Judges were bowled over by local entrepreneur Jared Wilson when he spoke about his business ‘Cricket Jobs Ltd’ during the Derry City and Strabane District heat of Go Succeed: The Ultimate Pitch at the Guildhall.
This exciting new initiative, backed by the government’s business support service, is aimed at individuals, businesses, and social enterprises across all sectors that have been trading for less than two years.
A number of local applicants had the opportunity to present their ‘ultimate pitch’ to a panel of experienced judges, but it was Jared Wilson who impressed the most and walked away with a £1,000 prize as well as a year’s hot desk space and 12 months’ membership of the Derry Chamber of Commerce.
Jared will join the Special Category winners from the Derry/Strabane heat at The Ultimate Pitch Final in Belfast in November. The Special Category Winners are as follows: The Rising Star winner – Clare Hamilton, The Influencer Hub; The Social Inclusion winner – Alannah Kerrigan, Wildflower Weddings; and The Social Enterprise winner – Caroline McGinness Brooks, Repair & Share Foyle.
A professional cricketer, Jared’s innovative idea revolves around his company ‘Cricket Jobs’ which gives amateur and professional cricketers the opportunity to view playing and job opportunities around the world.
Reflecting on the success of the local heat of the competition Business Development Manager with Derry City and Strabane District Council, Danielle McNally said: “We were really impressed with the calibre of applicants at the local heat of Go Succeed: The Ultimate Pitch. Our Pitchers had some great ideas which, with the right support, could become sustainable businesses. I would like to thank everyone who took part and to wish Jared, Clare, Alannah and Caroline all the best in the final in Belfast.”
Anna Doherty, Chief Executive of Derry Chamber of Commerce, was one of the judges at the local heat. She said, “We were delighted to see so many local entrepreneurs coming forward to Pitch to us. Every one of them had obviously put a lot of work into their Pitch and I know many of them will go on to build successful businesses and contribute to our local economy. We at the Chamber of Commerce are delighted to be able to offer Jarad membership for one year and use of a hot desk space – we hope the networking opportunities this will present will help him bolster his future business plans.”
Overall winner Jared Wilson was delighted to secure the top prize. He said: “I’m delighted that the judges were impressed with my Pitch. The prize money and support from the Chamber of Commerce will be invaluable in helping to take ‘Cricket Jobs’ to the next level. I am really looking forward to taking part in the Final in Belfast next month and hopefully I can bring The Ultimate Pitch prize back to the North West.”
Go Succeed (www.go-succeed.com) is funded by the UK Government and delivered by Northern Ireland’s 11 councils. The service supports entrepreneurs, new starts and existing businesses with easy-to-access advice and support including mentoring, master classes, peer networks, access to grant funding and a business plan, at every stage of their growth journey.
To find out more information about Go Succeed: The Ultimate Pitch, view a full list of terms and conditions, and apply, visit www.go-succeed.com/TheUltimatePitch.
Communities across Canada will be able to build environmentally friendly, climate-resilient housing and infrastructure with support from the Climate Toolkit for Housing and Infrastructure (CTHI).
Ottawa, Ontario, October 24, 2024 —Communities across Canada will be able to build environmentally friendly, climate-resilient housing and infrastructure with support from the Climate Toolkit for Housing and Infrastructure (CTHI).
Today, Sean Fraser, Minister of Housing, Infrastructure and Communities, launched a suite of tools, resources, and support services that will be available, free of cost, to communities to help them adapt their infrastructure to changing climate conditions, and also reduce greenhouse gas emissions during new home and infrastructure constructions. The federal government invested $94.7 million in CTHI, and it will include a help desk, an online platform, and a roster of climate and infrastructure experts.
The Climate Help Desk provides communities with direct support and guidance on infrastructure and climate-related concerns. Housing, Infrastructure and Communities Canada operates the help desk which offers advice and best practices on how to make environmentally friendly and climate resilient considerations during project planning and development.
In collaboration with ICLEI Canada – an organization that supports local governments by providing them with the expertise and resources to take climate action in their communities – we have also launched the ClimateInsight.ca Platform. The platform will ease the burden of data collection for small and medium sized communities. With guided navigation, the platform will provide easy access to curated tools and resources on one dedicated website.
Finally, in partnership with the Canadian Urban Institute (CUI) – a national research organization dedicated to achieving healthy urban development – we will be launching the Roster of Climate and Infrastructure Experts in December 2024. The federal government’s investment will help CUI establish a roster of employees consisting of housing, infrastructure, and climate experts. This service will allow small communities with eligible infrastructure and housing projects to request climate related support. The roster will match communities with specialized experts to provide project-specific advice on reducing emissions and increasing climate resilience.
Investing in the tools and services needed to improve the resiliency of Canadian infrastructure will support the continued success and economic growth of communities for years to come.
Quotes
“As we deal with the growing impacts of climate change, the Climate Toolkit for Housing and Infrastructure will help us work with communities across the country to ensure that new homes and infrastructure have minimal impact on the environment, while better protecting people, their houses, their businesses, and their livelihoods from the impacts of climate change.”
The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities
“The impacts of extreme weather and climate change are no longer distant concerns. This is a new reality municipalities need to prepare for now more than ever while simultaneously shifting towards a net-zero future. Climate Insight will play a crucial role in equipping local practitioners with the data and information they need to build low-carbon, climate-resilient communities.”
Megan Meaney, Executive Director, ICLEI Canada
“Communities across Canada are facing an unprecedented challenge in adapting to the growing impacts of climate change while modernizing critical infrastructure. To help advance a sustainable and resilient future, we must support these communities from coast to coast to coast, empowering them to consider climate information in infrastructure decision making. The Roster of Climate and Infrastructure Experts plays a vital role by equipping local governments in smaller communities with the specialized expertise needed to integrate innovative approaches to infrastructure projects that foster locally specific climate solutions.”
Mary W. Rowe, President & CEO, Canadian Urban Institute
Quick facts
On June 27, 2023, the federal government released National Adaptation Strategy. It commits $1.6 billion in new federal funding to help address both immediate and future climate risks to Canadian communities.
The National Adaptation Strategy and Government of Canada Adaptation Action Plan have committed $94.7M over 5 years to deliver a climate toolkit and services through the Climate Toolkit for Housing and Infrastructure initiative (CTHI).
The Climate Toolkit for Housing and Infrastructure will support the development of integrated climate-related tools, resources and services for communities:
Climate Help Desk to provide direct support to address infrastructure and climate-related inquiries;
Roster of Climate and Infrastructure Experts to provide access to expert advice to strengthen climate-related considerations of public infrastructure and housing projects; and
Climate Tools and Resources that are widely available and accessible through the ClimateInsight.ca Platform.
Associated links
Contacts
For more information (media only), please contact:
Sofia Ouslis Press Secretary Office of the Minister of Housing, Infrastructure and Communities sofia.ouslis@infc.gc.ca
Source: United States House of Representatives – Congressman Andy Kim (NJ-03)
WILLINGBORO, N.J. – Yesterday, Congressman Andy Kim (NJ-03) hosted a telephone town hall to hear directly from neighbors and share updates from his recent work in Congress, including raising awareness during National Bully Awareness Month and addressing the nationwide mental health crisis.
To begin his 80th town hall, Congressman Kim highlighted his continued efforts to address youth mental health needs and close gaps to accessing care and resources. In recognition of National Bullying Awareness Month, he was joined by Jessica Smedley, LPC and Director of Counseling for West Windsor/Plainsboro Regional School District, who spoke about the role of school counselors to provide proactive mental health and academic support, collective efforts to prevent violence and bullying in schools, and resources available to students and families.
Congressman Kim spoke about his continued work in Congress to address the shortage of mental healthcare resources and workers, including voting to pass the largest gun violence prevention legislative package in 30 years that secured investment in programs to expand mental health and support services in schools as well as securing $1,000,000 to construct a new behavioral health clinic to serve children in Burlington County. He also addressed his “kids agenda” in Congress to combat child poverty with the Child Tax Credit, expand students’ access to nutritious meals, and deliver support to vulnerable communities, including direct support for LGBTQ+ youth.
He also provided updates from his tour yesterday along the Northeast Corridor with NJ Transit and Amtrak leadership where he saw the successful progress of the Gateway Tunnel Project and urged the importance of continued upgrades and investigations to deliver the safe and reliable public transit New Jersey deserves.
The Congressman answered questions from neighbors about issues on their mind, including his efforts to combat corruption, including through legislation to end the dominance of big money in politics, deliver mental health support to children with minority identities, and incentivize building to expand access to affordable housingoptions in New Jersey as well as provide emergency housing resources, like a new homeless shelter in Burlington County that he was able to secure funding for in 2022.
To sign up for more updates from Congressman Kim, including the location and time of his next town hall, click here.
Congressman Kim is the Ranking Member on the Military Personnel Subcommittee, and a member of the House Armed Services Committee, the Foreign Affairs Committee, and the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party. More information about Congressman Kim’s accessibility, his work serving New Jersey’s 3rd Congressional District, and information on newsletters and his monthly town halls can be found on his website by clicking here.
NEW YORK – New York Attorney General Letitia James and California Attorney General Rob Bonta today co-led a coalition of 24 attorneys general in filing an amicus brief in U.S. v. Idaho to protect access to emergency abortion care in Idaho. The brief urges the United States Court of Appeals for the Ninth Circuit to uphold a lower court’s preliminary injunction blocking Idaho’s restrictive abortion ban, which does not include an exception for emergency abortion care. Attorney General James and the coalition argue that preventing pregnant patients from receiving emergency abortion care can seriously harm patients’ health and overwhelm health care systems in Idaho and neighboring states.
“Denying emergency abortion care to a pregnant patient whose health is in jeopardy is unbelievably cruel,” said Attorney General James. “State restrictions on emergency abortion care are endangering patients, hurting families, and overwhelming health care providers. The right to get emergency abortion care should not depend on where you live. I will keep fighting back against these harmful bans, and I thank my fellow attorneys general for joining me in this effort.”
The federal Emergency Medical Treatment and Labor Act (EMTALA) requires hospitals that operate an emergency department and participate in Medicare – virtually every hospital in the country – to treat all patients who have an emergency medical condition before discharging or transferring them. Idaho’s abortion ban does not include an exception for emergency abortion care. Attorney General James and the coalition argue that several government agencies and courts have long determined that emergency abortion care and other pregnancy-related emergencies are covered under EMTALA.
The amicus brief submitted by Attorney General James and the coalition argues that allowing Idaho to override EMTALA’s protections for emergency abortion care can lead to pregnant patients dying or suffering irreversible injuries. The brief also notes that this action by Idaho could cause health care providers to leave the state, leading to worse patient care and pregnant patients seeking care in other states, which can overwhelm their health care systems. In fact, within a few months of Idaho’s abortion ban going into effect, nearly one in four obstetricians left the state or retired. This past March, Attorney General James co-led a multistate coalition of attorneys general and filed an amicus brief with the United States Supreme Court in this case, urging the court to maintain the district court’s preliminary injunction. The court ultimately sent the case back to the Ninth Circuit with the district court’s stay intact.
Joining Attorney General James in filing today’s amicus brief are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.
Today’s action is the latest in Attorney General James’ efforts to defend access to reproductive care and protect reproductive freedom in New York and nationwide. In October, Attorney General James and a coalition of attorneys general filed an amicus brief in support of access to mifepristone. In May, Attorney General James sued an anti-abortion group and 11 crisis pregnancy centers for promoting unproven abortion reversal treatment. In April, Attorney General James led a coalition of attorneys general in urging Congress to expand access to reproductive health services and pass the Access to Family Building Act. In January, Attorney General James led a coalition of 24 attorneys general urging the U.S. Supreme Court to protect access to mifepristone. In December 2022, Attorney General James secured a court order to stop militant anti-abortion group Red Rose Rescue from blocking access to abortion care in New York.
Quarterly financial information as of September 30, 2024 IFRS – Regulated information – Not audited
Cegedim: Revenue growth continued in the third quarter of 2024
Revenue of €156.8 million in Q3 2024, up 5.7%
Marketing, BPO, HR, and cloud businesses led the way
Revenue for the first nine months of 2024 grew 5.9% to €475.8 million
Boulogne-Billancourt, France, October 24, 2024, after the market close. Revenue
Third quarter
Change Q3 2024 / 2023
in millions of euros
2024
2023 reclassified(1)
Reclassification(1)
2023 Reported
Reported vs. reclassified(1)
Like for like(2)(3) vs. reclassified(1)
Software & Services
75.6
76.0
-4.8
80.8
-0.5%
-4.2%
Flow
23.7
22.4
-0.4
22.8
5.5%
5.4%
Data & Marketing
28.2
24.1
0.0
24.1
17.0%
17.1%
BPO
21.6
19.0
0.0
19.0
13.9%
13.9%
Cloud & Support
7.7
6.8
+5.2
1.6
12.5%
12.5%
Cegedim
156.8
148.3
0.0
148.3
5.7%
3.8%
First 9 months
Change 9M 2023 / 2022
in millions of euros
2024
2023 reclassified(1)
Reclassification(1)
2023 Reported
Reported vs. reclassified(1)
Like for like(2)(4) vs. reclassified(1)
Software & Services
227.7
226.6
-15.7
242.3
0.5%
-2.6%
Flow
73.2
69.2
-1.8
71.0
5.7%
5.6%
Data & Marketing
87.5
79.0
0.0
79.0
10.8%
10.8%
BPO
61.5
51.8
0.0
51.8
18.8%
18.8%
Cloud & Support
25.8
22.6
+17.5
5.1
13.9%
13.9%
Cegedim
475.8
449.3
0.0
449.3
5.9%
4.3%
Cegedim posted consolidated third quarter revenues up 5.7% as reported and 3.8% like for like(2) compared with the same period in 2023. Revenues to end-September rose 5.9% as reported and 4.3% like for like compared with 9M 2023. Marketing, BPO, HR, and cloud businesses all delivered solid growth in the third quarter. As expected, the Software & Services division felt the impact of comparisons with Ségur public health investment spending in 2023 and a slowdown in international sales owing to the decision to refocus the Group’s UK doctor software activities on Scotland. Analysis of business trends by division
Software & Services
Software & Services
Third quarter
Change Q3 2024 / 2023
First 9 months
Change 9M 2024 / 2023
in millions of euros
2024
2023 reclassified(3)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
Cegedim Santé
20.1
18.6
8.0%
-6.2%
58.9
58.4
0.9%
-9.8%
Insurance, HR, Pharmacies, and other services
42.7
43.9
-2.7%
-2.7%
129.5
128.4
0.9%
0.8%
International businesses
12.8
13.5
-5.0%
-6.1%
39.3
39.8
-1.3%
-2.8%
Software & Services
75.6
76.0
-0.5%
-4.2%
227.7
226.6
0.5%
-2.6%
Revenues at Cegedim Santé grew 8.0% as reported in the third quarter but fell 6.2% like for like. We did not fully meet our 2024 goal of offsetting last year’s Ségur impact and keeping like-for-like sales stable, but we are closing the gap with each quarter. Reported growth figures include Visiodent as of March 1, 2024. Visiodent’s gradual transition to Cegedim Group products for scheduling, databases, and so on is generating internal sales, which do not appear in the consolidated scope.
Other French subsidiaries had a challenging quarter, with revenues down 2.7%. We saw positive growth at our insurance businesses, thanks to robust project-based sales, and in HR, which is still getting a boost from its client diversification strategy. Conversely, the €2 million in Ségur public health investment subsidies we recorded in Q3 2023 made for a demanding comparison in the pharmacy business, where equipment sales also flagged after accelerating last year.
Internationally, revenues from software sales to UK doctors declined, as expected, following the decision to refocus the activity on Scotland.
