ 26,018             $ 26,219      
    Ratio of average interest-earning assets to average interest-bearing liabilities         124 %           122 %           123 %           124 %           125 %
                                                               
    NOTES:                                                          
    (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
    (2) Average balance of investment securities is computed at fair value.
    (3) Average balances include nonaccrual loans.
    (4) Interest income on loans includes prepayment and late fees, where applicable.
    (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024.
    ANALYSIS OF NET INTEREST INCOME        
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)    
    (continued)                      
      Nine Months Ended
      September 30, 2024   September 30, 2023
          Taxable-   Taxable-       Taxable-   Taxable-
      Average   Equivalent   Equivalent   Average   Equivalent   Equivalent
    (In thousands) Balance   Interest   Rate   Balance   Interest   Rate
    Assets                      
    Federal funds sold & interest-bearing bank balances $ 134,136   $ 5,272     5.25 %   $ 41,861   $ 1,349     4.31 %
    Investment securities (1)(2)   636,781     21,931     4.60       524,365     16,523     4.21  
    Loans (1)(3)(4)(5)   2,878,171     142,921     6.63       2,223,701     93,051     5.59  
    Total interest-earning assets   3,649,088     170,124     6.23       2,789,927     110,923     5.31  
    Other assets   298,334             196,694        
    Total assets $ 3,947,422           $ 2,986,621        
    Liabilities and Shareholders’ Equity                      
    Interest-bearing demand deposits $ 1,927,337     35,475     2.46     $ 1,519,013     18,611     1.64  
    Savings deposits   206,552     432     0.28       204,832     431     0.28  
    Time deposits   642,959     21,477     4.46       320,000     6,350     2.65  
    Total interest-bearing deposits   2,776,848     57,384     2.76       2,043,845     25,392     1.66  
    Securities sold under agreements to repurchase and federal funds purchased   16,191     148     1.22       14,190     84     0.79  
    FHLB advances and other borrowings   122,604     3,780     4.12       122,300     3,992     4.36  
    Subordinated notes and trust preferred debt   44,294     2,925     8.82       32,049     1,513     6.29  
    Total interest-bearing liabilities   2,959,937     64,237     2.90       2,212,384     30,981     1.87  
    Noninterest-bearing demand deposits   550,407             480,006        
    Other liabilities   76,846             52,618        
    Total liabilities   3,587,190             2,745,008        
    Shareholders’ equity   360,232             241,613        
    Total liabilities and shareholders’ equity $ 3,947,422           $ 2,986,621        
    Taxable-equivalent net interest income / net interest spread       105,887     3.33 %         79,942     3.44 %
    Taxable-equivalent net interest margin         3.88 %           3.83 %
    Taxable-equivalent adjustment       (1,206 )             (1,054 )    
    Net interest income     $ 104,681             $ 78,888      
    Ratio of average interest-earning assets to average interest-bearing liabilities         123 %           126 %
                           
    NOTES TO ANALYSIS OF NET INTEREST INCOME:                
    (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
    (2) Average balance of investment securities is computed at fair value.
    (3) Average balances include nonaccrual loans.
    (4) Interest income on loans includes prepayment and late fees, where applicable.
    (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status for the nine months ended September 30, 2024.
     
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)        
                       
    (In thousands) September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Profitability for the quarter:                  
    Net interest income $ 51,697     $ 26,103     $ 26,881     $ 26,018     $ 26,219  
    Provision for credit losses   13,681       812       298       418       136  
    Noninterest income   12,386       7,172       6,630       6,491       5,925  
    Noninterest expenses   60,299       22,639       22,469       22,392       20,447  
    (Loss) income before income taxes   (9,897 )     9,824       10,744       9,699       11,561  
    Income tax (benefit) expense   (1,994 )     2,086       2,213       2,056       2,535  
    Net (loss) income $ (7,903 )   $ 7,738     $ 8,531     $ 7,643     $ 9,026  
                       
