Pandemic – Page 126 – NewzIntel.com

MIL-OSI: Carbon Streaming Announces Project Update

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 29, 2025 (GLOBE NEWSWIRE) — Carbon Streaming Corporation (Cboe CA: NETZ) (OTCQB: OFSTF) (FSE: M2Q) (“Carbon Streaming” or the “Company”) today provided a project update with respect to the Purchase and Sale Agreement dated as of May 9, 2023, as amended pursuant to that First Amending Agreement, dated as of February 7, 2024 (the “Sheep Creek Stream”), among Carbon Streaming, Mast Reforestation SPV I, LLC (“Mast”) and its parent company DroneSeed Co., d/b/a Mast Reforestation (“Mast Parent Co”).

Carbon Streaming has received a Notice of Adverse Impact from Mast and Mast Parent Co under the Sheep Creek Stream Agreement pursuant to which, among other things, Mast advised Carbon Streaming that the Sheep Creek project has experienced significantly higher than expected mortality rates and that the surviving seedlings had exhibited slower than expected growth rates. As a result, Mast indicated to Carbon Streaming that it no longer expects to deliver the agreed-upon 286,229 forecast mitigation units to Carbon Streaming under the Sheep Creek Stream, as Mast no longer considers the existing Sheep Creek project plan and budget to be viable. Carbon Streaming has formally responded to the Notice of Adverse Impact and requested that Mast respond to Carbon Streaming’s significant concerns regarding, among other things, the timing of the delivery of the Notice of Adverse Impact, and the characterization of the cause of the adverse impact. The Company is continuing to evaluate all legal avenues available under the Sheep Creek Agreement.

The Company had entered into a project pipeline streaming agreement (the “Pipeline Agreement”) for up to US$15 million with Mast and Mast Parent Co, to advance its pipeline of post-wildfire reforestation projects in the Western USA. Carbon Streaming also invested US$2 million into Mast Parent Co through a convertible note (the “Convertible Note”). In October 2023, the Convertible Note was converted into preferred shares of Mast Parent Co upon the execution of a qualifying financing event, resulting in 1.3 million preferred shares of Mast Parent Co (the “Preferred Shares”) being issued to the Company at a fair value of $2.6 million. The Company expects that the facts described above will materially decrease the fair value of the Sheep Creek Stream and the Preferred Shares on the Company’s consolidated financial statements.

About Carbon Streaming

The Company’s focus is on projects that generate high-quality carbon credits and have a positive impact on the environment, local communities, and biodiversity, in addition to their carbon reduction or removal potential. This approach aligns our strategic interests with those of project partners to create long-term relationships built on a shared commitment to sustainability and accountability and positions us as a trusted source for buyers seeking high-quality carbon credits.

ON BEHALF OF THE COMPANY:
Marin Katusa, Chief Executive Officer
Tel: 365.607.6095
info@carbonstreaming.com
www.carbonstreaming.com

Investor Relations
investors@carbonstreaming.com

Media
media@carbonstreaming.com

Cautionary Statement Regarding Forward-Looking Information

This news release contains certain forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable securities laws. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, are forward-looking information, including, without limitation: statements regarding the feasibility of the project under the Sheep Creek Stream and the implications to the Company’s financial statements; statements regarding the fair value of the Sheep Creek Streaming and the Preferred Shares; and statements regarding the Company’s evaluation of legal avenues under the Sheep Creek Stream.

When used in this news release, words such as “estimates”, “expects”, “plans”, “anticipates”, “will”, “believes”, “intends” “should”, “could”, “may” and other similar terminology are intended to identify such forward-looking statements. This forward-looking information is based on the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. They should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Factors that could cause actual results or events to differ materially from current expectations include, among other things: future engagement with Mast after the date hereof in respect of the Sheep Creek Stream and matters related thereto and arising therefrom; general economic, market and business conditions and global financial conditions, including fluctuations in interest rates, foreign exchange rates and stock market volatility; volatility in prices of carbon credits and demand for carbon credits; change in social or political views towards climate change, carbon credits and ESG initiatives and subsequent changes in corporate or government policies or regulations and associated changes in demand for carbon credits; limited operating history for the Company’s current strategy; risks arising from competition and future acquisition activities; concentration risk; inaccurate estimates of growth strategy; dependence upon key management; impact of corporate restructurings; reputational risk; failure or timing delays for projects to be registered, validated and ultimately developed and for emission reductions or removals to be verified and carbon credits issued (and other risks associated with carbon credits standards and registries); foreign operations and political risks including actions by governmental authorities, including changes in or to government regulation, taxation and carbon pricing initiatives; uncertainties and ongoing market developments surrounding the validation and verification requirements of the voluntary and/or compliance markets; due diligence risks, including failure of third parties’ reviews, reports and projections to be accurate; dependence on project partners, operators and owners, including failure by such counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; failure of projects to generate carbon credits, or natural disasters such as flood or fire which could have a material adverse effect on the ability of any project to generate carbon credits; volatility in the market price of the Company’s common shares or warrants; the effect that the issuance of additional securities by the Company could have on the market price of the Company’s common shares or warrants; global health crises, such as pandemics and epidemics; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s Annual Information Form dated as of March 27, 2024 filed on SEDAR+ at www.sedarplus.ca.

Any forward-looking information speaks only as of the date of this news release. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.

The MIL Network –

January 30, 2025

MIL-OSI Economics: W&T Offshore Announces Closing of $350 Million Senior Second Lien Notes Offering And Additional Strengthening of Balance Sheet

Source: W & T Offshore Inc

Headline: W&T Offshore Announces Closing of $350 Million Senior Second Lien Notes Offering And Additional Strengthening of Balance Sheet

HOUSTON, Jan. 29, 2025 (GLOBE NEWSWIRE) — W&T Offshore, Inc. (NYSE: WTI) (“W&T Offshore” or the “Company”) today announced the closing, on January 28, 2025, of its previously announced offering of $350 million in aggregate principal amount of 10.750% Senior Second Lien Notes due 2029 (the “Notes”) at par in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and receipt of proceeds from a previously-announced insurance settlement. In conjunction with the issuance of the Notes, the Company entered into a credit agreement with certain lenders and other parties which provides the Company a revolving credit facility of $50 million.

Closed $350 million of Notes;
- Lowered the interest rate from the previous 11.750% Senior Second Lien Notes due 2026 (the “2026 Senior Second Lien Notes”) by one hundred basis points;
- Repaid $114.2 million outstanding under the term loan provided by Munich Re Risk Financing, Inc., as lender (the “MRE Term Loan”);
Entered into a new credit agreement for a $50 million revolving credit facility through July 2028 that is undrawn and replaces the previous credit facility provided by Calculus Lending, LLC; and
Received in cash $58.2 million of the previously announced $58.5 million insurance settlement related to the Mobile Bay 78-1 well, with the remainder expected shortly, which further bolsters W&T’s balance sheet.

Tracy W. Krohn, Chairman and Chief Executive Officer, commented, “We have begun 2025 with several positive events that improve W&T’s financial position. Over the past month, we have strengthened the balance sheet by closing the new senior second lien notes offering, entering into a new revolving credit facility and collecting our insurance settlement. I would like to thank our banks for running such a smooth process. The new senior second lien notes, which received improved credit ratings from S&P and Moody’s, had a broad distribution. This included international investors and was significantly oversubscribed, further demonstrating the investment community’s confidence in W&T’s underlying asset base. We are likewise pleased to now have access to the bank revolver market again. With pathways in place to bring additional fields back online and our successful actions to enhance our balance sheet, we are well-positioned for success moving forward.”

The Company has used a portion of the proceeds from the Notes offering, along with cash on hand to, (i) purchase for cash pursuant to a tender offer, such of the Company’s outstanding 2026 Senior Second Lien Notes that were validly tendered pursuant to the terms thereof (the “Tender Offer”), (ii) repay outstanding amounts under the MRE Term Loan, (iii) fund the full redemption amount for an August 1, 2025 redemption of the remaining 2026 Senior Second Lien Notes not validly tendered and accepted for purchase in the Tender Offer and (iv) pay premiums, fees and expenses related to the offering of Notes, the Tender Offer, the redemption of the remaining 2026 Senior Second Lien Notes, the satisfaction and discharge of the indenture governing the 2026 Senior Second Lien Notes and the repayment of the MRE Term Loan. On the closing date of the offering of the Notes, the Company completed all actions necessary to satisfy and discharge the indenture governing the 2026 Senior Second Lien Notes.

On January 28, 2025, in conjunction with the issuance of the Notes, the Company entered into a credit agreement (the “Credit Agreement”), by and among the Company, as borrower, Texas Capital Bank, as Administrative Agent, lender and L/C Issuer, TCBI Securities, Inc., doing business as Texas Capital Securities, as Lead Arranger and Bookrunner, the other lenders named therein and other parties thereto which provides the Company a revolving credit and letter of credit facility (the “Credit Facility”), with initial lending commitments of $50 million with a letter of credit sublimit of $10 million. The Credit Facility matures on July 28, 2028.

The Credit Facility is guaranteed by each of the Company’s wholly owned direct and indirect subsidiaries (the “Guarantors”) and is secured by a first-priority lien on substantially all of the natural gas and oil properties and personal property assets of the Company and the Guarantors, other than the Company’s membership interest in its Unrestricted Subsidiaries (as defined in the Credit Agreement) and minority ownership in certain joint venture entities. Certain future-formed or acquired majority-owned domestic subsidiaries of the Company may also be required to guarantee the Credit Facility and grant a security interest in substantially all of their natural gas and oil properties and personal property assets to secure the obligations under the Credit Facility.

This press release is being issued for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell the 2026 Senior Second Lien Notes, and it does not constitute a notice of redemption of the 2026 Senior Second Lien Notes.

The Notes and the related guarantees have not been and will not be registered under the Securities Act or any other securities laws, and the Notes and the related guarantees may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. The Notes and the related guarantees are being offered only to persons reasonably believed to be qualified institutional buyers in the United States under Rule 144A and to non-U.S. investors outside the United States pursuant to Regulation S.

This press release is being issued for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a sale of the Notes, the related guarantees, or any other securities, nor does it constitute an offer to sell, a solicitation of an offer to buy or a sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

ABOUT W&T OFFSHORE

W&T Offshore, Inc. is an independent oil and natural gas producer with operations offshore in the Gulf of Mexico and has grown through acquisitions, exploration and development. As of September 30, 2024, the Company had working interests in 53 fields in federal and state waters (which include 46 fields in federal waters and 7 in state waters). The Company has under lease approximately 673,100 gross acres (515,400 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 514,000 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 5,600 gross acres in Alabama state waters. A majority of the Company’s daily production is derived from wells it operates.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this release regarding the Company’s financial position, operating and financial performance, and potential to return fields back to production are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. Items contemplating or making assumptions about actual or potential future production and sales, prices, market size, and trends or operating results also constitute such forward-looking statements.

These forward-looking statements are based on the Company’s current expectations and assumptions about future events and speak only as of the date of this release. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, as results actually achieved may differ materially from expected results described in these statements. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements, unless required by law.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, the regulatory environment, including availability or timing of, and conditions imposed on, obtaining and/or maintaining permits and approvals, including those necessary for drilling and/or development projects; the impact of current, pending and/or future laws and regulations, and of legislative and regulatory changes and other government activities, including those related to permitting, drilling, completion, well stimulation, operation, maintenance or abandonment of wells or facilities, managing energy, water, land, greenhouse gases or other emissions, protection of health, safety and the environment, or transportation, marketing and sale of the Company’s products; inflation levels; global economic trends, geopolitical risks and general economic and industry conditions, such as the global supply chain disruptions and the government interventions into the financial markets and economy in response to inflation levels and world health events; volatility of oil, NGL and natural gas prices; the global energy future, including the factors and trends that are expected to shape it, such as concerns about climate change and other air quality issues, the transition to a low-emission economy and the expected role of different energy sources; supply of and demand for oil, natural gas and NGLs, including due to the actions of foreign producers, importantly including OPEC and other major oil producing companies (“OPEC+”) and change in OPEC+’s production levels; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver the Company’s oil and natural gas and other processing and transportation considerations; inability to generate sufficient cash flow from operations or to obtain adequate financing to fund capital expenditures, meet the Company’s working capital requirements or fund planned investments; price fluctuations and availability of natural gas and electricity; the Company’s ability to use derivative instruments to manage commodity price risk; the Company’s ability to meet the Company’s planned drilling schedule, including due to the Company’s ability to obtain permits on a timely basis or at all, and to successfully drill wells that produce oil and natural gas in commercially viable quantities; uncertainties associated with estimating proved reserves and related future cash flows; the Company’s ability to replace the Company’s reserves through exploration and development activities; drilling and production results, lower–than–expected production, reserves or resources from development projects or higher–than–expected decline rates; the Company’s ability to obtain timely and available drilling and completion equipment and crew availability and access to necessary resources for drilling, completing and operating wells; changes in tax laws; effects of competition; uncertainties and liabilities associated with acquired and divested assets; the Company’s ability to make acquisitions and successfully integrate any acquired businesses; asset impairments from commodity price declines; large or multiple customer defaults on contractual obligations, including defaults resulting from actual or potential insolvencies; geographical concentration of the Company’s operations; the creditworthiness and performance of the Company’s counterparties with respect to its hedges; impact of derivatives legislation affecting the Company’s ability to hedge; failure of risk management and ineffectiveness of internal controls; catastrophic events, including tropical storms, hurricanes, earthquakes, pandemics and other world health events; environmental risks and liabilities under U.S. federal, state, tribal and local laws and regulations (including remedial actions); potential liability resulting from pending or future litigation; the Company’s ability to recruit and/or retain key members of the Company’s senior management and key technical employees; information technology failures or cyberattacks; and governmental actions and political conditions, as well as the actions by other third parties that are beyond the Company’s control, and other factors discussed in W&T Offshore’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q found at www.sec.gov or at the Company’s website at www.wtoffshore.com under the Investor Relations section.

CONTACT:

Al Petrie
Investor Relations Coordinator
investorrelations@wtoffshore.com
713-297-8024

Sameer Parasnis
Executive Vice President and Chief Financial Officer
sparasnis@wtoffshore.com
713-513-8654

Source: W&T Offshore, Inc.

Released January 29, 2025

MIL OSI Economics –

January 30, 2025

MIL-OSI Europe: REPORT on European Central Bank – annual report 2024 – A10-0003/2025

Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on European Central Bank – annual report 2024

(2024/2054(INI))

The European Parliament,

– having regard to the 2023 Annual Report of the European Central Bank (ECB),

– having regard to the ECB’s feedback of 18 April 2024 on the input provided by Parliament as part of its resolution on the ECB’s 2022 Annual Report [1],

– having regard to the Statute of the European System of Central Banks (ESCB) and of the ECB, in particular Articles 2, 15 and 21 thereof,

– having regard to Articles 119, 123(1), 125, 127(1) and (2), 130, 282(2) and 284(3) of the Treaty on the Functioning of the European Union (TFEU),

– having regard to Articles 3 and 13 of the Treaty on European Union (TEU),

– having regard to the Eurosystem staff macroeconomic projections for the euro area of 7 March 2024, 6 June 2024, 12 September 2024, and 12 December 2024,

– having regard to the decisions taken by the ECB Governing Council of 25 January 2024, 7 March 2024, 11 April 2024, 6 June 2024, 18 July 2024, 12 September 2024, 17 October 2024 and 12 December 2024,

– having regard to Eurostat’s inflation estimate of 18 December 2024,

– having regard to the Commission’s Autumn 2024 Economic Forecast published on 26 November 2024,

– having regard to the World Economic Outlook of the International Monetary Fund (IMF) of October 2024,

– having regard to the monetary dialogues with the President of the ECB, Christine Lagarde, of 15 February 2024, 30 September 2024 and 4 December 2024,

– having regard to its decision of 1 June 2023 on the arrangements in the form of an exchange of letters between the European Parliament and the ECB on structuring the practices for interaction in the area of central banking [2],

– having regard to the European Pillar of Social Rights,

– having regard to the approval of the transmission protection instrument (TPI) by the ECB Governing Council of 21 July 2022,

– having regard to the Commission proposal of 28 June 2023 for a regulation of the European Parliament and of the Council on the establishment of the digital euro (COM(2023)0369),

– having regard to the ECB’s first progress report of 24 June 2024 and second progress report of 2 December 2024 on the digital euro preparation phase,

– having regard to the four ECB progress reports of 13 July 2023, 24 April 2023, 21 December 2022 and 29 September 2022 on the digital euro investigation phase,

– having regard to the ECB monetary policy strategy review launched on 23 January 2020 and concluded on 8 July 2021, and to the upcoming 2025 monetary policy strategy assessment,

– having regard to the ECB’s operational framework review published on 13 March 2024,

– having regard to the ECB annual report on the international role of the euro of June 2024,

– having regard to the results of the ECB’s first-ever cyber resilience stress test of 26 July 2024,

– having regard to the ECB’s Financial Stability Review published on 20 November 2024,

– having regard to the publication of the revised Capital Requirements Regulation [3] (‘CRR III’) and Capital Requirements Directive [4] (‘CRD VI’) in the Official Journal of the European Union on 19 June 2024,

– having regard to the results of the ECB’s climate risk stress test of 8 July 2022,

– having regard to the 2024 update of the ECB’s Environmental Statement,

– having regard to the ECB’s Climate and Nature Plan 2024-2025,

– having regard to Rule 142(1) of its Rules of Procedure,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0003/2025),

A. whereas, according to Eurostat, harmonised index of consumer prices (HICP) inflation reached a level of 2.2 % in the euro area in November 2024;

B. whereas, according to the December 2024 Eurosystem staff macroeconomic projections for the euro area, HICP inflation is projected to decline to 2.1 % in 2025, 1.9 % in 2026, and to increase to 2.1 % in 2027 [5];

C. whereas the ECB’s primary objective is to maintain price stability, which it has defined as a level of inflation of 2 % over the medium term;

D. whereas the ECB should support the general economic policies of the EU, thereby contributing to the achievement of the objectives of the EU as laid down in Article 3 TEU;

E. whereas the ECB is politically independent, which means that neither EU institutions and agencies nor Member State governments should seek to influence it;

F. whereas the ECB can take decisions to fulfil its primary objective of maintaining price stability without political interference other than being held accountable;

G. whereas political independence requires the ECB to refrain from taking political actions;

H. whereas Article 123 TFEU and Article 21 of the Statute of the ESCB and of the ECB prohibit the direct monetary financing of governments; whereas the ECB may purchase debt securities on the secondary market if this is necessary to pursue its objectives;

I. whereas the Eurosystem has been built on the principle of monetary dominance;

J. whereas the principal payments from maturing securities purchased under the asset purchase programme (APP) are no longer reinvested and the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP) will no longer be reinvested from January 2025;

K. whereas bank reserves held by credit institutions at the ECB amounted to EUR 3 trillion in December 2024;

L. whereas the euro is the second most important currency globally;

M. whereas the ECB is accountable to Parliament as the EU institution representing EU citizens; whereas this accountability has been maintained at the highest level, with the regular organisation of the Monetary Dialogue, the ECB President’s regular appearances at Parliament plenary sittings and various visits and meetings between Members of Parliament and ECB board members;

General overview

1. Welcomes the role of the ECB in safeguarding monetary and financial stability, which is a necessary precondition for growth and economic stability; underlines that the ECB is the institution responsible for maintaining price stability in the euro area in this regard; notes that, ‘without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union’ as laid down in Article 127 TFEU;

2. Underlines that the statutory independence of the ECB, as laid down in the Treaties, is a prerequisite for it to fulfil its mandate, which is to maintain price stability in the euro area and thereby contribute to economic growth, competitiveness and job creation;

3. Highlights the importance of the ECB’s political independence, which should remain untouched; stresses that this independence requires the ECB to in turn refrain from taking political actions; welcomes the institutional cooperation, thereby stressing the importance of the corresponding level of accountability to Parliament;

4. Invites the ECB and the European Parliament to make full use of the accountability and transparency arrangements and, where possible, further enhance these arrangements, without prejudice to the ECB’s independence;

5. Recognises the ECB’s efforts to bring inflation back down to levels commensurate with its target of 2 % over the medium term;

6. Stresses that both the ECB’s monetary policy, delivering on its mandate, and fiscal policies, should work in tandem to help European citizens and households, as well as small businesses;

7. Takes note of the disparities between Member States with regard to inflation levels above or below the ECB’s 2 % target; emphasises that inflation diminishes the purchasing power of fixed incomes, savings and pensions and that it distorts the signalling function of prices, that ensures an efficient allocation of resources, thereby having a negative impact on economic stability;

8. Stresses that inflation triggered a ‘cost of living crisis’ for EU citizens; emphasises therefore the imperative of reducing inflation to its target rate of 2 %; notes that high inflation levels disproportionally affect lower-income households that spend a higher proportion of their budget on necessities; stresses that bringing headline and core inflation back down to their target levels is therefore also important to maintaining social cohesion;

9. Regrets that core inflation still remains high in the euro area (2.7 % in November 2024), with only one euro area Member State reporting core inflation rates below 2 % in November 2024; recalls that this situation generates economic uncertainty, discourages savings and increases citizens’ living costs, particularly affecting those on fixed and limited incomes;

10. Stresses that keeping interest rates too high could harm economic growth; calls on the ECB not to lower interest rates too quickly, given the risk that inflation levels could start increasing again while inflation is already above 2 %; highlights the key role that inflation expectations play and that excessive volatility in inflation rates might distort inflation expectations; invites the ECB to assess the impact of interest rate changes on different economic sectors, among them capital-intensive sectors;

11. Acknowledges that the monetary policy decisions taken by the Governing Council of the ECB since the inflation crisis stemming from the rise in energy prices have put inflation on a path which is compatible with the achievement of the objective of price stability, while avoiding a serious deterioration in economic activity or employment;

12. Recalls that the Eurosystem was built on the principle of monetary dominance and that the economic and monetary union therefore requires solid fiscal policies in the Member States in order to be able to respond to external shocks; recalls the need for adequate implementation of the new fiscal framework to ensure the credibility of fiscal policies at the level of the economic and monetary union; notes that sufficient fiscal space also allows Member States to respond to external shocks; notes the flexibility provided by the new fiscal rules in this regard; points out that Member States can enhance their resilience to external shocks through fiscal measures as well as with growth-enhancing reforms;

13. Recalls that prudent fiscal policies by the Member States can complement the ECB’s efforts to keep inflation low and thereby protect incomes; highlights that addressing excessive public deficit and debt levels is crucial to maintaining a stable economy, sustainable growth and to having the policy space available for governments to respond to adverse shocks; notes in this respect the recent findings of the Financial Stability Review concerning high levels of national debt;

14. Notes that the ECB’s monetary policies aimed at delivering its primary mandate are subject to a proportionality assessment; notes that the proportionality assessment takes into account the impact of monetary policy measures on the broader economy and economic policies;

Monetary policy

15. Strongly welcomes the fact that headline inflation has come down from its peak of 10.6 % in October 2022 to 2.2 % in November 2024;

16. Welcomes the decrease in core inflation from its peak of 7.6 % in March 2023 to 2.7 % in November 2024, but expresses its unease at its historically and persistently high level; notes with concern that high core inflation could translate into higher headline inflation numbers;

17. Notes that it has taken the ECB more than three years to achieve a level of inflation that is commensurate with its target level of 2 %; recalls in this regard the ECB’s incorrect assessment that inflation was expected to be only transitory;

18. Stresses that supply shocks, primarily originating from external sources, were among the key drivers of the inflation surges; recognises that monetary policy has a more direct effect on inflation levels when it stems primarily from demand factors rather than supply factors;

19. Welcomes the ECB’s efforts to regularly update its models; invites the ECB to continue reviewing and improving its models and their role in its policymaking in light of the subpar performance of the models in recent years, in order to learn from previous crises, particularly to better distinguish between demand-driven and supply-side sources of inflation; stresses that economic supply shocks can arise from many sources, among others geopolitical events, climate-related or natural disasters and cyberattacks;

20. Stresses that the inclusion of owner-occupied housing (OOH) in the HICP is desirable for reasons of both representativeness and comparability across countries in the euro area; calls for an acceleration of the roadmap in order to ensure the rapid inclusion of OOH data in the HICP; welcomes the Governing Council of the ECB’s commitment to consider both in its monetary policy assessments and decisions also the available inflation measures regarding the quarterly stand-alone OOH index;

21. Supports the ECB’s decision to scale back its asset purchase programmes, so as to balance market liquidity conditions and inflation levels, in view of the excess liquidity in the market and decreased levels of inflation; welcomes the fact that the asset portfolio under the ECB’s purchasing programmes has been on a downward trend since 2023;

22. Underlines that interest on commercial banks’ holdings of bank reserves resulted in the Eurosystem paying more than EUR 120 billion interest to credit institutions in 2023, amounting to at least 0.8 % of euro area GDP; considers this is a significant subsidy to the banking sector; asks the ECB to mitigate this issue;

23. Stresses that the ECB’s purchase programmes are unconventional policies applicable only during crisis periods that, if not carefully implemented, risk contravening the prohibition on monetary financing under Article 123(1) TFEU; invites the ECB to continue monitoring the gradual reduction of its balance sheet, to limit prolonged potential destabilising effects in the euro area, while monitoring the growth and competitiveness of the EU’s economy; invites the ECB to share insights on the impact of the purchasing programmes on the functioning of financial markets, including the impact on pension funds and pension insurance cooperation;

24. Stresses that an even transmission of monetary policy is vital to the achievement of the ECB’s price stability mandate; underlines that excessive divergence in sovereign yields makes credit conditions inconsistent with the uniform transmission of monetary policy and makes reducing public debt exceedingly difficult; takes note of the establishment of the transmission protection instrument (TPI) in July 2022 as a tool to support the effective transmission of monetary policy;

25. Stresses that diverging interest rates in the euro area are – in the absence of any serious financial disturbances – generally the result of different risk premiums on government bonds reflecting, among other factors, different approaches to fiscal policy; notes that TPI interventions may conceal underlying fiscal challenges; stresses that TPI should be used under the conditions set by the ECB only to address financial market stress unrelated to economic fundamentals; calls on Member States to conduct responsible fiscal policies and ensure sustainable debt levels, thereby ensuring their resilience against current and future shocks;

Digital euro

26. Welcomes the ECB’s progress on the digital euro project and its ongoing dialogue with Parliament; underscores that the digital euro should deliver clear added value to European citizens, including enhanced strategic autonomy in payments, a higher level of competition in the retail payment market, potential to foster innovation in payments and finance, improved financial inclusion and a reliable offline backup payment system; calls on the ECB to clearly communicate these benefits in order to foster public trust and awareness; notes that the EU co-legislators will need to strike the right balance, among others, on holding limits, privacy concerns, competition with private payment solutions and usability in a business context;

27. Considers that the digital euro will only become a success story if it provides tangible added value for European citizens that they can understand; notes that currently many European citizens either have not heard about the digital euro project or remain sceptical; invites the ECB, together with relevant stakeholders, to launch a broad information campaign on the digital euro in order to allay citizens’ concerns;

28. Reiterates that the digital euro will serve as complement to physical cash, that it should not replace cash and that cash will remain widely available and accessible at all times in order to ensure a plurality of means of payment; welcomes, in that context, the proposal for a regulation on the use of euro cash as legal tender;

29. Stresses the need for a cost-based compensation model for the banking sector, which is tasked with the practical implementation of the digital euro project; recalls that the compensation model must guarantee a euro that is free of charge for its users;

30. Calls on the ECB to take due account of financial stability concerns and potential changes in the structure of the financial sector resulting from the introduction of the digital euro; recalls the importance of holding limits, in order not to create additional risks for banks’ balance sheets, especially during crises;

31. Calls on the ECB to prioritise robust privacy safeguards, establishing them as a gold standard for privacy for central bank digital currency (CBDC), to secure public confidence and address citizens’ concerns regarding data protection and autonomy;

Secondary objectives

32. Stresses that the EU’s secondary objectives are indeterminate as currently specified by the Treaties; notes that the supportive nature of the ECB’s secondary objectives complements the primary mandate; according to the Treaties, the EU’s aim is to promote peace, its values and the well-being of its peoples, create balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment;

33. Recalls that without prejudice to the ECB’s primary mandate, the Treaties require it to support the general economic policies of the Union; calls on the ECB to adhere to its mandate when interpreting or acting upon its secondary objectives; stresses that overstepping this mandate touches on the independence of the ECB; considers that maintaining price stability and stable macroeconomic conditions is conducive to creating the right conditions for the implementation of the EU’s general economic policy objectives;

34. Stresses that the ECB’s secondary objectives are best achieved when operating in a stable macroeconomic environment based on predictable price levels that encourages investment; calls on the ECB to include a specific chapter in its annual report explaining how it has interpreted and implemented its secondary objectives;

35. Stresses that the ECB should prevent distortions in the signalling function of prices that ensures an efficient allocation of resources; invites the ECB to further assess to what extent climate change affects its ability to maintain price stability;

36. Insists that the ECB respect the market neutrality approach in its monetary operations;

37. Notes that the ECB’s actions to decarbonise its corporate bond holdings have not strictly followed a market neutral approach;

38. Invites the ECB to review its policies to ensure that these measures promote EU competitiveness whereas such actions should in no way jeopardise the primary objective of the ECB;

39. Calls on the ECB to use all its available tools to ensure that banks take all financial and external risks, including climate and geopolitical risks, seriously; welcomes the ECB’s activities to further enhance the Eurosystem’s risk assessment tools and capabilities in order to better include climate- and environment-related risks, particularly because climate change and extreme weather phenomena could lead to greater price volatility, especially in the agri-food sector; invites the ECB to continue its work on climate risk stress tests developed to assess the resilience of banks and corporations in the face of climate transition risk;

40. Notes the Climate and nature plan 2024-2025; invites the ECB to draft a Geopolitics plan 2025-2030 in order to better understand the implications of war and conflict on price stability and treat all potential sources of external shocks equally;

Other aspects

41. Underlines that a strengthened international role of the euro would lead to lower interest rates in the euro area, increased status for the EU on the international stage and enhanced macroeconomic stability; recalls that strengthening the international role of the euro would contribute to enhancing the EU’s strategic autonomy;

42. Calls on the ECB to look into strengthening the international role of the euro with a view to enhancing its attractiveness as a reserve currency and support market-driven shifts in this direction; notes that the completion of the economic and monetary union could foster the international role of the euro;

43. Notes the ECB’s support for the establishment of a fully fledged European deposit insurance scheme; acknowledges that risk-sharing and risk-reduction are interlinked;

44. Welcomes the attention that the ECB pays to the risks of cyberattacks; calls on the ECB to ensure the safety and security of the monetary system for its users, especially in the light of ongoing geopolitical developments;

45. Considers that financial stability is a prerequisite for effective monetary policy and a resilient financial system; welcomes the finalisation of the Basel III framework and its implementation from 1 January 2025, as it has the potential to strengthen the resilience of the banking sector in this regard; notes, however, the delays in implementation and lack of clarity with regard to implementation by a certain number of other jurisdictions, resulting in an uneven level playing field at the global level;

46. Acknowledges the ECB’s concern regarding the rise of the shadow banking sector and the risk it may pose to financial stability;

47. Encourages collaboration with the Member States and national central banks on financial literacy programmes to empower individuals and businesses to make informed financial decisions;

48. Regrets that only two members of the ECB’s Executive Board and Governing Council are women; reiterates that the nominations to the Executive Board should be gender-balanced, with shortlists submitted to Parliament; urges the euro area Member States to improve the principles of gender equality in their appointment procedures, so that both genders have equal opportunities to serve as governors of their respective national central banks;

49. Reiterates that ECB appointments should be based on objective merit and competence assessment processes;

50. Supports the aim of the ECB to increase female representation by encouraging women to advance in this field; therefore welcomes initiatives such as the ECB Women in Economics Scholarship;

51. Highlights that the latest Financial Stability Review released by the ECB in November 2024 raises concerns over the possibility of an AI-related asset price bubble given the concentration among a few large AI beneficiary firms;

52. Calls for the further enhancement of the ECB’s internal whistleblowing framework to bring it into line with the EU Whistleblower Directive;

53. Invites the ESCB to continue and strengthen its dialogues with national parliaments, which it believes would strengthen the legitimacy and policies of the ESCB;

°

° °

54. Instructs its President to forward this resolution to the Council, the Commission and the European Central Bank.

MIL OSI Europe News –

January 30, 2025

MIL-OSI: Lantronix Launches New 28-Port PoE++ Network Switch at 2025 BICSI Winter Conference & Exhibition

Source: GlobeNewswire (MIL-OSI)

IRVINE, Calif., Jan. 29, 2025 (GLOBE NEWSWIRE) — Lantronix Inc. (NASDAQ: LTRX) (the “Company”), a global leader of compute and connectivity for IoT solutions enabling AI Edge Intelligence, today announced it will launch its new 28-port SM24TBT4XPA Managed 2.5G Ethernet PoE++ network switch as well as feature its 24-port SM24TBT4SA and 8-port SM8TBT2SA Managed Gigabit Ethernet PoE++ network switches at the 2025 BICSI Winter Conference & Exhibition. Taking place Feb. 4–6, 2025, at the Gaylord Palms Resort & Convention Center in Orlando, Fla., Lantronix will exhibit these newest items, along with more IoT network solutions, at booth Number 910.

“At BICSI, we will feature our new PoE++ network switches that offer flexibility in port speed and power while delivering the always-on performance needed for critical applications, such as smart building, wireless and security and surveillance. Our users know they can rely on Lantronix’s secure network solutions to stay connected at the network edge while gaining easy, intuitive control of end-to-end devices,” said Mathi Gurusamy, chief strategy officer at Lantronix.

Ideal for connecting and powering wireless devices in security and surveillance, smart building and other applications that require always-on performance, Lantronix’s new 28-port Managed Ethernet PoE++ Switch features 2.5G ports and IEEE 1588v2 precision clock synchronization protocol, providing the highly accurate time synchronization needed for use in applications like wireless networks and financial trading. Similar to other Lantronix switches, it also includes the unique, simple-to-navigate user interface with device management features that help reduce troubleshooting time and operating costs. The switches come integrated with Lantronix’s Percepxion™ Software End-to-End Solutions platform, providing comprehensive device life cycle management, enterprise application integration and data analytics, all through a single pane of glass.

Lantronix Speaker to Present on Lantronix’s New 24-Port Switch

Dennis Troxell, senior field applications engineer at Lantronix, will speak about Lantronix’s 24-port SM24TBT4SA Managed Gigabit Ethernet PoE++ switch. He will highlight its benefits in smart buildings and security and surveillance applications as part of the “What’s New, What’s It Do?” speaker series held on Monday, Feb. 3, at 5:40 p.m. at the BICSI Theatre.

Other solutions on display at the Lantronix booth include:

Network Extension Solutions

Secure Data Transmission at the Desktop Solutions

Fiber to the Desk Solutions: Learn how to improve security and increase network reliability by integrating fiber optic cabling with existing copper infrastructure utilizing compact Mini Media Converters or Network Interface Cards (NICs) at desktop workstations

Solutions for Connecting and Powering at the Network Edge

Industrial IoT Solutions

About Lantronix

Lantronix Inc. is a global leader of compute and connectivity IoT solutions that target high-growth markets, including Smart Cities, Enterprise and Transportation. Lantronix’s products and services empower companies to succeed in the growing IoT markets by delivering customizable solutions that enable AI Edge Intelligence. Lantronix’s advanced solutions include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with advanced Out-of-Band Management (OOBM) for Cloud and Edge Computing.

For more information, visit the Lantronix website.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking statements within the meaning of federal securities laws, including, without limitation, statements related to Lantronix leadership. These forward-looking statements are based on our current expectations and are subject to substantial risks and uncertainties that could cause our actual results, future business, financial condition, or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. The potential risks and uncertainties include, but are not limited to, such factors as the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains due to the COVID-19 pandemic or other outbreaks, wars and recent tensions in Europe, Asia and the Middle East, or other factors; future responses to and effects of public health crises; cybersecurity risks; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to successfully implement our acquisitions strategy or integrate acquired companies; difficulties and costs of protecting patents and other proprietary rights; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; and any additional factors included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission (the “SEC”) on Sept. 9, 2024, including in the section entitled “Risk Factors” in Item 1A of Part I of that report, as well as in our other public filings with the SEC. Additional risk factors may be identified from time to time in our future filings. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.

Lantronix Media Contact:
Gail Kathryn Miller
Corporate Marketing &
Communications Manager
media@lantronix.com

Lantronix Analyst and Investor Contact:
investors@lantronix.com

The MIL Network –

January 30, 2025

MIL-OSI: Fidelity D & D Bancorp, Inc. Reports 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

DUNMORE, Pa., Jan. 29, 2025 (GLOBE NEWSWIRE) — Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking subsidiary, The Fidelity Deposit and Discount Bank (“the Company”), announced its unaudited, consolidated financial results for the three and twelve month periods ended December 31, 2024.

Unaudited Financial Information

Net income recorded for the year ended December 31, 2024 was $20.8 million, or $3.60 diluted earnings per share, compared to $18.2 million, or $3.19 diluted earnings per share, for the year ended December 31, 2023. The $2.6 million, or 14% increase in net income resulted primarily from the $7.6 million increase in non-interest income for 2024 compared to 2023. During 2023, the Company sold available-for-sale securities resulting in a $6.5 million loss, $5.1 million net of tax, which was the primary reason for the change in non-interest income. This was partially offset by the $3.7 million increase in non-interest expense.

Net income for the quarter ended December 31, 2024 was $5.8 million, or $1.01 diluted earnings per share, compared to $0.5 million, or $0.08 diluted earnings per share, for the quarter ended December 31, 2023. The $5.3 million increase in net income stemmed from a $6.5 million loss, $5.1 million net of tax, on the sale of securities which lowered non-interest income for the fourth quarter of 2023. This is coupled with a $1.5 million increase in net interest income to $16.4 million in the fourth quarter of 2024, compared to $14.9 million in the same quarter of 2023. These increases are offset by a $1.6 million increase in non-interest expense.

“We are pleased to post solid performance in Q4, attributable to the execution of our strategic initiatives and improvement in our net interest margin,” said Dan Santaniello, President and CEO. “Strong deposit and lending growth, along with positive balance sheet trends and credit metrics contributed to the achievement of year end asset balances of $2.6 billion and $20.8 million in net income. I would like to thank our bankers for their efforts and dedication in continuing to serve our clients, our shareholders and our communities well, positioning us for a strong 2025.”

Consolidated Year-To-Date Operating Results Overview

Net interest income was $61.9 million for the year ended December 31, 2024 compared to $62.1 million for the year ended December 31, 2023. The $0.2 million, or less than 1%, decline was the result of interest expense growing faster than interest income. On the asset side, the loan portfolio caused interest income growth by producing $12.6 million more in interest income primarily from an increase of 45 basis points in the fully-taxable equivalent (“FTE”) loan yields on $106.1 million in higher average balances. On the funding side, total interest expense increased by $13.4 million due to an increase in interest expense paid on deposits of $14.2 million from a 72 basis point higher rate paid on a $111.0 million larger average balance of interest-bearing deposits, partially offset by a decrease in interest expense on borrowings of $0.8 million for the twelve months ended December 31, 2024 compared to the same period in 2023.

The overall cost of interest-bearing liabilities was 2.60% for the twelve months ended December 31, 2024 compared to 1.93% for the twelve months ended December 31, 2023. The cost of funds increased 55 basis points to 1.99% for the twelve months ended December 31, 2024 from 1.44% for the same period of 2023. The FTE yield on interest-earning assets was 4.62% for the year ended December 31, 2024, an increase of 44 basis points from the 4.18% for the same period of 2023. The Company’s FTE (non-GAAP measurement) net interest spread was 2.02% for the twelve months ended December 31, 2024, a decrease of 23 basis points from the 2.25% recorded for the same period of 2023. FTE net interest margin decreased by 9 basis points to 2.72% for the twelve months ended December 31, 2024 from 2.81% for the same 2023 period due to the increase of 67 basis points in rates paid on interest-bearing liabilities growing at a faster pace than the increase of 44 basis points in yields on interest-earning assets.

For the year ended December 31, 2024, the provision for credit losses on loans was $1.3 million and the provision for credit losses on unfunded commitments was $0.1 million, compared to a $1.5 million provision for credit losses on loans and a $0.2 million net benefit for the provision for unfunded commitments for the year ended December 31, 2023. For the year ended December 31, 2024, the decrease in the provision for credit losses on loans compared to the prior year period was due to lower net charge-offs coupled with improved economic forecast assumptions. For the year ended December 31, 2024, the increase in the provision for credit losses on unfunded commitments compared to the prior period was due to growth in unfunded commitments, specifically in commercial construction commitments.

Total non-interest income for the year ended December 31, 2024 was $19.0 million, an increase of $7.6 million, or 67%, from $11.4 million for the year ended December 31, 2023. The primary driver of the large increase was a $6.5 million loss recognized on the sale of securities during 2023. The remaining $1.1 million increase resulted from increases of $0.6 million in additional trust fiduciary fees, $0.3 million in additional service charges on loans, $0.2 million more in debit card interchange fees and $0.1 million higher fees from financial services. Partially offsetting these increases, the Company received $0.3 million in recoveries from acquired charged-off loans during 2023. Additionally, the Company experienced a decrease of $0.2 million in fees from commercial loans with interest rate hedges compared to 2023.

Non-interest expenses increased to $55.5 million for the year ended December 31, 2024, an increase of $3.6 million, or 7%, from $51.9 million for the year ended December 31, 2023. Salaries and benefits expense increased $3.2 million due to an increase in employees and incentive-based compensation throughout the year ended December 31, 2024. There were additional increases throughout the period in professional fees of $0.6 million, and PA shares tax of $0.3 million. The increases were partially offset by $0.5 million less in fraud losses and $0.3 million less advertising and marketing expenses.

The provision for income taxes increased $1.0 million during 2024 compared to 2023 due to $3.6 million higher income before taxes.

Consolidated Fourth Quarter Operating Results Overview

Net interest income was $16.4 million for the fourth quarter of 2024, a 10% increase over the $14.9 million earned for the fourth quarter of 2023. The $1.5 million increase in net interest income resulted from the increase of $3.2 million in interest income primarily due to a $131.7 million increase in the average balance of interest-earning assets and a 32 basis point increase in the FTE yield. The loan portfolio had the biggest impact, producing a $3.2 million increase in interest income from $132.1 million in higher quarterly average balances and an increase of 37 basis points in the FTE loan yield. Slightly offsetting the higher interest income is a $1.7 million increase in interest expense due to a 24 basis point increase in the rates paid on interest-bearing liabilities coupled with a $152.4 million quarter-over-quarter increase in average interest-bearing deposit balances. The largest contributor to the increase in interest expense was due to growth in average balances and a 31 basis point increase in the rates paid on interest-bearing deposits.

The overall cost of interest-bearing liabilities was 2.60% for the fourth quarter of 2024, an increase of 24 basis points from the 2.36% paid for the fourth quarter of 2023. The cost of funds increased 21 basis points to 2.00% for the fourth quarter of 2024 from 1.79% for the fourth quarter of 2023. The Company’s FTE (non-GAAP measurement) net interest spread was 2.08% for the fourth quarter of 2024, up 8 basis points from the 2.00% recorded for the fourth quarter of 2023. FTE net interest margin increased by 12 basis points to 2.78% for the three months ended December 31, 2024 from 2.66% for the same 2023 period due to the increase of 32 basis points in the yields on interest-earning assets growing slightly faster than increase of 24 basis points in rates paid on interest-bearing liabilities.

For the three months ended December 31, 2024, the provision for credit losses on loans was $0.2 million partially offset by a $0.1 million net benefit in the provision for unfunded commitments, compared to a $0.1 million provision for credit losses on loans and a $0.1 million net benefit in the provision for credit losses on unfunded loan commitments for the three months ended December 31, 2023. For the three months ended December 31, 2024, the increase in the provision for credit losses on loans compared to the prior year period was due to higher net charge-offs compared to the same period of 2023. For the three months ended December 31, 2024, the $0.1 million net benefit for credit losses on unfunded commitments, which was unchanged from the prior year period, was due to a reduction in unfunded commitments as funds were advanced during the quarter.

Total non-interest income increased $6.8 million to $4.8 million in the fourth quarter of 2024 compared to the same period of 2023 primarily due to the $6.5 million loss recognized on the sale of securities during the fourth quarter of 2023. Additionally, the Company experienced an increase of $0.2 million in trust fiduciary activities revenue.

Non-interest expenses increased $1.6 million, or 12%, for the fourth quarter of 2024 to $14.4 million from $12.8 million for the same quarter of 2023. The increase in non-interest expenses was primarily due to $1.2 million increase in salaries and benefits expense from higher salaries related to new hires and banker incentives. There were also increases in professional services of $0.3 million, data center services of $0.1 million, and PA shares tax of $0.1 million.

The provision for income taxes increased $1.2 million during the fourth quarter of 2024 primarily due to the higher level of operating income compared to the fourth quarter of 2023.

Consolidated Balance Sheet & Asset Quality Overview

The Company’s total assets grew to $2.6 billion as of December 31, 2024, an increase of $81.5 million from December 31, 2023. The increase resulted from $114.3 million in growth in the loans and leases portfolio during the twelve months ended December 31, 2024. Asset growth was offset by a decline in cash and cash equivalents by $28.6 million and a decrease in the investment portfolio by $11.1 million. The decline in the investment portfolio was primarily due to $22.0 million in paydowns partially offset by a $15.4 million in purchases within the available-for-sale securities portfolio. As of December 31, 2024, the market value of held-to-maturity securities decreased by $2.6 million compared to December 31, 2023, bringing the portfolio down to a $31.2 million unrealized loss position.

During the same time period, total liabilities increased $67.0 million, or 3%. Deposit growth of $182.4 million was utilized to fund loan growth and pay-off of short-term borrowings as of December 31, 2024. The Company experienced an increase of $110.4 million in money market deposits and an increase of $125.9 million in time deposits due to promotional rates offered as a result of market competition. The growth in these products was partially offset by a decrease of $53.9 million in checking and savings account balances as of December 31, 2024. This decrease resulted primarily from declines experienced in average balances per checking and saving account, even though the number of accounts in each product grew throughout 2024. Also as of December 31, 2024, checking deposit balances remained at more than half of total deposits. As of December 31, 2024, the ratio of insured and collateralized deposits to total deposits was approximately 76%.

Shareholders’ equity increased $14.5 million, or 8%, to $204.0 million at December 31, 2024 from $189.5 million at December 31, 2023. The increase was caused by $11.9 million higher retained earnings from net income of $20.8 million plus a $0.9 million, after tax, improvement in accumulated other comprehensive income from lower net unrealized losses recorded on available-for-sale securities, partially offset by $8.9 million in cash dividends paid to shareholders. An additional $1.7 million was recorded from the issuance of common stock under the Company’s stock plans and stock-based compensation expense. At December 31, 2024, there were no credit losses on available-for-sale and held-to-maturity debt securities. Accumulated other comprehensive income (loss) is excluded from regulatory capital ratios. The Company remains well capitalized with Tier 1 capital at 9.22% of total average assets as of December 31, 2024. Total risk-based capital was 14.78% of risk-weighted assets and Tier 1 risk-based capital was 13.60% of risk-weighted assets as of December 31, 2024. Tangible book value per share was $31.98 at December 31, 2024 compared to $29.57 at December 31, 2023. Tangible common equity was 7.16% of total assets at December 31, 2024 compared to 6.79% at December 31, 2023.

Asset Quality

Total non-performing assets were $7.8 million, or 0.30% of total assets at December 31, 2024, compared to $3.3 million, or 0.13% of total assets at December 31, 2023. Past due and non-accrual loans to total loans were 0.71% at December 31, 2024 compared to 0.46% at December 31, 2023. Net charge-offs to average total loans were 0.03% at December 31, 2024 compared to 0.04% at December 31, 2023.

About Fidelity D & D Bancorp, Inc. and The Fidelity Deposit and Discount Bank

Fidelity D & D Bancorp, Inc. has built a strong history as trusted financial advisor to the clients served by The Fidelity Deposit and Discount Bank (“Fidelity Bank”). Fidelity Bank continues its mission of exceeding client expectations through a unique banking experience. It operates 21 full-service offices throughout Lackawanna, Luzerne, Lehigh and Northampton Counties and a Fidelity Bank Wealth Management Office in Schuylkill County. Fidelity Bank provides a digital banking experience online at www.bankatfidelity.com, through the Fidelity Mobile Banking app, and in the Client Care Center at 1-800-388-4380. Additionally, the Bank offers full-service Wealth Management & Brokerage Services, a Mortgage Center, and a full suite of personal and commercial banking products and services. Part of the Company’s vision is to serve as the best bank for the community, which was accomplished by having provided over 5,960 hours of volunteer time and over $1.3 million in donations to non-profit organizations directly within the markets served throughout 2024. Fidelity Bank’s deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures to provide information useful to the reader in understanding its operating performance and trends, and to facilitate comparisons with the performance of other financial institutions. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The Company’s non-GAAP financial measures and key performance indicators may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to measure their performance and trends. Non-GAAP financial measures should be supplemental to GAAP used to prepare the Company’s operating results and should not be read in isolation or relied upon as a substitute for GAAP measures. Reconciliations of non-GAAP financial measures to GAAP are presented in the tables below.