Flow
Flow
Third quarter
Change Q3 2024 / 2023
First 9 months
Change 9M 2024 / 2023
in millions of euros
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
e-business
13.5
13.5
-0.2%
-0.4%
43.5
41.3
5.1%
4.8%
Third-party payer
10.2
8.9
14.3%
14.3%
29.7
27.9
6.7%
6.7%
Flow
23.7
22.4
5.5%
5.4%
73.2
69.2
5.7%
5.6%
Third-quarter growth in e-business, e-invoicing, and digitized data exchanges was nearly flat, at -0.2%. Healthcare flows offset a relative slowdown in the Invoicing & Procurement segment, which last year enjoyed sustained growth in France ahead of the e-invoicing reform scheduled to take effect July 1, 2024, but which has since been postponed to September 2026.
The digital data flow business dealing with reimbursement of healthcare payments in France (Third-party payer) experienced 14.3% yoy growth in Q3. It was boosted by strong growth in demand for its fraud and long-term illness detection offerings.
Data & Marketing
Data & Marketing
Third quarter
Change Q3 2024 / 2023
First 9 months
Change 9M 2024 / 2023
in millions of euros
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
Data
15.1
14.6
3.4%
3.4%
43.1
43.4
-0.7%
-0.7%
Marketing
13.1
9.5
38.0%
38.0%
44.4
35.6
24.8%
24.8%
Data & Marketing
28.2
24.1
17.0%
17.1%
87.5
79.0
10.8%
10.8%
Data business posted 3.4% yoy growth in the third quarter, resulting in nearly stable growth over nine months. Growth was led by French sales, which were more dynamic than international sales.
The Marketing segment had a record third quarter, up 38% owing to special ad campaigns during the Olympics. The rising popularity of our phygital media offerings in pharmacies helped the segment post 24.8% growth over the first nine months.
BPO
BPO
Third quarter
Change Q3 2024 / 2023
First 9 months
Change 9M 2024 / 2023
in millions of euros
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified
Insurance BPO
15.9
13.8
15.7%
15.7%
44.6
35.9
24.2%
24.2%
Business Services BPO
5.7
5.2
+9.2%
+9.2%
16.9
15.9
6.5%
6.5%
BPO
21.6
19.0
13.9%
13.9%
61.5
51.8
18.8%
18.8%
The Insurance BPO business grew by more than 15.7% over the third quarter, chiefly owing to its overflow business, which has been flourishing since the start of the year. Growth over nine months amounted to 24.2%, partly thanks to a favorable comparison stemming from the April 1, 2023, launch of the Allianz contract.
Business Services BPO (HR and digitalization) continues to report strong growth, up 9.2% yoy over the quarter on the back of a popular compliance offering and new clients.
Cloud & Support
Cloud & Support
Third quarter
Change Q3 2024 / 2023
First 9 months
Change 9M 2024 / 2023
in millions of euros
2024
2023 reclassified(4)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
2024
2023 reclassified(1)
Reported vs. reclassified(1)
Like for like(2) vs. reclassified(1)
Cloud & Support
7.7
6.8
12.5%
12.5%
25.8
22.6
13.9%
13.9%
The Cloud & Support division’s trajectory continued over the third quarter, with growth of 12.5% reflecting our expanded range of sovereign cloud-backed products and services.
Highlights
Apart from the items cited below, to the best of the company’s knowledge, there were no events or changes during Q3 2024 that would materially alter the Group’s financial situation.
• New financing arrangement
On July 31, 2024, Cegedim announced that it had secured a new financing arrangement consisting of a €230 million syndicated loan. The arrangement is split into €180 million of lines drawn upon closing to refinance the Group’s existing debt (RCF and Euro PP, which were to mature in October 2024 and October 2025 respectively) and an additional, undrawn revolving credit facility (RCF) of €50 million. This new financing arrangement will bolster the Group’s liquidity and extend the maturity of its debt to, respectively, 5 years (€30 million, payments every six months); 6 years (€60 million, repayable upon maturity); and 7 years (€90 million, repayable upon maturity).
Significant transactions and events post September 30, 2024
To the best of the company’s knowledge, there were no post-closing events or changes after September 30, 2024, that would materially alter the Group’s financial situation.
Outlook
Based on the currently available information, the Group expects 2024 like-for-like revenue(1) growth to be towards the lower end of the 5-8% range relative to 2023. That said, we still expect recurring operating income to continue to improve. These targets are not forecasts and may need to be revised if there is a significant worsening of geopolitical, macroeconomic, or currency risks.
—————
Webcast on October 24, 2024, at 6:15 pm (Paris time)
Disclaimer This press release is available in French and in English. In the event of any difference between the two versions, the original French version takes precedence. This press release may contain inside information. It was sent to Cegedim’s authorized distributor on October 24, 2024, no earlier than 5:45 pm Paris time. The figures cited in this press release include guidance on Cegedim’s future financial performance targets. This forward-looking information is based on the opinions and assumptions of the Group’s senior management at the time this press release is issued and naturally entails risks and uncertainty. For more information on the risks facing Cegedim, please refer to Chapter 7, “Risk management”, section 7.2, “Risk factors and insurance”, and Chapter 3, “Overview of the financial year”, section 3.6, “Outlook”, of the 2023 Universal Registration Document filled with the AMF on April 3, 2024, under number D.24-0233.
About Cegedim: Founded in 1969, Cegedim is an innovative technology and services group in the field of digital data flow management for healthcare ecosystems and B2B, and a business software publisher for healthcare and insurance professionals. Cegedim employs more than 6,500 people in more than 10 countries and generated revenue of €616 million in 2023. Cegedim SA is listed in Paris (EURONEXT: CGM). To learn more please visit: www.cegedim.fr And follow Cegedim on X: @CegedimGroup, LinkedIn, and Facebook.
Aude Balleydier Cegedim Media Relations and Communications Manager
Breakdown of revenue by geographic zone, currency and division at September 30, 2024
as a % of consolidated revenues
Geographic zone
Currency
France
EMEA ex. France
Americas
Euro
GBP
Other
Software & Services
82.8%
17.1%
0.1%
86.2%
12.0%
1.7%
Flow
91.9%
8.1%
0.0%
94.5%
5.5%
0.0%
Data & Marketing
97.9%
2.1%
0.0%
98.0%
0.0%
2.0%
BPO
100.0%
0.0%
0.0%
100.0%
0.0%
0.0%
Cloud & Support
99.9%
0.1%
0.0%
100.0%
0.0%
0.0%
Cegedim
90.1%
9.8%
0.1%
92.2%
6.6%
1.2%
1As of January 1, 2024, our Cegedim Outsourcing and Audiprint subsidiaries—which were previously housed in the Software & Services division—as well as BSV—formerly of the Flow division—have been moved to the Cloud & Support division in order to capitalize on operating synergies between cloud activities and IT solutions integration.
2At constant scope and exchange rates.The positive currency impact of 0.2% was mainly due to the pound sterling. The positive scope effect of 1.8% was attributable to the first-time consolidation inCegedim’saccounts ofVisiodentstarting March 1, 2024.The positive currency impact of 0.1% was mainly due to the pound sterling. The positive scope effect of 1.4% was attributable to the first-time consolidation inCegedim’saccounts ofVisiodentstarting March 1, 2024.
3To take advantage of synergies,Cegedim Outsourcing,Audiprint,andBSVhave been reassigned to the Cloud & Support division.At constant scope and exchange rates.
4To take advantage of synergies,Cegedim Outsourcing,Audiprint,andBSVhave been reassigned to the Cloud & Support division.At constant scope and exchange rates.
Source: United Kingdom – Executive Government & Departments
Confidence in the police, and in the systems that hold them to account, will be boosted under a package of reforms announced by the Home Secretary.
The announcement will reassure both the police and the public that the system of vetting and accountability is working.
It will tackle delays in investigations, ensuring the complexity of specialist police roles are considered from the outset, and introduce stronger vetting processes so the highest standards are always upheld and maintained.
This follows the long-awaited accountability review and draws on findings of the reviews undertaken by Dame Louise Casey and Lady Elish Angiolini.
In a statement to Parliament, Yvette Cooper set out the government’s mission to put confidence back into policing, ensuring both that the police have the confidence of the communities they serve, and that officers have the confidence they need to do the vital job of keeping people safe.
She set out new measures that will be taken forward in response to the accountability review started under the previous government, including:
a presumption of anonymity for firearms officers facing criminal proceedings following police shootings, up until the point of a conviction
raising the threshold for the Independent Office for Police Conduct (IOPC) to refer police officers to the Crown Prosecution Service (CPS), so that only cases that have a reasonable prospect of conviction are referred – as is already the test for members of the public suspected of committing a crime
a rapid independent review to consider the legal test for use of force in misconduct proceedings and the threshold for unlawful killing in inquests
an examination by the Director of Public Prosecutions of CPS guidance and processes in relation to charging police officers for offences committed in the course of their duties
the creation of a national lessons-learned database for deaths or serious injuries following police contact or pursuits to ensure findings are incorporated into future training and guidance
placing the IOPC victims’ right to review policy on a statutory footing
The Home Secretary also announced reforms to address fundamental flaws in police vetting and misconduct processes, including delivering on key manifesto commitments. These will:
for the first time, place vetting standards on a statutory footing
empower chief constables to promptly dismiss officers who fail their vetting
strengthen requirements relating to the suspension of officers under investigation for violence against women and girls
ensure officers convicted of certain criminal offences are automatically found to have committed gross misconduct and create a presumption of dismissal in gross misconduct cases
The Home Secretary set out these reforms to address concerns held by police, local communities and the families of those impacted by police use of force.
As well as legislating for a presumption of anonymity, ministers will take forward 3 measures set out by the previous government. These will align the threshold for IOPC referrals of officers to the CPS to that used by police for members of the public, accelerate processes by allowing the IOPC to send cases to the CPS prior to their final investigation report where there is sufficient evidence, and place the victims’ right to review policy for IOPC decisions on a legislative footing to ensure the voices for victims and bereaved families are heard.
The Home Office and Ministry of Justice have also appointed 2 independent reviewers, Tim Godwin OBE QPM and Sir Adrian Fulford PC, to undertake a rapid review of the legal test for use of force in misconduct cases, and the threshold for determining unlawful killing in coronial inquests, to bring greater clarity and prevent delays in the accountability system following recent legal rulings.
The Attorney General has also requested that the Director of Public Prosecutions (DPP) reviews CPS guidance and processes in relation to charging police officers for offences committed in the course of their duties, reflecting the complexity of specialist roles.
Home Secretary Yvette Cooper said:
The British tradition of policing by consent relies on mutual bonds of trust between the public and the police. For our policing model to work, it is essential that the police have the confidence of the communities they serve and that officers have the confidence they need to do their vital and often extremely difficult job of keeping us all safe.
Too often in recent times, both elements of that confidence have become frayed. The government have made it a mission to put confidence back into policing.
The measures I have outlined are practical steps to rebuild confidence, tackle delays, provide clarity and ensure that high standards are maintained. The government is determined to take the necessary action to strengthen public confidence in the police, and to strengthen the confidence of the police when they are out on the street every day, doing the difficult job of keeping us all safe.
Chief Constable Simon Chesterman, the National Police Chiefs’ Council lead for Armed Policing, said:
Police officers are not above the law, and nobody expects them to be, but the system that holds officers to account when they use force to protect the public, their colleagues and themselves, has become broken.
We are supportive of the Home Secretary’s announcement and welcome their commitment to getting it right for officers and the public they serve and improving overall policing standards.
The ongoing work on the accountability review now has momentum to continue and is a real opportunity to get the balance right in the interests of the public we are here to protect.
We are proud to have the most restrained and professional armed officers in the world, but increasingly they are more afraid of going to prison for doing their jobs, than facing the violent and dangerous individuals we rely on them to protect us from.
“Good police officers need to know that if they do what they are trained to do, they will be supported by the leaders of the police service, government and most importantly the public. > > We remain determined to get police accountability right and we will support government to address concerns about the current accountability system to restore the confidence of police officers and the public.
Today, the Chief Public Health Officer of Canada annual report on the state of public health in Canada, entitled Realizing the Future of Vaccination for Public Health, was tabled in Parliament by the Honourable Mark Holland, Minister of Health.
October 24, 2024 | Ottawa, ON | Public Health Agency of Canada
Today, my annual report on the state of public health in Canada, entitled Realizing the Future of Vaccination for Public Health, was tabled in Parliament by the Honourable Mark Holland, Minister of Health.
Vaccination is one of the most significant public health achievements in modern history, helping people to live longer and healthier lives. In fact, over the past 50 years, researchers estimate vaccines have saved over 150 million lives worldwide. In addition to direct health benefits, vaccination also provides important social and economic benefits, such as reduced sick time in schools and workplaces, and increased job productivity. Vaccination can also help reduce the burden on our healthcare system by reducing hospitalizations and the need for medical care.
Although vaccination is a foundation of public health practice, we haven’t taken full advantage of its potential to tackle existing and emerging public health threats. Gaps in vaccination access and uptake in Canada, fueled in part by the spread of mis- and disinformation, have led to an increase in vaccine-preventable outbreaks, such as measles and pertussis. Some populations also face disproportionate barriers to vaccination such as those living in rural and remote areas, individuals who have difficulties connecting with health services, or those who have experienced stigma in the health system.
The public health system must be prepared to take advantage of scientific breakthroughs in vaccine technology. In the coming years, new vaccines will have the potential to address an expanding range of health threats, including the treatment of chronic diseases, cancers, and anti-microbial resistant pathogens. New ways to administer vaccines are also emerging, such as nasal vaccines and microneedle patches, that could help improve the vaccination experience, enhancing the acceptability and accessibility of vaccines.
This is why we must strive to create the conditions for everyone in Canada to experience the full benefits of vaccination at every stage of life.
Strengthening our vaccination system now and into the future
To help realize this vision, we must address gaps in our current vaccination system. This includes working with partners across governments and communities to reduce vaccination inequities and improve access to vaccines. Promising examples from the pandemic include setting up mobile clinics and community health workers to reach people who have difficulties in connecting with care, and providing trusted healthcare professionals with the resources to support the vaccination needs of their communities. Public health also has a responsibility to integrate rights-based approaches in vaccination for First Nations, Inuit and Métis Peoples. Protecting these rights and supporting self-determination is fundamental to the health and well-being of Indigenous Peoples.
More timely and comprehensive data is required to better understand and respond to population health needs and evolving public health threats. Strengthening vaccination data and evidence systems will help to identify vaccination coverage gaps, barriers to vaccination and how to meet the needs of communities as equitably and responsibly as possible.
Looking to the future, it will also be important to evaluate the high cost of introducing and delivering new vaccines, as well as evaluating vaccination programs, against their health and economic benefits for society. By being more strategic we will help minimize health risks while ensuring that public funds are allocated in a sustainable and impactful manner.
Public health can continue to play a leadership role in helping plan for the future of vaccination. We need vaccine research, development and implementation to be rooted in equity, based on the best available evidence, and driven by population health needs in Canada. By considering this work alongside the development of pandemic preparedness plans, we can help ensure that we are ready to act in the face of future public health emergencies.
Now is the opportune time to reflect on the lessons we’ve learned from the COVID-19 pandemic and mpox. By strengthening our vaccination system, we can improve the health and well-being of all people in Canada and contribute to global health security.
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Media Relations Public Health Agency of Canada 613-957-2983 media@hc-sc.gc.ca
The U.S. National Science Foundation, in collaboration withEvery Page Foundation(EPF), is excited to announce 22 women science leaders as the 2024 NSF-EPF Ocean Decade Champions.
Each champion is associated with a project funded by the NSF Coastlines and People (NSF CoPe) program and receives a monetary award to support leadership activities, networking opportunities, technical and communications training and cross-disciplinary and intercultural scientific endeavors.
NSF CoPe is endorsed by the United NationsDecade of Ocean Science for Sustainable Development,also known as the Ocean Decade, which aims to promote ocean health and ensure any development efforts are sustainable and informed by science. The initiative’s10 Decade Challengesinclude a fair representation of women and other underrepresented groups in ocean science and decision-making.
The champions contribute to CoPe projects focused on coastline and community research that integrates natural and social processes and creates new or adapts existing technologies to bolster coastal resilience. The champions excel in their research and prioritize mentoring others and positively impacting society.