    Financial ratios:                  
    Return on average assets (1) (0.57)%     0.97 %     1.11 %     1.00 %     1.18 %
    Return on average assets, adjusted (1)(2)(3)   1.55 %     1.09 %     1.19 %     1.13 %     1.18 %
    Return on average equity (1) (5.85)%     11.41 %     12.79 %     12.21 %     14.42 %
    Return on average equity, adjusted (1)(2)(3)   15.85 %     12.88 %     13.79 %     13.77 %     14.42 %
    Net interest margin (1)   4.14 %     3.54 %     3.77 %     3.71 %     3.73 %
    Efficiency ratio   94.1 %     68.0 %     67.0 %     68.9 %     63.6 %
    Efficiency ratio, adjusted (2)(3)   60.2 %     64.6 %     65.0 %     65.6 %     63.6 %
                       
    Per share information:                  
    (Loss) income per common share:                  
    Basic $ (0.41 )   $ 0.74     $ 0.82     $ 0.74     $ 0.87  
    Basic, adjusted (2)(3)   1.12       0.84       0.89       0.84       0.87  
    Diluted   (0.41 )     0.73       0.81       0.73       0.87  
    Diluted, adjusted (2)(3)   1.11       0.83       0.88       0.83       0.87  
    Book value   26.65       25.97       25.38       24.98       22.90  
    Tangible book value(3)   21.12       24.08       23.47       23.03       20.94  
    Cash dividends paid   0.23       0.20       0.20       0.20       0.20  
                       
    Average basic shares   19,088       10,393       10,349       10,321       10,319  
    Average diluted shares   19,226       10,553       10,482       10,419       10,405  
    (1) Annualized.
    (2) Ratio has been adjusted for non-recurring expenses for the three months ended September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023.
    (3) Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
     
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)        
    (continued)                  
    (In thousands) September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Noninterest income:                  
    Service charges $ 2,360   $ 1,283     $ 1,200     $ 1,198     $ 1,260  
    Interchange income   1,779     961       911       952       963  
    Swap fee income   505     375       199       588       255  
    Wealth management income   5,037     3,312       3,102       2,945       2,826  
    Mortgage banking activities   491     369       458       143       (142 )
    Other income   1,943     884       765       704       761  
    Investment securities gains (losses)   271     (12 )     (5 )     (39 )     2  
    Total noninterest income $ 12,386   $ 7,172     $ 6,630     $ 6,491     $ 5,925  
                       
    Noninterest expenses:                  
    Salaries and employee benefits $ 27,190   $ 13,195     $ 13,752     $ 12,848     $ 12,885  
    Occupancy, furniture and equipment   4,333     2,705       2,639       2,534       2,460  
    Data processing   2,046     1,237       1,265       1,247       1,248  
    Advertising and bank promotions   537     774       398       501       332  
    FDIC insurance   862     419       441       460       477  
    Professional services   1,119     801       631       702       965  
    Taxes other than income   503     49       494       203       387  
    Intangible asset amortization   2,464     215       225       236       228  
    Merger-related expenses   16,977     1,135       672       1,059       —  
    Restructuring expenses   257     —       —       —       —  
    Other operating expenses   4,011     2,109       1,952       2,602       1,465  
    Total noninterest expenses $ 60,299   $ 22,639     $ 22,469     $ 22,392     $ 20,447  
                       