Interest income was adjusted to recognize the income from tax exempt interest-earning assets as if the interest was taxable, fully-taxable equivalent (“FTE”), in order to calculate certain ratios within this document. This treatment allows a uniform comparison among yields on interest-earning assets. Interest income was FTE adjusted, using the corporate federal tax rate of 21% for 2024 and 2023.

Forward-looking statements

Certain of the matters discussed in this press release constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” and similar expressions are intended to identify such forward-looking statements.

The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:

	■	local, regional and national economic conditions and changes thereto;
	■	the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
	■	the risks of changes and volatility of interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks;
	■	securities markets and monetary fluctuations and volatility;
	■	disruption of credit and equity markets;
	■	impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;
	■	governmental monetary and fiscal policies, as well as legislative and regulatory changes;
	■	effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;
	■	the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
	■	the impact of new or changes in existing laws and regulations, including laws and regulations concerning taxes, banking, securities and insurance and their application with which the Company and its subsidiaries must comply;

	■	the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters;
	■	the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;
	■	the effects of economic conditions of any pandemic, epidemic or other health-related crisis such as COVID-19 and responses thereto on current customers and the operations of the Company, specifically the effect of the economy on loan customers’ ability to repay loans;
	■	the effects of bank failures, banking system instability, deposit fluctuations, loan and securities value changes;
	■	technological changes;
	■	the interruption or breach in security of our information systems, continually evolving cybersecurity and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses;
	■	acquisitions and integration of acquired businesses;
	■	the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
	■	acts of war or terrorism; and
	■	the risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

The Company cautions readers not to place undue reliance on forward-looking statements, which reflect analyses only as of the date of this release. The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

For more information please visit our investor relations web site located through www.bankatfidelity.com.

FIDELITY D & D BANCORP, INC. Unaudited Condensed Consolidated Balance Sheets (dollars in thousands)

At Period End:	December 31, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	83,353		$	111,949
Investment securities		557,221			568,273
Restricted investments in bank stock		3,961			3,905
Loans and leases		1,800,856			1,686,555
Allowance for credit losses on loans		(19,666	)		(18,806	)
Premises and equipment, net		35,914			34,232
Life insurance cash surrender value		58,069			54,572
Goodwill and core deposit intangible		20,504			20,812
Other assets		44,404			41,667

Total assets	$	2,584,616		$	2,503,159

Liabilities
Non-interest-bearing deposits	$	533,935		$	536,143
Interest-bearing deposits		1,806,885			1,622,282
Total deposits		2,340,820			2,158,425
Short-term borrowings		–			117,000
Secured borrowings		6,266			7,372
Other liabilities		33,561			30,883
Total liabilities		2,380,647			2,313,680

Shareholders’ equity		203,969			189,479

Total liabilities and shareholders’ equity	$	2,584,616		$	2,503,159

Average Year-To-Date Balances:	December 31, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	55,773		$	35,462
Investment securities		557,537			597,359
Restricted investments in bank stock		3,960			4,212
Loans and leases		1,741,349			1,635,286
Allowance for credit losses on loans		(19,391	)		(18,680	)
Premises and equipment, net		35,580			32,215
Life insurance cash surrender value		56,455			54,085
Goodwill and core deposit intangible		20,641			20,977
Other assets		41,755			44,180

Total assets	$	2,493,659		$	2,405,096

Liabilities
Non-interest-bearing deposits	$	527,825		$	558,962
Interest-bearing deposits		1,697,529			1,586,527
Total deposits		2,225,354			2,145,489
Short-term borrowings		32,446			49,860
Secured borrowings		6,830			7,489
Other liabilities		32,471			29,881
Total liabilities		2,297,101			2,232,719

Shareholders’ equity		196,558			172,377

Total liabilities and shareholders’ equity	$	2,493,659		$	2,405,096

FIDELITY D & D BANCORP, INC. Unaudited Condensed Consolidated Statements of Income (dollars in thousands)

	Three Months Ended						Twelve Months Ended
	Dec. 31, 2024			Dec. 31, 2023			Dec. 31, 2024			Dec. 31, 2023
Interest income
Loans and leases	$	24,584		$	21,406		$	93,269		$	80,629
Securities and other		3,475			3,434			13,753			13,206

Total interest income		28,059			24,840			107,022			93,835

Interest expense
Deposits		(11,468	)		(9,232	)		(43,165	)		(28,945	)
Borrowings and debt		(217	)		(707	)		(1,992	)		(2,843	)

Total interest expense		(11,685	)		(9,939	)		(45,157	)		(31,788	)

Net interest income		16,374			14,901			61,865			62,047

Provision for credit losses on loans		(250	)		(111	)		(1,325	)		(1,491	)
Net benefit (provision) for credit losses on unfunded loan commitments		85			65			(140	)		165
Non-interest income (loss)		4,847			(1,944	)		19,013			11,405
Non-interest expense		(14,395	)		(12,804	)		(55,541	)		(51,870	)

Income before income taxes		6,661			107			23,872			20,256

(Provision) benefit for income taxes		(826	)		361			(3,078	)		(2,046	)
Net income	$	5,835		$	468		$	20,794		$	18,210

	Three Months Ended
	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Interest income
Loans and leases	$	24,584		$	24,036		$	22,516		$	22,133		$	21,406
Securities and other		3,475			3,263			3,523			3,492			3,434

Total interest income		28,059			27,299			26,039			25,625			24,840

Interest expense
Deposits		(11,468	)		(11,297	)		(10,459	)		(9,941	)		(9,232	)
Borrowings and debt		(217	)		(571	)		(463	)		(741	)		(707	)

Total interest expense		(11,685	)		(11,868	)		(10,922	)		(10,682	)		(9,939	)

Net interest income		16,374			15,431			15,117			14,943			14,901

Provision for credit losses on loans		(250	)		(675	)		(275	)		(125	)		(111	)
Net benefit (provision) for credit losses on unfunded loan commitments		85			(135	)		(140	)		50			65
Non-interest income (loss)		4,847			4,979			4,615			4,572			(1,944	)
Non-interest expense		(14,395	)		(13,840	)		(13,616	)		(13,689	)		(12,804	)

Income before income taxes		6,661			5,760			5,701			5,751			107

(Provision) benefit for income taxes		(826	)		(793	)		(766	)		(694	)		361
Net income	$	5,835		$	4,967		$	4,935		$	5,057		$	468

FIDELITY D & D BANCORP, INC. Unaudited Condensed Consolidated Balance Sheets (dollars in thousands)

At Period End:	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Assets
Cash and cash equivalents	$	83,353		$	120,169		$	78,085		$	72,733		$	111,949
Investment securities		557,221			559,819			552,495			559,016			568,273
Restricted investments in bank stock		3,961			3,944			3,968			3,959			3,905
Loans and leases		1,800,856			1,795,548			1,728,509			1,697,299			1,686,555
Allowance for credit losses on loans		(19,666	)		(19,630	)		(18,975	)		(18,886	)		(18,806	)
Premises and equipment, net		35,914			36,057			35,808			34,899			34,232
Life insurance cash surrender value		58,069			57,672			57,278			54,921			54,572
Goodwill and core deposit intangible		20,504			20,576			20,649			20,728			20,812
Other assets		44,404			41,778			42,828			44,227			41,667

Total assets	$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896		$	2,503,159

Liabilities
Non-interest-bearing deposits	$	533,935		$	549,710		$	527,572		$	537,824		$	536,143
Interest-bearing deposits		1,806,885			1,792,796			1,641,558			1,678,172			1,622,282
Total deposits		2,340,820			2,342,506			2,169,130			2,215,996			2,158,425
Short-term borrowings		–			25,000			98,120			25,000			117,000
Secured borrowings		6,266			6,323			7,237			7,299			7,372
Other liabilities		33,561			34,843			30,466			28,966			30,883
Total liabilities		2,380,647			2,408,672			2,304,953			2,277,261			2,313,680

Shareholders’ equity		203,969			207,261			195,692			191,635			189,479

Total liabilities and shareholders’ equity	$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896		$	2,503,159

Average Quarterly Balances:	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Assets
Cash and cash equivalents	$	67,882		$	41,991		$	58,351		$	54,887		$	42,176
Investment securities		560,453			554,578			551,445			563,674			558,423
Restricted investments in bank stock		3,957			3,965			3,983			3,934			3,854
Loans and leases		1,797,023			1,763,254			1,707,598			1,696,669			1,664,905
Allowance for credit losses on loans		(20,050	)		(19,323	)		(19,171	)		(19,013	)		(19,222	)
Premises and equipment, net		36,065			36,219			35,433			34,591			33,629
Life insurance cash surrender value		57,919			57,525			55,552			54,796			54,449
Goodwill and core deposit intangible		20,529			20,602			20,677			20,759			20,844
Other assets		41,454			41,734			42,960			40,871			46,028

Total assets	$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168		$	2,405,086

Liabilities
Non-interest-bearing deposits	$	538,506		$	522,827		$	530,048		$	519,856		$	533,663
Interest-bearing deposits		1,769,265			1,702,187			1,670,211			1,647,615			1,616,826
Total deposits		2,307,771			2,225,014			2,200,259			2,167,471			2,150,489
Short-term borrowings		10,326			37,220			28,477			53,952			48,490
Secured borrowings		6,297			6,429			7,269			7,335			7,412
Other liabilities		34,695			31,999			30,734			32,434			30,745
Total liabilities		2,359,089			2,300,662			2,266,739			2,261,192			2,237,136

Shareholders’ equity		206,143			199,883			190,089			189,976			167,950

Total liabilities and shareholders’ equity	$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168		$	2,405,086

FIDELITY D & D BANCORP, INC. Selected Financial Ratios and Other Financial Data

	Three Months Ended
	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Selected returns and financial ratios
Basic earnings per share	$	1.02		$	0.87		$	0.86		$	0.88		$	0.08
Diluted earnings per share	$	1.01		$	0.86		$	0.86		$	0.88		$	0.08
Dividends per share	$	0.40		$	0.38		$	0.38		$	0.38		$	0.38
Yield on interest-earning assets (FTE)*		4.68	%		4.68	%		4.58	%		4.52	%		4.36	%
Cost of interest-bearing liabilities		2.60	%		2.70	%		2.58	%		2.51	%		2.36	%
Cost of funds		2.00	%		2.08	%		1.96	%		1.93	%		1.79	%
Net interest spread (FTE)*		2.08	%		1.98	%		2.00	%		2.01	%		2.00	%
Net interest margin (FTE)*		2.78	%		2.70	%		2.71	%		2.69	%		2.66	%
Return on average assets		0.90	%		0.79	%		0.81	%		0.83	%		0.08	%
Pre-provision net revenue to average assets*		1.06	%		1.05	%		1.00	%		0.96	%		0.03	%
Return on average equity		11.26	%		9.89	%		10.44	%		10.71	%		1.10	%
Return on average tangible equity*		12.50	%		11.02	%		11.72	%		12.02	%		1.26	%
Efficiency ratio (FTE)*		65.48	%		65.33	%		66.47	%		67.56	%		63.74	%
Expense ratio		1.48	%		1.41	%		1.47	%		1.50	%		2.43	%

	Years ended
	Dec. 31, 2024			Dec. 31, 2023
Basic earnings per share	$	3.63		$	3.21
Diluted earnings per share	$	3.60		$	3.19
Dividends per share	$	1.54		$	1.46
Yield on interest-earning assets (FTE)*		4.62	%		4.18	%
Cost of interest-bearing liabilities		2.60	%		1.93	%
Cost of funds		1.99	%		1.44	%
Net interest spread (FTE)*		2.02	%		2.25	%
Net interest margin (FTE)*		2.72	%		2.81	%
Return on average assets		0.83	%		0.76	%
Pre-provision net revenue to average assets*		1.02	%		0.90	%
Return on average equity		10.58	%		10.56	%
Return on average tangible equity*		11.82	%		12.03	%
Efficiency ratio (FTE)*		66.19	%		62.67	%
Expense ratio		1.47	%		1.69	%

FIDELITY D & D BANCORP, INC. Selected Financial Ratios and Other Financial Data

Non-GAAP Measures	Three Months Ended						Twelve Months Ended
(dollars in thousands except per share data)	Dec. 31, 2024			Dec. 31, 2023			Dec. 31, 2024			Dec. 31, 2023
Net income	$	5,835		$	468		$	20,794		$	18,210
Loss (gain) on the sale of available-for-sale debt securities, net of income taxes		–			5,109			–			5,110
Adjusted net income*	$	5,835		$	5,577		$	20,794		$	23,320
Adjusted basic earnings per share*	$	1.02		$	0.98		$	3.63		$	4.11
Adjusted diluted earnings per share*	$	1.01		$	0.97		$	3.60		$	4.08
Adjusted return on average assets*		0.90	%		0.92	%		0.83	%		0.97	%
Adjusted return on average tangible equity*		12.51	%		15.04	%		11.82	%		15.40	%

Other financial data	At period end:
(dollars in thousands except per share data)	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Assets under management	$	921,994		$	942,190		$	906,861		$	900,964		$	876,287
Book value per share	$	35.56		$	36.13		$	34.12		$	33.41		$	33.22
Tangible book value per share*	$	31.98		$	32.55		$	30.52		$	29.80		$	29.57
Equity to assets		7.89	%		7.92	%		7.83	%		7.76	%		7.57	%
Tangible common equity ratio*		7.16	%		7.19	%		7.06	%		6.98	%		6.79	%
Allowance for credit losses on loans to:
Total loans		1.09	%		1.09	%		1.10	%		1.11	%		1.12	%
Non-accrual loans	2.68x			2.77x			2.75x			5.31x			5.68x
Non-accrual loans to total loans		0.41	%		0.39	%		0.40	%		0.21	%		0.20	%
Non-performing assets to total assets		0.30	%		0.29	%		0.28	%		0.15	%		0.13	%
Net charge-offs to average total loans		0.03	%		0.02	%		0.03	%		0.01	%		0.04	%

Capital Adequacy Ratios
Total risk-based capital ratio		14.78	%		14.56	%		14.69	%		14.68	%		14.67	%
Common equity tier 1 risk-based capital ratio		13.60	%		13.38	%		13.52	%		13.47	%		13.42	%
Tier 1 risk-based capital ratio		13.60	%		13.38	%		13.52	%		13.47	%		13.42	%
Leverage ratio		9.22	%		9.30	%		9.30	%		9.15	%		9.15	%

* Non-GAAP Financial Measures – see reconciliations below

FIDELITY D & D BANCORP, INC. Reconciliations of Non-GAAP Financial Measures to GAAP

Reconciliations of Non-GAAP Measures to GAAP	Three Months Ended
(dollars in thousands)	Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
FTE net interest income (non-GAAP)
Interest income (GAAP)	$	28,059		$	27,299		$	26,039		$	25,625		$	24,840
Adjustment to FTE		764			775			751			747			664
Interest income adjusted to FTE (non-GAAP)		28,823			28,074			26,790			26,372			25,504
Interest expense (GAAP)		11,685			11,868			10,922			10,682			9,939
Net interest income adjusted to FTE (non-GAAP)	$	17,138			16,206		$	15,868			15,690			15,565

Efficiency Ratio (non-GAAP)
Non-interest expenses (GAAP)	$	14,395		$	13,840		$	13,616		$	13,689		$	12,804

Net interest income (GAAP)		16,374			15,431			15,117			14,943			14,901
Plus: taxable equivalent adjustment		764			775			751			747			664
Non-interest income (GAAP)		4,847			4,979			4,615			4,572			(1,944	)
Less: (Loss) gain on sales of securities		–			–			–			–			(6,467	)
Net interest income (FTE) plus adjusted non-interest income (non-GAAP)	$	21,985		$	21,185		$	20,483		$	20,262		$	20,088
Efficiency ratio (non-GAAP) ⁽¹⁾		65.47	%		65.33	%		66.48	%		67.56	%		63.74	%
⁽¹⁾ The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest (loss) income.

Tangible Book Value per Share/Tangible Common Equity Ratio (non-GAAP)
Total assets (GAAP)	$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896		$	2,503,159
Less: Intangible assets, primarily goodwill		(20,504	)		(20,576	)		(20,649	)		(20,728	)		(20,812	)
Tangible assets		2,564,112			2,595,357			2,479,996			2,448,168			2,482,347
Total shareholders’ equity (GAAP)		203,969			207,261			195,692			191,635			189,479
Less: Intangible assets, primarily goodwill		(20,504	)		(20,576	)		(20,649	)		(20,728	)		(20,812	)
Tangible common equity		183,465			186,685			175,043			170,907			168,667

Common shares outstanding, end of period		5,736,252			5,736,025			5,735,728			5,735,732			5,703,636
Tangible Common Book Value per Share	$	31.98		$	32.55		$	30.52		$	29.80		$	29.57
Tangible Common Equity Ratio		7.16	%		7.19	%		7.06	%		6.98	%		6.79	%

Pre-Provision Net Revenue to Average Assets
Income before taxes (GAAP)	$	6,661		$	5,760		$	5,701		$	5,751		$	107
Plus: Provision for credit losses		165			810			415			75			47
Total pre-provision net revenue (non-GAAP)		6,826			6,570			6,116			5,826			154
Total (annualized) (non-GAAP)	$	27,157		$	26,423		$	24,600		$	23,432		$	609

Average assets	$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168		$	2,405,086
Pre-Provision Net Revenue to Average Assets (non-GAAP)		1.06	%		1.05	%		1.00	%		0.96	%		0.03	%

FIDELITY D & D BANCORP, INC. Reconciliations of Non-GAAP Financial Measures to GAAP

Reconciliations of Non-GAAP Measures to GAAP	Years ended
(dollars in thousands)	Dec. 31, 2024			Dec. 31, 2023
FTE net interest income (non-GAAP)
Interest income (GAAP)	$	107,022		$	93,835
Adjustment to FTE		3,036			2,850
Interest income adjusted to FTE (non-GAAP)		110,058			96,685
Interest expense (GAAP)		45,157			31,788
Net interest income adjusted to FTE (non-GAAP)	$	64,901			64,897

Efficiency Ratio (non-GAAP)
Non-interest expenses (GAAP)	$	55,541		$	51,870

Net interest income (GAAP)		61,865			62,047
Plus: taxable equivalent adjustment		3,036			2,850
Non-interest income (GAAP)		19,013			11,405
Less: (Loss) gain on sales of securities		–			(6,468	)
Net interest income (FTE) plus non-interest income (non-GAAP)	$	83,914		$	82,770
Efficiency ratio (non-GAAP) ⁽¹⁾		66.19	%		62.67	%
⁽¹⁾ The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest (loss) income.

Pre-Provision Net Revenue to Average Assets
Income before taxes (GAAP)	$	23,873		$	20,256
Plus: Provision for credit losses		1,465			1,327
Total pre-provision net revenue (non-GAAP)	$	25,338		$	21,583

Average assets	$	2,493,659		$	2,405,096
Pre-Provision Net Revenue to Average Assets (non-GAAP)		1.02	%		0.90	%

Contacts:

Daniel J. Santaniello	Salvatore R. DeFrancesco, Jr.
President and Chief Executive Officer	Treasurer and Chief Financial Officer
570-504-8035	570-504-8000

The MIL Network –

January 30, 2025

MIL-OSI United Kingdom: Decade-long ban for director of London bakery who abused Covid support scheme

Source: United Kingdom – Government Statements

Director disqualified for Bounce Back Loan abuse

Azizullrahman Akbari overstated his company’s turnover when he applied for a £50,000 Bounce Back Loan – the maximum amount businesses could receive under the scheme
His New Watan Bakery Limited company did not have a turnover of more than £200,000 as he falsely claimed
Akbari has been banned as a company director until January 2035 following investigations by the Insolvency Service

The former boss of a west London bakery who overstated his company’s turnover to secure a maximum-value Covid loan has been banned from acting as a director for 10 years.

Azizullrahman Akbari, 60, obtained a £50,000 Bounce Back Loan just weeks into the pandemic, claiming the turnover for his New Watan Bakery Limited company was more than £200,000.

In reality, the company, which ran the Watan Bakery on South Road in Southall, never had such a high turnover.

Elizabeth Pigney, Chief Investigator at the Insolvency Service, said:

Azizullrahman Akbari exaggerated his company’s turnover to secure a £50,000 Bounce Back Loan, the most businesses were entitled to under the rules of the scheme.

From our analysis of the accounts, the company did not deserve anywhere near this amount.

Tackling Bounce Back Loan misconduct remains a key priority for the Insolvency Service and we will continue to take action against directors like Akbari who made false declarations when applying for financial support from the government.

New Watan Bakery began trading in June 2016, with Akbari as its sole director.

Akbari, of The Broadway, Southall, applied for a Bounce Back Loan in May 2020, declaring his company had a turnover of £214,010.

Businesses established before the start of January 2019 could apply for a Bounce Back Loan of up to a quarter of their annual turnover, with a maximum amount of £50,000.

Insolvency Service analysis of the company’s accounts revealed a turnover of £62,584 for the period up until the end of June 2019.

For the period ending June 2020, the turnover was smaller at £52,370.

New Watan Bakery entered liquidation in July 2023 owing more than £53,000.

The Secretary of State for Business and Trade accepted a disqualification undertaking from Akbari, and his ban started on Wednesday 29 January. 

The undertaking prevents him from being involved in the promotion, formation or management of a company, without the permission of the court.

A separate company now runs the bakery. Akbari is not listed as a director of this company.

Further information

Azizullrahman Akbari is of The Broadway, Southall, London. His date of birth is 23 September 1964
New Watan Bakery Limited (company number 10237625)
Read more about the Bounce Back Loan Scheme and the action the Insolvency Service can take if it finds misconduct
Further information about the work of the Insolvency Service, and how to complain about financial misconduct.

Published 29 January 2025

MIL OSI United Kingdom –

January 30, 2025

MIL-OSI Economics: W&T Offshore Announces Initial Results of Cash Tender Offer and Consent Solicitation

Source: W & T Offshore Inc

Headline: W&T Offshore Announces Initial Results of Cash Tender Offer and Consent Solicitation

HOUSTON, Jan. 29, 2025 (GLOBE NEWSWIRE) — W&T Offshore, Inc. (NYSE: WTI) (“W&T” or the “Company”) announced today the initial results of its previously announced cash tender offer (the “Tender Offer”) relating to any and all of its outstanding 11.750% senior second lien notes due 2026 (the “2026 Senior Second Lien Notes”) pursuant to its Offer to Purchase and Consent Solicitation dated January 13, 2025 (the “Offer to Purchase”). In conjunction with the Tender Offer, the Company also solicited consents (the “Consent Solicitation”) from the holders of the 2026 Senior Second Lien Notes for the adoption of proposed amendments (the “Proposed Amendments”), which, among other things, eliminated substantially all of the restrictive covenants, as well as various events of default and related provisions contained in the indenture governing the 2026 Senior Second Lien Notes (the “Indenture”).

As of 5:00 p.m. (New York City time) on January 27, 2025, the Company had received the requisite tenders and consents to the Proposed Amendments. The Proposed Amendments became effective on January 27, 2025 upon execution of a supplemental indenture to the indenture governing the 2026 Senior Second Lien Notes.

On January 28, 2025 (the “Early Settlement Date”), the Company accepted and purchased $269,741,000 aggregate principal amount of the outstanding 2026 Senior Second Lien Notes (or approximately 98.09% of the outstanding principal amount of 2026 Senior Second Lien Notes) for a purchase price equal to $1,036.25, plus accrued and unpaid interest, for each $1,000 principal amount of the 2026 Senior Second Lien Notes purchased. After giving effect to the purchase of 2026 Senior Second Lien Notes on the Early Settlement Date, an aggregate $5,259,000 principal amount of the 2026 Senior Second Lien Notes will remain outstanding.

W&T’s tender offer for the 2026 Senior Second Lien Notes will expire at 5:00 p.m. (New York City time) on February 11, 2025, unless the Tender Offer is extended by the Company in its sole discretion (the “Expiration Time”). Holders of the 2026 Senior Second Lien Notes who validly tender their 2026 Senior Second Lien Notes on or prior to the Expiration Time, and whose 2026 Senior Second Lien Notes are accepted for purchase, will receive consideration of $1,006.25 per $1,000 principal amount of the 2026 Senior Second Lien Notes tendered. In addition, the Company will pay accrued and unpaid interest on the principal amount of 2026 Senior Second Lien Notes accepted for purchase from the most recent interest payment date on the 2026 Senior Second Lien Notes to, but not including, February 13, 2025, the final settlement date.

Also on January 28, 2025, the Company mailed a notice of redemption to each remaining holder of 2026 Senior Second Lien Notes. The notice of redemption calls for the redemption of any 2026 Senior Second Lien Notes that remain outstanding on August 1, 2025. Such redemption is being made in accordance with the “optional redemption” provision of the Indenture, at a redemption price equal to 100.000% of the aggregate principal amount of the 2026 Senior Second Lien Notes, plus accrued and unpaid interest up to, but excluding, the date of redemption.

Because the withdrawal deadline of 5:00 p.m. (New York City time) on January 27, 2025 has passed, previously tendered 2026 Senior Second Lien Notes may no longer be withdrawn, and holders who tender 2026 Senior Second Lien Notes after the withdrawal deadline will not have withdrawal rights.

W&T engaged Morgan Stanley & Co. LLC to act as dealer manager for the Tender Offer and as solicitation agent for the Consent Solicitation and can be contacted at (212) 761-1057 (collect) or (800) 624-1808 (toll-free) with questions regarding the Tender Offer and Consent Solicitation.

Copies of the Offer to Purchase are available to holders of 2026 Second Senior Lien Notes from D.F. King & Co., Inc., the information agent and tender agent for the Tender Offer and the Consent Solicitation. Requests for copies of the Offer to Purchase should be directed to D.F. King at (866) 620-2535 (toll free), (212) 269-5550 (banks and brokers) or wtoffshore@dfking.com

Neither the Offer to Purchase nor any related documents have been filed with the U.S. Securities and Exchange Commission (“SEC”), nor have any such documents been filed with or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary.

The Tender Offer and the Consent Solicitation were made solely on the terms and conditions set forth in the Offer to Purchase. Under no circumstances shall this press release constitute an offer to buy or the solicitation of an offer to sell the 2026 Second Senior Lien Notes or any other securities of the Company or any of its subsidiaries. The Tender Offer and the Consent Solicitation are not being made to, nor will the Company accept tenders of 2026 Second Senior Lien Notes or deliveries of consents from, holders in any jurisdiction in which the Tender Offer and the Consent Solicitation or the acceptance thereof would not be in compliance with the securities of blue sky laws of such jurisdiction. This press release also is not a solicitation of consents to the Proposed Amendments to the indenture governing the 2026 Second Senior Lien Notes. No recommendation is made as to whether holders should tender their 2026 Second Senior Lien Notes or deliver their consents with respect to the 2026 Second Senior Lien Notes. Holders should carefully read the Offer to Purchase because it contains important information, including the terms and conditions of the Tender Offer and the Consent Solicitation.

About W&T Offshore

W&T Offshore, Inc. is an independent oil and natural gas producer, active in the exploration, development and acquisition of oil and natural gas properties in the Gulf of Mexico. As of September 30, 2024, the Company had working interests in 53 producing offshore fields in federal and state waters (which include 46 fields in federal waters and seven in state waters). The Company has under lease approximately 673,100 gross acres (515,400 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 514,000 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 5,600 gross acres in Alabama state waters. A majority of the Company’s daily production is derived from wells it operates. For more information on W&T, please visit the Company’s website at www.wtoffshore.com.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this release regarding the Company’s financial position, operating and financial performance, timing and completion of the Tender Offer and Consent Solicitation are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. Items contemplating or making assumptions about actual or potential future production and sales, prices, market size, and trends or operating results also constitute such forward-looking statements.

These forward-looking statements are based on the Company’s current expectations and assumptions about future events and speak only as of the date of this release. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, as results actually achieved may differ materially from expected results described in these statements. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements, unless required by law.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially including, among other things, the regulatory environment, including availability or timing of, and conditions imposed on, obtaining and/or maintaining permits and approvals, including those necessary for drilling and/or development projects; the impact of current, pending and/or future laws and regulations, and of legislative and regulatory changes and other government activities, including those related to permitting, drilling, completion, well stimulation, operation, maintenance or abandonment of wells or facilities, managing energy, water, land, greenhouse gases or other emissions, protection of health, safety and the environment, or transportation, marketing and sale of the Company’s products; inflation levels; global economic trends, geopolitical risks and general economic and industry conditions, such as the global supply chain disruptions and the government interventions into the financial markets and economy in response to inflation levels and world health events; volatility of oil, NGL and natural gas prices; the global energy future, including the factors and trends that are expected to shape it, such as concerns about climate change and other air quality issues, the transition to a low-emission economy and the expected role of different energy sources; supply of and demand for oil, natural gas and NGLs, including due to the actions of foreign producers, importantly including OPEC and other major oil producing companies (“OPEC+”) and change in OPEC+’s production levels; disruptions to, capacity constraints in, or other limitations on the pipeline systems that deliver the Company’s oil and natural gas and other processing and transportation considerations; inability to generate sufficient cash flow from operations or to obtain adequate financing to fund capital expenditures, meet the Company’s working capital requirements or fund planned investments; price fluctuations and availability of natural gas and electricity; the Company’s ability to use derivative instruments to manage commodity price risk; the Company’s ability to meet the Company’s planned drilling schedule, including due to the Company’s ability to obtain permits on a timely basis or at all, and to successfully drill wells that produce oil and natural gas in commercially viable quantities; uncertainties associated with estimating proved reserves and related future cash flows; the Company’s ability to replace the Company’s reserves through exploration and development activities; drilling and production results, lower–than–expected production, reserves or resources from development projects or higher–than–expected decline rates; the Company’s ability to obtain timely and available drilling and completion equipment and crew availability and access to necessary resources for drilling, completing and operating wells; changes in tax laws; effects of competition; uncertainties and liabilities associated with acquired and divested assets; the Company’s ability to make acquisitions and successfully integrate any acquired businesses; asset impairments from commodity price declines; large or multiple customer defaults on contractual obligations, including defaults resulting from actual or potential insolvencies; geographical concentration of the Company’s operations; the creditworthiness and performance of the Company’s counterparties with respect to its hedges; impact of derivatives legislation affecting the Company’s ability to hedge; failure of risk management and ineffectiveness of internal controls; catastrophic events, including tropical storms, hurricanes, earthquakes, pandemics and other world health events; environmental risks and liabilities under U.S. federal, state, tribal and local laws and regulations (including remedial actions); potential liability resulting from pending or future litigation; the Company’s ability to recruit and/or retain key members of the Company’s senior management and key technical employees; information technology failures or cyberattacks; and governmental actions and political conditions, as well as the actions by other third parties that are beyond the Company’s control, and other factors discussed in W&T Offshore’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q found at www.sec.gov or at the Company’s website at www.wtoffshore.com under the Investor Relations section.

Disclaimer

This press release must be read in conjunction with the Offer to Purchase. This announcement and the Offer to Purchase contain important information which must be read carefully before any decision is made with respect to the Tender Offer and the Consent Solicitation. If any holder of 2026 Senior Second Lien Notes is in any doubt as to the actions it should take, it is recommended to seek its own legal, tax, accounting and financial advice, including as to any tax consequences, immediately from its stockbroker, bank manager, attorney, accountant or other independent financial or legal adviser. Any individual or company whose 2026 Senior Second Lien Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Offer to Purchase. None of the Company, the dealer manager and solicitation agent, the information agent and tender agent and any person who controls, or is a director, officer, employee or agent of such persons, or any affiliate of such persons, makes any recommendation as to whether holders of 2026 Senior Second Lien Notes should participate in the Tender Offer.


CONTACT:	Al Petrie	Sameer Parasnis
	Investor Relations Coordinator	Executive VP and CFO
	investorrelations@wtoffshore.com	sparasnis@wtoffshore.com
	713-297-8024	713-513-8654

Source: W&T Offshore, Inc.

Released January 29, 2025

MIL OSI Economics –

January 30, 2025

MIL-OSI: 180 Degree Capital Corp. Responds to Non-Binding Proposal from Source Capital

Source: GlobeNewswire (MIL-OSI)

MONTCLAIR, N.J., Jan. 29, 2025 (GLOBE NEWSWIRE) — 180 Degree Capital Corp. (NASDAQ:TURN) (“180 Degree Capital”) notes that its Board of Directors (the “Board”), including the Special Committee of the Board, has evaluated the non-binding proposal from Source Capital issued on January 24, 2025 (the “Source Proposal”), pursuant to the requirements of Section 7.10 of the Agreement and Plan of Merger by and among 180 Degree Capital Corp., Mount Logan Capital Inc. (“Mount Logan”), Yukon New Parent, Inc., Polar Merger Sub, Inc. and Moose Merger Sub, LLC, dated January 16, 2025 (the “Merger Agreement”). Based on this assessment, the Board has determined that the Source Proposal does not constitute a TURN Superior Proposal (as defined in the Merger Agreement) and does not, at this time, otherwise satisfy the criteria set forth in Section 7.10(a) of the Merger Agreement.

The Board takes its fiduciary responsibilities seriously and is deeply committed to value creation for all of 180 Degree Capital shareholders. The Board unanimously reaffirms its support of the proposed strategic business combination with Mount Logan as contemplated by the Merger Agreement as being in the best interests of all 180 Degree Capital shareholders. The Board believes that the proposed merger with Mount Logan would provide unique and value-creating benefits as described in the joint investor presentation previously publicly filed by 180 Degree Capital on January 17, 2025, and available on its website at https://ir.180degreecapital.com/ir-calendar/detail/2908/180-degree-capital-and-mount-logan-capital-proposed-merger.

About 180 Degree Capital Corp.

180 Degree Capital Corp. is a publicly traded registered closed-end fund focused on investing in and providing value-added assistance through constructive activism to what we believe are substantially undervalued small, publicly traded companies that have potential for significant turnarounds. 180 Degree Capital’s goal is that the result of its constructive activism leads to a reversal in direction for the share price of these investee companies, i.e., a 180-degree turn. Detailed information about 180 Degree Capital and its holdings can be found on its website at www.180degreecapital.com.

Press Contact:
Daniel B. Wolfe
Robert E. Bigelow
180 Degree Capital Corp.
973-746-4500
ir@180degreecapital.com

About Mount Logan Capital Inc.

Mount Logan Capital Inc. is an alternative asset management and insurance solutions company that is focused on public and private debt securities in the North American market and the reinsurance of annuity products, primarily through its wholly owned subsidiaries Mount Logan Management LLC (“ML Management”) and Ability Insurance Company (“Ability”), respectively. Mount Logan also actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

ML Management was organized in 2020 as a Delaware limited liability company and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. The primary business of ML Management is to provide investment management services to (i) privately offered investment funds exempt from registration under the Investment Company Act of 1940, as amended (the “1940 Act”) advised by ML Management, (ii) a non-diversified closed-end management investment company that has elected to be regulated as a business development company, (iii) Ability, and (iv) non-diversified closed-end management investment companies registered under the 1940 Act that operate as interval funds. ML Management also acts as the collateral manager to collateralized loan obligations backed by debt obligations and similar assets.

Ability is a Nebraska domiciled insurer and reinsurer of long-term care policies and annuity products acquired by Mount Logan in the fourth quarter of fiscal year 2021. Ability is also no longer insuring or re-insuring new long-term care risk.

Additional Information and Where to Find It

In connection with the Business Combination, 180 Degree Capital intends to file with the Securities and Exchange Commission (“SEC”) and mail to its shareholders a proxy statement on Schedule 14A (the “Proxy Statement”). In addition, New Mount Logan plans to file with the SEC a registration statement on Form S-4 (the “Registration Statement”) that will register the exchange of New Mount Logan shares in the Business Combination and include the Proxy Statement and a prospectus of New Mount Logan (the “Prospectus”). The Proxy Statement and the Registration Statement (including the Prospectus) will each contain important information about 180 Degree Capital, Mount Logan, New Mount Logan, the Business Combination and related matters. SHAREHOLDERS OF 180 DEGREE CAPITAL AND MOUNT LOGAN ARE URGED TO READ THE PROXY STATEMENT AND PROSPECTUS CONTAINED IN THE REGISTRATION STATEMENT AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE APPLICABLE SECURITIES REGULATORY AUTHORITIES AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT 180 DEGREE CAPITAL, MOUNT LOGAN, NEW MOUNT LOGAN, THE BUSINESS COMBINATION AND RELATED MATTERS. Investors and security holders may obtain copies of these documents and other documents filed with the applicable securities regulatory authorities free of charge through the website maintained by the SEC at https://www.sec.gov and the website maintained by the Canadian securities regulators at www.sedarplus.ca. Copies of the documents filed by 180 Degree Capital are also available free of charge by accessing 180 Degree Capital’s investor relations website at https://ir.180degreecapital.com.

Certain Information Concerning the Participants

180 Degree Capital, its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in connection with the Business Combination. Information about 180 Degree Capital’s executive officers and directors is available in 180 Degree Capital’s Annual Report filed on Form N-CSR for the year ended December 31, 2023, which was filed with the SEC on February 20, 2024, and in its proxy statement for the 2024 Annual Meeting of Shareholders (“2024 Annual Meeting”), which was filed with the SEC on March 1, 2024. To the extent holdings by the directors and executive officers of 180 Degree Capital securities reported in the proxy statement for the 2024 Annual Meeting have changed, such changes have been or will be reflected on Statements of Change in Ownership on Forms 3, 4 or 5 filed with the SEC. These documents are or will be available free of charge at the SEC’s website at https://www.sec.gov. Additional information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the 180 Degree Capital shareholders in connection with the Business Combination will be contained in the Proxy Statement when such document becomes available.

Mount Logan, its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Mount Logan in favor of the approval of the Business Combination. Information about Mount Logan’s executive officers and directors is available in Mount Logan’s annual information form dated March 14, 2024, available on its website at https://mountlogancapital.ca/investor-relations and on SEDAR+ at https://sedarplus.ca. To the extent holdings by the directors and executive officers of Mount Logan securities reported in Mount Logan’s annual information form have changed, such changes have been or will be reflected on insider reports filed on SEDI at https://www.sedi.ca/sedi/. Additional information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the Mount Logan shareholders in connection with the Business Combination will be contained in the Prospectus included in the Registration Statement when such document becomes available.

Non-Solicitation

This press release is not intended to be, and shall not constitute, an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Forward-Looking Statements

This press release, and oral statements made from time to time by representatives of 180 Degree Capital and Mount Logan, may contain statements of a forward-looking nature relating to future events within the meaning of federal securities laws. Forward-looking statements may be identified by words such as “anticipates,” “believes,” “could,” “continue,” “estimate,” “expects,” “intends,” “will,” “should,” “may,” “plan,” “predict,” “project,” “would,” “forecasts,” “seeks,” “future,” “proposes,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions). Forward-looking statements are not statements of historical fact and reflect Mount Logan’s and 180 Degree Capital’s current views about future events. Such forward-looking statements include, without limitation, statements about the benefits of the Business Combination involving Mount Logan and 180 Degree Capital, including future financial and operating results, Mount Logan’s and 180 Degree Capital’s plans, objectives, expectations and intentions, the expected timing and likelihood of completion of the Business Combination, and other statements that are not historical facts, including but not limited to future results of operations, projected cash flow and liquidity, business strategy, payment of dividends to shareholders of New Mount Logan, and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this press release will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, without limitation, the ability to obtain the requisite Mount Logan and 180 Degree Capital shareholder approvals; the risk that Mount Logan or 180 Degree Capital may be unable to obtain governmental and regulatory approvals required for the Business Combination (and the risk that such approvals may result in the imposition of conditions that could adversely affect New Mount Logan or the expected benefits of the Business Combination); the risk that an event, change or other circumstance could give rise to the termination of the Business Combination; the risk that a condition to closing of the Business Combination may not be satisfied; the risk of delays in completing the Business Combination; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the Business Combination may not be fully realized or may take longer to realize than expected; the risk that any announcement relating to the Business Combination could have adverse effects on the market price of Mount Logan’s common stock or 180 Degree Capital’s common stock; unexpected costs resulting from the Business Combination; the possibility that competing offers or acquisition proposals will be made; the risk of litigation related to the Business Combination; the risk that the credit ratings of New Mount Logan or its subsidiaries may be different from what the companies expect; the diversion of management time from ongoing business operations and opportunities as a result of the Business Combination; the risk of adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Business Combination; competition, government regulation or other actions; the ability of management to execute its plans to meet its goals; risks associated with the evolving legal, regulatory and tax regimes; changes in economic, financial, political and regulatory conditions; natural and man-made disasters; civil unrest, pandemics, and conditions that may result from legislative, regulatory, trade and policy changes; and other risks inherent in Mount Logan’s and 180 Degree Capital’s businesses. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Readers should carefully review the statements set forth in the reports, which 180 Degree Capital has filed or will file from time to time with the SEC and Mount Logan has filed or will file from time to time on SEDAR+.

Neither Mount Logan nor 180 Degree Capital undertakes any obligation, and expressly disclaims any obligation, to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Any discussion of past performance is not an indication of future results. Investing in financial markets involves a substantial degree of risk. Investors must be able to withstand a total loss of their investment. The information herein is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions. The references and link to the website www.180degreecapital.com and mountlogancapital.ca have been provided as a convenience, and the information contained on such websites are not incorporated by reference into this press release. Neither 180 Degree Capital nor Mount Logan is responsible for the contents of third-party websites.

The MIL Network –

January 30, 2025

MIL-OSI Security: Nigerian who defrauded U.S. pandemic aid programs of more than $1 million sentenced to 54 months in prison

Source: United States Department of Justice (National Center for Disaster Fraud)

Defendant defrauded Americans for a decade with trove of over 14,000 stolen identities

Tacoma – The second of two Nigerian men residing in Canada who defrauded pandemic aid programs of millions was sentenced today in U.S. District Court in Tacoma to 54 months in prison for wire fraud and aggravated identity theft announced U.S. Attorney Tessa M. Gorman. Fatiu Ismaila Lawal, 46, was extradited from Canada last July, and pleaded guilty in September 2024. At today’s sentencing hearing U.S. District Judge Tiffany M. Cartwright said, the crime required substantial planning. “This took advantage of programs designed to help people who were really struggling in an international emergency,” Judge Cartwright said.

“This defendant made it his full-time job to defraud the U.S. for years before the pandemic, but he kicked it into high gear once critical aid to Americans workers was flowing,” said U.S. Attorney Gorman. “His fraud included using stolen identities of Washington residents to file dozens of unemployment claims in the first few weeks of the pandemic, contributing to the flood of fraudulent claims that caused the state to pause all unemployment payments. In this way his fraud harmed all Washingtonians who desperately needed assistance at the onset of the pandemic.”

According to records filed in the case, Lawal, and codefendant Sakiru Olanrewaju Ambali, 46, used the stolen identities of thousands of workers to submit over 1,700 claims for pandemic unemployment benefits to over 25 different states, including Washington State. In total, the claims sought approximately $25 million, but the conspirators obtained approximately $2.7 million, primarily from pandemic unemployment benefits. Lawal admits that he personally submitted claims for $1,345,472.

Lawal personally submitted at least 790 unemployment claims using the stolen identities of 790 workers. He submitted claims for pandemic unemployment benefits to New York, Maryland, Michigan, Nevada, California, Washington and some 19 other states. Lawal also established four internet domain names that were subsequently used for fraud – creating some 800 different email addresses that were used in this scheme.

Additionally, between 2018 and November 2022, Lawal used stolen personal information to submit 3,000 income tax returns for $7.5 million in refunds. The IRS detected the fraud and paid just $30,000.

“While Mr. Lawal may not have secured the $7.5 million he sought from fraudulent tax refunds, each of the 3,000 returns he filed represents a life he disrupted,” said Adam Jobes, Special Agent in Charge of IRS Criminal Investigation’s Seattle Field Office.

Lawal and co-defendant Ambali also attempted to use the stolen American identities for Economic Injury Disaster Loans (EIDL) to defraud the Small Business Administration (SBA). The pair submitted some 38 applications, but SBA caught most of the fraud and paid only $2,500.

Lawal and Ambali had the proceeds of their fraud sent to cash cards or to “money mules” who transferred the funds according to instructions given by the co-conspirators. They also allegedly used stolen identities to open bank accounts and have the money deposited directly into those accounts for their use.

Evidence gathered in the case shows that Lawal personally received a substantial portion of the criminal proceeds. Lawal was ordered to pay restitution of $1,345,472.

Co-defendant Ambali was sentenced to 42 months in prison in March 2024.

In asking for a 65-month prison sentence, the government argued, “During major disasters and nationwide emergencies, it is particularly importantfor the government to be able to disburse aid quickly to real victims to mitigate the impact of the crisis. The actual monetary loss to the government comes secondary to the fact that a real person or business behind each stolen identity had difficulty accessing assistance because a fraudulent claim was already paid in their identity. These difficulties were further compounded by the onslaught of fraudulent claims that clogged the infrastructure in place to distribute the aid. The estimated loss from these fraudulent pandemic unemployment claims is over $100 billion.”

The National Unemployment Fraud Task Force provided a lead on this case to the investigative team in Western Washington. The case was investigated by the FBI with assistance from U.S. Postal Inspection Service (USPIS) and the Department of Labor Office of Inspector General (DOL-OIG). Also contributing to the investigation were Internal Revenue Service Criminal Investigation (IRS-CI), Washington State Employment Security Division (ESD), and the Small Business Administration (SBA).

The case was prosecuted by Assistant United States Attorney Cindy Chang of the Western District of Washington. DOJ’s Office of International Affairs assisted with extradition on this matter.

The COVID-19 Fraud Enforcement Task Force was established to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

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

MIL Security OSI –

January 29, 2025

MIL-OSI Africa: WHO in Africa: three ways the continent stands to lose from Trump’s decision to pull out

Source: The Conversation – Africa – By Lawrence O. Gostin, University Professor; Founding Linda D. & Timothy J. O’Neill Professor of Global Health Law, Georgetown University

President Donald Trump’s decision to withdraw the US from the World Health Organization (WHO) will be keenly felt across the globe, with profound implications for health in Africa.

In the executive order putting the withdrawal process in place, Trump also paused the transfer of US funds, support and resources to the WHO.

Trump’s executive order is his second attempt to pull the US out of the agency. He has also complained that the US financial contribution to the international organisation is “onerous”.

The biggest impacts will come from the loss of US funding. The US is by far the WHO’s largest state donor, contributing approximately 18% of the agency’s total funding.

The WHO’s funding is split into two tranches.

There are assessed contributions: countries’ membership fees, to which all WHO members agree and over which the WHO has full control. The US accounts for 22%, or US$264 million of these, for the current 2024/25 budget. The US is yet to pay the WHO its assessed contributions for 2024 and 2025. Withdrawing from the organisation without paying these fees would violate US law and must be challenged in the US courts.

Then there are voluntary contributions: donations by member countries, foundations and other sources, usually earmarked to that donor’s priorities. The US contributes 16%, or US$442 million, of all voluntary contributions.

In the case of the US, these priorities include HIV/AIDS, polio eradication and health emergencies.

As experts in global health law, we are deeply concerned about the impacts of this order, which will be far reaching.

The US withdrawal from the WHO threatens core health programmes in Africa. It will weaken the ability of African countries to respond to health emergencies, and could lead to increases in death and illness on the continent.

It will also have broader implications for leadership and governance in global health.

Impact on core programmes

Trump’s decision to withdraw comes at a time when the WHO’s health priorities in Africa were already underfunded. Eight of 12 areas were funded less than 50% earlier this year.

Twenty-seven percent of all US funding through the WHO for the African region goes to polio eradication, 20% supports improved access to quality essential health services, and much of the balance goes to pandemic preparedness and response.

The WHO/US partnership has long supported the HIV/AIDS response in Africa, but the redirection and reduction in funds could reduce the availability of prevention, testing and treatment programmes across the continent. This threatens progress to end AIDS by 2030.

The funding gap will also have an impact on programmes designed to increase access to quality essential health services, including the prevention and treatment of tuberculosis and malaria, and child and maternal health services.

If the WHO is forced to cut back on these services due to a lack of financing, it could lead to increases in mortality and morbidity in Africa.

European countries filled the financing gap in 2020 when Trump last withheld US funding from the WHO. But it is unlikely that they will be able to do so again, as countries across Europe are facing their own geopolitical and financial challenges.