NSF and EPF, along with support fromPanorama Global, contributed over half a million dollars to support the careers of these leading women. Each awardee received support ranging from $20,000 to $50,000.
The 2024 NSF-EPF Ocean Decade Champions
Lynette Adams Black in Marine Science NSF Award Number: 2209284 Lynnette Adams is a director of development leading initiatives that bridge science, community and advocacy while centering joy as a driving force for equity and inclusion in marine biology.
Wai Allen Arizona State University NSF Award Number: 2103843 Wai Allen (Diné/Navajo) is a postdoctoral researcher exploring the interface between systems of Western science and Indigenous knowledge that converge to help Indigenous communities actualize their self-determination through Indigenous data sovereignty and governance in the geosciences.
Sharon Alston Norfolk State University NSF Award Number: 2209139 Sharon Alston is an associate professor of social work, researching risk and resilience among youth in public housing and exploring the career aspirations of African American youth.
Rebecca Asch East Carolina University NSF Award Number: 2052889 Rebecca Asch is a fisheries oceanographer researching interactions between fish reproduction, fish early life history, plankton ecology, climate change and climate variability.
Natasha Batista Stanford University NSF Award Number: 2209284 Natasha Batista is a marine spatial analyst and researcher investigating blue carbon modeling, ecosystem service valuations, community-based management and co-developed nature-based solutions.
Mona Behl University of Georgia NSF Award Number: 1940082 Mona Behl is an associate director of Georgia Sea Grant, and her research focuses on building climate adaptation and broadening participation in geosciences and workforce readiness.
Marilyn Brandt University of the Virgin Islands NSF Award Number: 2209284 Marilyn Brandt is a research associate professor studying the characteristics and impacts of coral reef diseases and using insights from her work to create effective strategies for coral conservation and restoration.
Lisa Carne Fragments of Hope NSF Award Number: 2209284 Lisa Carne founded Fragments of Hope, a community-based organization restoring coral reef habitats in 2013 after conducting coral reef research in Belize and witnessing the area’s vulnerability to hurricanes and rising sea temperatures.
Jade Delevaux Seascape Solutions NSF Award Number: 2209284 Jade Maeva Delevaux is a natural resource management specialist who works with decision-makers, local communities and nongovernmental organizations across the Pacific and the Caribbean to co-develop place-based solutions.
Allie Durdall University of the Virgin Islands NSF Award Number: 2209284 Allie Durdall is a marine and environmental scientist dedicated to coastal systems — mangroves, seagrass beds and salt ponds — who prioritizes fostering camaraderie among women and minorities in science.
Anne Guerry Stanford University NSF Award Number: 2209284 Anne Guerry is a scientist who studies the relationship between people and nature. She works on coastal resilience, marine planning, natural capital assessments and ecosystem services.
Sucharita Gopal Boston University NSF Award Number: 2209284 Sucharita Gopal is a multidisciplinary researcher who uses spatial analysis and modeling, GIS, data mining, information visualization and artificial neural networks to address various problems in biology, environmental science, public health and business.
Cindy Grace-McCaskey East Carolina University NSF Award Number: 2209284 Cindy Grace-McCaskey is an applied environmental anthropologist who uses qualitative, quantitative and participatory methods to examine the multiple ways social and natural systems interact with and influence one another and what that means for equitable resource management, adaptation and governance.
Kristin Grimes University of the Virgin Islands NSF Award Number: 2209284 Kristin Grimes is a research assistant professor who studies human impacts on nearshore environments. She focuses on mangrove ecosystems and is interested in how community-driven science approaches can improve restoration, education and stewardship outcomes.
Jamie Melvin Elizabeth River Project NSF Award Number: 2209139 Jamie Melvin is an engagement coordinator who develops and implements thoughtful and equitable programming at the Elizabeth River Project’s new Ryan Resilience Lab to engage with Norfolk’s diverse communities and coordinate the Knitting Mill Creek EcoDistrict.
Laura Moore University of North Carolina NSF Award Number: 1939447 Laura Moore is a professor researching how low-lying coastlines respond to climate change, emphasizing understanding the interactions between human activities and natural processes.
Tiara Moore Black in Marine Science NSF Award Number: 2209284 Tiara Moore is a CEO dedicated to promoting diversity and involvement in science through her research on biodiversity and efforts to increase participation in science through innovative methods such as environmental DNA and community engagement.
Shouraseni Sen Roy University of Miami NSF Award Number: 2209284 Shouraseni Sen Roy is a geographer working on the long-term spatial-temporal patterns of climate processes, trends and impacts in the “global south,” incorporating geospatial analysis techniques.
Diamond Tachera Rising Voices Center for Indigenous and Earth Sciences,NSF National Center for Atmospheric Research NSF Award Number: 2103843 Diamond Tachera is a kanaka ‘ōiwi (Native Hawaiian) and co-director whose research is driven by the Indigenous knowledge of her kūpuna (ancestors); she uses modern hydrogeochemical techniques to investigate the relationships between ʻāina (land), wai (water) and kānaka (people).
Nikki Taylor-Knowles University of Miami NSF Award Number: 2209284 Nikki Traylor-Knowles is a cell biologist whose research is dedicated to unraveling the evolution of immunity, wound healing and regeneration. She seeks to apply her research to conservation efforts.
Maya Trotz University of South Florida NSF Award Number: 2209284 Maya Trotz is a professor whose research covers water quality, water source protection and water provision for sustainable communities. She works with partners in the United States and the Caribbean on ridge-to-reef nature-based solutions.
Jingya Wang University of Delaware NSF Award Number: 2209190 Jingya Wang is a postdoctoral researcher focused on studying decision-making under deep uncertainties and strategies for adapting to climate change. She specializes in making risk-informed decisions to adapt systems to evolving conditions.
Rebecca Zarger University of South Florida NSF Award Number: 2209284 Rebecca Zarger is an environmental anthropologist working at the intersection of environmental knowledge and social justice to address coastal futures, climate change and youth informal science education.
Good morning, and thank you for the warm welcome. A special thank you to Nodal for inviting me to join your annual Trader Conference again this year. It is truly an honor to address all of you this morning. I am more than two years into my role as a commissioner at the Commodity Futures Trading Commission, and I still feel humbled by the opportunity to stand on a stage with a microphone to address accomplished professionals like all of you. My children, on the other hand, are surprised that anyone would want to hear me talk about anything, and they are even more shocked that I would need a microphone to be heard as they are convinced that the only volume I ever use when speaking is shouting.
The topic for my speech on today’s agenda is: New Perspectives on Energy Trading and Power Markets, and I plan to focus on the road ahead for these markets. But before discussing the road ahead, I will start with a story from my childhood about when I learned to drive. I say this is a story from my childhood because in South Dakota, children as young as fourteen years old are allowed to obtain a driver’s license. As much as I miss my home state, when I look at my fourteen-year-old son and think about him driving, I see the wisdom in Virginia’s approach.
At the ripe old age of twelve, my dad decided it was time for me to learn how to drive. As a tall child, I could reach the gas and brake pedals, which was apparently the minimum criteria for beginning driving lessons on the farm. To be honest, I was scared to death of driving. But my parents said I should learn because if there was ever an emergency, and I was the only one home, I may need to drive for help. That logic just made me scared of driving and being left alone on the farm.
My experience as a parent teaching two teenagers to drive involved multiple practice sessions in empty parking lots before slowly graduating to quiet side roads before paying another adult to do the really scary stuff, such as driving on highways and making left turns across oncoming traffic. I suspect that sounds familiar to many in this room as well.
But that suburban approach is not how I learned to drive. My lesson – notice I said lesson, not lessons—was a little more hands-off. On the day I learned to drive, my dad had me jump in the passenger seat of his 1977 blue Chevy pick-up truck to take a ride with him. Oddly, my older brother jumped in another farm truck and followed close behind.
After driving a few miles away from our house, my dad drove the truck into the middle of a freshly plowed field. Dad threw the truck into park, jumped out, and told me to slide over to the driver’s seat. He then shut the door, leaned into the window, and told me to drive around the field until I was comfortable enough to drive myself home. At that point, I realized why my brother had followed us in another vehicle—it was my dad’s getaway car.
Honestly, I panicked. I screamed, pleaded, and begged. But my dad was confident in his approach. And he left me with this advice: always keep your eyes on the road. But don’t just look at the road immediately in front of the vehicle; be sure to watch the road ahead so you know where you are going—and so that you do not smash into a deer.
I’m sharing this story with you today for two reasons. First, to offer some entertainment.
Second, I found the advice my dad gave me that day relevant to the topic for my speech today. Specifically, I want to share with you some thoughts and observations on energy markets, the road ahead for these markets, and potential down-the-road effects on the derivatives markets that are regulated by the CFTC.
Being a derivatives regulator can feel a little like being that driver who is looking down the road to see what is ahead. Our markets are forward looking, offering a view into points off in the distance so drivers are prepared for the path ahead. But, just like a careful driver needs to see what is right in front of the vehicle as much as what is on the road ahead, careful regulation requires us to also keep our eyes on current market conditions, in addition to ensuring the reliability and safety of the futures markets, which reflect the road ahead. The CFTC is always surveilling markets, spotting trends, and monitoring for risk that could impact the futures markets.
Now, here is where this speech will diverge from my story of learning to drive. While I was left to teach myself how to drive and had no one willing to share their expertise with me, our work at the CFTC in following markets occurs with the benefit of a variety of internal resources (such as the Market Intelligence Branch of the Division of Market Oversight and the Office of the Chief Economist) as well as external resources (such as our advisory committees).
At the CFTC, we have five advisory committees, each of which is sponsored by a commissioner. These committees are comprised of subject matter experts representing a variety of viewpoints, such as private sector stakeholders, non-profit groups, academia, and other governmental entities. As many of you know, especially those who are members, I sponsor the Energy and Environmental Markets Advisory Committee.
Growing up on a farm in South Dakota, I always understood that the price of energy had a major impact on whether it was a good year or a bad year for the farm. Even at a young age, I could tell you the exact cost-per-gallon of diesel because either my dad was grumbling about it as he left for the field, or it was the topic of discussion at the local café in town where the older farmers convened for their morning coffee.
The price of diesel determined the cost of running planters, tractors, combines, and trucks. The cost of fertilizers and pesticides are also directly linked to fossil fuel input prices, and spreading those fertilizers and pesticides required hiring a spray pilot whose services were priced based on the cost of the aviation fuel.
Even after our crops were harvested, energy costs were critical. Energy prices influenced the cost of storage at the grain elevators and transportation; barges and ships run on bunker fuel and trains need diesel. Everything in the farm economy depends on the price of energy. You might have perfect temperatures, exactly the right amount of rain at exactly the right time, and high yields but still see your net profit shrink due to high energy prices.
As the only Commissioner with a background in production agriculture, sponsoring the Commission’s Agriculture Advisory Committee may have seemed like the obvious choice. But I saw the EEMAC as an opportunity to focus on sectors critical to the agricultural economy and to study those energy markets to understand their impact on the markets we regulate. The goal is for the energy futures complex to serve end-users who need to hedge those costs and to mitigate the frequent price volatility experienced by the underlying cash markets.
As the EEMAC has held meetings and participated in discussions around energy markets, we have heard over and over that the United States has critical gaps in its energy and power infrastructure. As those gaps widen, so do risks to the stability of these markets that become more sensitive and less resilient to forces beyond US control. Instability and volatility in spot energy markets and prices have a direct impact on the derivative products we regulate.
Energy infrastructure’s impact on energy prices is something that cannot be ignored, and this reality has become even more apparent in the last decade. Of course, it makes sense that energy transmission and delivery directly impact the cost to the end consumer. However, truly understanding how energy infrastructure market fundamentals influence energy spot and derivatives prices requires hearing directly from hardworking domestic energy producers and seeing the infrastructure up close.
With that in mind, the EEMAC has held a series of meetings on the road, and members of the advisory committee have joined me in getting outside of Washington to see our energy production and infrastructure and to talk directly with the experts who manage these facilities.
In our first meeting, we visited Oklahoma and focused on more traditional energy markets such as crude oil and natural gas.[1] We visited Cushing, Oklahoma, where the WTI Crude Oil contract settles to see the pipelines and storage facilities as well as to talk with those in charge of storing, blending, and moving the oil to locations throughout the US. During the EEMAC meeting, a witness from the Federal Energy Regulatory Commission described an anomaly in the price of natural gas in New England.[2] Despite having one of the largest concentrations of natural gas in the Marcellus Shale just over two hundred miles away, a lack of pipeline capacity makes it impossible to fully supply New England with gas from the Marcellus Shale.[3] This situation means that New England relies on liquified natural gas (“LNG”) supplies from tanker ships. As a result, the price New England end users pay is based on the Henry Hub price for exported LNG, rather than the domestic production price. This circumstance creates an unusual situation where the spot price that a natural gas-fired power plant in Massachusetts pays for its fuel is more dependent on Europe’s desire for natural gas and a global market thousands of miles away than on the price and availability of natural gas produced two states away in Pennsylvania.
To examine power markets and electrification, we held meetings in Roy, Utah; Nashville, Tennessee; and Golden, Colorado.[4] In the course of those meetings, we had the opportunity to tour a large Ford EV production facility in Spring Hill, Tennessee, the Bingham Canyon Copper Mine in Utah, and a startup company looking to reuse mine tailings to produce critical metals and minerals in Golden, Colorado.
Here in the United States, we have some of the largest deposits of the metals necessary for power generation, transmission, and use, but large gaps in our infrastructure and policies render these advantages almost meaningless. In Golden, Colorado, we learned that despite a startup company’s cutting-edge technology that can turn mine waste into critical metals and minerals, China’s dominance in rare earth markets means that they can manipulate prices at will and squeeze out competition and force any US production into bankruptcy.
Southwest of Salt Lake City, Utah, we toured the Bingham Canyon Copper Mine. The Bingham County Mine is the largest man-made excavation in the world.[5] It’s also the world’s deepest open pit mine, and it has produced more copper than any other mine in the world.[6] As you can probably guess, the US has abundant supplies of copper; however, because of a lack of domestic smelting capacity, much of the copper mined in the US must be shipped overseas, often to China, to be processed and refined. In fact, since 2000, China has been responsible for 75% of the global smelter capacity growth.[7]
Finally, in Spring Hill, Tennessee, we learned that car companies are increasingly concerned about logistical challenges reducing their ability to provide cost-competitive electric vehicles. This is not an idle concern. Just four weeks ago, Rivian disclosed that it will be forced to reduce production and decrease its sales target in 2024 by almost 20% because of difficulties sourcing a component used in its electric motor.[8] And last week, to secure a steady supply of lithium, GM announced an almost $1 billion investment in the Thacker Pass mine in Nevada.[9]
For years, the problem for domestic energy policy was how to mine, drill, and import enough raw materials to satisfy America’s growing energy demand.[10] Even after the oil glut of the 1980s and lower energy prices, we were still concerned with our reliance on foreign energy.[11] The continuous mantra of Presidents starting with Richard Nixon was the concept of “Energy Independence” as a policy goal.[12] Now, not because of government mandates, plans, or policies, but thanks to technological innovation, hard work, and the deployment of private capital, that goal has largely been achieved. We have the raw materials in the ground that we need to power American energy independence; however, we need our infrastructure to catch-up with our domestic supply.
Returning to my driving lesson, when I look at the road ahead, I see the United States coming to a crossroads. One road leads to more resilient infrastructure, lower prices, and energy abundance. The other road leads to energy scarcity, higher prices, and a loss of energy independence. The direction we take as a country will have a major impact on the energy markets and the futures markets we regulate at the CFTC. Unfortunately, gaps in energy infrastructure lead to instability and volatility in energy markets, which have a direct impact on the derivatives markets. If derivatives markets fail to offer adequate price discovery and risk mitigation, they will no longer serve producers and end users as appropriate tools to hedge their exposure. That is a road we cannot afford to go down.