     
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)            
    (continued)                  
    (In thousands) September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Balance Sheet at quarter end:                  
    Cash and cash equivalents $ 236,780     $ 132,509     $ 182,722     $ 65,161     $ 94,939  
    Restricted investments in bank stocks   20,247       11,147       11,453       11,992       12,987  
    Securities available for sale   826,828       529,082       514,909       513,519       495,162  
    Loans held for sale, at fair value   3,561       1,562       535       5,816       6,448  
    Loans:                  
    Commercial real estate:                  
    Owner occupied   622,726       371,301       364,280       373,757       376,350  
    Non-owner occupied   1,164,501       710,477       707,871       694,638       630,514  
    Multi-family   276,296       151,542       147,773       150,675       143,437  
    Non-owner occupied residential   190,786       89,156       91,858       95,040       100,391  
    Commercial and industrial   601,469       374,976       365,524       367,085       374,190  
    Acquisition and development:                  
    1-4 family residential construction   56,383       32,439       22,277       24,516       25,642  
    Commercial and land development   262,317       129,883       118,010       115,249       153,279  
    Municipal   27,960       10,594       10,925       9,812       10,334  
    Total commercial loans   3,202,438       1,870,368       1,828,518       1,830,772       1,814,137  
    Residential mortgage:                  
    First lien   451,195       271,153       270,748       266,239       248,335  
    Home equity – term   6,508       4,633       4,966       5,078       5,223  
    Home equity – lines of credit   303,165       192,736       189,966       186,450       188,736  
    Installment and other loans   18,131       8,713       8,875       9,774       10,405  
    Total loans   3,981,437       2,347,603       2,303,073       2,298,313       2,266,836  
    Allowance for credit losses   (49,630 )     (29,864 )     (29,165 )     (28,702 )     (28,278 )
    Net loans held for investment   3,931,807       2,317,739       2,273,908       2,269,611       2,238,558  
    Goodwill   70,655       18,724       18,724       18,724       18,724  
    Other intangible assets, net   46,144       1,974       2,189       2,414       2,650  
    Total assets   5,470,589       3,198,782       3,183,331       3,064,240       3,054,435  
    Total deposits   4,650,853       2,702,884       2,695,951       2,558,814       2,546,435  
    FHLB advances and other borrowings and and Securities sold under agreements to repurchase   137,310       129,625       127,099       147,285       175,241  
    Subordinated notes and trust preferred debt   68,510       32,128       32,111       32,093       32,076  
    Total shareholders’ equity   516,206       278,376       271,682       265,056       243,080  
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)            
    (continued)                  
      September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Capital and credit quality measures(1):                  
    Total risk-based capital:                  
    Orrstown Financial Services, Inc.   12.5 %     13.3 %     13.4 %     13.0 %     13.0 %
    Orrstown Bank   12.3 %     13.1 %     13.1 %     12.8 %     12.5 %
    Tier 1 risk-based capital:                  
    Orrstown Financial Services, Inc.   10.0 %     11.1 %     11.2 %     10.8 %     10.6 %
    Orrstown Bank   11.1 %     12.0 %     11.9 %     11.6 %     11.4 %
    Tier 1 common equity risk-based capital:                  
    Orrstown Financial Services, Inc.   9.8 %     11.1 %     11.2 %     10.8 %     10.6 %
    Orrstown Bank   11.1 %     12.0 %     11.9 %     11.6 %     11.4 %
    Tier 1 leverage capital:                  
    Orrstown Financial Services, Inc.   8.0 %     8.9 %     9.0 %     8.9 %     8.7 %
    Orrstown Bank   8.8 %     9.5 %     9.6 %     9.5 %     9.3 %
                       
    Average equity to average assets   9.75 %     8.50 %     8.66 %     8.18 %     8.18 %
    Allowance for credit losses to total loans   1.25 %     1.27 %     1.27 %     1.25 %     1.25 %
    Total nonaccrual loans to total loans   0.68 %     0.36 %     0.56 %     1.11 %     0.98 %
    Nonperforming assets to total assets   0.49 %     0.26 %     0.40 %     0.83 %     0.73 %
    Allowance for credit losses to nonaccrual loans   184 %     357 %     226 %     112 %     127 %
                       
    Other information:                  
    Net charge-offs (recoveries) $ 269     $ 113     $ (42 )   $ (6 )   $ 241  
    Classified loans   105,465       48,722       48,997       55,030       33,593  
    Nonperforming and other risk assets:                  
    Nonaccrual loans   26,927       8,363       12,886       25,527       22,324  
    Other real estate owned   138       —       —       —       —  
    Total nonperforming assets   27,065       8,363       12,886       25,527       22,324  
    Financial difficulty modifications still accruing   9,497       —       —       9       —  
    Loans past due 90 days or more and still accruing   337       187       99       66       277  
    Total nonperforming and other risk assets $ 36,899     $ 8,550     $ 12,985     $ 25,602     $ 22,601  
    (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard.

    Appendix A- Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

    Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges.

    As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $116.8 million and $21.1 million at September 30, 2024 and December 31, 2023, respectively. In addition, during the three months ended September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, the Company incurred $17.0 million, $1.1 million, $0.7 million and $1.1 million in merger-related expenses, respectively. During the three months ended September 30, 2024, the Company incurred other non-recurring charges totaling $20.2 million.