The WHO’s budget was already thinly spread, and its mandate keeps growing.

Through its new investment round, the WHO raised US$1.7 billion in pledges, and is expecting another US$2.1 billion through partnerships and other agreements. Yet even before the US president’s executive order, this left a funding gap of approximately US$3.3 billion (or 47%) for the WHO’s 2025-2028 strategy.

If the gap left by the loss of US funding cannot be filled from other sources, it will fall to African nations to fund health programmes and services that are cut, placing a greater strain on governments reckoning with limited fiscal space.

Weakened response to health emergencies

Trump’s decision comes at a pivotal moment for health in Africa, which is experiencing major outbreaks.

The US has been a key actor supporting WHO-led emergency responses to outbreaks.

Last year, the US partnered with the WHO and Rwanda to rapidly bring a Marburg outbreak under control. The Marburg virus continues to threaten the continent. Tanzania has just confirmed an outbreak.

Earlier in August 2024, the WHO and Africa Centres for Disease Control each declared mpox on the continent to be a public health emergency.

The Biden administration delivered 60,000 vaccines, pledged 1 million more, and contributed over US$22 million to support capacity building and vaccination.

But now US health officials have been instructed to immediately stop working with the WHO, preventing US teams in Africa from responding to Marburg virus and mpox.

Even before these outbreaks, the US supported WHO-led emergency responses to COVID-19, Ebola and HIV/AIDS. The US withdrawal could lead to increased transmission, sickness and death in vulnerable regions.

Similarly, strong partnership between the WHO and the US has helped build health system capacities in Africa for public health emergencies.

US experts have supported nearly half of all WHO joint external evaluation missions to assess countries’ pandemic preparedness and response capacities under the International Health Regulations. This is a binding WHO agreement to help countries prepare for, detect and initially respond to health emergencies globally.

The US withdrawal from the WHO risks eroding these efforts, though it may also accelerate a regionalisation of health security already underway in Africa, led by the African Union through the Africa CDC.

Restructuring of governance

The US was instrumental in establishing the WHO and shaping WHO norms and standards, in particular driving amendments to the International Health Regulations adopted in June 2024. This included improved obligations to facilitate the rapid sharing of information between the WHO and countries.

The US has also been a key figure in ongoing negotiations for a new international treaty, a Pandemic Agreement. This would create new rights and obligations to prevent, prepare for and respond to pandemics with elements that go beyond the International Health Regulations. These include obligations on the equitable sharing of vaccines.

Trump’s executive order would prevent these instruments from being implemented or enforced in the US.

This would only entrench inequitable dynamics when the next global health emergency breaks out, given the concentration of global pharmaceutical companies in the US.

The order also pulls the US out of the Pandemic Agreement negotiations. This will inevitably create new diplomatic dynamics. Optimistically, this could provide enhanced opportunities for African nations to strengthen their position on equity.

The US departure from the WHO will create a leadership vacuum, ushering in a restructuring of power and alliances for global health.

This vacuum could cede influence to US adversaries, opening the door to even greater Chinese influence on the African continent.

But it also presents opportunities for greater African leadership in global health, which could strengthen African self-reliance.

Trump has directed the US to find “credible and transparent” partners to assume the activities the WHO would have performed. And yet there is no substitute for the WHO, with its worldwide reach and stature.

For more than 75 years, the WHO has been, and remains, the only global health organisation with the membership, authority, expertise and credibility to protect and promote health for the world’s population.

For this reason, the African Union, among scores of other bodies and leaders, has already urged Trump to reconsider.

It is now time for the global community to stand up for the WHO and ensure its vital health work in Africa and beyond can thrive.

– WHO in Africa: three ways the continent stands to lose from Trump’s decision to pull out
– https://theconversation.com/who-in-africa-three-ways-the-continent-stands-to-lose-from-trumps-decision-to-pull-out-248237

MIL OSI Africa –

January 29, 2025

MIL-OSI: ASML reports €28.3 billion total net sales and €7.6 billion net income in 2024

Source: GlobeNewswire (MIL-OSI)

ASML reports €28.3 billion total net sales and €7.6 billion net income in 2024
2025 total net sales expected to be between €30 billion and €35 billion

VELDHOVEN, the Netherlands, January 29, 2025 – Today, ASML Holding NV (ASML) has published its 2024 fourth-quarter and full-year results.

Q4 total net sales of €9.3 billion, gross margin of 51.7%, net income of €2.7 billion
Quarterly net bookings in Q4 of €7.1 billion² of which €3.0 billion is EUV
2024 total net sales of €28.3 billion, gross margin of 51.3%, net income of €7.6 billion
ASML expects Q1 2025 total net sales between €7.5 billion and €8.0 billion, and a gross margin between 52% and 53%
ASML expects 2025 total net sales to be between €30 billion and €35 billion, with a gross margin between 51% and 53%

(Figures in millions of euros unless otherwise indicated)	Q3 2024	Q4 2024	FY 2023		FY 2024
Total net sales	7,467	9,263	27,559		28,263
…of which Installed Base Management sales¹	1,541	2,147	5,620		6,494

New lithography systems sold (units)	106	119	421		380
Used lithography systems sold (units)	10	13	28		38

Net bookings²	2,633	7,088	20,040	³	18,899	³

Gross profit	3,793	4,790	14,136		14,492
Gross margin (%)	50.8	51.7	51.3		51.3

Net income	2,077	2,693	7,839		7,572
EPS (basic; in euros)	5.28	6.85	19.91		19.25

End-quarter cash and cash equivalents and short-term investments	4,985	12,741	7,010		12,741

(1) Installed Base Management sales equals our net service and field option sales.
(2) Net bookings include all system sales orders and inflation-related adjustments, for which written authorizations have been accepted.
(3) The sum of quarterly net bookings over the full year.

Numbers have been rounded for readers’ convenience. A complete summary of US GAAP Consolidated Statements of Operations is published on www.asml.com.

CEO statement and outlook
“Our fourth-quarter was a record in terms of revenue, with total net sales coming in at €9.3 billion, and a gross margin of 51.7%, both above our guidance. This was primarily driven by additional upgrades. We also recognized revenue on two High NA EUV systems. We shipped a third High NA EUV system to a customer in the fourth quarter.

“ASML achieved another record year, ending with total net sales for 2024 of €28.3 billion, and a gross margin of 51.3%.

“We expect first-quarter total net sales between €7.5 billion and €8.0 billion, with a gross margin between 52% and 53%. ASML expects R&D costs of around €1,140 million and SG&A costs of around €290 million. As we communicated last October, we expect total net sales for the year between €30 billion and €35 billion, with a gross margin between 51% and 53%.

“Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry. It has created a shift in the market dynamics that is not benefiting all of our customers equally, which creates both opportunities and risks as reflected in our 2025 revenue range,” said ASML President and Chief Executive Officer Christophe Fouquet.

Update dividend and share buyback program
ASML intends to declare a total dividend for the year 2024 of €6.40 per ordinary share, which is a 4.9% increase compared to 2023. An interim dividend of €1.52 per ordinary share will be made payable on February 19, 2025. Recognizing this interim dividend and the two interim dividends of €1.52 per ordinary share paid in 2024, this leads to a final dividend proposal to the General Meeting of €1.84 per ordinary share.

In the fourth quarter, we did not purchase any shares under the current 2022-2025 share buyback program.

Details of the share buyback program as well as transactions pursuant thereto, and details of the dividend are published on ASML’s website (www.asml.com/investors).

Media Relations contacts	Investor Relations contacts
Monique Mols +31 6 5284 4418	Jim Kavanagh +31 6 1524 9925
Sarah de Crescenzo +1 925 899 8985	Pete Convertito +1 203 919 1714
Karen Lo +886 9 397 88635	Peter Cheang +886 3 659 6771

Quarterly video interview, annual press conference and investor call
With this press release, ASML is publishing a video interview in which CEO Christophe Fouquet and CFO Roger Dassen discuss the 2024 fourth-quarter and full-year results and outlook for 2025. This video and the video transcript can be viewed on www.asml.com shortly after the publication of this press release.

CEO Christophe Fouquet and CFO Roger Dassen will host a press conference in Veldhoven on January 29, 2025, at 11:00 Central European Time, which will also be accessible via a live webcast on www.asml.com.

An investor call for both investors and the media will be hosted by CEO Christophe Fouquet and CFO Roger Dassen on January 29, 2025 at 15:00 Central European Time / 09:00 US Eastern Time. Details can be found on our website.

About ASML
ASML is a leading supplier to the semiconductor industry. The company provides chipmakers with hardware, software and services to mass produce the patterns of integrated circuits (microchips). Together with its partners, ASML drives the advancement of more affordable, more powerful, more energy-efficient microchips. ASML enables groundbreaking technology to solve some of humanity’s toughest challenges, such as in healthcare, energy use and conservation, mobility and agriculture. ASML is a multinational company headquartered in Veldhoven, the Netherlands, with offices across EMEA, the US and Asia. Every day, ASML’s more than 44,000 employees (FTE) challenge the status quo and push technology to new limits. ASML is traded on Euronext Amsterdam and NASDAQ under the symbol ASML. Discover ASML – our products, technology and career opportunities – at www.asml.com.

US GAAP and IFRS Financial Reporting
ASML’s primary accounting standard for quarterly earnings releases and annual reports is US GAAP, the accounting principles generally accepted in the United States of America. Quarterly Summary US GAAP consolidated statements of operations, consolidated statements of cash flows and consolidated balance sheets are available on www.asml.com.

The consolidated balance sheets of ASML Holding N.V. as of December 31, 2024, the related consolidated statements of operations and consolidated statements of cash flows for the quarter and twelve months ended December 31, 2024 as presented in this press release are unaudited.

In addition to reporting financial figures in accordance with US GAAP, ASML also reports financial figures in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS’) for statutory purposes. The most significant recurring differences between US GAAP and IFRS that affect ASML concerns the capitalization of certain product development costs and accounting for income taxes.

2024 Annual Reports
ASML will publish its 2024 Annual Report based on US GAAP and its 2024 Annual Report based on IFRS on March 5, 2025. Both reports will include sustainability statements in accordance with the Corporate Sustainability Reporting Directive. The reports and introductory video with CFO Roger Dassen will be published on our website, www.asml.com.

Regulated information
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Forward Looking Statements
This document and related discussions contain statements that are forward-looking within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements with respect to plans, strategies, expected trends, including trends in the semiconductor industry and end markets and business environment trends, expected growth in the semiconductor industry by 2030, our expectation that AI will be the key driver for the industry and the expected impact of AI demand on our business, our expectation that lithography will remain at the heart of customer innovation, expected demand, bookings, backlog, outlook of market segments, outlook and expected financial results including expected results for Q1 2025, including net sales, Installed Base Management sales, gross margin, R&D costs, SG&A costs, outlook for full year 2025, including expected full year 2025 total net sales, gross margin and estimated annualized effective tax rate, statements made at our 2024 Investor Day, including revenue and gross margin opportunity for 2030, our expectation to continue to return significant amounts of cash to shareholders through growing dividends and share buybacks, statements with respect to our share buyback program, including the amount of shares that may be repurchased thereunder and statements with respect to dividends, statements with respect to expected performance and capabilities of our systems and customer plans and other non- historical statements. You can generally identify these statements by the use of words like “may”, “will”, “could”, “should”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue”, “target”, “future”, “progress”, “goal”, “model”, “opportunity” and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions, plans and projections about our business and our future financial results and readers should not place undue reliance on them. Forward- looking statements do not guarantee future performance and involve a number of substantial known and unknown risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to customer demand, semiconductor equipment industry capacity, worldwide demand for semiconductors and semiconductor manufacturing capacity, lithography tool utilization and semiconductor inventory levels, general trends and consumer confidence in the semiconductor industry, the impact of general economic conditions, including the impact of the current macroeconomic environment on the semiconductor industry, uncertainty around a market recovery including the timing thereof, the ultimate impact of AI on our industry and business, the impact of inflation, interest rates, wars and geopolitical developments, the impact of pandemics, the performance of our systems, the success of technology advances and the pace of new product development and customer acceptance of and demand for new products, our production capacity and ability to adjust capacity to meet demand, supply chain capacity, timely availability of parts and components, raw materials, critical manufacturing equipment and qualified employees, our ability to produce systems to meet demand, the number and timing of systems ordered, shipped and recognized in revenue, risks relating to fluctuations in net bookings and our ability to convert bookings into sales, the risk of order cancellation or push outs and restrictions on shipments of ordered systems under export controls, risks relating to the trade environment, import/export and national security regulations and orders and their impact on us, including the impact of changes in export regulations and the impact of such regulations on our ability to obtain necessary licenses and to sell our systems and provide services to certain customers, exchange rate fluctuations, changes in tax rates, available liquidity and free cash flow and liquidity requirements, our ability to refinance our indebtedness, available cash and distributable reserves for, and other factors impacting, dividend payments and share repurchases, the number of shares that we repurchase under our share repurchase program, our ability to enforce patents and protect intellectual property rights and the outcome of intellectual property disputes and litigation, our ability to meet ESG goals and execute our ESG strategy, other factors that may impact ASML’s business or financial results, and other risks indicated in the risk factors included in ASML’s Annual Report on Form 20-F for the year ended December 31, 2023 and other filings with and submissions to the US Securities and Exchange Commission. These forward-looking statements are made only as of the date of this document. We undertake no obligation to update any forward-looking statements after the date of this report or to conform such statements to actual results or revised expectations, except as required by law.

Attachments

The MIL Network –

January 29, 2025

MIL-OSI Russia: Burning Hearts: Stories of Those Who Received the Moscow Volunteer Badge

Translartion. Region: Russians Fedetion –

Source: Moscow Government – Government of Moscow –

These people represent different generations: some have recently graduated from school, while others have already retired. But they are united by a common cause – volunteering. They help organize and hold the Victory Parade, are on duty at major events and collect humanitarian aid, and Resource center “Mosvolonter” — preparation and coordination of concerned Muscovites. The unofficial motto of such enthusiasts is “No other way!” On January 21, Sergei Sobyanin presented the “Volunteer of Moscow” badge of distinction 30 residents of the capital.

About what merits can lead to receiving an honorary award, how kindness leads to the profession of dreams and helps to create a family – in the material mos.ru.

A smile as a reward

One of the youngest volunteers to earn the badge was 18-year-old Yuri Potolokov. He studies at the Moscow City Pedagogical University and plans to teach geography in the future. But even after graduating and getting a job, Yuri plans to participate in public events.

The young man joined the volunteer movement in 2022, while still at school. “One day I went to a concert at VDNKh and saw guys handing out raincoats to the audience because it was raining. That’s when I noticed that people were smiling at the volunteers. And I realized that I wanted to receive such smiles too. After all, this is the best gratitude for your work! After the concert, I told my mother: “I’m going to volunteer!” She happily accepted my choice,” our interlocutor recalls.

Yuri Potolokov is a graduate of a cadet school and has been interested in Russian history since childhood. That is why patriotic events are closest to him, for example, meeting veterans who came to Moscow from different cities for Victory Day at train stations. However, over the past two years, the young man has had the opportunity to volunteer at other events. For example, he helped participants National Championship “Abilympics”in 2022 and 2023, navigate the site and get to the competitions on time, coordinated guests at the World Youth Festival in 2024. And recently, I sorted out New Year’s decorations at the N.N. Blokhin National Medical Research Center of Oncology: I twisted the branches of artificial trees with insulating tape, packed the toys and sent them to the warehouse. Moreover, I was already performing the duties of a team leader, managing a team of five people.

In total, he has over three thousand volunteer hours to his credit. Nevertheless, the mos.ru interviewee did not expect to be among those awarded.

“I can imagine how many people applied for the badge! And they chose me. Now I want to try even harder than before. In the near future, I hope to hold a master class on creating eco-paintings from recycled materials in the “Good Place” space in the South-Eastern Administrative District,” says Yuri Potolokov, holder of the “Volunteer of Moscow” badge.

From the veterans’ meeting to the registry office

Kirill Kononaev is 21 years old. The volunteer is a final-year student at the Moscow Institute of Economics. He joined the “club of caring people” three years ago: first, he headed the student council, and soon he wanted to do good deeds outside the university. “The opportunity presented itself: the pandemic began, and I went to deliver food to the elderly,” recalls the mos.ru source.

Then there were other events, for example the International Forum of Civic Participation “Moscow helps”The young man devoted more than 1,700 hours to volunteer work. He personally liked patriotic events.

“Once I was distributing water in the center of the capital during the Immortal Regiment march. It was an amazing feeling: we were met by participants carrying portraits of their fathers and grandfathers who fought for their country in the Great Patriotic War. And it was in our power to make sure that they did not feel thirsty. Another time I was processing applications for the “Faces of Victory” campaign: relatives sent touching stories about their ancestors, battle heroes,” says Kirill Kononaev, holder of the “Moscow Volunteer” badge.

At one of these events at the headquarters, organized to meet veterans, our interlocutor met his future wife: Taisiya Borisova, a student at the Moscow State Pedagogical University, also a volunteer. They got married in February 2024 and now come to help together.

“It was very nice to receive a badge of distinction this year. And although I have less and less free time, I will continue to volunteer. So, soon it will be time to distribute St. George ribbons to Moscow residents. Even when I feel tired, helping people and the city allows me to switch off, charges me with positive energy,” smiles Kirill Kononaev.

Dream job

Margarita Buchina teaches English at school #2075In 2018, when the capital hosted the World Cup, her students enthusiastically and delightedly told how they rooted for the teams and interacted with foreign guests on the city streets.

“I thought it was good language practice and a new experience. And soon I signed up through the website Mosvolonter.ruto her first large-scale event — the Moscow Urban Forum — 2019, where guests from different countries came. She successfully passed the interview and became part of the team of volunteers with knowledge of foreign languages, who help at the information desks,” recalls the mos.ru interlocutor.

Already at the event, Margarita Buchina realized that applying her knowledge for the benefit of the city is her calling. In addition to her teaching profession, she is also a photographer and journalist. Therefore, she offered her help as a media volunteer.

“Every year on June 22, I go to the Krymskaya Embankment to collect material for a report on the “Candle of Memory” campaign: I get amazing emotional portraits of volunteers in military uniform from the Great Patriotic War, who came to light the lights in honor of those who died in 1941-1945. I was the manager of the volunteer corps at the International Exhibition and Forum “Russia” at VDNKh and supervised media volunteers, photographed Christmas trees decorated with balls with children’s wishes, as part of the “Kind Christmas Tree” charity campaign at festival venues, photographed artists performing at the International Military Music Festival “Spasskaya Tower”. In addition, I am a volunteer editor of the “Good News” magazine, which tells about the lives of active and caring city residents,” says Margarita Buchina, holder of the “Volunteer of Moscow” badge.

Now she is trying to find her dream job and realize herself as a journalist. But she does not plan to leave volunteering.

“When I was awarded the “Moscow Volunteer” badge for my services, I once again realized how important and useful my good deeds are for the city. And you can do them in different ways, for example, by helping to collect humanitarian aid. If you were born with a kind heart, then it is not difficult for you to share kindness with others, volunteering is forever!” our interlocutor believes.

Six thousand hours of good deeds

Elena Akhtyrskaia is a “silver” volunteer, she is 56 years old. “In 2015, I began to actively attend excursions organized Department of Cultural Heritage of Moscow. Once I was asked to help a guide gather a group and make sure no one was left behind during a walk around the capital. It turned out to be much more interesting than just listening! So I joined the ranks of cultural volunteers. Now I also help organize events for Mosconcert,” she says.

During the winter holidays, Elena Akhtyrskaya was on duty at the New Year’s game-journey through Russian fairy tales in the Petrovsky Travel Palace, and after the performance she gave gifts to the young spectators.

However, our interlocutor participates not only in cultural programs. For example, she had the opportunity to accompany the Victory Parade in 2024. “This is the highest honor for a volunteer!” she admits. Elena Akhtyrskaya met visitors at the entrance to Red Square and explained where to go next, and then seated veterans in the stands and watched the procession from a place of honor.

“I have dedicated almost six thousand hours to good deeds. But when I was awarded the “Volunteer of Moscow” badge, I was surprised. After all, there are many worthy candidates, including “silver” ones, and they are older than me. Of course, it is very nice to receive such an award. However, something else is more important to me: the emotional response of those whom I helped, eyes full of joy and gratitude!” – summarizes the holder of the “Volunteer of Moscow” badge Elena Akhtyrskaya.

A Holiday for Everyone: How the Mosconcert Cultural Brigade Congratulated Soldiers and Children on the New Year “Moscow Helps”: Sobyanin Told How Muscovites Support SVO Participants Over a thousand events were held in 2024 in the Dobroe Mesto centers in Moscow The number of events in Moscow involving cultural heritage volunteers has almost doubled What dreams does the “Kind Tree” of the “Winter in Moscow” project fulfill?

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

Please Note; This Information is Raw Content Directly from the Information Source. It is access to What the Source Is Stating and Does Not Reflect

https: //vv.mos.ru/nevs/ite/149440073/

MIL OSI Russia News –

January 29, 2025

MIL-OSI USA: Senators Marshall, Kaine, Young and Reed Introduce Bipartisan Bill Increasing Access to Mental Health Resources for Health Care Providers

US Senate News:

Source: United States Senator for Kansas Roger Marshall

Washington, D.C. – Today, U.S. Senators Roger Marshall, M.D., Tim Kaine (D-VA), Todd Young (R-IN) and Jack Reed (D-RI) introduced bipartisan legislation to reauthorize the Dr. Lorna Breen Health Care Provider Protection Act, a comprehensive law Senators Marshall, Kaine, Young and Reed successfully passed in 2022 to help prevent suicide, burnout, and mental and behavioral health conditions among health care professionals. The law has already provided $100 million in funding for mental health care for providers across the country, but provisions of the law that made this funding possible expired last year. The Dr. Lorna Breen Health Care Provider Protection Reauthorization Act would reauthorize these grant programs for five years.
“Our health care providers dedicate their lives to taking care of patients, sometimes, this comes at their own expense,” Senator Marshall said. “We must ensure we’re giving them the support they need when it comes to their mental health. I’m proud to join Senators Kaine and Young in leading the reauthorization of this very important program which helps provide access to mental and behavioral health resources to our health care professionals.”
“Dr. Lorna Breen was a physician from Charlottesville who tragically died by suicide after working on the frontlines of the COVID-19 pandemic,” said Senator Kaine. “In 2022, I was honored to work with her family and Senators Young, Reed and Marshall to pass legislation in her honor to help ensure health care workers have access to the mental health support they need. I urge all of my colleagues on both sides of the aisle to join us in standing with our health care heroes by reauthorizing that law, so it can continue to support our healers.”
“Health workers are at the heart of every life saved and ever patient cared for, yet the U.S. health care system is straining our workforce and perpetuating the alarming levels of burnout and poor mental health they are experiencing,” said Corey Feist, JD, MBA, co-founder and CEO of the Dr. Lorna Breen Heroes’ Foundation, which leads the ALL IN: Wellbeing First for Healthcare coalition. “We are immensely grateful to Senators Kaine, Young, Reed, and Marshall for their steadfast commitment to reauthorize and fund the landmark Dr. Lorna Breen Health Care Provider Protection Act and build upon it to address the primary driver of health workers’ burnout—administrative burden.”
Specifically, Dr. Lorna Breen Health Care Provider Protection Reauthorization Act would:
Reauthorize a grant program for health care organizations and professional associations for employee education on strategies to reduce burnout, peer-support programming, and mental and behavioral health treatment for five years. Communities with a shortage of health care workers, rural communities, and those experiencing burnout due to administrative burdens, such as lengthy paperwork, will be prioritized.
Reauthorize a grant program for health profession schools or other institutions to train health care workers and students in strategies to prevent suicide, burnout, mental health conditions, and substance use disorders for five years.
Reauthorize a national evidence-based education and awareness campaign. Currently, the campaign provides hospital and health system leaders with evidence-informed solutions to reduce health care worker burnout. Reauthorization will provide resources for the campaign to continue and expand beyond its current scope.
Full text of the bill is available HERE.

MIL OSI USA News –

January 29, 2025

MIL-OSI United Nations: Endorsing Resolution, General Assembly Calls Upon All Stakeholders to Implement 2024–2034 Programme of Action for Landlocked Developing Countries

Source: United Nations General Assembly and Security Council

Text on UN Cooperation with Community-Portuguese-Speaking Countries Also Adopted

The General Assembly today adopted a resolution containing the “Programme of Action for Landlocked Developing Countries for the Decade 2024–2034” — which focuses on diversifying economies, promoting trade, supporting jobs and enhancing climate resilience over the next 10 years in that group of nations — calling upon all stakeholders to commit to implementing it.

In that action programme — listed in the annex of document A/79/L.21 — the Assembly recommitted to expediting action on the Sustainable Development Goals, calling for increased investment, including through international cooperation, and taking necessary measures to harmonize skills development and training programmes at the national and regional levels.

The Programme of Action, which was originally adopted 24 December 2024 (see Press Release GA/12671), also lays out Member States’ commitments to substantially increasing investment from all sources in research and development, and in building accessible, reliable and affordable digital infrastructure. The Assembly committed to doubling the contribution of manufacturing value added to the gross domestic product (GDP) of the landlocked developing countries by 2034. Further, 193-member body urged development partners to support landlocked developing countries in strengthening strategic coherence between trade and investment policies, and industrial policy objectives.

“The 570 million people living in the landlocked developing countries deserve nothing less,” said Assembly President Philémon Yang (Cameroon). “For too long, they have faced unique challenges to trade, connectivity and development,” he added. Recent shocks, such as the COVID-19 pandemic, rising prices worldwide, geopolitical tensions and the deepening impact of climate change, have only intensified their vulnerabilities.

“The combined gross domestic product of landlocked developing countries in 2023 came in at 8 per cent below pre-pandemic projections,” he went on to say, commending these countries for their “resilience and ability to quickly reverse negative trends”. The Assembly, “the great drum that gives voice to all peoples and nation”, will monitor implementation of the programme of action, he pledged.

Rabab Fatima, Secretary-General of the third United Nations Conference on Landlocked Developing Countries, said the group of countries face profound challenges. To address their issues, the new Programme of Action proposes regional agricultural hubs, which can help transform the sector and spearhead efforts toward sustainable development.

“Internet usage is far below the global average,” she added, emphasizing the need to bridge the gender gap in the area. On trade, she said that landlocked developing countries face 40 per cent higher trade costs than coastal States. Climate finance remains grossly insufficient for landlocked developing countries, she added, noting that the Programme of Action underscores the need to urge development partners to honour their official development assistance (ODA) commitments.

“This instrument must be a catalyst to eliminate structural barriers,” said Diego Pary Rodríguez (Bolivia), Chair of the Group of Landlocked Developing Countries. Many of these countries have taken many measures to diversify their economies, but the Programme of Action has the potential to build new alliances that can provide them with the economic, political and technological tools to overcome barriers.

He pointed out that the lack of development of regional transport corridors continues to undermine their participation in global trade. “Trade remains a critical means for the landlocked developing countries to achieve economic growth,” he said. “We also ask for your support in capacity-building initiatives that will allow landlocked developing countries to comply with global trade standards,” he added, stressing the importance of fostering international cooperation in the transfer of clean technology to strengthen responses to climate change.

Cooperation between United Nations and Community of Portuguese-Speaking Countries

By adopting a text titled “Cooperation between the United Nations and the Community of Portuguese-speaking Countries” (document A/79/L.43), the Assembly also stressed the importance of strengthening the cooperation between the Community and United Nations specialized agencies and other entities and programmes.

By other terms of that resolution, the Assembly stressed the importance of partnership and cooperation between the UN and other relevant organizations, including the Community, to improve coordination and cooperation in peacebuilding and sustaining peace.

Appointment of Member of Advisory Committee on Administrative and Budgetary Questions

On other matters, the Assembly appointed Alexandra Arias (Dominican Republic) as a member of the Advisory Committee on Administrative and Budgetary Questions (ACABQ) for a term of office beginning on 31 January and expiring on 31 December. She replaces Olivio Fermín, also of the Dominican Republic, who resigned effective 31 January.

Application of Article 19 of UN Charter

The Assembly also noted that Antigua and Barbuda has made the payments necessary to reduce its arrears in assessed contributions to the United Nations below the amount specified in Article 19 of the Charter.

MIL OSI United Nations News –

January 29, 2025

MIL-OSI Security: Former Minneapolis Mayoral Aide and Safari Restaurant Co-Owner Both Plead Guilty in $250 Million Feeding Our Future Fraud Scheme

Source: Office of United States Attorneys

MINNEAPOLIS –Two more defendants pleaded guilty for their roles in the $250 million fraud scheme that exploited a federally-funded child nutrition program during the COVID-19 pandemic, announced Acting U.S. Attorney Lisa D. Kirkpatrick.

According to court documents, from approximately April 2020 through January 2022, Abdulkadir Nur Salah, 38, of Columbia Heights, Minnesota, and Abdi Nur Salah, 37, of St. Paul, Minnesota, knowingly participated in a scheme to defraud a federal child nutrition program designed to provide free meals to children in need. The co-conspirators obtained, misappropriated, and laundered millions of dollars in program funds that were intended as reimbursements for the cost of serving meals to children. The defendants exploited changes in the program intended to ensure underserved children received adequate nutrition during the Covid-19 pandemic. Rather than feed children, the defendants took advantage of the Covid-19 pandemic—and the resulting program changes—to enrich themselves by fraudulently misappropriating millions of dollars in federal child nutrition program funds.

According to court documents, Abdulkadir Nur Salah was co-owner and operator of Safari Restaurant, a site that received more than $16 million in fraudulent Federal Child Nutrition Program funds. Abdi Nur Salah registered Stigma-Free International, a non-profit entity used to carry out the fraud scheme with sites throughout Minnesota, including in Willmar, Mankato, St. Cloud, Waite Park, and St. Paul. Abdi Salah also worked for the City of Minneapolis as a Senior Policy Aide to the Mayor.

As part of their plea agreement entered today, each defendant agreed that a variety of assets and money were derived specifically from their fraud scheme and are thus subject to forfeiture to the United States. For Abdulkadir Salah that includes: $309,993.51 seized from Bell Bank account for Cosmopolitan Business Solutions d/b/a Safari Restaurant; $435,512.44 seized from Bell Bank account for 3017 LLC; $472,889.08 seized from Northeast Bank account for 3017 LLC; real estate property located at 2722 Park Avenue South, Minneapolis, Minnesota. For Abdi Salah, that includes $343,418.98 seized from Star Choice Credit Union account for Stone Bridge Development, LLC; real estate properties located at 8432 Noble Avenue, North Brooklyn Park, Minnesota (known previously as Kelly’s 19th Hole) and 2529 12th Avenue South, Minneapolis, Minnesota.

Both pleaded guilty today in U.S. District Court before Chief Judge Patrick J. Schiltz. Their sentencing hearings will be scheduled at a later date.

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

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

MIL Security OSI –

January 29, 2025

MIL-OSI Security: Woman Sentenced for Fraud Scheme Involving Claims for Unnecessary Respiratory Tests Submitted with COVID-19 Tests

Source: United States Attorneys General

A California woman was sentenced today to nine years in prison for her role in fraudulently submitting claims to governmental and private insurance programs during the COVID‑19 pandemic for expensive respiratory pathogen panel (RPP) tests that were medically unnecessary and never ordered by health care providers.

According to court documents, Lourdes Navarro, 66, of Glendale, and Imran Shams owned and controlled Matias Clinical Laboratory, doing business as Health Care Providers Laboratory (HCPL). Navarro and Shams conspired to obtain nasal swab specimens that enabled HCPL to test for COVID-19, as well as to obtain testing orders from physicians and other medical professionals. The specimens were collected from, among others, residents and staff at nursing homes, assisted living facilities, rehabilitation facilities, and similar types of facilities, and from students and staff at primary and secondary schools, for the purported purpose of conducting screening tests to identify and isolate individuals infected with COVID-19. However, Navarro and Shams caused HCPL to perform RPP tests on most of the specimens, even though only COVID-19 testing had been ordered and there was no medical justification for conducting RPP tests on asymptomatic individuals who needed only COVID-19 screening tests. Through HCPL, Navarro and Shams billed approximately $369 million for the RPP tests to Medicare, the Health Resources and Services Administration COVID-19 Uninsured Program, and a private health insurance company, and were reimbursed approximately $46.7 million for fraudulent claims.

Navarro was also ordered to forfeit $11,662,939 in funds that the government had previously seized from three bank accounts. The total amount seized and forfeited from Navarro and Shams is $14,518,485. Navarro also was ordered to pay $46,735,400 in restitution.

Navarro pleaded guilty on Oct. 5, 2023, to conspiracy to commit health care fraud and wire fraud. Shams pleaded guilty on Jan. 24, 2023, in the Central District of California to conspiracy to commit health care fraud and concealment of his exclusion from Medicare and was sentenced to 10 years in prison on Jan. 30, 2024. In addition, on May 29, 2024, Shams was sentenced to five years in prison in connection with his 2017 plea in the Eastern District of New York to conspiracy to commit money laundering, conspiracy to pay and receive kickbacks, and defrauding the United States by obstructing the lawful functions of the IRS, of which three years were ordered to run consecutive to the Central District of California sentence.

Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office, and Acting Special Agent in Charge Rochelle Wong of the Department of Health and Human Services Office of Inspector General (HHS-OIG) Los Angeles Regional Office made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorneys Gary A. Winters and Raymond E. Beckering III of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Maxwell Coll for the Central District of California handled the financial penalties.

The Justice Department’s COVID-19 Fraud Enforcement Task Force marshals the resources of the department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, visit www.justice.gov/coronavirus.

MIL Security OSI –

January 29, 2025

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

Source: GlobeNewswire (MIL-OSI)

CHAMPAIGN, Ill., Jan. 28, 2025 (GLOBE NEWSWIRE) — First Busey Corporation (Nasdaq: BUSE)

Net Income of $28.1 million
Diluted EPS of $0.49

FOURTH QUARTER 2024 HIGHLIGHTS

Adjusted net income¹ of $30.7 million, or $0.53 per diluted common share
Adjusted noninterest income¹ of $35.4 million, or 30.3% of total revenue
Record high quarterly and annual revenue of $17.0 million and $65.0 million, respectively, for the Wealth Management segment
Tangible book value per common share¹ of $17.88 at December 31, 2024, compared to $16.62 at December 31, 2023, a year-over-year increase of 7.6%
Tangible common equity¹ increased to 8.76% of tangible assets at December 31, 2024, compared to 7.75% at December 31, 2023
Received stockholder approvals for the CrossFirst Bankshares, Inc. merger in December 2024, followed by remaining requisite regulatory approvals in January 2025

For additional information, please refer to the 4Q24 Earnings Investor Presentation.

MESSAGE FROM OUR CHAIRMAN & CEO

Fourth Quarter Financial Results

Net income for First Busey Corporation (“Busey,” “Company,” “we,” “us,” or “our”) was $28.1 million for the fourth quarter of 2024, or $0.49 per diluted common share, compared to $32.0 million, or $0.55 per diluted common share, for the third quarter of 2024, and $25.7 million, or $0.46 per diluted common share, for the fourth quarter of 2023. Adjusted net income¹, which excludes the impact of acquisition and restructuring expenses, was $30.7 million, or $0.53 per diluted common share, for the fourth quarter of 2024, compared to $33.5 million, or $0.58 per diluted common share, for the third quarter of 2024 and $29.1 million or $0.52 per diluted common share for the fourth quarter of 2023. Annualized return on average assets and annualized return on average tangible common equity¹ were 0.93% and 10.86%, respectively, for the fourth quarter of 2024. Annualized adjusted return on average assets¹ and annualized adjusted return on average tangible common equity¹ were 1.01% and 11.87%, respectively, for the fourth quarter of 2024.

Taking into account our fourth quarter results, full year 2024 net income and adjusted net income¹ were $113.7 million, or $1.98 per diluted common share, and $119.8 million, or $2.08 per diluted common share, respectively. Return on average assets and adjusted return on average assets¹ were 0.94% and 0.99%, respectively. Return on average tangible common equity¹ and adjusted return on average tangible common equity¹ were 11.65% and 12.28%, respectively.

Full year 2024 net income and adjusted net income¹ include $6.1 million of net securities losses and $7.7 million in gains on the sale of mortgage servicing rights. Net income and adjusted net income¹ for 2024 were further impacted by a one-time deferred tax valuation adjustment of $1.4 million resulting from a change to our Illinois apportionment rate due to recently enacted regulations. Excluding the tax-effected impact of these items, further adjusted net income¹ would have been $120.0 million, equating to adjusted diluted earnings per common share¹ of $2.09.

Pre-provision net revenue¹ was $38.8 million for the fourth quarter of 2024, compared to $41.7 million for the third quarter of 2024 and $32.9 million for the fourth quarter of 2023. Pre-provision net revenue to average assets¹ was 1.28% for the fourth quarter of 2024, compared to 1.38% for the third quarter of 2024, and 1.06% for the fourth quarter of 2023. Adjusted pre-provision net revenue¹ was $42.0 million for the fourth quarter of 2024, compared to $44.1 million for the third quarter of 2024 and $40.2 million for the fourth quarter of 2023. Adjusted pre-provision net revenue to average assets¹ was 1.38% for the fourth quarter of 2024, compared to 1.46% for the third quarter of 2024 and 1.30% for the fourth quarter of 2023.

Taking into account our fourth quarter results, full year 2024 pre-provision net revenue¹ and adjusted pre-provision net revenue¹ were $168.0 million and $167.3 million, respectively. Pre-provision net revenue to average assets¹ and adjusted pre-provision net revenue to average assets¹ were each 1.39%.

Our fee-based businesses continue to add revenue diversification. Total noninterest income was $35.2 million for the fourth quarter of 2024, compared to $35.8 million for the third quarter of 2024 and $31.3 million for the fourth quarter of 2023. Fourth quarter results included $0.2 million in net securities losses. Adjusted noninterest income¹ was $35.4 million, or 30.3% of operating revenue¹, during the fourth quarter of 2024, compared to $35.0 million, or 29.8% of operating revenue¹, for the third quarter of 2024 and $30.5 million, or 28.3% of operating revenue¹, for the fourth quarter of 2023. Wealth management fees and wealth management referral income included in other noninterest income contributed $17.0 million and payment technology solutions contributed $5.1 million to our consolidated noninterest income for the fourth quarter of 2024, representing 62.3% of adjusted noninterest income¹ on a combined basis.

For the full year 2024, total noninterest income was $139.7 million. Wealth management fees and wealth management referral income included in other noninterest income contributed $65.0 million and payment technology solutions contributed $22.0 million to our consolidated noninterest income for 2024, representing 63.0% of adjusted noninterest income¹ on a combined basis.

Busey views certain non-operating items, including acquisition-related expenses and restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for acquisition and restructuring expenses¹ were $3.6 million in the fourth quarter of 2024. Busey believes that its non-GAAP measures (which are identified with the endnote labeled as 1) facilitate the assessment of its financial results and peer comparability. For more information and a reconciliation of these non-GAAP measures in tabular form, see “Non-GAAP Financial Information.“

We remain focused on prudently managing our expense base and operating efficiency in the current operating environment. Noninterest expense was $78.2 million in the fourth quarter of 2024, compared to $75.9 million in the third quarter of 2024 and $75.0 million in the fourth quarter of 2023. Adjusted core expense¹, which excludes the amortization of intangible assets and new markets tax credits, acquisition and restructuring expenses, and the provision for unfunded commitments, was $72.6 million in the fourth quarter of 2024, compared to $71.0 million in the third quarter of 2024 and $65.2 million in the fourth quarter of 2023. The year-over-year comparable period growth in adjusted core expense can be attributed primarily to the acquisition of Merchants and Manufacturers Bank Corporation (“M&M”) and general inflationary pressures on compensation and benefits and to a lesser extent certain other expense categories.

Quarterly pre-tax expense synergies resulting from our acquisition of M&M are anticipated to be $1.6 million to $1.7 million per quarter when fully realized. Quarterly run-rate savings are projected to be achieved by the first quarter of 2025. During the fourth quarter of 2024, we achieved approximately 86% of the full quarterly savings.

Planned Partnership with CrossFirst

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

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

On December 20, 2024, Busey and CrossFirst stockholders voted to approve the merger. On January 16, 2025, Busey received regulatory approval from the Board of Governors of the Federal Reserve System for the merger. Busey and CrossFirst intend to close the merger on March 1, 2025, subject to the satisfaction of the remaining customary closing conditions. The transaction has also been approved by the Illinois Department of Financial and Professional Regulation and the Kansas Office of the State Bank Commissioner. The combined holding company will continue to operate under the First Busey Corporation name and the combined bank will operate under the Busey Bank name. It is anticipated that CrossFirst Bank will merge with and into Busey Bank in mid-2025. At the time of the bank merger, CrossFirst Bank locations will become banking centers of Busey Bank. In connection with this merger, Busey incurred one-time pretax acquisition-related expenses of $2.4 million during the fourth quarter of 2024 and $3.9 million for the full year.

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

Busey’s Conservative Banking Strategy

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

The quality of our core deposit franchise is a critical value driver of our institution. Our granular deposit base continues to position us well, with core deposits¹ representing 96.5% of our deposits as of December 31, 2024. Our retail deposit base was comprised of more than 251,000 accounts with an average balance of $22 thousand and an average tenure of 16.9 years as of December 31, 2024. Our commercial deposit base was comprised of more than 32,000 accounts with an average balance of $98 thousand and an average tenure of 12.8 years as of December 31, 2024. We estimate that 30% of our deposits were uninsured and uncollateralized² as of December 31, 2024, and we have sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of our customers.

Asset quality remains strong by both Busey’s historical and current industry trends. Non-performing assets increased to $23.3 million during the fourth quarter of 2024, representing 0.19% of total assets. The increase relates to one Commercial Real Estate loan that was classified in the fourth quarter of 2023 and was moved to non-accrual during the fourth quarter of 2024. This loan carries a remaining balance of $15.0 million following a $3.0 million charge-off in the fourth quarter of 2024. Busey’s results for the fourth quarter of 2024 include a $1.3 million provision expense for credit losses and a $0.5 million provision release for unfunded commitments. The allowance for credit losses was $83.4 million as of December 31, 2024, representing 1.08% of total portfolio loans outstanding, and providing coverage of 3.59 times our non-performing loan balance. Including the charge-off for the Commercial Real Estate loan mentioned above, Busey’s net charge-offs totaled $2.9 million for the fourth quarter of 2024. As of December 31, 2024, our commercial real estate loan portfolio of investor-owned office properties within Central Business District³ areas was minimal at $2.0 million. Our credit performance continues to reflect our highly diversified, conservatively underwritten loan portfolio, which has been originated predominantly to established customers with tenured relationships with our company.

The strength of our balance sheet is also reflected in our capital foundation. In the fourth quarter of 2024, our Common Equity Tier 1 ratio⁴ was 14.10% and our Total Capital to Risk Weighted Assets ratio⁴ was 18.53%. Our regulatory capital ratios continue to provide a buffer of more than $610 million above levels required to be designated well-capitalized. Our Tangible Common Equity ratio¹ was 8.76% during the fourth quarter of 2024, compared to 8.96% for the third quarter of 2024 and 7.75% for the fourth quarter of 2023. Busey’s tangible book value per common share¹ was $17.88 at December 31, 2024, compared to $18.19 at September 30, 2024, and $16.62 at December 31, 2023, reflecting a 7.6% year-over-year increase. During the fourth quarter of 2024, we paid a common share dividend of $0.24.

Community Banking

In the last two months of 2024, Busey offered a new, short-term Express Microloan product, created to help small businesses thrive. With a competitive 4.99% fixed interest rate, flexible terms and loans of up to $10,000, existing Busey customers with business checking accounts were invited to apply—allowing them to manage expenses, refinance debt, invest in new opportunities, and enhance operations. Busey originated more than 100 Express Microloans in 60-days, meeting the needs of our small business customers.

As we reflect back on 2024 and look ahead to 2025, we feel confident that we are well positioned to produce quality growth and profitability. The pending CrossFirst transaction fits with our acquisition strategy and we are excited to welcome our CrossFirst colleagues into the Busey family. We are grateful for the opportunities to consistently earn the business of our customers, based on the contributions of our talented associates and the continued support of our loyal stockholders.