As a regulator, the CFTC is not the driver of this car, but we definitely have an interest in taking the road that leads to liquid, stable, and vibrant derivatives markets that serve as a tool for hedging against risk. We can do that by ensuring that new derivative products come to market efficiently without the fear of litigation or unreasonable staff positions, and by cultivating new market structures that minimize conflicts and instill market confidence. Our enforcement efforts should be focused on ‘bad actors’ and not on trying to shortcut deliberative policymaking. The CFTC should prefer “responsible regulation” over “regulation by enforcement.” To arrive at our desired destination, we all need to keep our eyes on the road, to see what is right in front of us while simultaneously paying attention to the road ahead.
Thank you for taking this road trip with me today. I look forward to answering your questions.
[1] CFTC Energy and Environmental Markets Advisory Committee meeting in Stillwater, Oklahoma, September 20, 2022.
[4] CFTC Energy and Environmental Markets Advisory Committee meeting in Nashville, Tennessee, February 28, 2023. CFTC Energy and Environmental Markets Advisory Committee meeting in Roy, Utah, June 27, 2023. CFTC Energy and Environmental Markets Advisory Committee meeting in Golden, Colorado, February 13, 2024.
[5] Kristine L. Pankow, Jeffrey R. Moore, J. Mark Hale, Keith D. Koper, Tex Kubacki, Katherine M. Whidden, and Michael K. McCarter. “Massive landslide at Utah copper mine generates wealth of geophysical data.” Geological Society of America, vol. 24, no. 1, January 2014.
[7] Securing Copper Supply: No China, No Energy Transition, WoodsMcKenzie, August 2024, Nick Pickens, Robin Griffin, Eleni Joanides, and Zhifei Liu.
[8] Ed Ludlow and Kiel Porter. “Rivian Misstep Triggered Parts Shortage Hobbling Its EV Output.” Bloomberg, October 7, 2024.
[9] Camilla Hodgson. “General Motors increases investment in lithium mine to nearly $1bn.” Financial Times, October 6, 2024.
[10] US Energy Information Administration, “U.S. energy facts explained, Imports & Exports.” Last updated July 15, 2024, with data from the Monthly Energy Review.
[12] Charles Homans, “Energy Independence: A Short History.” Foreign Policy, January 3, 2012.
Source: The Conversation – UK – By Christopher Hill, Associate Professor (Research and Development), Faculty of Business and Creative Industries, University of South Wales
Nuclear detonations were the backdrop to Teeua and Teraabo’s childhood. By the time the sisters were eight and four, the Pacific island on which they grew up, Kiritimati, had hosted 30 atomic and thermonuclear explosions – six during Operation Grapple, a British series between 1957 and 1958, and 24 during Operation Dominic, led by the US in 1962.
The UK’s secretary of state for the colonies, Alan Lennox-Boyd, had claimed the Grapple series would put Britain “far ahead of the Americans, and probably the Russians too, in super-bomb development”. Grapple, the country’s largest tri-service operation since D-Day, also involved troops from Fiji and New Zealand. It sought to secure the awesome power of the hydrogen bomb: a thermonuclear device far more destructive than the atomic bomb.
Britain’s seat at the top table of “super-bomb development” was emphatically announced in April 1958 with Grapple Y: an “H-bomb” 200 times more powerful than the bomb dropped on Hiroshima in 1945. This remains Britain’s largest nuclear detonation – one of more than 100 conducted by the UK, US and Soviet Union in 1958 alone.
More than six decades later, the health effects on former servicemen based on Kiritimati, as well as at test locations in South and Western Australia, remain unresolved. Greater Manchester’s mayor, Andy Burnham, has called the treatment of UK nuclear test veterans “the longest-standing and, arguably, the worst” of all the British public scandals in recent history.
Over the past year, the life stories of British nuclear test veterans have been collected by researchers, including myself, for an oral history project in partnership with the British Library. Whether from a vantage point of air, land or sea, the veterans all recall witnessing nuclear explosions with startling clarity, as if the moment was seared on to their memories. According to Doug Herne, a ship’s cook with the Royal Navy:
When the flash hit you, you could see the X-rays of your hands through your closed eyes. Then the heat hit you, and it was as if someone my size had caught fire and walked through me. To say it was frightening is an understatement. I think it shocked us into silence.
British servicemen describe their nuclear test experiences. Video: Wester van Gaal/Motherboard.
But what of the experiences of local people on Kiritimati? I have recently interviewed two sisters who are among the few surviving islanders who witnessed the nuclear tests. This is their story.
‘A mushroom cloud igniting the sky’
At the start of Operation Grapple in May 1957, around 250 islanders lived on Kiritimati – the world’s largest coral reef atoll, slap bang in the centre of the Pacific Ocean, around 1,250 miles (2,000km) due south of Hawaii. The island’s name is derived from the English word “Christmas”, the atoll having been “discovered” by the British explorer James Cook on Christmas Eve 1777.
In May 2023, I visited Kiritimati for a research project on “British nuclear imperialism”, which investigated how post-war Britain used its dwindling imperial assets and resources as a springboard for nuclear development. I sought to interview islanders who had remained on the atoll since the tests, including Teeua Tekonau, then aged 68. In 2024, I visited her younger sister, Teraabo Pollard, who lives more than 8,000 miles away in the contrasting surroundings of Burnley, north-west England.
Far from descriptions of fear and terror, both Teeua and Teraabo looked back on the tests with striking enthusiasm. Teraabo recalled witnessing them from the local maneaba (open-air meeting place) or tennis court as a “pleasurable” experience full of “excitement”.
She described having her ears plugged with cotton wool before being covered with a blanket. As if by magic, the blanket was then lifted to reveal a mushroom cloud igniting the night sky – a sight accompanied by sweetened bread handed out by American soldiers. So vivid was the light that Teraabo, then aged four, described “being excited about it being daytime again”.
An Operation Grapple thermonuclear test near Kiritimati, 1957-58. Video: Imperial War Museums.
In view of the violence of the tests, I was struck that Teeua and Teraabo volunteered these positive memories. Their enthusiasm seemed in marked contrast to growing concerns about the radioactive fallout – including those voiced by surviving test veterans and their descendants. As children, the tests seem to have offered the sisters a spectacle of fantasy and escapism – glazed with the saccharine of American treats and Disney films on British evacuation ships.
Yet they have also lived through the premature deaths of family members and, in Teraabo’s case, a malignant tumour dating from the time of the tests. And there have been similar stories from other families who lived in the shadow of these very risky, loosely controlled experiments. Teraabo told me about a friend who had peeked out from her blanket as a young girl – and who suffered from eye and health problems ever since.
‘Only a very slight health hazard’
Kiritimati forms part of the impossibly large Republic of Kiribati – a nation of 33 islands spread over 3.5 million square kilometres; the only one to have territory in all four hemispheres and, until 1995, on either side of the international date line. Before independence from Britain in 1979, Kiribati belonged to the Gilbert and Ellice Island Colony, which in effect made Kiritimati a “nuclear colony” for the purpose of British and American testing.
In 1955, Teeua and Teraabo’s parents, Taraem and Tekonau Tetoa, left their home island of Tabiteuea, a small atoll belonging to the Gilbert group of islands in the western Pacific. They boarded a British merchant vessel bound for Christmas Island nearly 2,000 miles away. Setting sail with new-born Teeua in their arms, the family looked forward to a future cutting copra on Kiritimati’s British coconut plantation.
The scale of this journey, with four young children, was immense. Just how the hundred or so Gilbertese passengers “managed to live [during the voyage] was better not asked”, according to one royal engineer who described a similar voyage a few years later. “There were piles of coconuts everywhere – perhaps they were for both food and drink.”
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Within two years of their arrival, the family faced more upheaval as mother Taraem and her children were packed aboard another ship ahead of the first three sets of British nuclear tests in the Pacific. Known as Grapple 1, 2 and 3, they were to be detonated over Malden Island, an atoll some 240 miles to the south of Kiritimati – but still too close for the comfort of local residents.
According to Teeua, the evacuation was prompted by disillusioned labourers brought to Kiritimati without their families, who went on strike after learning how much the British troops were being paid. But the islanders’ perspectives do not feature much in the colonial records, which give precedence to British disputes about logistical costs and safety calculations.
The Grapple task force resolved that the safe limit set by the International Commission on Radiological Protection should be reduced, to limit the cost of evacuations. A meeting in November 1956 noted that “only a very slight health hazard to people would arise from this reduction – and that only to primitive peoples”.
Shocking as this remark sounds, it is typical of the disregard that nuclear planners appear to have had, both for Indigenous communities and the mostly working-class soldiers. These lives did not seem to matter much in the context of Britain’s quest for nuclear supremacy. William Penney, Britain’s chief nuclear scientist, had bemoaned how critics during tests in Australia were “intent on thwarting the whole future of the British Empire for the sake of a few Aboriginals”.
Tekonau, Teeua’s father, was one of the 30 or so I-Kiribati people to stay behind on Kiritimati during the Malden tests in May and June 1957. As one of the only labourers to speak English, he had gained the trust of the district commissioner, Percy Roberts, who invited Tekonau to accompany him during inspections of villagers’ houses in Port London, then the island’s only village. On one occasion, Teeua said, the islanders did not recognise her father as he had been given a “flat top” haircut like the Fijian soldiers. “This means he had a nice relationship with the soldiers,” she told me. “Thank God for giving me such a good and clever dad.”
Since the initial tests did not produce a thermonuclear explosion, the task force embarked on further trials between November 1957 and September 1958, known as Grapple X, Y and Z. In view of expense and time, these were conducted on Kiritimati rather than Malden Island – and this time, the residents were not evacuated to other islands. Rather, families were brought aboard ships in the island’s harbour and shown films below deck.
After these tests, the islanders returned to find the large X and Y detonations had cracked the walls of their homes and smashed their doors and furniture. One islander found their pet frigate bird, like so many of the wild birds on Kiritimati, had been blinded by the flash of Grapple Y. No compensation was ever paid to the islanders, although the Ministry of Supply did reimburse the colony for deterioration of “plantation assets”, including £4 for every damaged coconut tree (equivalent to £120 today).
A month before Grapple Y, Teraabo was born. Her earliest and most vivid childhood memories are of the US-led Operation Dominic four years later, by which time evacuation procedures had been abandoned altogether.
This series of tests was sanctioned by Britain in exchange for a nuclear-powered submarine and access to the Nevada Proving Grounds in the US – regarded as pivotal to the future of British weapons technology ahead of the signing of the Test Ban Treaty in October 1963, which would prohibit atmospheric testing.
Dominic’s 24 detonations on Kiritimati – which usually took place after sunset around 6pm, between April and November 1962 – were “awesome”, according to Teraabo. Recalling the suspense as the “tannoy announced the countdown”, she described “coming out of cover [and] witnessing the bomb [as] an amazing experience … When the bomb set off, the brilliance of the light was tremendous.”
Each explosion’s slow expiration would re-illuminate the Pacific sky. One, Starfish Prime, became known as a “rainbow bomb” because of the multi-coloured aurora it produced over the Pacific, having been launched into space where it exploded.
So spectacular were these descriptions that I almost felt I had to suspend disbelief as I listened. At one point in my interview with Teraabo, she leaned in to reassure me that she had no interest in exaggerating these events: “I’m a very proud person,” she whispered, “I would never lie.”
‘In our blood’
More than six decades on from the Grapple tests, I was sitting in Teeua’s kitchen in the village of Tabwakea (meaning “turtle”), near the northern tip of Kiritimati. I had driven here in a Subaru Forester, clapped-out from the many potholes on the island’s main road, itself built by royal engineers over 60 years ago.
Teeua Tekonau in her kitchen during the author’s visit to Kiritimati in 2023. Christopher R. Hill., CC BY
Teeua’s home, nestled down a sand track, had a wooden veranda at the front where she would teach children to read and write under shelter from the hot equatorial sun. Handcrafted mats lined the sand and coral floor, fanning out from the veranda to the kitchen at the back.
The house felt full of the sounds of the local community, from the chatter of neighbours to the laughter of children outdoors. No one could feel lonely here, despite the vastness of the ocean that surrounds Kiritimati.
As Teeua cooked rice and prepared coffee, we discussed the main reason for my visit: to understand the impacts of the nuclear tests on the islanders, their descendents, and the sensitive ecosystem in which they live. Teeua is chair of Kiritimati’s Association of Atomic Cancer Patients, and one of only three survivors of the tests still living on Kiritimati. She pulled up a seat and looked at me:
Many, many died of cancer … And many women had babies that died within three months … I remember the coconut trees … when you drank [from the coconuts], you [were] poisoned.
Both Teeua’s parents and four of her eight siblings had died of cancer or unexplained conditions, she said. Her younger brother, Takieta, died of leukaemia at the age of two in November 1963 – less than a year after Operation Dominic ended. Her sister Teraabo, who discovered a tumour in her stomach shortly after the trials, was only able to have her stomach treated once she moved to the UK in 1981, by which time the tumour had turned malignant.
Teeua’s testimony pointed to the gendered impacts of the nuclear tests. She referred to the prevalence of menstrual problems and stillbirths, evidence of which can be inferred from the testimony of another nuclear survivor, Sui Kiritome, a fellow I-Kiribati who had arrived on Kiritimati in 1957 with her teacher husband. Sui has described how their second child, Rakieti, had “blood coming out of all the cavities of her body” at birth.
A rare military hospital record from 1958 – stored in the UK’s National Archives at Kew in London – also refers to the treatment of a civilian woman for ante-partum haemorrhage and stillbirth, though it is unclear whether this was a local woman or one of the soldier’s wives on the passenger ship HMT Dunera, which visited briefly to “boost morale” after Grapple X.
Members of the Kiritimati Association of Atomic Cancer Patients. Courtesy: Teeua Taukaro., CC BY-ND
Having re-established the Association of Atomic Cancer Patients in 2009, Teeua has continued much of the work that Ken McGinley, first chair of the British Nuclear Tests Veterans Association, did after its establishment in 1983. She has documented the names of all I-Kiribati people present during the tests, along with their spouses, children and other relatives. And she has listed the cancers and illnesses from which they have suffered.
In the absence of medical records at the island hospital, these handwritten notes are the closest thing on the atoll to epidemiological data about the tests. But according to Teeua, concerns about the health effects of the tests date back much longer, to 1965 when a labourer named Bwebwe spoke out about poisonous clouds. “Everyone thought he was crazy,” Teeua recalled.
But Bwebwe’s speculations were lent credibility by Sui Kiritome’s testimony, and by the facial scars she bore that were visible for all to see. In an interview with her daughter, Sui explained how she was only 24 when she started to lose her hair, and “burns developed on my face, scalp and parts of my shoulder”.
In a similar manner to claims made by British nuclear test veterans, Sui attributed her health problems to being rained on during Grapple Y – which may have been detonated closer to the atoll’s surface than the task force was prepared to admit.
When I asked Teeua why her campaigning association was only reformed in 2009, she explained it had been prompted by a visit from British nuclear test veterans who “told us that everyone [involved in the tests] has cancer – blood cancer”. They had been told this in the past but, she said, “we did not believe it. But after years … after our children [also] died of cancer, then we remembered what they told us.”
After some visiting researchers explained to Teeua and the community that the effects of the tests were “not good”, she concluded that “our kids died of cancer because of the tests … That’s why we start to combine together … the nuclear survivors, to talk about what they did to our kids”.
I found Teeua’s testimony deeply troubling: not only because of the suffering she and other families have been through, but in the way that veterans had returned to Kiritimati as civilians, raising concerns among locals that may have lain dormant or been forgotten. The suggestion that radiation was “in her blood” must have been deeply disturbing for Teeua and her community.
But I reminded myself that the veterans who came looking for answers in 2009 were also victims. They made the long journey seeking clues about their health problems, or a silver bullet to prove their government’s deception over the nuclear fallout.
As young men, they were unwittingly burdened with a lifetime of uncertainty – compounded by endless legal disputes with the Ministry of Defence or inconclusive health studies that jarred with their personal medical histories. And, like the islanders, some of these servicemen died young after experiencing agonising illnesses.
