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MIL-OSI Europe: AMERICA/COLOMBIA – In Toribio, the end of a historic stage, but not the end of a mission

Source: Agenzia Fides – MIL OSI

Friday, 31 January 2025

IMC

Toribio (Agenzia Fides) – “Thank you for having walked with us, for being part of our history,” were some of the words that resonated during the Mass of thanksgiving celebrated on Sunday, January 26, which marked the 41 years of presence of the Consolata Missionaries in Toribío, in northern Cauca.”The end of the presence of the missionaries in Toribío marked the end of a historic stage, but not the end of a mission,” reads a note released by the missionaries. “The seed sown for more than four decades continues to bear fruit in community leaders, families strengthened in their faith and a local Church committed to justice and peace.”For more than four decades, the Consolata Missionaries have walked alongside the communities of Toribío, a territory rich in indigenous cultural heritage, but also marked by deep social and political difficulties. The missionaries have witnessed resistance, solidarity and commitment to the indigenous, peasant and Afro-descendant communities of the Nasa indigenous people.”Dear family, we greet you from this parish church of San Giovanni Battista and from this town of Toribío: ‘We did what we had to do’,” said Father Venanzio Mwangi, Regional Superior, citing the teachings of their Founder San Giuseppe Allamano.The ceremony brought together a large crowd of faithful, community leaders and representatives of local organizations, who expressed their gratitude for the pastoral and social work of the missionaries. They recalled the history shared with the community, evoking moments of joy and pain, the struggles for social justice, the defense of the territory and the promotion of peace in the midst of armed conflict.In Toribío, the Consolata Missionaries arrived after the violent death in 1984 of Father Álvaro Ulcué Chocué, the first indigenous priest of the Nasa ethnic group, ordained in the Church of the Archdiocese of Popayán, whose example has inspired their work and whose legacy lives on in the region.Over the years, the missionaries have integrated themselves into the communities, not only as spiritual guides, but also as allies in building a more dignified future. They have built parishes, trained community leaders and strengthened an inculturated spirituality that respects and values the ancestral traditions of the Nasa people.The Cauca region is particularly strategic because it brings together in one place all the phases of work and marketing: illicit crops, processing workshops and the important routes, the paths that drugs take to leave the country illegally. (AP) (Agenzia Fides, 31/1/2025)
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MIL OSI Europe News –

February 1, 2025

MIL-OSI Europe: ASIA/SYRIA – Syrian Catholic Archbishop of Homs: The new era is full of mysteries

Source: Agenzia Fides – MIL OSI

Friday, 31 January 2025

by Gianni ValenteHoms (Agenzia Fides) – “A new era has begun for Syria. And it is a difficult time again,” said Archbishop Jacques Mourad. The monk of the Deir Mar Musa community, spiritual son of Father Paolo Dall’Oglio, was held hostage for months by jihadists of the Islamic State in 2015. Perhaps this experience made his Christian vision even clearer. And today, as Syrian Catholic Archbishop of Homs, what he sees and hears about the new suffering in Syria does not correspond to the dominant narrative in the media, especially in the West, which reports on a “regime change”, a successful and peaceful regime change with new Islamist leaders seeking international recognition after more than 50 years of the Assad clan ruling the country.The dominant media coverage, for example, fails to mention the widespread violence and fear that once again overshadows the days of a large part of the Syrian population. A violence that – as Jacques Mourad admits – “seems to be a trap that all those who come to power here fall into”.In recent weeks – the Syrian Catholic Archbishop of Homs told Fides – people have disappeared, prisons are filling up “and we do not know who is still alive and who is dead”. Those accused of having colluded with the collapsed regime are being tortured in public. And he also reports “several cases of young Christians being threatened and tortured in the streets in front of everyone, in order to instill fear and force them to renounce their faith and become Muslims”. Crimes that are taking place far from Damascus.Things are not going well and Father Mourad feels that “nobody can do anything” to get out of this new period of fear and revenge. “I try to encourage people, to console them, to ask for patience and to look for solutions,” said Archbishop Jacques Mourad. “During the Christmas period, I visited our 12 parishes and also went to the villages to encourage them, to keep hope together. There were beautiful meetings with different groups. But when the violence increases, our words and our calls for patience will no longer convince them.”Meanwhile, Cardinal Claudio Gugerotti, Prefect of the Dicastery for the Oriental Churches, visited Syria in recent days as the Pope’s envoy to testify to the closeness of the Successor of Peter to the Christian communities who are experiencing this moment of the tormented Syrian affair with an additional burden of worries, compared to those suffered by other Syrians.”The previous regime,” explains Archbishop Mourad, “presented itself as the defender of Christians. They always said: if we leave, the fanatics will return. Now many priests are pessimistic about the future. My answer is always the same: the situation is definitely incomparable to that of the past, when there were unimaginable crimes. But since the new violence, there are also those who say: ‘You saw that what Bashar al Assad said is true.’ The result is that many Christians now, more than ever, see no other way than to emigrate. To leave Syria. And it is difficult for us to say that we must not lose hope. We try, but people do not believe what we say. What they experience and what they see are too different.”In the churches, since the fall of the Assad regime, in many ways everything seems to continue as before: services, processions, prayers and works of charity. The new rulers have not issued any compulsory regulations that in any way affect the everyday life of the church. The recognized leader Ahmad Sharaa, also known as Abu Muhammad Dscholani, leader of the armed jihadist group “Hayat Tahrir al Sham”, who declared himself “interim president” of Syria on January 29, met with Father Ibrahim Faltas and the Franciscans at the end of 2024 and found words of praise for Pope Francis, stressing that the Christians who emigrated during and after the civil war should return to Syria. The violence suffered by the young Christians took the form of attacks on individuals. “But,” says Jacques Mourad, “when the confiscation of weapons began, the Christian and Alawite soldiers were disarmed. Nobody took the weapons away from the Sunnis.” “And the reality,” he adds, “is that there is no government. There are different armed groups. Some are fanatics, others are not. And each has its own power and imposes its own rule in the areas it controls. And they have many weapons, having also acquired those of the old regime”. Like other bishops, Archbishop Mourad met with representatives of the new forces. He heard reassuring words, but then things did not change.Jacques Mourad says he does not know how things can go on. In the meantime, he himself is moving on.”We continue our life as parishes and as a diocese, day after day,” he says. Since April last year, the Archbishop has been responsible for catechism in all of Syria. Even then, the situation was serious: no work, society and Christian communities still torn apart by the consequences of the war. “I thought the most important thing was to start again with the children. You can only start again with children and young people after the war has somehow wiped out everything. And together with them you have to start again with the essential, original things,” the Archbishop continued.The regional church committees were re-established to work together on the training of catechists, because “many who had experience had left. Now there are young people who are enthusiastic, but who still need to make a spiritual journey and a catechetical and biblical formation”. The dioceses, the Jesuits and the Bible Society have joined forces “to set out together. We thank the Lord because so many young people show such desire, such courage and such generosity”. The same goes for the liturgies and the resumption of pilgrimages to Mar Musa and to all the other monasteries, “to revive the memory, in this situation of poverty and suffering, which is still very serious. And to see if something is reborn, like a new sprout”. (Agenzia Fides, 31/1/2025)
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MIL OSI Europe News –

February 1, 2025

MIL-OSI: Pacific Financial Corp Earns $2.2 Million, or $0.21 per Diluted Share for Fourth Quarter 2024; Reports Fiscal 2024 Earnings of $9.5 Million, or $0.92 per Diluted Share; Declares Quarterly Cash Dividend of $0.14 per Share

Source: GlobeNewswire (MIL-OSI)

ABERDEEN, Wash., Jan. 31, 2025 (GLOBE NEWSWIRE) — Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.2 million, or $0.21 per diluted share for the fourth quarter of 2024, compared to $2.6 million, or $0.25 per diluted share for the third quarter of 2024, and $2.9 million, or $0.28 per diluted share for the fourth quarter of 2023. For the year ended December 31, 2024, the Company reported net income of $9.5 million, or $0.92 per share compared to $14.6 million, or $1.40 for the year ended December 31, 2023. Except for year-end December 31, 2023, all results are unaudited.

The board of directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on January 22, 2025. The dividend will be payable on February 28, 2025 to shareholders of record on February 14, 2025.

“During the quarter we finalized the closure of our mortgage banking division recording termination costs of $773,000 impacting our fourth quarter 2024 operating results. Excluding those expenses adjusted net income was $2.8 million for the fourth quarter, an increase from the prior quarter. As we begin 2025, we expect the benefit of this closure to translate to improved efficiency of our operations moving forward,” said Denise Portmann, President and Chief Executive Officer.

“Though the loan portfolio increased at a slower rate during the quarter, we continue to have healthy customer activity as pipelines began to improve with the decrease in index rates experienced early in the quarter. In addition, earnings for the year benefited from solid year over year growth in average loan balances. Our history of a strong net interest margin continued to be supported by solid relationships with our depositors with a strong core deposit base. Core deposits represented 87% of total deposits at year end,” said Portmann. “In addition, our overall credit quality metrics remained strong with nonperforming assets remaining low at $1.1 million or 0.09% of total assets and with a net recovery to the ACL for the quarter. Our capital base and ratios continue to be robust and exceed regulatory well-capitalized ratios. This robust capital base allowed for the continued repurchase of shares during the year. With our strong capital ratios and strong balance sheet, we believe we remain well-positioned for the future.”

Fourth Quarter 2024 Financial Highlights:

Return on average assets (“ROAA”) was 0.74%, compared to 0.90% for the third quarter 2024, and 1.02% for the fourth quarter 2023.
Return on average equity (“ROAE”) was 7.27%, compared to 8.77% from the preceding quarter, and 10.88% from the fourth quarter a year earlier.
Net interest income was $10.9 million, compared to $11.2 million for the third quarter of 2024, and $11.7 million for the fourth quarter of 2023.
Net interest margin (“NIM”) decreased to 3.99%, compared to 4.19% from the preceding quarter, and 4.34% for the fourth quarter a year ago.
Provision for credit losses was a benefit of $103,000 for the fourth quarter ended December 31, 2024, compared to a benefit of $66,000 for the preceding quarter and a provision of $111,000 in the fourth quarter a year ago.
Gross loans balances held in portfolio increased by $5.3 million, or less than 1% to $704.9 million at December 31, 2024, compared to $699.6 million at September 30, 2024, and increased by $19.5 million, or 3%, from $685.3 million at December 31, 2023.
Total deposits remained at $1.01 billion at December 31, 2024 relative to the previous quarter and one year earlier. Core deposits represented 87% of total deposits, with non-interest bearing deposits representing 38% of total deposits at December 31, 2024.
Asset quality remains solid with nonperforming assets to total assets declining to 0.09%, compared to 0.10% three months earlier, and increasing from 0.06% at December 31, 2023. Substandard loans decreased $911,000 to $2.7 million at December 31, 2024 from $3.6 million the prior quarter.
Shareholder equity decreased $7.2 million during the quarter largely due to accumulated other comprehensive income marks on the investment portfolio, stock repurchases and dividend payments offset by net income. Tangible book value per share was $9.93 at December 31, 2024.
Pacific Financial and Bank of the Pacific continues to exceed regulatory well-capitalized requirements. At December 31, 2024 Pacific Financial’s estimated leverage ratio was 11.3% and its estimated total risk-based capital ratio was 17.5%.

Balance Sheet Review

Total assets decreased slightly to $1.15 billion at December 31, 2024, compared to $1.16 billion at September 30, 2024, and was unchanged relative to December 31, 2023.

Liquidity metrics continued to remain strong with total liquidity, both on and off balance sheet sources, at $550.6 million as of December 31, 2024. The Bank has established collateralized credit lines with borrowing capacity from the Federal Home Loan Bank of Des Moines (FHLB) and from the Federal Reserve Bank of San Francisco, as well as $60.0 million in unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end. The Company’s available liquidity sources at December 31, 2024 represented a coverage of short-term funds available to uninsured and uncollateralized deposits of 217%. Uninsured or uncollateralized deposits were 25% of total deposits at December 31, 2024.

The following table summarizes the Bank’s available liquidity:

LIQUIDITY (unaudited)	Period Ended						Change from								% of Deposits
($ in 000s)	Period Ended						Change from								% of Deposits

		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024		2024		2023		$		%		$		%	2024	2024	2023
Short-term Funding
Cash and cash equivalents	$	67,951	$	85,430	$	95,781	$	(17,479	)	-20%	$	(27,830	)	-29%	7%	8%	9%
Unencumbered AFS Securities		158,472		154,565		140,049		3,907		3%		18,423		13%	16%	15%	14%
Secured lines of Credit (FHLB, FRB)		324,187		336,771		327,264		(12,584	)	-4%		(3,077	)	-1%	32%	33%	32%
Short-term Funding	$	550,610	$	576,766	$	563,094	$	(26,156	)	-5%	$	(12,484	)	-2%	55%	57%	56%

Investment securities: The investment securities portfolio increased 3% to $304.5 million, compared to $296.8 million at September 30, 2024 and increased 4% compared to the like period a year ago. The increase from the prior quarter was primarily due to the purchase of $19.8 million of collateralized mortgage obligations and mortgage backed securities. These purchases were partially offset by an increase in net unrealized losses on available for sale investments which increased $7.6 million to $22.4 million ($17.5 million after-tax) at December 31, 2024, which represents 7% of the AFS portfolio.

U.S. Treasury bonds and securities issued by the U.S. Government sponsored agencies accounted for 86%, 85%, and 85%, of the investment portfolio as of December 31, 2024, September 30, 2024, and December 31, 2023. The largest investment category is collateralized mortgage obligations which accounted for 48% of the investment portfolio at December 31, 2024, compared to 43% one year earlier. The average adjusted duration to reset of the investment securities portfolio was 4.19 years at December 31, 2024.

Gross loans balances increased $5.3 million, or 1%, to $704.9 million at December 31, 2024, compared to $699.6 million at September 30, 2024. During the fourth quarter, new multi-family loans more than offset the decline in construction and development loans and the decline in residential 1-4 family loans.

Year-over-year loan growth was 3%, or $19.5 million, with the largest increases in residential 1-4 family and multi-family loans increasing $7.2 million and $18.0 million, respectively. Loans classified as commercial real estate for regulatory concentration purposes totaled $267.9 million at December 31, 2024, or 192% of total risk-based capital.

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

Credit quality: Nonperforming assets were minimal and remained at $1.1 million, or 0.09% of total assets at December 31, 2024, compared to $664,000, or 0.06% at December 31, 2023. The Company has zero other real estate owned as of December 31, 2024 and accruing loans past due more than 30 days represent only 0.14% of total loans. Total loans designated as special mention increased by $6.0 million to $10.8 million at December 31, 2024 compared to $4.8 million at September 30, 2024 and was primarily related to a downgrade of one agriculture credit relationship of $4.2 million.

Allowance for credit losses (“ACL”) for loans was $8.9 million, or 1.26% of gross loans at December 31, 2024, compared to $8.9 million or 1.27% of loans at September 30, 2024 and $8.5 million or 1.24% at December 31, 2023. A benefit for credit losses on loans of $119,000 was recorded in the current quarter. This compares to a provision for credit losses on loans of $27,000 in the third quarter of 2024 and a provision for credit losses on loans of $162,000 for the fourth quarter of 2023. The benefit for credit losses in the current quarter largely reflects net loan recoveries of $73,000 realized during the quarter, compared to a net recovery of $11,000 for the preceding quarter and $21,000 for the fourth quarter one year ago. Provisions for unfunded loans was $16,000 for the fourth quarter compared to a benefit of $93,000 the previous quarter and a benefit of $51,000 one year earlier.

Total deposits remained at $1.01 billion at December 31, 2024 compared to the prior quarter and one year earlier. Deposit composition between non-maturity deposits and time deposit CDs also remained relatively unchanged for the quarter. Within non-maturity deposits, non-interest bearing demand deposits decreased which was more than offset by the growth in interest bearing demand deposits and reflects the Bank’s continued focused efforts on retaining core customer relationships. Pacific Financial continues to benefit from a strong core deposit base which positively impacts our net interest margin. Non-interest bearing deposits continues to remain the largest concentration of deposits and represented 38% of deposits at December 31, 2024 and September 30, 2024. Interest-bearing demand and money market deposits both represent 19% of total deposits at December 31, 2024.

Year-over-year the deposit composition changed slightly, primarily as a result of customers transferring balances to higher yielding accounts, and as a result, time deposits increased to $135.5 million, or 13% of total deposits at December 31, 2024 compared to $100.8 million or 10% of total deposits at December 31, 2023.

Shareholders’ equity was $113.9 million at December 31, 2024, compared to $121.1 million at September 30, 2024, and $114.7 million at December 31, 2023. The decrease in shareholders’ equity during the current quarter was due to repurchases of common stock, dividend payments and an increase in unrealized losses on available-for-sale securities due to increases in interest rates. Net unrealized losses (after-tax) included in shareholders’ equity on available-for-sale securities was $17.5 million at December 31, 2024 compared to $11.5 million at September 30, 2024, and $16.1 million at December 31, 2023.

Book value per common share was $11.26 at December 31, 2024, compared to $11.78 at September 30, 2024, and $11.04 at December 31, 2023. The Company’s tangible common equity ratio was 8.8% at December 31, 2024 and 9.4% at September 30, 2024, compared to 8.9% at December 31, 2023. Regulatory capital ratios of both the Company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the Company’s leverage ratio at 11.3% and total risk-based capital ratio at 17.5% as of December 31, 2024. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.

In anticipation of the expiration of the stock repurchase plan authorized in 2023, in September 2024, the Board of Directors authorized an additional $2.6 million toward future repurchases; approximately 2.0% of total shares outstanding.

Income Statement Review

Net interest income decreased $353,000 to $10.9 million for the fourth quarter of 2024, compared to $11.2 million for the third quarter of 2024, and decreased $801,000 compared to $11.7 million for the fourth quarter a year ago. The change in the current quarter compared to the preceding quarter reflects lower overall loan and interest bearing cash yields. Though yields for newly originated loans and other variable rate loans plus purchased investments were recorded at higher yields, the downward repricing of floating rate loans and interest-earning cash tied to short term rate indexes as well as decreased balances of interest earning cash and increasing deposit costs impacted total net interest income.

The decrease in net interest income compared to the year ago quarter reflects the increase in funding costs, with interest income remaining relatively flat, reflecting lower interest earning deposit balances offset by increased loan interest income as the Bank re-deployed interest earning deposit balances into higher yielding assets including both loans and investments.

Though decreasing from 4.19% for the preceding quarter and 4.34% for the fourth quarter ended December 31, 2023, the Bank’s net interest margin continued to remain strong at 3.99% for the quarter ended December 31, 2024. Yields on total interest earning assets decreased 19 basis points to 5.10% for the fourth quarter of 2024 compared to 5.29% for the prior quarter and 5.14% in the like quarter a year ago. Average loan yields decreased 15 basis points to 5.84% during the current quarter, compared to 5.99% for the preceding quarter and 5.80% for the fourth quarter 2023. The Bank’s total cost of funds increased only 2 basis points to 1.17% for the current quarter, compared to 1.15% for the preceding quarter, and 0.83% for the fourth quarter 2023. The small increase in the costs of deposits was due to retention efforts and competitive pricing of deposit products. As mentioned earlier, the large balance of non-interest bearing deposits at 38% has helped minimize volatility in deposit costs.

Noninterest income increased to $1.8 million for the current quarter, compared to $1.7 million for the linked quarter and increased from $1.5 million a year earlier. The increase compared to the linked quarter was primarily due to $60,000 of death benefit income from a bank-owned life insurance policy. Fee and service charge income increased slightly in the fourth quarter of 2024 to $1.3 million compared to $1.2 million in the previous quarter and the fourth quarter of 2023.

The company closed its mortgage banking division in the fourth quarter. The elimination of the mortgage banking division is expected to improve the efficiency of the company in 2025.

Noninterest expenses increased to $10.1 million for the fourth quarter of 2024 compared to $9.7 million for the prior quarter and increased from $9.5 million for the fourth quarter of 2023. The current quarter reflects increased expenses associated with closing the mortgage division. Salaries and employee benefit expenses were elevated in the current quarter due to severance and retention payments while occupancy expenses were also elevated due to lease contract termination costs associated with our mortgage operations center. In addition, data processing and IT costs increased related to the termination of mortgage origination software contracts. Overall, expenses associated with closing the mortgage division were approximately $773,000. Excluding the mortgage division termination costs, total non-interest expenses would have been $9.3 million for the current quarter.

The company’s efficiency ratio increased to 79.80% for the fourth quarter of 2024, compared to 75.48% in the preceding quarter and increased from 72.22% in the same quarter a year ago. The efficiency ratio is expected to decline in 2025 with the elimination of expenses associated with the closed mortgage division.

Income tax expense: Federal and Oregon state income tax expenses totaled $492,000 for the current quarter, and $633,000 for the preceding quarter, resulting in effective tax rates of 18.5% and 19.6%, respectively. These income tax expenses reflect the benefits of tax exempt income on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank-owned life insurance.