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

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

	Three Months Ended									Years Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
EARNINGS & PER SHARE AMOUNTS
Net income	$	28,105		$	32,004		$	25,749		$	113,691		$	122,565
Diluted earnings per common share		0.49			0.55			0.46			1.98			2.18
Cash dividends paid per share		0.24			0.24			0.24			0.96			0.96
Pre-provision net revenue^{1, 2}		38,828			41,744			32,909			167,996			158,502
Operating revenue²		116,995			117,688			107,888			460,671			444,034

Net income by operating segment:
Banking		30,856			33,221			25,164			117,266			123,853
FirsTech		(723	)		(61	)		325			(670	)		830
Wealth Management		5,853			5,618			4,233			22,030			18,804

AVERAGE BALANCES
Cash and cash equivalents	$	776,572		$	502,127		$	608,647		$	555,281		$	330,952
Investment securities		2,597,309			2,666,269			2,995,223			2,726,488			3,188,815
Loans held for sale		6,306			11,539			1,679			8,012			1,885
Portfolio loans		7,738,772			7,869,798			7,736,010			7,804,629			7,759,472
Interest-earning assets		11,048,350			10,942,745			11,235,326			10,999,424			11,181,010
Total assets		12,085,993			12,007,702			12,308,491			12,051,871			12,246,218

Noninterest-bearing deposits		2,724,344			2,706,858			2,827,696			2,738,892			3,018,563
Interest-bearing deposits		7,325,662			7,296,921			7,545,234			7,301,124			7,052,370
Total deposits		10,050,006			10,003,779			10,372,930			10,040,016			10,070,933

Federal funds purchased and securities sold under agreements to repurchase		135,728			132,688			182,735			147,786			200,894
Interest-bearing liabilities		7,763,729			7,731,459			8,054,663			7,763,084			7,825,459
Total liabilities		10,689,054			10,643,325			11,106,074			10,709,447			11,048,707
Stockholders’ equity – common		1,396,939			1,364,377			1,202,417			1,342,424			1,197,511
Tangible common equity²		1,029,539			994,657			846,948			975,823			838,164

PERFORMANCE RATIOS
Pre-provision net revenue to average assets^{1, 2, 3}		1.28	%		1.38	%		1.06	%		1.39	%		1.29	%
Return on average assets³		0.93	%		1.06	%		0.83	%		0.94	%		1.00	%
Return on average common equity³		8.00	%		9.33	%		8.50	%		8.47	%		10.23	%
Return on average tangible common equity^{2, 3}		10.86	%		12.80	%		12.06	%		11.65	%		14.62	%
Net interest margin^2, 4		2.95	%		3.02	%		2.75	%		2.95	%		2.89	%
Efficiency ratio²		64.45	%		62.15	%		66.89	%		61.76	%		61.65	%
Adjusted noninterest income to operating revenue²		30.27	%		29.77	%		28.31	%		29.97	%		27.79	%

NON-GAAP FINANCIAL INFORMATION
Adjusted pre-provision net revenue^1, 2	$	41,958		$	44,104		$	40,223		$	167,317		$	172,290
Adjusted net income²		30,725			33,533			29,123			119,805			126,012
Adjusted diluted earnings per share²		0.53			0.58			0.52			2.08			2.24
Adjusted pre-provision net revenue to average assets^{2, 3}		1.38	%		1.46	%		1.30	%		1.39	%		1.41	%
Adjusted return on average assets^{2, 3}		1.01	%		1.11	%		0.94	%		0.99	%		1.03	%
Adjusted return on average tangible common equity^{2, 3}		11.87	%		13.41	%		13.64	%		12.28	%		15.03	%
Adjusted net interest margin^2, 4		2.92	%		2.97	%		2.74	%		2.92	%		2.87	%
Adjusted efficiency ratio²		61.40	%		60.50	%		62.98	%		61.03	%		60.68	%

___________________________________________

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

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

	As of
	December 31, 2024			September 30, 2024			December 31, 2023
ASSETS
Cash and cash equivalents	$	697,659		$	553,709		$	719,581
Debt securities available for sale		1,810,221			1,818,117			2,087,571
Debt securities held to maturity		826,630			838,883			872,628
Equity securities		15,862			10,315			9,812
Loans held for sale		3,657			11,523			2,379

Commercial loans		5,552,288			5,631,281			5,635,048
Retail real estate and retail other loans		2,144,799			2,177,816			2,015,986
Portfolio loans		7,697,087			7,809,097			7,651,034

Allowance for credit losses		(83,404	)		(84,981	)		(91,740	)
Restricted bank stock		49,930			6,000			6,000
Premises and equipment, net		118,820			120,279			122,594
Right of use assets		10,608			11,100			11,027
Goodwill and other intangible assets, net		365,975			368,249			353,864
Other assets		533,677			524,548			538,665
Total assets	$	12,046,722		$	11,986,839		$	12,283,415

LIABILITIES & STOCKHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing deposits	$	2,719,907		$	2,683,543		$	2,834,655
Interest-bearing checking, savings, and money market deposits		5,771,948			5,739,773			5,637,227
Time deposits		1,490,635			1,519,925			1,819,274
Total deposits		9,982,490			9,943,241			10,291,156

Securities sold under agreements to repurchase		155,610			128,429			187,396
Short-term borrowings		—			—			12,000
Long-term debt		227,723			227,482			240,882
Junior subordinated debt owed to unconsolidated trusts		74,815			74,754			71,993
Lease liabilities		11,040			11,470			11,308
Other liabilities		211,775			198,579			196,699
Total liabilities		10,663,453			10,583,955			11,011,434

Stockholders’ equity
Retained earnings		294,054			279,868			237,197
Accumulated other comprehensive income (loss)		(207,039	)		(170,913	)		(218,803	)
Other stockholders’ equity¹		1,296,254			1,293,929			1,253,587
Total stockholders’ equity		1,383,269			1,402,884			1,271,981
Total liabilities & stockholders’ equity	$	12,046,722		$	11,986,839		$	12,283,415

SHARE AND PER SHARE AMOUNTS
Book value per common share	$	24.31		$	24.67		$	23.02
Tangible book value per common share²	$	17.88		$	18.19		$	16.62
Ending number of common shares outstanding		56,895,981			56,872,241			55,244,119

___________________________________________

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

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

	Three Months Ended								Years Ended
	December 31, 2024			September 30, 2024			December 31, 2023		December 31, 2024			December 31, 2023
INTEREST INCOME
Interest and fees on loans	$	106,120		$	111,336		$	101,425	$	426,422		$	385,848
Interest and dividends on investment securities		16,788			18,072			20,634		73,970			82,994
Dividend income on bank stock		557			106			212		848			1,170
Other interest income		7,851			5,092			6,641		22,441			10,531
Total interest income	$	131,316		$	134,606		$	128,912	$	523,681		$	480,543

INTEREST EXPENSE
Deposits	$	44,152		$	46,634		$	45,409	$	178,463		$	123,985
Federal funds purchased and securities sold under agreements to repurchase		915			981			1,431		4,308			5,203
Short-term borrowings		25			26			248		701			12,775
Long-term debt		3,183			3,181			3,475		12,950			14,106
Junior subordinated debt owed to unconsolidated trusts		1,463			1,137			1,004		4,648			3,853
Total interest expense	$	49,738		$	51,959		$	51,567	$	201,070		$	159,922

Net interest income	$	81,578		$	82,647		$	77,345	$	322,611		$	320,621
Provision for credit losses		1,273			2			455		8,590			2,399
Net interest income after provision for credit losses	$	80,305		$	82,645		$	76,890	$	314,021		$	318,222

NONINTEREST INCOME
Wealth management fees	$	16,786		$	15,378		$	13,715	$	63,630		$	57,309
Fees for customer services		7,911			8,168			7,484		30,933			29,044
Payment technology solutions		5,094			5,265			5,420		21,983			21,192
Mortgage revenue		496			355			218		2,075			1,089
Income on bank owned life insurance		1,080			1,189			1,019		5,130			4,701
Realized net gains (losses) on the sale of mortgage servicing rights		—			(18	)		—		7,724			—
Net securities gains (losses)		(196	)		822			761		(6,102	)		(2,199	)
Other noninterest income		4,050			4,686			2,687		14,309			10,078
Total noninterest income	$	35,221		$	35,845		$	31,304	$	139,682		$	121,214

NONINTEREST EXPENSE
Salaries, wages, and employee benefits	$	45,458		$	44,593		$	42,730	$	175,619		$	162,597
Data processing expense		6,564			6,910			6,236		27,124			23,708
Net occupancy expense of premises		4,794			4,633			4,318		18,737			18,214
Furniture and equipment expense		1,650			1,647			1,694		6,805			6,759
Professional fees		4,938			3,118			2,574		12,804			7,147
Amortization of intangible assets		2,471			2,548			2,479		10,057			10,432
Interchange expense		1,305			1,352			1,355		6,001			6,864
FDIC insurance		1,330			1,413			1,167		5,603			5,650
Other noninterest expense		9,657			9,712			12,426		37,649			44,161
Total noninterest expense	$	78,167		$	75,926		$	74,979	$	300,399		$	285,532

Income before income taxes	$	37,359		$	42,564		$	33,215	$	153,304		$	153,904
Income taxes		9,254			10,560			7,466		39,613			31,339
Net income	$	28,105		$	32,004		$	25,749	$	113,691		$	122,565

SHARE AND PER SHARE AMOUNTS
Basic earnings per common share	$	0.49		$	0.56		$	0.46	$	2.01		$	2.21
Diluted earnings per common share	$	0.49		$	0.55		$	0.46	$	1.98		$	2.18
Weighted average number of common shares outstanding, basic		57,061,542			57,033,359			55,403,662		56,610,032			55,432,322
Weighted average number of common shares outstanding, diluted		57,934,812			57,967,848			56,333,033		57,543,001			56,256,148

BALANCE SHEET STRENGTH

Our balance sheet remains a source of strength. Total assets were $12.05 billion as of December 31, 2024, compared to $11.99 billion as of September 30, 2024, and $12.28 billion as of December 31, 2023.

We remain steadfast in our conservative approach to underwriting and disciplined approach to pricing, particularly given our outlook for the economy in the coming quarters, and this approach has impacted loan growth as predicted. Portfolio loans totaled $7.70 billion at December 31, 2024, compared to $7.81 billion at September 30, 2024, and $7.65 billion at December 31, 2023.

Average portfolio loans were $7.74 billion for both the fourth quarter of 2024 and the fourth quarter of 2023, compared to $7.87 billion for the third quarter of 2024. Average interest-earning assets were $11.05 billion for the fourth quarter of 2024, compared to $10.94 billion for the third quarter of 2024, and $11.24 billion for the fourth quarter of 2023.

Total deposits were $9.98 billion at December 31, 2024, compared to $9.94 billion at September 30, 2024, and $10.29 billion at December 31, 2023. Average deposits were $10.05 billion for the fourth quarter of 2024, compared to $10.00 billion for the third quarter of 2024 and $10.37 billion for the fourth quarter of 2023. Deposit fluctuations over the last several quarters were driven by a number of elements, including (1) seasonal factors, including ordinary course public fund flows and fluctuations in the normal course of business operations of certain core commercial customers, (2) the macroeconomic environment, including prevailing interest rates and inflationary pressures, (3) depositors moving some funds to accounts at competitors offering above-market rates, and (4) deposits moving within the Busey ecosystem between deposit accounts and our wealth management group. Core deposits¹ accounted for 96.5% of total deposits as of December 31, 2024. Cost of deposits was 1.75% in the fourth quarter of 2024, which represents a decrease of 10 basis points from the third quarter of 2024. Excluding time deposits, Busey’s cost of deposits was 1.38% in the fourth quarter of 2024, a decrease of 12 basis points from the third quarter of 2024. Busey Bank continues to offer savings account specials to customers with larger account balances, with the intention of migrating maturing CDs to these managed rate products. Spot rates on total deposit costs, including noninterest bearing deposits, decreased by 13 basis points from 1.80% at September 30, 2024, to 1.67% at December 31, 2024. Spot rates on interest bearing deposits decreased by 17 basis points from 2.46% at September 30, 2024, to 2.29% at December 31, 2024.

There were no short term borrowings as of December 31 or September 30, 2024, compared to $12.0 million at December 31, 2023. We had no borrowings from the Federal Home Loan Bank (“FHLB”) at the end of the fourth quarter of 2024, the third quarter of 2024, or the fourth quarter of 2023. We have sufficient on- and off-balance sheet liquidity⁵ to manage deposit fluctuations and the liquidity needs of our customers. As of December 31, 2024, our available sources of on- and off-balance sheet liquidity totaled $6.19 billion. We have executed various deposit campaigns to attract term funding and savings accounts at a lower rate than our marginal cost of funds. New certificate of deposit production in the fourth quarter of 2024 had a weighted average term of 7.6 months at a rate of 3.58%, 128 basis points below our average marginal wholesale equivalent-term funding cost during the quarter. Furthermore, our balance sheet liquidity profile continues to be aided by the cash flows we expect from our relatively short-duration securities portfolio. Those cash flows were approximately $132.5 million in the fourth quarter of 2024. Cash flows from our securities portfolio are expected to be approximately $353.8 million for 2025, with a current book yield of 1.87%, and approximately $288.3 million for 2026, with a current book yield of 2.03%.

ASSET QUALITY

Credit quality continues to be strong. Loans 30-89 days past due totaled $8.1 million as of December 31, 2024, compared to $10.1 million as of September 30, 2024, and $5.8 million as of December 31, 2023. Non-performing loans were $23.2 million as of December 31, 2024, compared to $8.2 million as of September 30, 2024, and $7.8 million as of December 31, 2023. The increase relates to one Commercial Real Estate loan that was classified in the fourth quarter of 2023 and was moved to non-accrual during the fourth quarter of 2024. This loan carries a remaining balance of $15.0 million following a $3.0 million charge-off in the fourth quarter of 2024. Continued disciplined credit management resulted in non-performing loans as a percentage of portfolio loans of 0.30% as of December 31, 2024, compared to 0.11% as of September 30, 2024, and 0.10% as of December 31, 2023. Non-performing assets were 0.19% of total assets for the fourth quarter of 2024, compared to 0.07% for the third quarter of 2024 and 0.06% for the fourth quarter of 2023. Our total classified assets were $85.3 million at December 31, 2024, compared to $89.0 million at September 30, 2024, and $72.3 million at December 31, 2023. Our ratio of classified assets to estimated bank Tier 1 capital⁴ and reserves remains low by historical standards, at 5.6% as of December 31, 2024, compared to 5.9% as of September 30, 2024, and 5.0% as of December 31, 2023.

Net charge-offs were $2.9 million for the fourth quarter of 2024, compared to $0.2 million for the third quarter of 2024, and $0.4 million for the fourth quarter of 2023. The fourth quarter charge-off relates to the Commercial Real Estate loan mentioned above. The allowance as a percentage of portfolio loans was 1.08% as of December 31, 2024, compared to 1.09% as of September 30, 2024, and 1.20% as of December 31, 2023. The ratio was impacted in 2024 by the acquisition of M&M’s Life Equity Loan^® portfolio, as Busey did not record an allowance for credit loss for these loans due to no expected credit loss at default, as permitted under the practical expedient provided within the Accounting Standards Codification 326-20-35-6. The allowance coverage for non-performing loans was 3.59 times as of December 31, 2024, compared to 10.34 times as of September 30, 2024, and 11.74 times as of December 31, 2023.

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

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

	As of
	December 31, 2024			September 30, 2024			December 31, 2023
Total assets	$	12,046,722		$	11,986,839		$	12,283,415
Portfolio loans		7,697,087			7,809,097			7,651,034
Loans 30 – 89 days past due		8,124			10,141			5,779
Non-performing loans:
Non-accrual loans		22,088			8,192			7,441
Loans 90+ days past due and still accruing		1,149			25			375
Non-performing loans	$	23,237		$	8,217		$	7,816
Non-performing loans, segregated by geography:
Illinois / Indiana	$	19,558		$	3,981		$	3,715
Missouri		3,016			3,530			3,836
Florida		663			706			265
Other non-performing assets		63			64			125
Non-performing assets	$	23,300		$	8,281		$	7,941

Allowance for credit losses	$	83,404		$	84,981		$	91,740

RATIOS
Non-performing loans to portfolio loans		0.30	%		0.11	%		0.10	%
Non-performing assets to total assets		0.19	%		0.07	%		0.06	%
Non-performing assets to portfolio loans and other non-performing assets		0.30	%		0.11	%		0.10	%
Allowance for credit losses to portfolio loans		1.08	%		1.09	%		1.20	%
Coverage ratio of the allowance for credit losses to non-performing loans		3.59	x		10.34	x		11.74	x

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

	Three Months Ended						Years Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Net charge-offs (recoveries)	$	2,850	$	247	$	425	$	18,169	$	2,267
Provision expense (release)		1,273		2		455		8,590		2,399

NET INTEREST MARGIN AND NET INTEREST INCOME

Net interest margin¹ was 2.95% for the fourth quarter of 2024, compared to 3.02% for the third quarter of 2024 and 2.75% for the fourth quarter of 2023. Excluding purchase accounting accretion, adjusted net interest margin¹ was 2.92% for the fourth quarter of 2024, compared to 2.97% in the third quarter of 2024 and 2.74% in the fourth quarter of 2023. Net interest income was $81.6 million in the fourth quarter of 2024, compared to $82.6 million in the third quarter of 2024 and $77.3 million in the fourth quarter of 2023.

After raising federal funds rates by a total of 525 basis points between March 2022 and July 2023, the Federal Open Market Committee (“FOMC”) lowered rates by 100 basis points beginning in September 2024. In anticipation of the FOMC pivot to an easing cycle, we limited our exposure to term funding structures and intentionally priced savings specials to encourage maturing CD balances to migrate to managed rate non-maturity products. Beginning in September we began lowering rates on special priced deposit accounts and other managed rate products to benefit from the FOMC rate cuts. In addition, approximately 7% of our deposit portfolio is indexed and immediately repriced with the rate cuts by the FOMC. CD balances comprise only 15% of the total deposit funding base. If rates move lower in 2025, we have the ability to reprice CD balances due to the short duration term structure of the portfolio. Approximately 58% of Busey’s non-maturity deposits are at rack rates with a weighted average rate of 0.01%. We continue to offer CD specials with shorter term structures as well as offering attractive premium savings rates to encourage rotation of maturing CD deposits into nimble pricing products. Components of the 7 basis point decrease in net interest margin¹ during the fourth quarter of 2024 include:

Reduced non-maturity deposit funding costs contributed +9 basis points
Increased cash and securities portfolio yield contributed +6 basis points
Reduced time deposit funding costs contributed +1 basis point
Decreased loan portfolio and held for sale loan yields contributed -20 basis points
Decreased purchase accounting contributed -2 basis points
Increased borrowing expense -1 basis point

Based on our most recent Asset Liability Management Committee (“ALCO”) model, a +100 basis point parallel rate shock is expected to increase net interest income by 2.0% over the subsequent twelve-month period. Busey continues to evaluate and execute off-balance sheet hedging and balance sheet restructuring strategies as well as embedding rate protection in our asset originations to provide stabilization to net interest income in lower rate environments. Time deposit and savings specials have provided funding flows, and we had excess earning cash during the fourth quarter of 2024. Our cumulative interest-bearing non-maturity tightening cycle deposit beta peaked at 41% during the third quarter of 2024. Our total deposit beta for the completed tightening cycle was 34%. Since the onset of the current easing cycle, we have reduced our interest-bearing non-maturity deposit cost of funds by 18 basis points, which represents a 26% easing cycle beta. Deposit betas were calculated based on an average federal funds rate of 4.82% during the fourth quarter of 2024. The average federal funds rate has decreased by 68 basis points since the end of the tightening cycle that concluded in the third quarter of 2024.

NONINTEREST INCOME

Noninterest income was $35.2 million for the fourth quarter of 2024, as compared to $35.8 million for the third quarter of 2024 and $31.3 million for the fourth quarter of 2023. Excluding the impact of net securities gains and losses and immaterial follow-on adjustments from the previously announced mortgage servicing rights sale, adjusted noninterest income¹ was $35.4 million, or 30.3% of operating revenue¹, during the fourth quarter of 2024, $35.0 million, or 29.8% of operating revenue, for the third quarter of 2024, and $30.5 million, or 28.3% of operating revenue, for the fourth quarter of 2023.

Consolidated wealth management fees were $16.8 million for the fourth quarter of 2024, compared to $15.4 million for the third quarter of 2024 and $13.7 million for the fourth quarter of 2023. On a segment basis, Wealth Management generated $17.0 million in revenue during the fourth quarter of 2024, a 22.7% increase over revenue of $13.8 million for the fourth quarter of 2023. Fourth quarter of 2024 results marked a new record high reported quarterly revenue for the Wealth Management operating segment. The Wealth Management operating segment generated net income of $5.9 million in the fourth quarter of 2024, compared to $5.6 million in the third quarter of 2024 and $4.2 million in the fourth quarter of 2023. Busey’s Wealth Management division ended the fourth quarter of 2024 with $13.83 billion in assets under care, compared to $13.69 billion at the end of the third quarter of 2024 and $12.14 billion at the end of the fourth quarter of 2023. Our portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets and has outperformed its blended benchmark⁶ over the last three and five years.

Payment technology solutions revenue was $5.1 million for the fourth quarter of 2024, compared to $5.3 million for the third quarter of 2024 and $5.4 million for the fourth quarter of 2023. Excluding intracompany eliminations, the FirsTech operating segment generated revenue of $5.4 million during the fourth quarter of 2024, compared to $5.6 million in the third quarter of 2024 and $5.8 million in the fourth quarter of 2023.

Wealth management fees, wealth management referral income included in other noninterest income, and payment technology solutions represented 62.3% of adjusted noninterest income¹ for the fourth quarter of 2024.

Fees for customer services were $7.9 million for the fourth quarter of 2024, compared to $8.2 million in the third quarter of 2024 and $7.5 million in the fourth quarter of 2023.

Other noninterest income was $4.1 million in the fourth quarter of 2024, compared to $4.7 million in the third quarter of 2024 and $2.7 million in the fourth quarter of 2023. The third quarter of 2024 benefited from $0.8 million in revenue associated with certain wealth management activities that was reported as other noninterest income; in comparison, other noninterest income from wealth management activities was $0.2 million for the fourth quarter of 2024 and $0.1 million for the fourth quarter of 2023. Compared to the prior quarter, we also saw decreases in venture capital income and swap origination fee income, which were mostly offset by increases in commercial loan sales gains. When compared with the fourth quarter of 2023, increases in other noninterest income were primarily attributable to increases in commercial loan sales gains and venture capital income, as well as the addition of Life Equity Loan^® servicing income beginning in the second quarter of 2024.

OPERATING EFFICIENCY

Noninterest expense was $78.2 million in the fourth quarter of 2024, compared to $75.9 million in the third quarter of 2024 and $75.0 million for the fourth quarter of 2023. The efficiency ratio¹ was 64.5% for the fourth quarter of 2024, compared to 62.1% for the third quarter of 2024, and 66.9% for the fourth quarter of 2023. Adjusted core expense¹ was $72.6 million in the fourth quarter of 2024, compared to $71.0 million in the third quarter of 2024 and $65.2 million in the fourth quarter of 2023. The adjusted core efficiency ratio¹ was 61.8% for the fourth quarter of 2024, compared to 60.2% for the third quarter of 2024, and 60.1% for the fourth quarter of 2023. We expect to continue to prudently manage our expenses and to realize the full extent of M&M acquisition synergies in 2025.

Noteworthy components of noninterest expense are as follows:

Salaries, wages, and employee benefits expenses were $45.5 million in the fourth quarter of 2024, compared to $44.6 million in the third quarter of 2024 and $42.7 million in the fourth quarter of 2023. Busey recorded $0.2 million of non-operating salaries, wages, and employee benefit expenses in the fourth quarter of 2024, compared to $0.1 million in the third quarter of 2024 and $3.8 million in the fourth quarter of 2023. Our associate-base consisted of 1,509 full-time equivalents as of December 31, 2024, compared to 1,510 as of September 30, 2024, and 1,479 as of December 31, 2023. The increase in our associate-base in 2024 was largely due to the M&M acquisition.
Data processing expense was $6.6 million in the fourth quarter of 2024, compared to $6.9 million in the third quarter of 2024 and $6.2 million in the fourth quarter of 2023. Busey has continued to make investments in technology enhancements and has also experienced inflation-driven price increases.
Professional fees were $4.9 million in the fourth quarter of 2024, compared to $3.1 million in the third quarter of 2024 and $2.6 million in the fourth quarter of 2023. Busey recorded $3.0 million of non-operating professional fees in the fourth quarter of 2024, as compared to $1.4 million in the third quarter of 2024 and $0.4 million in the fourth quarter of 2023. Fourth quarter of 2024 non-operating professional fees consisted of $1.9 million related to merger activities and $1.1 million in restructuring activities related to corporate strategy advisement.
Other noninterest expense was $9.7 million for both the third and fourth quarters of 2024, compared to $12.4 million in the fourth quarter of 2023. Busey recorded $0.3 million of non-operating costs in other noninterest expense in the fourth quarter of 2024, compared to $0.4 million in the third quarter of 2024 and $0.1 million in the fourth quarter of 2023. In connection with Busey’s adoption of ASU 2023-02 on January 1, 2024, Busey began recording amortization of New Markets Tax Credits as income tax expense instead of other operating expense, which resulted in a decrease to other operating expenses of $2.3 million compared to the fourth quarter of 2023. Other items contributing to the fluctuations in other noninterest expense included the provision for unfunded commitments, mortgage servicing rights valuation expenses, fixed asset impairment, marketing, business development, and expenses related to recruiting and onboarding.

Busey’s effective tax rate for the fourth quarter of 2024 was 24.8%, which was lower than the combined federal and state statutory rate of approximately 28.0% due to the impact of tax exempt interest income, such as municipal bond interest, bank owned life insurance income, and investments in various federal and state tax credits. Busey’s effective tax rate for the full year 2024 was 25.8%. In the second quarter of 2024, Busey recorded a one-time deferred tax valuation adjustment of $1.4 million resulting from a change to our Illinois apportionment rate due to recently enacted regulations. These newly enacted regulations are expected to lower our tax obligation in future periods. Excluding the impact of the one-time deferred tax valuation adjustment, our effective tax rate for the full year 2024 would have been 24.9%.

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

CAPITAL STRENGTH

Busey’s strong capital levels, coupled with its earnings, have allowed the Company to provide a steady return to its stockholders through dividends. On January 31, 2025, Busey will pay a cash dividend of $0.25 per common share to stockholders of record as of January 24, 2025, which represents a 4.2% increase from the previous quarterly dividend of $0.24 per share. Busey has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

As of December 31, 2024, Busey continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. Busey’s Common Equity Tier 1 ratio is estimated⁴ to be 14.10% at December 31, 2024, compared to 13.78% at September 30, 2024, and 13.09% at December 31, 2023. Our Total Capital to Risk Weighted Assets ratio is estimated⁴ to be 18.53% at December 31, 2024, compared to 18.19% at September 30, 2024, and 17.44% at December 31, 2023.

Busey’s tangible common equity¹ was $1.02 billion at December 31, 2024, compared to $1.04 billion at September 30, 2024, and $925.0 million at December 31, 2023. Tangible common equity¹ represented 8.76% of tangible assets at December 31, 2024, compared to 8.96% at September 30, 2024, and 7.75% at December 31, 2023. Busey’s tangible book value per common share¹ was $17.88 at December 31, 2024, compared to $18.19 at September 30, 2024, and $16.62 at December 31, 2023, reflecting a 7.6% year-over-year increase. The ratios of tangible common equity to tangible assets¹ and tangible book value per common share have been impacted by the fair value adjustment of Busey’s securities portfolio as a result of the current rate environment, which is reflected in the accumulated other comprehensive income (loss) component of stockholder’s equity.

FOURTH QUARTER EARNINGS INVESTOR PRESENTATION

For additional information on Busey’s financial condition and operating results, please refer to the Q4 2024 Earnings Investor Presentation furnished via Form 8-K on January 28, 2025, in connection with this earnings release.

CORPORATE PROFILE

As of December 31, 2024, First Busey Corporation (Nasdaq: BUSE) was an $12.05 billion financial holding company headquartered in Champaign, Illinois.

Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $12.01 billion as of December 31, 2024, and is headquartered in Champaign, Illinois. Busey Bank currently has 62 banking centers, with 21 in Central Illinois markets, 17 in suburban Chicago markets, 20 in the St. Louis Metropolitan Statistical Area, three in Southwest Florida, and one in Indianapolis. More information about Busey Bank can be found at busey.com.

Through Busey’s Wealth Management division, the Company provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Assets under care totaled $13.83 billion as of December 31, 2024. More information about Busey’s Wealth Management services can be found at busey.com/wealth-management.

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

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

For more information about us, visit busey.com.

Category: Financial
Source: First Busey Corporation

Contacts:

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

NON-GAAP FINANCIAL INFORMATION

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

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

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

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Pre-Provision Net Revenue and Related Measures

		Three Months Ended									Years Ended
(dollars in thousands)		December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net interest income (GAAP)		$	81,578		$	82,647		$	77,345		$	322,611		$	320,621
Total noninterest income (GAAP)			35,221			35,845			31,304			139,682			121,214
Net security (gains) losses (GAAP)			196			(822	)		(761	)		6,102			2,199
Total noninterest expense (GAAP)			(78,167	)		(75,926	)		(74,979	)		(300,399	)		(285,532	)
Pre-provision net revenue (Non-GAAP)	[a]		38,828			41,744			32,909			167,996			158,502
Acquisition and restructuring expenses			3,585			1,935			4,237			8,140			4,328
Provision for unfunded commitments			(455	)		407			818			(1,095	)		461
Amortization of New Markets Tax Credits			—			—			2,259			—			8,999
Realized (gain) loss on the sale of mortgage service rights			—			18			—			(7,724	)		—
Adjusted pre-provision net revenue (Non-GAAP)	[b]	$	41,958		$	44,104		$	40,223		$	167,317		$	172,290

Average total assets (GAAP)	[c]		12,085,993			12,007,702			12,308,491			12,051,871			12,246,218

Pre-provision net revenue to average total assets (Non-GAAP)¹	[a÷c]		1.28	%		1.38	%		1.06	%		1.39	%		1.29	%
Adjusted pre-provision net revenue to average total assets (Non-GAAP)¹	[b÷c]		1.38	%		1.46	%		1.30	%		1.39	%		1.41	%

___________________________________________

For quarterly periods, measures are annualized.


Adjusted Net Income, Average Tangible Common Equity, and Related Ratios

		Three Months Ended									Years Ended
(dollars in thousands, except per share amounts)		December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net income (GAAP)	[a]	$	28,105		$	32,004		$	25,749		$	113,691		$	122,565
Acquisition expenses:
Salaries, wages, and employee benefits			247			73			—			1,457			—
Data processing			14			90			—			548			—
Professional fees, occupancy, furniture and fixtures, and other			2,208			1,772			266			4,896			357
Restructuring expenses:
Salaries, wages, and employee benefits			—			—			3,760			123			3,760
Professional fees, occupancy, furniture and fixtures, and other			1,116			—			211			1,116			211
Acquisition and restructuring expenses			3,585			1,935			4,237			8,140			4,328
Related tax benefit¹			(965	)		(406	)		(863	)		(2,026	)		(881	)
Adjusted net income (Non-GAAP)	[b]	$	30,725		$	33,533		$	29,123		$	119,805		$	126,012

Weighted average number of common shares outstanding, diluted (GAAP)	[c]		57,934,812			57,967,848			56,333,033			57,543,001			56,256,148
Diluted earnings per common share (GAAP)	[a÷c]	$	0.49		$	0.55		$	0.46		$	1.98		$	2.18
Adjusted diluted earnings per common share (Non-GAAP)	[b÷c]	$	0.53		$	0.58		$	0.52		$	2.08		$	2.24

Average total assets (GAAP)	[d]		12,085,993			12,007,702			12,308,491			12,051,871			12,246,218
Return on average assets (GAAP)²	[a÷d]		0.93	%		1.06	%		0.83	%		0.94	%		1.00	%
Adjusted return on average assets (Non-GAAP)²	[b÷d]		1.01	%		1.11	%		0.94	%		0.99	%		1.03	%

Average common equity (GAAP)		$	1,396,939		$	1,364,377		$	1,202,417		$	1,342,424		$	1,197,511
Average goodwill and other intangible assets, net			(367,400	)		(369,720	)		(355,469	)		(366,601	)		(359,347	)
Average tangible common equity (Non-GAAP)	[e]	$	1,029,539		$	994,657		$	846,948		$	975,823		$	838,164

Return on average tangible common equity (Non-GAAP)²	[a÷e]		10.86	%		12.80	%		12.06	%		11.65	%		14.62	%
Adjusted return on average tangible common equity (Non-GAAP)²	[b÷e]		11.87	%		13.41	%		13.64	%		12.28	%		15.03	%

___________________________________________

Year-to-date tax benefits were calculated by multiplying year-to-date acquisition and restructuring expenses by tax rates of 24.9% and 20.4% for the years ended December 31, 2024 and 2023, respectively. Quarterly tax benefits were calculated as the year-to-date tax benefit amounts less the sum of amounts applied to previous quarters during the year, equating to tax rates of 26.9%, 21.0%, and 20.4% for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.
For quarterly periods, measures are annualized.

Further Adjusted Net Income and Related Measures

		Three Months Ended									Years Ended
(dollars in thousands, except per share amounts)		December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Adjusted net income (Non-GAAP)¹		$	30,725		$	33,533		$	29,123		$	119,805		$	126,012
Further non-GAAP adjustments:
Net securities (gains) losses			196			(822	)		(761	)		6,102			2,199
Realized net (gains) losses on the sale of mortgage servicing rights			—			18			—			(7,724	)		—
Tax effect for further non-GAAP adjustments²			(49	)		199			171			419			(448	)
Tax effected further non-GAAP adjustments³			147			(605	)		(590	)		(1,203	)		1,751
Further adjusted net income (Non-GAAP)³	[a]	$	30,872		$	32,928		$	28,533		$	118,602		$	127,763
One-time deferred tax valuation adjustment⁴			—			—			—			1,446			—
Further adjusted net income, excluding one-time deferred tax valuation adjustment (Non-GAAP)³	[b]	$	30,872		$	32,928		$	28,533		$	120,048		$	127,763

Weighted average number of common shares outstanding, diluted	[c]		57,934,812			57,967,848			56,333,033			57,543,001			56,256,148

Further adjusted diluted earnings per common share (Non-GAAP)³	[a÷c]	$	0.53		$	0.57		$	0.51		$	2.06		$	2.27
Further adjusted diluted earnings per common share, excluding one-time deferred tax valuation adjustment (Non-GAAP)³	[b÷c]	$	0.53		$	0.57		$	0.51		$	2.09		$	2.27

___________________________________________

Adjusted net income is a non-GAAP measure. See the previous table for a reconciliation to the nearest GAAP measure.
Tax effects for further non-GAAP adjustments were calculated by multiplying further non-GAAP adjustments by the effective income tax rate for each period. Effective income tax rates that were used to calculate the tax effect were 24.8%, 24.8%, and 22.5% for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively, and were 25.8% and 20.4% for the years ended December 31, 2024 and 2023, respectively.
Tax-effected measure.
An estimated one-time deferred tax valuation adjustment of $1.4 million resulted from a change to our Illinois apportionment rate due to recently enacted regulations.

Tax-Equivalent Net Interest Income, Adjusted Net Interest Income, Net Interest Margin, and Adjusted Net Interest Margin

		Three Months Ended									Years Ended
(dollars in thousands)		December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net interest income (GAAP)		$	81,578		$	82,647		$	77,345		$	322,611		$	320,621
Tax-equivalent adjustment¹			446			396			501			1,693			2,173
Tax-equivalent net interest income (Non-GAAP)	[a]		82,024			83,043			77,846			324,304			322,794
Purchase accounting accretion related to business combinations			(812	)		(1,338	)		(384	)		(3,166	)		(1,477	)
Adjusted net interest income (Non-GAAP)	[b]	$	81,212		$	81,705		$	77,462		$	321,138		$	321,317

Average interest-earning assets (GAAP)	[c]		11,048,350			10,942,745			11,235,326			10,999,424			11,181,010

Net interest margin (Non-GAAP)²	[a÷c]		2.95	%		3.02	%		2.75	%		2.95	%		2.89	%
Adjusted net interest margin (Non-GAAP)²	[b÷c]		2.92	%		2.97	%		2.74	%		2.92	%		2.87	%

___________________________________________

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

Adjusted Noninterest Income, Revenue Measures, Adjusted Noninterest Expense, Adjusted Core Expense, and Efficiency Ratios

		Three Months Ended									Years Ended
(dollars in thousands)		December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Net interest income (GAAP)	[a]	$	81,578		$	82,647		$	77,345		$	322,611		$	320,621
Tax-equivalent adjustment¹			446			396			501			1,693			2,173
Tax-equivalent net interest income (Non-GAAP)	[b]		82,024			83,043			77,846			324,304			322,794

Total noninterest income (GAAP)			35,221			35,845			31,304			139,682			121,214
Net security (gains) losses (GAAP)			196			(822	)		(761	)		6,102			2,199
Noninterest income excluding net securities gains and losses (Non-GAAP)	[c]		35,417			35,023			30,543			145,784			123,413
Realized net (gains) losses on the sale of mortgage servicing rights (GAAP)			—			18			—			(7,724	)		—
Adjusted noninterest income (Non-GAAP)	[d]	$	35,417		$	35,041		$	30,543		$	138,060		$	123,413

Tax-equivalent revenue (Non-GAAP)	[e = b+c]	$	117,441		$	118,066		$	108,389		$	470,088		$	446,207
Adjusted tax-equivalent revenue (Non-GAAP)	[f = b+d]		117,441			118,084			108,389			462,364			446,207
Operating revenue (Non-GAAP)	[g = a+d]		116,995			117,688			107,888			460,671			444,034

Adjusted noninterest income to operating revenue (Non-GAAP)	[d÷g]		30.27	%		29.77	%		28.31	%		29.97	%		27.79	%

Total noninterest expense (GAAP)		$	78,167		$	75,926		$	74,979		$	300,399		$	285,532
Amortization of intangible assets (GAAP)	[h]		(2,471	)		(2,548	)		(2,479	)		(10,057	)		(10,432	)
Noninterest expense excluding amortization of intangible assets (Non-GAAP)	[i]		75,696			73,378			72,500			290,342			275,100
Non-operating adjustments:
Salaries, wages, and employee benefits			(247	)		(73	)		(3,760	)		(1,580	)		(3,760	)
Data processing			(14	)		(90	)		—			(548	)		—
Professional fees, occupancy, furniture and fixtures, and other			(3,324	)		(1,772	)		(477	)		(6,012	)		(568	)
Adjusted noninterest expense (Non-GAAP)	[j]		72,111			71,443			68,263			282,202			270,772
Provision for unfunded commitments			455			(407	)		(818	)		1,095			(461	)
Amortization of New Markets Tax Credits			—			—			(2,259	)		—			(8,999	)
Adjusted core expense (Non-GAAP)	[k]	$	72,566		$	71,036		$	65,186		$	283,297		$	261,312

Noninterest expense, excluding non-operating adjustments (Non-GAAP)	[j-h]	$	74,582		$	73,991		$	70,742		$	292,259		$	281,204

Efficiency ratio (Non-GAAP)	[i÷e]		64.45	%		62.15	%		66.89	%		61.76	%		61.65	%
Adjusted efficiency ratio (Non-GAAP)	[j÷f]		61.40	%		60.50	%		62.98	%		61.03	%		60.68	%
Adjusted core efficiency ratio (Non-GAAP)	[k÷f]		61.79	%		60.16	%		60.14	%		61.27	%		58.56	%

___________________________________________

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

Tangible Book Value and Tangible Book Value Per Common Share

		As of
(dollars in thousands, except per share amounts)		December 31, 2024			September 30, 2024			December 31, 2023
Total stockholders’ equity (GAAP)		$	1,383,269		$	1,402,884		$	1,271,981
Goodwill and other intangible assets, net (GAAP)			(365,975	)		(368,249	)		(353,864	)
Tangible book value (Non-GAAP)	[a]	$	1,017,294		$	1,034,635		$	918,117

Ending number of common shares outstanding (GAAP)	[b]		56,895,981			56,872,241			55,244,119

Tangible book value per common share (Non-GAAP)	[a÷b]	$	17.88		$	18.19		$	16.62

Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets

		As of
(dollars in thousands)		December 31, 2024			September 30, 2024			December 31, 2023
Total assets (GAAP)		$	12,046,722		$	11,986,839		$	12,283,415
Goodwill and other intangible assets, net (GAAP)			(365,975	)		(368,249	)		(353,864	)
Tax effect of other intangible assets¹			6,379			7,178			6,888
Tangible assets (Non-GAAP)²	[a]	$	11,687,126		$	11,625,768		$	11,936,439

Total stockholders’ equity (GAAP)		$	1,383,269		$	1,402,884		$	1,271,981
Goodwill and other intangible assets, net (GAAP)			(365,975	)		(368,249	)		(353,864	)
Tax effect of other intangible assets¹			6,379			7,178			6,888
Tangible common equity (Non-GAAP)²	[b]	$	1,023,673		$	1,041,813		$	925,005

Tangible common equity to tangible assets (Non-GAAP)²	[b÷a]		8.76	%		8.96	%		7.75	%

___________________________________________

Net of estimated deferred tax liability, calculated using an estimated tax rate of 26.73% as of December 31, 2024, and 28% as of September 30, 2024, and December 31, 2023.
Tax-effected measure.

Core Deposits and Related Ratios

		As of
(dollars in thousands)		December 31, 2024			September 30, 2024			December 31, 2023
Portfolio loans (GAAP)	[a]	$	7,697,087		$	7,809,097		$	7,651,034

Total deposits (GAAP)	[b]	$	9,982,490		$	9,943,241		$	10,291,156
Brokered deposits, excluding brokered time deposits of $250,000 or more			(13,090	)		(13,089	)		(6,001	)
Time deposits of $250,000 or more			(334,503	)		(338,808	)		(386,286	)
Core deposits (Non-GAAP)	[c]	$	9,634,897		$	9,591,344		$	9,898,869

RATIOS
Core deposits to total deposits (Non-GAAP)	[c÷b]		96.52	%		96.46	%		96.19	%
Portfolio loans to core deposits (Non-GAAP)	[a÷c]		79.89	%		81.42	%		77.29	%

FORWARD-LOOKING STATEMENTS

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

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

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

END NOTES

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

The MIL Network –

January 29, 2025

MIL-OSI: Fairfax India Shareholders Approve One-Time Deviation From Investment Concentration Restriction

Source: GlobeNewswire (MIL-OSI)

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TORONTO, Jan. 28, 2025 (GLOBE NEWSWIRE) — Fairfax India Holdings Corporation (“Fairfax India” or the “Company”) (TSX: FIH.U) is pleased to announce the voting results from its special meeting of shareholders held on January 28, 2025 (the “Special Meeting”) in connection with a proposed one-time deviation from the Company’s investment concentration restriction set forth in its by-laws (the “Investment Concentration Restriction”) in order to complete the previously announced acquisition of an additional 10% equity interest in Bangalore International Airport Limited (the “Additional BIAL Investment”).

The special resolution to approve the one-time deviation from the Investment Concentration Restriction required the approval of the holders of multiple voting shares and subordinate voting shares of the Company, each voting separately as a class. At the Special Meeting, the special resolution was approved by (i) 100% of the votes cast by holders of multiple voting shares, and (ii) approximately 99% of the votes cast by holders of subordinate voting shares.

Completion of the Additional BIAL Investment remains subject to receipt of applicable third party consents and other customary closing conditions. Assuming that the remaining conditions to closing are satisfied, it is expected that the Additional BIAL Investment will close in Q1 2025.

About Fairfax India

Fairfax India is an investment holding company whose objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, India.

For further information, contact:	John Varnell, Vice President, Corporate Affairs
	(416) 367-4755

This press release may contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements may relate to the Company’s or an Indian Investment’s future outlook and anticipated events or results and may include statements regarding the financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividends, plans and objectives of the Company. Particularly, statements regarding future results, performance, achievements, prospects or opportunities of the Company, an Indian Investment, or the Indian market are forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”.

Forward-looking statements are based on our opinions and estimates as of the date of this press release, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the following factors: oil price risk; geographic concentration of investments; foreign currency fluctuation; volatility of the Indian securities markets; investments may be made in foreign private businesses where information is unreliable or unavailable; valuation methodologies involve subjective judgments; financial market fluctuations; pace of completing investments; minority investments; reliance on key personnel and risks associated with the Investment Advisory Agreement; disruption of the Company’s information technology systems; lawsuits; use of leverage; significant ownership by Fairfax may adversely affect the market price of the subordinate voting shares; weather risk; taxation risks; emerging markets; MLI; economic risk; trading price of subordinate voting shares relative to book value per share risk; and economic disruptions from the after-effects of the COVID-19 pandemic and the conflicts in Ukraine and the Middle East. Additional risks and uncertainties are described in the Company’s annual information form dated March 8, 2024 which is available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.fairfaxindia.ca. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the Company. These factors and assumptions, however, should be considered carefully.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws.

The MIL Network –

January 29, 2025

MIL-OSI Submissions: Economy Analysis – KOF-NZZ survey: where do Swiss economists stand on key economic policy issues?

Source: KOF Economic Institute

KOF has collaborated with the Neue Zürcher Zeitung (NZZ) newspaper to survey economists on fundamental and current economic questions. The results show that they reject state intervention such as rent controls and trade tariffs. On the other hand, opinions are divided along political lines when it comes to questions about easing Switzerland’s debt brake or subsidising environmentally friendly technologies.

The December 2024 survey consisted of 19 statements from various economic subject areas. Academic research economists based in Switzerland were questioned.

A total of 177 responses were received, which represents a response rate of 21 per cent.

The respondents* were also asked about three characteristics: their age, gender and political affiliation. As far as political affiliation is concerned, the proportion of respondents defining themselves as being (more) to the left (36 per cent) is higher than the proportion defining themselves as (more) to the right (20 per cent).

A large proportion (44 per cent) place themselves politically in the centre. However, it should be noted that 18 per cent of respondents did not answer the question about their political affiliation. A comparison of these characteristics shows that women and young people (tend to) position themselves on the left politically.

This is consistent with surveys (in German, French or Italian) conducted by the Federal Statistical Office (FSO) among the Swiss population as a whole. The KOF-NZZ survey shows that political affiliation has a significant influence on the responses to 13 out of the 19 questions in the survey.

Competition and regulation: mostly sceptical about intervention

Four questions about market intervention show that the economists surveyed tend to favour only little regulation. A majority (71 per cent) are of the opinion that rent controls (tend to) reduce the quantity and quality of housing supply. Respondents who tend to define themselves politically as right-wing overwhelmingly agree with this statement (93 per cent).

Among left-leaning economists, around half (51 per cent) agree (25 per cent of them are undecided, i.e. neither agree nor disagree). There is unanimity on the question of whether tariffs and import quotas reduce a country’s material prosperity. A total of 81 per cent of economists (tend to) agree with this statement. This figure rises to 93 per cent among those with a right-wing political affiliation and is 70 per cent among those on the left.

The view that wage controls and/or price controls should (preferably) not be used as a means of combatting inflation is very widely held among the survey respondents, with 83 per cent agreeing with this opinion (93 per cent of right-wing respondents, 81 per cent of left-wing respondents and 86 per cent of those in the centre).

By contrast, the responses to the question of whether a binding minimum wage increases unemployment among young people and unskilled workers are less clear-cut: overall, 44 per cent (tend to) agree with this statement while 38 per cent (tend to) disagree.

A high proportion (18 per cent) neither agree nor disagree with the statement. The political affiliations are divided in their assessment of this question. While the majority of (more) right-wing respondents (72 per cent) agree with the statement that unemployment will (tend to) increase, the corresponding figure is 50 per cent for respondents from the centre. In contrast, the majority of (more) left-wing respondents (tend to) reject this statement (60 per cent).

Regulation of large Swiss banks: too-big-to-fail amendment controversial

Since Credit Suisse was acquired by UBS, the regulation of big banks has once again become the focus of public debate. Economists do not agree on whether it would be possible in principle to amend too-big-to-fail regulation, so that a major Swiss bank could be wound up without any risk to taxpayers in the event of a crisis. 47 per cent (tend to) agree with this statement, 14 per cent neither agree nor disagree, and 39 per cent (tend to) disagree. The influence of political affiliation on response behaviour is not very pronounced here.

Public debt: considered too high in many advanced economies

The COVID-19 pandemic has led to a sharp increase in government debt in many countries. This has triggered a broad debate about the extent to which public debt is too high in several countries. Overall, around two-thirds of survey respondents (tend to) consider it to be too high in many advanced economies. The majority of economists who define themselves as politically (more) to the right or in the centre agree with this statement (86 per cent and 75 per cent respectively). The situation is different in the case of respondents who define themselves politically as (more) to the left: 44 per cent of them agree with this statement, 30 per cent neither agree nor disagree, and 26 per cent disagree.

In Switzerland, the government spending ratio – i.e. public spending as a share of gross domestic product – is not considered to be too high. More than two-thirds of survey respondents reject the statement that the government spending ratio is too high. This view is fairly widespread across the political spectrum, although not equally pronounced in all cases. 48 per cent of respondents who define themselves as (more) right-wing reject this statement, 11 per cent are undecided and 41 per cent agree. The majority of other political affiliations reject this statement (59 per cent of respondents who define themselves as centrists and 90 per cent of those on the left).

The economists agree less about Switzerland’s debt brake. Overall, 37 per cent agree with the statement that the debt brake should be relaxed, 17 per cent are undecided and 46 per cent disagree. Of the (more) right-wing economists, 71 per cent disagree with the statement. Of those respondents who define themselves politically as centrists, 45 per cent disagree and 33 per cent agree. And, of the economists who see themselves as (more) left-wing, 47 per cent agree and 34 per cent disagree.

Inequality: wealth distribution too unequal according to around half of respondents

The economists were also asked about their views on inequality in Switzerland. A distinction was made here between disposable income and wealth. 41 per cent of respondents stated that disposable incomes should (probably) be distributed more equally. On the other hand, 36 per cent (tend to) reject this statement. However, the answers differed considerably depending on the respondents’ political preferences. 71 per cent of those with (more) left-wing leanings agree with the statement that incomes should be distributed more equally, while the same proportion of those with (more) right-wing leanings reject this statement. There is a mixed picture among economists who see themselves politically as centrists, with 30 per cent agreeing and 41 per cent disagreeing with the statement.

56 per cent consider the distribution of wealth to be (probably) too unequal. 29 per cent (tend to) reject this statement. This means that wealth inequality in Switzerland is viewed more critically than income inequality. However, the influence of political affiliation can be felt here in a similar way to the issue of income inequality. 75 per cent of right-wing respondents disagree with the statement that wealth should be distributed more equally, whereas 88 per cent of left-wing respondents agree with it. 53 per cent of those in the centre agree with the statement.

Causes of inflation: monetary explanation widespread

As far as the causes of inflation are concerned, a distinction can be made between monetarist and non-monetarist (e.g. Keynesian, supply-side or structural) explanations. Monetarists believe that inflation is a monetary phenomenon. This means that inflation – particularly beyond the short term – is a consequence of an expansion of the money supply that is greater than the increase in the real production of goods and services. Keynesian inflation theory, on the other hand, focuses on the Phillips curve, which shows that unemployment and the inflation rate are negatively correlated in the short term.

Both theories tend to meet with approval in the survey. However, approval of the monetarist approach is slightly higher: 58 per cent agree with the statement that inflation is (more likely to be) a monetary phenomenon. In contrast, just under half of respondents (51 per cent) are convinced that unemployment can be reduced in the short term by a higher inflation rate. Views on monetarism differ according to the respondents’ political affiliations: 76 per cent of the (more) right-wing respondents (tend to) agree with monetarism theory, while 68 per cent of economists in the centre of the political spectrum (tend to) agree. Of those respondents on the (more) left wing of the spectrum, 34 per cent (tend to) agree and 47 per cent (tend to) disagree. In contrast, the approval rates for the short-term Phillips curve do not differ greatly across the political spectrum (left: 50 per cent, centre: 61 per cent, right: 45 per cent).

Environmental policy: disagreement over industrial subsidies

The economists surveyed also commented on key environmental policy issues. There is disagreement on the question of whether the transition to green technologies in Switzerland should be subsidised by industry. While a total of 45 per cent of the economists surveyed were (mainly) in favour of this, 41 per cent were (mainly) against this approach. A further 14 per cent were undecided. The respondents’ political affiliations play a significant role in this question.

Industrial subsidies are rejected by 71 per cent of respondents who define themselves as (more) politically right-wing, as do 46 per cent of those in the political centre. In contrast, 65 per cent of respondents on the (more) left wing of the spectrum are in favour of such subsidies.

On the other hand, the general attitude towards combatting pollution through emissions taxes rather than through the statutory imposition of limits is clearer. A clear majority of 78 per cent overall (tend to) prefer the introduction of emissions taxes over the imposition of limits. This preference applies across the political spectrum.

There is also a consensus when it comes to assessing the potential of new technologies. A total of 72 per cent of respondents (tend to) believe that carbon-neutral economic growth will be possible as a result of technological innovation. Only 12 per cent are (mainly) sceptical, while 16 per cent are undecided.