The scramble for the Pacific
My research on British nuclear imperialism also sheds light on how imperial and settler colonial perceptions of “nature” shaped how these nuclear tests were planned and operationalised.
British sites were selected on the basis of in-depth environmental research. When searching the site for Britain’s first atomic bomb (the Montebello Islands off the west coast of Australia), surveyors discovered 20 new species of insect, six new plants, and a species of legless lizard.
Monitoring of radioactive fallout from nuclear tests fed into the rise of ecosystem ecologies as an academic discipline. In the words of one environmental specialist on the US tests, it seemed that “destruction was the enabling condition for understanding life as interconnected”.
Since H-bombs would exceed the explosive yield deemed acceptable by Australia, Winston Churchill’s government in the mid-1950s had been forced to look for a new test site beyond Western and South Australia. British planners drew on a wealth of imperial knowledge and networks – but their proposal to use the Kermadec Islands, an archipelago 600 miles north-east of Auckland, was rejected by New Zealand on environmental grounds.
So, when Teeua and her family landed on Kiritimati in 1955, their journey was part of “the scramble for the Pacific”: a race between Britain and the US to lay claim to the sovereignty of Pacific atolls in light of their strategic significance for air and naval power.
The British government archives include some notable environmental “what ifs?” Had the US refused the UK’s selection of Kiritimati because of its own sovereignty claim, then it would have been probable, as Lennox-Boyd, Britain’s colonial secretary, admitted, that “the Antarctic region south of Australia might have to be used” for its rapidly expanding nuclear programme.
Instead, this extraordinary period in global history recently took me to a Victorian mansion in the Lancashire town of Burnley, where I interviewed Teeua’s younger sister, Teraabo, about her memories of the Kiritimati tests.
‘No longer angry’
Teraabo’s home felt like the antithesis of Teeua’s island abode 8,300 miles away: ordered instead of haphazard, private instead of communal, spacious instead of crowded. And our interview had a more detached, philosophical tone.
Teraabo Pollard with her father’s nuclear test veteran medal. Christopher R. Hill., CC BY-ND
Like her sister, Teraabo has worked to raise awareness about the legacy of the nuclear tests, including with the Christmas Island Appeal, an offshoot of the British Nuclear Test Veterans Association that sought to publicise the extent of the waste left on Kiritimati from the nuclear test period.
The appeal succeeded in persuading Tony Blair’s UK government to tackle the remaining waste in Kiritimati – most of which was non-radiological, according to a 1998 environmental assessment. The island was “cleaned up” and remediated between 2004 and 2008, at a cost of around £5 million to the Ministry of Defence. Much of the waste was flown or shipped back to the UK, where 388 tonnes of low-grade radioactive material were deposited in a former salt mine at Port Clarence, near Middlesbrough.
Yet Teraabo’s views have evolved. She told me she is “no longer angry” about the tests, a stark contrast to her position 20 years ago, when she told British journalist Alan Rimmer how islanders had “led a simple life with disease virtually unknown. But after the tests, everything changed. I now realise the whole island was poisoned.”
Whereas the Teraabo of 2003 blamed “the British government for all this misery”, she has since become more reflective. In the context of the cold war and the nuclear arms race, she even told me she could understand the British rationale for selecting Kiritimati as a test site. This seemed a remarkable statement from a survivor who had lost so much.
Over the course of the interview, it became clear Teraabo had grown tired of being angry – and that she had felt “trapped” by the tragic figure she was meant to represent in the campaigns of veterans and disarmers. Each time Teraabo rehearsed the doom-laden script of radiation exposure, she admitted she was also suppressing the joy of her childhood memories.
A turning point for Teraabo seems to have come in 2007, when she last visited Kiritimati and met her sister Teeua. By this time, the atoll’s population was 4,000 – quite a leap from the 300 residents she grew up with. “It is no longer the island I remember,” she said.
The Kiritimati of Teraabo’s memory was neat and well-structured. The one she described encountering in 2007 was chaotic and unkempt. She had come to the realisation that the Kiritimati she had been campaigning for – the pristine, untouched atoll of her parents – had long since moved on, so she should move on with it. The sorrow caused by the test operations would not define her.
Radioactive colonialism
Not long after I left Kiritimati in June 2023, the global nuclear disarmament organisation Ican began researching the atoll ahead of a major global summit to discuss the UN Treaty on the Prohibition of Nuclear Weapons. Descendants of Kiritimati’s nuclear test survivors were asked a series of questions, with those who provided the “right” answers being selected for a sponsored trip to UN headquarters in New York.
The chosen representatives included Teeua’s daughter, Taraem. I wondered if the survivors of Kiritimati are doomed to forever rehearse the stories of their nuclear past – a burden that Teeua and Teraabo have had to carry ever since they stood in awe of atomic and thermonuclear detonations more than 60 years ago.
They have had to deal with “radioactive colonialism” all their adult lives – the outside world demanding to see the imprint of radioactivity on their health and memories. But the sisters’ fondness for British order, despite all they have been through, prevails.
Their positive memories of Britain may in part reflect the elevated role of their father, Tekonau Tetoa – a posthumous recipient of the test veteran medal – within the British colonial system. During my visit, I happened upon an old photo of Tekonau, looking immaculate as he hangs off the side of a plantation truck in a crisp white shirt. Knowing Teeua did not possess a photo of her parents, I took a scan and raced to her house down the road.
“Do you recognise this man?” I asked, holding up my phone.
She flickered with recognition. “Is that my father?”
I nodded, and she shed a tear of joy.
Tekonau Tetoa, father of Teeua and Teraabo, hangs off the door of a coconut plantation truck in Kiritimati. Courtesy: John Bryden., CC BY-ND
Memories of Teeua and Teraabo’s father are preserved in the island landscape of their youth: pristine, regimented by the ostensible tidiness of colonial and military order.
But such order masked contamination: an unknown quantity that would only become evident years later in ill-health and environmental damage. It was not only the nuclear tests: from 1957 to 1964, the atoll was sprayed four times a week with DDT, a carcinogenic insecticide, as part of attempts to reduce insect-borne disease. In the words of one of the pilots: “I had many a wave from the rather fat Gilbo ladies sitting on their loos as I passed overhead, and gave them some spray for good measure!” British tidiness concealed a special brand of poison.
Today, the prospect of a meaningful response from the UK to the concerns raised by the islanders and servicemen alike seems slim. In October 2023, the UK and France followed North Korea and Russia in vetoing a Kiribati and Kazakhstan-proposed UN resolution on victim assistance and environmental remediation for people and places harmed by nuclear weapons use and testing.
Over in Kiritimati, meanwhile, Teeua still tends to a small plot where Prince Philip planted a commemorative tree in April 1959, shortly after the British-led nuclear tests had ended. It is rumoured he did not drink from the atoll’s water while he was there.
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Christopher Hill receives funding from the Office for Veterans’ Affairs, UK Cabinet Office. The research for this article was also supported by funding from the Arts and Humanities Research Council (AHRC), UKRI. The author wishes to thank the following for their support with this article: Fiona Bowler, Ian Brailsford, Joshua Bushen, John Bryden, Jon Hogg, Brian Jones, Rens van Munster, Wesley Perriman, Maere Tekanene, Michael Walsh, Rotee Walsh and Derek Woolf. Sincere thanks to Teeua Tekonau and Teraabo Pollard for sharing their family stories.
Source: The Conversation – UK – By Philip Murphy, Director of History & Policy at the Institute of Historical Research and Professor of British and Commonwealth History, School of Advanced Study, University of London
That the recent visit of King Charles to Australia – his first as the country’s sovereign – attracted protests will have come as a surprise to very few people.
But the message from the most prominent protester was, perhaps, less expected. At the end of a speech by the king at Parliament House in Canberra on October 21, he was heckled by Lidia Thorpe, an independent senator of Aboriginal (Djab Wurrung, Gunnai and Gunditjmara) origin.
She told him: “You committed genocide against our people. Give us our land back. Give us what you stole from us – our bones, our skulls, our babies, our people.”
Earlier in the day, Thorpe had issued a statement outlining her position. In it, she claimed:
As First Peoples, we never ceded our Sovereignty over this land. The crown invaded this country, has not sought treaty with First Peoples, and committed a genocide of our people. King Charles is not the legitimate sovereign of these lands. Any move towards a republic must not continue this injustice. Treaty must play a central role in establishing an independent nation. A republic without a treaty must not happen.
Historic treaties
The recognition of the rights of Aboriginal peoples through a formal treaty has been a demand of Australian indigenous rights campaigners for decades. Indeed, Australia is unusual among British settler colonies in the failure of the crown to forge treaties with Indigenous peoples in the process of imperial occupation. In New Zealand and Canada these treaties continue to be invoked as an historical underpinning of indigenous rights.
The 1840 Treaty of Waitangi between Māori leaders and the crown as well as the rights and principles that followed from it are certainly politically contentious in New Zealand. Yet the Treaty is still widely regarded as the country’s founding document and a key symbolic basis for inclusion and reconciliation.
In Canada, the treaties signed by the crown with First Nations peoples are explicitly referenced in the country’s 1982 constitution and are cited by the Canadian government as “a framework for living together and sharing the land Indigenous peoples traditionally occupied.”
It should not come as much of a surprise that the issue of the the absence of similar treaties in Australia has been raised during the king’s visit. The rather dull itineraries of royal visits provide activists with a perfect opportunity to have their voices heard by journalists desperate for something interesting to write about. There is a history of Aboriginal protesters using them in this way.
In 1972, the Larrakia people, the traditional owners of the Darwin region in the Northern Territory, used a visit by Princess Margaret to draw attention to a petition asking Queen Elizabeth II to assist them in their demand for land rights and political representation.
The palace and the governments of the Realms are keenly aware of these sensitivities and plan royal tours accordingly. During his visit to Canada in 2022, for example, while he was still Prince of Wales, Charles made a point of meeting the survivors of the country’s notorious residential schools where thousands of indigenous children suffered abuse.
Ironically, indigenous treaties with the crown have complicated the republican issue, forcing campaigners for a republic in both New Zealand and Canada to offer assurances that the rights and obligations in those treaties would not be lost if the monarchy was to be abolished.
The question of reparations
Charles has followed his Australia visit by flying to Samoa for the summit of the Commonwealth Heads of Government. Again, the UK press sensed trouble ahead, predicting that as head of the Commonwealth Charles might be caught up in a row between the British government and Caribbean nations over the call for reparations for slavery.
The UK is not the only government in the Commonwealth having to wrestle with colonial legacy issues. But there is no avoiding them.
Britain has a monarchy steeped in imperial history, with a king who is quite separately sovereign of 14 other realms. Its government continues to profess a belief in the value of the Commonwealth, when its members have little else in common except that most of them were colonised by Britain.
A recent report by the UK thinktank Policy Exchange, which imagined the Commonwealth playing a greater role in British diplomatic, defence and trade policy, seemed blithely unaware of the tensions within the organisation and the barriers to collective action.
In a similar vein, UK prime minister Keir Starmer has claimed that he wants to “look forward” and focus on issues such as climate change and boosting prosperity rather than reparations.
But the Commonwealth is simply not a logical framework for the discussion of these matters. On the other hand, it is uniquely qualified to debate the impact of colonialism and the question of reparatory justice. And even if Britain doesn’t want to have that conversation, other Commonwealth countries certainly do.
Philip Murphy has received funding from the AHRC. He belongs to the European Movement UK.
Source: United Kingdom – Executive Government & Departments
John Tuckett, Immigration Services Commissioner, has been reappointed for a second 5 year term.
John Tuckett, the Immigration Services Commissioner, has been reappointed for a second term of 5 years with effect from 7 July 2024.
The Commissioner is the head of Office of the Immigration Services Commissioner (OISC) and has statutory regulatory, complaint handling and law enforcement responsibilities in respect of the provision of immigration advice and services in the UK.
SBM Offshore announces it has completed the divestment of a 13.5% ownership interest in the special purpose companies related to the lease and operation of the FPSO Sepetiba to China Merchants Financial Leasing (Hong Kong) Holding Co., Limited (CMFL). This follows the announcement on February 10, 2022, of an agreement whereby CMFL would acquire its ownership interest after the FPSO Sepetiba had commenced operations. SBM Offshore is operator of the FPSO and will remain the majority shareholder with 51% ownership interest.
FPSO Sepetiba is installed at the Mero unitized field located in the Santos Basin, approximately 180 kilometers offshore Rio de Janeiro in Brazil. The Mero unitized field is operated by Petrobras (38.6%), in partnership with Shell Brasil (19.3%), TotalEnergies (19.3%), CNPC (9.65%), CNOOC (9.65%) and Pré-Sal Petróleo S.A. (PPSA) (3.5%), representing the government in the non-contracted area.
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Source: United Kingdom – Executive Government & Departments
A speech from the Deputy Prime Minister
Location:
Harrogate
Delivered on:
(Transcript of the speech, exactly as it was delivered)
Firstly, I want to say a massive thank you to you, some of our most dedicated, brilliant public servants in this room.
For everything that you do, every day, to keep our country going.
You’ve shown remarkable resilience through some tough – and very tough – years.
During the pandemic, you kept vital services running in our communities.
Through this period of economic instability, you’ve made tough choices to protect the most vulnerable.
And following a summer of violent far-right disorder, you stood up for the values of decency and community that define our country.
And time and again, you step forward to support your local communities.
Now, I understand that this conference was originally planned for just before the General Election.
I have to admit that I’m much happier to be stood here as your Deputy Prime Minister!
Last year in Bournemouth, I said that if we were elected, we would deliver a plan for change.
A new way of governing. A government of public service.
And just over 100 days into government and we are getting on with the job.
We’re fixing the foundations to build a country that works for working people.
And local government is at the heart of this vision.
Because as you all know, I am a creature of local government.
I loved my job as a home help for Stockport council.
And I learned the importance of a good local service, and what it meant to really know and trust your community.
Back then, local government wasn’t on its knees.
Don’t get me wrong, things weren’t easy.
But we had the time and resource to provide a good service.
I know that good, functioning local government looks like great working with a good central government working in genuine partnership to deliver better outcomes.
So I know we can’t deliver true change for Britain without the support of every one of you in this room.
We can’t deliver for our missions without you.
Take our plans to deliver 1.5 million homes, including a new generation of secure, social and affordable homes.
The delivery of safer streets, an NHS and social care system that’s back on its feet.
The sustained economic growth we need to raise living standards.
And the strong communities on which good lives are built.
That’s why, in my very first week in the job – as Secretary of State for Housing, Communities and Local Government – I put local government back where it belongs.
At the heart of my department’s name and mission.
And I’m lucky I have Jim by my side, the Minister of State for Local Government – who has run a council and knows local government from the inside out – and he’s here with me today and as part of the team.
Louise, your new Chair, also represents the best of local government – a fierce commitment to public service and leadership steeped in years of experience – not too many years, but a few.
And the fact that her predecessor, Shaun, has now joined us in the House of Commons just goes to show we are a government that believes in the power of local government.
We know what’s possible when you give people with skin in the game the power to change lives.
And, after an incredibly difficult few years, it’s time to unleash that power.
Which means resetting our relationship with local government and rebuilding its foundations.
It means ditching the slogans and gimmicks and going back to basics: delivering services that people can rely on.
You don’t need me to tell you how much harder that job has been after fourteen years of neglect.
[Redacted political content]
Councils stuck in a doom loop with money pouring out of a system with too many cracks.
And it isn’t just the scandal of wasted money. It’s the heartache of the wasted lives and potential.
[Redacted political content]
For all the promises about localism and levelling up, there was an assumption that if something needed doing, it should be done from Whitehall.
With central government hoarding power, micromanaging you, intervening in an uncoordinated and unhelpful way.
A begging-bowl system of wasteful competitive pots that led to councils bidding to pay for chess tables in public parks.
No more.
We’re going to turn the page on this failed approach – bringing local government into the heart of government.