FINANCIAL HIGHLIGHTS (unaudited)	Quarter Ended						Change From									Twelve Months Ended			Change
FINANCIAL HIGHLIGHTS (unaudited)	Quarter Ended						Change From									Twelve Months Ended			Change
(In 000s, except per share data)
		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023				Dec 31,		Dec 31,
		2024		2024		2023		$		%		$		%		2024		2023		$		%
Earnings Ratios & Data
Net Income	$	2,162	$	2,594	$	2,942	$	(432	)	-17%	$	(780	)	-27%	$	9,532	$	14,605	$	(5,073	)	-35%
Return on average assets		0.74%		0.90%		1.02%		-0.16%				-0.28%				0.84%		1.22%		-0.38%
Return on average equity		7.27%		8.77%		10.88%		-1.50%				-3.61%				8.20%		13.48%		-5.28%
Efficiency ratio⁽¹⁾		79.80%		75.48%		72.22%		4.32%				7.58%				76.69%		66.56%		10.13%
Net-interest margin %⁽²⁾		3.99%		4.19%		4.34%		-0.20%				-0.35%				4.18%		4.39%		-0.21%

Share Ratios & Data
Basic earnings per share	$	0.21	$	0.25	$	0.28	$	(0.04	)	-16%	$	(0.07	)	-25%	$	0.93	$	1.40	$	(0.47	)
Diluted earning per share	$	0.21	$	0.25	$	0.28	$	(0.04	)	-16%	$	(0.07	)	-25%	$	0.92	$	1.40	$	(0.48	)
Book value per share⁽³⁾	$	11.26	$	11.78	$	11.04	$	(0.52	)	-4%	$	0.22		2%
Tangible book value per share⁽⁴⁾	$	9.93	$	10.47	$	9.75	$	(0.54	)	-5%	$	0.18		2%
Common shares outstanding		10,110		10,283		10,389		(173	)	-2%		(279	)	-3%
PFLC stock price	$	12.45	$	11.65	$	10.70	$	0.80		7%	$	1.75		16%
Dividends paid per share	$	0.14	$	0.14	$	0.14	$	–		0%	$	–		0%	$	0.56	$	0.53	$	0.03		6%

Balance Sheet Data
Assets	$	1,153,563	$	1,158,410	$	1,148,899	$	(4,847	)	0%	$	4,664		0%
Portfolio Loans	$	704,865	$	699,603	$	685,349	$	5,262		1%	$	19,516		3%
Deposits	$	1,014,731	$	1,011,473	$	1,009,292	$	3,258		0%	$	5,439		1%
Investments	$	304,502	$	296,792	$	293,579	$	7,710		3%	$	10,923		4%
Shareholders equity	$	113,856	$	121,087	$	114,691	$	(7,231	)	-6%	$	(835	)	-1%

Liquidity Ratios
Short-term funding to uninsured
and uncollateralized deposits		217%		229%		243%		-12%				-26%
Uninsured and uncollateralized
deposits to total deposits		25%		25%		23%		0%				2%
Portfolio loans to deposits ratio		69%		69%		67%		0%				2%

Asset Quality Ratios
Non-performing assets to assets		0.09%		0.10%		0.06%		-0.01%				0.03%
Non-accrual loans to portfolio loans		0.16%		0.16%		0.10%		0.00%				0.06%
Loan losses to avg portfolio loans		-0.04%		-0.01%		-0.01%		-0.03%				-0.03%				0.00%		0.03%		-0.03%
ACL to portfolio loans		1.26%		1.27%		1.24%		-0.01%				0.02%

Capital Ratios (PFC)
Total risk-based capital ratio		17.5%		17.9%		17.7%		-0.4%				-0.2%
Tier 1 risk-based capital ratio		16.3%		16.7%		16.5%		-0.4%				-0.2%
Common equity tier 1 ratio		14.7%		15.0%		14.9%		-0.3%				-0.2%
Leverage ratio		11.3%		11.6%		11.3%		-0.3%				0.0%
Tangible common equity ratio		8.8%		9.4%		8.9%		-0.6%				-0.1%

⁽¹⁾Non-interest expense divided by net interest income plus noninterest income.
⁽²⁾Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.
⁽³⁾Book value per share is calculated as the total common shareholders’ equity divided by the period ending number of common stock shares outstanding.
⁽⁴⁾Tangible book value per share is calculated as the total common shareholders’ equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding.

INCOME STATEMENT (unaudited)	Quarter Ended								Change From									Twelve Months Ended				Change
INCOME STATEMENT (unaudited)	Quarter Ended								Change From									Twelve Months Ended				Change
($ in 000s)
		Dec 31,			Sep 30,			Dec 31,		Sep 30, 2024				Dec 31, 2023				Dec 31,		Dec 31,
		2024			2024			2023		$		%		$		%		2024		2023			$		%
Interest Income
Loan interest & fee income	$	10,340		$	10,520		$	9,872	$	(180	)	-2%	$	468		5%	$	41,192	$	37,037		$	4,155		11%
Interest bearing cash income		942			1,108			1,440		(166	)	-15%		(498	)	-35%		3,833		9,109			(5,276	)	-58%
Investment income		2,590			2,503			2,501		87		3%		89		4%		9,978		9,334			644		7%
Interest Income		13,872			14,131			13,813		(259	)	-2%		59		0%		55,003		55,480			(477	)	-1%

Interest Expense
Deposits interest expense		2,796			2,684			1,914		112		4%		882		46%		9,829		5,351			4,478		84%
Other borrowings interest expense		225			243			247		(18	)	-7%		(22	)	-9%		951		929			22		2%
Interest Expense		3,021			2,927			2,161		94		3%		860		40%		10,780		6,280			4,500		72%
Net Interest Income		10,851			11,204			11,652		(353	)	-3%		(801	)	-7%		44,223		49,200			(4,977	)	-10%
Provision (benefit) for credit losses		(103	)		(66	)		111		(37		56%		(214	)	-193%		168		520			(352	)	-68%
Net Interest Income after provision		10,954			11,270			11,541		(316	)	-3%		(587	)	-5%		44,055		48,680			(4,625	)	-10%

Non-Interest Income
Fees and service charges		1,267			1,225			1,242		42		3%		25		2%		4,791		4,937			(146	)	-3%
Gain on sale of investments, net		–			–			–		–		-100%		–		-100%		121		(154	)		275		-179%
Gain on sale of loans, net		267			267			95		–		0%		172		181%		1,132		635			497		78%
Income on bank-owned insurance		250			188			176		62		33%		74		42%		800		685			115		17%
Other non-interest income		(9	)		7			16		(16	)	-229%		(25	)	-156%		25		69			(44	)	-64%
Non-Interest Income		1,775			1,687			1,529		88		5%		246		16%		6,869		6,172			697		11%

Non-Interest Expense
Salaries and employee benefits		6,288			6,341			5,787		(53	)	-1%		501		9%		24,944		22,793			2,151		9%
Occupancy		768			601			679		167		28%		89		13%		2,574		2,215			359		16%
Furniture, Fixtures & Equipment		289			286			301		3		1%		(12	)	-4%		1,127		1,109			18		2%
Marketing & donations		149			201			169		(52	)	-26%		(20	)	-12%		680		549			131		24%
Professional services		267			233			342		34		15%		(75	)	-22%		1,163		1,283			(120	)	-9%
Data Processing & IT		1,380			1,185			1,223		195		16%		157		13%		4,921		4,713			208		4%
Other		934			883			1,019		51		6%		(85	)	-8%		3,775		4,194			(419	)	-10%
Non-Interest Expense		10,075			9,730			9,520		345		4%		555		6%		39,184		36,856			2,328		6%
Income before income taxes		2,654			3,227			3,550		(573	)	-18%		(896	)	-25%		11,740		17,996			(6,256	)	-35%
Provision for income taxes		492			633			608		(141	)	-22%		(116	)	-19%		2,208		3,391			(1,183	)	-35%
Net Income	$	2,162		$	2,594		$	2,942	$	(432	)	-17%		(780	)	-27%	$	9,532	$	14,605		$	(5,073	)	-35%

Effective tax rate		18.5%			19.6%			17.1%		-1.1%				1.4%				18.8%		18.8%			0.0%

BALANCE SHEET (unaudited)	Period Ended									Change from								% of Total
($ in 000s)	Period Ended									Change from								% of Total

		Dec 31,			Sep 30,			Dec 31,			Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024			2024			2023			$		%		$		%	2024	2024	2023
Assets
Cash on hand and in banks	$	18,136		$	20,621		$	16,716		$	(2,485	)	-12%	$	1,420		8%	2%	2%	1%
Interest bearing deposits		62,015			80,522			91,355			(18,507	)	-23%		(29,340	)	-32%	6%	7%	8%
Investment securities		304,502			296,792			293,579			7,710		3%		10,923		4%	26%	26%	26%
Loans held-for-sale		–			140			1,103			(140	)	-100%		(1,103	)	-100%	0%	0%	0%
Portfolio Loans, net of deferred fees		704,248			698,974			684,554			5,274		1%		19,694		3%	61%	60%	60%
Allowance for credit losses		(8,851	)		(8,897	)		(8,530	)		46		-1%		(321	)	4%	-1%	-1%	-1%
Net loans		695,397			690,077			676,024			5,320		1%		19,373		3%	60%	60%	59%
Premises & equipment		16,952			17,124			15,579			(172	)	-1%		1,373		9%	1%	1%	1%
Goodwill & Other Intangibles		13,435			13,435			13,435			–		0%		–		0%	1%	1%	1%
Bank-owned life Insurance		28,333			28,084			27,497			249		1%		836		3%	2%	2%	2%
Other assets		14,793			11,615			13,611			3,178		27%		1,182		9%	2%	2%	2%
Total Assets	$	1,153,563		$	1,158,410		$	1,148,899		$	(4,847	)	0%	$	4,664		0%	100%	100%	100%

Liabilities & Shareholders’ Equity
Deposits	$	1,014,731		$	1,011,473		$	1,009,292		$	3,258		0%	$	5,439		1%	88%	88%	88%
Borrowings		13,403		$	13,403		$	13,403			–		0%		–		0%	1%	1%	1%
Other liabilities		11,573		$	12,447		$	11,513			(874	)	-7%		60		1%	1%	1%	1%
Shareholders’ equity		113,856		$	121,087		$	114,691			(7,231	)	-6%		(835	)	-1%	10%	10%	10%
Liabilities & Shareholders’ Equity	$	1,153,563		$	1,158,410		$	1,148,899		$	(4,847	)	0%	$	4,664		0%	100%	100%	100%

INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from								% of Total
INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from								% of Total
($ in 000s)
		Dec 31,			Sep 30,			Dec 31,			Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024			2024			2023			$		%		$		%	2024	2024	2023
Investment Securities
Collateralized mortgage obligations	$	147,262		$	141,842		$	126,949		$	5,420		4%	$	20,313		16%	48%	48%	43%
Mortgage backed securities		46,112			41,264			38,103			4,848		12%		8,009		21%	15%	14%	13%
U.S. Government and agency securities		67,716			68,961			83,748			(1,245	)	-2%		(16,032	)	-19%	22%	23%	29%
Municipal securities		43,412			44,725			44,779			(1,313	)	-3%		(1,367	)	-3%	15%	15%	15%
Investment Securities	$	304,502		$	296,792		$	293,579		$	7,710		3%	$	10,923	)	4%	100%	100%	100%

Held to maturity securities	$	41,442		$	42,301		$	55,454		$	(859	)	-2%	$	(14,012	)	-25%	14%	14%	19%
Available for sale securities	$	263,060		$	254,491		$	238,125		$	8,569		3%	$	24,935		10%	86%	86%	81%

Government & Agency securities	$	261,063		$	252,039		$	248,768		$	9,024		4%	$	12,295		5%	86%	85%	85%
AAA, AA, A rated securities	$	42,773		$	44,084		$	43,687		$	(1,311	)	-3%	$	(914	)	-2%	14%	15%	15%
Non-rated securities	$	666		$	669		$	1,124		$	(3	)	0%	$	(458	)	-41%	0%	0%	0%

AFS Unrealized Gain (Loss)	$	(22,437	)	$	(14,804	)	$	(20,808	)	$	(7,633	)	52%	$	(1,629	)	8%	-7%	-5%	-7%

PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from								% of Total
PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from								% of Total
($ in 000s)
		Dec 31,			Sep 30,			Dec 31,			Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024			2024			2023			$		%		$		%	2024	2024	2023
Portfolio Loans
Commercial & agriculture	$	75,240		$	73,002		$	75,444		$	2,238		3%	$	(204	)	0%	10%	10%	11%
Real estate:
Construction and development		42,725			46,569			48,720			(3,844	)	-8%		(5,995	)	-12%	6%	7%	7%
Residential 1-4 family		103,489			105,298			96,301			(1,809	)	-2%		7,188		7%	15%	15%	14%
Multi-family		68,978			60,773			51,025			8,205		14%		17,953		35%	10%	9%	7%
CRE — owner occupied		165,120			167,086			164,443			(1,966	)	-1%		677		0%	23%	24%	24%
CRE — non owner occupied		159,582			157,347			155,280			2,235		1%		4,302		3%	23%	22%	23%
Farmland		26,864			26,553			27,273			311		1%		(409	)	-1%	4%	4%	4%
Consumer		62,867			62,975			66,863			(108	)	0%		(3,996	)	-6%	9%	9%	10%
Portfolio Loans		704,865			699,603			685,349			5,262		1%		19,516		3%	100%	100%	100%
Less: ACL		(8,851	)		(8,897	)		(8,530	)
Less: deferred fees		(617	)		(629	)		(795	)
Net loans	$	695,397		$	690,077		$	676,024

Regulatory Commercial Real Estate	$	267,857		$	261,292		$	252,493		$	6,565		3%	$	15,364		6%	38%	37%	37%
Total Risk Based Capital⁽¹⁾	$	139,458		$	140,971		$	138,449		$	(1,513	)	-1%	$	1,009		1%
CRE to Risk Based Capital⁽¹⁾		192%			185%			182%					7%				10%

CRE–MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited)	Period Ended						Change from								% of Total
	Period Ended						Change from								% of Total
($ in 000s)
		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024		2024		2023		$		%		$		%	2024	2024	2023
Collateral Composition⁽²⁾
Multifamily	$	73,575	$	63,099	$	59,557	$	10,476		17%	$	14,018		24%	30%	27%	27%
Retail		36,813		37,685		29,470		(872	)	-2%		7,343		25%	15%	16%	13%
Hospitality		31,369		30,844		31,657		525		2%		(288	)	-1%	13%	13%	14%
Mini Storage		25,028		25,758		21,625		(730	)	-3%		3,403		16%	10%	11%	10%
Office		23,921		22,921		23,626		1,000		4%		295		1%	10%	10%	11%
Mixed Use		22,662		22,708		26,329		(46	)	0%		(3,667	)	-14%	9%	10%	12%
Industrial		14,723		13,912		11,410		811		6%		3,313		29%	6%	6%	5%
Warehouse		7,531		7,582		6,169		(51	)	-1%		1,362		22%	3%	3%	3%
Special Purpose		6,921		6,968		7,102		(47	)	-1%		(181	)	-3%	3%	3%	3%
Other		3,155		3,174		3,326		(19	)	-1%		(171	)	-5%	1%	1%	2%
Total	$	245,698	$	234,651	$	220,271	$	11,047		5%	$	25,427		12%	100%	100%	100%

⁽¹⁾Bank of the Pacific
⁽²⁾Includes loans in process of construction

CREDIT QUALITY (unaudited)	Period Ended						Change from
CREDIT QUALITY (unaudited)	Period Ended						Change from
($ in 000s)		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023
		2024		2024		2023		$		%		$		%
Risk Rating Distribution
Pass	$	691,350	$	691,199	$	674,992	$	151		0%	$	16,358		2%
Special Mention		10,811		4,789		4,669		6,022		126%		6,142		132%
Substandard		2,704		3,615		5,688		(911	)	-25%		(2,984	)	-52%
Portfolio Loans	$	704,865	$	699,603	$	685,349	$	5,262		1%	$	19,516		3%

Nonperforming Assets
Nonaccruing loans		1,094		1,138		664	$	(44	)	-4%		430		65%
Other real estate owned		–		–		–		–		0%		–		0%
Nonperforming Assets	$	1,094	$	1,138	$	664	$	(44	)	-4%		430		65%

Credit Metrics
Classified loans¹to portfolio loans		0.38%		0.52%		0.83%		-0.14%				-0.45%
ACL to classified loans¹		327.33%		246.11%		149.96%		81.22%				177.37%
Loans past due 30+ days to portfolio loans²		0.14%		0.03%		0.08%		0.11%				0.06%
Nonperforming assets to total assets		0.09%		0.10%		0.06%		-0.01%				0.03%
Nonaccruing loans to portfolio loans		0.16%		0.16%		0.10%		0.00%				0.06%

⁽¹⁾Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower’s financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected.
⁽²⁾Excludes non-accrual loans

DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended						Change from								% of Total
DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended						Change from								% of Total
($ in 000s)
		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023			Dec 31,	Sep 30,	Dec 31,
		2024		2024		2023		$		%		$		%	2024	2024	2023
Deposits
Interest-bearing demand	$	194,526	$	183,337	$	183,436	$	11,189		6%	$	11,090		6%	19%	18%	18%
Money market		193,324		192,185		179,344		1,139		1%		13,980		8%	19%	19%	18%
Savings		115,520		117,131		136,408		(1,611	)	-1%		(20,888	)	-15%	11%	12%	13%
Time deposits (CDs)		135,485		133,995		100,832		1,490		1%		34,653		34%	13%	13%	10%
Total interest-bearing deposits		638,855		626,648		600,020		12,207		2%		38,835		6%	62%	62%	59%
Non-interest bearing demand		375,876		384,825		409,272		(8,949	)	-2%		(33,396	)	-8%	38%	38%	41%
Total deposits	$	1,014,731	$	1,011,473	$	1,009,292	$	3,258		0%	$	5,439		1%	100%	100%	100%

Insured Deposits	$	629,600	$	636,725	$	647,330	$	(7,125	)	-1%	$	(393,526	)	-61%	62%	63%	64%
Collateralized Deposits		131,327		122,448		129,895		8,879		7%		1,432		1%	13%	12%	13%
Uninsured Deposits		253,804		252,300		232,067		1,504		1%		397,533		171%	25%	25%	23%
Total Deposits	$	1,014,731	$	1,011,473	$	1,009,292	$	3,258		0%	$	5,439		1%	100%	100%	100%

Consumer Deposits	$	466,826	$	458,097	$	470,425	$	8,729		2%	$	(3,599	)	-1%	46%	45%	46%
Business Deposits		406,308		420,845		398,977		(14,537	)	-3%		7,331		2%	40%	42%	40%
Public Deposits		141,597		132,531		139,890		9,066		7%		1,707		1%	14%	13%	14%
Total Deposits	$	1,014,731	$	1,011,473	$	1,009,292	$	3,258		0%	$	5,439		1%	100%	100%	100%

NET INTEREST MARGIN (unaudited)	Quarter Ended						Change From									Twelve Months Ended			Change
NET INTEREST MARGIN (unaudited)	Quarter Ended						Change From									Twelve Months Ended			Change
($ in 000s)
		Dec 31,		Sep 30,		Dec 31,		Sep 30, 2024				Dec 31, 2023				Dec 31,		Dec 31,
		2024		2024		2023		$		%		$		%		2024		2023		$		%

Average Interest Bearing Balances
Portfolio loans	$	703,811	$	697,904	$	675,622	$	5,907		1%	$	28,189		4%	$	697,527	$	659,165	$	38,362		6%
Loans held for sale	$	1,033	$	1,276	$	709	$	(243	)	-19%	$	324		46%	$	1,125	$	628	$	497		79%
Investment securities	$	302,501	$	285,947	$	289,245	$	16,554		6%	$	13,256		5%	$	291,133	$	286,473	$	4,660		2%
Interest-bearing cash	$	78,296	$	81,755	$	105,177	$	(3,459	)	-4%	$	(26,881	)	-26%	$	72,893	$	180,781	$	(107,888	)	-60%
Total interest-earning assets	$	1,085,641	$	1,066,882	$	1,070,753	$	18,759		2%	$	14,888		1%	$	1,062,678	$	1,127,047	$	(64,369	)	-6%
Non-interest bearing deposits	$	388,227	$	383,332	$	419,994	$	4,895		1%	$	(31,767	)	-8%	$	388,561	$	448,234	$	(59,673	)	-13%
Interest-bearing deposits	$	628,475	$	615,388	$	593,464	$	13,087		2%	$	35,011		6%	$	607,678	$	620,026	$	(12,348	)	-2%
Total Deposits	$	1,016,702	$	998,720	$	1,013,458	$	17,982		2%	$	3,244		0%	$	996,239	$	1,068,260	$	(72,021	)	-7%
Borrowings	$	13,403	$	13,403	$	13,403	$	–		0%	$	–		0%	$	13,403	$	13,401	$	2		0%
Total interest-bearing liabilities	$	641,878	$	628,791	$	606,867	$	13,087		2%	$	35,011		6%	$	621,081	$	633,427	$	(12,346	)	-2%

Yield / Cost $⁽¹⁾
Portfolio loans	$	10,336	$	10,509	$	9,879	$	(173	)	-2%	$	457		5%	$	41,169	$	37,088	$	4,081		11%
Loans held for sale	$	16	$	22	$	12	$	(6	)	-27%	$	4		33%	$	71	$	39	$	32		82%
Investment securities	$	2,622	$	2,535	$	2,536	$	87		3%	$	86		3%	$	10,107	$	9,489	$	618		7%
Interest-bearing cash	$	942	$	1,108	$	1,440	$	(166	)	-15%	$	(498	)	-35%	$	3,833	$	9,109	$	(5,276	)	-58%
Total interest-earning assets	$	13,916	$	14,174	$	13,867	$	(258	)	-2%	$	49		0%	$	55,180	$	55,725	$	(545	)	-1%
Interest-bearing deposits	$	2,796	$	2,684	$	1,914	$	112		4%	$	882		46%	$	9,829	$	5,351	$	4,478		84%
Borrowings	$	225	$	243	$	247	$	(18	)	-7%	$	(22	)	-9%	$	951	$	929	$	22		2%
Total interest-bearing liabilities	$	3,021	$	2,927	$	2,161	$	94		3%	$	860		40%	$	10,780	$	6,280	$	4,500		72%
Net interest income	$	10,895	$	11,247	$	11,706	$	(352	)	-3%	$	(811	)	-7%	$	44,400	$	49,445	$	(5,045	)	-10%

Yield / Cost %⁽¹⁾
Yield on portfolio loans		5.84%		5.99%		5.80%		-0.15%				0.04%				5.90%		5.63%		0.27%
Yield on investment securities		3.45%		3.53%		3.48%		-0.08%				-0.03%				3.47%		3.31%		0.16%
Yield on interest-bearing cash		4.79%		5.39%		5.44%		-0.60%				-0.65%				5.26%		5.04%		0.22%
Cost of interest-bearing deposits		1.77%		1.74%		1.28%		0.03%				0.49%				1.62%		0.86%		0.76%
Cost of borrowings		6.68%		7.21%		7.31%		-0.53%				-0.63%				7.10%		6.93%		0.17%
Cost of deposits and borrowings		1.17%		1.15%		0.83%		0.02%				0.34%				1.07%		0.58%		0.49%

Yield on interest-earning assets		5.10%		5.29%		5.14%		-0.19%				-0.04%				5.19%		4.94%		0.25%
Cost of interest-bearing liabilities		1.87%		1.85%		1.41%		0.02%				0.46%				1.74%		0.99%		0.75%
Net interest spread		3.23%		3.44%		3.73%		-0.21%				-0.50%				3.45%		3.95%		-0.50%
Net interest margin		3.99%		4.19%		4.34%		-0.20%				-0.35%				4.18%		4.39%		-0.21%

⁽¹⁾Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.

ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited)	Quarter Ended									Change From									Twelve Months Ended					Change
ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited)	Quarter Ended									Change From									Twelve Months Ended					Change
($ in 000s)
		Dec 31,			Sep 30,			Dec 31,			Sep 30, 2024				Dec 31, 2023				Dec 31,			Dec 31,
		2024			2024			2023			$		%		$		%		2024			2023			$		%
Allowance for Credit Losses
Beginning of period balance	$	8,897		$	8,859		$	8,347		$	38		0%	$	550		7%	$	8,530		$	8,236		$	294		4%
Impact of CECL Adoption (ASC 326)		–			–			–			–		-100%		–		-100%		–			(157	)		157		-100%
Charge-offs		(32	)		(5	)		(20	)		(27	)	540%		(12	)	60%		(129	)		(279	)		150		-54%
Recoveries		105			16			41			89		556%		64		156%		124			96			28		29%
Net (charge-off) recovery		73			11			21			62		564%		52		248%		(5	)		(183	)		178		-97%
Provision (benefit)		(119	)		27			162			(146	)	-541%		(281	)	-173%		326			634			(308	)	-49%
End of period balance	$	8,851		$	8,897		$	8,530		$	(46	)	-1%	$	321		4%	$	8,851		$	8,530		$	321		4%

Net charge-off (recovery) to
average portfolio loans		-0.04%			-0.01%			-0.01%			-0.03%				-0.03%				0.00%			0.03%			-0.03%
ACL to portfolio loans		1.26%			1.27%			1.24%			-0.01%				0.02%				1.26%			1.24%			0.02%

Allowance for unfunded loans
Beginning of period balance	$	524		$	617		$	749		$	(93	)	-15%	$	(225	)	-30%	$	698		$	203		$	495		244%
Impact of CECL Adoption (ASC 326)		–			–			–			–		-100%		–		-100%		–			609			(609	)	-100%
Provision (benefit)		16			(93	)		(51	)		109		-117%		67		-131%		(158	)		(114	)		(44	)	39%
End of period balance	$	540		$	524		$	698		$	16		3%	$	(158	)	-23%	$	540		$	698		$	(158	)	-23%

ABOUT PACIFIC FINANCIAL CORPORATION

Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At December 31, 2024, the Company had total assets of $1.15 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.

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

The MIL Network –

February 1, 2025

MIL-OSI: Patria Investments Announces Sale of Aguas Pacifico

Source: GlobeNewswire (MIL-OSI)

GRAND CAYMAN, Cayman Islands, Jan. 31, 2025 (GLOBE NEWSWIRE) — Patria Investments Limited (“Patria”) (NASDAQ: PAX), a global alternative asset manager, announced that Patria Infrastructure Fund III (“IS Fund III”) has substantially met the conditions precedent necessary for the sale of Aguas Pacifico, a multi-client water desalination project under construction in Chile, to Patria Infrastructure Fund V (“IS Fund V”) and other investors. The agreement for the transaction was signed in December 2024.

The sale of this asset is expected to be completed in 1Q25 and will be supported by a number of global investors, including sovereign wealth funds and institutional investors, in addition to IS Fund V, highlighting the long-term attractiveness of this platform.

The transaction reflects Patria’s long-term commitment to investing across infrastructure sectors in Latin America that address structural bottlenecks and generate positive impact on local economies and populations. Aguas Pacifico is located in Chile’s central region and is positioned for additional growth considering the strong demand and severe water scarcity in the region. It also illustrates the power of Patria’s strategic approach to infrastructure investment in the region, demonstrating our ability to develop and de-risk high-quality assets, partner with global investors, and generate attractive investment returns.

About Patria Investments
Crafting attractive returns for its clients and building a legacy in the regions where it operates. Patria is a leading alternative investment firm with over 35 years of history specializing in key resilient sectors. Its unique approach combines the knowledge from macro analysts, investment leaders, operating partners and on the ground team. With over U$44 billion in assets under management and a global presence, it aims to provide consistent returns in attractive long term investment opportunities while creating sustainable value for society.

Asset Classes: Private Equity, Infrastructure, Credit, Public Equities, Real Estate and Global Private Markets Solutions
Investment Regions: Latin America, Europe and United States

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “can,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in our annual report on Form 20-F, as such factors may be updated from time to time in our periodic filings with the United States Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our periodic filings. The forward-looking statements speak only as of the date of this press release, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Media Contact:
Burson / +44 20 7113 3468 / patria@hillandknowlton.com

Patria Shareholder Relations:
+1 917 769 1611 / PatriaShareholderRelations@patria.com

The MIL Network –

February 1, 2025

MIL-OSI: Airship AI Secures Follow-On Seven-Figure Contract Award with Fortune 100 Transportation & E-Commerce Company

Source: GlobeNewswire (MIL-OSI)

Acropolis Enterprise Video and Data Management Platform Supports Operational and Physical Security Requirements for Global Locations

REDMOND, Wash., Jan. 31, 2025 (GLOBE NEWSWIRE) — Airship AI Holdings, Inc. (NASDAQ: AISP) (“Airship AI” or the “Company”), a leader in AI-driven video, sensor, and data management surveillance solutions, today announced it has been awarded an additional one (1) year system maintenance and sustainment contract for an existing Fortune 100 customer leveraging the Company’s Acropolis Enterprise Video and Data Management platform supporting operational and physical security requirements.

“Our follow-on expansion contract with this flagship customer is a testament to the Acropolis eco-system’s ability to enhance physical security at the scale needed for the large-scale operations of the world’s largest corporations,” said Paul Allen, President of Airship AI. “This allows the customer to continue to federate and manage global logistical operations from a single security operations center.

“The seven-figure contract includes ongoing health monitoring, technical and engineering support, and software maintenance, demonstrating the ability to provide revenue from a mix of professional services in addition to our traditional software and hardware offerings. With employee safety and operational efficiency a key mission for this global Fortune 100 company, we look forward to further developing our suite of AI driven offerings to create additional efficiencies and continual improvements to operational effectiveness,” concluded Allen.

Airship AI’s Acropolis backend enterprise management system enables customers to manage devices and sensors across their entire digital eco-system, via hardware deployed on-premises or in the cloud, while utilizing Artificial Intelligence (AI) at the edge and or the backend to optimize operational efficiency and improve real-time decision-making capabilities. Combining the sensor-agnostic nature of our Acropolis platform with an edge-based AI platform Outpost AI, customers can efficiently add “smarts” to existing edge sensors, avoiding costly and operationally disruptive rip and replace requirements.

To experience how Airship AI and its suite of enterprise video and data management solutions can help your organization solve your complex video and data management challenges, please email your request to info@airship.ai.

About Airship AI Holdings, Inc.

Founded in 2006, Airship AI (NASDAQ: AISP) is a U.S. owned and operated technology company headquartered in Redmond, Washington. Airship AI is an AI-driven video, sensor and data management surveillance platform that improves public safety and operational efficiency for public sector and commercial customers by providing predictive analysis of events before they occur and meaningful intelligence to decision makers. Airship AI’s product suite includes Outpost AI edge hardware and software offerings, Acropolis enterprise management software stack, and Command family of visualization tools.

For more information, visit https://airship.ai.

Forward-Looking Statements

The disclosure herein includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, (1) statements regarding estimates and forecasts of financial, performance and operational metrics and projections of market opportunity; (2) changes in the market for Airship AI’s services and technology, expansion plans and opportunities; (3) the projected technological developments of Airship AI; and (4) current and future potential commercial and customer relationships. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Airship AI’s management and are not predictions of actual performance. These forward-looking statements are also subject to a number of risks and uncertainties, as set forth in the section entitled “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024, and the other documents that the Company has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. In addition, forward looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while it may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Investor Contact:

Chris Tyson/Larry Holub
MZ North America
949-491-8235
AISP@mzgroup.us

The MIL Network –

February 1, 2025

MIL-OSI: Helport AI Opens Office in the Philippines

Source: GlobeNewswire (MIL-OSI)

New ‘Global Center of Excellence’ to Drive Artificial Intelligence Operations and Service Offerings in the Business Process Outsourcing Industry

SINGAPORE and SAN DIEGO, Jan. 31, 2025 (GLOBE NEWSWIRE) — Helport AI Limited (NASDAQ: HPAI) (“Helport AI”), an AI technology company serving enterprise clients with intelligent customer communication software, services, and solutions, today announced the grand opening of its new office in the Philippines. Located at the IBM Plaza in Eastwood City, Quezon City, this facility is expected to establish Helport AI’s Global Center of Excellence for AI operations and training.

The new office represents Helport AI’s commitment to fostering innovation in the business process outsourcing (BPO) industry and supporting the growing demand for advanced AI solutions in Southeast Asia. The office will serve as a hub for Helport AI’s research and development efforts.

A Strategic Step for Helport AI

Guanghai Li, CEO of Helport AI, highlighted the significance of this milestone during the opening ceremony. “Our decision to establish a presence in the Philippines underscores the immense potential of this region,” said Li. “The Philippines is home to a thriving BPO sector and a highly skilled workforce. We believe this office will play a pivotal role in advancing our AI-driven solutions, helping our clients achieve greater efficiency, enhancing customer satisfaction, and anticipating potential industry disruption.”

The Philippines office will focus on refining Helport AI’s flagship product, an intelligent co-pilot software for call center agents. This technology provides real-time guidance to agents, optimizing customer interactions while reducing onboarding time and training costs. As an integral part of Helport AI’s portfolio, this tool has already proven its scalability, with clients reporting improved agent performance and operational efficiency.

A Celebration of Innovation and Collaboration

The grand opening event featured a series of keynotes and discussions, including a presentation on “The Future of AI in BPO” and a live demonstration of Helport AI’s software. The program concluded with a ribbon-cutting ceremony and a networking session attended by industry leaders, government officials, and alliance partners.

Over fifty guests, including representatives from local BPO companies, investors, industry associations, and members of the news media, attended the gathering. They expressed interest in Helport AI’s solutions and demonstrated a desire for future collaboration, signaling the potential for partnerships in the region.

Looking Ahead

This new office marks another chapter in Helport AI’s journey toward redefining the future of AI in the BPO sector. With robust in-house AI training capabilities and a growing global footprint, Helport AI aspires to empower businesses, transform customer interactions, and drive sustainable growth.

About Helport AI

Helport AI (NASDAQ: HPAI) is an AI technology company dedicated to optimizing customer communication through its digital platform and intelligent software solutions. Offering enterprise level customer contact services, Helport AI’s mission is to empower everyone to work as an expert. Learn more at www.helport.ai.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements, including, but not limited to, Helport AI’s business plan and outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on Helport AI’s current expectations and projections about future events that Helport AI believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions. Helport AI undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Helport AI believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and Helport AI cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in Helport AI’s registration statement and other filings with the U.S. Securities and Exchange Commission.

Helport AI Investor Relations:
Website: https://ir.helport.ai/
Email: ir@helport.ai

External Investor Relations Contact:
Chris Tyson
Executive Vice President
MZ North America
Direct: 949-491-8235
HPAI@mzgroup.us
www.mzgroup.us

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9fdedad8-fef3-4e3b-8b9e-40960895c3a5

The MIL Network –

February 1, 2025

MIL-OSI: Ninepoint Partners Announces Final January 2025 Cash Distribution for Ninepoint Cash Management Fund – ETF Series

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 31, 2025 (GLOBE NEWSWIRE) — Ninepoint Partners LP (“Ninepoint Partners”) today announced the final January 2025 cash distribution for the Ninepoint Cash Management Fund – ETF Series. The record date for the distribution is January 31, 2025. This distribution is payable on February 7, 2025.

The per-unit final January distribution is detailed below:

Ninepoint ETF Series	Ticker	Cash Distribution per unit		Notional Distribution per unit		CUSIP
Ninepoint Cash Management Fund	NSAV	$0.14673		$0.00000		65443X105

About Ninepoint Partners

Based in Toronto, Ninepoint Partners LP is one of Canada’s leading alternative investment management firms overseeing approximately $7 billion in assets under management and institutional contracts. Committed to helping investors explore innovative investment solutions that have the potential to enhance returns and manage portfolio risk, Ninepoint offers a diverse set of alternative strategies spanning Equities, Fixed Income, Alternative Income, Real Assets, F/X and Digital Assets

For more information on Ninepoint Partners LP, please visit www.ninepoint.com or for inquiries regarding the offering, please contact us at (416) 943-6707 or (866) 299-9906 or invest@ninepoint.com.

Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

Please note that distribution factors (breakdown between income, capital gains and return of capital) can only be calculated when a fund has reached its year-end. Distribution information should not be relied upon for income tax reporting purposes as this is only a component of total distributions for the year. For accurate distribution amounts for the purpose of filing an income tax return, please refer to the appropriate T3/T5 slips for that particular taxation year. Please refer to the prospectus or offering memorandum of each Fund for details of the Fund’s distribution policy.

The payment of distributions and distribution breakdown, if applicable, is not guaranteed and may fluctuate. The payment of distributions should not be confused with a Fund’s performance, rate of return, or yield. If distributions paid by the Fund are greater than the performance of the Fund, then an investor’s original investment will shrink. Distributions paid as a result of capital gains realized by a Fund and income and dividends earned by a Fund are taxable in the year they are paid. An investor’s adjusted cost base will be reduced by the amount of any returns of capital. If an investor’s adjusted cost base goes below zero, then capital gains tax will have to be paid on the amount below zero.

Sales Inquiries:

Ninepoint Partners LP
Neil Ross
416-945-6227
nross@ninepoint.com

The MIL Network –

February 1, 2025

MIL-OSI Global: South Africa’s debt has skyrocketed – new rules are needed to manage it

Source: The Conversation – Africa – By Robert Botha, Research Fellow at the Impumelelo Economic Growth Lab. The Impumelelo Economic Growth Lab is a unit of the Bureau for Economic Research (BER), Stellenbosch University

South Africa’s fiscal trajectory paints a concerning picture. Public expenditure exceeds revenue. As a result sovereign debt is building up and interest on this debt is increasing.

This raises concerns over the South African government’s financial sustainability. The debt-to-GDP ratio has skyrocketed from 23.6% in 2008/09 to a projected 74.7% in 2024/25. The International Monetary Fund has recommended that, over the long term, South Africa should reduce its debt-to-GDP ratio to 60% of GDP, in line with that of peers.

Arguably more important than the debt level is how quickly debt has accumulated. Debt servicing costs, which consist of the interest on government debt and other costs directly associated with borrowing, have been the fastest-growing line item in the national budget. Rising interest payments have been crowding out critical expenditures on services such as health, education and infrastructure.

As I argue in a recently published report titled “A fiscal anchor for South Africa: Avoiding the mistakes of the past”, establishing a credible fiscal anchor (or fiscal rule) could be step towards avoiding a debt spiral and regaining fiscal sustainability and credibility.

Fiscal rules are constraints on fiscal policy, designed to impose numerical limits. For example, a limit on the allowable debt-to-GDP ratio, or the allowable balance after accounting for government expenditure and revenue. Fiscal rules are widely used – 105 countries have adopted them so far.

Failing to address the country’s fiscal challenges risks plunging South Africa into a debt trap. This happens when a country finds it difficult to escape a cycle of debt and has to borrow more to pay off old debt. If debt-servicing costs continue to rise, essential public services will come under even greater strain.

Several emerging markets have experienced the severe consequences of unchecked debt accumulation and debt servicing costs. Argentina is one example. Without a credible plan to stabilise and reduce debt and debt servicing costs, the risk of economic stagnation and financial instability grows quickly.

Fiscal erosion and credibility concerns

The roots of South Africa’s current predicament lie in years of mistakes. These include:

spending beyond its means
questionable political decisions like bailing out state-owned entities
poor governance and oversight at municipal and local government level, which led to inefficient public spending.

These factors were underpinned by an underperforming economy, unrealised forecasts and arguably weak institutional checks.

For the last 15 years South Africa’s National Treasury has undertaken to stabilise the country’s debt-to-GDP ratio. This would have required keeping the ratio constant. But these commitments have consistently been deferred. Debt stabilisation targets have been revised upwards 13 times, from 40% in 2015/16 to the current 75.5%. The stabilisation year has been pushed back 10 times, from the initial year of 2015/16 to the current target of 2025/26. This has created a perception of inconsistent policy.

Over-optimistic macroeconomic forecasting has undermined credibility. Over the last ten years, GDP growth projections have routinely overshot actual performance by an average of 0.5 percentage points in the first year of forecasts and even more in subsequent years. In defence of the National Treasury, the South African economy has performed worse than more forecasters expected in recent years.

Adding to the fiscal strain are rising social expenditures, the public sector wage bill and repeated bailouts of state-owned enterprises. This spending relieves short-term political and social pressures, but undermines the country’s long-term fiscal health.

Without credible mechanisms to constrain spending, South Africa’s fiscal framework lacks the discipline needed to ensure sustainability, and to restore credibility.

Why fiscal rules matter

Fiscal rules are there to promote discipline, ensure that debt can be paid and enhance credibility. The experience in the 105 countries that have adopted them suggests that strong, well-designed rules can signal a government’s commitment to fiscal prudence.

It’s difficult to establish whether there is a causal relationship between fiscal rules and fiscal performance. But there’s at least a correlation. As a practical example of enforcing fiscal rules, in November 2023, the German constitutional court overruled a budget that was passed in the Bundestag but breached Germany’s fiscal rules.

However, fiscal rules are not a panacea. Poorly designed or inadequately enforced rules can make the problems worse. For South Africa, this risk is acute.

Political commitment and strong institutional frameworks are needed too. Also, a shift in how fiscal policy is conceived and implemented.

Designing new rules

Drawing lessons from global best practices, South Africa’s fiscal rules must be enforceable, flexible and simple. A well-designed rule should:

stabilise and eventually reduce the debt-to-GDP ratio
target government spending as a share of GDP, emphasising consumption spending like salaries and goods and services, rather than capital expenditure
have political buy-in
be overseen independently
be legally binding and enforceable.

Context

South Africa’s low economic growth rate is a complication. Average interest rates on government debt are higher than the nominal GDP growth rate. But reining in spending too much could stifle growth, creating a vicious cycle.

That’s why stabilising debt first would make more sense than aiming to reduce debt too rapidly.

South Africa’s fiscal rules must also have some flexibility. For instance, they could allow for shocks such as natural disasters or global economic crises.

Fiscal rules could follow a phased approach to initially focus on stabilising debt, and then to move towards reducing debt. Both of these phases would entail expenditure rules to guide annual budget processes and to place limits on spending.

The benefits

Credible fiscal rules could have a number of benefits.

Firstly, they could improve South Africa’s credibility by signalling to markets and international institutions that South Africa is committed to fiscal discipline.

Secondly, fiscal credibility is associated with reduced sovereign risk premiums, which translates into lower debt-servicing costs. In turn this would free up resources for critical development priorities.

Third, they can foster a more stable economic environment for investment and growth.

Fourth, they would help coordinate policies. South Africa enjoys rule-based monetary policy in the form of inflation targeting but lacks the same for fiscal policy. This can lead to sub-optimal outcomes. For example, the central bank can keep interest rates too high, not necessarily because it thinks the treasury’s policies are inflationary, but because it cannot predict the treasury’s actions.

The way forward

Adopting fiscal rules in South Africa comes with risks. Weak institutional capacity, especially in oversight bodies like the Parliamentary Budget Office, could undermine rule enforcement.

To shield against these risks, South Africa should have stronger institutions. It could create an independent statutory fiscal council, possibly falling under Parliament, the National Treasury or as an independent constitutional advisory body.

Oversight bodies would also need to build their capacity.

Robert Botha is a Research Fellow at the Impumelelo Economic Growth Lab. The Impumelelo Economic Growth Lab is a unit of the Bureau for Economic Research (BER)

– ref. South Africa’s debt has skyrocketed – new rules are needed to manage it – https://theconversation.com/south-africas-debt-has-skyrocketed-new-rules-are-needed-to-manage-it-248355

MIL OSI – Global Reports –

February 1, 2025

MIL-OSI Global: The sound of skateboarding offers skaters a therapeutic way to connect with the city

Source: The Conversation – UK – By Paul O’Connor, Senior lecturer in Sociology, University of Exeter

Alistair Macrobert/Unsplash

The sound of a skateboard trick communicates a world of sensory information to skateboarders. The power of “skatesound” – the noises of the board and the environment it comes into contact with – is so distinct because it relates to an experience that is both heard and felt.

Despite the sound of skateboarding frequently being an issue of public complaint, many skaters find it therapeutic, calming and a source of joy.

The visually spectacular activity of skateboarding is often presented as an exciting, iconoclastic pursuit. Despite its inclusion in the last two summer Olympics, it remains sub-culturally distinct. Some skateboarding practices are perhaps even arcane and cult-like in their reverence for banal concrete steps and metal benches.

Research my colleagues and I conducted argues that the niche world of skateboarding endures because of its dense sensory culture – one that is heard and felt by skateboarders.

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For skateboarders, skatesound is an augmented experience of the world multilayered with insights about the body, movement and the texture of the city.

Imagine the skateboard itself as an amplifying tool, one that gives fine and detailed information about terrain, efficacy and possibility. It is as if the skateboard is an extended sensory appendage, to feel and hear the world at large.

The sounds of the city

A series of research on sport and sound has explored how physical ability can be enhanced by music, the motivation and communal experience of spectator chants and even hearing loss.

Our research in skateboarding highlights new areas of consideration. One of the most distinct issues relates to how skateboarders have a dynamic understanding of skateable urban spaces that are unknown to other street denizens.

‘Relaxing’ skateboarding sounds videos rack up thousands of views on YouTube.

What skateboarders hear is also what they feel – the sound of the pavements or office plazas becomes part of their sensory world. Skateboarders can hear the sound of a skateboard and be aware of not just the environment it is being ridden through, but also the embodied experience, “the feel” of it for the rider.

One middle-aged Canadian skateboarder told us that when she heard the sound of someone skateboarding it both gave her joy and a sense of connection to the rider. Sound might therefore tell us something of the shared community and bond skaters report. They connect with each other because they share such a wealth of specialised knowledge.

Skaters say they feel excited when they hear the sound of someone else skateboarding.
Tanner Vote/Unsplash

Generally, skateboarders love the sound of skateboarding, describing it with a range of adjectives as the “sound of freedom”, “happiness”, or simply “lovely”. Yet, they are also keenly aware that, by some, skateboarding is considered unpleasant noise.

The paradox of skatesound is that skateboarders are able to hold both opposing notions simultaneously. We collected numerous accounts of skateboarders deliberately avoiding certain locations and times so as not to disturb, startle and annoy other city users. Yet, their own experience of hearing skatesound unexpectedly while at work, or in the street below at home, was always met with excitement.