The role of central banks in climate policy is another topic that is repeatedly the subject of intense debate. In April 2024, for example, the National Council discussed climate rules for the Swiss National Bank (SNB). 62 per cent of the economists responding to the KOF-NZZ survey generally (tend to) reject the inclusion of climate targets in central banks’ mandates. By contrast, 28 per cent would (tend to) be in favour of such an extension of these mandates. However, the responses given differ significantly depending on political affiliation. 86 per cent of (more) right-wing respondents and 70 per cent of those located in the political centre (tend to) reject the inclusion of climate targets by central banks. Respondents on the (more) left wing of the spectrum are less clear in their preferences: a narrow majority of 53 per cent are in favour, 15 per cent are neither in favour nor against, and 32 per cent are opposed. It is also clear that female economists are more in favour of including climate targets than male economists.

Political views most influential in assessing distribution issues

The respondents’ political views play a role in their responses to the majority of questions. This influence is particularly strong in the case of questions on the distribution of both wealth and income. However, the responses to some of the questions on climate policy also differ according to political affiliation – for example, the role of central banks in climate policy or the use of industrial subsidies. The respondents’ political affiliations are also of great importance when assessing the impact of minimum wages and the public spending ratio in Switzerland.

On the other hand, views across the political spectrum are similar when it comes to the potential of new technologies for carbon-neutral growth, assessing the introduction of emissions taxes, capital rules for banks, and too-big-to-fail regulation. Assessments of the Phillips curve also hardly differ across the political spectrum.

————————
*Demographics of survey respondents:
Of those surveyed, 14 per cent are younger than 35, 38 per cent are between 36 and 45, 22 per cent are between 46 and 55, and 26 per cent are older than 56. 84 per cent of respondents are male and 16 per cent are female. Broken down by age category, the proportion of women is highest (20 per cent) in the 36 to 45 age group. The lowest proportion of women (11 per cent) is in the over 56 age group.

The KOF-NZZ survey of economists covers topics relevant to economic policy in Switzerland and provides a means of publicising the views of economists conducting academic research. The Neue Zürcher Zeitung (NZZ) newspaper is KOF’s media partner in the preparation and interpretation of this survey. KOF and the NZZ jointly conducted a survey of major fundamental and topical economic issues in December 2024. Some of the questions are updated formulations of an international survey conducted by Bruno S. Frey, Werner W. Pommerehne, Friedrich Schneider and Guy Gilbert in 1980 (link to the paper). The survey was conducted between 2 December and 20 December 2024. 854 economists were contacted. Responses were received from 177 economists at 19 institutions. (ref. https://news.ethz.ch/d?p00ce04y00o6iq00d0000l3i0000000003muuielzwweyd2e3r5ll4si000bik000000o2qwjku )

MIL OSI – Submitted News –

January 29, 2025

MIL-OSI New Zealand: Economy – Reserve Bank NZ speech: Beyond the cycle – Growth and interest rates in the long run

Source: Reserve Bank of New Zealand

29 January 2025 – In a speech delivered today, Reserve Bank Chief Economist Paul Conway discussed New Zealand’s longer-term ‘potential output’ and its significance for monetary policy.

“Understanding potential output is crucial for assessing whether the economy is running too hot or too cold from an inflation control perspective and for gauging medium-term growth prospects,” Mr Conway says.

Mr Conway also outlined the Reserve Bank’s assessment of the ‘neutral interest rate’, which shapes expectations for where the OCR will tend to move over time, in the absence of economic shocks.

The speech goes beyond the business cycle to explore New Zealand’s long-term economic challenges and key factors influencing future growth – including productivity growth. It also explores drivers behind changes in New Zealand’s neutral interest rate.

Key insights from the speech include:

In the absence of future shocks, economic activity in New Zealand will tend towards the level of potential output, as pandemic-related disruptions fade. Likewise, without future shocks, the OCR will tend towards the neutral interest rate.
Over the next few years, with declining inward migration and weak productivity growth, potential output growth is likely to be modest. This will set a modest ‘speed limit’ on how fast the economy can grow without generating excess inflation pressure.
Unlocking higher investment and productivity growth is key to raising potential output growth and improving per capita incomes. This would also reduce the likelihood of negative recessionary economic growth during future periods of restrictive monetary policy.
Reserve Bank estimates suggest that the neutral interest rate has fallen over recent decades, given weak productivity growth and aging populations. Our research suggests that this decline may be reversing and that the long-term nominal neutral interest rate currently lies between 2.5% and 3.5%.

Background notes

What is potential output?
Potential output is the level of goods and services the economy can sustainably supply without generating excess inflation or disinflation. It depends on the supply of inputs – capital and labour – and how productively they are combined to produce output. For example, if there are more people available to work, more capital to use, or better ways of doing things, then potential output increases.

What is the neutral interest rate?
The nominal neutral interest rate is the level of the Official Cash Rate (OCR) consistent with inflation being sustainably at target and the economy running at its potential output. Without future shocks, the neutral interest rate indicates where the OCR is likely to settle to keep inflation at the 2% target midpoint.

More information

Read the speech: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=2920e70068&e=f3c68946f8
Watch the speech: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=e1dd2a8aa0&e=f3c68946f8

MIL OSI New Zealand News –

January 29, 2025

MIL-OSI USA: Woman Sentenced for Fraud Scheme Involving Claims for Unnecessary Respiratory Tests Submitted with COVID-19 Tests

Source: US State of California

A California woman was sentenced today to nine years in prison for her role in fraudulently submitting claims to governmental and private insurance programs during the COVID‑19 pandemic for expensive respiratory pathogen panel (RPP) tests that were medically unnecessary and never ordered by health care providers.

According to court documents, Lourdes Navarro, 66, of Glendale, and Imran Shams owned and controlled Matias Clinical Laboratory, doing business as Health Care Providers Laboratory (HCPL). Navarro and Shams conspired to obtain nasal swab specimens that enabled HCPL to test for COVID-19, as well as to obtain testing orders from physicians and other medical professionals. The specimens were collected from, among others, residents and staff at nursing homes, assisted living facilities, rehabilitation facilities, and similar types of facilities, and from students and staff at primary and secondary schools, for the purported purpose of conducting screening tests to identify and isolate individuals infected with COVID-19. However, Navarro and Shams caused HCPL to perform RPP tests on most of the specimens, even though only COVID-19 testing had been ordered and there was no medical justification for conducting RPP tests on asymptomatic individuals who needed only COVID-19 screening tests. Through HCPL, Navarro and Shams billed approximately $369 million for the RPP tests to Medicare, the Health Resources and Services Administration COVID-19 Uninsured Program, and a private health insurance company, and were reimbursed approximately $46.7 million for fraudulent claims.

Navarro was also ordered to forfeit $11,662,939 in funds that the government had previously seized from three bank accounts. The total amount seized and forfeited from Navarro and Shams is $14,518,485. Navarro also was ordered to pay $46,735,400 in restitution.

Navarro pleaded guilty on Oct. 5, 2023, to conspiracy to commit health care fraud and wire fraud. Shams pleaded guilty on Jan. 24, 2023, in the Central District of California to conspiracy to commit health care fraud and concealment of his exclusion from Medicare and was sentenced to 10 years in prison on Jan. 30, 2024. In addition, on May 29, 2024, Shams was sentenced to five years in prison in connection with his 2017 plea in the Eastern District of New York to conspiracy to commit money laundering, conspiracy to pay and receive kickbacks, and defrauding the United States by obstructing the lawful functions of the IRS, of which three years were ordered to run consecutive to the Central District of California sentence.

Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office, and Acting Special Agent in Charge Rochelle Wong of the Department of Health and Human Services Office of Inspector General (HHS-OIG) Los Angeles Regional Office made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorneys Gary A. Winters and Raymond E. Beckering III of the Criminal Division’s Fraud Section prosecuted the case. Assistant U.S. Attorney Maxwell Coll for the Central District of California handled the financial penalties.

The Justice Department’s COVID-19 Fraud Enforcement Task Force marshals the resources of the department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, visit www.justice.gov/coronavirus.

MIL OSI USA News –

January 29, 2025

MIL-OSI USA: Kaine, Young, Reed & Marshall Introduce Bipartisan Bill to Support Mental Health Resources for Health Care Providers

US Senate News:

Source: United States Senator for Virginia Tim Kaine
WASHINGTON, D.C. – Today, U.S. Senators Tim Kaine (D-VA), a member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Todd Young (R-IN), Jack Reed (D-RI), and Roger Marshall (R-KS) introduced bipartisan legislation to reauthorize the Dr. Lorna Breen Health Care Provider Protection Act, a comprehensive law Kaine, Young, Reed and Marshall successfully passed in 2022 to help prevent suicide, burnout, and mental and behavioral health conditions among health care professionals. The law has already provided $100 million in funding for mental health care for providers across the country, including $5.6 million in federal funding for Virginia providers at UVA Health, Virginia Commonwealth University, and George Mason University. But provisions of the law that made this funding possible expired last year. The Dr. Lorna Breen Health Care Provider Protection Reauthorization Act would reauthorize these grant programs for five years.
“Dr. Lorna Breen was a physician from Charlottesville who tragically died by suicide after working on the frontlines of the COVID-19 pandemic,” said Kaine. “In 2022, I was honored to work with her family and Senators Young, Reed and Marshall to pass legislation in her honor to help ensure health care workers have access to the mental health support they need. I urge all of my colleagues on both sides of the aisle to join us in standing with our health care heroes by reauthorizing that law, so it can continue to support our healers.”
“Our frontline workers put their own health on the line every day to serve our communities in Indiana and across the country,” said Young. “Congress must act to reauthorize this important program to provide our health care workforce with needed support to prevent suicide and promote mental and behavioral health.”
“Doctors, nurses, and health aids take care of patients who need them. The federal government must do its part to ensure the mental and physical health needs of our health care workforce are taken care of too,” said Reed.
“Our health care providers dedicate their lives to taking care of patients, sometimes, this comes at their own expense,” said Marshall. “We must ensure we’re giving them the support they need when it comes to their mental health. I’m proud to join Senators Kaine and Young in leading the reauthorization of this very important program which helps provide access to mental and behavioral health resources to our health care professionals.”
“Health workers are at the heart of every life saved and ever patient cared for, yet the U.S. health care system is straining our workforce and perpetuating the alarming levels of burnout and poor mental health they are experiencing,” said Corey Feist, JD, MBA, co-founder and CEO of the Dr. Lorna Breen Heroes’ Foundation, which leads the ALL IN: Wellbeing First for Healthcare coalition. “We are immensely grateful to Senators Kaine, Young, Reed, and Marshall for their steadfast commitment to reauthorize and fund the landmark Dr. Lorna Breen Health Care Provider Protection Act and build upon it to address the primary driver of health workers’ burnout—administrative burden.”
Specifically, Dr. Lorna Breen Health Care Provider Protection Reauthorization Act would:
Reauthorize a grant program for health care organizations and professional associations for employee education on strategies to reduce burnout, peer-support programming, and mental and behavioral health treatment for five years. Communities with a shortage of health care workers, rural communities, and those experiencing burnout due to administrative burdens, such as lengthy paperwork, will be prioritized.
Reauthorize a grant program for health profession schools or other institutions to train health care workers and students in strategies to prevent suicide, burnout, mental health conditions, and substance use disorders for five years.
Reauthorize a national evidence-based education and awareness campaign. Currently, the campaign provides hospital and health system leaders with evidence-informed solutions to reduce health care worker burnout. Reauthorization will provide resources for the campaign to continue and expand beyond its current scope.
In addition to Kaine, Young, Reed and Marshall, the legislation is cosponsored by U.S. Senators Shelley Moore Capito (R-WV), Lisa Murkowski (R-AK), Jeanne Shaheen (D-NH), and Mark R. Warner (D-VA).
Full text of the bill is available here.

MIL OSI USA News –

January 29, 2025

MIL-OSI Security: Former Colorado Springs Man Sentenced For Defrauding Taxpayer Funded COVID-19 Relief Program

Source: Office of United States Attorneys

DENVER – The United States Attorney’s Office for the District of Colorado announces that Charles Lacona, Jr., 67, formerly of Colorado Springs, was sentenced to 24 months in federal prison and ordered to pay $549,274.14 in restitution after being found guilty by a federal jury on two counts of wire fraud and one count of money laundering related to fraudulent COVID-19 related funds he received through the Paycheck Protection Program (PPP).

According to the facts established at trial, between April 2020 and April 2021, Lacona devised and participated in a scheme to defraud a lender of $513,732.50 in PPP loans. Lacona inflated payroll costs and gross receipts, made false statements and certifications, and submitted fabricated tax documents and payroll reports. During that same period, Lacona unsuccessfully applied for additional emergency government assistance through the Economic Injury Disaster Loan (EIDL) program. Lacona used some of the fraudulently obtained funds to purchase a Cadillac CT6 for $67,704.13.

“Theft of taxpayer dollars will not be tolerated,” said Acting United States Attorney J. Bishop Grewell. “This sentence sends a message that people who defrauded the United States Government will be held accountable for their actions.”

“IRS Criminal Investigation is committed to holding accountable those who exploited the COVID-19 pandemic relief programs,” said Amanda Prestegard, Special Agent In Charge, Denver Field Office. “Investigating those who defrauded programs meant for hard working Americans will remain a top priority for our agency.”

United States District Court Judge Daniel D. Domenico presided over the trial. IRS Criminal Investigation handled the investigation. Assistant United States Attorneys Craig Fansler and Nicole Cassidy handled the prosecution.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

On July 11, 2023, the Attorney General selected the District of Colorado’s U.S. Attorney’s Office to head one of five national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. The Strike Force combines law enforcement and prosecutorial resources and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors, as well as those who committed multiple instances of pandemic relief fraud. The Strike Force uses prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds. Additional information regarding the Strike Force may be found at https://www.justice.gov/opa/pr/justice-department-announces-results-nationwide-covid-19-fraud-enforcement-action.

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

MIL Security OSI –

January 29, 2025

MIL-OSI: Columbia Financial, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2024

Source: GlobeNewswire (MIL-OSI)

FAIR LAWN, N.J., Jan. 28, 2025 (GLOBE NEWSWIRE) — Columbia Financial, Inc. (the “Company”) (NASDAQ: CLBK), the mid-tier holding company for Columbia Bank (“Columbia”), reported a net loss of $21.2 million, or $0.21 per basic and diluted share, for the quarter ended December 31, 2024, as compared to net income of $6.6 million, or $0.06 per basic and diluted share, for the quarter ended December 31, 2023. The net loss for the quarter ended December 31, 2024 reflected lower non-interest income mainly due to the previously disclosed balance sheet repositioning transaction. As part of the Company’s strategy to improve future earnings and expand its net interest margin, the Company sold $352.3 million of debt securities available for sale during the fourth quarter of 2024, and the proceeds from the sale were used to fund loan growth of $72.9 million, purchase $78.1 million of higher yielding debt securities and prepay $170.0 million of higher cost borrowings. This balance sheet repositioning transaction resulted in a pre-tax loss on the sale of securities and extinguishment of debt of $37.9 million. The quarter ended December 31, 2024 results also reflected a higher provision for credit losses, partially offset by higher net interest income, mainly due to an increase in interest income, lower non-interest expense and lower income tax expense. For the quarter ended December 31, 2024, the Company reported core net income of $11.4 million, an increase of $1.3 million, or 12.4%, compared to core net income of $10.1 million for the quarter ended December 31, 2023. The benefit of the balance sheet repositioning transaction was modest during the fourth quarter, as the settlement of the transaction occurred late in the quarter. (Refer to “Reconciliation of GAAP to Non-GAAP Financial Measures” for a reconciliation of GAAP net income to core net income.)

For the year ended December 31, 2024, the Company reported a net loss of $11.7 million, or $0.11 per basic and diluted share, as compared to net income of $36.1 million, or $0.35 per basic and diluted share, for the year ended December 31, 2023. The year ended December 31, 2024 reflected lower net interest income, mainly due to an increase in interest expense, higher provision for credit losses and lower non-interest income due to loss on securities transactions resulting from the balance sheet repositioning transaction described above, partially offset by lower non-interest expense and lower income tax expense. Non-interest income for the year ended December 31, 2024 included a $34.6 million loss on the sale of securities and non-interest expense included a $3.4 million loss on extinguishment of debt.

Thomas J. Kemly, President and Chief Executive Officer commented: “The Company maintained a strong balance sheet and capital position, which will allow us to benefit from an improving operating environment. Additionally, our fourth quarter repositioning strategy should result in improved future earnings and net interest margin. We will continue to examine and implement prudent strategies that we believe will build a foundation for the future success of the Company and increased profitability.”

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

A net loss of $21.2 million was recorded for the quarter ended December 31, 2024, a decrease of $27.8 million, compared to net income of $6.6 million for the quarter ended December 31, 2023. The decrease in net income was primarily attributable to a $35.0 million decrease in non-interest income, and a $1.7 million increase in provision for credit losses, partially offset by a $1.1 million increase in net interest income, a $1.4 million decrease in non-interest expense, and a $6.4 million decrease in income tax expense.

Net interest income was $46.4 million for the quarter ended December 31, 2024, an increase of $1.1 million, or 2.4%, from $45.3 million for the quarter ended December 31, 2023. The increase in net interest income was primarily attributable to a $6.1 million increase in interest income partially offset by a $5.0 million increase in interest expense on deposits and borrowings. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields. Market interest rates increased 100 basis points throughout the 2023 period and were subsequently reduced 100 basis points during the last four months of 2024. The increase in interest expense on deposits was driven by the higher rate environment coupled with intense competition for deposits in the market and the repricing of existing deposits into higher cost products throughout the majority of the 2024 fiscal year. However, during the fourth quarter, competitive pressures eased, and deposits became easier to attract, resulting in a reduced cost of deposits. The decrease in interest expense on borrowings was also impacted by the lower interest rates for new borrowings, along with a decrease in the average balance of borrowings. Prepayment penalties, which are included in interest income on loans, totaled $84,000 for the quarter ended December 31, 2024, compared to $419,000 for the quarter ended December 31, 2023.

The average yield on loans for the quarter ended December 31, 2024 increased 22 basis points to 4.88%, as compared to 4.66% for the quarter ended December 31, 2023, as interest income was influenced by the interest rate increases that occurred in 2023 and loan growth. The average yield on securities for the quarter ended December 31, 2024 increased 41 basis points to 2.99%, as compared to 2.58% for the quarter ended December 31, 2023, as new securities purchased during 2024 were at higher interest rates. The average yield on other interest-earning assets for the quarter ended December 31, 2024 increased 36 basis points to 6.00%, as compared to 5.64% for the quarter ended December 31, 2023, due to an increase in the average balance of higher yielding Federal Home Loan Bank stock, as compared to average cash balances, which decreased in the 2024 period.

Total interest expense was $67.2 million for the quarter ended December 31, 2024, an increase of $5.0 million, or 8.0%, from $62.2 million for the quarter ended December 31, 2023. The increase in interest expense was primarily attributable to a 37 basis point increase in the average cost of interest-bearing deposits, coupled with an increase in the average balance of interest-bearing deposits, partially offset by a 31 basis point decrease in the average cost of borrowings, coupled with a decrease in the average balance of borrowings. Interest expense on deposits increased $8.5 million or 19.6%, and interest expense on borrowings decreased $3.5 million, or 18.8%.

The Company’s net interest margin for the quarter ended December 31, 2024 increased 3 basis points to 1.88%, when compared to 1.85% for the quarter ended December 31, 2023. The weighted average yield on interest-earning assets increased 22 basis points to 4.61% for the quarter ended December 31, 2024 as compared to 4.39% for the quarter ended December 31, 2023. The average cost of interest-bearing liabilities increased 20 basis points to 3.38% for the quarter ended December 31, 2024 as compared to 3.18% for the quarter ended December 31, 2023. The net interest margin increased for the quarter ended December 31, 2024, as the increase in the average yield on interest-earning assets slightly outweighed the average cost of interest-bearing liabilities.

The provision for credit losses for the quarter ended December 31, 2024 was $2.9 million, an increase of $1.7 million, from $1.2 million for the quarter ended December 31, 2023. The increase in the allowance for credit losses for loans was primarily due to net charge-offs totaling $1.4 million and an increase in loan performance qualitative factors.

Non-interest income was $(23.7) million for the quarter ended December 31, 2024, a decrease of $35.0 million, or 310.8%, from $11.2 million for the quarter ended December 31, 2023. The decrease was primarily attributable to the loss on securities transactions of $34.6 million resulting from the balance sheet repositioning transaction and a decrease in bank-owned life insurance income of $2.4 million, attributable to death benefits in 2023, partially offset by a $1.7 million increase in the fair value of Federal Home Loan Mortgage Corporation and Federal National Mortgage Association preferred stock included in equity securities.

Non-interest expense was $46.6 million for the quarter ended December 31, 2024, a decrease of $1.4 million, or 2.9%, from $48.0 million for the quarter ended December 31, 2023. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $1.9 million and a decrease in federal deposit insurance premiums of $3.2 million, partially offset by an increase in loss on the extinguishment of debt of $3.1 million. The decrease in compensation and employee benefits expense was the result of lower incentive compensation and a workforce reduction related to cost cutting strategies implemented during 2023 and 2024. The decrease in federal deposit insurance premiums was due to the 2023 quarter including a one-time Federal Deposit Insurance Corporation special assessment recorded in December 2023. During the quarter ended December 31, 2024, the Company prepaid $200.0 million in FHLB borrowings, inclusive of the $170.0 million as part of a balance sheet repositioning transaction which resulted in a $3.4 million loss on the extinguishment of debt.

Income tax benefit was $5.5 million for the quarter ended December 31, 2024, a decrease of $6.4 million, as compared to income tax expense of $865,000 for the quarter ended December 31, 2023, mainly due to a decrease in pre-tax income. The Company’s effective tax rate was 20.7% and 11.6% for the quarters ended December 31, 2024 and 2023, respectively.

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

A net loss of $11.7 million was recorded for the year ended December 31, 2024, a decrease of $47.7 million, compared to net income of $36.1 million for the year ended December 31, 2023. The decrease in net income was primarily attributable to a $27.9 million decrease in net interest income, a $9.7 million increase in provision for credit losses and a $25.5 million decrease in non-interest income, partially offset by a $1.1 million decrease in non-interest expense, and a $14.2 million decrease in income tax expense.

Net interest income was $178.0 million for the year ended December 31, 2024, a decrease of $27.9 million, or 13.5%, from $205.9 million for the year ended December 31, 2023. The decrease in net interest income was primarily attributable to an $84.3 million increase in interest expense on deposits and borrowings, partially offset by a $56.4 million increase in interest income. The increase in interest income was primarily due to an increase in the average balance of total interest-earning assets coupled with an increase in average yields due to market interest rate increases in 2023. The increase in interest expense on deposits and borrowings was driven by these same rate increases coupled with intense competition for deposits in the market and the repricing of existing deposits into higher cost products along with higher balances. The increase in interest expense on borrowings was also impacted by the increase in interest rates for new borrowings along with an increase in the average balance of borrowings. Prepayment penalties, which are included in interest income on loans, totaled $960,000 for the year ended December 31, 2024, compared to $817,000 for the year ended December 31, 2023.

The average yield on loans for the year ended December 31, 2024 increased 46 basis points to 4.90%, as compared to 4.44% for the year ended December 31, 2023, as interest income increased due to rising rates and loan growth. The average yield on securities for the year ended December 31, 2024 increased 40 basis points to 2.86%, as compared to 2.46% for the year ended December 31, 2023 as $124.6 million of higher yielding securities were purchased, and a number of adjustable rate securities tied to various indexes continued to reprice higher during the year. The average yield on other interest-earning assets for the year ended December 31, 2024 increased 73 basis points to 6.27%, as compared to 5.54% for the year ended December 31, 2023, due to the rise in interest rates, as noted above.

Total interest expense was $273.4 million for the year ended December 31, 2024, an increase of $84.3 million, or 44.6%, from $189.1 million for the year ended December 31, 2023. The increase in interest expense was primarily attributable to a 109 basis point increase in the average cost of interest-bearing deposits and an increase in the average balance of deposits, coupled with an increase in interest on borrowings of $7.1 million due to an 11 basis point increase in the cost of total borrowings and an increase in the average balance of borrowings.

The Company’s net interest margin for the year ended December 31, 2024 decreased 34 basis points to 1.82%, when compared to 2.16% for the year ended December 31, 2023. The weighted average yield on interest-earning assets for the year ended December 31, 2024 increased 47 basis points to 4.61%, as compared to 4.14% for the year ended December 31, 2023. The average cost of interest-bearing liabilities increased 92 basis points to 3.44% for the year ended December 31, 2024 as compared to 2.52% for the year ended December 31, 2023. The increase in yields for the year ended December 31, 2024 was due to the impact of market rate increases between periods, with rates decreasing just prior to the fourth quarter of 2024. The net interest margin decreased for the year ended December 31, 2024, as the increase in the average cost of interest-bearing liabilities outweighed the increase in the average yield on interest-earning assets.

The provision for credit losses for the year ended December 31, 2024 was $14.5 million, an increase of $9.7 million, from $4.8 million for the year ended December 31, 2023. The increase in provision for credit losses during the year was primarily due to net charge-offs totaling $9.6 million and an increase in loan performance qualitative factors.

Non-interest income was $1.9 million for the year ended December 31, 2024, a decrease of $25.5 million, or 93.1%, from $27.4 million for the year ended December 31, 2023. The decrease was primarily attributable to an increase in the loss on securities transactions of $25.0 million, and a decrease in bank-owned life insurance income of $2.8 million, attributable to death benefits in 2023, partially offset by a $1.9 million increase in the fair value of Federal Home Loan Mortgage Corporation and Federal National Mortgage Association preferred stock included in equity securities.

Non-interest expense was $181.3 million for the year ended December 31, 2024, a decrease of $1.1 million, or 0.6%, from $182.4 million for the year ended December 31, 2023. The decrease was primarily attributable to a decrease in compensation and employee benefits expense of $11.4 million, partially offset by an increase in professional fee of $4.3 million, an increase in merger-related expenses of $1.1 million and an increase in loss on extinguishment of debt of $3.1 million, resulting primarily from the repositioning transaction, and an increase in other non-interest expense of $2.0 million. The decrease in compensation and employee benefits expense was the result of lower incentive compensation and a workforce reduction related to cost cutting strategies implemented during 2023 and 2024. The increase in professional fees was primarily related to an increase in legal, regulatory and compliance-related costs while the increase in other non-interest expense related to swap transactions. During the quarter ended December 31, 2024, the Company prepaid $170.0 million of FHLB borrowings as part of the previously discussed balance sheet repositioning transaction which resulted in a $3.3 million loss on the extinguishment of debt.

Income tax benefit was $4.3 million for the year ended December 31, 2024, a decrease of $14.2 million, as compared to income tax expense of $10.0 million for the year ended December 31, 2023, mainly due to a decrease in pre-tax income. The Company’s effective tax rate was 26.8% and 21.6% for the years ended December 31, 2024 and 2023, respectively.

Balance Sheet Summary

Total assets decreased $170.1 million, or 1.6%, to $10.5 billion at December 31, 2024 as compared to $10.6 billion at December 31, 2023. The decrease in total assets was primarily attributable to a decrease in cash and cash equivalents of $134.0 million, a decrease in debt securities available for sale of $67.6 million, and a decrease in Federal Home Loan Bank stock of $20.6 million, partially offset by an increase in loans receivable, net, of $37.5 million and an increase in other assets of $15.6 million.

Cash and cash equivalents decreased $134.0 million, or 31.7%, to $289.2 million at December 31, 2024 from $423.2 million at December 31, 2023. The decrease was primarily attributable to purchases of securities of $446.2 million, a decrease in borrowings of $448.1 million, and repurchases of common stock under our stock repurchase program of $5.9 million, partially offset by proceeds from the sale of securities of $321.2 million, principal repayments on securities of $185.6 million, and repayments on loans receivable, and an increase in total deposits of $249.6 million.

Debt securities available for sale decreased $67.6 million, or 6.2%, to $1.0 billion at December 31, 2024 from $1.1 billion at December 31, 2023. The decrease was attributable to sales of securities with an amortized cost of $357.1 million which resulted in a realized loss of $35.9 million, and repayments on securities of $140.5 million, which was partially offset by purchases of securities of $404.7 million and a decrease in the gross unrealized loss on securities of $34.9 million. The Company sold predominantly fixed rate, low-yielding debt securities and used the proceeds to repay high costing borrowings and purchase higher-yielding debt securities to improve future net interest rate margin.

Loans receivable, net, increased $37.5 million, or 0.5%, to $7.9 billion at December 31, 2024 from $7.8 billion at December 31, 2023. Multifamily loans, construction loans, and commercial business loans increased $51.5 million, $30.5 million, and $89.0 million, respectively, partially offset by decreases in one-to-four family real estate loans, commercial real estate loans and home equity loans and advances of $81.9 million, $37.2 million and $7.6 million, respectively. The allowance for credit losses for loans increased $4.9 million to $60.0 million at December 31, 2024 from $55.1 million at December 31, 2023. During the year ended December 31, 2024, the increase in the allowance for credit losses for loans was primarily due to net charge-offs of $9.6 million and an increase in loan performance qualitative factors.

Federal Home Loan Bank stock decreased $20.6 million, or 25.5%, to $60.4 million at December 31, 2024 from $81.0 million at December 31, 2023. The decrease was due to the redemption of stock required upon repaying FHLB borrowings.

Other assets increased $15.6 million, or 5.1%, to $324.0 million at December 31, 2024 from $308.4 million at December 31, 2023, primarily due to a $14.3 million increase in the Company’s pension plan balance, as the return on plan assets outpaced the growth in the plan’s obligations.

Total liabilities decreased $210.1 million, or 2.2%, to $9.4 billion at December 31, 2024 from $9.6 billion at December 31, 2023. The decrease was primarily attributable to a decrease in borrowings of $448.1 million, or 29.3%, partially offset by an increase in total deposits of $249.6 million, or 3.2%. The $448.1 million decrease in borrowings was primarily driven by a net decrease in long-term borrowings of $170.0 million, coupled with a decrease in short-term borrowings of $237.8 million. The decrease in long-term borrowings was mainly attributable to the prepayment of $170.0 million of long-term borrowings as part of the balance sheet repositioning transaction as described above. The increase in total deposits primarily consisted of increases in non-interest-bearing and interest-bearing demand deposits and certificates of deposit of $669,000, $54.8 million, and $255.8 million, respectively, partially offset by decreases in money market and savings and club accounts of $13.8 million and $47.8 million, respectively.

Total stockholders’ equity increased $40.0 million, or 3.8%, to $1.1 billion at December 31, 2024 from $1.0 billion at December 31, 2023. The increase in total stockholders’ equity was primarily attributable to the recognition of $8.0 million in stock based compensation expense and an increase of $48.2 million in other comprehensive income, which includes changes in unrealized losses on debt securities available for sale and unrealized gains on swap contracts, net of taxes. These increases were partially offset by a net loss of $11.7 million, and the repurchase of 365,116 shares of common stock at a cost of approximately $5.9 million, or $16.14 per share, under our stock repurchase program. Repurchases have been paused in order to retain capital.

Asset Quality

The Company’s non-performing loans at December 31, 2024 totaled $21.7 million, or 0.28% of total gross loans, as compared to $12.6 million, or 0.16% of total gross loans, at December 31, 2023. The $9.1 million increase in non-performing loans was primarily attributable to an increase in non-performing commercial business loans of $3.3 million and an increase in non-performing one-to-four family real estate loans of $5.6 million. The increase in non-performing commercial business loans primarily consists of two loans totaling $6.4 million at December 31, 2024, partially offset by the charge-off of a $3.7 million loan to a technology company during 2024. The increase in non-performing one-to-four family real estate loans was due to an increase in the number of loans from 17 non-performing loans at December 31, 2023 to 32 loans at December 31, 2024. Non-performing assets as a percentage of total assets totaled 0.22% at December 31, 2024 as compared to 0.12% at December 31, 2023.

For the quarter ended December 31, 2024, net charge-offs totaled $1.4 million, as compared to $173,000 in net charge-offs recorded for the quarter ended December 31, 2023. For the year ended December 31, 2024, net charge-offs totaled $9.6 million, as compared to $2.5 million in net charge-offs recorded for the year ended December 31, 2023. Net charge-offs for the year ended December 31, 2024 included charge-offs related to 17 commercial business loans totaling $9.2 million. Recoveries on previously charged-off loans for the quarter ended December 31, 2024, and the year ended December 31, 2024, totaled approximately $88,000 and $1.4 million, respectively.

The Company’s allowance for credit losses on loans was $60.0 million, or 0.76% of total gross loans, at December 31, 2024, compared to $55.1 million, or 0.70% of total gross loans, at December 31, 2023. The increase in the allowance for credit losses for loans was primarily due to net charge-offs of $9.6 million and an increase in loan performance qualitative factors.

Additional Liquidity, Loan, and Deposit Information

The Company services a diverse retail and commercial deposit base through its 69 branches. With over 215,000 accounts, the average deposit account balance was approximately $38,000 at December 31, 2024.

Deposit balances are summarized as follows:

	At December 31, 2024				At September 30, 2024
	Balance		Weighted Average Rate		Balance		Weighted Average Rate
	(Dollars in thousands)

Non-interest-bearing demand	$	1,438,030	—	%	$	1,406,152	—	%
Interest-bearing demand		2,021,312	2.19			1,980,298	2.41
Money market accounts		1,241,691	2.82			1,239,204	2.92
Savings and club deposits		652,501	0.75			649,858	0.79
Certificates of deposit		2,742,615	4.24			2,682,547	4.45
Total deposits	$	8,096,149	2.47	%	$	7,958,059	2.62	%

The Company continues to maintain strong liquidity and capital positions. The Company had no outstanding borrowings from the Federal Reserve Discount Window at December 31, 2024. As of December 31, 2024, the Company had immediate access to approximately $2.7 billion of funding, with additional unpledged loan collateral available to pledge is approximately $2.1 billion.

At December 31, 2024, the Company’s non-performing commercial real estate loans totaled $2.9 million, or 0.04%, of the total loans receivable loan portfolio balance.

The following table presents multifamily real estate, owner occupied commercial real estate, and the components of investor owned commercial real estate loans included in the real estate loan portfolio.

	At December 31, 2024
	(Dollars in thousands)
	Balance		% of Gross Loans		Weighted Average Loan to Value Ratio		Weighted Average Debt Service Coverage
Multifamily Real Estate	$	1,460,641	18.4	%	58.0	%	1.59	x

Owner Occupied Commercial Real Estate	$	688,341	8.7	%	53.3	%	2.22	x

Investor Owned Commercial Real Estate:
Retail / Shopping centers	$	506,544	6.4	%	51.6	%	1.50	x
Mixed Use		214,148	2.7		57.3		1.58
Industrial / Warehouse		383,585	4.8		54.7		1.69
Non-Medical Office		193,569	2.4		50.8		1.65
Medical Office		120,381	1.5		58.5		1.46
Single Purpose		96,907	1.2		52.3		3.13
Other		136,408	1.7		47.8		1.76
Total	$	1,651,542	20.9	%	53.2	%	1.69

Total Multifamily and Commercial Real Estate Loans	$	3,800,524	48.0	%	55.1	%	1.75	x

At December 31, 2024, the Company had less than $1.0 million in loan exposure to office or rent stabilized multifamily loans in New York City.

Annual Meeting of Stockholders

On January 28, 2025, the Company also announced that its annual meeting of stockholders will be held on June 5, 2025.

About Columbia Financial, Inc.

The consolidated financial results include the accounts of Columbia Financial, Inc., its wholly-owned subsidiary Columbia Bank (the “Bank”) and the Bank’s wholly-owned subsidiaries. Columbia Financial, Inc. is a Delaware corporation organized as Columbia Bank’s mid-tier stock holding company. Columbia Financial, Inc. is a majority-owned subsidiary of Columbia Bank, MHC. Columbia Bank is a federally chartered savings bank headquartered in Fair Lawn, New Jersey that operates 69 full-service banking offices and offers traditional financial services to consumers and businesses in its market area.

Forward-Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “would,” “expects,” “projects,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, adverse conditions in the capital and debt markets and the impact of such conditions on the Company’s business activities; changes in interest rates, higher inflation and their impact on national and local economic conditions; changes in monetary and fiscal policies of the U.S. Treasury, the Board of Governors of the Federal Reserve System and other governmental entities; the impact of legal, judicial and regulatory proceedings or investigations, competitive pressures from other financial institutions; the effects of general economic conditions on a national basis or in the local markets in which the Company operates, including changes that adversely affect a borrowers’ ability to service and repay the Company’s loans; the effect of acts of terrorism, war or pandemics,, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; changes in the value of securities in the Company’s portfolio; changes in loan default and charge-off rates; fluctuations in real estate values; the adequacy of loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and securities; legislative changes and changes in government regulation; changes in accounting standards and practices; the risk that goodwill and intangibles recorded in the Company’s consolidated financial statements will become impaired; cyber-attacks, computer viruses and other technological risks that may breach the security of our systems and allow unauthorized access to confidential information; the inability of third party service providers to perform; demand for loans in the Company’s market area; the Company’s ability to attract and maintain deposits and effectively manage liquidity; risks related to the implementation of acquisitions, dispositions, and restructurings; the successful implementation of our December 2024 balance sheet repositioning transaction; the risk that the Company may not be successful in the implementation of its business strategy, or its integration of acquired financial institutions and businesses, and changes in assumptions used in making such forward-looking statements which are subject to numerous risks and uncertainties, including but not limited to, those set forth in Item 1A of the Company’s Annual Report on Form 10-K and those set forth in the Company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all as filed with the Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website, www.sec.gov. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, the Company’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Non-GAAP Financial Measures

Reported amounts are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods presented. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

The Company also provides measurements and ratios based on tangible stockholders’ equity. These measures are commonly utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

A reconciliation of GAAP to non-GAAP financial measures are included at the end of this press release. See “Reconciliation of GAAP to Non-GAAP Financial Measures”.


COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(In thousands)

	December 31,
		2024		2023
Assets	(Unaudited)
Cash and due from banks	$	289,113	$	423,140
Short-term investments		110		109
Total cash and cash equivalents		289,223		423,249

Debt securities available for sale, at fair value		1,025,946		1,093,557
Debt securities held to maturity, at amortized cost (fair value of $350,153, and $357,177 at December 31, 2024 and 2023, respectively)		392,840		401,154
Equity securities, at fair value		6,673		4,079
Federal Home Loan Bank stock		60,387		81,022

Loans receivable		7,916,928		7,874,537
Less: allowance for credit losses		59,958		55,096
Loans receivable, net		7,856,970		7,819,441

Accrued interest receivable		40,383		39,345
Office properties and equipment, net		81,772		83,577
Bank-owned life insurance		274,908		268,362
Goodwill and intangible assets		121,008		123,350
Other real estate owned		1,334		—
Other assets		324,049		308,432
Total assets	$	10,475,493	$	10,645,568

Liabilities and Stockholders’ Equity
Liabilities:
Deposits	$	8,096,149	$	7,846,556
Borrowings		1,080,600		1,528,695
Advance payments by borrowers for taxes and insurance		45,453		43,509
Accrued expenses and other liabilities		172,915		186,473
Total liabilities		9,395,117		9,605,233

Stockholders’ equity:
Total stockholders’ equity		1,080,376		1,040,335
Total liabilities and stockholders’ equity	$	10,475,493	$	10,645,568

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)

	Three Months Ended December 31,					Year Ended December 31,
		2024			2023		2024			2023
Interest income:	(Unaudited)					(Unaudited)
Loans receivable	$	96,202		$	91,744	$	382,266		$	343,770
Debt securities available for sale and equity securities		9,793			7,077		36,411			28,120
Debt securities held to maturity		2,479			2,370		9,966			9,708
Federal funds and interest-earning deposits		3,309			4,828		15,181			8,188
Federal Home Loan Bank stock dividends		1,843			1,531		7,602			5,192
Total interest income		113,626			107,550		451,426			394,978
Interest expense:
Deposits		51,943			43,429		202,383			125,162
Borrowings		15,256			18,782		71,061			63,940
Total interest expense		67,199			62,211		273,444			189,102

Net interest income		46,427			45,339		177,982			205,876

Provision for credit losses		2,876			1,155		14,451			4,787

Net interest income after provision for credit losses		43,551			44,184		163,531			201,089

Non-interest income:
Demand deposit account fees		1,809			1,330		6,507			5,145
Bank-owned life insurance		2,066			4,456		7,319			10,126
Title insurance fees		570			560		2,505			2,400
Loan fees and service charges		1,193			1,144		4,483			4,510
Loss on securities transactions		(34,595	)		—		(35,851	)		(10,847	)
Change in fair value of equity securities		2,169			446		2,594			695
Gain on sale of loans		81			154		906			1,214
Other non-interest income		2,991			3,159		13,431			14,136
Total non-interest income		(23,716	)		11,249		1,894			27,379

Non-interest expense:
Compensation and employee benefits		26,579			28,463		109,489			120,846
Occupancy		5,861			5,590		23,482			22,927
Federal deposit insurance premiums		1,829			5,015		7,581			8,639
Advertising		457			498		2,510			2,805
Professional fees		2,567			3,083		14,164			9,824
Data processing and software expenses		3,572			4,154		15,578			15,039
Merger-related expenses		928			326		1,665			606
Loss on extinguishment of debt		3,447			300		3,447			300
Other non-interest expense		1,356			570		3,419			1,431
Total non-interest expense		46,596			47,999		181,335			182,417

(Loss) income before income tax (benefit) expense		(26,761	)		7,434		(15,910	)		46,051

Income tax (benefit) expense		(5,538	)		865		(4,257	)		9,965

Net (loss) income	$	(21,223	)	$	6,569	$	(11,653	)	$	36,086

(Loss) earnings per share-basic	$	(0.21	)	$	0.06	$	(0.11	)	$	0.35
(Loss) earnings per share-diluted	$	(0.21	)	$	0.06	$	(0.11	)	$	0.35
Weighted average shares outstanding-basic		101,686,108			101,656,890		101,676,758			102,656,388
Weighted average shares outstanding-diluted		101,945,750			101,817,194		101,839,507			102,894,969

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

	For the Three Months Ended December 31,
		2024							2023
	Average Balance			Interest and Dividends		Yield / Cost		Average Balance			Interest and Dividends		Yield / Cost
	(Dollars in thousands)
Interest-earnings assets:
Loans	$	7,839,416		$	96,202	4.88	%	$	7,816,272		$	91,744	4.66	%
Securities		1,635,028			12,272	2.99	%		1,453,863			9,447	2.58	%
Other interest-earning assets		341,393			5,152	6.00	%		447,369			6,359	5.64	%
Total interest-earning assets		9,815,837			113,626	4.61	%		9,717,504			107,550	4.39	%
Non-interest-earning assets		874,522							854,857
Total assets	$	10,690,359						$	10,572,361

Interest-bearing liabilities:
Interest-bearing demand	$	2,027,003		$	13,686	2.69	%	$	2,000,406		$	12,308	2.44	%
Money market accounts		1,235,421			7,630	2.46	%		1,119,290			8,962	3.18	%
Savings and club deposits		649,686			1,209	0.74	%		714,664			846	0.47	%
Certificates of deposit		2,696,740			29,418	4.34	%		2,416,773			21,313	3.50	%
Total interest-bearing deposits		6,608,850			51,943	3.13	%		6,251,133			43,429	2.76	%
FHLB advances		1,298,686			15,102	4.63	%		1,494,794			18,592	4.93	%
Notes payable		—			—	—	%		916			23	9.96	%
Junior subordinated debentures		7,036			154	8.71	%		7,013			167	9.45	%
Total borrowings		1,305,722			15,256	4.65	%		1,502,723			18,782	4.96	%
Total interest-bearing liabilities		7,914,572		$	67,199	3.38	%		7,753,856		$	62,211	3.18	%

Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,460,125							1,441,005
Other non-interest-bearing liabilities		241,582							247,545
Total liabilities		9,616,279							9,442,406
Total stockholders’ equity		1,074,080							1,129,955
Total liabilities and stockholders’ equity	$	10,690,359						$	10,572,361

Net interest income				$	46,427						$	45,339
Interest rate spread						1.23	%						1.21	%
Net interest-earning assets	$	1,901,265						$	1,963,648
Net interest margin						1.88	%						1.85	%
Ratio of interest-earning assets to interest-bearing liabilities		124.02	%						125.32	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Average Balances/Yields

	For the Years Ended December 31,
		2024							2023
	Average Balance			Interest and Dividends		Yield / Cost		Average Balance			Interest and Dividends		Yield / Cost
	(Dollars in thousands)
Interest-earnings assets:
Loans	$	7,801,939		$	382,266	4.90	%	$	7,748,096		$	343,770	4.44	%
Securities		1,622,519			46,377	2.86	%		1,540,726			37,828	2.46	%
Other interest-earning assets		363,370			22,783	6.27	%		241,520			13,380	5.54	%
Total interest-earning assets		9,787,828		$	451,426	4.61	%		9,530,342		$	394,978	4.14	%
Non-interest-earning assets		865,684							840,215
Total assets	$	10,653,512						$	10,370,557

Interest-bearing liabilities:
Interest-bearing demand	$	1,986,215		$	55,360	2.79	%	$	2,183,333		$	37,774	1.73	%
Money market accounts		1,235,495			32,977	2.67	%		951,174			24,296	2.55	%
Savings and club deposits		667,836			5,130	0.77	%		793,303			2,231	0.28	%
Certificates of deposit		2,587,360			108,916	4.21	%		2,229,042			60,861	2.73	%
Total interest-bearing deposits		6,476,906			202,383	3.12	%		6,156,852			125,162	2.03	%
FHLB advances		1,454,674			70,418	4.84	%		1,315,401			62,398	4.74	%
Notes payable		—			—	—	%		22,780			918	4.03	%
Junior subordinated debentures		7,023			640	9.11	%		7,054			624	8.85	%
Other borrowings		55			3	5.45	%		—			—	—	%
Total borrowings		1,461,752			71,061	4.86	%		1,345,235			63,940	4.75	%
Total interest-bearing liabilities		7,938,658		$	273,444	3.44	%		7,502,087		$	189,102	2.52	%

Non-interest-bearing liabilities:
Non-interest-bearing deposits		1,420,104							1,539,354
Other non-interest-bearing liabilities		242,290							231,018
Total liabilities		9,601,052							9,272,459
Total stockholders’ equity		1,052,460							1,098,098
Total liabilities and stockholders’ equity	$	10,653,512						$	10,370,557

Net interest income				$	177,982						$	205,876
Interest rate spread						1.17	%						1.62	%
Net interest-earning assets	$	1,849,170						$	2,028,255
Net interest margin						1.82	%						2.16	%
Ratio of interest-earning assets to interest-bearing liabilities		123.29	%						127.04	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Components of Net Interest Rate Spread and Margin

	Average Yields/Costs by Quarter
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Yield on interest-earning assets:
Loans	4.88	%	5.00	%	4.93	%	4.79	%	4.66	%
Securities	2.99		2.90		2.89		2.65		2.58
Other interest-earning assets	6.00		6.72		6.30		6.06		5.64
Total interest-earning assets	4.61	%	4.70	%	4.64	%	4.50	%	4.39	%

Cost of interest-bearing liabilities:
Total interest-bearing deposits	3.13	%	3.21	%	3.14	%	3.02	%	2.76	%
Total borrowings	4.65		4.87		4.92		4.98		4.96
Total interest-earning liabilities	3.38	%	3.52	%	3.49	%	3.38	%	3.18	%

Interest rate spread	1.23	%	1.18	%	1.15	%	1.12	%	1.21	%
Net interest margin	1.88	%	1.84	%	1.81	%	1.75	%	1.85	%

Ratio of interest-earning assets to interest-bearing liabilities	124.02	%	123.06	%	123.03	%	123.06	%	125.32	%

COLUMBIA FINANCIAL, INC. AND SUBSIDIARIES
Selected Financial Highlights

	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023

SELECTED FINANCIAL RATIOS⁽¹⁾:
Return on average assets	(0.79	)%	0.23	%	0.17	%	(0.04	)%	0.25	%
Core return on average assets	0.42	%	0.23	%	0.20	%	0.02	%	0.38	%
Return on average equity	(7.86	)%	2.32	%	1.77	%	(0.45	)%	2.31	%
Core return on average equity	4.09	%	2.29	%	2.06	%	0.18	%	3.56	%
Core return on average tangible equity	4.74	%	2.58	%	2.34	%	0.20	%	3.99	%
Interest rate spread	1.23	%	1.18	%	1.15	%	1.12	%	1.21	%
Net interest margin	1.88	%	1.84	%	1.81	%	1.75	%	1.85	%
Non-interest income to average assets	(0.88	)%	0.33	%	0.35	%	0.28	%	0.42	%
Non-interest expense to average assets	1.73	%	1.60	%	1.74	%	1.74	%	1.80	%
Efficiency ratio	205.17	%	78.95	%	86.83	%	91.96	%	84.82	%
Core efficiency ratio	73.68	%	79.14	%	85.34	%	88.39	%	76.93	%
Average interest-earning assets to average interest-bearing liabilities	124.02	%	123.06	%	123.03	%	123.06	%	125.32	%
Net charge-offs to average outstanding loans	0.07	%	0.14	%	0.03	%	0.26	%	0.01	%