As part of a partnership based on honesty and respect.
And it’s in that spirit that we need to face up to the financial crisis facing local government.
We all know that there’s no quick fix.
The dire public finances – the £22 billion black hole – we’ve inherited mean that it’s going to take hard graft on all sides to get us back on the road to recovery.
We knew things were bad, but on entering office, we uncovered a shocking crisis in local government which was far beyond what we had anticipated.
Councils of all political stripes have been left shelling out millions to plaster over the government’s mismanagement.
[Redacted political content]
To make matters worse, we discovered that over the last decade, the last [Redacted political content] government ripped away any financial oversight of council spending, scrapping the Audit Commission and pushing councils to borrow more and more.
This reckless approach has left the government with no transparent system in place to warn the public when a council is struggling.
And more and more authorities are struggling to stay afloat with communities in the most deprived parts of our country disproportionately affected, through cuts to services that they desperately depend on, as people’s [inaudible] go up.
And get it.
And I know we need change urgently.
You’ve all heard me say it – I’m going provide multi-year funding settlements, that will give you the stability and certainty to plan and invest for the long-term.
And that we will end the Dragon’s Den-style bidding wars between councils for competitive funding pots.
Instead, we’ll show you some respect with long-term funding, giving you flexibility to spend it where it is needed.
And through the next Local Government Finance Settlement and beyond, we will provide more detail on how this is going to work.
Let me be clear that we can’t fix the system overnight.
[Redacted political content]
And I have to say, looking at the numbers we inherited, I am shocked by the scale of neglect.
It is going to be a long, hard slog to get local government back on its feet.
And in the short term, we’re doing all that we can to protect severely struggling councils, which is why I can announce that we are scrapping the punitive ‘pay day loan’ premium on borrowing for councils in need of Exceptional Financial Support.
This government will take a collaborative and a constructive approach to councils in financial difficulty.
You know I can’t go into detail about the Spending Review.
So let me talk to you today about things that I can tell you.
Fundamentally, I want to work together, across central and local government to reform high-cost public services and focus on preventing people from needing them in the first place.
Tackling profiteering in broken markets serving vulnerable groups, like we’ve seen in some of the private children’s homes.
When it comes to prevention, there can be few bigger priorities for us than preventing homelessness – one of the biggest pressures that you face.
By getting Britain building again. Speeding up the planning system and reintroducing mandatory housing targets.
I know that this will mean asking more from local councils.
Which is why we’re boosting the number of planners.
As part of our plans, to strengthen local planning departments and reinforce planning obligations to deliver more affordable homes on new developments – we will support you to hold developers to account.
And it’s why we’re also reviewing Right to Buy, to stem the loss of precious council homes.
But we’ll also tackle homelessness directly, by learning lessons from the past and working with local leaders to take action on all forms of homelessness.
We will develop a cross-government strategy to get us back on track to end homelessness.
We will also reform the broken local audit system in England that we inherited.
This should be the bedrock of local accountability and transparency, of trust and confidence in local democracy.
Instead, last year, just one percent of local bodies were able to publish audited accounts by the deadline.
This cannot go on.
We have already taken decisive action to introduce backstop dates to clear the backlog in unaudited accounts.
Local audit will and must provide value for money for the taxpayers and be fit for the future.
And similarly, when the way councils are run has gone wrong, central government hasn’t always responded constructively.
Instead kicking councils when they’re down for political reasons.
This Labour government are going to do things differently.
We will work with every council that needs it to put in place clear, deliverable plans to address problems and protect local taxpayers, rather than treating them as political footballs.
That’s the approach we’re taking in Birmingham.
Significant challenges continue to face the city council, but we’re going to work with the councillors and the community to solve them in partnership.
Birmingham has huge potential – and we’re going to work closely with the partners across the West Midlands to unlock that potential, including with the Mayor Parker of the West Midlands Combined Authority.
And that’s the change that we represent.
Not punishment, but collaboration.
Getting places into a stable financial footing by, yes, making difficult decisions, but with the interests of residents at the heart.
Our aim is to support councils to perform at their very best.
Councillor conduct / standards framework
Standards in local government matter – both the delivery of services and personal conduct.
Every decision you make has an impact on the daily lives of those you serve.
And most councillors meet the highest standards of public office and I am so proud to be representing you in government.
But sadly we all know there are rare occasions where bad behaviour occurs.
I’ve been made aware of cases of persistent bullying and harassment by councillors, even, in some cases, leading to victims’ resignations.
We don’t have a system that protects victims or empowers councils to deal with unacceptable behaviour.
And this cannot go on and we will give councils the powers to address poor conduct.
We will consult on reforms to the local government standards framework, including a proposal to allow for the suspension of members who violate codes of conduct.
But we also recognise that too often, councillors become victims themselves.
Too often I speak to dedicated councillors who are facing death threats and intimidation.
And I take this very seriously and recognise the impact this has on the lives of dedicated public servants and their families.
That’s why we are taking decisive action to prevent councillors from being subjected to intimidation and harassment by removing the requirement for members’ home addresses to be published.
[And I want you to know] this is a government that respects and appreciates the huge contribution made by councillors who work tirelessly for residents – and we will always have your back.
We are also taking a more collaborative approach to pressing issues like the widespread workforce challenges you are experiencing.
Ninety-four per cent of councils say they’re having difficulties with recruitment and retention.
This isn’t just your problem – it’s all our problem because council staff are on the frontline serving local communities.
So, we’re ready to work hand in hand with you to find creative solutions to staffing issues.
We’ll launch a Workforce Development Group in partnership with the sector to gain a shared understanding of the most immediate priorities and focus our efforts on where we can add the most value to your work.
And when we say we’ll work in partnership with the sector, every step of the way, we mean it.
I have formally launched our new Leaders’ Council at this very conference – which will give local government a voice at the heart of government – this a mark of just how seriously we take this.
The Council will bring together local government leaders and ministers to tackle shared problems and deliver for the communities they all ultimately serve.
We will use it to learn from the exciting innovations that councils are pioneering.
And we hugely respect your knowledge and expertise.
But it’s more than that.
The Leaders’ Council will be critical for co-designing policy at the highest levels.
And I look forward to working closely with the Council over the coming years.
Gone are the day of diktats from above.
It is time for those with skin in the game to be put in the driving seat.
That is what our devolution agenda is all about.
We will make it easier for you to come together and form combined authorities and devolve more powers to existing ones – meaning access to new powers over skills, transport and employment support.
Our landmark English Devolution Bill will deliver our manifesto commitment to transfer power out of Whitehall, making devolution the default setting.
And look, I know the coming years won’t always be easy, but I’m confident that, working in partnership, we can fix the basics so that you can focus on the things that really matter to our and your communities.
My starting point is that we should be clear about what we ask of you and then give you the autonomy and the support you need to deliver.
So, where we don’t need to get involved, we won’t.
It’s not our place, for example, to decide whether councillors should attend your meetings remotely or use proxy votes when they need to.
So, I can announce today that we’re putting forward proposals to let councils make the decision for themselves.
Which means making it possible for people from all walks of life to have a stake in local democracy, whether they have caring responsibilities or aren’t able to make it to the town hall in person because of illness or disability.
It’s right that we make it easier for more people to get involved in making their community a great place to live.
It’s also right that we expect the highest standards of local government – with central government playing its part as a responsible steward.
And for me this is personal.
I’m passionate about backing you with the long-term funding and certainty that you need.
The powers you need.
And the new relationship that we all need.
So local government can once again be a strong, functioning arm of the state, providing public services that people can rely on.
And I want to thank you, once again, for everything that you do for our communities.
This is a government of service that is on your side.
And the road ahead won’t always be a smooth path, but we will walk it together and build a better Britain.
Source: United Kingdom – Executive Government & Departments 3
Statement by Lord Richard Simon Hermer, Attorney General for England and Wales and Advocate General for Northern Ireland, in the UN General Assembly Plenary Debate on the International Court of Justice.
Location:
United Nations, New York
Delivered on:
(Transcript of the speech, exactly as it was delivered)
May I start by thanking President Salam for his leadership during what has been an exceptionally busy period for the Court. As today’s report highlights, the past year has seen a significant increase in the number of States involved in both contentious and advisory proceedings.
And I would like on behalf of the United Kingdom to express my gratitude to all Members of the Court and the Registry for their continued commitment to the sound administration of justice and the peaceful resolution of international disputes. Our thanks goes for their independence, for the quality of their judgement and for the central and vital role they play in our international rules-based order.
The United Nations Charter has served as a font of inspiration for generations. Its clarion call on behalf of the peoples of the United Nations for a determination that we should establish conditions under which respect for international law should be maintained has never been more important. And through Chapter XIV of the Charter we sought to give real and practical effect to the aspiration of the creation of the International Court of Justice (ICJ).
We came from a myriad of distinct legal cultures and traditions to recognise that the security and prosperity of us all can be met by the compliance with law and peaceful resolution of disputes through international judicial means.
We recognized that the world for future generations will be better when we settle disputes in courtrooms not on battlefields.
And as the globe currently faces critical challenges, there has never been a more important moment for us all to reaffirm our commitment to that ideal, to the international rule of law and thus to the important world of the ICJ.
The United Kingdom has demonstrated its support for the Court in part by accepting compulsory jurisdiction. And I reiterate the call made by the General Assembly for States that have not yet done so to consider accepting the jurisdiction of the ICJ in accordance with its Statute.
And our commitment to the future of the Court and our commitment to the very highest standards in international law is such that I am delighted that the UK National Group has decided to nominate Professor Dapo Akande for election to the Court for the 2027-2036 term.
The United Kingdom would once again wish to thank the President of the Court for the report and at this critical moment to reaffirm our unwavering support for its vital work.
Source: United States House of Representatives – Representative Mike Kelly (R-PA)
WASHINGTON, D.C. — Today, U.S. Rep. Mike Kelly (R-PA) issued this statement after the Greenville Area School Board unanimously voted down changes to Title IX, which would have expanded “the prohibition of discrimination to criteria to include pregnancy, sexual orientation and gender identity,” according to The (Greenville) Record-Argus.
“Well done parents and fellow citizens of Greenville Area School District. The federal Department of Education has no right dictating to parents what is best for their kids. They certainly should not be engaging in culture wars in our schools,” Rep. Kelly said.
Parents and community members raised concerns that changes to the district’s Title IX policy would risk student safety, particularly for female students; and, “they also worry it opens the door for biologically male students to compete in girls’ sports,” according to the Record-Argus.
The Sharon Herald reports Greenville Area School Board President Rick Rossi said, “I have been in education for more than 50 years and I have never seen a policy come out of the government as bad as this.”
In April 2024, a mandate issued by Biden Administration expanded Title IX’s term “sex discrimination” to recognize sexual orientation and gender identity.
Title IX, passed in 1972, is a federal law that protects the rights of women and girls to educational equality.
Source: United States House of Representatives – Congresswoman Nicole Malliotakis (NY-11)
(STATEN ISLAND, NY) – Today, Congresswoman Nicole Malliotakis was joined by a bipartisan group of local elected officials to call on the U.S. Department of Education to hold New York City accountable for violating federal law by failing to provide non-public school students with developmental disabilities the Individualized Education Services Program (IESP) accommodations they are entitled to under the 1975 Individuals with Disabilities Education Act (IDEA).
One of the most prominent cases involves a deaf fifth grade student whose listening device, which she had used all summer and which the city had already paid for, was taken away. Her mother, Marisa Jones, has been advocating for the city to immediately reinstate her daughter’s accommodation, as without this device she struggles to hear and cannot participate fully in her education.
“It not only unconscionable that students across our city are being denied the accommodations they are legally entitled to, but it’s plain cruel to take away an already paid for listening device from a deaf 5th grade student. If another kid in the classroom were to walk up to her and snatch her device, you’d call it bullying, and that’s exactly what the City of New York, our own government, is doing,” said Congresswoman Nicole Malliotakis. “The city needs to stop playing games with children’s education and immediately reinstate these essential accommodations that they are legally required to provide under both state and federal laws immediately to prevent further learning loss by disabled students.”
“Without this [hearing device] my daughter can’t hear the teacher in the classroom she is effectively denied her right to an education.” said Marisa Jones, parent of a deaf student at St. Joseph Hill Academy. “It’s been two months since she hasn’t had these services, how do you make up for the regression? How do you make up for the lost time?”
“This year’s implementation of the IESP law is having an unjust impact on students with disabilities. The requirement to submit a written request by June 1st has caught many families off guard, as they were not properly informed. As a parent and a member of the Disabilities Committee, my priority is ensuring that these students have their necessary services reinstated. The financial burden on families to cover these essential services out of pocket is overwhelming, and we must ensure that every student receives the support they are entitled to.” said New York State Senator Jessica Scarcella-Spanton.
“We continue to receive numerous calls from private school parents regarding the DOE’s lack of concern or action taken regarding their children’s IEP’s (Individualized Educational Plans) and the services that are not being provided. This is unacceptable. These are mandated services that private school children, like public school children, are entitled to from the DOE. These children have been without their required services for almost two months. DOE needs to find the solution and provide the services needed to these children immediately. We support any and all efforts to get these students the services they need, and we thank Congresswoman Malliotakis for doing what she can to get it done.” said Staten Island Borough President Vito Fossella.
“As we have been saying from the beginning of this entirely preventable situation, NYC Public Schools knows our students need and are entitled to these critical services, yet the City recklessly deprives them of these services. Now, they must reap what they have sown. I applaud Congresswoman Malliotakis’ leadership and join her and my colleagues in calling on the U.S. Department of Education to hold New York City accountable for failing to provide our students with their legally prescribed IESP accommodations. They must be restored immediately.” said Assemblyman Sam Pirozzolo.
“We once again demand that the City take action immediately to rectify this disastrous situation. The City has been in violation of federal law since the beginning of the school year, and they have not been held accountable for their actions. We are calling on the federal government to step in and ensure accountability for our students and families,” said Assemblyman Mike Tannousis.
“I cannot believe that we are almost two months into the school year and some of our most vulnerable students are still being denied mandated services by the City of New York despite our ongoing efforts to rectify this at a local level,” said Assemblyman Michael Reilly. “This is embarrassing for our city and today we are joining with Congresswoman Malliotakis to make sure that the bureaucrats responsible for this are held accountable.”
“As we approach the third month of school and end of first marking period, children in need of valuable services are being denied because of an arbitrary date that has never been enforced before. I am once again calling on the DOE to rectify this situation immediately, so these students do not fall further behind in their development,” said Councilmember Joe Borelli.
“The decision by our local government to deliberately refuse to notify parents of the necessary paperwork for their IESP children is abhorrent. Students with special needs are refused access to services which are essential for their education simply because they are enrolled in private schools. This kind of decision making only reinforces the feelings of many parents who have already disengaged from our public school model due to previous breaches of trust. I expected better from the DOE, and I hope they will correct course and come into compliance with federal law.” said Councilmember David Carr.
Congresswoman Nicole Malliotakis and Congressman Ritchie Torres (NY-15) wrote to the U.S Department of Education requesting that it hold the city accountable for violating federal law by withholding Individualized Education Services Program (IESP) accommodations that children with disabilities are entitled to under the 1975 Individuals with Disabilities Education Act (IDEA). You can view the letter HERE.
Source: United States House of Representatives – Lori Chavez-DeRemer (OR-05)
Citing severe damages to Central and Eastern Oregon, lawmakers’ letter asks President Biden “to swiftly provide the federal resources for our communities to recover and rebuild.”
WASHINGTON, D.C. – Oregon’s entire congressional delegation, including Reps. Lori Chavez-DeRemer, Cliff Bentz, Earl Blumenauer, Suzanne Bonamici, Val Hoyle, Andrea Salinas, and Sens. Ron Wyden and Jeff Merkley, are urging President Biden to grant the governor’s request for Oregon to receive a major disaster declaration in response to record-setting wildfires that burned about three times the average acreage this year.