    Tangible book value per common share and the impact of the non-recurring expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

    The following tables present the computation of each non-GAAP based measure:

    (In thousands)

    Tangible Book Value per Common Share   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Shareholders’ equity (most directly comparable GAAP-based measure)   $ 516,206     $ 278,376     $ 271,682     $ 265,056     $ 243,080  
    Less: Goodwill     70,655       18,724       18,724       18,724       18,724  
    Other intangible assets     46,144       1,974       2,189       2,414       2,650  
    Related tax effect     (9,690 )     (415 )     (460 )     (507 )     (557 )
    Tangible common equity (non-GAAP)   $ 409,097     $ 258,093     $ 251,229     $ 244,425     $ 222,263  
                         
    Common shares outstanding     19,373       10,720       10,705       10,612       10,613  
                         
    Book value per share (most directly comparable GAAP-based measure)   $ 26.65     $ 25.97     $ 25.38     $ 24.98     $ 22.90  
    Intangible assets per share     5.53       1.89       1.91       1.95       1.96  
    Tangible book value per share (non-GAAP)   $ 21.12     $ 24.08     $ 23.47     $ 23.03     $ 20.94  
                         
    (In thousands) Three Months Ended   Nine Months Ended
    Adjusted Ratios for Non-recurring Charges September 30,
    2024    		   June 30, 2024   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023    		   September 30,
    2024    		   September 30,
    2023
    Net (loss) income (A) – most directly comparable GAAP-based measure $ (7,903 )   $ 7,738     $ 8,531     $ 8,531     $ 9,026     $ 8,366     $ 28,020  
    Plus: Merger-related expenses (B)   16,977       1,135       672       672       —       18,784       —  
    Plus: Executive retirement expenses (B)   4,758       —       —       —       —       4,758       —  
    Plus: Provision for credit losses on non-PCD loans (B)   15,504       —       —       —       —       15,504       —  
    Less: Related tax effect (C)   (7,915 )     (139 )     (1 )     (1 )     —       (8,056 )     —  
    Adjusted net (loss) income (D=A+B-C) – Non-GAAP $ 21,421     $ 8,734     $ 9,202     $ 9,202     $ 9,026     $ 39,356     $ 28,020  
                               
    Average assets (E) $ 5,515,143     $ 3,211,124     $ 3,098,772     $ 3,098,772     $ 3,036,186     $ 3,947,422     $ 2,986,621  
    Return on average assets (= A / E) – most directly comparable GAAP-based measure (1) (0.57)%     0.97 %     1.11 %     1.11 %     1.18 %     0.28 %     1.25 %
    Return on average assets, adjusted (= D / E) – Non-GAAP (1)   1.55 %     1.09 %     1.19 %     1.19 %     1.18 %     1.33 %     1.25 %
                               
    Average equity (F) $ 537,670     $ 272,788     $ 268,289     $ 268,289     $ 248,263     $ 360,232     $ 241,613  
    Return on average equity (= A / F) – most directly comparable GAAP-based measure (1) (5.85)%     11.41 %     12.79 %     12.79 %     14.42 %     3.10 %     15.51 %
    Return on average equity, adjusted (= D / F) – Non-GAAP (1)   15.85 %     12.88 %     13.79 %     13.79 %     14.42 %     14.59 %     15.51 %
                               
    Weighted average shares – basic (G) – most directly comparable GAAP-based measure   19,088       10,393       10,349       10,349       10,319       13,298       10,346  
    Basic (loss) earnings per share (= A / G) – most directly comparable GAAP-based measure $ (0.41 )   $ 0.74     $ 0.82     $ 0.82     $ 0.87     $ 0.63     $ 2.71  
    Basic earnings per share, adjusted (= D / G) – Non-GAAP $ 1.12     $ 0.84     $ 0.89     $ 0.89     $ 0.87     $ 2.96     $ 2.71  
                               
    Weighted average shares – diluted (H) – most directly comparable GAAP-based measure   19,226       10,553       10,482       10,482       10,405       13,441       10,440  
    Diluted (loss) earnings per share (= A / H) – most directly comparable GAAP-based measure $ (0.41 )   $ 0.73     $ 0.81     $ 0.81     $ 0.87     $ 0.62     $ 2.68  
    Diluted earnings per share, adjusted (= D / H) – Non-GAAP $ 1.11     $ 0.83     $ 0.88     $ 0.88     $ 0.87     $ 2.93     $ 2.68  
                               
    continued
    (1) Annualized                          
      Three Months Ended   Nine Months Ended
      September 30,
    2024    		   June 30, 2024   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023    		   September 30,
    2024    		   September 30,
    2023
    Noninterest expense (I) – most directly comparable GAAP-based measure $ 60,299     $ 22,639     $ 22,469     $ 22,469     $ 20,447     $ 105,407     $ 61,451  
    Less: Merger-related expenses (B)   (16,977 )     (1,135 )     (672 )     (672 )     —       (18,784 )     —  
    Less: Executive retirement expenses (B)   (4,758 )     —       —       —       —       (4,758 )     —  
    Adjusted noninterest expense (J = I – B) – Non-GAAP $ 38,564     $ 21,504     $ 21,797     $ 21,797     $ 20,447     $ 81,865     $ 61,451  
                               