^{(1) Ratios are annualized when appropriate.}

ASSET QUALITY:
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
	(Dollars in thousands)

Non-accrual loans	$	21,701		$	28,014		$	25,281		$	22,935		$	12,618
90+ and still accruing		—			—			—			—			—
Non-performing loans		21,701			28,014			25,281			22,935			12,618
Real estate owned		1,334			1,974			1,974			—			—
Total non-performing assets	$	23,035		$	29,988		$	27,255		$	22,935		$	12,618

Non-performing loans to total gross loans		0.28	%		0.36	%		0.33	%		0.30	%		0.16	%
Non-performing assets to total assets		0.22	%		0.28	%		0.25	%		0.22	%		0.12	%
Allowance for credit losses on loans (“ACL”)	$	59,958		$	58,495		$	57,062		$	55,401		$	55,096
ACL to total non-performing loans		276.29	%		208.81	%		225.71	%		241.56	%		436.65	%
ACL to gross loans		0.76	%		0.75	%		0.73	%		0.71	%		0.70	%

LOAN DATA:
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
	(In thousands)
Real estate loans:
One-to-four family	$	2,710,937		$	2,737,190		$	2,764,177		$	2,778,932		$	2,792,833
Multifamily		1,460,641			1,399,000			1,409,316			1,429,369			1,409,187
Commercial real estate		2,339,883			2,312,759			2,316,252			2,318,178			2,377,077
Construction		473,573			510,439			462,880			437,566			443,094
Commercial business loans		622,000			586,447			554,768			538,260			533,041
Consumer loans:
Home equity loans and advances		259,009			261,041			260,427			260,786			266,632
Other consumer loans		3,404			2,877			2,689			2,601			2,801
Total gross loans		7,869,447			7,809,753			7,770,509			7,765,692			7,824,665
Purchased credit deteriorated loans		11,686			11,795			12,150			14,945			15,089
Net deferred loan costs, fees and purchased premiums and discounts		35,795			35,642			36,352			34,992			34,783
Allowance for credit losses		(59,958	)		(58,495	)		(57,062	)		(55,401	)		(55,096	)
Loans receivable, net	$	7,856,970		$	7,798,695		$	7,761,949		$	7,760,228		$	7,819,441

CAPITAL RATIOS:
	December 31,
	2024⁽¹⁾		2023
Company:
Total capital (to risk-weighted assets)	14.20	%	14.08	%
Tier 1 capital (to risk-weighted assets)	13.40	%	13.32	%
Common equity tier 1 capital (to risk-weighted assets)	13.31	%	13.23	%
Tier 1 capital (to adjusted total assets)	10.02	%	10.04	%

Columbia Bank:
Total capital (to risk-weighted assets)	14.41	%	14.02	%
Tier 1 capital (to risk-weighted assets)	13.56	%	13.22	%
Common equity tier 1 capital (to risk-weighted assets)	13.56	%	13.22	%
Tier 1 capital (to adjusted total assets)	9.64	%	9.48	%

^{(1) Estimated ratios at December 31, 2024.}

Reconciliation of GAAP to Non-GAAP Financial Measures

Book and Tangible Book Value per Share
	December 31,
		2024			2023
	(Dollars in thousands)
Total stockholders’ equity	$	1,080,376		$	1,040,335
Less: goodwill		(110,715	)		(110,715	)
Less: core deposit intangible		(8,964	)		(11,155	)
Total tangible stockholders’ equity	$	960,697		$	918,465

Shares outstanding		104,759,185			104,918,905

Book value per share	$	10.31		$	9.92
Tangible book value per share	$	9.17		$	8.75

Reconciliation of Core Net Income
	Three Months Ended December 31,					Years Ended December 31,
		2024			2023		2024			2023
	(In thousands)
Net (loss) income	$	(21,223	)	$	6,569	$	(11,653	)	$	36,086
Add: loss on securities transactions, net of tax		28,952			—		30,082			9,249
Add: FDIC special assessment, net of tax		—			3,009		385			3,009
Add: severance expense from reduction in workforce, net of tax		—			—		67			1,390
Add: merger-related expenses, net of tax		777			288		1,468			529
Add: loss on extinguishment of debt, net of tax		2,885			265		2,885			265
Add: litigation expenses, net of tax		—			—		—			262
Core net income	$	11,391		$	10,131	$	23,234		$	50,790

Return on Average Assets
	Three Months Ended December 31,						Years Ended December 31,
		2024			2023			2024			2023
	(Dollars in thousands)
Net (loss) income	$	(21,223	)	$	6,569		$	(11,653	)	$	36,086

Average assets	$	10,690,359		$	10,572,361		$	10,653,512		$	10,370,557

Return on average assets		(0.79	)%		0.25	%		(0.11	)%		0.35	%

Core net income	$	11,391		$	10,131		$	23,234		$	50,790

Core return on average assets		0.42	%		0.38	%		0.22	%		0.49	%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Return on Average Equity
	Three Months Ended December 31,						Years Ended December 31,
		2024			2023			2024			2023
	(Dollars in thousands)
Total average stockholders’ equity	$	1,074,080		$	1,129,955		$	1,052,460		$	1,098,098
Add: loss on securities transactions, net of tax		28,952			—			30,082			9,249
Add: FDIC special assessment, net of tax		—			3,009			385			3,009
Add: severance expense from reduction in workforce, net of tax		—			—			67			1,390
Add: merger-related expenses, net of tax		777			288			1,468			529
Add: loss on extinguishment of debt, net of tax		2,885			265			2,885			265
Add: litigation expenses, net of tax		—			—			—			262
Core average stockholders’ equity	$	1,106,694		$	1,133,517		$	1,087,347		$	1,112,802

Return on average equity		(7.86	)%		2.31	%		(1.11	)%		3.29	%

Core return on core average equity		4.09	%		3.56	%		2.14	%		4.56	%

Return on Average Tangible Equity
	Three Months Ended December 31,						Years Ended December 31,
		2024			2023			2024			2023
	(Dollars in thousands)
Total average stockholders’ equity	$	1,074,080		$	1,129,955		$	1,052,460		$	1,098,098
Less: average goodwill		(110,715	)		(110,715	)		(110,715	)		(110,715	)
Less: average core deposit intangible		(9,311	)		(11,524	)		(10,119	)		(12,398	)
Total average tangible stockholders’ equity	$	954,054		$	1,007,716		$	931,626		$	974,985

Core return on average tangible equity		4.74	%		3.99	%		2.49	%		5.21	%

Reconciliation of GAAP to Non-GAAP Financial Measures (continued)

Efficiency Ratios
	Three Months Ended December 31,						Years Ended December 31,
		2024			2023			2024			2023
	(Dollars in thousands)
Net interest income	$	46,427		$	45,339		$	177,982		$	205,876
Non-interest income		(23,716	)		11,249			1,894			27,379
Total income	$	22,711		$	56,588		$	179,876		$	233,255

Non-interest expense	$	46,596		$	47,999		$	181,335		$	182,417

Efficiency ratio		205.17	%		84.82	%		100.81	%		78.20	%

Non-interest income	$	(23,716	)	$	11,249		$	1,894		$	27,379
Add: loss on securities transactions		34,595			—			35,851			10,847
Core non-interest income	$	10,879		$	11,249		$	37,745		$	38,226

Non-interest expense	$	46,596		$	47,999		$	181,335		$	182,417
Less: FDIC special assessment		—			(3,840	)		(439	)		(3,840	)
Less: severance expense from reduction in workforce		—			—			(74	)		(1,605	)
Less: merger-related expenses		(928	)		(326	)		(1,665	)		(606	)
Less: loss on extinguishment of debt		(3,447	)		(300	)		(3,447	)		(300	)
Less: litigation expenses		—			—			—			(317	)
Core non-interest expense	$	42,221		$	43,533		$	175,710		$	175,749

Core efficiency ratio		73.68	%		76.93	%		81.45	%		72.00	%

Columbia Financial, Inc.
Investor Relations Department
(833) 550-0717

The MIL Network –

January 29, 2025

MIL-OSI: CNB Financial Corporation Reports Fourth Quarter and Full-Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

CLEARFIELD, Pa., Jan. 28, 2025 (GLOBE NEWSWIRE) — CNB Financial Corporation (“Corporation”) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the three and twelve months ended December 31, 2024.

Executive Summary

Net income available to common shareholders (“earnings”) was $14.0 million, or $0.66 per diluted share, for the three months ended December 31, 2024, compared to earnings of $12.9 million, or $0.61 per diluted share, for the three months ended September 30, 2024. The quarterly increase was a result of an increase in net interest income combined with a reduction in non-interest expense, partially offset by a decrease in non-interest income, as discussed in more detail below. The increase in fourth quarter 2024 earnings and diluted earnings per share when compared to earnings of $12.9 million, or $0.62 per diluted share, in the quarter ended December 31, 2023 was primarily due to increases in both net interest income and non-interest income, coupled with a decrease in non-interest expense, partially offset by an increase in the provision for credit losses.
Earnings were $50.3 million, or $2.39 per diluted share, for the twelve months ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the twelve months ended December 31, 2023. The decrease in earnings and diluted earnings per share comparing the twelve months ended December 31, 2024 to the twelve months ended December 31, 2023 was primarily due to the rise in deposit costs year over year, as discussed in more detail below.
At December 31, 2024, loans totaled $4.5 billion excluding the balances of syndicated loans. This adjusted total of $4.5 billion in loans represented a quarterly increase of $6.6 million, or 0.15% (0.58% annualized), compared to the same adjusted total loans measured as of September 30, 2024, and a year-over-year increase of $169.4 million, or 3.88%, compared to the same adjusted total loans measured as of December 31, 2023. The increase in loans for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 was primarily driven by commercial and residential real estate growth across our regions, including growth in CNB’s Private Banking division. This growth was partially offset by a larger volume of loan payoffs during the quarter. The year-over-year growth in loans as of December 31, 2024 compared to loans as of December 31, 2023 resulted primarily from growth in commercial and residential real estate loans in the Corporation’s more recent expansion markets of Cleveland, OH and Roanoke, VA. Additional growth occurred in commercial and residential real estate loans in the Columbus, OH market, commercial industrial loans in the Erie, PA market, and residential real estate loans in CNB Bank’s Private Banking division.
- At December 31, 2024, the Corporation’s balance sheet reflected an increase in syndicated lending balances of $10.4 million compared to September 30, 2024. The increase in syndicated lending balances was the result of the Corporation identifying loans with the combination of meeting the Corporation’s traditionally disciplined high credit quality standards, and with favorable yields versus investment alternatives. Year over year, the Corporation’s balance sheet reported a decrease in syndicated lending balances of $28.8 million compared to December 31, 2023, resulting from scheduled paydowns or early payoffs of certain syndicated loans. The syndicated loan portfolio totaled $79.9 million, or 1.73% of total loans, at December 31, 2024, compared to $69.5 million, or 1.51% of total loans, at September 30, 2024 and $108.7 million, or 2.43% of total loans, at December 31, 2023. The Corporation closely manages the level and composition of its syndicated loan portfolio to ensure it continues to provide a high credit quality, profitable use of excess liquidity to complement the Corporation’s loan growth from its in-market customer relationships.
At December 31, 2024, total deposits were $5.4 billion, reflecting a quarterly increase of $154.4 million, or 2.96% (11.78% annualized), compared to September 30, 2024, and a year-over-year increase of $372.6 million, or 7.45%, compared to total deposits measured as of December 31, 2023. The increase in deposit balances compared to September 30, 2024 was primarily attributable to an increase in retail and business savings and retail time deposits. Additional deposit and liquidity profile details were as follows:
- At December 31, 2024, the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 27.71% of total CNB Bank deposits. However, when excluding $101.9 million of affiliate company deposits and $429.0 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $986.0 million, or approximately 18.01% of total CNB Bank deposits as of December 31, 2024.
  - The level of adjusted uninsured deposits at December 31, 2024 was relatively unchanged compared to the level at September 30, 2024, when the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 28.50% of total CNB Bank deposits. Excluding $103.1 million of affiliate company deposits and $462.7 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $950.6 million, or approximately 17.87% of total CNB Bank deposits as of September 30, 2024.
- At December 31, 2024, the average deposit balance per account for CNB Bank was approximately $34 thousand, which has remained consistently at this level for an extended period. CNB Bank has experienced increases in the volume of business deposits, as well as retail customer household deposits, including those that continue to be added after the 2023 launches of (i) CNB Bank’s “At Ease” account, a service for U.S. service member and veteran families, and (ii) CNB Bank’s women-focused banking division, Impressia Bank.
- At December 31, 2024, the Corporation had $375.0 million of cash equivalents held in CNB Bank’s interest-bearing deposit account at the Federal Reserve. These excess funds, when combined with collective contingent liquidity resources of $4.6 billion including (i) available borrowing capacity from the Federal Home Bank of Pittsburgh (“FHLB”) and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in the total on-hand and contingent liquidity sources for the Corporation as of December 31, 2024 to be approximately 5.0 times the estimated amount of adjusted uninsured deposit balances discussed above.
At December 31, 2024, September 30, 2024 and December 31, 2023, the Corporation had no outstanding short-term borrowings from the FHLB or the Federal Reserve’s Discount Window.
At December 31, 2024, the Corporation’s pre-tax net unrealized losses on available-for-sale and held-to-maturity securities totaled $74.8 million, or 12.25% of total shareholders’ equity, compared to $62.5 million, or 10.30% of total shareholders’ equity, at September 30, 2024 and $82.2 million, or 14.40% of total shareholders’ equity, at December 31, 2023. The change in unrealized losses during the fourth quarter 2024 was primarily due to changes in the yield curve compared to the third quarter of 2024, coupled with the Corporation’s scheduled bond maturities, which were all realized at par. Importantly, all regulatory capital ratios for the Corporation would still exceed regulatory “well-capitalized” levels as of December 31, 2024, September 30, 2024, and December 31, 2023 if the net unrealized losses at the respective dates were fully recognized. Additionally, the Corporation maintained approximately $100.7 million of liquid funds at its holding company, which more than covers the $74.8 million in unrealized losses on investments held primarily in its wholly-owned banking subsidiary, as an immediately available source of contingent capital to be down-streamed to CNB Bank, if necessary.
Total nonperforming assets were approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $42.0 million, or 0.70% of total assets, as of September 30, 2024, and $31.8 million, or 0.55% of total assets, as of December 31, 2023. The increase in nonperforming assets for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was primarily due to one commercial multifamily relationship totaling $20.4 million with a specific reserve balance of $885 thousand. Management does not believe there is a risk of significant additional loss exposure beyond the specific reserves related to this loan relationship and is actively working with the borrower and their real estate broker to facilitate the sale of the property. The increase in non-performing assets at December 31, 2024 compared to December 31, 2023 was due to the loan relationship discussed above, as well as certain commercial and industrial and owner-occupied commercial real estate relationships as previously disclosed in the second quarter of 2024 and a commercial relationship (consisting of various loan types) in the third quarter of 2024. For the three months ended December 31, 2024, net loan charge-offs were $2.1 million, or 0.19% (annualized) of average total loans and loans held for sale, compared to $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended September 30, 2024, and $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended December 31, 2023. The increase in net loan charge-offs during the quarter ended December 31, 2024 was primarily related to (i) an owner-occupied commercial real estate relationship with a charge-off of $750 thousand (remaining balance of approximately $3.8 million with specific reserves of $1.4 million), and (ii) a nonowner-occupied commercial real estate relationship for $625 thousand (no remaining balance).
Pre-provision net revenue (“PPNR”), a non-GAAP measure, was $21.6 million for the three months ended December 31, 2024, compared to $19.7 million and $18.4 million for the three months ended September 30, 2024 and December 31, 2023, respectively.¹ The fourth quarter 2024 PPNR, when compared to the third quarter of 2024, reflected increases in net interest income and reductions in non-interest expense, partially offset by a reduction in quarterly non-interest income. The increase in PPNR for the three months ended December 31, 2024, compared to the three months ended December 31, 2023 was primarily attributable to the increases in net interest income and non-interest income. PPNR was $76.6 million for the twelve months ended December 31, 2024 compared to $77.8 million for the twelve months ended December 31, 2023.¹ The decrease in PPNR for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 was primarily attributable to the significant year-over-year increase in deposit costs, coupled with increases in certain personnel costs (primarily from new offices and personnel added in the recently added expansion markets of Cleveland, OH and Roanoke, VA). Also, the Corporation incurred additional technology expenses for the recently completed full implementation of certain franchise-wide business development and customer relationship management applications.

¹ This release contains references to certain financial measures that are not defined under U.S. Generally Accepted Accounting Principles (“GAAP”). Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. A reconciliation of these non-GAAP financial measures is provided in the “Reconciliation of Non-GAAP Financial Measures” section.

Commenting on the Corporation’s positive quarterly results, Michael Peduzzi, President and CEO of both the Corporation and CNB Bank, stated, “CNB’s performance for the fourth quarter of 2024 continued the favorable trend of increased earnings for each of the most recent three quarters. This favorable earnings trend is the result of a continued implementation of the fundamental strategic initiatives that we continue to focus on – deepening existing customer relationships while adding new clients in both interest-earning and fee-based activities, remaining committed to our traditionally disciplined loan and investment underwriting standards, employing risk-based and market-relevant loan and deposit pricing, and continuing solid risk measurement and management practices. While we remain confident in the continued growth and increasing profitability of our current multi-state core franchise, we are very excited by the prospect of expanding our business development model across all of our financial services, and realizing even greater back-office efficiencies of operating scale, with our recently announced plan to add over $2 billion in assets with our intended acquisition of ESSA Bancorp, Inc. (“ESSA Bancorp”) and its banking subsidiary, ESSA Bank & Trust, based primarily in northeastern Pennsylvania (collectively, “ESSA”).

With full consideration of the impact of the prospective merger and the additional skilled employees and resources from both internal leadership development efforts and the ESSA employee base, we remain intently focused on achieving qualitative growth across our commercial, retail, and wealth management activities, while controlling the growth in staffing levels and overhead costs. Our collective Board and employee team is committed to our core strategic principles, including a focus on delivering increasing profitable and desirable financial services, while striving to most effectively realize the accretive value of our prospective acquisition, for the mutually beneficial and sustainable success of our valued investors and growing client base across our expanding franchise.”

Other Balance Sheet Highlights

Book value per common share was $26.34 at December 31, 2024, reflecting an increase from $26.13 at September 30, 2024 and $24.57 at December 31, 2023. Tangible book value per common share, a non-GAAP measure, was $24.24 as of December 31, 2024, reflecting an increase of $0.21, or 3.48% (annualized) from $24.03 as of September 30, 2024 and a year-over-year increase of $1.78, or 7.93%, from $22.46 as of December 31, 2023.¹ The increases in book value per common share and tangible book value per common share from September 30, 2024 to December 31, 2024 were primarily due to a $10.2 million increase in retained earnings, partially offset by a $6.3 million increased in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio for the fourth quarter of 2024. The increases in book value per common share and tangible book value per common share from December 31, 2023 to December 31, 2024 were primarily due to (i) a $35.4 million increase in retained earnings over the twelve months ended December 31, 2024, (ii) the Corporation’s repurchase of 23,988 common shares at a weighted average price of $18.38 in the second quarter of 2024, and (iii) a $2.5 million decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio for the past twelve months.

Loan Portfolio Profile

As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and if any concentration risk issues could lead to additional credit loss exposure. In the current post-pandemic and relatively inflationary economic environment, the Corporation has continued to evaluate its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio. Even given the Corporation’s historically sound underwriting protocols and high credit quality standards for borrowers in the commercial real estate industry segments, the Corporation monitors numerous relevant sensitivity elements, including occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally. At December 31, 2024, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios:
- Commercial office loans:
  - There were 112 outstanding loans, totaling $113.7 million, or 2.47% of total Corporation loans outstanding;
  - There were no nonaccrual commercial office loans at December 31, 2024;
  - There were no past due commercial office loans at December 31, 2024; and
  - The average outstanding balance per commercial office loan was $1.0 million.
- Commercial hospitality loans:
  - There were 170 outstanding loans, totaling $321.6 million, or 6.98% of total Corporation loans outstanding;
  - There were no nonaccrual commercial hospitality loans at December 31, 2024;
  - There were no past due commercial hospitality loans at December 31, 2024; and
  - The average outstanding balance per commercial hospitality loan was $1.9 million.
- Commercial multifamily loans:
  - There were 225 outstanding loans, totaling $367.6 million, or 7.98% of total Corporation loans outstanding;
  - There were two nonaccrual commercial multifamily loan that totaled $20.7 million, or 5.62% of total multifamily loans outstanding. As previously discussed, one customer relationship did have a specific reserve of $885 thousand, while the other customer relationship did not have a related specific loss reserve at December 31, 2024;
  - There were three past due commercial multifamily loans that totaled $21.1 million, or 5.75% of total commercial multifamily loans outstanding at December 31, 2024; and
  - The average outstanding balance per commercial multifamily loan was $1.6 million.

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be high volatility commercial real estate (“HVCRE”) credits.

Performance Ratios

Annualized return on average equity was 9.79% for the three months ended December 31, 2024, compared to 9.28% and 9.97% for the three months ended September 30, 2024 and December 31, 2023, respectively. Return on average equity was 9.21% for the twelve months ended December 31, 2024 compared to 10.54% for the twelve months ended December 31, 2023.
Annualized return on average tangible common equity, a non-GAAP measure, was 10.90% for the three months ended December 31, 2024, compared to 10.33% and 11.27% for the three months ended September 30, 2024 and December 31, 2023, respectively.¹ Return on average tangible common equity, a non-GAAP measure, was 10.25% for the twelve months ended December 31, 2024 compared to 11.98% for the twelve months ended December 31, 2023.¹
The Corporation’s efficiency ratio was 63.68% for the three months ended December 31, 2024, compared to 66.34% and 67.66% for the three months ended September 30, 2024 and December 31, 2023, respectively. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP measure, was 63.02% for the three months ended December 31, 2024, compared to 65.58% and 66.93% for the three months ended September 30, 2024 and December 31, 2023, respectively.¹ The decrease for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was primarily driven by an increase in net interest income, coupled with lower non-interest expenses, primarily due to decreases in salaries and benefits, as discussed in more detail below.
The Corporation’s efficiency ratio was 66.20% for the twelve months ended December 31, 2024, compared to 65.13% for the twelve months ended December 31, 2023. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.47% for the twelve months ended December 31, 2024, compared to 64.45% the twelve months ended December 31, 2023.¹

Revenue

Total revenue (net interest income plus non-interest income) was $59.4 million for the three months ended December 31, 2024, an increase when compared to $58.5 million and $56.8 million for the three months ended September 30, 2024 and December 31, 2023, respectively.
- Net interest income was $49.0 million for the three months ended December 31, 2024, compared to $47.5 million and $47.7 million for the three months ended September 30, 2024 and December 31, 2023, respectively. When comparing the fourth quarter of 2024 to the third quarter of 2024, the increase in net interest income of $1.6 million, or 3.28% (13.05% annualized), was primarily driven by targeted interest-bearing deposit rate decreases as a result of the Federal Reserve rate decreases since mid-September 2024.
- Net interest margin was 3.44%, 3.43% and 3.54% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.43%, 3.42% and 3.51% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.¹
  - The yield on earning assets of 5.84% for the three months ended December 31, 2024 decreased 14 basis points from September 30, 2024 and increased 2 basis points from December 31, 2023. The decrease in yield compared to September 30, 2024 was attributable to the net impact of declining interest rates on floating-rate loans as a result of the Federal Reserve decreases to the Prime rate (upon which the majority of the Corporation’s floating rate loans are indexed).
  - The cost of interest-bearing liabilities of 3.03% for the three months ended December 31, 2024 decreased 18 basis points from September 30, 2024 and increased 14 basis points from December 31, 2023. When comparing the fourth quarter of 2024 to the third quarter of 2024, the decrease in the cost of interest-bearing liabilities is primarily the result of the Corporation’s targeted interest-bearing deposit rate decreases in response to the Federal Reserve rate decreases since mid-September 2024.
Total revenue was $226.6 million for the twelve months ended December 31, 2024 compared to $223.2 million for the twelve months ended December 31, 2023.
- Net interest income was $187.5 million for the twelve months ended December 31, 2024 compared to $189.8 million for the twelve months ended December 31, 2023. When comparing the twelve months ended December 31, 2024 to the twelve months ended December 31, 2023, the decrease in net interest income of $2.4 million, or 1.24%, was due to an increase in the Corporation’s interest expense, as a result of targeted interest-bearing deposit rate increases to ensure both deposit growth and retention, more than offsetting the interest income growth from both year-over-year loan growth and the impact of higher interest rates for much of the 2024 year resulting in greater income on loans, coupled with a higher average balance of earnings on excess liquidity maintained as interest-bearing deposits with the Federal Reserve.
- Net interest margin was 3.41% and 3.63% for the twelve months ended December 31, 2024 and 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.39% and 3.61% for the twelve months ended December 31, 2024 and 2023, respectively.¹
  - The yield on earning assets of 5.88% for the twelve months ended December 31, 2024 increased 31 basis points from the twelve months ended December 31, 2023. The increase in yield compared to December 31, 2023 was attributable to the net benefit of higher interest rates on both variable-rate loans and new loan production.
  - The cost of interest-bearing liabilities of 3.11% for the twelve months ended December 31, 2024 increased 62 basis points from the twelve months ended December 31, 2023 primarily as a result of the Corporation’s targeted interest-bearing deposit rate increases for deposit retention and growth initiatives given the competitive environment resulting from the numerous Federal Reserve rate hikes since the first quarter of 2022 that did not start to have some easing measures until late in 2024.
Total non-interest income was $10.3 million for the three months ended December 31, 2024 compared to $11.0 million and $9.1 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The three months ended December 31, 2024 included increases in net realized and unrealized losses on equity securities compared to the three months ended September 30, 2024. The increase in fourth quarter 2024 non-interest income compared to the three months ended December 31, 2023 was primarily due to increased wealth and asset management fees and higher pass-through income from small business investment companies (“SBICs”), partially offset by an increase in net realized and unrealized losses on equity securities.
Total non-interest income was $39.1 million for the twelve months ended December 31, 2024 compared to $33.3 million for the twelve months ended December 31, 2023. This increase was primarily due to higher pass-through income from SBICs coupled with an increase in net realized and unrealized gains on equity securities and an increase in wealth and asset management fees.

Non-Interest Expense

For the three months ended December 31, 2024 total non-interest expense was $37.8 million, compared to $38.8 million and $38.5 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The decrease of $979 thousand, or 2.52%, from the three months ended September 30, 2024, was primarily due to a decrease in salaries and benefits. The decrease in salaries and benefits resulted primarily from a decrease in incentive compensation accruals (which are based on various components of the Corporation’s financial performance for the year), coupled with the timing of retirement plan contribution accruals and lower supplemental executive retirement plan accruals with the departure of an executive during the fourth quarter, as previously disclosed. The $645 thousand decrease in non-interest expense compared to the three months ended December 31, 2023 was primarily due to lower salaries and benefits driven by reduced incentive compensation accruals, along with a decrease in quarterly advertising expense. These decreases were partially offset by higher card processing and interchange expenses resulting from fourth quarter 2023 accrual adjustments related to changes in the Corporation’s cardholder rewards program.
For the twelve months ended December 31, 2024 total non-interest expense was $150.0 million, compared to $145.3 million for the twelve months ended December 31, 2023. The increase of $4.7 million, or 3.21%, from the twelve months ended December 31, 2023 was primarily a result of an increase in salaries and benefits and technology expenses The increase in salaries and benefits was driven by an increase in personnel costs related to annual merit increases and growth in the Corporation’s staff and new offices in its expansion markets (Cleveland, OH and Roanoke, VA), while the increase in technology was primarily due to usage and licensing increases in year-over-year investments in applications aimed at enhancing both customer online banking capabilities, customer call center communications, and in-branch technology delivery channels.

Income Taxes

Income tax expense for the three months ended December 31, 2024 was $3.6 million, representing a 19.14% effective tax rate, compared to $3.3 million, representing an 19.31% effective tax rate, for the three months ended September 30, 2024 and $3.2 million, representing a 18.45% effective tax rate, for the three months ended December 31, 2023. Income tax expense for the twelve months ended December 31, 2024 was $12.8 million, representing an 18.98% effective tax rate compared to $13.8 million, representing a 19.22% effective tax rate, for the twelve months ended December 31, 2023.

Asset Quality

Based upon the addition of one larger nonaccrual loan relationship in the fourth quarter of 2024 as discussed above, total nonperforming assets were approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $42.0 million, or 0.70% of total assets, as of September 30, 2024, and $31.8 million, or 0.55% of total assets, as of December 31, 2023.
The allowance for credit losses measured as a percentage of total loans was 1.03% as of December 31, 2024 compared to 1.02% as of September 30, 2024 and 1.03% as of December 31, 2023. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 84.08% as of December 31, 2024, compared to 117.03% and 154.63% as of September 30, 2024 and December 31, 2023, respectively. The change in the allowance for credit losses as a percentage of nonaccrual loans was primarily attributable to the levels of nonperforming assets, as discussed above.
The provision for credit losses was $2.9 million for the three months ended December 31, 2024, compared to $2.4 million and $1.2 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The $549 thousand increase in the provision expense for the fourth quarter of 2024 compared to the third quarter of 2024 was primarily a result of increased net loan charge-offs in the fourth quarter of 2024. The $1.7 million increase in the provision expense for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was primarily due to both required provisioning to cover loan portfolio growth, and the increased net loan charge-offs in the fourth quarter of 2024 compared to the fourth quarter of 2023.
As discussed in more detail above, for the three months ended December 31, 2024, net loan charge-offs were $2.1 million, or 0.19% (annualized) of average total loans and loans held for sale, compared to $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended September 30, 2024, and $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended December 31, 2023.
For the twelve months ended December 31, 2024, net loan charge-offs were $7.5 million, or 0.17%, of average total loans and loans held for sale, compared to $3.4 million, or 0.08%, of average total loans and loans held for sale, during the twelve months ended December 31, 2023, with a couple of the larger charge-offs occurring in the first and second quarters of 2024, as previously disclosed in those periods.

Capital

As of December 31, 2024, the Corporation’s total shareholders’ equity was $610.7 million, representing an increase of $4.3 million, or 0.71% (2.84% annualized), from September 30, 2024 and an increase of $39.4 million, or 6.91%, from December 31, 2023. The changes resulted from an increase in the Corporation’s retained earnings (net income, partially offset by the common and preferred stock dividends paid) and a decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio. The additions to shareholders equity from retained earnings were also partially offset by the Corporation’s repurchase of some of its common stock.
Regulatory capital ratios for the Corporation continue to exceed regulatory “well-capitalized” levels as of December 31, 2024, consistent with prior periods.
As of December 31, 2024, the Corporation’s ratio of common shareholders’ equity to total assets was 8.93% compared to 9.12% at September 30, 2024 and 8.93% at December 31, 2023. As of December 31, 2024, the Corporation’s ratio of tangible common equity to tangible assets, a non-GAAP measure, was 8.28% compared to 8.45% at September 30, 2024 and 8.22% at December 31, 2023. The decrease in the December 31, 2024 ratio compared to September 30, 2024 was primarily the result of an increase in accumulated other comprehensive loss, partially offset by an increase in retained earnings, as discussed above.¹

Recent Events

On January 10, 2025, the Corporation announced that the Corporation and CNB Bank entered into a definitive merger agreement (the “Merger Agreement”) with ESSA in an all-stock transaction. Under the terms of the Merger Agreement, each outstanding share of ESSA Bancorp common stock will be converted into the right to receive 0.8547 shares of the Corporation’s common stock. The transaction is currently expected to close in the third quarter of 2025, subject to customary closing conditions, including the receipt of regulatory approvals, and approval by the shareholders of ESSA Bancorp and the Corporation.

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated assets of approximately $6.2 billion. CNB Financial Corporation conducts business primarily through its principal subsidiary, CNB Bank. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers. CNB Bank operations include a private banking division, one drive-up office, one mobile office, and 55 full-service offices in Pennsylvania, Ohio, New York, and Virginia. CNB Bank, headquartered in Clearfield, Pennsylvania, with offices in Central and North Central Pennsylvania, serves as the multi-brand parent to various divisions. These divisions include ERIEBANK, based in Erie, Pennsylvania, with offices in Northwest Pennsylvania and Northeast Ohio; FCBank, based in Worthington, Ohio, with offices in Central Ohio; BankOnBuffalo, based in Buffalo, New York, with offices in Western New York; Ridge View Bank, based in Roanoke, Virginia, with offices in the Southwest Virginia region; and Impressia Bank, a division focused on banking opportunities for women, which operates in CNB Bank’s primary market areas. Additional information about CNB Financial Corporation may be found at www.CNBBank.bank.

Forward-Looking Statements

This press release includes 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, with respect to the Corporation’s financial condition, liquidity, results of operations, future performance and business. These forward-looking statements are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. Forward-looking statements include statements with respect to beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond the Corporation’s control). Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would” and “could.” The Corporation’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry; (ii) changes in interest rates; (iii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (v) changes in general business, industry or economic conditions or competition; (vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (vii) governmental approvals of the Corporation’s pending merger with ESSA may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (viii) the Corporation’s shareholders and/or the shareholders of ESSA may fail to approve the merger; (ix) higher than expected costs or other difficulties related to integration of combined or merged businesses; (x) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (xi) changes in the quality or composition of our loan and investment portfolios; (xii) adequacy of loan loss reserves; (xiii) increased competition; (xiv) loss of certain key officers; (xv) deposit attrition; (xvi) rapidly changing technology; (xvii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xviii) changes in the cost of funds, demand for loan products or demand for financial services; and (xix) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on the Corporation’s financial position and results of operations. For more information about factors that could cause actual results to differ from those discussed in the forward-looking statements, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of and the forward-looking statement disclaimers in the Corporation’s annual and quarterly reports filed with the Securities and Exchange Commission.

The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this press release. Factors or events that could cause the Corporation’s actual results to differ may emerge from time to time, and it is not possible for the Corporation to predict all of them. The Corporation undertakes no obligation to publicly update or revise any forward-looking statements included in this press release or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur and you should not put undue reliance on any forward-looking statements.


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Income Statement
Interest and fees on loans	$	74,164		$	75,725		$	73,014		$	293,544		$	273,223
Interest and dividends on securities and cash and cash equivalents		9,514			7,510			6,194			31,926			20,473
Interest expense		(34,634	)		(35,749	)		(31,514	)		(138,001	)		(103,867	)
Net interest income		49,044			47,486			47,694			187,469			189,829
Provision for credit losses		2,930			2,381			1,242			9,222			5,993
Net interest income after provision for credit losses		46,114			45,105			46,452			178,247			183,836
Non-interest income
Wealth and asset management fees		1,976			2,060			1,684			7,845			7,251
Service charges on deposit accounts		1,712			1,790			1,803			6,990			7,372
Other service charges and fees		770			796			727			2,973			3,010
Net realized gains (losses) on available-for-sale securities		83			(9	)		—			74			52
Net realized and unrealized gains (losses) on equity securities		(13	)		656			543			754			(387	)
Mortgage banking		93			197			160			673			676
Bank owned life insurance		784			775			734			3,110			2,945
Card processing and interchange income		2,222			2,241			2,082			8,666			8,301
Other non-interest income		2,694			2,467			1,404			8,029			4,115
Total non-interest income		10,321			10,973			9,137			39,114			33,335
Non-interest expenses
Salaries and benefits		18,501			19,572			19,200			74,536			71,062
Net occupancy expense of premises		3,816			3,701			3,719			14,737			14,509
Technology expense		5,743			5,417			5,525			21,805			20,202
Advertising expense		684			623			1,048			2,545			3,133
State and local taxes		1,090			1,256			1,018			4,726			4,126
Legal, professional, and examination fees		986			940			1,247			4,217			4,414
FDIC insurance premiums		864			846			978			3,718			3,879
Card processing and interchange expenses		1,325			1,193			756			4,575			5,025
Other non-interest expense		4,796			5,236			4,959			19,143			18,992
Total non-interest expenses		37,805			38,784			38,450			150,002			145,342
Income before income taxes		18,630			17,294			17,139			67,359			71,829
Income tax expense		3,566			3,340			3,162			12,784			13,809
Net income		15,064			13,954			13,977			54,575			58,020
Preferred stock dividends		1,076			1,076			1,076			4,302			4,302
Net income available to common shareholders	$	13,988		$	12,878		$	12,901		$	50,273		$	53,718

Ending shares outstanding		20,987,992			20,994,730			20,896,439			20,987,992			20,896,439
Average diluted common shares outstanding		20,929,885			20,911,862			20,841,528			20,900,037			20,944,376
Diluted earnings per common share	$	0.66		$	0.61		$	0.62		$	2.39		$	2.55
Cash dividends per common share	$	0.180		$	0.180		$	0.175		$	0.710		$	0.700
Dividend payout ratio		27	%		30	%		28	%		30	%		27	%


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Average Balances
Total loans and loans held for sale	$	4,556,770		$	4,536,702		$	4,463,644		$	4,491,304		$	4,396,341
Investment securities		744,149			722,577			730,050			733,055			760,976
Total earning assets		5,674,794			5,503,832			5,343,817			5,499,187			5,232,117
Total assets		6,085,277			5,907,115			5,719,313			5,894,958			5,601,371
Noninterest-bearing deposits		832,168			795,771			759,781			781,780			793,713
Interest-bearing deposits		4,442,150			4,319,606			4,217,771			4,328,430			4,037,554
Shareholders’ equity		612,184			597,984			556,245			592,550			550,333
Tangible common shareholders’ equity (non-GAAP)⁽¹⁾		510,308			496,091			454,294			490,647			448,355

Average Yields (annualized)
Total loans and loans held for sale		6.50	%		6.66	%		6.51	%		6.55	%		6.23	%
Investment securities		2.40	%		2.19	%		1.96	%		2.19	%		1.96	%
Total earning assets		5.84	%		5.98	%		5.82	%		5.88	%		5.57	%
Interest-bearing deposits		3.00	%		3.19	%		2.86	%		3.08	%		2.42	%
Interest-bearing liabilities		3.03	%		3.21	%		2.89	%		3.11	%		2.49	%

Performance Ratios (annualized)
Return on average assets		0.98	%		0.94	%		0.97	%		0.93	%		1.04	%
Return on average equity		9.79	%		9.28	%		9.97	%		9.21	%		10.54	%
Return on average tangible common equity (non-GAAP)⁽¹⁾		10.90	%		10.33	%		11.27	%		10.25	%		11.98	%
Net interest margin, fully tax equivalent basis (non-GAAP)⁽¹⁾		3.43	%		3.42	%		3.51	%		3.39	%		3.61	%
Efficiency Ratio, fully tax equivalent basis (non-GAAP)⁽¹⁾		63.02	%		65.58	%		66.93	%		65.47	%		64.45	%

Net Loan Charge-Offs
CNB Bank net loan charge-offs	$	1,719		$	837		$	747		$	5,782		$	1,702
Holiday Financial net loan charge-offs		425			383			487			1,730			1,739
Total Corporation net loan charge-offs	$	2,144		$	1,220		$	1,234		$	7,512		$	3,441
Annualized net loan charge-offs / average total loans and loans held for sale		0.19	%		0.11	%		0.11	%		0.17	%		0.08	%


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	December 31, 2024			September 30, 2024			December 31, 2023
Ending Balance Sheet
Cash and due from banks	$	63,771		$	75,214		$	54,789
Interest-bearing deposits with Federal Reserve		375,009			281,972			164,385
Interest-bearing deposits with other financial institutions		4,255			3,723			2,872
Total cash and cash equivalents		443,035			360,909			222,046
Debt securities available-for-sale, at fair value		468,546			378,965			341,955
Debt securities held-to-maturity, at amortized cost		306,081			328,152			388,968
Equity securities		10,456			10,389			9,301
Loans held for sale		762			768			675
Loans receivable
Syndicated loans		79,882			69,470			108,710
Loans		4,529,074			4,522,438			4,359,718
Total loans receivable		4,608,956			4,591,908			4,468,476
Less: allowance for credit losses		(47,357	)		(46,644	)		(45,832	)
Net loans receivable		4,561,599			4,545,264			4,422,644
Goodwill and other intangibles		43,874			43,874			43,874
Core deposit intangible		206			223			280
Other assets		357,451			346,300			323,214
Total Assets	$	6,192,010		$	6,014,844		$	5,752,957

Noninterest-bearing demand deposits	$	819,680		$	841,292		$	728,881
Interest-bearing demand deposits		706,796			681,056			803,093
Savings		3,122,028			3,040,769			2,960,282
Certificates of deposit		722,860			653,832			506,494
Total deposits		5,371,364			5,216,949			4,998,750
Subordinated debentures		20,620			20,620			20,620
Subordinated notes, net of issuance costs		84,570			84,495			84,267
Other liabilities		104,761			86,417			78,073
Total liabilities		5,581,315			5,408,481			5,181,710
Common stock		—			—			—
Preferred stock		57,785			57,785			57,785
Additional paid in capital		219,876			219,304			220,495
Retained earnings		381,296			371,086			345,935
Treasury stock		(4,689	)		(4,516	)		(6,890	)
Accumulated other comprehensive loss		(43,573	)		(37,296	)		(46,078	)
Total shareholders’ equity		610,695			606,363			571,247
Total liabilities and shareholders’ equity	$	6,192,010		$	6,014,844		$	5,752,957

Book value per common share	$	26.34		$	26.13		$	24.57
Tangible book value per common share (non-GAAP)⁽¹⁾	$	24.24		$	24.03		$	22.46


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	December 31, 2024			September 30, 2024			December 31, 2023
Capital Ratios
Tangible common equity / tangible assets (non-GAAP)⁽¹⁾		8.28	%		8.45	%		8.22	%
Tier 1 leverage ratio⁽²⁾		10.43	%		10.59	%		10.54	%
Common equity tier 1 ratio⁽²⁾		11.76	%		11.64	%		11.49	%
Tier 1 risk-based ratio⁽²⁾		13.41	%		13.30	%		13.20	%
Total risk-based ratio⁽²⁾		16.16	%		16.06	%		15.99	%

Asset Quality Detail
Nonaccrual loans	$	56,323		$	39,855		$	29,639
Loans 90+ days past due and accruing		653			666			55
Total nonperforming loans		56,976			40,521			29,694
Other real estate owned		2,509			1,514			2,111
Total nonperforming assets	$	59,485		$	42,035		$	31,805

Asset Quality Ratios
Nonperforming assets / Total loans + OREO		1.29	%		0.92	%		0.71	%
Nonperforming assets / Total assets		0.96	%		0.70	%		0.55	%
Ratio of allowance for credit losses on loans to nonaccrual loans		84.08	%		117.03	%		154.63	%
Allowance for credit losses / Total loans		1.03	%		1.02	%		1.03	%


Consolidated Financial Data Notes:
⁽¹⁾Management uses non-GAAP financial information in its analysis of the Corporation’s performance. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Corporation’s management believes that investors may use these non-GAAP measures to analyze the Corporation’s financial performance without the impact of unusual items or events that may obscure trends in the Corporation’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
⁽²⁾Capital ratios as of December 31, 2024 are estimated pending final regulatory filings.


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
	Three Months Ended,
	December 31, 2024							September 30, 2024							December 31, 2023
	Average Balance			Annual Rate		Interest Inc./Exp.		Average Balance			Annual Rate		Interest Inc./Exp.		Average Balance			Annual Rate		Interest Inc./Exp.
ASSETS:
Securities:
Taxable^{(1) (4)}	$	711,286		2.36	%	$	4,487	$	690,098		2.14	%	$	3,980	$	694,369		1.89	%	$	3,626
Tax-exempt^{(1) (2) (4)}		25,489		2.67			184		25,368		2.57			178		27,590		2.55			198
Equity securities^{(1) (2)}		7,374		5.77			107		7,111		5.71			102		8,091		5.54			113
Total securities⁽⁴⁾		744,149		2.40			4,778		722,577		2.19			4,260		730,050		1.96			3,937
Loans receivable:
Commercial^{(2) (3)}		1,458,902		6.77			24,824		1,457,192		7.02			25,708		1,467,452		7.07			26,165
Mortgage and loans held for sale^{(2) (3)}		2,965,914		6.12			45,633		2,947,787		6.25			46,278		2,860,619		5.99			43,166
Consumer⁽³⁾		131,954		11.93			3,956		131,723		11.93			3,950		135,573		11.38			3,890
Total loans receivable⁽³⁾		4,556,770		6.50			74,413		4,536,702		6.66			75,936		4,463,644		6.51			73,221
Interest-bearing deposits with the Federal Reserve and other financial institutions		373,875		5.08			4,771		244,553		5.33			3,279		150,123		6.06			2,292
Total earning assets		5,674,794		5.84		$	83,962		5,503,832		5.98		$	83,475		5,343,817		5.82		$	79,450
Noninterest-bearing assets:
Cash and due from banks		59,445							58,472							55,815
Premises and equipment		124,398							118,404							109,469
Other assets		273,326							272,377							256,253
Allowance for credit losses		(46,686	)						(45,970	)						(46,041	)
Total non interest-bearing assets		410,483							403,283							375,496
TOTAL ASSETS	$	6,085,277						$	5,907,115						$	5,719,313
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Demand—interest-bearing	$	686,359		0.83	%	$	1,437	$	682,690		0.86	%	$	1,477	$	778,488		0.55	%	$	1,081
Savings		3,068,451		3.26			25,139		3,076,351		3.55			27,461		2,920,026		3.36			24,712
Time		687,340		4.02			6,953		560,565		4.03			5,684		519,257		3.50			4,587
Total interest-bearing deposits		4,442,150		3.00			33,529		4,319,606		3.19			34,622		4,217,771		2.86			30,380
Short-term borrowings		—		0.00			—		—		0.00			—		0		0.00			0
Finance lease liabilities		212		3.75			2		236		5.06			3		305		3.90			3
Subordinated notes and debentures		105,153		4.17			1,103		105,077		4.26			1,124		104,849		4.28			1,131
Total interest-bearing liabilities		4,547,515		3.03		$	34,634		4,424,919		3.21		$	35,749		4,322,925		2.89		$	31,514
Demand—noninterest-bearing		832,168							795,771							759,781
Other liabilities		93,410							88,441							80,362
Total Liabilities		5,473,093							5,309,131							5,163,068
Shareholders’ equity		612,184							597,984							556,245
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	6,085,277						$	5,907,115						$	5,719,313
Interest income/Earning assets				5.84	%	$	83,962				5.98	%	$	83,475				5.82	%	$	79,450
Interest expense/Interest-bearing liabilities				3.03			34,634				3.21			35,749				2.89			31,514
Net interest spread				2.81	%	$	49,328				2.77	%	$	47,726				2.93	%	$	47,936
Interest income/Earning assets				5.84	%		83,962				5.98	%		83,475				5.82	%		79,450
Interest expense/Earning assets				2.41			34,634				2.56			35,749				2.31			31,514
Net interest margin (fully tax-equivalent)				3.43	%	$	49,328				3.42	%	$	47,726				3.51	%	$	47,936

_____________________________________
⁽¹⁾Includes unamortized discounts and premiums.
⁽²⁾Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023 was $284 thousand, $240 thousand and $242 thousand, respectively.
⁽³⁾Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income. In addition, loans receivable interest income consists of loans receivable fees, including PPP deferred processing fees.
⁽⁴⁾Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023 was $(47.0) million, $(51.1) million and $(68.5) million, respectively.