A universal among skateboarders is what we have termed the “head whip” – the immediate instinctual turn of the head to seek out the origin of skatesound. The association of this sound was reported as an invitation to adventure, a feeling of fraternity with an unseen but clearly heard member of the tribe.

A surprising feature of our research was that several participants reported some form of neurodiversity, either being on the autism spectrum or having ADHD. The sensory experience of skateboarding, of feeling what you see and hear, was reported in positive terms as a way to calm sometimes overpowering senses.

For these skaters, skatesound has become part of a full-body connecting experience engaging the physical, mental and emotional with the board and the world at large. It represents some form of craft and mastery of the chaos of everyday life.

For the past 15 years, the A-Skate foundation provided skateboarding opportunities for children on the autism spectrum in recognition of these therapeutic processes. A range of therapists worldwide are incorporating elements of skateboarding into their support of people’s needs, spanning anxiety to learning disabilities.

The art of skateboarding

Bridging the gap between skateboarder and non-skateboarder, artist Max Boutin’s Texturologies art installation (2022) enables those curious about the sensory world to get a no-risk taster.

Using dynamic sound, large visual screens and static boards that pulse with the skatesound being played underneath, Boutin’s art offers a sensory experience of the skateboarder’s unique relationship to urban space. As a consequence, hearing like a skateboarder becomes one of the simplest ways to feel like a skateboarder.

Boutin’s work advocates for the specific knowledge embedded in the act of skateboarding. It speaks of those who find joy and revelry in often neglected and unloved urban realms that have lost their enchantment to a public chaperoned endlessly into spaces of consumption.

As contempt for the city deepens, skatesound can allow us to feel our urban spaces in new ways.

Paul O’Connor does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. The sound of skateboarding offers skaters a therapeutic way to connect with the city – https://theconversation.com/the-sound-of-skateboarding-offers-skaters-a-therapeutic-way-to-connect-with-the-city-247866

MIL OSI – Global Reports –

February 1, 2025

MIL-OSI Global: DeepSeek, Nvidia and the AI race that’s shaping the future

Source: The Conversation – UK – By Daniele D’Alvia, Lecturer in Banking and Finance Law, Queen Mary University of London

Koshiro K/Shutterstock

The AI revolution is well under way and two companies – DeepSeek and Nvidia – stand out among those competing to lead it. Outside the financial world, the story might seem distant – but it really does have consequences for everyone. It comes down to why investors are paying so much attention to AI, and how this competition could affect the technology we use daily.

Developments in AI investment will shape the capabilities of the next generation of apps, smart assistants, self-driving technology and business practices.

DeepSeek, the new player on the scene, is a Chinese company that has been making huge waves in AI development. Its powerful technology could change things such as healthcare, finance – and even the way we interact with the internet. Investors are excited because they see DeepSeek as a potential leader in shaping the next generation of AI tools.

Meanwhile, Nvidia has long been a giant in AI hardware, producing the graphics processing units (GPUs, or chips) that power many AI applications. However, the rise of DeepSeek has made some investors rethink their bets, leading to a sell-off in Nvidia shares, and wiping almost US$300 billion (£242 billion) off the company’s value.

Why does this matter? To put it simply, the AI race isn’t just about corporate profits. The technology developed by companies such as DeepSeek and Nvidia is what powers voice assistants, recommendation systems on streaming platforms, self-driving car software and even medical breakthroughs. As investment flows into AI, it means that innovation could become more advanced and accessible – much faster than we previously expected.

When investors hear about a new company like DeepSeek making big advances, they often react by shifting their investments. This is what happened with Nvidia. Some investors sold their shares, fearing that DeepSeek might take away some of Nvidia’s dominance in AI. This does not necessarily mean the company is struggling – only that markets move based on expectations, rather than just current success.

Speculation – where investors accept uncertainty and high risks in return for potentially big returns – plays a key role in these shifts. Investors do not always wait for solid proof that a company will succeed, instead they often act based on excitement, predictions or just fear of missing out. This can cause rapid changes in stock prices, even before new technology is widely available.

Speculation can sometimes lead to instability, but it also helps to drive innovation. When investors put money into AI companies, it allows those companies to develop technology that could improve people’s daily lives. This has happened before – during the dotcom boom of the 1990s, investment rushed into internet startups. While many companies failed, others like Amazon and Google became global leaders.

Similarly, cryptocurrency investment surged in the past decade. While the hype led to many failures, blockchain technology – one of its key innovations – has since become a major part of modern finance and security systems.

Is it a bubble?

With so much excitement around AI, some experts worry that the industry is experiencing a speculative bubble. A bubble happens when investors pour money into a sector too quickly, driving up prices beyond their real value. This happened in the early 2000s with the dotcom crash that followed the boom years of the previous decade. Many internet companies received huge investments, but when they failed to deliver on their promises markets crashed.

Could the same happen with AI? It’s possible – but unlike some past bubbles, AI is already being widely used in everyday life. The key question is not whether AI is important, but whether current investments reflect realistic long-term growth or over-optimistic speculation.

AI is already a big part of people’s lives.
Tero Vesalainen/Shutterstock

The sell-off of Nvidia shares does not necessarily mean it is losing its place in AI. Instead, it could reflect investors trying to hedge their bets, moving some of their money to newer companies such as DeepSeek while still keeping Nvidia in their portfolios.

In other words, investors are looking into the potential “next big thing” (Chinese e-commerce giant Alibaba, for example, is touting a new AI model that claims to be superior to those of DeepSeek and Meta). Savvy investors often shop around like this to spread risk to avoid relying too much on a single company to bring them returns.

Beyond Nvidia and DeepSeek, there is a larger global race for AI dominance. Countries, including the United States, China and some European states, are investing heavily in AI research because they recognise how much power and influence this technology could bring. Governments are funding AI initiatives, and businesses are pouring resources into being the first to create groundbreaking AI systems.

But while speculation and innovation drive growth, regulation is needed to prevent market and financial instability. The history of economic crashes shows that unchecked hype can lead to over-investment and eventual collapse. Regulators need to ensure that AI companies and investors operate responsibly, balancing growth with stability.

For example, regulators should provide clear AI investment guidelines, endorse transparency around the financial risks of investing, and be on the lookout for possible AI investment bubbles. Importantly, they should also introduce consumer protection policies to shield retail (non-professional) investors. And they should encourage international cooperation around regulation, working towards common principles.

The battle between DeepSeek and Nvidia is a sign of how AI is transforming the world. Investors, regulators and everyday consumers all have a stake in how this technology develops. While financial speculation can be unpredictable, it is also one of the driving forces behind the innovation that’s shaping the future.

Daniele D’Alvia does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. DeepSeek, Nvidia and the AI race that’s shaping the future – https://theconversation.com/deepseek-nvidia-and-the-ai-race-thats-shaping-the-future-248626

MIL OSI – Global Reports –

February 1, 2025

MIL-OSI Global: How satellites have become Earth’s new health and nature watchdogs

Source: The Conversation – UK – By Dhritiraj Sengupta, Earth Observation Scientist, Plymouth Marine Laboratory

Harvepino/Shutterstock

Satellite-derived Earth observation (EO) data helps researchers like me unlock new insights into monitoring both environmental and human health.

I’m working with the European Space Agency’s EO4Health Resilience project to integrate information about different types of disease into one digital platform. Due to launch in summer 2025, this project aims to improve accessibility to EO data for medical professionals, support more informed decision-making in public health and hopefully prevent more deaths from disease in the future.

Environmental and animal health are both closely linked to human health. Climate change has a huge influence on these connections, as it can make disease outbreaks such as the 2003 Sars virus and the recent H5N1 bird flu more likely.

By increasing the chance of human-wildlife contact, disruptions like deforestation can increase the risk of disease (like COVID-19) transferring from wildlife to people. Many other factors beyond medicine also determine health, such as sanitation, water supply and farming practices.

The World Health Organization adopted the One Health approach to inspire a joint response to health threats by connecting efforts by veterinary, public health and environmental sectors.

At a time when governments are struggling to come to grips with the growing costs of healthcare, avoiding outbreaks of infectious diseases is crucial. So, the importance of identifying and monitoring areas of high risk, and of communicating the means of avoiding risks to the public rise to the fore.

Satellite data can improve environmental and human health monitoring for three different categories of disease:

1. Waterborne diseases

There is growing concern about the impact of climate change and human migration. This intensifies the global spread of major bacterial waterborne infectious diseases. EO technology plays a key role in tracking climate change by monitoring big areas over long periods, often in enough detail to spot changes clearly.

Many bacteria, like Vibrio cholerae which causes cholera, thrive in stagnant water. My team worked with the European Space Agency to show that its presence can be modelled using the concentration of chlorophyll found on the surface of bodies of water. Chlorophyll is the green pigment in plants that helps them use sunlight to make their food and grow.

Risk maps for an entire lake can be created using satellite-derived chlorophyll data. Zoonotic diseases that spread from animals to humans such as leptospirosis (a disease caused by Leptospira bacteria) have an animal origin, but reach humans through contaminated floodwater in cities.

Bacteria such as Escherichia coli are often present in sewage pollution and can cause of diarrhoea and gastrointestinal illness. These infections typically occur through activities like drinking or swimming in contaminated water.

A recent study predicts that US cases of non-cholera Vibrio infections could rise by 50% by 2090 compared to 1995. That’s because sea surface temperatures are increasing due to climate change and bacterial populations can grow and spread at warmer temperatures. Satellites could help monitor those temperature changes and therefore identify places most prone to outbreaks.

One recent report highlights the value of satellites studying waterborne diseases. The ability to measure and monitor water quality across large areas makes it much easier and quicker to deliver near real-time information.

Harmful blooms of blue-green algae can be spotted from space.
Ray Hugo Tang

2. Vector-borne diseases

Vector-borne diseases, such as the West Nile virus and malaria, pose
significant global health threats. They are transmitted by
mosquitoes and can lead to severe neurological diseases. Vector-borne diseases are a leading cause of morbidity and mortality, particularly in tropical regions.

My colleagues in Italy used EO data to unlock new insights about the transmission of West Nile virus. Models based on satellite data that showed temperature, humidity and vegetation – all of which influence mosquito populations and disease transmission patterns – can help forecast the next outbreak.

The malaria atlas is a collaborative project that involves scientists from around the world. By collating EO data, mosquito breeding sites can be mapped, while climate change can be tracked as it affects the habitats that disease-carrying mosquitoes live in. Maps like this enhance the effectiveness of public health strategies by pinpointing where best to focus efforts and resources to control and prevent the spread of these diseases.

3. Non-communicable diseases

Non-communicable diseases, such as cardiovascular diseases
exacerbated by heatwaves, rank among the top global causes of death. Prolonged exposure to extreme heat can strain the heart, increasing risks of heart attacks and strokes. So, isolating locations most at risk of heatwaves could help target aid and reduce the risk of widespread heatstroke and other conditions.

Environmental factors like urbanisation, climate change and air pollution amplify health risks. Several EO projects funded by the European Space Agency use AI and satellite data to map land surface temperatures, greenhouse gas emissions, green spaces, rivers and lakes.

For example, poor air quality caused by high levels of emissions in urban areas can lead to respiratory diseases such as asthma and chronic obstructive pulmonary disease. Long-term exposure to pollutants like fine particulate matter known as PM2.5 and nitrogen dioxide may increase the risks of cardiovascular diseases, lung cancer, and even premature death.

Mapping air quality using satellite data helps identify particulate pollution hotspots. This supports targeted interventions to improve public health.

In the future, satellites could track plastic pollution in oceans. Marine life consumes plastic particles that humans ingest through seafood. Chemicals present in plastics can lead to hormone disruption in humans and may increase cancer risk or immunity, for example. So tracking pollution distribution around the globe could identify sources and the places where people and wildlife are at most risk of exposure to chemical contaminants like those in plastic.

Don’t have time to read about climate change as much as you’d like?

Get a weekly roundup in your inbox instead. Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. Join the 40,000+ readers who’ve subscribed so far.

Dhritiraj Sengupta receives funding from The European Space Agency and The Welcome Trust. He is affiliated with the Plymouth Marine Laboratory, Group of Earth Observation (GEO) Aqua Watch, International Geographical Union, and Future Earth-Coasts.

– ref. How satellites have become Earth’s new health and nature watchdogs – https://theconversation.com/how-satellites-have-become-earths-new-health-and-nature-watchdogs-247319

MIL OSI – Global Reports –

February 1, 2025

MIL-OSI Africa: Mission 300: Significant new donor pledges in support of the Sustainable Energy Fund for Africa announced on margins of the Africa Energy Summit

Source: Africa Press Organisation – English (2) – Report:

DAR ES SALAAM, Tanzania, January 31, 2025/APO Group/ —

Denmark, the United Kingdom, Spain and France have unveiled new or additional contributions to the Sustainable Energy Fund for Africa, demonstrating strong support for the African Development Bank (www.AfDB.org)-managed fund as it expands energy access across Africa, including through the Mission 300 partnership. Another new donor – Japan –joined in December 2024 with a $5 million contribution under AGIA (https://apo-opa.co/3Eju6LT).

SEFA is a multi-donor Special Fund that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. It aims to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa in line with the New Deal on Energy for Africa and Mission 300.

Mission 300 (https://apo-opa.co/4hDAJqx), an ambitious new partnership of the African Development Bank Group, the World Bank Group and other development partners, aims to provide access to electricity to an additional 300 million Africans by 2030.

France, a new donor to SEFA, will provide €10 million. Denmark, the UK and Spain will increase existing contributions by DKK 100 million (€13.4 million), £8.5 million (€10.13) and €3 million, respectively.

France’s contribution will bolster the Africa Green Infrastructure Alliance (AGIA) (https://apo-opa.co/4aHQE4M), a platform of the African Development Bank, Africa 50 and other partners that will develop transformative sustainable infrastructure projects for investment.

These contributions come as SEFA enjoyed its best year on record in 2024, with $108 million approved for 14 projects. SEFA now boasts a portfolio of over $300 million in highly impactful investments and technical assistance programmes, which is expected to unlock up to $15 billion in investments and deliver approximately 12 million new electricity connections.

Denmark’s Acting State Secretary for Development Policy, Ole Thonke, said: “Africa is endowed with enormous untapped potential for renewable energy, which can fuel green industrialisation. The latest Danish financial contribution to SEFA will focus on the newly established Africa-led Accelerated Partnership for Renewables in Africa (APRA), further supporting the continent’s ambitious development and climate goals.”

“We are halfway through this decisive decade to achieve the sustainable development goals and get on track to tackle climate change,” said Rachel Kyte, UK Special Representative for Climate, Foreign, Commonwealth and Development Office. “Achieving our collective goals of reliable, affordable and clean power is a golden thread that links economic growth, greater investment, strengthened resilience and climate ambition. By accelerating the roll-out of clean power, the UK and Mission 300 are putting green and inclusive growth at the heart of our partnerships with Africa. Our announcement of an additional £8.5 million in UK funding for the AfDB’s SEFA will mobilise the much-needed private sector investment so that more Africans can access clean power right across the continent.”

Inés Carpio San Román, Alternate Governor of Spain for the African Development Bank, said, “We are pleased that Spain has decided to renew its support for the SEFA fund with a contribution of €3 million. This reaffirms our commitment to the crucial sector of renewable energy, which plays a key role in fostering sustainable development across Africa.”

“As a strong supporter of Africa’s green infrastructure investments with financial tools that mobilise private finance, France is proud to contribute €10 million to the AGIA through SEFA,” stated Bertrand Dumont, Director General of the French Treasury and Governor for France at the African Development Bank. “This very first contribution is our first step towards reinforcing Africa’s sustainable development and accelerating the continent’s path to a low-carbon economy. By investing in green infrastructure in Africa, we are investing for the future.”

Dr Daniel Schroth, Director of Renewable Energy and Energy Efficiency at the African Development Bank, said, “We welcome the new commitments from donors whose support underscores the impactful work of SEFA. These contributions are essential in enabling SEFA to fulfil its role as a key delivery vehicle for Mission 300 at this pivotal moment.”

MIL OSI Africa –

February 1, 2025

MIL-OSI Europe: ECB and ESRB issue joint report on experiences of using the countercyclical capital buffer early in the cycle

Source: European Central Bank

31 January 2025

17 EEA countries have adopted a positive neutral CCyB approach
Authorities using this approach do not expect it to result in higher CCyB requirements at the peak of the cycle
The European macroprudential framework could be clarified to facilitate a more flexible and proactive use of the CCyB

A timely build-up of capital buffers that can be released in times of stress is essential for financial stability. One way to achieve this is by setting a positive countercyclical capital buffer (CCyB) rate early in the cycle when cyclical systemic risks are neither subdued nor elevated. Understanding how authorities can apply this “positive neutral” approach is essential to advancing the use of the CCyB.

The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) today published a joint report aimed at deepening our knowledge of the implementation of positive neutral approaches to setting the CCyB in the European Economic Area (EEA).

The report describes the experience of countries that have adopted a positive neutral CCyB approach, as well as the views of those that have not. It outlines the perceived costs and benefits, implications for setting the CCyB through the cycle, calibration methods, conditions for build-up and release, interactions with other capital instruments, buffer usability and reciprocity.

Motivations for the adoption of a positive neutral CCyB approach mostly relate to three areas. The first is the need to build up the CCyB in a timely manner, not only to address uncertainty in the identification of systemic risks, but also to ensure that releasable capital buffers are available in the early stages of the financial cycle. The second is to allow for a more gradual, and therefore less costly, build-up of the buffer. The third is increasing the amount of releasable buffers, also to boost resilience against a wider spectrum of potentially large shocks.

The report highlights three common elements in the positive neutral CCyB approaches adopted by EEA countries. First, a positive neutral CCyB approach is not intended as a new buffer, but rather as an earlier activation of the CCyB in an environment where cyclical systemic risks are neither subdued nor elevated. Second, in most countries, adopting a positive neutral CCyB approach is not expected to yield higher CCyB requirements at the peak of the cycle. This is in line with the objective of building up the CCyB early in the cycle. Third, for most countries, this more proactive and flexible use of the CCyB does not need to be offset by lowering other requirements, consistent with the risk-based nature of the CCyB.

Finally, the report describes what ESRB member institutions see as the challenges and obstacles to implementing a positive neutral CCyB approach, and presents potential avenues for overcoming them. First, more clarity on the objectives of a positive neutral CCyB could alleviate concerns about potential overlaps with the objectives of other instruments, most notably the systemic risk buffer. Second, some countries view a lack of clarity in EU legislation as an obstacle to adopting a positive neutral CCyB approach. In this context, it would be helpful to clarify the European macroprudential framework to ensure that the CCyB can be used more flexibly and proactively. This could be done notably by reducing the prominence of the credit-to-GDP gap and other credit indicators to guide the setting of the CCyB rate.

The report could serve as a useful reference for countries within and outside the EEA region that are considering adopting such an approach. It may also provide valuable information to regulatory bodies looking at issuing further guidance on positive neutral CCyB approaches.

For media queries, please contact Ettore Fanciulli tel.: +49 69 1344 95012.

MIL OSI Europe News –

February 1, 2025

MIL-OSI United Kingdom: Star re-imburses tenant following PCA intervention

Source: United Kingdom – Executive Government & Departments

Star has re-imbursed a tenant £5,832 for costs the tenant was ordered to pay in arbitration because of the PCA’s intervention.

What happened?

In 2023, a tenant referred a dispute with Star to the PCA for arbitration. As part of this dispute, the tenant alleged that Star had breached regulation 46 of the Pubs Code, relating to premises insurance.

The PCA appointed an alternative arbitrator to decide the dispute. During the arbitration, Star did not tell the tenant or the arbitrator that it had admitted breaches of regulation 46 of the Pubs Code, or that the PCA was in the process of reviewing those breaches at the time of the arbitration. Star also told the arbitrator that it believed its communications to tenants had satisfied Star’s obligations under regulation 46.

The arbitrator decided that the tenant’s complaints, including about regulation 46, were vexatious, and ordered the tenant to pay the arbitrator’s fee of £5,832. In Pubs Code arbitrations, the pub-owing business must pay the reasonable fees and expenses of an arbitrator, except if the arbitrator decides that the referral was vexatious, in which case they can require the tenant to pay some or all of those costs.

The PCA has legal powers to request information or documents from an arbitration for regulatory purposes. Upon reviewing the arbitrator’s award of costs against the tenant and the reasons for it, the PCA contacted Star to express concern with Star’s conduct in this arbitration. In particular, the PCA was concerned that Star’s lack of transparency about its admitted breaches of regulation 46 may have influenced the arbitrator’s decision to order the tenant to pay costs.

Action taken by Star

Star now agrees that it should have informed the arbitrator and the tenant about its breaches of regulation 46, and that the PCA was reviewing those breaches. Star also acknowledges that it is possible that this information could have influenced the arbitrator’s decision in the arbitration, including in respect of costs.

As a result, Star has now reimbursed the tenant for the costs the tenant was ordered to pay.

The PCA’s expectations of pub-owning businesses in Pubs Code Arbitrations

The PCA expects all pub-owning businesses participating in Pubs Code arbitrations will actively seek to avoid any practice which may result in unfairness.

For this reason, the PCA expects all pub-owning businesses will draw information about regulatory engagement with the PCA to the attention of a tenant and arbitrator where that information is relevant to the issues in dispute.

The PCA office can be contacted at office@pubscodeadjudicator.gov.uk.

Published 31 January 2025

MIL OSI United Kingdom –

February 1, 2025

MIL-OSI Russia: Denis Manturov held a session on the use of artificial intelligence to enhance the combat capabilities of weapons and control systems

Translartion. Region: Russians Fedetion –

Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

Denis Manturov, Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko and representatives of the Ministry of Industry and Trade, the Ministry of Digital Development, Communications and Mass Media of Russia, members of the board of the military-industrial complex, heads of military command bodies, representatives of defense industry enterprises and the People’s Defense Industry Complex at a session on the use of artificial intelligence to increase the combat capabilities of weapons and control systems

January 31, 2025

Denis Manturov, Dmitry Chernyshenko and Deputy Minister of Defense Alexey Krivoruchko at a session on the use of artificial intelligence to enhance the combat capabilities of weapons and control systems

January 31, 2025

Denis Manturov and Dmitry Chernyshenko visited the Military Innovation Technopolis (VIT) “ERA”

January 31, 2025

Denis Manturov and Dmitry Chernyshenko visited the Military Innovation Technopolis (VIT) “ERA”

January 31, 2025

Samples of unmanned aircraft systems for intercepting air targets

January 31, 2025

Samples of unmanned aircraft systems for intercepting air targets

January 31, 2025

Previous news Next news

Denis Manturov, Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko and representatives of the Ministry of Industry and Trade, the Ministry of Digital Development, Communications and Mass Media of Russia, members of the board of the military-industrial complex, heads of military command bodies, representatives of defense industry enterprises and the People’s Defense Industry Complex at a session on the use of artificial intelligence to increase the combat capabilities of weapons and control systems

A strategic session was held at the Military Innovation Technopolis (VIT) “Era” under the leadership of First Deputy Prime Minister Denis Manturov.