    Net interest income (K) $ 51,697     $ 26,103     $ 26,881     $ 26,881     $ 26,219     $ 104,681     $ 78,888  
    Noninterest income (L)   12,386       7,172       6,630       6,630       5,925       26,188       19,161  
    Total operating income (M = K + L) $ 64,083     $ 33,275     $ 33,511     $ 33,511     $ 32,144     $ 130,869     $ 98,049  
                               
    Efficiency ratio (= I / M) – most directly comparable GAAP-based measure   94.1 %     68.0 %     67.0 %     67.0 %     63.6 %     80.5 %     62.7 %
    Efficiency ratio, adjusted (= J / M) – Non-GAAP   60.2 %     64.6 %     65.0 %     65.0 %     63.6 %     62.6 %     62.7 %
                               
                               
                               
    (1) Annualized                          

    Appendix B- Investment Portfolio Concentrations

    The following table summarizes the credit ratings and collateral associated with the Company’s investment security portfolio, excluding equity securities, at September 30, 2024:

    (In thousands)

    Sector Portfolio Mix   Amortized Book   Fair Value   Credit Enhancement   AAA   AA   A   BBB   NR   Collateral / Guarantee Type
    Unsecured ABS — %   $ 3,199   $ 2,975   27 %   — %   — %   — %   — %   100 %   Unsecured Consumer Debt
    Student Loan ABS 1       4,348     4,283   27     —     —     —     —     100     Seasoned Student Loans
    Federal Family Education Loan ABS 10       83,199     82,962   11     7     80     —     13     —     Federal Family Education Loan (1)
    PACE Loan ABS —       2,034     1,813   7     100     —     —     —     —     PACE Loans (2)
    Non-Agency CMBS 2       13,750     14,045   26     —     —     —     —     100      
    Non-Agency RMBS 2       16,749     14,212   16     100     —     —     —     —     Reverse Mortgages (3)
    Municipal – General Obligation 12       99,779     93,395       11     82     7     —     —      
    Municipal – Revenue 14       121,130     112,705       —     82     12     —     6      
    SBA ReRemic (5) —       2,427     2,409       —     100     —     —     —     SBA Guarantee (4)
    Small Business Administration 1       6,632     7,042       —     100     —     —     —     SBA Guarantee (4)
    Agency MBS 18       154,058     154,762       —     100     —     —     —     Residential Mortgages (4)
    Agency CMO 38       316,385     315,677       —     100     —     —     —      
    U.S. Treasury securities 2       20,047     18,373       —     100     —     —     —     U.S. Government Guarantee (4)
    Corporate bonds —       1,932     1,975       —     —     52     48     —      
      100 %   $ 845,669   $ 826,628       4 %   89 %   3 %   1 %   3 %    
                                           
    (1) 97% guaranteed by U.S. government
    (2) PACE acronym represents Property Assessed Clean Energy loans
    (3) Non-agency reverse mortgages with current structural credit enhancements
    (4) Guaranteed by U.S. government or U.S. government agencies
    (5) SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits
                                           
    Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor’s, Moody’s, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor’s rates U.S. government obligations at AA+.

    About the Company

    With $5.5 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit http://www.orrstown.com.

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company’s management with respect to, among other things, future events and the Company’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company’s operations to differ materially from expectations include, but are not limited to: general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company’s strategic growth plan due to changes in current or future market conditions; changes in interest rates; the diversion of management’s attention from ongoing business operations and opportunities; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus (the “Merger”) are not realized when expected or at all; the possibility that the Merger may be more expensive to complete than anticipated; the possibility that revenues following the Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the ability to complete the integration of the two companies successfully; the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the Merger; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.

    The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company’s behalf may issue.

    The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.

    The MIL Network –