“The 2024 wildfire season has been one of the most devastating and costly fire seasons on record,”the lawmakers wrote.“Central and Eastern Oregon experienced intense heat waves this summer, which dried out vegetation and created extreme fire risk on the landscape. Severe lightning storms ignited a large number of fires, and windy conditions allowed many of these fires to spread rapidly.”
“Over 1.9 million acres burned, making it the largest wildfire season by acreage in Oregon’s history. For context, the state’s 10-year average acres burned is 640,000 acres,”they continued.“The estimated damages and cost to public infrastructure exceeds $650 million, and this figure does not account for the long-term loss in revenue local businesses will experience as a result of these fires.“
The delegation wrote that this year’s extreme infernos and severe storms hit Gilliam, Grant, Jefferson, Umatilla, Wasco, and Wheeler counties hardest.
“The fires destroyed 42 homes and 132 additional buildings and structures, damaged critical infrastructure and the natural environment, interrupted schools, care facilities, and social services, injured 26 civilians and fire responders, and led to the death of an air tanker pilot,”the lawmakers wrote.“These fires have also created profound hardship for our ranchers, as they destroyed private and public grazing lands and cut off access to essential resources for livestock.”
In their letter supporting the governor’s request for federal disaster assistance, the Oregon lawmakers asked the Biden-Harris administration to ensure state, local, and tribal governments have access to all available resources through the Federal Emergency Management Agency and that the state’s cost-share be waived due to a lack of available state funding.
“Oregonians now require federal support and assistance to navigate the aftermath of this unprecedented fire season. The back-to-back incidents and lack of basic services had a devastating effect on the safety and stamina of our fire crews,”the delegation wrote.“We urge you and your administration to swiftly provide the federal resources for our communities to recover and rebuild.”
Source: United States Senator for Massachusetts – Elizabeth Warren
October 03, 2024
Two prominent Democratic senators are criticizing United States Steel Corp. Chief Executive Officer David Burritt over his potential $72 million “golden parachute” if the sale to a Japanese company goes through – while President Joe Biden’s decision on the takeover hangs in the air.
Senator Elizabeth Warren of Massachusetts and Senator Sherrod Brown of Ohio, whose race for reelection is one of the closest in the chamber this year, wrote to Burritt Wednesday regarding financial incentives offered to him and other US Steel executives if Nippon Steel Corp. acquires the company in a $14.1 billion deal.
The executives would be eligible for the incentives if they’re terminated following a takeover, according to a March filing with the US Securities and Exchange Commission.
First, let me begin by wishing everyone a happy UN Day.
Every year, in this Chamber, the global community reaffirms its commitment to ensuring women’s full, equal, and meaningful participation in conflict prevention, resolution, and recovery, and to upholding their rights during times of war.
Yet, progress remains dishearteningly slow.
Peace and security decision-making is overwhelmingly dominated by men.
And ending impunity for atrocities against women and girls is still but a distant goal.
And the past year has been especially difficult.
In Gaza, tens of thousands of Palestinian women and girls have been killed and injured amidst continued war and a terrible humanitarian crisis.
Meanwhile, the plight of Israeli women still held hostage demands urgent action to ensure their safety and immediate release.
In Lebanon, an escalation of destruction and displacement threatens women and girls’ safety and livelihood.
In Sudan, women are enduring extreme suffering, facing not only the loss of loved ones but also the dire lack of access to essential services and medical care.
I reiterate the Secretary-General’s calls:
Civilians must be protected, civilian infrastructure must not be targeted, and international law must be upheld.
The United Nations remains steadfast.
We will not look away or lose hope.
The women, peace and security agenda will always guide our work and show a path forward.
Despite attacks on our offices, and the detention and killings of our staff in unprecedented numbers, allow me to honor the work of my colleagues and share examples of what they do.
In peacekeeping missions, the women, peace and security agenda is a key political and strategic imperative.
Our teams work tirelessly to help protect and assist women – from relocating human rights defenders to aiding women after their release from abduction by armed groups, from ensuring women’s representation in local dialogues to helping bring justice to women in places where sexual violence has long been met with impunity.
In the Democratic Republic of Congo, for example, 57 percent of cases supported by the mission’s Prosecution Support Cells in 2023 involved conflict-related sexual violence, contributing to the conviction of dozens of members of armed groups and state security forces.
In Abyei, earlier this year, one-third of participants in a post-migration conference were women – this was a first.
In the Central African Republic, the mission is helping mobilize women for local elections that have not been held in 38 years.
Deploying more diverse teams to peacekeeping operations has helped us deliver better on our mandates.
The representation of women in most categories of uniformed personnel has doubled in the last five years, and initiatives have been put in place to foster gender-responsive work environments for all peacekeepers.
Yet, much more remains to be done to improve the gender balance of our deployments and reap the benefits of inclusion and diversity.
Success in peacekeeping hinges on the political support from Member States, especially those with the great honor of sitting in this Chamber to protect international peace and security.
I commend the efforts of the United Arab Emirates to empower Women in Peace and Security. This initiative has provided training and capacity building opportunities for over 600 women from the Middle East, Africa and Asia in military and peacekeeping. The UN is a proud partner in these efforts that advance the Women, Peace and Security Agenda.
Throughout the world, the UN reaches millions of displaced women and girls and survivors of violence with food, medical support, legal aid, shelter, access to safe spaces, psychosocial support, education, and jobs and livelihood opportunities.
Yesterday, survivors of conflict-related sexual violence from many war-torn corners of the globe gathered for a Survivor’s Hearing to mark the 15th anniversary of resolution 1888.
Effective protection from sexual violence is fundamental to women’s effective participation in peacebuilding, conflict recovery, and sustainable development that leaves no one behind.
None of this would happen without women’s organizations in the frontlines of crises, and we are trying to find ways of channeling more resources to them.
The Women’s Peace and Humanitarian Fund has supported over 1,300 local women’s civil society organizations since 2016, nearly half of them accessing UN funds for the first time, and 582 women human rights defenders and their families.
Last year, the Secretary-General invited all partners to contribute to the goal of raising 300 million dollars for women’s organizations in conflict-affected countries.
We still have a long way to go to get there.
40 percent of all funding of the 25-million-dollar GBV-focused grant by the Central Emergency Response Fund to UN Women and UNFPA was sub-granted to local women’s organizations and delivered remarkable results, a powerful demonstration that localization is both feasible and effective.
The Peacebuilding Fund has now exceeded its internal target allocation of 30 percent to gender equality for seven years in a row.
We know that the inclusion of women and gender-related provisions in peace processes not only advances gender equality, but also results in more durable peace agreements. From Guatemala to Northern Ireland, from Colombia to Liberia, research has shown how women in formal processes worked with diverse women’s groups to not only reach an agreement but also to strengthen the substance of peace agreements and opportunities for implementation.
Yet, women remain starkly under-represented from peace negotiations and conflict resolution efforts – including in some of the most intractable conflicts over the last year.
Historical data underscores this challenge: between 1992 and 2019, women constituted only 13 per cent of negotiators and six per cent of mediators in major peace processes.
More recent data from UN Women for 2023 shows that women on average made up less than ten per cent of peace negotiators and 13.5 per cent of mediators.
The processes in Libya and Yemen, where conflict parties have not included women, highlight a continued resistance to progress.
In Afghanistan, the regression of women’s rights highlights the severe impact of excluding women from governance – and society altogether.
It is imperative that we reinforce our resolve to support women in Afghanistan and elsewhere, advocating for their rights, agency and inclusion at every opportunity.
Collective action and solidarity are crucial.
In today’s broader global mediation landscape, the United Nations is not always present.
In fact, a diverse set of regional, state and other mediation actors initiates and leads mediation processes.
Many contexts feature joint or overlapping peace initiatives.
This means that no single mediator can affect global and meaningful change on women’s participation.
It is why, today, on behalf of the Secretary-General, I am pleased to launch the “Common Pledge on Women’s Participation in Peace Processes”, an initiative that brings together a broad array of mediation actors.
By endorsing this Common Pledge, Member States, regional organizations and other mediation actors commit to join the United Nations in taking concrete steps on women’s participation in all peace processes they are involved in.
These commitments include:
Appointing women as lead mediators and ensuring women are an integral part of mediation teams;
Ensuring mediators advocate with conflict parties for concrete targets and measures that promote women’s direct and meaningful participation in peace processes, including as members of their delegations;
Consulting with a broad range of women leaders and women-led civil society organizations in all stages of peace processes; and
Embedding gender expertise in their mediation teams to foster gender-responsive peace processes and agreements.
This Pledge targets mediating entities and is intended as an operational initiative, and not another general statement of principle.
It focuses on measures and decisions that are under the control of mediators and their organizations.
The Secretary-General invites Member States, regional organizations and other actors who are actively engaged in mediation to join this initiative and report on their progress at next year’s 25th Anniversary Security Council Open Debate on women, peace and security.
Madam President,
We have no illusions about the challenges posed by today’s geopolitical landscape and the complexity of achieving diplomatic outcomes.
As long as gendered power inequalities, patriarchal social structures, systematic biases, violence and discrimination continues to hold back half our societies, peace will remain elusive.
Yet, our collective experience has shown that progress is possible.
Together, we can have an impact that is greater than the sum of our individual efforts.
By leveraging our respective political capital and roles, let us dismantle the patriarchal power structures and advance gender equality, ensuring women’s full, equal and meaningful participation in political and public life.
Source: United States Senator for Commonwealth of Virginia Mark R Warner
WASHINGTON–U.S. Senator Mark R. Warner (D-VA), Chairman of the Senate Select Committee on Intelligence, today wrote to American domain registrars NameCheap, GoDaddy, Cloudflare, NewFold Digital, NameSilo, and Versign – which were identified in a Department of Justice affidavit as providing domain services to the “Doppelganger” Russian covert influence network – pressing them to take immediate steps to address the continued abuse of their services for foreign covert influence, particularly in the period preceding and following Election Day.
Through the maintenance of both inauthentic social media accounts and websites, the hallmark of the Russian government-directed foreign malign influence campaigns known as “Doppelganger” has been the impersonation of Western media institutions online, including outlets like the Washington Post, Fox News, and Forward. Russian influence operatives have been attributed impersonating dozens of legitimate organizations online as early as September 2022, when researchers at the nonprofit EU Disinfo Lab first identified the network’s campaigns, using misleading domains (such as www.washingtonpost.pm, www.washingtonpost.ltd, www.fox-news.in, www.fox-news.top and www.forward.pw) to covertly spread Russian government propaganda with the aim of reducing international support for Ukraine, bolstering pro-Russian policies and interests, and influencing voters in U.S. and foreign elections, including the 2024 presidential election.
Citing research conducted by Meta in 2023, Warner noted several ways in which the global domain name industry has enabled Russian malign influence activity, including withholding vital domain name registration information from good-faith researchers and digital forensic investigators, ignoring inaccurate registration information submitted by registrants, and failing to identify repeated instances of intentional and malicious domain name squatting used to impersonate legitimate organizations.
Wrote Warner today,“Information included in the affidavit supporting recent seizure of a number of these domains provides further indication of your industry’s apparent inattention to abuses by foreign actors engaged in covert influence. Specifically, Russian influence actors utilized a number of tactics, techniques, and procedures that – against the backdrop of extensive open source literature on Doppelganger’s practices – should have alerted your company to abuse of its services, including the use of cryptocurrency to purchase domains, heavy reliance on anonymizing infrastructure to access your registration services (including the use of IPs widely associated with cybercriminal obfuscation network activity), the use of credit cards issued to a U.S. company “that has significant ties to, and employees based in, Russia,” use of fictitious and poorly-backstopped identities for registrants, and in at least one instance the use of a Russian address.”
Noted Warner,“While foreign covert influence represents one of the most egregious abuses of the domain name system, the industry’s inattention to abuse has been well-documented for years, enabling malicious activity such as phishing campaigns, drive-by malware, and online scams – all possible because of malicious actors using your services… Given the continued lapses of your industry to address these abuses, I believe Congress may need to evaluate legislative remedies that promote greater diligence across the global domain name ecosystem.”
“In the interim, your company must take immediate steps to address the continued abuse of your services for foreign covert influence – particularly in the days preceding, and weeks immediately following, Election Day. With the prospect of a close election – and declassified intelligence demonstrating the past practice of foreign adversaries in spreading narratives that undermine confidence in election processes– Americans will be particularly reliant on media organizations and state and local government websites to provide authoritative and accurate election information. It is imperative that your company work to diminish the risk that foreign adversaries use impersonated domains to promote false narratives in this context,” Warner concluded.
As Chairman of the Senate Select Committee on Intelligence, Warner has been consistently warning about the threat posed by foreign covert influence networks ahead of the 2024 elections. Last month, he convened a public hearing with representatives from Alphabet, Meta and Microsoft examining the roles and responsibilities of U.S. platforms to prevent the spread of foreign propaganda and misinformation on their networks.
A detailed report written independently by the WTO Secretariat.
Government report
A policy statement by the government of the member under review.
From the meeting
The Secretariat and Government reports are discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB).
Concluding remarks
Background
Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals. Significant developments that may have an impact on the global trading system are also monitored. All WTO members are subject to review, with the frequency of review depending on the country’s size.
Source: United States House of Representatives – Congressman Juan Ciscomani (Arizona)
ARIZONA 6th – U.S. Congressman Juan Ciscomani (AZ-06) and House Committee on Veterans’ Affairs Chairman Mike Bost (IL-12) attended several veterans-focused events in Arizona’s 6th Congressional district, which is home to over 70,000 veterans.
The events included hosting a quarterly meeting with Ciscomani’s Veterans Advisory Council, touring Northstar Neurology’s facilities, attending the Cochise County Veteran StandDown Resource Fair, discussing Cochise College’s Military and Veteran Serving Program, and attending the Fort Huachuca Quarterly Installation Retirement Ceremony.
“As the Representative to over 70,000 veterans that call Arizona’s 6th district home, it is my duty and honor to advocate on their behalf and ensure their needs are prioritized by the federal government,” said Ciscomani. “I am grateful to Chairman Bost for his leadership and taking the time to talk directly with veterans in my district. I will continue to push for legislation, funding, and other efforts that provide comprehensive healthcare, mental health support, educational opportunities, and employment resources to our veterans to empower them to transition successfully into civilian life.”
“As Chairman of the House Committee on Veterans’ Affairs, I was honored to visit with my friend and colleague Rep. Juan Ciscomani in Arizona’s sixth congressional district last week to meet with his veteran community,” said Chairman Bost. “We visited with veterans from all walks of life, including veterans from the Cochise community, and veterans’ survivors to see firsthand how Arizona is leading the way to get veterans and their family’s access to the economic opportunities, education, and outside-the-box mental health support and resources they have earned. House Republicans will continue pushing to cut through the red tape and open more doors for veterans and transitioning active-duty servicemembers across the country. It goes without saying that veterans in southeastern Arizona have no better advocate than my friend, Rep. Ciscomani, fighting for them every day in DC on the issues that matter most to them.”
Veterans Advisory Council
Ciscomani, Bost hosted a quarterly meeting with Ciscomani’s Veteran Advisory Council, which is chaired by Maj. Gen. Don Shepperd (Ret.) and is comprised of veterans from the U.S. Marine Corps, U.S. Air Force, U.S. Army, and U.S. Navy. The council has identified specific areas of focus, which include which include veterans’ transition into civilian life, access to housing, mental health and suicide prevention, and workforce and education opportunities.
Tour of Northstar Neurology
Ciscomani and Bost toured Northstar Neurology, a treatment facility in Tucson founded in 2017 that provides critical help to veterans suffering with a traumatic brain injury or PTSD.
Cochise County Veteran StandDown Resource Fair
Ciscomani, Bost, and Congressman Tony Gonzales (TX-23) attended the Cochise County Veteran StandDown Resource Fair to speak directly with veterans about the most pressing issues they face and share resources Ciscomani’s office can offer to veterans.
Cochise College Military & Veteran Serving Program
Ciscomani, Bost visited Cochise College to discuss their Military and Veteran Serving Program and strong partnership with Fort Huachuca to assist active-duty members and veterans and the two new Baccalaureate programs.