The event was attended by Deputy Prime Minister Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko, representatives of the Ministry of Industry and Trade and the Ministry of Digital Development, members of the board of the Military-Industrial Commission, heads of military command bodies, representatives of enterprises of the defense industry complex and the national defense industry complex.

During the meeting, issues of the influence of artificial intelligence on increasing the combat effectiveness of units in combat zones and increasing the combat capabilities of weapons, equipment, and control systems were considered.

“All leading countries of the world are aware of the growing role of artificial intelligence technologies, big data processing and cloud computing, having included their development among their strategic priorities. In fact, we can talk about another race of technological competition, comparable to the arms race and space exploration programs. Russia as a whole is following in the wake of global trends. Russian companies are developing technological products, including large language models, computer vision, machine learning, based on neural network tools. Most of the existing and planned developments have dual-use potential. Our task is to use them in solving applied military problems,” Denis Manturov noted.

Artificial intelligence is used for automatic processing and analysis of intelligence data, can improve information support for combat operations, increase the ability to predict threats and the course of conflict development. Digital technologies are the basis for the mass introduction of robotic systems and swarm interaction of unmanned aerial vehicles.

“Artificial intelligence is a breakthrough and fast technology that is important for both civilian and military needs. In the coming years, we will increase the volume of funding for AI research. We plan to accumulate these resources within the framework of a single AI research program. It is planned to allocate 5% of the state budget for funding scientific research in the field of AI and 15% of the state budget for funding research in other areas, but with the mandatory use of AI tools. Consolidation of these resources in the field of AI and training of specialists are extremely important for achieving technological sovereignty and other goals set by the President of Russia,” said Dmitry Chernyshenko.

“It is also important to use the capabilities of AI analytics for a deep analysis of the conflict in Ukraine and further training of domestic intelligent systems,” Denis Manturov emphasized.

The session participants discussed the formation of information and computing systems for the trusted use of elements of artificial intelligence for military purposes, as well as the experience of transitioning to a new generation of drones on neuroprocessors.

An exhibition of new samples and technologies developed by residents of innovative scientific and technological centers and innovative development funds of the Russian Federation was opened for the participants of the strategic session. A number of samples using AI technologies were selected by the Main Directorate for Innovative Development of the Ministry of Defense of Russia together with the People’s Front for use in the special military operation zone.

In particular, control modules for receiving video images, analyzing, capturing and automatically tracking targets, semi-autonomous underwater robotic systems (RTS) for reconnaissance, technical control of underwater objects, delivery and manipulation of cargo in difficult underwater conditions, unified consoles for simultaneous control of a group of RTS (several unmanned boats, ground-based RTS or a swarm of UAVs) were presented.

Manufacturers also presented universal flight controller control units based on technical vision. In particular, in complex electronic environments, these devices retain full functionality of video analytics and allow you to hit a target when you lose control of the drone or return to the base on your own.

In addition, the participants of the strategic session considered unmanned aircraft systems for intercepting air targets. Interceptor control systems with artificial intelligence allow for automatic detection and capture of targets for subsequent neutralization with a net, special pellets or kinetic damage.

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.

MIL OSI Russia News –

February 1, 2025

MIL-OSI: Topicus.com Inc. acquires 9.99% Stake in Asseco Poland S.A. in Poland

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 31, 2025 (GLOBE NEWSWIRE) — Topicus.com Inc. (TOI.V) today announced that Topicus’ subsidiary Yukon Niebieski Kapital B.V. has purchased 8,300,029 shares in Asseco Poland S.A. (“Company”) from Cyfrowy Polsat S.A., representing approximately 9.99% of the issued shares in the Company. The shares were acquired at a price of 85 PLN per share.

About Asseco Poland S.A.

Asseco Group is a federation of companies engaged in information technology and operates in 62 countries worldwide. Asseco Group companies are listed on the Warsaw Stock Exchange, Tel-Aviv Stock Exchange as well as on the American NASDAQ Global Markets. Asseco Group offers comprehensive, proprietary IT solutions for all sectors of the economy.

About Topicus.com

Topicus.com Inc. is a leading pan-European provider of vertical market software and vertical market platforms to clients in public and private sector markets. Operating and investing in countries and markets across Europe with long-term growth potential, Topicus.com Inc. acquires, builds and manages leading software companies providing specialized, mission-critical and high-impact software solutions that address the particular needs of customers.

About Cyfrowy Polsat S.A.

Cyfrowy Polsat S.A. is a leading media and telecom group in Poland, offering digital pay-TV, mobile and fixed-line telephony, mobile and fixed-line broadband internet, and TV broadcasting. It also operates in renewable energy and green hydrogen development. Key brands include Polsat, PolsatBox, Plus, Netia, and Interia.pl. Founded in 1996, the company is headquartered in Warsaw.

For further information, contact:

Topicus.com Inc.
Jamal Baksh, Chief Financial Officer
416-861-9677
Email: jbaksh@csisoftware.com

The MIL Network –

February 1, 2025

MIL-OSI: POET Engaged by Global Financial Services Leader to Develop Custom Optical Engine

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 31, 2025 (GLOBE NEWSWIRE) — POET Technologies Inc. (“POET” or the “Company“) (TSX Venture: PTK; NASDAQ: POET), a leader in the design and implementation of highly-integrated optical engines and light sources for Artificial Intelligence networks, announces that it has signed an agreement to develop a novel optical engine for use in a high-frequency securities trading operation for a global capital markets firm. High-frequency trading (“HFT”) is a type of automated trading that uses powerful computers to execute a large number of trades in fractions of a second.

The multi-phase project is a pioneering effort to increase the speed and decrease the latency inherent in current transceiver solutions utilized by securities trading operations. The first phase of the project will begin immediately with POET designing prototypes of POET Optical Interposer–based transceiver engines built to meet the customer’s specification. Subsequent phases include building additional prototypes and, if successful, production optical engines customized for this application.

“We are delighted to have embarked on this ambitious project with a global leader in HFT,” commented Raju Kankipati, Chief Revenue Officer of POET. “This project generates revenue for POET this year and demonstrates the versatility of the POET Optical Interposer and the entry into a new, related market space by the Company.”

About POET Technologies Inc.
POET is a design and development company offering high-speed optical modules, optical engines and light source products to the artificial intelligence systems market and to hyperscale data centers. POET’s photonic integration solutions are based on the POET Optical Interposer™, a novel, patented platform that allows the seamless integration of electronic and photonic devices into a single chip using advanced wafer-level semiconductor manufacturing techniques. POET’s Optical Interposer-based products are lower cost, consume less power than comparable products, are smaller in size and are readily scalable to high production volumes. In addition to providing high-speed (800G, 1.6T and above) optical engines and optical modules for AI clusters and hyperscale data centers, POET has designed and produced novel light source products for chip-to-chip data communication within and between AI servers, the next frontier for solving bandwidth and latency problems in AI systems. POET’s Optical Interposer platform also solves device integration challenges in 5G networks, machine-to-machine communication, self-contained “Edge” computing applications and sensing applications, such as LIDAR systems for autonomous vehicles. POET is headquartered in Toronto, Canada, with operations in Allentown, PA, Shenzhen, China, and Singapore. More information about POET is available on our website at www.poet-technologies.com.

Forward-Looking Statements
This news release contains “forward-looking information” (within the meaning of applicable Canadian securities laws) and “forward-looking statements” (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”, “estimate”, “propose”, “project”, “outlook”, “foresee” or similar words suggesting future outcomes or statements regarding any potential outcome. Such statements include the Company’s expectations with respect to the success of the Company’s product development efforts, the performance of its products, operations, meeting revenue targets, and the expectation of continued success in the financing efforts, the capability, functionality, performance and cost of the Company’s technology as well as the market acceptance, inclusion and timing of the Company’s technology in current and future products and expectations regarding its successful development of high-frequency trading solutions and its penetration of the Artificial Intelligence hardware markets.

Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, the completion of its development efforts with its securities trading partner, the ability to build working prototypes to the customer’s specifications, and the size, future growth and needs of Artificial Intelligence network suppliers. Actual results could differ materially due to a number of factors, including, without limitation, the failure to produce working prototypes on time and within budget, the failure of Artificial Intelligence networks to continue to grow as expected, the failure of the Company’s products to meet performance requirements for AI and datacom networks, operational risks in the completion of the Company’s projects, the ability of the Company to generate sales for its products, and the ability of its customers to deploy systems that incorporate the Company’s products. Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company’s securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
120 Eglinton Avenue, East, Suite 1107, Toronto, ON, M4P 1E2- Tel: 416-368-9411 – Fax: 416-322-5075

The MIL Network –

February 1, 2025

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

Source: GlobeNewswire (MIL-OSI)

Net income of $13.7 million, or $0.71 per diluted share, for the three months ended December 31, 2024 compared to net loss of $7.9 million, or $0.41 per diluted share, for the three months ended September 30, 2024; the fourth quarter of 2024 included $3.9 million in expenses related to the merger and $0.5 million for a legal settlement compared to $17.0 million in expenses related to the merger, $15.5 million of provision for credit losses on non-purchase credit deteriorated loans and $4.8 million for an executive retirement, net of taxes, for the third quarter of 2024;
Excluding the impact of the non-recurring charges referenced above, net income and diluted earnings per share, respectively, were $16.7 million⁽¹⁾ and $0.87⁽¹⁾ for the fourth quarter of 2024 compared to adjusted net income and diluted earnings per share of $21.4 million⁽¹⁾ and $1.11⁽¹⁾, respectively;
The Board of Directors declared a cash dividend of $0.26 per common share, payable February 21, 2025, to shareholders of record as of February 14, 2025; this represents an increase in the Company’s quarterly cash dividend of $0.03 per share, or 13%;
The previously announced cost save target of 18% has been achieved for the go-forward operating run rate as of December 31, 2024;
With the core conversion being completed in November 2024, the fourth quarter results reflected several ongoing activities associated with the conversion and the transitional period; the fourth quarter also included elevated salaries and employee benefit expenses due to year end performance-based incentive accruals;
Net interest margin, on a tax equivalent basis, was 4.05% in the fourth quarter of 2024 compared to 4.14% in the third quarter of 2024; the net accretion impact of purchase accounting marks was $7.2 million of net interest income, which represents 52 basis points of net interest margin for the fourth quarter of 2024 compared to $5.8 million of net interest income, which represents 42 basis points of net interest margin, for the third quarter of 2024;
Commercial loans declined by $59.5 million, or 2%, from September 30, 2024 to December 31, 2024 due primarily to strategic actions to reduce risk in the portfolio, including reducing commercial real estate (“CRE”) loan concentrations; a pool of mostly commercial and industrial loans totaling $6.0 million was sold, including $2.6 million of nonaccrual loans; total classified loans declined by $16.9 million during the fourth quarter of 2024;
Noninterest income decreased by $1.2 million to $11.2 million in the three months ended December 31, 2024 compared to $12.4 million in the three months ended September 30, 2024; this reduction was driven by certain courtesy fee waivers provided to clients as well as tax credits recognized in the third quarter of 2024 that did not recur in the fourth quarter;
The provision for credit losses was $1.8 million for the three months ended December 31, 2024, inclusive of a charge-off of $2.4 million for one commercial and industrial (C&I) relationship and charge-offs associated with the loan sale of $0.6 million, which was offset by the acceleration of a purchase mark for the same amount;
Tangible book value per common share⁽¹⁾ increased to $21.19 per share at December 31, 2024 compared to $21.12 per share at September 30, 2024.

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

HARRISBURG, Pa., Jan. 31, 2025 (GLOBE NEWSWIRE) — Orrstown Financial Services, Inc. (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended December 31, 2024. Net income totaled $13.7 million for the three months ended December 31, 2024, compared to net loss of $7.9 million for the three months ended September 30, 2024 and net income of $7.6 million for the three months ended December 31, 2023. Diluted earnings per share was $0.71 for the three months ended December 31, 2024, compared to diluted loss per share of $0.41 for the three months ended September 30, 2024 and diluted earnings per share of $0.73 for the three months ended December 31, 2023. For the fourth quarter of 2024, excluding the impact of merger-related expenses and other non-recurring charges, net of taxes, net income and diluted earnings per share were $16.7 million⁽¹⁾ and $0.87⁽¹⁾, respectively. For the third quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $21.4 million⁽¹⁾ and $1.11⁽¹⁾, respectively. For the fourth quarter of 2023, excluding the impact from the merger-related expenses, net income and diluted earnings per share were $8.6 million⁽¹⁾ and $0.83⁽¹⁾, respectively.

“While we are pleased with another year of strong core earnings, we are even more excited about what lies ahead,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “We successfully completed our core conversion in November and have achieved the targeted 18% cost savings in our future operating run rate of the two banks’ combined noninterest expense base. With the integration behind us, we look forward to returning our focus to growing the company, enhancing shareholder value and building the premier community banking franchise in our Pennsylvania and Maryland markets.”

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

DISCUSSION OF RESULTS

Balance Sheet

Loans

Loans held for investment was $3.9 billion at December 31, 2024, a decrease of $50.2 million, compared to $4.0 billion at September 30, 2024. The decrease from the third quarter of 2024 was primarily due to strategic actions to reduce risk in the portfolio, including reducing CRE loan concentrations.

Investment Securities

Investment securities, all of which are classified as available-for-sale, increased by $2.9 million to $829.7 million at December 31, 2024 from $826.8 million at September 30, 2024. During the fourth quarter of 2024, investment securities totaling $37.7 million were purchased, partially offset by paydowns of $18.1 million and net unrealized losses of $16.2 million. The overall duration of the Company’s investment securities portfolio was 4.1 years at December 31, 2024 compared to 4.6 years at September 30, 2024. See Appendix B for a summary of the Bank’s investment securities at December 31, 2024, highlighting their concentrations, credit ratings and credit enhancement levels.

Deposits

During the fourth quarter of 2024, deposits decreased by $35.1 million to $4.6 billion at December 31, 2024 compared to $4.7 billion at September 30, 2024 due to normal seasonal activity. The Bank’s loan-to-deposit ratio decreased slightly to 85% at December 31, 2024 from 86% at September 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 remained at $115.4 million at December 31, 2024 and September 30, 2024. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed in a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.7 billion at December 31, 2024.

Goodwill and Intangible Assets

Goodwill decreased by $2.5 million from September 30, 2024 to December 31, 2024 due to certain purchase accounting adjustments, primarily an increase in the core deposit intangible of $4.1 million.

Income Statement

Net Interest Income and Margin

Net interest income was $50.6 million for the three months ended December 31, 2024 compared to $51.7 million for the three months ended September 30, 2024. The net interest margin, on a tax equivalent basis, decreased to 4.05% in the fourth quarter of 2024 from 4.14% in the third quarter of 2024. The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $7.2 million, which represents 52 basis points of net interest margin during the fourth quarter of 2024. During the third quarter of 2024, the net accretion impact of purchase accounting marks was $5.8 million, which represented 42 basis points of net interest margin. Funding costs show signs of stabilizing.

Interest income on loans, on a tax equivalent basis, decreased by $2.7 million to $68.1 million for the three months ended December 31, 2024 compared to $70.8 million for the three months ended September 30, 2024. Average loans decreased by $28.0 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

Interest income on investment securities, on a tax equivalent basis, was $9.9 million for the fourth quarter of 2024 compared to $10.1 million in the third quarter of 2024.

Interest expense, on a tax equivalent basis, decreased by $1.9 million to $29.4 million for the three months ended December 31, 2024 compared to $31.3 million for the three months ended September 30, 2024. Average interest-bearing deposits decreased by $58.1 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Average borrowings decreased by $1.3 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Interest expense includes $0.9 million and $1.5 million of amortization of purchase accounting marks for the three months ended December 31, 2024 and September 30, 2024, respectively.

Provision for Credit Losses

The allowance for credit losses (“ACL”) on loans decreased to $48.7 million at December 31, 2024 from $49.6 million at September 30, 2024. The ACL to total loans was 1.24% at December 31, 2024 compared to 1.25% at September 30, 2024. The Company recorded a provision for credit losses on loans of $2.1 million for the three months ended December 31, 2024 compared to $14.1 million for the three months ended September 30, 2024. Net charge-offs were $3.0 million for the three months ended December 31, 2024 compared to net charge-offs of $0.3 million for the three months ended September 30, 2024. During the fourth quarter of 2024, the Bank sold $6.0 million of mostly C&I loans, which resulted in a charge-off totaling $0.6 million. There was also a corresponding $0.6 million of purchase accounting accretion associated with these loans.

Classified loans decreased by $16.9 million to $88.6 million at December 31, 2024 from $105.5 million at September 30, 2024 primarily due to a combination of repayments and net rating upgrades, in addition to the loan sale. Non-accrual loans decreased by $2.8 million to $24.1 million at December 31, 2024 from $26.9 million at September 30, 2024 partially due to a sale of mostly C&I loans on nonaccrual status totaling $2.6 million during the fourth quarter of 2024. Nonaccrual loans to total loans decreased to 0.61% at December 31, 2024 compared to 0.68% at September 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 decreased by $1.2 million to $11.2 million in the three months ended December 31, 2024 from $12.4 million in the three months ended September 30, 2024. There were reduced service charges in the fourth quarter due to fee waivers provided to clients in the post-conversion period from November through the end of the year.

Wealth management income decreased to $4.9 million in the three months ended December 31, 2024 compared to $5.0 million for the three months ended September 30, 2024. The team continues to provide value added services to clients and deliver strong results.

Other income decreased by $0.3 million to $1.6 million in the three months ended December 31, 2024 compared to $1.9 million in the three months ended September 30, 2024 due to income from solar tax credits totaling $0.3 million recorded during the third quarter of 2024.

Noninterest Expenses

Noninterest expenses decreased by $17.4 million to $42.9 million in the three months ended December 31, 2024 from $60.3 million in the three months ended September 30, 2024.

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 merger-related items below, the Company’s financial results for the fourth quarter of 2024 may not be directly comparable to prior reported periods.

For the three months ended December 31, 2024, merger-related expenses totaled $3.9 million, a decrease of $13.1 million, compared to $17.0 million for the three months ended September 30, 2024. The merger costs incurred during the fourth quarter of 2024 include employee separation costs, software conversion costs and professional fees. The Company expect to incur some additional merger-related expenses in the first quarter of 2025.

Salaries and benefits expense decreased by $4.8 million to $22.4 million for the three months ended December 31, 2024 compared to $27.2 million for the three months ended September 30, 2024. The three months ended September 30, 2024 included $4.8 million of expenses associated with the retirement of an executive.

Intangible asset amortization increased to $2.8 million for the three months ended December 31, 2024 compared to $2.5 million for the three months ended September 30, 2024. This increase is due to the amortization expense recognized on the core deposit intangible of $40.1 million and wealth customer relationship intangible of $10.4 million established on July 1, 2024 from the merger. Due to the aforementioned purchase accounting adjustment, the three months ended December 31, 2024 included $0.4 million of additional amortization expense associated with this adjustment.

Taxes other than income decreased by $0.8 million in the three months ended December 31, 2024 compared to the three months ended September 30, 2024. This decrease reflects tax credits recognized during the fourth quarter of 2024.

Income Taxes

The Company’s effective tax rate was 20.1% for both the fourth and third quarters of 2024. The Company’s effective tax rate for the three months ended December 31, 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 $516.7 million at December 31, 2024 compared to $516.2 million at September 30, 2024. The impact of net income of $13.7 million was offset by a reduction of $10.4 million in accumulated other comprehensive loss from an increase in unrealized losses in the investment portfolio and dividend payments of $4.4 million.

Tangible book value per share⁽¹⁾ increased to $21.19 per share at December 31, 2024 from $21.12 per share at September 30, 2024.

The Company’s tangible common equity ratio was 7.5% at both December 31, 2024 and September 30, 2024. The Company’s total risk-based capital ratio was 12.4% at both December 31, 2024 and September 30, 2024. The Company’s Tier 1 leverage ratio increased to 8.3% at December 31, 2024 compared to 8.0% at September 30, 2024 driven by earnings and a decrease in average assets during the fourth quarter of 2024.