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

	Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
	Twelve Months Ended,
	December 31, 2024							December 31, 2023
	Average Balance			Annual Rate		Interest Inc./Exp.		Average Balance			Annual Rate		Interest Inc./Exp.
ASSETS:
Securities:
Taxable^{(1) (4)}	$	700,078		2.14	%	$	16,059	$	720,818		1.89	%	$	14,766
Tax-exempt^{(1) (2) (4)}		25,919		2.60			731		30,153		2.59			844
Equity securities^{(1) (2)}		7,058		5.71			403		10,005		5.09			509
Total securities⁽⁴⁾		733,055		2.19			17,193		760,976		1.96			16,119
Loans receivable:
Commercial^{(2) (3)}		1,440,667		6.88			99,184		1,501,202		6.63			99,587
Mortgage and loans held for sale^{(2) (3)}		2,920,537		6.15			179,645		2,765,484		5.77			159,606
Consumer⁽³⁾		130,100		11.95			15,547		129,655		11.47			14,868
Total loans receivable⁽³⁾		4,491,304		6.55			294,376		4,396,341		6.23			274,061
Interest-bearing deposits with the Federal Reserve and other financial institutions		274,828		5.41			14,856		74,800		6.03			4,513
Total earning assets		5,499,187		5.88		$	326,425		5,232,117		5.57		$	294,693
Noninterest-bearing assets:
Cash and due from banks		56,295							54,824
Premises and equipment		116,341							107,635
Other assets		269,167							251,725
Allowance for credit losses		(46,032	)						(44,930	)
Total non interest-bearing assets		395,771							369,254
TOTAL ASSETS	$	5,894,958						$	5,601,371
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Demand—interest-bearing	$	705,488		0.77	%	$	5,451	$	853,632		0.54	%	$	4,626
Savings		3,052,031		3.46			105,675		2,666,905		2.92			77,782
Time		570,911		3.92			22,367		517,017		2.97			15,362
Total interest-bearing deposits		4,328,430		3.08			133,493		4,037,554		2.42			97,770
Short-term borrowings		—		0.00			—		35,224		5.07			1,787
Finance lease liabilities		247		4.45			11		339		4.42			15
Subordinated notes and debentures		105,039		4.28			4,497		104,735		4.10			4,295
Total interest-bearing liabilities		4,433,716		3.11		$	138,001		4,177,852		2.49		$	103,867
Demand—noninterest-bearing		781,780							793,713
Other liabilities		86,912							79,473
Total Liabilities		5,302,408							5,051,038
Shareholders’ equity		592,550							550,333
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,894,958						$	5,601,371
Interest income/Earning assets				5.88	%	$	326,425				5.57	%	$	294,693
Interest expense/Interest-bearing liabilities				3.11			138,001				2.49			103,867
Net interest spread				2.77	%	$	188,424				3.08	%	$	190,826
Interest income/Earning assets				5.88	%		326,425				5.57	%		294,693
Interest expense/Earning assets				2.49			138,001				1.96			103,867
Net interest margin (fully tax-equivalent)				3.39	%	$	188,424				3.61	%	$	190,826

_____________________________________
⁽¹⁾Includes unamortized discounts and premiums.
⁽²⁾Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the twelve months ended December 31, 2024 and 2023, was $955 thousand and $997 thousand, respectively.
⁽³⁾Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income. In addition, loans receivable interest income consists of loans receivable fees, including PPP deferred processing fees.
⁽⁴⁾Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the twelve months ended December 31, 2024 and 2023 was $(53.1) million and $(61.1) million, respectively.


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

Reconciliation of Non-GAAP Financial Measures

	December 31, 2024			September 30, 2024			December 31, 2023
Calculation of tangible book value per common share and tangible common equity / tangible assets (non-GAAP):
Shareholders’ equity	$	610,695		$	606,363		$	571,247
Less: preferred equity		57,785			57,785			57,785
Common shareholders’ equity		552,910			548,578			513,462
Less: goodwill and other intangibles		43,874			43,874			43,874
Less: core deposit intangible		206			223			280
Tangible common equity (non-GAAP)	$	508,830		$	504,481		$	469,308

Total assets	$	6,192,010		$	6,014,844		$	5,752,957
Less: goodwill and other intangibles		43,874			43,874			43,874
Less: core deposit intangible		206			223			280
Tangible assets (non-GAAP)	$	6,147,930		$	5,970,747		$	5,708,803

Ending shares outstanding		20,987,992			20,994,730			20,896,439

Book value per common share (GAAP)	$	26.34		$	26.13		$	24.57
Tangible book value per common share (non-GAAP)	$	24.24		$	24.03		$	22.46

Common shareholders’ equity / Total assets (GAAP)		8.93	%		9.12	%		8.93	%
Tangible common equity / Tangible assets (non-GAAP)		8.28	%		8.45	%		8.22	%


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

Reconciliation of Non-GAAP Financial Measures

	Three Months Ended									Twelve Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Calculation of net interest margin:
Interest income	$	83,678		$	83,235		$	79,208		$	325,470		$	293,696
Interest expense		34,634			35,749			31,514			138,001			103,867
Net interest income	$	49,044		$	47,486		$	47,694		$	187,469		$	189,829

Average total earning assets	$	5,674,794		$	5,503,832		$	5,343,817		$	5,499,187		$	5,232,117

Net interest margin (GAAP) (annualized)		3.44	%		3.43	%		3.54	%		3.41	%		3.63	%

Calculation of net interest margin (fully tax equivalent basis) (non-GAAP):
Interest income	$	83,678		$	83,235		$	79,208		$	325,470		$	293,696
Tax equivalent adjustment (non-GAAP)		284			240			242			955			997
Adjusted interest income (fully tax equivalent basis) (non-GAAP)		83,962			83,475			79,450			326,425			294,693
Interest expense		34,634			35,749			31,514			138,001			103,867
Net interest income (fully tax equivalent basis) (non-GAAP)	$	49,328		$	47,726		$	47,936		$	188,424		$	190,826

Average total earning assets	$	5,674,794		$	5,503,832		$	5,343,817		$	5,499,187		$	5,232,117
Less: average mark to market adjustment on investments (non-GAAP)		(46,988	)		(51,075	)		(68,546	)		(53,087	)		(61,089	)
Adjusted average total earning assets, net of mark to market (non-GAAP)	$	5,721,782		$	5,554,907		$	5,412,363		$	5,552,274		$	5,293,206

Net interest margin, fully tax equivalent basis (non-GAAP) (annualized)		3.43	%		3.42	%		3.51	%		3.39	%		3.61	%


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

Reconciliation of Non-GAAP Financial Measures

	Three Months Ended						Twelve Months Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Calculation of PPNR (non-GAAP):⁽¹⁾
Net interest income	$	49,044	$	47,486	$	47,694	$	187,469	$	189,829
Add: Non-interest income		10,321		10,973		9,137		39,114		33,335
Less: Non-interest expense		37,805		38,784		38,450		150,002		145,342
PPNR (non-GAAP)	$	21,560	$	19,675	$	18,381	$	76,581	$	77,822

⁽¹⁾Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation’s ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies.

	Three Months Ended									Twelve Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Calculation of efficiency ratio:
Non-interest expense	$	37,805		$	38,784		$	38,450		$	150,002		$	145,342

Non-interest income	$	10,321		$	10,973		$	9,137		$	39,114		$	33,335
Net interest income		49,044			47,486			47,694			187,469			189,829
Total revenue	$	59,365		$	58,459		$	56,831		$	226,583		$	223,164
Efficiency ratio		63.68	%		66.34	%		67.66	%		66.20	%		65.13	%

Calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP):
Non-interest expense	$	37,805		$	38,784		$	38,450		$	150,002		$	145,342
Less: core deposit intangible amortization		16			18			19			73			84
Adjusted non-interest expense (non-GAAP)	$	37,789		$	38,766		$	38,431		$	149,929		$	145,258

Non-interest income	$	10,321		$	10,973		$	9,137		$	39,114		$	33,335

Net interest income	$	49,044		$	47,486		$	47,694		$	187,469		$	189,829
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP)		1,508			1,473			1,383			5,635			5,425
Add: tax exempt investment and loan income (fully tax equivalent basis) (non-GAAP)		2,111			2,123			1,968			8,068			7,635
Adjusted net interest income (fully tax equivalent basis) (non-GAAP)		49,647			48,136			48,279			189,902			192,039
Adjusted net revenue (fully tax equivalent basis) (non-GAAP)	$	59,968		$	59,109		$	57,416		$	229,016		$	225,374

Efficiency ratio (fully tax equivalent basis) (non-GAAP)		63.02	%		65.58	%		66.93	%		65.47	%		64.45	%


CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL DATA Unaudited (dollars in thousands, except per share data)

Reconciliation of Non-GAAP Financial Measures

	Three Months Ended									Twelve Months Ended
	December 31, 2024			September 30, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Calculation of return on average tangible common equity (non-GAAP):
Net income	$	15,064		$	13,954		$	13,977		$	54,575		$	58,020
Less: preferred stock dividends		1,076			1,076			1,076			4,302			4,302
Net income available to common shareholders	$	13,988		$	12,878		$	12,901		$	50,273		$	53,718

Average shareholders’ equity	$	612,184		$	597,984		$	556,245		$	592,550		$	550,333
Less: average goodwill & intangibles		44,091			44,108			44,166			44,118			44,193
Less: average preferred equity		57,785			57,785			57,785			57,785			57,785
Tangible common shareholders’ equity (non-GAAP)	$	510,308		$	496,091		$	454,294		$	490,647		$	448,355

Return on average equity (GAAP) (annualized)		9.79	%		9.28	%		9.97	%		9.21	%		10.54	%
Return on average common equity (GAAP) (annualized)		10.04	%		9.48	%		10.27	%		9.40	%		10.91	%
Return on average tangible common equity (non-GAAP) (annualized)		10.90	%		10.33	%		11.27	%		10.25	%		11.98	%

The MIL Network –

January 29, 2025

MIL-OSI: Western New England Bancorp, Inc. Reports Results for Three Months and Year Ended December 31, 2024 and Declares Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

WESTFIELD, Mass., Jan. 28, 2025 (GLOBE NEWSWIRE) — Western New England Bancorp, Inc. (the “Company” or “WNEB”) (NasdaqGS: WNEB), the holding company for Westfield Bank (the “Bank”), announced today the unaudited results of operations for the three and twelve months ended December 31, 2024. For the three months ended December 31, 2024, the Company reported net income of $3.3 million, or $0.16 per diluted share, compared to net income of $2.5 million, or $0.12 per diluted share, for the three months ended December 31, 2023. On a linked quarter basis, net income was $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024, as compared to net income of $1.9 million, or $0.09 per diluted share, for the three months ended September 30, 2024. For the twelve months ended December 31, 2024, net income was $11.7 million, or $0.56 per diluted share, compared to net income of $15.1 million, or $0.70 per diluted share, for the twelve months ended December 31, 2023.

The Company also announced that the Board of Directors declared a quarterly cash dividend of $0.07 per share on the Company’s common stock. The dividend will be payable on or about February 26, 2025 to shareholders of record on February 12, 2025.

James C. Hagan, President and Chief Executive Officer, commented, “I am pleased to report the results for the fourth quarter of 2024. Our strong, diversified, core deposit base was integral in effectively managing our funding costs over the last two years during a rising rate environment. Our disciplined approach to managing our funding costs resulted in an increase in net interest income for the second consecutive quarter in 2024.

As we continue to manage the balance sheet, we remain focused on identifying initiatives to mitigate top line pressures and improve efficiencies over the Company’s long-term. In 2024, total deposits increased $118.9 million, or 5.6%, and core deposits represented 68.9% of total deposits as compared to 2023. The loan-to-deposit ratio decreased to 91.5%. We continue to focus on extending credit within our markets and servicing the needs of our existing customer base while ensuring new opportunities present the appropriate levels of risk and return.

Our asset quality remains strong, with nonaccrual loans at 0.26% of total loans, and classified loans, which we define as special mention and substandard loans, at 1.9% of total loans as of December 31, 2024. Our loan portfolio continues to perform well and we continue to proactively identify and manage credit risk within the loan portfolio, consistent with our prudent credit culture.

The Company is considered to be well-capitalized and we remain disciplined in our capital management strategies. During the twelve months ended December 31, 2024, we repurchased 934,282 shares of the Company’s common stock at an average price per share of $7.94. We continue to believe that buying back shares represents a prudent use of the Company’s capital. We are pleased to be able to continue to return value to shareholders through share repurchases. Although the banking environment has been challenged, our capital management strategies have been critical to sustaining growth in book value per share, which increased to $11.30, while tangible book value per share, a non-GAAP financial measure, increased $0.33, or 3.2%, to $10.63 at December 31, 2024.”

Hagan concluded, “Over the last few years, the banking industry as a whole experienced challenging headwinds, however, our team remains focused on serving our customers and supporting our community. Our commitment to strong capital and liquidity levels gives us a strong foundation to take advantage of opportunities in the markets we serve and to enhance shareholder value in the long term.”

Key Highlights:

Loans and Deposits

Total loans increased $42.9 million, or 2.1%, from $2.0 billion at December 31, 2023 to $2.1 billion at December 31, 2024. Residential real estate loans, including home equity loans, increased $53.5 million, or 7.4%, commercial real estate loans decreased $4.0 million, or 0.4%, commercial and industrial loans decreased $5.7 million, or 2.7%, and consumer loans decreased $1.1 million, or 19.8%.

Total deposits increased $118.9 million, or 5.6%, from $2.1 billion at December 31, 2023 to $2.3 billion at December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $26.7 million, or 1.7%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.6 billion, or 68.9% of total deposits, at December 31, 2024. Time deposits increased $92.2 million, or 15.1%, from $611.4 million at December 31, 2023 to $703.6 million at December 31, 2024. Brokered time deposits, which are included in time deposits, totaled $1.7 million at December 31, 2024 and at December 31, 2023. The loan-to-deposit ratio decreased from 94.6% at December 31, 2023 to 91.5% at December 31, 2024.

Liquidity

The Company’s liquidity position remains strong with solid core deposit relationships, cash, unencumbered securities, a diversified deposit base and access to diversified borrowing sources. At December 31, 2024, the Company had $1.1 billion in immediately available liquidity, compared to $643.6 million in uninsured deposits, or 28.4% of total deposits, representing a coverage ratio of 171.8%.

Uninsured deposits of the Bank’s customers are eligible for FDIC pass-through insurance if the customer opens an IntraFi Insured Cash Sweep account or a reciprocal time deposit through the Certificate of Deposit Account Registry System. IntraFi allows for up to $250.0 million per customer of pass-through FDIC insurance, which would more than cover each of the Bank’s deposit customers if such customer desired to have such pass-through insurance.

Allowance for Credit Losses and Credit Quality

At December 31, 2024, the allowance for credit losses was $19.5 million, or 0.94% of total loans and 362.9% of nonperforming loans, compared to $20.3 million, or 1.00% of total loans and 315.6% of nonperforming loans, at December 31, 2023. At December 31, 2024, nonperforming loans totaled $5.4 million, or 0.26% of total loans, compared to $6.4 million, or 0.32% of total loans, at December 31, 2023. Total delinquent loans decreased $1.0 million, or 16.7%, from $6.0 million, or 0.30% of total loans, at December 31, 2023 to $5.0 million, or 0.24% of total loans, at December 31, 2024. At December 31, 2024 and December 31, 2023, the Company did not have any other real estate owned.

Net Interest Margin

The net interest margin was 2.41% for the three months ended December 31, 2024, compared to 2.40% for the three months ended September 30, 2024. The net interest margin, on a tax-equivalent basis, was 2.43% for the three months ended December 31, 2024, compared to 2.42% for the three months ended September 30, 2024.

Stock Repurchase Program

On May 22, 2024, the Board of Directors authorized a new stock repurchase plan (the “2024 Plan”) under which the Company may repurchase up to 1.0 million shares, or approximately 4.6%, of the Company’s then-outstanding shares of common stock.

During the three months ended December 31, 2024, the Company repurchased 220,000 shares of common stock under the 2024 Plan, with an average price per share of $9.00. During the twelve months ended December 31, 2024, the Company repurchased 934,282 shares of common stock under the 2024 Plan and the previously existing share repurchase plan, as applicable, with an average price per share of $7.94. As of December 31, 2024, there were 472,318 shares of common stock available for repurchase under the 2024 Plan.

The repurchase of shares under the stock repurchase program is administered through an independent broker. The shares of common stock repurchased under the 2024 Plan have been and will continue to be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, or otherwise, depending upon market conditions. There is no guarantee as to the exact number, or value, of shares that will be repurchased by the Company, and the Company may discontinue repurchases at any time that the Company’s management (“Management”) determines additional repurchases are not warranted. The timing and amount of additional share repurchases under the 2024 Plan will depend on a number of factors, including the Company’s stock price performance, ongoing capital planning considerations, general market conditions, and applicable legal requirements.

Book Value and Tangible Book Value

The Company’s book value per share was $11.30 at December 31, 2024, compared to $10.96 at December 31, 2023, while tangible book value per share, a non-GAAP financial measure, increased $0.33, or 3.2%, from $10.30 at December 31, 2023 to $10.63 at December 31, 2024. See pages 20-22 for the related tangible book value calculation and a reconciliation of GAAP to non-GAAP financial measures.

Net Income for the Three Months Ended December 31, 2024 Compared to the Three Months Ended September 30, 2024

The Company reported an increase in net income of $1.4 million, or 72.7%, from $1.9 million, or $0.09 per diluted share, for the three months ended September 30, 2024, to $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024. Net interest income increased $545,000, or 3.7%, the provision for credit losses decreased $1.7 million, non-interest income increased $113,000, or 3.6%, and non-interest expense increased $520,000, or 3.6%. Return on average assets and return on average equity were 0.49% and 5.48%, respectively, for the three months ended December 31, 2024, compared to 0.29% and 3.19%, respectively, for the three months ended September 30, 2024.

Net Interest Income and Net Interest Margin

On a sequential quarter basis, net interest income, our primary driver of revenues, increased $545,000, or 3.7%, to $15.3 million for the three months ended December 31, 2024, from $14.7 million for the three months ended September 30, 2024. The increase in net interest income was primarily due to an increase in interest income of $746,000, or 2.7%, partially offset by an increase in interest expense of $201,000, or 1.5%.

The net interest margin was 2.41% for the three months ended December 31, 2024, compared to 2.40% for the three months ended September 30, 2024. The net interest margin, on a tax-equivalent basis, was 2.43% for the three months ended December 31, 2024, compared to 2.42% for the three months ended September 30, 2024. During the three months ended December 31, 2024 and during the three months ended September 30, 2024, the Company had a fair value hedge which contributed to an increase in the net interest margin of one basis point for the three months ended December 31, 2024, compared to an increase of seven basis points during the three months ended September 30, 2024. Excluding the interest income attributed to the fair value hedge, the net interest margin increased seven basis points from 2.33% for the three months ended September 30, 2024 to 2.40% for the three months ended December 31, 2024, respectively. The fair value hedge matured in October of 2024.

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.52% for the three months ended December 31, 2024, compared to 4.54% for the three months ended September 30, 2024. Excluding the impact of the fair value hedge discussed above, the average yield on interest-earnings assets, without the impact of tax-equivalent adjustments, increased four basis points to 4.51% during the three months ended December 31, 2024, compared to 4.47% during the three months ended September 30, 2024. The average loan yield, without the impact of tax-equivalent adjustments, was 4.86% for the three months ended December 31, 2024, compared to 4.90% for the three months ended September 30, 2024. Excluding the impact of the fair value hedge discussed above, the average yield on loans, without the impact of tax-equivalent adjustments, increased two basis points to 4.84% during the three months ended December 31, 2024, compared to 4.82% during the three months ended September 30, 2024. During the three months ended December 31, 2024, average interest-earning assets increased $75.8 million, or 3.1% to $2.5 billion, primarily due to an increase in average loans of $24.2 million, or 1.2%, an increase in average short-term investments, consisting of cash and cash equivalents, of $44.8 million, or 139.7%, and an increase in average securities of $6.8 million, or 1.9%.

The average cost of total funds, including non-interest bearing accounts and borrowings, decreased four basis points from 2.24% for the three months ended September 30, 2024 to 2.20% for the three months ended December 31, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased five basis points to 0.98% for the three months ended December 31, 2024, from 0.93% for the three months ended September 30, 2024. The average cost of time deposits decreased 13 basis points from 4.44% for the three months ended September 30, 2024, to 4.31% for the three months ended December 31, 2024. The average cost of borrowings, including subordinated debt, decreased one basis point from 5.05% for the three months ended September 30, 2024 to 5.04% for the three months ended December 31, 2024. Average demand deposits, an interest-free source of funds, increased $20.0 million, or 3.6%, from $559.2 million, or 25.7% of total average deposits, for the three months ended September 30, 2024, to $579.2 million, or 25.6% of total average deposits, for the three months ended December 31, 2024.

Provision for (Reversal of) Credit Losses

During the three months ended December 31, 2024, the Company recorded a reversal of credit losses of $762,000, compared to a provision for credit losses of $941,000 during the three months ended September 30, 2024. The provision for credit losses includes a reversal of credit losses on loans of $553,000 and a reversal of credit losses on unfunded loan commitments of $209,000. The reversal of credit losses on loans was due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology as well as changes in the loan portfolio mix. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. The decrease in reserves on unfunded loan commitments was due to an decrease in commercial real estate unfunded loan commitments of $19.5 million, or 10.0%, from $195.3 million at September 30, 2024 to $175.8 million at December 31, 2024. Management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.

During the three months ended December 31, 2024, the Company recorded net recoveries of $128,000, compared to net charge-offs of $98,000 for the three months ended September 30, 2024.

Non-Interest Income

On a sequential quarter basis, non-interest income increased $113,000, or 3.6%, to $3.3 million for the three months ended December 31, 2024, from $3.1 million for the three months ended September 30, 2024. During the three months ended December 31, 2024, service charges and fees on deposits decreased $40,000, or 1.7%, to $2.3 million from the three months ended September 30, 2024. Income from bank-owned life insurance (“BOLI”) increased $16,000, or 3.4%, from the three months ended September 30, 2024 to $486,000 for the three months ended December 31, 2024. During the three months ended December 31, 2024, the Company reported $187,000 in other income from loan-level swap fees on commercial loans, compared to $74,000 during the three months ended September 30, 2024. During the three months ended December 31, 2024, the Company reported a loss of $11,000 from mortgage banking activities, compared to income from mortgage banking activities of $246,000, during the three months ended September 30, 2024. During the three months ended December 31, 2024, the Company reported unrealized losses on marketable equity securities of $9,000, compared to unrealized gains of $10,000, during the three months ended September 30, 2024. During the three months ended December 31, 2024, the Company reported gains on non-marketable equity investments of $300,000 and did not have comparable income during the three months ended September 30, 2024.

Non-Interest Expense

For the three months ended December 31, 2024, non-interest expense increased $520,000, or 3.6%, to $14.9 million from $14.4 million for the three months ended September 30, 2024. Salaries and related benefits increased $317,000, or 3.9%, primarily related to incentive compensation accrual adjustments due to revised payout estimates and an increase in health insurance benefits. FDIC insurance expense increased $51,000, or 15.1%, occupancy expense increased $39,000, or 3.2%, primarily due to snow removal costs of $47,000, advertising expense increased $39,000, or 14.4%, data processing expense increased $31,000, or 3.6%, software expenses increased $30,000, or 4.9%, furniture and equipment expense increased $22,000, or 4.6%, and other non-interest expense increased $116,000, or 8.8%. These increases were partially offset by a decrease in professional fees of $69,000, or 12.8%, and a decrease in debit card processing and ATM network costs of $56,000, or 8.6%.

For the three months ended December 31, 2024 and the three months ended September 30, 2024, the efficiency ratio was 80.6%. For the three months ended December 31, 2024, the adjusted efficiency ratio, a non-GAAP financial measure, was 81.9% compared to 80.7% for the three months ended September 30, 2024. The increase in the adjusted efficiency ratio was driven by higher expenses during the three months ended December 31, 2024. See pages 20-22 for the related adjusted efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.

Income Tax Provision

Income tax expense for the three months ended December 31, 2024 was $1.1 million, with an effective tax rate of 24.6%, compared to $618,000, with an effective tax rate of 24.5%, for the three months ended September 30, 2024.

Net Income for the Three Months Ended December 31, 2024 Compared to the Three Months Ended December 31, 2023

The Company reported net income of $3.3 million, or $0.16 per diluted share, for the three months ended December 31, 2024, compared to net income of $2.5 million, or $0.12 per diluted share, for the three months ended December 31, 2023. Net interest income decreased $903,000, or 5.6%, provision for credit losses decreased $1.2 million, non-interest income increased $540,000, or 19.9%, and non-interest expense increased $141,000, or 1.0%, during the same period. Return on average assets and return on average equity were 0.49% and 5.48%, respectively, for the three months ended December 31, 2024, compared to 0.39% and 4.31%, respectively, for the three months ended December 31, 2023.

Net Interest Income and Net Interest Margin

Net interest income decreased $903,000, or 5.6%, to $15.3 million, for the three months ended December 31, 2024, from $16.2 million for the three months ended December 31, 2023. The decrease in net interest income was due to an increase in interest expense of $2.7 million, or 25.7%, partially offset by an increase in interest and dividend income of $1.8 million, or 6.8%. During the three months ended December 31, 2024 and the three months ended December 31, 2023, the Company had a fair value hedge which contributed $74,000 to interest income during the three months ended December 31, 2024, compared to $459,000 during the three months ended December 31, 2023. The fair value hedge matured in October of 2024. The increase in interest expense was a result of competitive pricing on deposits due to the continued high interest rate environment and the unfavorable shift in the deposit mix from low cost core deposits to high cost time deposits.

The net interest margin was 2.41% for the three months ended December 31, 2024, compared to 2.64% for the three months ended December 31, 2023. The net interest margin, on a tax-equivalent basis, was 2.43% for the three months ended December 31, 2024, compared to 2.66% for the three months ended December 31, 2023. The decrease in the net interest margin was primarily due to an increase in the average cost of interest-bearing liabilities and the unfavorable shift in the deposit mix from low cost core deposits to high cost time deposits, which was partially offset by an increase in the average yield on interest-earning assets. During the three months ended December 31, 2024, the Company had a fair value hedge which contributed to an increase in the net interest margin of one basis point, compared to an increase of eight basis points during the three months ended December 31, 2023. The fair value hedge matured in October of 2024.

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, was 4.52% for the three months ended December 31, 2024, compared to 4.38% for the three months ended December 31, 2023. The average loan yield, without the impact of tax-equivalent adjustments, was 4.86% for the three months ended December 31, 2024, compared to 4.71% for the three months ended December 31, 2023. During the three months ended December 31, 2024, average interest-earning assets increased $89.9 million, or 3.7%, to $2.5 billion, primarily due to an increase in average loans of $45.7 million, or 2.3%, an increase in average short-term investments, consisting of cash and cash equivalents, of $34.0 million, or 79.3%, an increase in average securities of $6.4 million, or 1.8%, and an increase in average other investments of $3.8 million, or 31.4%.

The average cost of total funds, including non-interest bearing accounts and borrowings, increased 39 basis points from 1.81% for the three months ended December 31, 2023, to 2.20% for the three months ended December 31, 2024. The average cost of core deposits, which the Company defines as all deposits except time deposits, increased 22 basis points to 0.98% for the three months ended December 31, 2024, from 0.76% for the three months ended December 31, 2023. The average cost of time deposits increased 53 basis points from 3.78% for the three months ended December 31, 2023 to 4.31% for the three months ended December 31, 2024. The average cost of borrowings, including subordinated debt, increased 21 basis points from 4.83% for the three months ended December 31, 2023 to 5.04% for the three months ended December 31, 2024. Average demand deposits, an interest-free source of funds, decreased $9.6 million, or 1.6%, from $588.7 million, or 27.0% of total average deposits, for the three months ended December 31, 2023, to $579.2 million, or 25.6% of total average deposits, for the three months ended December 31, 2024.

Provision for (Reversal of) Credit Losses

During the three months ended December 31, 2024, the Company recorded a reversal of credit losses of $762,000, compared to a provision for credit losses of $486,000 during the three months ended December 31, 2023. The decrease was primarily due to a decrease in unfunded commercial real estate loan commitments, as well as changes in the economic environment and related adjustments to the quantitative components of the CECL methodology. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.

The Company recorded net recoveries of $128,000 for the three months ended December 31, 2024, as compared to net charge-offs of $136,000 for the three months ended December 31, 2023.

Non-Interest Income

Non-interest income increased $540,000, or 19.9%, from $2.7 million for the three months ended December 31, 2023, to $3.3 million for the three months ended December 31, 2024. Service charges and fees on deposits increased $18,000, or 0.8%, and income from BOLI increased $54,000, or 12.5%, from the three months ended December 31, 2023 to the three months ended December 31, 2024. During the three months ended December 31, 2024, the Company reported $187,000 in other income from loan-level swap fees on commercial loans and did not have comparable income during the three months ended December 31, 2023. During the three months ended December 31, 2024, the Company reported a loss of $11,000 from mortgage banking activities and did not have comparable loss during the three months ended December 31, 2023. During the three months ended December 31, 2024 and the three months ended December 31, 2023, the Company reported $9,000 and $1,000, respectively, in unrealized losses on marketable equity securities. During the three months ended December 31, 2024, the Company reported a gain on non-marketable equity investments of $300,000 and did not have comparable non-interest income during the three months ended December 31, 2023.

Non-Interest Expense

For the three months ended December 31, 2024, non-interest expense increased $141,000, or 1.0%, to $14.9 million from $14.8 million for the three months ended December 31, 2023. During the three months ended December 31, 2023, the Company reached an agreement-in-principle to settle purported class action lawsuits concerning the Company’s deposit products and related disclosures, specifically involving overdraft fees and insufficient funds fees. This agreement-in-principle reflects our business decision to avoid the costs, uncertainties and distractions of further litigation. Excluding the legal settlement accrual of $510,000 during the three months ended December 31, 2023, non-interest expense increased $651,000, or 4.6%, from $14.3 million for the three months ended December 31, 2023 to $14.9 million for the three months ended December 31, 2024.

Salaries and related benefits increased $690,000, or 8.9%, to $8.4 million, primarily related to incentive compensation accrual adjustments due to revised payout estimates and annual merit increases. Data processing expense increased $112,000, or 14.2%, occupancy expense increased $58,000, or 4.8%, FDIC insurance expense increased $51,000, or 15.1%, software related expenses increased $44,000, or 7.4%, debit card processing and ATM network costs increased $34,000, or 6.0%, and furniture and equipment related expenses increased $11,000, or 2.2%. These increases were partially offset by a decrease in professional fees of $203,000, or 30.1%, a decrease in advertising expense of $67,000, or 17.8%, and a decrease in other non-interest expense of $589,000, or 29.1%. Excluding the $510,000 legal settlement accrual, other non-interest expense decreased $79,000, or 5.2%.

For the three months ended December 31, 2024, the efficiency ratio was 80.6%, compared to 78.3% for the three months ended December 31, 2023. For the three months ended December 31, 2024, the adjusted efficiency ratio, a non-GAAP financial measure, was 81.9% compared to 78.3% for the three months ended December 31, 2023. The increase in the efficiency ratio and the non-GAAP adjusted efficiency ratio was primarily driven by lower revenues during the three months ended December 31, 2024, compared to the three months ended December 31, 2023. See pages 20-22 for the related adjusted efficiency ratio calculation and a reconciliation of GAAP to non-GAAP financial measures.

Income Tax Provision

For the three months ended December 31, 2024, income tax expense was $1.1 million, with an effective tax rate of 24.6%, compared to $1.1 million, with an effective tax rate of 30.6%, for the three months ended December 31, 2023. For the three months ended December 31, 2023, the effective tax rate was negatively impacted by discrete items totaling $285,000.

Net Income for the Twelve Months Ended December 31, 2024 Compared to the Twelve Months Ended December 31, 2023

For the twelve months ended December 31, 2024, the Company reported net income of $11.7 million, or $0.56 per diluted share, compared to $15.1 million, or $0.70 per diluted share, for the twelve months ended December 31, 2023. Net interest income decreased $8.1 million, or 11.9%, provision for credit losses decreased $1.5 million, non-interest income increased $2.0 million, or 18.4%, and non-interest expense increased $78,000, or 0.1%, during the same period in 2023. Return on average assets and return on average equity were 0.45% and 4.93% for the twelve months ended December 31, 2024, respectively, compared to 0.59% and 6.47% for the twelve months ended December 31, 2023, respectively.

Net Interest Income and Net Interest Margin

During the twelve months ended December 31, 2024, net interest income decreased $8.1 million, or 11.9%, to $59.8 million, compared to $67.9 million for the twelve months ended December 31, 2023. The decrease in net interest income was primarily due to an increase in interest expense of $16.8 million, or 50.6%, partially offset by an increase in interest and dividend income of $8.7 million, or 8.6%.

The net interest margin for the twelve months ended December 31, 2024 was 2.45%, compared to 2.82% for the twelve months ended December 31, 2023. The net interest margin, on a tax-equivalent basis, was 2.47% for the twelve months ended December 31, 2024, compared to 2.84% for the twelve months ended December 31, 2023.

The average yield on interest-earning assets, without the impact of tax-equivalent adjustments, increased 30 basis points from 4.20% for the twelve months ended December 31, 2023 to 4.50% for the twelve months ended December 31, 2024. The average yield on loans, without the impact of tax-equivalent adjustments, increased 32 basis points from 4.54% for the twelve months ended December 31, 2023 to 4.86% for the twelve months ended December 31, 2024. During the twelve months ended December 31, 2024, average interest-earning assets increased $33.5 million, or 1.4%, to $2.4 billion, compared to the twelve months ended December 31, 2023, primarily due to an increase in average loans of $29.0 million, or 1.4%, an increase in average short-term investments, consisting of cash and cash equivalents, of $12.8 million, or 62.5%, and an increase in average other investments of $2.2 million, or 18.1%, partially offset by a decrease in average securities of $10.6 million, or 2.9%.

During the twelve months ended December 31, 2024, the average cost of funds, including non-interest-bearing demand accounts and borrowings, increased 70 basis points from 1.44% for the twelve months ended December 31, 2023 to 2.14%. For the twelve months ended December 31, 2024, the average cost of core deposits, including non-interest-bearing demand deposits, increased 24 basis points from 0.65% for the twelve months ended December 31, 2023, to 0.89%. The average cost of time deposits increased 129 basis points from 3.03% for the twelve months ended December 31, 2023 to 4.32% for the twelve months ended December 31, 2024. The average cost of borrowings, which include borrowings and subordinated debt, increased 16 basis points from 4.84% for the twelve months ended December 31, 2023 to 5.00% for the twelve months ended December 31, 2024.

For the twelve months ended December 31, 2024, average demand deposits, an interest-free source of funds, decreased $41.4 million, or 6.9%, from $602.7 million, or 27.8% of total average deposits, for the twelve months ended December 31, 2023, to $561.3 million, or 25.8% of total average deposits.

Provision for (Reversal of) Credit Losses

During the twelve months ended December 31, 2024, the Company recorded a reversal of credit losses of $665,000, compared to a provision for credit losses of $872,000 during the twelve months ended December 31, 2023. The decrease in reserves was primarily due to changes in the economic environment and related adjustments to the quantitative components of the CECL methodology. During the twelve months ended December 31, 2024, the Company recorded net recoveries of $87,000, compared to net charge-offs of $2.0 million for the twelve months ended December 31, 2023. The charge-offs during the twelve months ended December 31, 2023 were related to one commercial relationship acquired in October 2016 from Chicopee Bancorp, Inc. Specifically, the Company recorded a $1.9 million charge-off on the acquired commercial relationship, which represented the non-accretable credit mark that was required to be grossed-up to the loan’s amortized cost basis with a corresponding increase to the allowance for credit losses under the CECL implementation.

The decrease in the provision for credit losses was primarily due to changes in the loan mix as well as economic environment and related adjustments to the quantitative components of the CECL methodology. The provision for credit losses was determined by a number of factors: the continued strong credit performance of the Company’s loan portfolio, changes in the loan portfolio mix and Management’s consideration of existing economic conditions and the economic outlook from the Federal Reserve’s actions to control inflation. Management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it is appropriately reserved for the current economic environment.

Non-Interest Income

For the twelve months ended December 31, 2024, non-interest income increased $2.0 million, or 18.4%, from $10.9 million for the twelve months ended December 31, 2023 to $12.9 million. During the twelve months ended December 31, 2023, the Company recorded a non-recurring final termination expense of $1.1 million related to the defined benefit pension plan termination. During the twelve months ended, December 31, 2023, the Company also recorded a non-taxable gain of $778,000 on BOLI death benefits and did not have a comparable gain during the twelve months ended December 31, 2024. Excluding the defined benefit pension plan termination expense and the BOLI death benefit, non-interest income increased $1.6 million, or 14.6%.

During the twelve months ended December 31, 2024, service charges and fees increased $346,000, or 3.9%, and income from BOLI increased $91,000, or 5.0%, from $1.8 million for the twelve months ended December 31, 2023 to $1.9 million. During the twelve months ended December 31, 2024, the Company recorded other income from loan-level swap fees on commercial loans of $261,000 and did not have comparable income during the twelve months ended December 31, 2023. During the twelve months ended December 31, 2024, the Company reported a gain of $1.3 million on non-marketable equity investments, compared to a gain of $590,000 during the twelve months ended December 31, 2023. During the twelve months ended December 31, 2024, the Company reported a loss on the disposal of premises and equipment of $6,000, compared to a loss of $3,000 during the twelve months ended December 31, 2023. During the twelve months ended December 31, 2023, the Company also reported unrealized losses on marketable equity securities of $1,000, compared to unrealized gains on marketable equity securities of $13,000 during the twelve months ended December 31, 2024.

Non-Interest Expense

For the twelve months ended December 31, 2024, non-interest expense increased $78,000, or 0.1%, to $58.4 million from the twelve months ended December 31, 2023. During the twelve months ended December 31, 2023, the Company reached an agreement-in-principle to settle purported class action lawsuits concerning the Company’s deposit products and related disclosures, specifically involving overdraft fees and insufficient funds fees. This agreement-in-principle reflects our business decision to avoid the costs, uncertainties and distractions of further litigation. Excluding the legal settlement accrual of $510,000, non-interest expense increased $588,000, or 1.0%, from $57.8 million for the twelve months ended December 31, 2023 to $58.4 million for the twelve months ended December 31, 2024.

During the same period, salaries and related benefits increased $472,000, or 1.5%, software expenses increased $208,000, or 9.0%, data processing expense increased $320,000, or 10.1%, debit card processing and ATM network costs increased $298,000, or 13.9%, occupancy expense increased $146,000, or 3.0%, due to higher repair and maintenance costs, real estate taxes, and depreciation expense. FDIC insurance expense increased $139,000, or 10.5%. These increases were partially offset by a decrease in professional fees of $571,000, or 20.9%, which is comprised of legal fees, audit and other professional fees. During the three months ended December 31, 2023, professional fees included legal fees related to the settlement of the purported class action lawsuits. Advertising expense decreased $226,000, or 15.1%, and other non-interest expense, excluding the $510,000 legal settlement accrual, decreased $199,000, or 3.5%.

For the twelve months ended December 31, 2024, the efficiency ratio was 80.4%, compared to 74.0% for the twelve months ended December 31, 2023. For the twelve months ended December 31, 2024, the adjusted efficiency ratio, a non-GAAP financial measure, was 81.8%, compared to 74.3% for the twelve months ended December 31, 2023. See pages 20-22 for the related efficiency ratio calculations and a reconciliation of GAAP to non-GAAP financial measures.

Income Tax Provision

For the twelve months ended December 31, 2024, income tax expense was $3.3 million, with an effective tax rate of 22.0%, compared to $4.5 million, with an effective tax rate of 23.1%, for twelve months ended December 31, 2023. The decrease in income tax expense for the twelve months ended December 31, 2024 compared to the twelve months December 31, 2023 was due to lower income before taxes in 2024.

Balance Sheet

At December 31, 2024, total assets were $2.7 billion, an increase of $88.5 million, or 3.5%, from December 31, 2023. The increase in total assets was primarily due to an increase in total loans of $42.9 million, or 2.1%, an increase in cash and cash equivalents of $37.6 million, or 130.4%, and an increase in investment securities of $5.5 million, or 1.5%.

Investments

At December 31, 2024, the investment securities portfolio totaled $366.1 million, or 13.8% of total assets, compared to $360.7 million, or 14.1% of total assets, at December 31, 2023. At December 31, 2024, the Company’s available-for-sale securities portfolio, recorded at fair market value, increased $23.6 million, or 17.2%, from $137.1 million at December 31, 2023 to $160.7 million. The held-to-maturity securities portfolio, recorded at amortized cost, decreased $18.4 million, or 8.2%, from $223.4 million at December 31, 2023 to $205.0 million at December 31, 2024.

At December 31, 2024, the Company reported unrealized losses on the available-for-sale securities portfolio of $31.2 million, or 16.2% of the amortized cost basis of the available-for-sale securities portfolio, compared to unrealized losses of $29.2 million, or 17.5% of the amortized cost basis of the available-for-sale securities at December 31, 2023. At December 31, 2024, the Company reported unrealized losses on the held-to-maturity securities portfolio of $39.4 million, or 19.2% of the amortized cost basis of the held-to-maturity securities portfolio, compared to $35.7 million, or 16.0% of the amortized cost basis of the held-to-maturity securities portfolio at December 31, 2023.

The securities in which the Company may invest are limited by regulation. Federally chartered savings banks have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various government-sponsored enterprises, mortgage-backed securities, certain certificates of deposit of insured financial institutions, repurchase agreements, overnight and short-term loans to other banks, corporate debt instruments and marketable equity securities. The securities, with the exception of $4.6 million in corporate bonds, are issued by the United States government or government-sponsored enterprises and are therefore either explicitly or implicitly guaranteed as to the timely payment of contractual principal and interest. These positions are deemed to have no credit impairment, therefore, the disclosed unrealized losses with the securities portfolio relate primarily to changes in prevailing interest rates. In all cases, price improvement in future periods will be realized as the issuances approach maturity.

Management regularly reviews the portfolio for securities in an unrealized loss position. At December 31, 2024 and December 31, 2023, the Company did not record any credit impairment charges on its securities portfolio and attributed the unrealized losses primarily due to fluctuations in general interest rates or changes in expected prepayments and not due to credit quality. The primary objective of the Company’s investment portfolio is to provide liquidity and to secure municipal deposit accounts while preserving the safety of principal. The available-for-sale and held-to-maturity portfolios are both eligible for pledging to the Federal Home Loan Bank (“FHLB”) as collateral for borrowings. The portfolios are comprised of high-credit quality investments and both portfolios generated cash flows monthly from interest, principal amortization and payoffs, which support’s the Bank’s objective to provide liquidity.

Total Loans

Total loans increased $42.9 million, or 2.1%, from December 31, 2023, to $2.1 billion at December 31, 2024. The increase in total loans was due to an increase in residential real estate loans, including home equity loans, of $53.5 million, or 7.4%, partially offset by a decrease in commercial real estate loans of $4.0 million, or 0.4%, a decrease in commercial and industrial loans of $5.7 million, or 2.7% and a decrease in consumer loans of $1.1 million, or 19.8%. During the twelve months ended December 31, 2024, the Company sold $20.1 million in fixed rate residential loans to the secondary market with servicing retained.

The following table presents the summary of the loan portfolio by the major classification of the loan at the periods indicated:

	December 31, 2024		December 31, 2023
	(Dollars in thousands)

Commercial real estate loans:
Non-owner occupied	$	880,828	$	881,643
Owner-occupied		194,904		198,108
Total commercial real estate loans		1,075,732		1,079,751

Residential real estate loans:
Residential		653,802		612,315
Home equity		121,857		109,839
Total residential real estate loans		775,659		722,154

Commercial and industrial loans		211,656		217,447

Consumer loans		4,391		5,472
Total gross loans		2,067,438		2,024,824
Unamortized premiums and net deferred loans fees and costs		2,751		2,493
Total loans	$	2,070,189	$	2,027,317

Credit Quality

Management continues to closely monitor the loan portfolio for any signs of deterioration in borrowers’ financial condition and also in light of speculation that commercial real estate values may deteriorate as the market continues to adjust to higher vacancies and interest rates. We continue to proactively take steps to mitigate risk in our loan portfolio.

Total delinquency was $5.0 million, or 0.24% of total loans, at December 31, 2024, compared to $6.0 million, or 0.30% of total loans at December 31, 2023. At December 31, 2024, nonperforming loans totaled $5.4 million, or 0.26% of total loans, compared to $6.4 million, or 0.32% of total loans, at December 31, 2023. At December 31, 2024 and December 31, 2023, there were no loans 90 or more days past due and still accruing interest. Total nonperforming assets totaled $5.4 million, or 0.20% of total assets, at December 31, 2024, compared to $6.4 million, or 0.25% of total assets, at December 31, 2023. At December 31, 2024 and December 31, 2023, the Company did not have any other real estate owned. At December 31, 2024, the allowance for credit losses was $19.5 million, or 0.94% of total loans and 362.9% of nonperforming loans, compared to $20.3 million, or 1.00% of total loans and 315.6% of nonperforming loans, at December 31, 2023. Total classified loans, defined as special mention and substandard loans, decreased $1.1 million, or 2.8%, from $39.5 million, or 1.9% of total loans, at December 31, 2023 to $38.4 million, or 1.9% of total loans, at December 31, 2024. Our commercial real estate portfolio is comprised of diversified property types and primarily within our geographic footprint. At December 31, 2024, the commercial real estate portfolio totaled $1.1 billion, and represented 52.0% of total loans. Of the $1.1 billion, $880.8 million, or 81.9%, was categorized as non-owner occupied commercial real estate and represented 325.2% of the Bank’s total risk-based capital. More details on the diversification of the loan portfolio are available in the supplementary earnings presentation.

Deposits

Total deposits increased $118.9 million, or 5.6%, from $2.1 billion at December 31, 2023 to $2.3 billion at December 31, 2024. Core deposits, which the Company defines as all deposits except time deposits, increased $26.7 million, or 1.7%, from $1.5 billion, or 71.5% of total deposits, at December 31, 2023, to $1.6 billion, or 68.9% of total deposits, at December 31, 2024. Non-interest-bearing deposits decreased $14.0 million, or 2.4%, to $565.6 million, and represent 25.0% of total deposits, money market accounts increased $27.1 million, or 4.3%, to $661.5 million, savings accounts decreased $5.8 million, or 3.1%, to $181.6 million and interest-bearing checking accounts increased $19.3 million, or 14.7%, to $150.3 million.

Time deposits increased $92.2 million, or 15.1%, from $611.4 million at December 31, 2023 to $703.6 million at December 31, 2024. Brokered time deposits, which are included in time deposits, totaled $1.7 million at December 31, 2024 and at December 31, 2023. The Company has experienced growth and movement in both money market accounts and time deposits as a result of relationship pricing, the current interest rate environment, and customer behaviors, as opposed to time deposit specials or interest rate adjustments. We continue our disciplined and focused approach to core relationship management and customer outreach to meet funding requirements and liquidity needs, with an emphasis on retaining a long-term customer relationship base by competing for and retaining deposits in our local market. At December 31, 2024, the Bank’s uninsured deposits represented 28.4% of total deposits, compared to 26.8% at December 31, 2023.

The table below is a summary of our deposit balances for the periods noted:

	December 31, 2024		September 30, 2024		December 31, 2023
	(Dollars in thousands)
Core Deposits:
Demand accounts	$	565,620	$	568,685	$	579,595
Interest-bearing accounts		150,348		140,332		131,031
Savings accounts		181,618		179,214		187,405
Money market accounts		661,478		635,824		634,361
Total Core Deposits	$	1,559,064	$	1,524,055	$	1,532,392
Time Deposits:		703,583		700,151		611,352
Total Deposits:	$	2,262,647	$	2,224,206	$	2,143,744

FHLB and Subordinated Debt

At December 31, 2024, total borrowings decreased $33.4 million, or 21.3%, from $156.5 million at December 31, 2023 to $123.1 million. At December 31, 2024, short-term borrowings decreased $10.7 million, or 66.5%, to $5.4 million, compared to $16.1 million at December 31, 2023. Long-term borrowings decreased $22.6 million, or 18.8%, from $120.6 million at December 31, 2023 to $98.0 million at December 31, 2024. At December 31, 2024 and December 31, 2023, borrowings also consisted of $19.8 million and $19.7 million, respectively, in fixed-to-floating rate subordinated notes.

The Company utilized the Bank Term Funding Program (“BTFP”), which was created in March 2023 to enhance banking system liquidity by allowing institutions to pledge certain securities at par value and borrow at a rate of ten basis points over the one-year overnight index swap rate. The BTFP was available to federally insured depository institutions in the U.S., with advances having a term of up to one year with no prepayment penalties. The BTFP ceased extending new advances in March 2024. At December 31, 2023, the Company’s outstanding balance under the BTFP was $90.0 million. There was no outstanding balance under the BTFP at December 31, 2024.

As of December 31, 2024, the Company had $461.6 million of additional borrowing capacity at the Federal Home Loan Bank, $382.9 million of additional borrowing capacity under the Federal Reserve Bank Discount Window and $25.0 million of other unsecured lines of credit with correspondent banks.