At December 31, 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						Twelve Months Ended
	December 31,			December 31,			December 31,			December 31,
(In thousands)		2024			2023			2024			2023

Profitability for the period:
Net interest income	$	50,573		$	26,018		$	155,254		$	104,906
Provision for credit losses		1,755			418			16,546			1,682
Noninterest income		11,247			6,491			37,435			25,652
Noninterest expenses		42,930			22,392			148,337			83,843
Income before income tax expense		17,135			9,699			27,806			45,033
Income tax expense		3,451			2,056			5,756			9,370
Net income available to common shareholders	$	13,684		$	7,643		$	22,050		$	35,663

Financial ratios:
Return on average assets ⁽¹⁾		1.00	%		1.00	%		0.51	%		1.19	%
Return on average assets, adjusted ^{(1) (2) (3)}		1.22	%		1.13	%		1.30	%		1.22	%
Return on average equity ⁽¹⁾		10.54	%		12.21	%		5.62	%		14.66	%
Return on average equity, adjusted ^{(1) (2) (3)}		12.86	%		13.77	%		14.29	%		15.06	%
Net interest margin ⁽¹⁾		4.05	%		3.71	%		3.92	%		3.80	%
Efficiency ratio		69.4	%		68.9	%		77.0	%		64.2	%
Efficiency ratio, adjusted ^{(2) (3)}		62.3	%		65.6	%		62.5	%		63.4	%
Income per common share:
Basic	$	0.72		$	0.74		$	1.49		$	3.45
Basic, adjusted ^{(2) (3)}	$	0.87		$	0.84		$	3.80		$	3.54
Diluted	$	0.71		$	0.73		$	1.48		$	3.42
Diluted, adjusted ^{(2) (3)}	$	0.87		$	0.83		$	3.76		$	3.51

Average equity to average assets		9.45	%		8.18	%		9.08	%		8.11	%

⁽¹⁾ Annualized for the three months ended December 31, 2024 and 2023.
⁽²⁾ Ratio has been adjusted for the non-recurring charges for all periods presented.
⁽³⁾ Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

FINANCIAL HIGHLIGHTS (Unaudited)
(continued)
	December 31,			December 31,
(Dollars in thousands, except per share amounts)		2024			2023
At period-end:
Total assets	$	5,431,023		$	3,064,240
Loans, net of allowance for credit losses		3,882,525			2,269,611
Loans held-for-sale, at fair value		6,614			5,816
Securities available for sale, at fair value		829,711			513,519
Total deposits		4,615,706			2,558,814
FHLB advances and other borrowings and Securities sold under agreements to repurchase		141,227			147,285
Subordinated notes and trust preferred debt		68,680			32,093
Shareholders’ equity		516,682			265,056

Credit quality and capital ratios ⁽¹⁾:
Allowance for credit losses to total loans		1.24	%		1.25	%
Total nonaccrual loans to total loans		0.61	%		1.11	%
Nonperforming assets to total assets		0.45	%		0.83	%
Allowance for credit losses to nonaccrual loans		202	%		112	%
Total risk-based capital:
Orrstown Financial Services, Inc.		12.4	%		13.0	%
Orrstown Bank		12.4	%		12.8	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		10.2	%		10.8	%
Orrstown Bank		11.2	%		11.6	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.0	%		10.8	%
Orrstown Bank		11.2	%		11.6	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		8.3	%		8.9	%
Orrstown Bank		9.1	%		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)	December 31, 2024			December 31, 2023
Assets
Cash and due from banks	$	51,026		$	32,586
Interest-bearing deposits with banks		187,282			32,575
Cash and cash equivalents		238,308			65,161
Restricted investments in bank stocks		20,232			11,992
Securities available for sale (amortized cost of $864,920 and $549,089 at December 31, 2024 and December 31, 2023, respectively)		829,711			513,519
Loans held for sale, at fair value		6,614			5,816
Loans		3,931,214			2,298,313
Less: Allowance for credit losses		(48,689	)		(28,702	)
Net loans		3,882,525			2,269,611
Premises and equipment, net		50,217			29,393
Cash surrender value of life insurance		143,854			73,204
Goodwill		68,106			18,724
Other intangible assets, net		47,765			2,414
Accrued interest receivable		21,058			13,630
Deferred tax assets, net		42,647			22,017
Other assets		79,986			38,759
Total assets	$	5,431,023		$	3,064,240

Liabilities
Deposits:
Noninterest-bearing	$	886,786		$	430,959
Interest-bearing		3,728,920			2,127,855
Total deposits		4,615,706			2,558,814
Securities sold under agreements to repurchase and federal funds purchased		25,863			9,785
FHLB advances and other borrowings		115,364			137,500
Subordinated notes and trust preferred debt		68,680			32,093
Other liabilities		88,728			60,992
Total liabilities		4,914,341			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; 19,722,640 shares issued and 19,389,967 outstanding at December 31, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023		1,027			583
Additional paid—in capital		423,274			189,027
Retained earnings		126,540			117,667
Accumulated other comprehensive loss		(26,316	)		(28,476	)
Treasury stock— 332,673 and 592,209 shares, at cost at December 31, 2024 and December 31, 2023, respectively		(7,843	)		(13,745	)
Total shareholders’ equity		516,682			265,056
Total liabilities and shareholders’ equity	$	5,431,023		$	3,064,240

ORRSTOWN FINANCIAL SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,			December 31,			December 31,		December 31,
(Dollars in thousands, except per share amounts)		2024			2023			2024		2023
Interest income
Loans	$	67,870		$	33,910		$	210,287	$	126,595
Investment securities – taxable		8,773			4,787			27,361		18,031
Investment securities – tax-exempt		880			871			3,521		3,462
Short-term investments		2,492			460			7,764		1,809
Total interest income		80,015			40,028			248,933		149,897
Interest expense
Deposits		26,850			12,118			84,234		37,510
Securities sold under agreements to repurchase and federal funds purchased		67			30			215		114
FHLB advances and other borrowings		1,165			1,358			4,945		5,350
Subordinated notes and trust preferred debt		1,360			504			4,285		2,017
Total interest expense		29,442			14,010			93,679		44,991
Net interest income		50,573			26,018			155,254		104,906
Provision for credit losses		1,755			418			16,546		1,682
Net interest income after provision for credit losses		48,818			25,600			138,708		103,224
Noninterest income
Service charges		2,050			1,198			6,893		4,866
Interchange income		1,608			952			5,259		3,873
Swap fee income		597			588			1,676		1,039
Wealth management income		4,902			2,945			16,353		11,340
Mortgage banking activities		517			143			1,835		591
Investment securities (losses) gains		(5	)		(39	)		249		(47	)
Other income		1,578			704			5,170		3,990
Total noninterest income		11,247			6,491			37,435		25,652
Noninterest expenses
Salaries and employee benefits		22,444			12,848			76,581		50,983
Occupancy, furniture and equipment		4,893			2,534			14,570		9,593
Data processing		1,540			1,247			6,088		4,913
Advertising and bank promotions		878			501			2,587		2,157
FDIC insurance		955			460			2,677		1,960
Professional services		1,591			702			4,142		2,905
Taxes other than income		(312	)		203			734		1,050
Intangible asset amortization		2,838			236			5,742		953
Merger-related expenses		3,887			1,059			22,671		1,059
Restructuring expenses		39			—			296		—
Other operating expenses		4,177			2,602			12,249		8,270
Total noninterest expenses		42,930			22,392			148,337		83,843
Income before income tax expense		17,135			9,699			27,806		45,033
Income tax expense		3,451			2,056			5,756		9,370
Net income	$	13,684		$	7,643		$	22,050	$	35,663
continued

	Three Months Ended						Twelve Months Ended
	December 31,			December 31,			December 31,		December 31,
		2024			2023			2024		2023
Share information:
Basic earnings per share	$	0.72		$	0.74		$	1.49	$	3.45
Diluted earnings per share	$	0.71		$	0.73		$	1.48	$	3.42
Dividends paid per share	$	0.23		$	0.20		$	0.86	$	0.80
Weighted average shares – basic		19,118			10,321			14,761		10,340
Weighted average shares – diluted		19,300			10,419			14,914		10,435

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)

	Three Months Ended
	12/31/2024							9/30/2024							6/30/2024							3/31/2024							12/31/2023
			Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-				Taxable-			Taxable-
	Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent		Average		Equivalent			Equivalent
(In thousands)	Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate		Balance		Interest			Rate
Assets
Federal funds sold & interest-bearing bank balances	$	199,236	$	2,492		4.96	%	$	184,465	$	2,452		5.29	%	$	142,868	$	1,864		5.25	%	$	74,523	$	956		5.16	%	$	37,873	$	460		4.82	%
Investment securities ⁽¹⁾⁽²⁾		849,389		9,887		4.66			849,700		10,123		4.77			538,451		6,114		4.54			519,851		5,694		4.39			508,891		5,890		4.63
Loans ^{(1)(3)(4)(5)(6)}		3,961,269		68,073		6.82			3,989,259		70,849		7.07			2,324,942		35,690		6.17			2,308,103		36,382		6.34			2,286,678		34,055		5.91
Total interest-earning assets		5,009,894		80,452		6.38			5,023,424		83,424		6.61			3,006,261		43,668		5.84			2,902,477		43,032		5.96			2,833,442		40,405		5.67
Other assets		454,271							491,719							204,863							196,295							204,382
Total assets	$	5,464,165						$	5,515,143						$	3,211,124						$	3,098,772						$	3,037,824
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits⁽⁷⁾	$	1,257,316		5,360		1.69		$	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
Savings deposits⁽⁷⁾		1,538,287		10,381		2.68			283,337		148		0.21			165,467		140		0.34			170,005		144		0.34			178,351		153		0.34
Time deposits		998,963		11,109		4.41			1,014,628		12,290		4.82			481,721		5,007		4.18			428,443		4,180		3.92			392,085		3,632		3.67
Total interest-bearing deposits		3,794,566		26,850		2.81			3,852,708		28,603		2.95			2,296,941		15,265		2.67			2,169,070		13,516		2.51			2,114,011		12,118		2.27
Securities sold under agreements to repurchase and federal funds purchased		21,572		67		1.23			23,075		96		1.66			13,412		27		0.81			12,010		25		0.85			13,874		30		0.85
FHLB advances and other borrowings		115,373		1,165		4.01			115,388		1,154		3.98			115,000		1,152		4.03			137,505		1,474		4.31			127,843		1,358		4.21
Subordinated notes and trust preferred debt		68,571		1,360		7.88			68,399		1,437		8.36			32,118		734		9.19			32,100		754		9.45			32,083		504		6.29
Total interest-bearing liabilities		4,000,082		29,442		2.92			4,059,570		31,290		3.07			2,457,471		17,178		2.81			2,350,685		15,769		2.70			2,287,811		14,010		2.43
Noninterest-bearing demand deposits		849,999							807,886							423,037							417,469							441,695
Other liabilities		97,685							110,017							57,828							62,329							59,876
Total liabilities		4,947,766							4,977,473							2,938,336							2,830,483							2,789,382
Shareholders’ equity		516,399							537,670							272,788							268,289							248,442
Total	$	5,464,165						$	5,515,143						$	3,211,124						$	3,098,772						$	3,037,824
Taxable-equivalent net interest income / net interest spread				51,010		3.46	%				52,134		3.55	%				26,490		3.02	%				27,263		3.26	%				26,395		3.24	%
Taxable-equivalent net interest margin						4.05	%						4.14	%						3.54	%						3.77	%						3.71	%
Taxable-equivalent adjustment				(437	)						(437	)						(387	)						(382	)						(377	)
Net interest income			$	50,573						$	51,697						$	26,103						$	26,881						$	26,018
Ratio of average interest-earning assets to average interest-bearing liabilities						125	%						124	%						122	%						123	%						124	%

NOTES:
⁽¹⁾ Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
⁽²⁾ Average balance of investment securities is computed at fair value.
⁽³⁾ Average balances include nonaccrual loans.
⁽⁴⁾ Interest income on loans includes prepayment and late fees, where applicable.
⁽⁵⁾ Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024.
⁽⁶⁾ Interest income on loans includes accretion on purchase accounting marks of $7.6 million, $7.3 million, $0.2 million, $0.1 million and $0.1 million for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.
⁽⁷⁾ Changes between average deposit type balances are due to operational updates for deposit sweeps during the three months ended December 31, 2024.

ANALYSIS OF NET INTEREST INCOME
Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)
(continued)
	Twelve Months Ended
	December 31, 2024								December 31, 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	$	150,500	$	7,764			5.14	%	$	40,856	$	1,809			4.43	%
Investment securities ⁽¹⁾⁽²⁾		690,223		31,817			4.60			520,465		22,414			4.31
Loans ^{(1)(3)(4)(5)(6)}		3,150,425		210,994			6.68			2,239,574		127,107			5.68
Total interest-earning assets		3,991,148		250,575			6.26			2,800,895		151,330			5.40
Other assets		330,324								198,632
Total assets	$	4,321,472							$	2,999,527
Liabilities and Shareholders’ Equity
Interest-bearing demand deposits⁽⁷⁾	$	1,147,124		21,455			1.87		$	1,525,204		26,944			1.77
Savings deposits⁽⁷⁾		1,153,097		30,193			2.61			198,157		585			0.30
Time deposits		732,446		32,586			4.44			338,170		9,981			2.95
Total interest-bearing deposits		3,032,667		84,234			2.77			2,061,531		37,510			1.82
Securities sold under agreements to repurchase and federal funds purchased		17,543		215			1.22			14,111		114			0.80
FHLB advances and other borrowings		120,787		4,945			4.08			123,697		5,350			4.32
Subordinated notes and trust preferred debt		50,397		4,285			8.48			32,058		2,017			6.29
Total interest-bearing liabilities		3,221,394		93,679			2.91			2,231,397		44,991			2.02
Noninterest-bearing demand deposits		625,714								470,349
Other liabilities		82,084								54,447
Total liabilities		3,929,192								2,756,193
Shareholders’ equity		392,280								243,334
Total liabilities and shareholders’ equity	$	4,321,472							$	2,999,527
Taxable-equivalent net interest income / net interest spread				156,896			3.36	%				106,339			3.39	%
Taxable-equivalent net interest margin							3.92	%							3.80	%
Taxable-equivalent adjustment				(1,642	)							(1,433	)
Net interest income			$	155,254							$	104,906
Ratio of average interest-earning assets to average interest-bearing liabilities							124	%							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 twelve months ended December 31, 2024.
⁽⁶⁾ Interest income on loans includes accretion on purchase accounting marks of $15.2 million and $0.7 million for the twelve months ended December 31, 2024 and 2023, respectively.
⁽⁷⁾ Changes between average deposit type balances are due to operational updates for deposit sweeps during the three months ended December 31, 2024.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)

(In thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Profitability for the quarter:
Net interest income	$	50,573		$	51,697		$	26,103		$	26,881		$	26,018
Provision for credit losses		1,755			13,681			812			298			418
Noninterest income		11,247			12,386			7,172			6,630			6,491
Noninterest expenses		42,930			60,299			22,639			22,469			22,392
Income (loss) before income taxes		17,135			(9,897	)		9,824			10,744			9,699
Income tax expense (benefit)		3,451			(1,994	)		2,086			2,213			2,056
Net income (loss)	$	13,684		$	(7,903	)	$	7,738		$	8,531		$	7,643

Financial ratios:
Return on average assets ⁽¹⁾		1.00	%		(0.57)	%		0.97	%		1.11	%		1.00	%
Return on average assets, adjusted ^(1)(2)(3)		1.22	%		1.55	%		1.09	%		1.19	%		1.13	%
Return on average equity ⁽¹⁾		10.54	%		(5.85)	%		11.41	%		12.79	%		12.21	%
Return on average equity, adjusted ^(1)(2)(3)		12.86	%		15.85	%		12.88	%		13.79	%		13.77	%
Net interest margin ⁽¹⁾		4.05	%		4.14	%		3.54	%		3.77	%		3.71	%
Efficiency ratio		69.4	%		94.1	%		68.0	%		67.0	%		68.9	%
Efficiency ratio, adjusted ⁽²⁾⁽³⁾		62.3	%		67.2	%		64.6	%		65.0	%		65.6	%

Per share information:
Income (loss) per common share:
Basic	$	0.72		$	(0.41	)	$	0.74		$	0.82		$	0.74
Basic, adjusted ⁽²⁾⁽³⁾		0.87			1.12			0.84			0.89			0.84
Diluted		0.71			(0.41	)		0.73			0.81			0.73
Diluted, adjusted ⁽²⁾⁽³⁾		0.87			1.11			0.83			0.88			0.83
Book value		26.65			26.65			25.97			25.38			24.98
Book value, adjusted ^{(2) (3)}		28.40			28.24			26.12			25.44			25.07
Tangible book value ⁽³⁾		21.19			21.12			24.08			23.47			23.03
Tangible book value, adjusted ^{(2) (3)}		22.94			22.72			24.23			23.53			23.12
Cash dividends paid		0.23			0.23			0.20			0.20			0.20

Average basic shares		19,118			19,088			10,393			10,349			10,321
Average diluted shares		19,300			19,226			10,553			10,482			10,419

⁽¹⁾ Annualized.
⁽²⁾ Ratio has been adjusted for non-recurring expenses for all periods presented.
⁽³⁾ Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.

ORRSTOWN FINANCIAL SERVICES, INC.
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	December 31, 2024			September 30, 2024		June 30, 2024			March 31, 2024			December 31, 2023
Noninterest income:
Service charges	$	2,050		$	2,360	$	1,283		$	1,200		$	1,198
Interchange income		1,608			1,779		961			911			952
Swap fee income		597			505		375			199			588
Wealth management income		4,902			5,037		3,312			3,102			2,945
Mortgage banking activities		517			491		369			458			143
Other income		1,578			1,943		884			765			704
Investment securities (losses) gains		(5	)		271		(12	)		(5	)		(39	)
Total noninterest income	$	11,247		$	12,386	$	7,172		$	6,630		$	6,491

Noninterest expenses:
Salaries and employee benefits	$	22,444		$	27,190	$	13,195		$	13,752		$	12,848
Occupancy, furniture and equipment		4,893			4,333		2,705			2,639			2,534
Data processing		1,540			2,046		1,237			1,265			1,247
Advertising and bank promotions		878			537		774			398			501
FDIC insurance		955			862		419			441			460
Professional services		1,591			1,119		801			631			702
Taxes other than income		(312	)		503		49			494			203
Intangible asset amortization		2,838			2,464		215			225			236
Merger-related expenses		3,887			16,977		1,135			672			1,059
Restructuring expenses		39			257		—			—			—
Other operating expenses		4,177			4,011		2,109			1,952			2,602
Total noninterest expenses	$	42,930		$	60,299	$	22,639		$	22,469		$	22,392

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
(In thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Balance Sheet at quarter end:
Cash and cash equivalents	$	238,308		$	236,780		$	132,509		$	182,722		$	65,161
Restricted investments in bank stocks		20,232			20,247			11,147			11,453			11,992
Securities available for sale		829,711			826,828			529,082			514,909			513,519
Loans held for sale, at fair value		6,614			3,561			1,562			535			5,816
Loans:
Commercial real estate:
Owner occupied		633,567			622,726			371,301			364,280			373,757
Non-owner occupied		1,160,238			1,164,501			710,477			707,871			694,638
Multi-family		274,135			276,296			151,542			147,773			150,675
Non-owner occupied residential		179,512			190,786			89,156			91,858			95,040
Agricultural		125,156			129,486			25,551			25,909			26,847
Commercial and industrial		451,384			471,983			349,425			339,615			340,238
Acquisition and development:
1-4 family residential construction		47,432			56,383			32,439			22,277			24,516
Commercial and land development		241,424			262,317			129,883			118,010			115,249
Municipal		30,044			27,960			10,594			10,925			9,812
Total commercial loans		3,142,892			3,202,438			1,870,368			1,828,518			1,830,772
Residential mortgage:
First lien		460,297			451,195			271,153			270,748			266,239
Home equity – term		5,988			6,508			4,633			4,966			5,078
Home equity – lines of credit		303,561			303,165			192,736			189,966			186,450
Installment and other loans		18,476			18,131			8,713			8,875			9,774
Total loans		3,931,214			3,981,437			2,347,603			2,303,073			2,298,313
Allowance for credit losses		(48,689	)		(49,630	)		(29,864	)		(29,165	)		(28,702	)
Net loans held for investment		3,882,525			3,931,807			2,317,739			2,273,908			2,269,611
Goodwill		68,106			70,655			18,724			18,724			18,724
Other intangible assets, net		47,765			46,144			1,974			2,189			2,414
Total assets		5,431,023			5,470,589			3,198,782			3,183,331			3,064,240
Total deposits		4,615,706			4,650,853			2,702,884			2,695,951			2,558,814
FHLB advances and other borrowings and Securities sold under agreements to repurchase		141,227			137,310			129,625			127,099			147,285
Subordinated notes and trust preferred debt		68,680			68,510			32,128			32,111			32,093
Total shareholders’ equity		516,682			516,206			278,376			271,682			265,056

HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)
(continued)
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Capital and credit quality measures ⁽¹⁾:
Total risk-based capital:
Orrstown Financial Services, Inc.		12.4	%		12.4	%		13.3	%		13.4	%		13.0	%
Orrstown Bank		12.4	%		12.2	%		13.1	%		13.1	%		12.8	%
Tier 1 risk-based capital:
Orrstown Financial Services, Inc.		10.2	%		10.0	%		11.1	%		11.2	%		10.8	%
Orrstown Bank		11.2	%		11.0	%		12.0	%		11.9	%		11.6	%
Tier 1 common equity risk-based capital:
Orrstown Financial Services, Inc.		10.0	%		9.8	%		11.1	%		11.2	%		10.8	%
Orrstown Bank		11.2	%		11.0	%		12.0	%		11.9	%		11.6	%
Tier 1 leverage capital:
Orrstown Financial Services, Inc.		8.3	%		8.0	%		8.9	%		9.0	%		8.9	%
Orrstown Bank		9.1	%		8.8	%		9.5	%		9.6	%		9.5	%

Average equity to average assets		9.45	%		9.75	%		8.50	%		8.66	%		8.18	%
Allowance for credit losses to total loans		1.24	%		1.25	%		1.27	%		1.27	%		1.25	%
Total nonaccrual loans to total loans		0.61	%		0.68	%		0.36	%		0.56	%		1.11	%
Nonperforming assets to total assets		0.45	%		0.49	%		0.26	%		0.40	%		0.83	%
Allowance for credit losses to nonaccrual loans		202	%		184	%		357	%		226	%		112	%

Other information:
Net charge-offs (recoveries)	$	3,002		$	269		$	113		$	(42	)	$	(6	)
Classified loans		88,628			105,465			48,722			48,997			55,030
Nonperforming and other risk assets:
Nonaccrual loans		24,111			26,927			8,363			12,886			25,527
Other real estate owned		138			138			—			—			—
Total nonperforming assets		24,249			27,065			8,363			12,886			25,527
Financial difficulty modifications still accruing		4,897			9,497			—			—			9
Loans past due 90 days or more and still accruing		641			337			187			99			66
Total nonperforming and other risk assets	$	29,787		$	36,899		$	8,550		$	12,985		$	25,602

(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 $115.9 million and $21.1 million at December 31, 2024 and December 31, 2023, respectively. In addition, during the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, the Company incurred $3.9 million, $17.0 million, $1.1 million, $0.7 million and $1.1 million in merger-related expenses, respectively. During the three months ended December 31, 2024 and September 30, 2024, the Company incurred other non-recurring charges totaling $0.5 million and $20.2 million, respectively.

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

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

(In thousands)

Tangible Book Value per Common Share	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Shareholders’ equity (most directly comparable GAAP-based measure)	$	516,682		$	516,206		$	278,376		$	271,682		$	265,056
Less: Goodwill		68,106			70,655			18,724			18,724			18,724
Other intangible assets		47,765			46,144			1,974			2,189			2,414
Related tax effect		(10,031	)		(9,690	)		(415	)		(460	)		(507	)
Tangible common equity (non-GAAP)	$	410,842		$	409,097		$	258,093		$	251,229		$	244,425

Common shares outstanding		19,390			19,373			10,720			10,705			10,612

Book value per share (most directly comparable GAAP-based measure)	$	26.65		$	26.65		$	25.97		$	25.38		$	24.98
Intangible assets per share		5.46			5.53			1.89			1.91			1.95
Tangible book value per share (non-GAAP)	$	21.19		$	21.12		$	24.08		$	23.47		$	23.03

(In thousands)	Three Months Ended															Twelve Months Ended
Adjusted Ratios for Non-recurring Charges	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net income (loss) (A) – most directly comparable GAAP-based measure	$	13,684		$	(7,903	)	$	7,738		$	8,531		$	7,643		$	22,050		$	35,663
Plus: Merger-related expenses (B)		3,887			16,977			1,135			672			1,059			22,671			1,059
Plus: Executive retirement expenses (B)		35			4,758			—			—			—			4,793			—
Plus: Provision for credit losses on non-PCD loans (B)		—			15,504			—			—			—			15,504			—
Plus: Provision for legal settlement (B)		478			—			—			—			—			478			—
Less: Related tax effect (C)		(1,386	)		(7,915	)		(139	)		(1	)		(79	)		(9,442	)		(79	)
Adjusted net income (D=A+B-C) – Non-GAAP	$	16,698		$	21,421		$	8,734		$	9,202		$	8,623		$	56,054		$	36,643

Average assets (E)	$	5,464,165		$	5,515,143		$	3,211,124		$	3,098,772		$	3,037,824		$	4,321,472		$	2,999,527
Return on average assets (= A / E) – most directly comparable GAAP-based measure ⁽¹⁾		1.00	%		(0.57)	%		0.97	%		1.11	%		1.00	%		0.51	%		1.19	%
Return on average assets, adjusted (= D / E) – Non-GAAP ⁽¹⁾		1.22	%		1.55	%		1.09	%		1.19	%		1.13	%		1.30	%		1.22	%

Average equity (F)	$	516,399		$	537,670		$	272,788		$	268,289		$	248,442		$	392,280		$	243,334
Return on average equity (= A / F) – most directly comparable GAAP-based measure ⁽¹⁾		10.54	%		(5.85)	%		11.41	%		12.79	%		12.21	%		5.62	%		14.66	%
Return on average equity, adjusted (= D / F) – Non-GAAP ⁽¹⁾		12.86	%		15.85	%		12.88	%		13.79	%		13.77	%		14.29	%		15.06	%

Weighted average shares – basic (G) – most directly comparable GAAP-based measure		19,118			19,088			10,393			10,349			10,321			14,761			10,340
Basic earnings (loss) per share (= A / G) – most directly comparable GAAP-based measure	$	0.72		$	(0.41	)	$	0.74		$	0.82		$	0.74		$	1.49		$	3.45
Basic earnings per share, adjusted (= D / G) – Non-GAAP	$	0.87		$	1.12		$	0.84		$	0.89		$	0.84		$	3.80		$	3.54

Weighted average shares – diluted (H) – most directly comparable GAAP-based measure		19,300			19,226			10,553			10,482			10,419			14,914			10,435
Diluted earnings (loss) per share (= A / H) – most directly comparable GAAP-based measure	$	0.71		$	(0.41	)	$	0.73		$	0.81		$	0.73		$	1.48		$	3.42
Diluted earnings per share, adjusted (= D / H) – Non-GAAP	$	0.87		$	1.11		$	0.83		$	0.88		$	0.83		$	3.76		$	3.51

continued
(1) Annualized

	Three Months Ended															Twelve Months Ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Noninterest expense (I) – most directly comparable GAAP-based measure	$	42,930		$	60,299		$	22,639		$	22,469		$	22,392		$	148,337		$	83,843
Less: Merger-related expenses (B)		(3,887	)		(16,977	)		(1,135	)		(672	)		(1,059	)		(22,671	)		(1,059	)
Less: Executive retirement expenses (B)		(35	)		(4,758	)		—			—			—			(4,793	)		—
Less: Provision for legal settlement (B)		(478	)		—			—			—			—			(478	)		—
Adjusted noninterest expense (J = I – B) – Non-GAAP	$	38,531		$	38,564		$	21,504		$	21,797		$	21,333		$	120,396		$	82,784

Net interest income (K)	$	50,573		$	51,697		$	26,103		$	26,881		$	26,018		$	155,254		$	104,906
Noninterest income (L)		11,247			12,386			7,172			6,630			6,491			37,435			25,652
Total operating income (M = K + L)	$	61,820		$	64,083		$	33,275		$	33,511		$	32,509		$	192,689		$	130,558

Efficiency ratio (= I / M) – most directly comparable GAAP-based measure		69.4	%		94.1	%		68.0	%		67.0	%		68.9	%		77.0	%		64.2	%
Efficiency ratio, adjusted (= J / M) – Non-GAAP		62.3	%		60.2	%		64.6	%		65.0	%		65.6	%		62.5	%		63.4	%

(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 December 31, 2024:

(In thousands)

Sector	Portfolio Mix		Amortized Book		Fair Value		Credit Enhancement		AAA		AA		A		BBB		NR		Collateral / Guarantee Type
Unsecured ABS	—	%	$	3,073	$	2,854	27	%	—	%	—	%	—	%	—	%	100	%	Unsecured Consumer Debt
Student Loan ABS	1			4,060		4,035	27		—		—		—		—		100		Seasoned Student Loans
Federal Family Education Loan ABS	9			80,121		80,063	11		7		81		—		12		—		Federal Family Education Loan ⁽¹⁾
PACE Loan ABS	—			1,985		1,727	7		100		—		—		—		—		PACE Loans ⁽²⁾
Non-Agency CMBS	2			15,920		15,901	27		—		—		—		—		100
Non-Agency RMBS	2			16,555		14,528	16		100		—		—		—		—		Reverse Mortgages ⁽³⁾
Municipal – General Obligation	12			99,515		90,767			11		82		7		—		—
Municipal – Revenue	14			120,903		109,261			—		82		12		—		6
SBA ReRemic ⁽⁵⁾	—			2,283		2,278			—		100		—		—		—		SBA Guarantee ⁽⁴⁾
Small Business Administration	1			5,926		6,263			—		100		—		—		—		SBA Guarantee ⁽⁴⁾
Agency MBS	19			160,027		155,778			—		100		—		—		—		Residential Mortgages ⁽⁴⁾
Agency CMO	38			332,380		326,045			—		100		—		—		—
U.S. Treasury securities	2			20,043		18,063			—		100		—		—		—		U.S. Government Guarantee ⁽⁴⁾
Corporate bonds	—			1,935		1,954			—		—		52		48		—
	100	%	$	864,726	$	829,517			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 $5.4 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes 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 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 –

February 1, 2025

MIL-OSI United Kingdom: Chris Kent goes ‘Offline’ for night of laughter at the Alley

Source: Northern Ireland – City of Derry

Chris Kent goes ‘Offline’ for night of laughter at the Alley

31 January 2025

Prepare for an evening of sharp wit and hilarious observations when comedian Chris Kent takes on the ultimate digital detox in his new stand-up show ‘Offline’, which comes to the Alley Theatre, Strabane on Saturday 15^th February.

At 40, Chris Kent wonders if it’s possible to reclaim a simpler time – before Google, before constant notifications, and before every question could be answered with a quick scroll. In ‘Offline’, he sets out to give up the internet entirely, navigating life without asking his phone what to eat, where to go, or how to get home. He longs for the days of playing Snake on his Nokia and constructing emojis manually. But can he really survive in a world without Wi-Fi? Join him on a journey of self-discovery and hilarity that could either make him or break him.

Chris Kent, known for his appearances on The Late Late Show and RTE Radio 1, delivers a night of side-splitting comedy as he grapples with modern life, technology, and the ultimate challenge: thinking for himself.

The Alley Theatre, one of the premier cultural venues in Strabane, offers an intimate and welcoming atmosphere, making it the perfect setting for an evening of comedy.

Don’t miss this hilarious journey of digital detox and self-reflection! Get your tickets now and join Chris Kent as he goes ‘Offline’ at the Alley Theatre.

Tickets are £20 available from the Alley Theatre website www.alley-theatre.com or call the Alley Theatre Box Office on 028 71 384444.

MIL OSI United Kingdom –

February 1, 2025

MIL-OSI United Kingdom: Free training on offer to help boost city centre business

Source: Scotland – City of Aberdeen

Aberdeen City Council, in partnership with Aberdeen Grampian Chamber of Commerce, is offering free tailored training sessions to help to city centre businesses.

The sessions take place on Monday 10 and Tuesday 18 February and cover business resilience and building long-term strategic relationships respectively.

The sessions are part of the Business Toolkit, launched earlier in January , designed to support best practice, knowledge sharing and networking, and a proactive adaptable, approach to the challenges and opportunities of a changing high street.

Aberdeen City Council Co-Leader Councillor Ian Yuill said: “The Council, in partnership with the Chamber of Commerce, is taking a proactive approach in helping city centre businesses adapt to the ever-evolving environment in which they operate.

“The two free sessions will focus on building the capabilities and relationships which can help operators future-proof their business in times of change. I would encourage businesses to take advantage of these opportunities.”

Aberdeen City Council Finance and Resources convener Councillor Alex McLellan said: “The Council’s aim is to support businesses in all sectors and ensure that the city centre thrives even in the face of changing consumer spending habits and other challenges.

“Our commitment to a vibrant city centre with a mix of attractions and businesses that will attract visitors from far and wide. The two training sessions are just part of a toolkit specifically designed to deliver on that ambition.”

The first training session will be held at Aberdeen Art Gallery with the second taking place at Marsichal College.

For more information on the training sessions and the business toolkit, visit:

Business toolkit | Aberdeen City Council

MIL OSI United Kingdom –

February 1, 2025

MIL-OSI United Kingdom: Awards spotlight Canterbury’s community heroes

Source: City of Canterbury

Home » Latest News » Awards spotlight Canterbury’s community heroes

Three pillars of the community were presented with Lord Mayor’s Awards to recognise all the work they do to make the district a better place.

The awards celebrate local heroes living in Canterbury, Herne Bay, Whitstable and the surrounding villages.

This year’s deserving winners were revealed by the Lord Mayor of Canterbury, Cllr Jean Butcher, at a special ceremony at Tower House on Thursday (30 January).

The first recipient was Dan Rattigan from Canterbury who runs Warhammer Alliance Canterbury – a free youth club that provides a setting for young people to take part in the Warhammer hobby.

Described as ‘kind, patient and inspiring’, Dan runs the youth club in his own time on top of his job as a teacher and holding tabletop hobby events and gaming sessions as part of Gothic Games Canterbury.

His nominations cite his support for the University of Kent’s Warhammer club by donating free equipment as well as his fundraising events for local charities.

The second recipient was Maureen Hawkes from Hoath whose nomination noted her unwavering service to the community by organising a number of local initiatives including monthly coffee mornings, festive events, and a regular community newsletter.

Maureen’s nomination highlights how she ‘has fostered a close-knit, vibrant community where everyone feels they belong’ through her voluntary work and that she brings ‘warmth, joy, and a strong sense of connection to residents of all ages.’

Barbara Plews from Canterbury was the final award winner, having been nominated for setting up a low-cost badminton club for local children back in 2017.

She created Canterbury Junior Badminton Club after feeling there was a lack of opportunities for children to play badminton locally and now gives up her time to coach every Saturday morning on top of accompanying the children at local tournaments and league matches.

Cllr Butcher said: “Reading the heart-warming nominations sent in was incredibly inspiring but certainly made judging a really tough job.

“Although there were so many who deserved thanks, each of the winners selected have shown a true sense of community spirit and had a profound impact on the lives of those living in the district.

“It’s a real privilege to recognise Dan, Maureen and Barbara for their deep commitment to our community through the Lord Mayor’s Awards.”

Pictured above, from left to right, are Lady Mayoress Di Baldock, Maureen Hawkes, Dan Rattigan, Barbara Plews, and Lord Mayor Cllr Jean Butcher.

Published: 31 January 2025

MIL OSI United Kingdom –

February 1, 2025

MIL-OSI Economics: Lending and Deposit Rates of Scheduled Commercial Banks – January 2025

Source: Reserve Bank of India

Data on lending and deposit rates of scheduled commercial banks (SCBs) (excluding regional rural banks and small finance banks) received during January 2025 are set out in Tables 1 to 7.

Highlights:

Lending Rates:

The weighted average lending rate (WALR) on fresh rupee loans of SCBs declined to 9.25 per cent in December 2024 from 9.40 per cent in November 2024.
The WALR on outstanding rupee loans of SCBs moderated to 9.87 per cent in December 2024 from 9.89 per cent in November 2024.¹
1-Year median Marginal Cost of fund-based Lending Rate (MCLR) of SCBs remained unchanged at 9.00 per cent in January 2025.

Deposit Rates:

The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of SCBs stood at 6.57 per cent in December 2024 as compared to 6.46 per cent in November 2024.
The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits of SCBs was 7.00 per cent in December 2024 (6.98 per cent in November 2024).¹

Ajit Prasad
Deputy General Manager
(Communications)

Press Release: 2024-2025/2060

MIL OSI Economics –

February 1, 2025

MIL-OSI Economics: RBI imposes monetary penalty on Equitas Small Finance Bank Limited

Source: Reserve Bank of India

The Reserve Bank of India (RBI) has, by an order dated January 20, 2025, imposed a monetary penalty of ₹65 lakh (Rupees Sixty Five Lakh only) on Equitas Small Finance Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Levy of Foreclosure Charges/Pre-payment Penalty on Floating Rate Term Loans’ and ‘Credit Flow to Agriculture – Collateral free agricultural loans’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with RBI directions.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank:

levied foreclosure charges on certain floating rate term loans sanctioned to individual borrowers for purposes other than business; and
obtained collateral security for certain agricultural loans amounting up to ₹1.6 lakh.

This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

(Puneet Pancholy)
Chief General Manager

Press Release: 2024-2025/2061

MIL OSI Economics –

February 1, 2025

MIL-OSI Economics: RBI imposes monetary penalty on India Post Payments Bank Limited

Source: Reserve Bank of India

The Reserve Bank of India (RBI) has, by an order dated January 15, 2025, imposed a monetary penalty of ₹26.70 lakh (Rupees Twenty Six Lakh Seventy Thousand only) on India Post Payments Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Customer Service in Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with RBI directions.

After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:

The bank upgraded certain Savings Bank accounts without obtaining customers’ consent (in writing or through any other mode) and also levied annual charges after upgradation of those accounts.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

(Puneet Pancholy)
Chief General Manager

Press Release: 2024-2025/2062

MIL OSI Economics –

February 1, 2025

MIL-OSI Economics: Phillips 66 Reports Fourth-Quarter Results and Announces Next Phase of Strategic Initiatives

Source: Phillips

Fourth Quarter
Reported fourth-quarter earnings of $8 million or $0.01 per share; adjusted loss of $61 million or $0.15 per share
Earnings impacted by $230 million pre-tax of accelerated depreciation related to Los Angeles Refinery
Returned $1.1 billion to shareholders through dividends and share repurchases
Record NGL fractionation and LPG export volumes in Midstream
Record clean product yield in Refining
Surpassed targeted $3 billion in announced asset dispositions
Full-Year 2024
Earnings of $2.1 billion or $4.99 per share and adjusted earnings of $2.6 billion or $6.15 per share
$4.2 billion of operating cash flow, $4.8 billion excluding working capital
$5.3 billion returned to shareholders through dividends and share repurchases
Second consecutive year above industry-average crude utilization
Achieved $1.5 billion in run-rate business transformation savings and $500 million in synergy capture from successful DCP integration

HOUSTON–(BUSINESS WIRE)– Phillips 66 (NYSE: PSX), a leading integrated downstream energy provider, announced fourth-quarter earnings.
“During the fourth quarter, we achieved our strategic priority targets for shareholder distributions and asset dispositions,” said Mark Lashier, chairman and CEO. “We also delivered on our goal of improving Refining performance by continuing to run above industry-average crude utilization, setting record clean product yields and achieving our targeted cost reductions of $1 per barrel.
“In support of our Midstream wellhead-to-market strategy, we recently announced an agreement to acquire EPIC’s NGL business, bolstering our Permian and Gulf Coast footprint,” said Lashier. “Upon closing, these assets will be accretive to earnings and highly integrated with our existing infrastructure, providing additional opportunities to enhance returns and shareholder value.”
Lashier added, “Building on our successes, I am pleased to announce that we have set new financial and operational targets that prioritize debt reduction, a lowered cost structure and EBITDA growth. Supported by world-class operations, we are committed to returning over 50% of operating cash flow to shareholders.”
On behalf of the Board of Directors, Glenn Tilton, lead independent director, remarked, “2024 was a pivotal year for Phillips 66. The team executed well on an ambitious set of strategic priorities, substantially improving the company’s competitiveness, and is well positioned to successfully deliver on a new set of targets through 2027.”
Financial Results Summary (in millions of dollars, except as indicated)

4Q 2024

3Q 2024

Earnings

$

8

346

Adjusted Earnings (Loss)1

(61)

859

Adjusted EBITDA1

1,130

1,998

Earnings (Loss) Per Share

Earnings Per Share – Diluted

0.01

0.82

Adjusted Earnings (Loss) Per Share – Diluted1

(0.15)

2.04

Cash Flow From Operations

1,198

1,132

Cash Flow From Operations, Excluding Working Capital1

901

1,513

Capital Expenditures & Investments2

506

358

Return of Capital to Shareholders

1,119

1,277

Repurchases of common stock

647

800

Dividends paid on common stock

472

477

Cash

1,738

1,637

Debt

20,062

19,998

Debt-to-capital ratio

41%

40%

Net debt-to-capital ratio1

39%

38%

1Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.

2Excludes net acquisitions of $58 million and $567 million in the fourth and third quarters of 2024, respectively, and purchases of government obligations of $1.1 billion in the third quarter of 2024.

Segment Financial and Operating Highlights (in millions of dollars, except as indicated)

4Q 2024

3Q 2024

Change

Earnings (Loss)1

$

8

346

(338)

Midstream

673

644

29

Chemicals

107

342

(235)

Refining

(775)

(108)

(667)

Marketing and Specialties

252

(22)

274

Renewable Fuels

28

(116)

144

Corporate and Other

(298)

(327)

29

Income tax (expense) benefit

38

(44)

82

Noncontrolling interests

(17)

(23)

6

Adjusted Earnings (Loss)1,2

$

(61)

859

(920)

Midstream

708

672

36

Chemicals

72

342

(270)

Refining

(759)

(67)

(692)

Marketing and Specialties

185

583

(398)

Renewable Fuels

28

(116)

144

Corporate and Other

(294)

(327)

33

Income tax (expense) benefit

16

(205)

221

Noncontrolling interests

(17)

(23)

6

Adjusted EBITDA2

$

1,130

1,998

(868)

Midstream

938

892

46

Chemicals

209

466

(257)

Refining

(298)

188

(486)

Marketing and Specialties

307

656

(349)

Renewable Fuels

50

(92)

142

Corporate and Other

(76)

(112)

36

Operating Highlights

Pipeline Throughput – Y-Grade to Market (MB/D)3

759

762

(3)

Chemicals Global O&P Capacity Utilization

98%

—%

Refining

Turnaround Expense

123

137

(14)

Realized Margin ($/BBL)2

6.08

8.31

(2.23)

Crude Capacity Utilization

94%

—%

Clean Product Yield

88%

87%

1%

Renewable Fuels Produced (MB/D)

42

44

(2)

1Segment reporting is pre-tax.

2Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.