Capital

At December 31, 2024, shareholders’ equity was $235.9 million, or 8.9% of total assets, compared to $237.4 million, or 9.3% of total assets, at December 31, 2023. The change was primarily attributable to an increase in accumulated other comprehensive loss of $1.5 million, cash dividends paid of $5.9 million, repurchase of shares at a cost of $7.8 million, partially offset by net income of $11.7 million. At December 31, 2024, total shares outstanding were 20,875,713. The Company’s regulatory capital ratios continue to be strong and in excess of regulatory minimum requirements to be considered well-capitalized as defined by regulators and internal Company targets.

	December 31, 2024				December 31, 2023
	Company		Bank		Company		Bank
Total Capital (to Risk Weighted Assets)	14.38	%	13.65	%	14.67	%	13.94	%
Tier 1 Capital (to Risk Weighted Assets)	12.37	%	12.64	%	12.59	%	12.88	%
Common Equity Tier 1 Capital (to Risk Weighted Assets)	12.37	%	12.64	%	12.59	%	12.88	%
Tier 1 Leverage Ratio (to Adjusted Average Assets)	9.14	%	9.34	%	9.40	%	9.62	%

Dividends

Although the Company has historically paid quarterly dividends on its common stock and currently intends to continue to pay such dividends, the Company’s ability to pay such dividends depends on a number of factors, including restrictions under federal laws and regulations on the Company’s ability to pay dividends, and as a result, there can be no assurance that dividends will continue to be paid in the future.

About Western New England Bancorp, Inc.

Western New England Bancorp, Inc. is a Massachusetts-chartered stock holding company and the parent company of Westfield Bank, CSB Colts, Inc., Elm Street Securities Corporation, WFD Securities, Inc. and WB Real Estate Holdings, LLC. Western New England Bancorp, Inc. and its subsidiaries are headquartered in Westfield, Massachusetts and operate 25 banking offices throughout western Massachusetts and northern Connecticut. To learn more, visit our website at www.westfieldbank.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the Company’s financial condition, liquidity, results of operations, future performance, and business. Forward-looking statements may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to:

unpredictable changes in general economic or political conditions, financial markets, fiscal, monetary and regulatory policies, including actual or potential stress in the banking industry;
the duration and scope of potential pandemics, including the emergence of new variants and the response thereto;
unstable political and economic conditions which could materially impact credit quality trends and the ability to generate loans and gather deposits;
inflation and governmental responses to inflation, including recent sustained increases and potential future increases in interest rates that reduce margins;
the effect on our operations of governmental legislation and regulation, including changes in accounting regulation or standards, the nature and timing of the adoption and effectiveness of new requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Basel guidelines, capital requirements and other applicable laws and regulations;
significant changes in accounting, tax or regulatory practices or requirements;
new legal obligations or liabilities or unfavorable resolutions of litigation;
disruptive technologies in payment systems and other services traditionally provided by banks;
the highly competitive industry and market area in which we operate;
operational risks or risk management failures by us or critical third parties, including without limitation with respect to data processing, information systems, cybersecurity, technological changes, vendor issues, business interruption, and fraud risks;
failure or circumvention of our internal controls or procedures;
changes in the securities markets which affect investment management revenues;
increases in Federal Deposit Insurance Corporation deposit insurance premiums and assessments;
the soundness of other financial services institutions which may adversely affect our credit risk;
certain of our intangible assets may become impaired in the future;
new lines of business or new products and services, which may subject us to additional risks;
changes in key management personnel which may adversely impact our operations;
severe weather, natural disasters, acts of war or terrorism and other external events which could significantly impact our business; and
other risk factors detailed from time to time in our SEC filings.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from the results discussed in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except to the extent required by law.

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Consolidated Statements of Net Income and Other Data (Dollars in thousands, except per share data) (Unaudited)

	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2024			2024			2024			2024			2023			2024			2023
INTEREST AND DIVIDEND INCOME:
Loans	$	25,183		$	25,134		$	24,340		$	24,241		$	23,939		$	98,898		$	91,169
Securities		2,273			2,121			2,141			2,114			2,094			8,649			8,370
Other investments		214			189			148			136			140			687			558
Short-term investments		916			396			173			113			597			1,598			1,021
Total interest and dividend income		28,586			27,840			26,802			26,604			26,770			109,832			101,118

INTEREST EXPENSE:
Deposits		11,443			11,165			10,335			9,293			8,773			42,236			26,649
Short-term borrowings		60			71			186			283			123			600			1,589
Long-term debt		1,557			1,622			1,557			1,428			1,444			6,164			3,957
Subordinated debt		253			254			254			254			254			1,015			1,014
Total interest expense		13,313			13,112			12,332			11,258			10,594			50,015			33,209

Net interest and dividend income		15,273			14,728			14,470			15,346			16,176			59,817			67,909

(REVERSAL OF) PROVISION FOR CREDIT LOSSES		(762	)		941			(294	)		(550	)		486			(665	)		872

Net interest and dividend income after (reversal of) provision for credit losses		16,035			13,787			14,764			15,896			15,690			60,482			67,037

NON-INTEREST INCOME:
Service charges and fees on deposits		2,301			2,341			2,341			2,219			2,283			9,202			8,856
Income from bank-owned life insurance		486			470			502			453			432			1,911			1,820
Unrealized (loss) gain on marketable equity securities		(9	)		10			4			8			(1	)		13			(1	)
(Loss) gain on sale of mortgages		(11	)		246			–			–			–			235			–
Gain on non-marketable equity investments		300			–			987			–			–			1,287			590
Loss on disposal of premises and equipment		–			–			–			(6	)		–			(6	)		(3	)
Loss on defined benefit plan termination		–			–			–			–			–			–			(1,143	)
Gain on bank-owned life insurance death benefit		–			–			–			–			–			–			778
Other income		187			74			–			–			–			261			–
Total non-interest income		3,254			3,141			3,834			2,674			2,714			12,903			10,897

NON-INTEREST EXPENSE:
Salaries and employees benefits		8,429			8,112			7,901			8,244			7,739			32,686			32,214
Occupancy		1,256			1,217			1,218			1,363			1,198			5,054			4,908
Furniture and equipment		505			483			483			484			494			1,955			1,954
Data processing		900			869			846			862			788			3,477			3,157
Software		642			612			566			699			598			2,519			2,311
Debit/ATM card processing expense		593			649			643			552			559			2,437			2,139
Professional fees		471			540			581			569			674			2,161			2,732
FDIC insurance		389			338			323			410			338			1,460			1,321
Advertising		310			271			339			349			377			1,269			1,495
Other		1,431			1,315			1,414			1,250			2,020			5,410			6,119
Total non-interest expense		14,926			14,406			14,314			14,782			14,785			58,428			58,350

INCOME BEFORE INCOME TAXES		4,363			2,522			4,284			3,788			3,619			14,957			19,584

INCOME TAX PROVISION		1,075			618			771			827			1,108			3,291			4,516
NET INCOME	$	3,288		$	1,904		$	3,513		$	2,961		$	2,511		$	11,666		$	15,068

Basic earnings per share	$	0.16		$	0.09		$	0.17		$	0.14		$	0.12		$	0.56		$	0.70
Weighted average shares outstanding		20,561,749			20,804,162			21,056,173			21,180,968			21,253,452			20,899,573			21,535,888
Diluted earnings per share	$	0.16		$	0.09		$	0.17		$	0.14		$	0.12		$	0.56		$	0.70
Weighted average diluted shares outstanding		20,701,276			20,933,833			21,163,762			21,271,323			21,400,664			21,016,358			21,610,329

Other Data:
Return on average assets (1)		0.49	%		0.29	%		0.55	%		0.47	%		0.39	%		0.45	%		0.59	%
Return on average equity (1)		5.48	%		3.19	%		6.03	%		5.04	%		4.31	%		4.93	%		6.47	%
Efficiency ratio		80.56	%		80.62	%		78.20	%		82.03	%		78.27	%		80.35	%		74.04	%
Adjusted efficiency ratio (2)		81.85	%		80.67	%		82.68	%		82.04	%		78.26	%		81.80	%		74.25	%
Net interest margin		2.41	%		2.40	%		2.42	%		2.57	%		2.64	%		2.45	%		2.82	%
Net interest margin, on a fully tax-equivalent basis		2.43	%		2.42	%		2.44	%		2.59	%		2.66	%		2.47	%		2.84	%
(1) Annualized.
(2) The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gain on non-marketable equity investments, loss on disposal of premises and equipment, loss on defined benefit plan termination and gain on bank-owned life insurance death benefit.

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands) (Unaudited)

	December 31,			September 30,			June 30,			March 31,			December 31,
	2024			2024			2024			2024			2023
Cash and cash equivalents	$	66,450		$	72,802		$	53,458		$	22,613		$	28,840
Securities available-for-sale, at fair value		160,704			155,889			135,089			138,362			137,115
Securities held to maturity, at amortized cost		205,036			213,266			217,632			221,242			223,370
Marketable equity securities, at fair value		397			252			233			222			196
Federal Home Loan Bank of Boston and other restricted stock – at cost		5,818			7,143			7,143			3,105			3,707

Loans		2,070,189			2,049,002			2,026,226			2,025,566			2,027,317
Allowance for credit losses		(19,529	)		(19,955	)		(19,444	)		(19,884	)		(20,267	)
Net loans		2,050,660			2,029,047			2,006,782			2,005,682			2,007,050

Bank-owned life insurance		77,056			76,570			76,100			75,598			75,145
Goodwill		12,487			12,487			12,487			12,487			12,487
Core deposit intangible		1,438			1,531			1,625			1,719			1,813
Other assets		73,044			71,492			75,521			76,206			74,848
TOTAL ASSETS	$	2,653,090		$	2,640,479		$	2,586,070		$	2,557,236		$	2,564,571

Total deposits	$	2,262,647		$	2,224,206		$	2,171,809		$	2,143,747		$	2,143,744
Short-term borrowings		5,390			4,390			6,570			11,470			16,100
Long-term debt		98,000			128,277			128,277			120,646			120,646
Subordinated debt		19,751			19,741			19,731			19,722			19,712
Securities pending settlement		8,622			2,513			102			–			–
Other liabilities		22,770			20,697			23,104			25,855			26,960
TOTAL LIABILITIES		2,417,180			2,399,824			2,349,593			2,321,440			2,327,162

TOTAL SHAREHOLDERS’ EQUITY		235,910			240,655			236,477			235,796			237,409
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,653,090		$	2,640,479		$	2,586,070		$	2,557,236		$	2,564,571

WESTERN NEW ENGLAND BANCORP, INC. AND SUBSIDIARIES Other Data (Dollars in thousands, except per share data) (Unaudited)

	Three Months Ended
	December 31,	September 30,	June 30,	March 31,	December 31,
	2024	2024	2024	2024	2023
Shares outstanding at end of period	20,875,713	21,113,408	21,357,849	21,627,690	21,666,807

Operating results:
Net interest income	$ 15,273	$ 14,728	$ 14,470	$ 15,346	$ 16,176
(Reversal of) provision for credit losses	(762)	941	(294)	(550)	486
Non-interest income	3,254	3,141	3,834	2,674	2,714
Non-interest expense	14,926	14,406	14,314	14,782	14,785
Income before income provision for income taxes	4,363	2,522	4,284	3,788	3,619
Income tax provision	1,075	618	771	827	1,108
Net income	3,288	1,904	3,513	2,961	2,511

Performance Ratios:
Net interest margin	2.41%	2.40%	2.42%	2.57%	2.64%
Net interest margin, on a fully tax-equivalent basis	2.43%	2.42%	2.44%	2.59%	2.66%
Interest rate spread	1.63%	1.60%	1.66%	1.85%	1.96%
Interest rate spread, on a fully tax-equivalent basis	1.65%	1.62%	1.67%	1.86%	1.98%
Return on average assets	0.49%	0.29%	0.55%	0.47%	0.39%
Return on average equity	5.48%	3.19%	6.03%	5.04%	4.31%
Efficiency ratio (GAAP)	80.56%	80.62%	78.20%	82.03%	78.27%
Adjusted efficiency ratio (non-GAAP) ⁽¹⁾	81.85%	80.67%	82.68%	82.04%	78.26%

Per Common Share Data:
Basic earnings per share	$ 0.16	$ 0.09	$ 0.17	$ 0.14	$ 0.12
Earnings per diluted share	0.16	0.09	0.17	0.14	0.12
Cash dividend declared	0.07	0.07	0.07	0.07	0.07
Book value per share	11.30	11.40	11.07	10.90	10.96
Tangible book value per share (non-GAAP) ⁽²⁾	10.63	10.73	10.41	10.25	10.30

Asset Quality:
30-89 day delinquent loans	$ 3,694	$ 3,059	$ 3,270	$ 3,000	$ 4,605
90 days or more delinquent loans	1,301	1,253	2,280	1,716	1,394
Total delinquent loans	4,995	4,312	5,550	4,716	5,999
Total delinquent loans as a percentage of total loans	0.24%	0.21%	0.27%	0.23%	0.30%
Nonperforming loans	$ 5,381	$ 4,873	$ 5,845	$ 5,837	$ 6,421
Nonperforming loans as a percentage of total loans	0.26%	0.24%	0.29%	0.29%	0.32%
Nonperforming assets as a percentage of total assets	0.20%	0.18%	0.23%	0.23%	0.25%
Allowance for credit losses as a percentage of nonperforming loans	362.93%	409.50%	332.66%	340.65%	315.64%
Allowance for credit losses as a percentage of total loans	0.94%	0.97%	0.96%	0.98%	1.00%
Net loan (recoveries) charge-offs	$ (128)	$ 98	$ 10	$ (67)	$ 136
Net loan (recoveries) charge-offs as a percentage of average loans	(0.01)%	0.00%	0.00%	0.00%	0.01%

____________________________

The adjusted efficiency ratio (non-GAAP) represents the ratio of operating expenses divided by the sum of net interest and dividend income and non-interest income, excluding realized and unrealized gains and losses on securities, gain on non-marketable equity investments, loss on disposal of premises and equipment, loss on defined benefit plan termination and gain on bank-owned life insurance death benefit.
Tangible book value per share (non-GAAP) represents the value of the Company’s tangible assets divided by its current outstanding shares.

The following table sets forth the information relating to our average balances and net interest income for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023 and reflects the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.

	Three Months Ended
	December 31, 2024								September 30, 2024							December 31, 2023
	Average						Average Yield/		Average					Average Yield/		Average					Average Yield/
	Balance		Interest				Cost⁽⁸⁾		Balance		Interest			Cost⁽⁸⁾		Balance		Interest			Cost⁽⁸⁾
	(Dollars in thousands)
ASSETS:
Interest-earning assets
Loans(1)(2)	$	2,062,822		$	25,311		4.88	%	$	2,038,593	$	25,253		4.93	%	$	2,017,089	$	24,052		4.73	%
Securities(2)		361,476			2,273		2.50			354,696		2,121		2.38			355,078		2,094		2.34
Other investments		15,924			214		5.35			15,904		189		4.73			12,119		140		4.58
Short-term investments(3)		76,795			916		4.75			32,043		396		4.92			42,826		597		5.53
Total interest-earning assets		2,517,017			28,714		4.54			2,441,236		27,959		4.56			2,427,112		26,883		4.39
Total non-interest-earning assets		155,538								153,585							158,435
Total assets	$	2,672,555							$	2,594,821						$	2,585,547

LIABILITIES AND EQUITY:
Interest-bearing liabilities
Interest-bearing checking accounts	$	149,231			264		0.70		$	131,133		271		0.82		$	139,894		260		0.74
Savings accounts		179,122			38		0.08			179,844		38		0.08			187,047		39		0.08
Money market accounts		654,965			3,553		2.16			621,340		3,172		2.03			657,407		2,716		1.64
Time deposit accounts		700,324			7,588		4.31			688,797		7,684		4.44			603,860		5,758		3.78
Total interest-bearing deposits		1,683,642			11,443		2.70			1,621,114		11,165		2.74			1,588,208		8,773		2.19
Borrowings		147,748			1,870		5.04			153,317		1,947		5.05			149,585		1,821		4.83
Interest-bearing liabilities		1,831,390			13,313		2.89			1,774,431		13,112		2.94			1,737,793		10,594		2.42
Non-interest-bearing deposits		579,168								559,224							588,748
Other non-interest-bearing liabilities		23,380								23,466							27,847
Total non-interest-bearing liabilities		602,548								582,690							616,595
Total liabilities		2,433,938								2,357,121							2,354,388
Total equity		238,617								237,700							231,159
Total liabilities and equity	$	2,672,555							$	2,594,821						$	2,585,547
Less: Tax-equivalent adjustment(2)					(128	)						(119	)						(113	)
Net interest and dividend income				$	15,273						$	14,728						$	16,176
Net interest rate spread(4)							1.63	%						1.60	%						1.96	%
Net interest rate spread, on a tax-equivalent basis(5)							1.65	%						1.62	%						1.98	%
Net interest margin(6)							2.41	%						2.40	%						2.64	%
Net interest margin, on a tax-equivalent basis(7)							2.43	%						2.42	%						2.66	%
Ratio of average interest-earning assets to average interest-bearing liabilities							137.44	%						137.58	%						139.67	%

The following tables set forth the information relating to our average balances and net interest income for the twelve months ended December 31, 2024 and 2023 and reflect the average yield on interest-earning assets and average cost of interest-bearing liabilities for the periods indicated.

	Twelve Months Ended December 31,
	2024							2023
	Average Balance		Interest			Average Yield/ Cost		Average Balance		Interest			Average Yield/ Cost
	Average Balance		Interest			Average Yield/ Cost		Average Balance		Interest			Average Yield/ Cost
	(Dollars in thousands)
ASSETS:
Interest-earning assets
Loans(1)(2)	$	2,035,149	$	99,369		4.88	%	$	2,006,166	$	91,640		4.57	%
Securities(2)		357,631		8,649		2.42			368,201		8,371		2.27
Other investments		14,669		687		4.68			12,425		558		4.49
Short-term investments(3)		33,254		1,598		4.81			20,459		1,021		4.99
Total interest-earning assets		2,440,703		110,303		4.52			2,407,251		101,590		4.22
Total non-interest-earning assets		155,056							155,511
Total assets	$	2,595,759						$	2,562,762

LIABILITIES AND EQUITY:
Interest-bearing liabilities
Interest-bearing checking accounts	$	136,861		1,022		0.75	%	$	142,005		1,041		0.73	%
Savings accounts		182,678		166		0.09			202,354		181		0.09
Money market accounts		631,197		12,242		1.94			697,621		9,529		1.37
Time deposit accounts		666,917		28,806		4.32			524,827		15,898		3.03
Total interest-bearing deposits		1,617,653		42,236		2.61			1,566,807		26,649		1.70
Short-term borrowings and long-term debt		155,560		7,779		5.00			135,532		6,560		4.84
Total interest-bearing liabilities		1,773,213		50,015		2.82			1,702,339		33,209		1.95
Non-interest-bearing deposits		561,264							602,652
Other non-interest-bearing liabilities		24,541							24,885
Total non-interest-bearing liabilities		585,805							627,537

Total liabilities		2,359,018							2,329,876
Total equity		236,741							232,886
Total liabilities and equity	$	2,595,759						$	2,562,762
Less: Tax-equivalent adjustment (2)				(471	)						(472	)
Net interest and dividend income			$	59,817						$	67,909
Net interest rate spread (4)						1.68	%						2.25	%
Net interest rate spread, on a tax-equivalent basis (5)						1.70	%						2.27	%
Net interest margin (6)						2.45	%						2.82	%
Net interest margin, on a tax-equivalent basis (7)						2.47	%						2.84	%
Ratio of average interest-earning assets to average interest-bearing liabilities						137.64	%						141.41	%

(1)	Loans, including nonaccrual loans, are net of deferred loan origination costs and unadvanced funds.
(2)	Loan and securities income are presented on a tax-equivalent basis using a tax rate of 21%. The tax-equivalent adjustment is deducted from tax-equivalent net interest and dividend income to agree to the amount reported on the consolidated statements of net income.
(3)	Short-term investments include federal funds sold.
(4)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(5)	Net interest rate spread, on a tax-equivalent basis, represents the difference between the tax-equivalent weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(6)	Net interest margin represents net interest and dividend income as a percentage of average interest-earning assets.
(7)	Net interest margin, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets.
(8)	Annualized.

Reconciliation of Non-GAAP to GAAP Financial Measures

The Company believes that certain non-GAAP financial measures provide information to investors that is useful in understanding its results of operations and financial condition. Because not all companies use the same calculation, this presentation may not be comparable to other similarly titled measures calculated by other companies. A reconciliation of these non-GAAP financial measures is provided below.

	For the quarter ended
	12/31/2024			9/30/2024			6/30/2024			3/31/2024			12/31/2023
	(Dollars in thousands)

Loan interest (no tax adjustment)	$	25,183		$	25,134		$	24,340		$	24,241		$	23,939
Tax-equivalent adjustment		128			119			114			110			113
Loan interest (tax-equivalent basis)	$	25,311		$	25,253		$	24,454		$	24,351		$	24,052

Net interest income (no tax adjustment)	$	15,273		$	14,728		$	14,470		$	15,346		$	16,176
Tax equivalent adjustment		128			119			114			110			113
Net interest income (tax-equivalent basis)	$	15,401		$	14,847		$	14,584		$	15,456		$	16,289

Net interest income (no tax adjustment)	$	15,273		$	14,728		$	14,470		$	15,346		$	16,176
Less:
Fair value hedge interest income		74			434			447			443			459
Adjusted net interest income (non-GAAP)	$	15,199		$	14,294		$	14,023		$	14,903		$	15,717

Average interest-earning assets	$	2,517,017		$	2,441,236		$	2,400,633		$	2,403,086		$	2,427,112
Net interest margin (no tax adjustment)		2.41	%		2.40	%		2.42	%		2.57	%		2.64	%
Net interest margin, tax-equivalent		2.43	%		2.42	%		2.44	%		2.59	%		2.66	%
Adjusted net interest margin, excluding fair value hedge interest income (non-GAAP)		2.40	%		2.33	%		2.35	%		2.50	%		2.57	%

Book Value per Share (GAAP)	$	11.30		$	11.40		$	11.07		$	10.90		$	10.96
Non-GAAP adjustments:
Goodwill		(0.60	)		(0.59	)		(0.58	)		(0.58	)		(0.58	)
Core deposit intangible		(0.07	)		(0.08	)		(0.08	)		(0.07	)		(0.08	)
Tangible Book Value per Share (non-GAAP)	$	10.63		$	10.73		$	10.41		$	10.25		$	10.30

	For the quarter ended
	12/31/2024			9/30/2024			6/30/2024			3/31/2024			12/31/2023
	(Dollars in thousands)

Efficiency Ratio:
Non-interest Expense (GAAP)	$	14,926		$	14,406		$	14,314		$	14,782		$	14,785

Net Interest Income (GAAP)	$	15,273		$	14,728		$	14,470		$	15,346		$	16,176

Non-interest Income (GAAP)	$	3,254		$	3,141		$	3,834		$	2,674		$	2,714
Non-GAAP adjustments:
Unrealized losses (gains) on marketable equity securities		9			(10	)		(4	)		(8	)		1
Gain on non-marketable equity investments		(300	)		–			(987	)		–			–
Loss on disposal of premises and equipment		–			–			–			6			–
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP)	$	2,963		$	3,131		$	2,843		$	2,672		$	2,715
Total Revenue for Adjusted Efficiency Ratio (non-GAAP)	$	18,236		$	17,859		$	17,313		$	18,018		$	18,891

Efficiency Ratio (GAAP)		80.56	%		80.62	%		78.20	%		82.03	%		78.27	%

Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP))		81.85	%		80.67	%		82.68	%		82.04	%		78.26	%

	For the twelve months ended
	12/31/2024	12/31/2023
	(Dollars in thousands)

Loan income (no tax adjustment)	$ 98,898	$ 91,169
Tax-equivalent adjustment	471	472
Loan income (tax-equivalent basis)	$ 99,369	$ 91,641

Net interest income (no tax adjustment)	$ 59,817	$ 67,909
Tax equivalent adjustment	471	472
Net interest income (tax-equivalent basis)	$ 60,288	$ 68,381

Net interest income (no tax adjustment)	$ 59,817	$ 67,909
Less:
Fair value hedge interest income	1,398	1,085
Adjusted net interest income (non-GAAP)	$ 58,419	$ 66,824

Average interest-earning assets	$ 2,440,703	$ 2,407,251
Net interest margin (no tax adjustment)	2.45%	2.82%
Net interest margin, tax-equivalent	2.47%	2.84%
Adjusted net interest margin, excluding fair value hedge interest income (non-GAAP)	2.39%	2.77%

Adjusted Efficiency Ratio:
Non-interest Expense (GAAP)	$ 58,428	$ 58,350

Net Interest Income (GAAP)	$ 59,817	$ 67,909

Non-interest Income (GAAP)	$ 12,903	$ 10,897
Non-GAAP adjustments:
Unrealized gains on marketable equity securities	(13)	1
Loss on disposal of premises and equipment, net	6	3
Gain on bank-owned life insurance	–	(778)
Gain on non-marketable equity investments	(1,287)	(590)
Loss on defined benefit plan curtailment	–	1,143
Non-interest Income for Adjusted Efficiency Ratio (non-GAAP)	$ 11,609	$ 10,676
Total Revenue for Adjusted Efficiency Ratio (non-GAAP)	$ 71,426	$ 78,585

Efficiency Ratio (GAAP)	80.35%	74.04%

Adjusted Efficiency Ratio (Non-interest Expense (GAAP)/Total Revenue for Adjusted Efficiency Ratio (non-GAAP))	81.80%	74.25%

For further information contact:
James C. Hagan, President and CEO
Guida R. Sajdak, Executive Vice President and CFO
Meghan Hibner, First Vice President and Investor Relations Officer
413-568-1911

The MIL Network –

January 29, 2025

MIL-OSI USA: Jan 28, 2025 ATU Congratulates Sean Duffy on Senate Confirmation as U.S. Secretary of Transportation

Source: US Amalgamated Transit Union

Silver Spring, MD – Amalgamated Transit Union (ATU) International President John Costa released the following statement on the Senate Confirmation of Sean Duffy as the new U.S. Secretary of Transportation.

“As the largest labor organization representing transit workers in the United States and Canada, we congratulate Sean Duffy on his Senate confirmation to serve as the U.S. Secretary of the Department of Transportation (DOT).

“Transit ridership is still not fully recovered since the COVID pandemic, funding is scarce, and new technology is quickly changing the way people travel. Secretary Duffy has a lot on his plate. We look forward to working with him to tackle these transportation challenges facing our nation including protecting transit workers on the job, reauthorization of the surface transportation bill, and most importantly building back our public transit systems. We’re hopeful that he will lead the Department of Transportation with public transit workers and riders in mind.”

MIL OSI USA News –

January 29, 2025

MIL-OSI Global: Commerce oversees everything from weather and salmon to trade and census − here are 3 challenges awaiting new secretary

Source: The Conversation – USA – By Linda J. Bilmes, Daniel Patrick Moynihan Senior Lecturer in Public Policy and Public Finance, Harvard Kennedy School

Howard Lutnick, left, is President Donald Trump’s nominee to run the Commerce Department. AP Photo/Evan Vucci

The U.S. secretary of commerce oversees the smallest but arguably most complex of all Cabinet-level departments.

Established as a distinct entity in 1913, it has evolved into a sprawling organization with 13 bureaus spanning a wide variety of critical areas that include weather forecasting, conducting the census, estimating gross domestic product, managing fisheries, promoting U.S. exports, setting standards for new technology and allocating radio frequency spectrum. It is even home to one of America’s eight uniformed military services, the NOAA Commissioned Officer Corps with its own fleet of ships, aircraft and 321 commissioned officers. Its main mission is to monitor oceans, waterways and the atmosphere in support of the National Oceanographic and Atmospheric Administration.

As a result, there is no other Cabinet position that has to engage with lawmakers in Congress across so many disparate technical issues, committees and stakeholders. This medley reflects both the historical evolution of the U.S. economy and a degree of political happenstance.

I served at the Commerce Department in several roles, including as chief financial officer and assistant secretary for administration, management and budget, and have watched several administrations attempt to craft an overarching strategic narrative around this diverse set of missions.

Besides the difficult job of formulating a unifying strategy for the department’s many activities, I believe there are three specific challenges in particular that await the next secretary, a position that requires Senate confirmation.

The Commerce Department manages salmon as part of its National Marine Fisheries Service.
AP Photo/Manuel Valdes

Commerce: A sprawling bureauocracy

From its earliest days, the Commerce Department has collected trade statistics, overseen lighthouses and issued patents and trademarks. But since then, its portfolio has expanded significantly.

In 1970, NOAA was placed inside Commerce, partly as a result of a feud between President Richard Nixon and his interior secretary, Wally Hickel, over the Vietnam War. NOAA now accounts for more than half the department’s US$11 billion budget and has created some peculiar departmental overlaps.

As President Barack Obama joked in his 2011 State of the Union speech, “The Interior Department is in charge of salmon while they’re in freshwater, but the Commerce Department handles them when they’re in saltwater.”

While the joke wasn’t quite accurate – a division of Commerce manages salmon in both fresh and saltwater, though Interior does restore their habitat – it does reflect some odd situations. For example, when it comes to sea turtles, Interior oversees their nests on shore, whereas Commerce protects them in the open sea.

Due to the department’s broad interests, the commerce secretary has a role in nearly every important issue facing the country.

He or she needs to be a quick study who is able to multitask, respond to congressional inquiries on a myriad of topics, as well as manage a 50,000-strong workforce including economists, scientists, statisticians, meteorologists and other experts.

One example of the caliber of experts Commerce oversees is the National Institute for Standards and Technology, which does cutting-edge research in bioscience, artificial intelligence, materials science and industrial measurement standards. The institute currently has five Nobel laureates in physics and chemistry on its staff and is on the front lines on cybersecurity and national defense.

While it’s unclear how Trump nominee Howard Lutnick plans to unify Commerce’s work, the previous secretary, Gina Raimondo, outlined five strategic goals for her department, including driving U.S. global competitiveness, using data to find new opportunities and modernizing its services and capabilities.

The Senate Committee on Commerce, Science and Transportation is holding a hearing on Jan. 29, 2025, to consider Lutnick’s nomination.

Challenge No. 1: Another census is just around the corner

The incoming secretary’s biggest challenge will be the decennial census due on April 1, 2030.

The census counts every person living in the U.S. and five U.S. territories. Census data is used to apportion the number of seats each state has in the House of Representatives and to adjust or redraw electoral districts, as well as to apportion federal funding allotted to each district. Consequently, the census receives huge attention in Congress. It will be an especially hot topic because the data collected in the 2020 census had errors due to the pandemic.

Conducting the census is highly labor intensive and takes many years of planning and preparation, which ramp up now.

The Commerce Department must hire 500,000 temporary workers, open local offices and run large-scale field tests, award billions of dollars in contracts, and work with every state, local, county and tribal government in the country to map where people live. This includes dorms, homeless shelters, nursing homes, prisons, oil rigs, boats, tents, hospitals and mobile homes as well as houses and apartments.

The Census Bureau says it began planning for 2030 as far back as 2019 and is preparing to do a test census in 2026.

Trump administration policies, such as ongoing efforts to round up and deport undocumented migrants, will make it even more challenging to count immigrants and other historically hard-to-reach groups. During his first term, President Donald Trump sought to prevent unauthorized immigrants from being counted at all – but ran out of time.

A NOAA crew on a reconnaissance flight into the eye of Hurricane Milton in October 2024.
Sim Aberson/NOAA via AP

Challenge No. 2: NOAA on the front lines of climate change fight

Second, NOAA is likely to be in the political crosshairs, due to its role as a global leader in studying oceans, climate and coastal ecosystems.

It tracks rising sea levels, ocean acidification and extreme weather events, and forecasts their impact on fisheries, shipping, marine protected areas and habitats. It also runs the National Weather Service and issues severe storm warnings. These and many other NOAA activities are vital to monitoring the pace of climate change and helping Americans adapt.

NOAA’s mission and its budget are sure to be scrutinized by the Trump administration, which has already reversed a variety of policies meant to slow the pace of climate change. Trump himself has called climate change a “hoax.” That and policy proposals that seek to break up or privatize NOAA suggest many of NOAA’s climate-related activities could be under threat.

Challenge No. 3: The patent problem

A third challenge the incoming secretary will face is an ongoing crisis at the Patent and Trademark Office.

Unlike most federal agencies, the Patent and Trademark Office is funded by user fees collected from applicants rather than from tax revenue. This is supposed to make it more efficient and easier to hire staff quickly, but the model is under stress due to a shortage of patent examiners with skills in assessing science, technology, engineering and math applications. The agency currently has a backlog of over 800,000 unexamined patent applications – near an all-time high.

The backlog is likely to continue to grow as artificial intelligence and other state-of-the-art technologies accelerate the discovery cycle, but the slow process of patent approval – two years on average – can throw a wrench in it.

Patents and trademarks are critical to U.S. competitiveness because they reward innovation and discovery and help inventors attract investors.

The Trump administration’s broad federal hiring freeze is likely to worsen the Patent and Trademark Office’s staffing issues, while the back-to-office mandate may make it harder to recruit patent examiners, who often work remotely.

On top of this, Elon Musk, whose companies hold large numbers of patents and who already holds tremendous sway in the Trump administration, says “patents are for the weak” and compared them with landmines in warfare. “They don’t actually help advance things,” he said. “They just stop others from following you.”

In addition to these three areas, Commerce’s roles in international trade, telecommunications, industrial security and other matters could also become epicenters of any global crisis.

This all adds up to an uncomfortable mix of political and operational challenges for the next secretary.

This story is part of a series of profiles explaining Cabinet and high-level administration positions.

Linda J. Bilmes is affiliated with the Harvard Kennedy School. She served as Deputy Assistant Secretary of the US Department of Commerce from 1997-1998 and as CFO and Assistant Secretary for Management, Budget and Administration from 1999-2001.

– ref. Commerce oversees everything from weather and salmon to trade and census − here are 3 challenges awaiting new secretary – https://theconversation.com/commerce-oversees-everything-from-weather-and-salmon-to-trade-and-census-here-are-3-challenges-awaiting-new-secretary-248087

MIL OSI – Global Reports –

January 29, 2025

MIL-OSI USA: Warren Slams Defense Nominee for Improperly Withholding Aid to Ukraine, Violating U.S. Constitution, Disregarding Congressional Authority

US Senate News:

Source: United States Senator for Massachusetts – Elizabeth Warren

January 28, 2025

Michael Duffey is responsible for holding up aid to Ukraine, leading to President Trump’s first impeachment

“[I]f you are confirmed…the Senate would be supporting the confirmation of an individual who has shown disregard for the Constitution, Congressional authority, and our nation’s laws.”

Text of Letter (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), member of the Senate Armed Services Committee, wrote to Mr. Michael Duffey, nominee for Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)) of the Department of Defense (DoD), ahead of his confirmation hearing, with serious concerns about his record, which include violating the law, disregarding Congressional authority, and his involvement in Project 2025. Mr. Duffey also played a direct role in Trump’s withholding of funding to Ukraine, an action that resulted in the impeachment of Donald Trump. It is especially alarming given he would oversee a DoD requested acquisition budget of $311 billion and procurement programs already at high-risk for fraud, waste, and abuse.

Mr. Duffey’s Role in the Unlawful Freezing of Aid to Ukraine

In December 2019, President Trump was impeached for high crimes and misdemeanors for illegally seeking assistance from Ukraine to help him win the 2020 election against President Joe Biden. In his role at the Office of Management and Budget (OMB), Mr. Duffey helped President Trump block aid to Ukraine in an effort to pressure them to open an investigation into President Biden. He did so despite under-oath testimony and emails showing that career officials raised concerns with him that this could violate the law and disrupt DoD’s ability to train and equip Ukraine to strengthen their security forces. The Government Accountability Office (GAO), a non-partisan independent government watchdog, concluded that freezing this aid violated the Impoundment Control Act of 1974.

“Your actions in the course of these events give the strong appearance that you knowingly violated the law and the Constitution – and that you were an important participant in events that ultimately resulted in the President’s impeachment,” said Senator Warren.

Duffey’s Disregard for Congressional Authority and Oversight

Mr. Duffey also refused to comply with a deposition request as part of the impeachment inquiry and ignored a subpoena from the three House committees that led the impeachment inquiry. His refusal to comply with the subpoena – at the direction of President Trump – was so significant that it was one of the reasons that President Trump was charged with the second article of impeachment for Obstruction of Congress and that Mr. Duffey was listed by name in the impeachment resolution.

Duffey’s Direct Involvement in Project 2025

Mr. Duffey also had direct involvement in Project 2025, developing several policies for the report. One of the chapters Mr. Duffey contributed to calls for “using government contracts to push back against woke policies in corporate America.” The senator raised concerns about whether Mr. Duffey would use his position to police the personnel and Human Resources decisions of defense contractors, rather than prioritizing government contracts that advance U.S. national security and support our servicemembers. Project 2025 also calls for “reducing the number of procurement competitions” and a new system that allows decision makers of federal contracts to “bypass unnecessary departmental regulations.”

“I am concerned by whether these policy plans will reduce necessary competition and favor the biggest – or most politically connected – defense contractors,” wrote Senator Warren.

Duffey’s Plan to Address Risks of Waste, Fraud, and Abuse in DoD Acquisition

Given Mr. Duffey’s past behavior, especially that which led to President Trump’s first impeachment, the senator raised concerns about whether he will ensure DoD contracts are awarded fairly and based on the best interests of taxpayers and national security.

Already, DoD’s acquisition program has been a target of “contracting-related fraud schemes” and DoD’s contracting processes have been found to be “vulnerable to waste, fraud, and abuse.” This concern is heightened as major DoD contractors, including Lockheed Martin and Boeing, made donations to President Trump’s second inauguration in order to ingratiate themselves with the new administration in an effort to avoid regulation and win government contracts.

“[I]f you are confirmed…the Senate would be supporting the confirmation of an individual who has shown disregard for the Constitution, Congressional authority, and our nation’s laws,” concluded Senator Warren. She requested his written answers to questions by February 3, 2025.

Senator Warren has led efforts, including bipartisan action, to hold DoD accountable and transparent to ensure taxpayers are not being price gouged and the defense industrial base remains resilient:

In January 2025, Senator Warren sent Elon Musk, Chair of the Department of Government Efficiency (DOGE), a letter detailing over 30 proposals that would cut at least $2 trillion of wasteful government spending over the next decade.
In September 2024, Senator Elizabeth Warren (D-Mass.), a member of the Senate Armed Services Committee, along with Senators Mike Braun (R-Ind.), Mike Lee (R-Utah) and Chuck Grassley (R-Iowa), reintroduced the Streamline Pentagon Spending Act, bipartisan legislation to repeal statutory requirements to provide unfunded priorities lists, reduce wasteful reporting burdens, and enhance civilian oversight over the budgetary process.
In May 2024, Senators Warren, then-Chair of the Senate Armed Services Subcommittee on Personnel and Chuck Grassley (R-Iowa), then-Ranking Member of the Senate Committee on the Budget, led a letter with Mike Braun (R-Ind.) and John Fetterman (D-Pa.) demanding the Department of Defense (DoD) provide answers about military contractors’ price gouging tactics that cost the Pentagon billions of dollars every year in overpayments.
In May 2024, at a hearing of the Senate Armed Services Subcommittee on Strategic Forces, Senator Elizabeth Warren (D-Mass.), raised concerns about DoD contractor, SpaceX, which is owned by Elon Musk, undermining U.S. allies and national security goals. Senator Warren questioned Mr. John D. Hill, Deputy Assistant Secretary of Defense for Space and Missile Defense, about SpaceX’s work to stop its Starlink technology from being illegally acquired by Russia. These illegal terminals may have provided Russia a major advantage in their invasion of Ukraine.
In March 2024, at a hearing of the U.S. Senate Armed Services Committee (SASC), Senator Warren questioned General Anthony J. Cotton, USAF, Commander of United States Strategic Command about significant cost overruns and mismanagement of the Sentinel program.
In February 2024, Senator Warren and Representative Garamendi (D-Calif.), sent a letter to Secretary of Defense Lloyd J. Austin III, expressing concerns with the Department of Defense’s (DoD) insufficient review process for consolidation in the defense industrial base and the resulting impact on supply chains, innovation, and national security.
In November 2023, after reports that defense contractor TransDigm refused to provide cost and pricing information needed to prevent price gouging of taxpayers and the DoD, Senator Warren and Representative Garamendi sent letters to the DoD and TransDigm, pressing them to provide transparency on cost and pricing data to ensure that taxpayers aren’t being overcharged for expensive DoD contracts.
In August 2023, Senator Warren, then-Chair of the Senate Armed Services Subcommittee on Personnel, Senator Richard Blumenthal (D-Conn.), and Senator Lindsey Graham (R-S.C.), met with President Volodymyr Zelenskyy and top officials during a visit to Kyiv, Ukraine on August 23rd. The congressional delegation’s trip coincided with Ukraine’s Independence Day celebration on August 24th and demonstrated strong bipartisan support from the U.S. Senate for the Ukrainian people in the face of Russia’s brutal and illegal invasion.
In July 2023, at a hearing of the Senate Armed Services Subcommittee on Personnel, Senator Warren called out the Department of Defense for wasting billions in taxpayers dollars due to price gouging by defense contractors for services and in health care, and identified opportunities for cost savings when DoD buys personnel-related goods and services.
In July 2023, Senator Warren sent a letter to Secretary of Defense Lloyd Austin and Director of the Defense Health Agency, Lieutenant General Telita Crosland, regarding a series of DoD Inspector General reports finding that the DoD is failing to prevent price gouging and overpayments to contractors in the TRICARE health program.
In June 2023, Senator Warren, Senator Mike Braun, and Representative Garamendi reintroduced the bipartisan Stop Price Gouging the Military Act which would close loopholes in current acquisition laws, tie financial incentives for contractors to performance, and provide the Department of Defense the information necessary to prevent future rip-offs.
In May 2023, Senator Warren and Representative Garamendi sent letters to Boeing, TransDigm, and the Department of Defense, calling out the defense contractors for their refusal to provide cost and pricing data to the Department of Defense (DoD), as required by law. The lawmakers also called on DoD to take action to address these contractors’ refusals to provide cost and pricing data.
In October 2022, Senator Warren obtained a commitment from DoD not to increase contract prices due to inflation.
In October 2022 Senator Warren sent a letter to DoD urging them to insist on receiving certified cost or pricing data to justify any contract adjustments.
In June 2022, Senator Warren and Representative Garamendi introduced the bicameral Stop Price Gouging the Military Act, which would enhance DoD’s ability to access certified cost and pricing data. Part of Senator Warren’s legislation was incorporated into the FY 2023 National Defense Authorization Act reported to the Senate.
In March 2022, at a SASC hearing, Senator Warren criticized DoD for failing to consider alternatives to the Sentinel program in order to justify unsustainable nuclear weapons spending.
In September 2020, Senator Warren and Representative Ro Khanna (D-Calif.) formally requested that the Department of Defense (DoD) Inspector General (IG) investigate reports that the Pentagon redirected hundreds of millions of dollars of funds meant for COVID-19 response via the Defense Production Act (DPA) to defense contractors for “jet engine parts, body armor and dress uniforms.”
In May 2020, Senator Warren wrote to the Department requesting clarification on how the Department would prevent profiteering following a recent change to increase payments to contractors in response to the COVID-19 pandemic.
In August 2017, Senator Warren traveled to Eastern Europe and Germany to learn more about plans to counteract Russian efforts to damage European democracies.
In May 2017, Senator Warren wrote to the DoD Inspector General, requesting an investigation into TransDigm for potential waste, fraud, and abuse in the military spares market.
In October 2015, Senator Warren visited Ukraine and other European countries for a visit focused on economic issues and the Syrian refugee crisis.

MIL OSI USA News –

January 29, 2025

MIL-Evening Report: Sydney’s Museum of Contemporary Art is now charging for entry. It’s a sign our cultural sector needs help

Source: The Conversation (Au and NZ) – By Chiara O’Reilly, Senior Lecturer in Museum Studies, University of Sydney

From January 31, Sydney’s Museum of Contemporary Art (MCA) will reintroduce ticketed entry, charging adults $20 for general admission and $35 for combined special exhibitions and museum entry. Entry will remain free for Australian students and people under 18.

This decision, which reverses 24 years of free general entry to the museum, reflects broader challenges faced by museums globally.

Driven by philanthropy

The MCA was opened in 1991, established through the bequest of Australian expatriate artist John Power. As an independent, not-for-profit organisation, its administrative and financial structure is different from major cultural institutions in Sydney.

Unlike the Art Gallery of New South Wales and Australian Museum, which are statutory bodies of the NSW government, the MCA receives a far smaller proportion of state funding.

For 2023-2024, the NSW government delivered A$46.2 million in recurrent funding to the Art Gallery of NSW and $47.4 million to the Australian Museum. The MCA received $4.2 million, which represented just 16% of its total revenue.

This funding disparity has always required the MCA to secure the bulk of its budget through other revenue streams. Corporate and philanthropic partnerships have been vital.

In 2000, financial support from Telstra allowed the museum to offer free admission. In 2012, philanthropists including Simon and Catriona Mordant contributed greatly to fund the museum’s expansion.

The MCA has also been proactive in leveraging its venue to maximise income. In 2023, 41% of revenue was earned through commercial services including venue hire, retail and commercial leases.

Why there’s no more free entry

Despite reducing its opening hours to six days a week post-COVID and scaling back audience engagement, the MCA’s financial pressures continued. According to director Suzanne Cotter, the museum “didn’t have any choice” but to implement an admission fee.

While ticketed admission creates a financial barrier, it also provides visitors a way to invest directly in the museum’s future and sustainability.

The MCA has consistently demonstrated its value, generating impressive visitor numbers. In 2019, attendance surpassed one million visitors, setting the museum ahead of many international peers.

But the effects of the COVID pandemic have lingered. In 2022-23, the museum attracted 859,386 visitors – a 15% decline compared to 2019.

In comparison, the Art Gallery of NSW welcomed almost two million visitors to its expanded campus in 2023, representing a 51% increase from pre-COVID figures.

The MCA isn’t struggling alone

Internationally, there are clear signs of an industry under immense pressure.

Major US institutions such as The Metropolitan Museum of Art (The Met), The Museum of Modern Art (MoMA) and the Guggenheim and Whitney have all increased general adult admission fees to US$30.

The Met’s shift away from a pay-what-you-can model to fixed admission for most visitors in 2018 was driven by speculation of a US$40 million deficit. However, New York state residents and students, as well as New Jersey and Connecticut students, can still pay what they wish – even as little as one cent.

Similarly, at the Whitney, a US$2 million donation last year by Trustee and artist Julie Mehretu has helped enable free entry for under-25s.

These examples show how paying visitors can support a museum’s sustainability while preserving subsidised access for priority groups.

Across Europe, major museums including the Louvre and Uffizi are also increasing prices, though many retain periodic free days to ensure accessibility.

In the UK, smaller regional museums are resorting to admission charges for the first time in their histories.

Meanwhile, commentators such as cultural historian Ben Lewis argue major institutions such as the British Museum should start charging general admission fees to supplement stagnant government funding and decrease dependence on potentially unethical corporate donors.

This would allow the museums to pay competitive wages and fund essential work, Lewis argues.

Lewis’s concerns about corporate donations accord with debates taking place internationally and in Australia around the role of big oil, mining and pharmaceutical companies that use the arts to “greenwash” their public brand.

Can accessiblity be prioritised in Australia?

The MCA’s situation, which reflects international trends, raises questions about arts funding and access.

Both the NSW and federal governments’ arts policies recognise the value of providing access to the arts. As the NSW government’s Creative Communities policy notes, “the right to participate in arts, cultural and creative activities is a fundamental human right.”

The MCA excelled in this regard under its free admission policy, attracting a diverse audience that other museums often struggled to reach. In 2023, about half of the museums on-site visitors were under 35, and 45% were from culturally and linguistically diverse backgrounds.

The NSW government’s policy – along with its national counterpart Revive – also emphasises the importance of telling Australian stories. This is another area the MCA has excelled in.

The question then is: if the state and federal governments value equitable access to the arts and appreciates the platforming of Australian stories, will they commit to a more sustainable funding arrangement for organisations like the MCA?

Without such a commitment, the gap between those who can afford to attend museums and those who can’t will continue to widen – compromising the democratic ideal of an accessible cultural sector.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

– ref. Sydney’s Museum of Contemporary Art is now charging for entry. It’s a sign our cultural sector needs help – https://theconversation.com/sydneys-museum-of-contemporary-art-is-now-charging-for-entry-its-a-sign-our-cultural-sector-needs-help-247458

MIL OSI Analysis – EveningReport.nz –

January 29, 2025

Category: Pandemic

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

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Commerce: A sprawling bureauocracy

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Challenge No. 2: NOAA on the front lines of climate change fight

Challenge No. 3: The patent problem

Driven by philanthropy

Why there’s no more free entry

The MCA isn’t struggling alone

Can accessiblity be prioritised in Australia?