3Represents volumes delivered to major fractionation hubs, including Mont Belvieu, Sweeny and Conway. Includes 100% of DCP Midstream Class A Segment and Phillips 66’s direct interest in DCP Sand Hills Pipeline, LLC and DCP Southern Hills Pipeline, LLC

Fourth-Quarter 2024 Financial Results
Reported earnings were $8 million for the fourth quarter of 2024 versus $346 million in the third quarter. Fourth-quarter earnings included pre-tax special item adjustments of $67 million in the Marketing and Specialties segment, $35 million in the Chemicals segment, $(35) million in the Midstream segment, $(16) million in the Refining segment, and $(4) million impacting the Corporate and Other segment. Adjusted losses for the fourth quarter were $61 million versus earnings of $859 million in the third quarter.
Midstream fourth-quarter 2024 adjusted pre-tax income increased compared with the third quarter mainly due to higher NGL margins and volumes.
Chemicals adjusted pre-tax income decreased mainly due to lower margins, as well as higher turnaround and maintenance costs.
Refining adjusted pre-tax loss increased primarily due to a decline in realized margins largely driven by lower market crack spreads and accelerated depreciation associated with the planned ceasing of operations at the Los Angeles Refinery, partially offset by a higher clean product yield.
Marketing and Specialties adjusted pre-tax income decreased primarily due to seasonally lower margins.
Renewable Fuels pre-tax results increased primarily due to higher margins at the Rodeo Complex and stronger international results.
Corporate and Other adjusted pre-tax loss decreased mainly due to lower net interest expense and employee-related costs, partially offset by depreciation expense.
As of Dec. 31, 2024, the company had $1.7 billion of cash and cash equivalents and $4.6 billion of committed capacity available under credit facilities.
Strategic Priorities Update
Phillips 66 successfully delivered on its strategic priorities first announced in October 2022. The company remains committed to leveraging its integrated portfolio to enhance long-term shareholder value and is announcing its next phase of priorities through 2027. Highlights include:
Delivering shareholder returns by returning greater than 50% of operating cash flow to shareholders;
Executing world-class operations by achieving 2% higher than industry-average crude utilization and targeting annual adjusted controllable costs of $5.50 per barrel in Refining, excluding adjusted turnaround expense;
Delivering disciplined growth and returns by growing Midstream and Chemicals mid-cycle adjusted EBITDA $1 billion in total by 2027; and
Maintaining financial strength and flexibility by reducing total debt to $17 billion.
Additional details will be covered in our investor webcast.
Investor Webcast
Members of Phillips 66 executive management will host a webcast at noon ET to provide an update on the company’s strategic initiatives and discuss the company’s fourth-quarter performance. To access the webcast and view related presentation materials, go to phillips66.com/investors and click on “Events & Presentations.” For detailed supplemental information, go to phillips66.com/supplemental.
About Phillips 66
Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow @Phillips66Co on LinkedIn.
Use of Non-GAAP Financial Information —This news release includes the terms “adjusted earnings (loss),” “adjusted pre-tax income (loss),” “adjusted EBITDA,” “adjusted earnings (loss) per share,” “refining realized margin per barrel,” “cash from operations, excluding working capital,” and “net debt-to-capital ratio.” These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods and to help facilitate comparisons with other companies in our industry. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
References in the release to earnings refer to net income attributable to Phillips 66. References to run-rate business transformation savings include cost savings and other benefits that will be captured in the sales and other operating revenues impacting gross margin; purchased crude oil and products costs impacting gross margin; operating expenses; selling, general and administrative expenses; and equity in earnings of affiliates lines on our consolidated statement of income when realized. Run-rate savings include run-rate sustaining capital savings. Run-rate sustaining capital savings include savings that will be captured in the capital expenditures and investments on our consolidated statement of cash flows when realized.
Basis of Presentation — Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments. This included changes in the composition of our operating segments, as well as measurement changes for certain activities between our operating segments. The primary effects of this realignment included establishment of a Renewable Fuels operating segment, which includes renewable fuels activities and assets historically reported in our Refining, Marketing and Specialties (M&S), and Midstream segments; change in method of allocating results for certain Gulf Coast distillate export activities from our M&S segment to our Refining segment; reclassification of certain crude oil and international clean products trading activities between our M&S segment and our Refining segment; and change in reporting of our investment in NOVONIX from our Midstream segment to Corporate and Other. Accordingly, prior period results have been recast for comparability.
In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired. Accordingly, prior period information has been reclassified for comparability.
Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 —This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66’s operations, strategy and performance. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: changes in governmental policies or laws that relate to our operations, including regulations that seek to limit or restrict refining, marketing and midstream operations or regulate profits, pricing, or taxation of our products or feedstocks, or other regulations that restrict feedstock imports or product exports; our ability to timely obtain or maintain permits necessary for projects; fluctuations in NGL, crude oil, refined petroleum, renewable fuels and natural gas prices, and refining, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum or renewable fuels products; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for renewable fuels; potential liability from pending or future litigation; liability for remedial actions, including removal and reclamation obligations under existing or future environmental regulations; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we have announced or may pursue, including receipt of any necessary regulatory approvals or permits related thereto; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our products; failure to complete construction of capital projects on time or within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the Russia-Ukraine war), expropriation of assets, and other diplomatic developments; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and property and equipment and/or strategic decisions with respect to our asset portfolio that cause impairment charges; investments required, or reduced demand for products, as a result of environmental rules and regulations; changes in tax, environmental and other laws and regulations (including alternative energy mandates); political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of equity affiliates we do not control; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Earnings (Loss)

Millions of Dollars

2024

2023

4Q

3Q

Year

4Q

Year

Midstream

$

673

644

2,638

759

2,819

Chemicals

107

342

876

106

600

Refining

(775

)

(108

)

(365

)

859

5,340

Marketing and Specialties

252

(22

)

1,011

396

1,897

Renewable Fuels

28

(116

)

(198

)

(11

)

153

Corporate and Other

(298

)

(327

)

(1,287

)

(348

)

(1,340

)

Pre-Tax Income (Loss)

(13

)

413

2,675

1,761

9,469

Less: Income tax expense (benefit)

(38

)

44

500

476

2,230

Less: Noncontrolling interests

17

23

58

25

224

Phillips 66

$

8

346

2,117

1,260

7,015

Adjusted Earnings (Loss)

Millions of Dollars

2024

2023

4Q

3Q

Year

4Q

Year

Midstream

$

708

672

2,746

757

2,672

Chemicals

72

342

841

106

600

Refining

(759

)

(67

)

(211

)

842

5,367

Marketing and Specialties

185

583

1,490

396

1,897

Renewable Fuels

28

(116

)

(198

)

(11

)

153

Corporate and Other

(294

)

(327

)

(1,283

)

(298

)

(1,110

)

Pre-Tax Income (Loss)

(60

)

1,087

3,385

1,792

9,579

Less: Income tax expense (benefit)

(16

)

205

693

405

2,173

Less: Noncontrolling interests

17

23

88

25

243

Phillips 66

$

(61

)

859

2,604

1,362

7,163

Millions of Dollars

Except as Indicated

2024

2023

4Q

3Q

Year

4Q

Year

Reconciliation of Consolidated Earnings to Adjusted Earnings (Loss)

Consolidated Earnings

$

8

346

2,117

1,260

7,015

Pre-tax adjustments:

Certain tax impacts

(9

)

—

(9

)

(19

)

(19

)

Impairments1

35

28

450

—

Net gain on asset dispositions2

(67

)

—

(305

)

—

(123

)

Change in inventory method for acquired business

—

(46

)

Winter-storm-related costs (recovery)

(35

)

—

(35

)

—

Los Angeles Refinery cessation costs3

7

41

48

—

Legal accrual4

22

605

627

—

30

Legal settlement

—

(66

)

—

Business transformation restructuring costs

—

50

177

Loss on early redemption of DCP debt

—

53

DCP integration restructuring costs

—

38

Tax impact of adjustments5

9

(161

)

(162

)

(12

)

(26

)

Other tax impacts

(31

)

—

(31

)

83

Noncontrolling interests

—

(30

)

—

(19

)

Adjusted earnings (loss)

$

(61

)

859

2,604

1,362

7,163

Earnings per share of common stock ( dollars )

$

0.01

0.82

4.99

2.86

15.48

Adjusted earnings (loss) per share of common stock ( dollars )6

$

(0.15

)

2.04

6.15

3.09

15.81

Reconciliation of Segment Pre-Tax Income

(Loss) to Adjusted Pre-Tax Income (Loss)

Midstream Pre-Tax Income

$

673

644

2,638

759

2,819

Pre-tax adjustments:

Impairments1

35

28

346

—

Certain tax impacts

—

(2

)

(2

)

Net gain on asset disposition

—

(238

)

—

(137

)

Change in inventory method for acquired business

—

(46

)

DCP integration restructuring costs

—

38

Adjusted pre-tax income

$

708

672

2,746

757

2,672

Chemicals Pre-Tax Income

$

107

342

876

106

600

Pre-tax adjustments:

Winter-storm-related costs (recovery)

(35

)

—

(35

)

—

Adjusted pre-tax income

$

72

342

841

106

600

Refining Pre-Tax Income (Loss)

$

(775

)

(108

)

(365

)

859

5,340

Pre-tax adjustments:

Impairments1

—

104

—

Los Angeles Refinery cessation costs3

3

41

44

—

Certain tax impacts

(9

)

—

(9

)

(17

)

(17

)

Net loss on asset disposition

—

14

Legal accrual

22

—

22

—

30

Legal settlement

—

(7

)

—

Adjusted pre-tax income (loss)

$

(759

)

(67

)

(211

)

842

5,367

Marketing and Specialties Pre-Tax Income (Loss)

$

252

(22

)

1,011

396

1,897

Pre-tax adjustments:

Legal accrual4

—

605

—

Net gain on asset disposition2

(67

)

—

(67

)

—

Legal settlement

—

(59

)

—

Adjusted pre-tax income

$

185

583

1,490

396

1,897

Renewable Fuels Pre-Tax Income (Loss)

$

28

(116

)

(198

)

(11

)

153

Pre-tax adjustments:

None

—

Adjusted pre-tax income (loss)

$

28

(116

)

(198

)

(11

)

153

Corporate and Other Pre-Tax Loss

$

(298

)

(327

)

(1,287

)

(348

)

(1,340

)

Pre-tax adjustments:

Business transformation restructuring costs

—

50

177

Loss on early redemption of DCP debt

—

53

Los Angeles Refinery cessation costs3

4

—

4

—

Adjusted pre-tax loss

$

(294

)

(327

)

(1,283

)

(298

)

(1,110

)

1Impairments primarily related to certain gathering and processing assets in the Midstream segment, as well as certain crude oil processing and logistics assets in California, reported in the Refining segment.

2In connection with the asset sale of our 49% non-operated equity interest in Coop Mineraloel AG closing early 2025, a before-tax unrealized gain was recognized from a foreign currency derivative in the Marketing & Specialties segment.

3Cessation costs include pre-tax charges for severance costs.

4Third-quarter legal accrual primarily related to ongoing litigation.

5We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 24%. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance.

6YTD 2024, Q4 2024, Q3 2024 and Q4 2023 are based on adjusted weighted-average diluted shares of 422,538 thousand, 411,687 thousand, 419,827 thousand and 440,582 thousand, respectively. Other periods are based on the same weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is the same as that used in the GAAP diluted earnings per share calculation.

Millions of Dollars

Except as Indicated

2024

4Q

3Q

Reconciliation of Consolidated Net Income to Adjusted EBITDA

Net Income

$

25

369

Plus:

Income tax expense

(38

)

44

Net interest expense

168

191

Depreciation and amortization

819

543

Phillips 66 EBITDA

$

974

1,147

Special Item Adjustments (pre-tax):

Certain tax impacts

(9

)

—

Impairments

35

28

Winter-storm-related costs (recovery)

(35

)

—

Net gain on asset disposition

(67

)

—

Los Angeles Refinery cessation costs

7

41

Legal accrual

22

605

Total Special Item Adjustments (pre-tax)

(47

)

674

Change in Fair Value of NOVONIX Investment

1

—

Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment

$

928

1,821

Other Adjustments (pre-tax):

Proportional share of selected equity affiliates income taxes

17

24

Proportional share of selected equity affiliates net interest

14

12

Proportional share of selected equity affiliates depreciation and amortization

209

188

Adjusted EBITDA attributable to noncontrolling interests

(38

)

(47

)

Phillips 66 Adjusted EBITDA

$

1,130

1,998

Reconciliation of Segment Income before Income Taxes to Adjusted EBITDA

Midstream Income before income taxes

$

673

644

Plus:

Depreciation and amortization

234

233

Midstream EBITDA

$

907

877

Special Item Adjustments (pre-tax):

Impairments

35

28

Midstream EBITDA, Adjusted for Special Items

$

942

905

Other Adjustments (pre-tax):

Proportional share of selected equity affiliates income taxes

3

5

Proportional share of selected equity affiliates net interest

3

Proportional share of selected equity affiliates depreciation and amortization

28

26

Adjusted EBITDA attributable to noncontrolling interests

(38

)

(47

)

Midstream Adjusted EBITDA

$

938

892

Chemicals Income before income taxes

$

107

342

Plus:

None

—

Chemicals EBITDA

$

107

342

Special Item Adjustments (pre-tax):

Winter-storm-related costs (recovery)

(35

)

—

Chemicals EBITDA, Adjusted for Special Items

$

72

342

Other Adjustments (pre-tax):

Proportional share of selected equity affiliates income taxes

11

13

Proportional share of selected equity affiliates net interest

—

(2

)

Proportional share of selected equity affiliates depreciation and amortization

126

113

Chemicals Adjusted EBITDA

$

209

466

Refining Loss before income taxes

$

(775

)

(108

)

Plus:

Depreciation and amortization

435

230

Refining EBITDA

$

(340

)

122

Special Item Adjustments (pre-tax):

Certain tax impacts

(9

)

—

Los Angeles Refinery cessation costs

3

41

Legal accrual

22

—

Refining EBITDA, Adjusted for Special Items

$

(324

)

163

Other Adjustments (pre-tax):

Proportional share of selected equity affiliates income taxes

(1

)

(1

)

Proportional share of selected equity affiliates net interest

—

(1

)

Proportional share of selected equity affiliates depreciation and amortization

27

Refining Adjusted EBITDA

$

(298

)

188

Marketing and Specialties Income (loss) before income taxes

$

252

(22

)

Plus:

Depreciation and amortization

79

32

Marketing and Specialties EBITDA

$

331

10

Special Item Adjustments (pre-tax):

Legal accrual

—

605

Net gain on asset disposition

(67

)

—

Marketing and Specialties EBITDA, Adjusted for Special Items

$

264

615

Other Adjustments (pre-tax):

Proportional share of selected equity affiliates income taxes

4

7

Proportional share of selected equity affiliates net interest

11

12

Proportional share of selected equity affiliates depreciation and amortization

28

22

Marketing and Specialties Adjusted EBITDA

$

307

656

Renewable Fuels Income (loss) before income taxes

$

28

(116

)

Plus:

Depreciation and amortization

22

24

Renewable Fuels EBITDA

$

50

(92

)

Special Item Adjustments (pre-tax):

None

—

Renewable Fuels EBITDA, Adjusted for Special Items

$

50

(92

)

Corporate and Other Loss before income taxes

$

(298

)

(327

)

Plus:

Net interest expense

168

191

Depreciation and amortization

49

24

Corporate and Other EBITDA

$

(81

)

(112

)

Special Item Adjustments (pre-tax):

Los Angeles Refinery cessation costs

4

—

Total Special Item Adjustments (pre-tax)

4

—

Change in Fair Value of NOVONIX Investment

1

—

Corporate EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment

$

(76

)

(112

)

Millions of Dollars

Except as Indicated

December 31, 2024

Debt-to-Capital Ratio

Total Debt

$

20,062

Total Equity

28,463

Debt-to-Capital Ratio

41

%

Total Cash

1,738

Net Debt-to-Capital Ratio

39

%

Millions of Dollars

December 31, 2024

Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow, Excluding Working Capital

Net Cash Provided by Operating Activities

$

1,198

Less: Net Working Capital Changes

297

Operating Cash Flow, Excluding Working Capital

$

901

Millions of Dollars

Except as Indicated

2024

4Q

3Q

Reconciliation of Refining Loss Before Income Taxes to Realized Refining Margins

Loss before income taxes

$

(775

)

(108

)

Plus:

Taxes other than income taxes

92

100

Depreciation, amortization and impairments

436

230

Selling, general and administrative expenses

60

Operating expenses

968

922

Equity in earnings of affiliates

79

12

Other segment expense, net

58

(4

)

Proportional share of refining gross margins contributed by equity affiliates

132

193

Special items:

Certain tax impacts

(9

)

—

Realized refining margins

$

1,041

1,405

Total processed inputs ( thousands of barrels )

147,880

145,440

Adjusted total processed inputs ( thousands of barrels )*

171,031

168,951

Loss before income taxes ( dollars per barrel )**

$

(5.24

)

(0.74

)

Realized refining margins ( dollars per barrel )***

$

6.08

8.31

*Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate.

**Income before income taxes divided by total processed inputs.

***Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.

Source: Phillips 66

MIL OSI Economics –

February 1, 2025

MIL-OSI Africa: South African troops are dying in the DRC: why they’re there and what’s going wrong

Source: The Conversation – Africa – By Lindy Heinecken, Professor of Sociology in the Department of Sociology and Social Anthropology., Stellenbosch University

The death of South African soldiers on a Southern African Development Community (SADC) mission in the Democratic Republic of Congo (DRC) has sparked fierce debate about the deployment of South African National Defence Force (SANDF) soldiers there. Some, including political parties, have questioned whether the soldiers were adequately trained, equipped and supported. Lindy Heinecken has spent decades researching the South African military in peacekeeping operations and has interviewed hundreds of soldiers about their experiences and the challenges during deployment. We asked her for her insights.

What is South Africa doing in the DRC?

The country is part of the Southern African Development Community Mission in the Democratic Republic of Congo (SAMIDRC), which includes troops from Malawi and Tanzania. This deployment followed approval by the Southern African Development Community in May 2023, in response to the deteriorating security situation in eastern DRC. The South African National Defence Force is leading the mission.

Their mandate is to support the DRC government, a member of the 16-member SADC group, in restoring peace, security and stability. The fact that the mandate states that it is to support the DRC government in combating armed groups that threaten peace and security in the eastern DRC implies that this is not a peacekeeping mission.

The legal basis for the deployment lies in the SADC Mutual Defence Pact, (2003), which states that

Any armed attack perpetrated against one of the States Parties shall be considered a threat to regional peace and security and shall be met with immediate collective action.

The mandate gives them the responsibility to protect civilians, disarm armed groups, and help implement the August 2024 ceasefire agreement between the DRC and Rwanda, brokered by Angola as part of the Luanda Process. This agreement aimed to provide a more secure environment, and protect critical infrastructure to ensure the safe delivery of humanitarian aid. This is in line with the United Nations’ responsibility to protect victims of genocide, war crimes, ethnic cleansing and crimes against humanity.

The M23 rebel group, which is supported by Rwanda, has committed a wide range of atrocities in the eastern DRC which can be traced back to the 1994 genocide.

The impact on civilians has been devastating. While pinning down an exact number is difficult, it’s clear that the rebel forces operating in the eastern DRC, particularly the M23, pose a significant challenge to the stability of the region, and the safety and security of civilians.

The rebels are implicated in mass killings of civilians, rape and other forms of sexual violence and attacks on camps for internally displaced persons. The M23’s atrocities have been condemned by the international community. The United Nations and human rights bodies have called for an end to the violence. They also demand accountability for the perpetrators.

In sum, South African soldiers – alongside Malawians and Tanzanians – are in the DRC to assist the Congolese army in combating the armed groups and to protect civilians from violence and human rights abuses.

Are the soldiers adequately prepared and equipped?

Many questions have been asked about whether South African troops on the mission forces are adequately trained and equipped. Critics claim this deployment is suicidal.

South African soldiers are well-trained and have served in numerous peace operations. Their extensive deployment means that they have accumulated valuable experience. They have been part of the UN Stabilisation Mission in the DR Congo, Monusco, almost since inception in 1999.

Monusco forces are still present in the DRC, but in the process of withdrawing. Congolese president Félix Tshisekedi requested they leave because of their perceived ineffectiveness.

Nonetheless, there are some valid concerns about the South Africans’ current level of preparedness for the DRC mission. Not least given the complex political situation. There are over 100 diverse armed groups involved. And the terrain is difficult.

The combination of budget cuts, resource limitations, and the complex nature of the conflict raises questions about the South African National Defence Force’s ability to effectively achieve its objectives, and ensure the safety of its personnel.

The force takes its own equipment on missions to ensure it is self-sufficient and can meet its specialised needs. The problem is that this equipment is old, leading to shortages due to maintenance problems. This affects the force’s ability to carry out its duties.

Budget cuts for defence over the years, to less than 1% of GDP compared to the global average of 2%, have severely affected the military’s ability to maintain equipment, conduct training exercises and modernise its force. This has led to a decline in overall readiness.

South African troops in the DRC lack essential resources, including adequate air support, attack helicopters and modern equipment. This limits their ability to respond quickly to threats and provide close air support for ground troops.

Despite having one of the most capable air forces in Africa, it is unable to deploy its Gripen and Rooivalk helicopters because they have not been serviced and lack spare parts.

The use of older equipment has also been less effective against the well-equipped M23.

Besides being outgunned, the regional mission is also out-manned.

The SADC mission in the DRC was authorised to have 5,000 troops from Malawi, South Africa and Tanzania. The actual deployment has fallen far short of this number. As of late January 2025, only about 1,300 troops had been deployed.

Where to from here?

There are concerns in the DRC about the presence of multiple foreign forces, given the relative ineffectiveness of these interventions.

There are also questions about the legitimacy of the mission. Rwanda has opposed the deployment, saying that the SAMIDRC, and specifically South Africa’s involvement, undermines regional unity and cooperation.

The best approach to peace and stability in the DRC requires a concerted effort by regional actors – the DRC, Rwanda, Uganda, Burundi, Kenya and the Southern African Development Community – to address the underlying causes of the conflict. This requires political dialogue with the regional actors, the UN, the international community and, most importantly, the Congolese people.

As for South Africa, it is time for some critical reflection on the future roles of its military. The equipment shortages and challenges it faces raise serious concerns about the defence force’s ability to carry out its core mandate of protecting South Africa, its territorial integrity and its people in accordance with the constitution.

The tragedy in the DRC highlights the dire need for the South African National Defence Force to be redesigned, modernised and funded to become more effective and capable, ready to meet the immediate challenges it faces (like ageing equipment) and ensure the security of South Africa.

– South African troops are dying in the DRC: why they’re there and what’s going wrong
– https://theconversation.com/south-african-troops-are-dying-in-the-drc-why-theyre-there-and-whats-going-wrong-248696

MIL OSI Africa –

February 1, 2025

MIL-OSI Global: South African troops are dying in the DRC: why they’re there and what’s going wrong

Source: The Conversation – Africa – By Lindy Heinecken, Professor of Sociology in the Department of Sociology and Social Anthropology., Stellenbosch University

The death of South African soldiers on a Southern African Development Community (SADC) mission in the Democratic Republic of Congo (DRC) has sparked fierce debate about the deployment of South African National Defence Force (SANDF) soldiers there. Some, including political parties, have questioned whether the soldiers were adequately trained, equipped and supported. Lindy Heinecken has spent decades researching the South African military in peacekeeping operations and has interviewed hundreds of soldiers about their experiences and the challenges during deployment. We asked her for her insights.

What is South Africa doing in the DRC?

The country is part of the Southern African Development Community Mission in the Democratic Republic of Congo (SAMIDRC), which includes troops from Malawi and Tanzania. This deployment followed approval by the Southern African Development Community in May 2023, in response to the deteriorating security situation in eastern DRC. The South African National Defence Force is leading the mission.

Their mandate is to support the DRC government, a member of the 16-member SADC group, in restoring peace, security and stability. The fact that the mandate states that it is to support the DRC government in combating armed groups that threaten peace and security in the eastern DRC implies that this is not a peacekeeping mission.

The legal basis for the deployment lies in the SADC Mutual Defence Pact, (2003), which states that

Any armed attack perpetrated against one of the States Parties shall be considered a threat to regional peace and security and shall be met with immediate collective action.

The mandate gives them the responsibility to protect civilians, disarm armed groups, and help implement the August 2024 ceasefire agreement between the DRC and Rwanda, brokered by Angola as part of the Luanda Process. This agreement aimed to provide a more secure environment, and protect critical infrastructure to ensure the safe delivery of humanitarian aid. This is in line with the United Nations’ responsibility to protect victims of genocide, war crimes, ethnic cleansing and crimes against humanity.

The M23 rebel group, which is supported by Rwanda, has committed a wide range of atrocities in the eastern DRC which can be traced back to the 1994 genocide.

The impact on civilians has been devastating. While pinning down an exact number is difficult, it’s clear that the rebel forces operating in the eastern DRC, particularly the M23, pose a significant challenge to the stability of the region, and the safety and security of civilians.

The rebels are implicated in mass killings of civilians, rape and other forms of sexual violence and attacks on camps for internally displaced persons. The M23’s atrocities have been condemned by the international community. The United Nations and human rights bodies have called for an end to the violence. They also demand accountability for the perpetrators.

In sum, South African soldiers – alongside Malawians and Tanzanians – are in the DRC to assist the Congolese army in combating the armed groups and to protect civilians from violence and human rights abuses.

Are the soldiers adequately prepared and equipped?

Many questions have been asked about whether South African troops on the mission forces are adequately trained and equipped.
Critics claim this deployment is suicidal.