Fort Huachuca Quarterly Installation Retirement Ceremony
Ciscomani, Bost attended Fort Huachuca Quarterly Installation Retirement Ceremony to celebrate military retirees.
Background:
In his freshman term in office, Congressman Ciscomani, who is a member of the House Committee on Veterans’ Affairs, has introduced ten pieces of veterans-focused legislation. These include:
The VET-TEC Authorization Act of 2023 (H.R. 1669) which extends a popular program that covers costs for veterans seeking job training in high-tech industries.
The VETS Opportunity Act (H.R. 7896), to expand veterans’ access to educational opportunities for in-demand skilled trade and vocational programs.
TheVET MEDS Act (H.R. 5470) to extend the VA’s authority to allow certain healthcare providers to conduct exams across state lines.
TheVeterans’ Appeals Backlog Improvement Act (H.R. 1378) to reduce wait times for veterans seeking disability claims and ensure they are processed faster.
ThePrioritizing Veterans’ Survivors Act (H.R. 7100) to move the Office of Survivors Assistance (OSA) back within the Office of the VA Secretary. This move ensures that OSA has direct access to the Secretary to fix policy and program-wide problems.
The Rural Veterans’ Benefit Improvement Act (H.R. 8881) to ensure veterans have permanent, cross-state access to certified healthcare providers for disability claim exams.
TheSenator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act (H.R. 8371), which will be the flagship veterans’ package for the 118th Congress. It includes a number of bipartisan and bicameral proposals to reform and improve the delivery of healthcare, benefits, and services at the Department of Veterans Affairs (VA) for veterans, their families, and their survivors. This includes your effort to reauthorize the VET-TEC program.
TheExpanding Access for Online Veterans Student Act (H.R. 5702), which increased housing stipends for student veterans attending classes online.
TheVeteran Exam Expansion Act (H.R. 5938), which expands the pool of providers eligible to cross state lines when conducting disability exams for veterans.
TheCoordinating Care for Senior Veterans and Wounded Warriors Act (H.R. 9399) to improve healthcare coordination and management for veterans who receive services through Medicare and the Department of Veteran Affairs (VA).
Through casework, the Congressman’s team has returned over $5 million to constituents, including $1.9 million to the veterans of Arizona’s 6th Congressional District. This is money and benefits that were owed to constituents but were stuck in the bureaucracy of a federal agency.
Source: United States Senator for Wisconsin Tammy Baldwin
WASHINGTON, D.C. – Today, U.S. Senator Tammy Baldwin (D-WI) introduced a Senate Resolution designating October 23, 2024 as “National Marine Sanctuary Day.” The resolution highlights the role of national marine sanctuaries in increasing access to nature, protecting biodiversity, and boosting economic activity for coastal communities.
“Wisconsin Shipwreck Coast National Marine Sanctuary is an engine for tourism and world-class research along Lake Michigan, stimulating our local economies and pioneering breakthroughs for our Great Lakes,” said Senator Baldwin. “I’m proud to have fought for and delivered a national marine sanctuary for Wisconsin, and will continue to fight to protect our nation’s natural resources and ensure generations to come can enjoy our coastlines.”
Senator Baldwin has fought to support national marine sanctuaries, successfully leading the charge to bring a National Marine Sanctuary to Wisconsin in 2021. In October 2013, Senator Baldwin urged the National Oceanic and Atmospheric Administration (NOAA) to re-open the public nomination process for marine sanctuaries for the first time in 20 years. After the Administration announced in June 2014 that Americans would be given the opportunity to nominate nationally significant marine and Great Lakes areas as national marine sanctuaries, Wisconsin’s Lake Michigan proposal was submitted and Senator Baldwin called on NOAA to support their efforts. The Wisconsin Shipwreck Coast National Marine Sanctuary was officially designated in 2021.
As a member of the Senate Appropriations Committee, Senator Baldwin has continued to advocate for Wisconsin’s Great Lakes by supporting robust funding for the National Marine Sanctuaries Program and by requesting federal funding for the Wisconsin Shipwreck Coast National Marine Sanctuary Foundation.
The resolution is co-sponsored by Senators Richard Blumenthal (D-CT), Maria Cantwell (D-WA), Ben Cardin (D-MD), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Patty Murray (D-WA), Alex Padilla (D-CA), Brian Schatz (D-HI), Chris Van Hollen (D-MD), Raphael Warnock (D-GA), Peter Welch (D-VT), Cory Booker (D-NJ), and Gary Peters (D-MI).
The resolution is supported by Alabama Coastal Foundation, Azul, California Academy of Sciences, Carolina Ocean Alliance, Creation Justice Ministries, EarthEcho International, The Florida Aquarium, Friends of the Mariana Trench, Global Rewilding Alliance, Greater Farallones Association, GreenLatinos, Guy Harvey Foundation, Healthy Ocean Coalition, Inland Ocean Coalition, Minorities in Shark Sciences, Monterey Bay Aquarium, National Aquarium, National Ocean Protection Coalition, National Wildlife Federation, Next 100 Coalition, Ocean Defense Initiative, Point Defiance Zoo & Aquarium + Northwest Trek Wildlife Park, Shark Stewards, Shedd Aquarium, South Carolina Aquarium, Surfrider Foundation, Sustainable Ocean Alliance, The Ocean Project, WILDCOAST, Wildlife Conservation Society, and World Ocean Day.
“National marine sanctuaries are special places in America’s waters where people show up as part of the solution to steward our blue planet,” said Joel R. Johnson, President and CEO of the National Marine Sanctuary Foundation. “From the Great Lakes to the Gulf of Mexico, the Chesapeake Bay to Pacific Islands, national marine sanctuaries connect us with wildlife and our shared history making us feel like we are part of something much greater than ourselves. Our continued support for these treasured waters is more essential than ever and makes a positive impact for present and future generations.”
“The conservation of our special ocean and Great Lakes places is vital for the species that depend on them, the communities that rely on them, and the future generations that dream about them,” said Ayana Melvan, Director of Conservation Action of the Aquarium Conservation Partnership.
“The ACP and its members strive to celebrate the science and stories of our National Marine Sanctuary System at every opportunity. We’re proud to stand behind the Senator’s resolution to recognize the 600,000 sq. miles and growing of marine and Great Lake waters that truly make America beautiful,” said Kim McIntyre, Executive Director of the Aquarium Conservation Partnership.
A full version of this resolution is available here and below.
Designating October 23, 2024, as “National Marine Sanctuary Day”.
Whereas, on October 23, 1972, the Marine Protection, Research, and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.) became law and ushered in a new era of ocean conservation;
Whereas the National Marine Sanctuary System is a nationwide network that conserves spectacular oceans, coasts, and Great Lakes;
Whereas communities across the United States can nominate their most treasured marine and Great Lakes waters for consideration as national marine sanctuaries;
Whereas national marine sanctuaries protect biodiversity, safeguard extraordinary seascapes, historic shipwrecks, and sacred cultural places, and provide abundant recreational opportunities;
Whereas national marine sanctuaries seek opportunities to partner with indigenous governments and communities to achieve shared conservation goals and to support the care-taking of ecological resources and cultural sites of indigenous peoples;
Whereas national marine sanctuaries protect vital habitats for countless species of fish and wildlife, including many species that are listed as threatened or endangered;
Whereas the conservation of marine ecosystems is vital for healthy oceans, coasts, and Great Lakes, for addressing climate change, and for sustaining productive coastal economies;
Whereas the National Marine Sanctuary Foundation and its partners work to protect and nurture the growth of the National Marine Sanctuary System;
Whereas national marine sanctuaries increase access to nature for all, support coastal communities, and generate billions of dollars annually in local communities by providing jobs in the United States, supporting commercial, Tribal, and recreational fisheries, bolstering tourism and recreation, engaging businesses in stewardship, and driving the growth of the blue economy;
Whereas national marine sanctuaries connect people and communities through science, education, United States history, recreation, and stewardship and inspire community-based solutions that help individuals understand and protect the spectacular underwater habitats, wildlife, archaeological resources, and cultural seascapes of the United States;
Whereas national marine sanctuaries are living laboratories that enable cooperative science and research that improves resource management and advances innovative public-private partnerships;
Whereas national marine sanctuaries can help make oceans, coasts, and Great Lakes more resilient by protecting ecosystems that sequester carbon, by safeguarding coastal communities from flooding and storms, and by protecting biodiversity;
Whereas the United States is a historic maritime Nation, and oceans, coasts, and Great Lakes are central to the way of life of the people of the United States;
Whereas engaging communities as stewards of these protected waters makes national marine sanctuaries unique and provides a comprehensive, ecosystem-based, highly participatory approach to managing and conserving marine and Great Lakes environments for current and future generations; and
Whereas October 23, 2024, is recognized as “National Marine Sanctuary Day” to increase awareness about the importance of the National Marine Sanctuary System and healthy oceans, coasts, and Great Lakes and to celebrate the many recreational opportunities available for the enjoyment of this network of protected waters: Now, therefore, be it
Resolved, That the Senate—
(1) designates October 23, 2024, as “National Marine Sanctuary Day”;
(2) encourages the people of the United States and the world to responsibly visit, experience, recreate in, and support the treasured national marine sanctuaries of the United States;
(3) acknowledges the importance of national marine sanctuaries in supporting community resilience, protecting biodiversity, and increasing access to nature;
(4) recognizes the importance of national marine sanctuaries for their recreational opportunities and contributions to local and national economies across the United States;
(5) celebrates the ability of the National Marine Sanctuary System to protect nationally significant places in oceans, coasts, and Great Lakes;
(6) calls on the National Oceanic and Atmospheric Administration to partner with communities and to complete designations of new national marine sanctuaries; and
(7) encourages Federal agencies to balance priorities and work together to support the priorities of the Marine Protection, Research, and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.).
Source: United States Senator for Wisconsin Tammy Baldwin
WASHINGTON, D.C. – Today, U.S. Senator Tammy Baldwin (D-WI) called on the Biden Administration to hold the People’s Republic of China (PRC) accountable for its role in actively supporting the production and export of fentanyl into the United States. Baldwin urged the Biden administration to heed the call from a group of families whose loved ones died of fentanyl overdoses and launch a formal probe into China’s role in fueling the U.S. synthetic opioid crisis.
“I have heard from parents who have lost children, law enforcement fighting on the front lines, and advocates urging for change – all demanding we do more to stop the scourge of fentanyl. There is no doubt that the actions of the PRC have left hundreds of thousands of Americans dead and countless families in mourning,” wrote Senator Baldwin in a letter to USTR Representative Tai.
Last week, a group of families impacted by the fentanyl crisis filed a petition under Section 301 of the Trade Act of 1974 to call on United States Trade Representative (USTR) Katherine Tai to initiate a full investigation into China’s role in the fentanyl crisis. Over the past two decades, the PRC has become one of the most significant global centers for the manufacture, purchase, and exportation of illicit drugs and precursor chemicals. According to the petition filed by the families impacted by fentanyl, over 97 percent of all illicit fentanyl present in the U.S. originates from the PRC. The petition recommends a variety of trade countermeasures, including imposing tariffs on at least $50 billion on Chinese goods and services, and banning Chinese shipments from entering the U.S. via the de minimis loophole.
“Despite the U.S. government’s best efforts through diplomatic channels, it has become obvious that the PRC will not voluntarily crack down on its fentanyl producers and exports. Until the PRC takes serious action to hold its own companies accountable, I urge you to seek redress for the harm inflicted upon American families. I therefore urge you to expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on the American people and our economy,” wrote Senator Baldwin.
Senator Baldwin has long been fighting to combat the fentanyl and opioid crisis, disrupting supply chains and bolstering support for prevention and recovery services. Senator Baldwin introduced the bipartisan Ensure Accountability in the De Minimis Act to hold countries like China accountable for sending hundreds of billions of dollars’ worth of products into the U.S. market, undermining U.S. manufacturers and letting illicit substances into our communities. Last year, Senators Baldwin and Bill Cassidy, M.D. (R-LA) introduced the De Minimis Reciprocity Act to close the de minimis loophole by excluding untrustworthy countries like China from using the de minimis channel.
A full version of the letter is available here and below.
Dear Ambassador Tai,
I write to express support for a petition filed under Section 301 of the Trade Act of 1974 on behalf of families who have lost loved ones to illicit fentanyl. I ask that you review the petition and initiate a full investigation into the role of the People’s Republic of China (PRC) in the fentanyl crisis, which is devastating families and the U.S. economy.
While Congress and the Administration have worked to hold China accountable and secure commitments from the PRC, the petition alleges that the PRC continues to actively support the production and export of illicit fentanyl to the United States and has failed to implement sufficient measures to prevent these exports. We have a responsibility to use every tool available to halt the flow of fentanyl into the United States. For that reason, I urge you to take up an investigation to examine the PRC’s acts, policies, and practices that have caused severe economic harm to the United States—to say nothing of the tragic deaths of hundreds of thousands of Americans—and consider appropriate countermeasures. As described in the petition, the economic impacts of the fentanyl crisis include undermining U.S. employment and the labor market. The need for supportive services and criminal justice expenditures also put increased pressure on state and local government budgets.
Over the past two decades, the PRC has become one of the most significant global centers for the manufacture, purchase, and exportation of illicit drugs and precursor chemicals. According to the petition filed by Facing Fentanyl, Inc., over 97 percent of all illicit fentanyl present in the U.S. originates in the PRC. Illicit synthetic fentanyl can be produced incredibly cheaply; one kilogram can be produced for less than $1,000 and sold for $80,000. Despite its low production cost, it is 50 times stronger than heroin.
Illicit synthetic fentanyl has been the deadliest of drugs exported by the PRC, leading to the deaths of over 70,000 Americans in 2022. In Wisconsin, synthetic opioids were identified in 91 percent of opioid overdose deaths and 73 percent of all overdose deaths in the past year. Early data indicates that the number of fentanyl deaths grew by 97 percent between 2019 and 2021. In 2022, more than 1,400 Wisconsinites died from an opioid overdose.
While the U.S. government is actively engaging with the PRC on this issue, it is imperative that we hold China accountable for its commitment to cracking down on the flow of illicit fentanyl and precursor chemicals that are fueling this crisis. Despite productive steps, the PRC has continued to provide tax incentives and other financial support for businesses – often state-owned – that export fentanyl and the illicit chemicals necessary to produce fentanyl to the U.S and countries in the Western hemisphere. The PRC has impeded investigations and prosecutions that seek to stop illicit drug manufacturers while willfully failing to identify and prosecute companies from manufacturing, selling, and exporting fentanyl to the U.S. Furthermore, the PRC conceals business operations involved in fentanyl trade and ignores money laundering schemes by companies that profit from illicit activities.
I have heard from parents who have lost children, law enforcement fighting on the front lines, and advocates urging for change – all demanding we do more to stop the scourge of fentanyl. There is no doubt that the actions of the PRC have left hundreds of thousands of Americans dead and countless families in mourning. Despite the U.S. government’s best efforts through diplomatic channels, it has become obvious that the PRC will not voluntarily crack down on its fentanyl producers and exports. Until the PRC takes serious action to hold its own companies accountable, I urge you to seek redress for the harm inflicted upon American. I therefore urge you to expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on the American people and our economy.
Thank you for your attention to this serious matter, and I look forward to continuing to work with you to halt the flow of deadly fentanyl into the United States.
Source: United States House of Representatives – Congressman Dan Newhouse (4th District of Washington)
Headline: Newhouse Introduces Bill To Reform Telework Locality Pay for Federal Employees
This week, Rep. Dan Newhouse (WA-04) introduced The Federal Employee Return to Work Act to crack down on wasteful government spending and incentivize federal employees to return to in-person work. Federal employees who telework from home currently receive annual locality bonuses despite not being required to physically attend their offices located in a high-cost-of-living area. This bill is the House companion to U.S. Senator Bill Cassidy of Louisiana’s bill.
“The federal government pays for massive offices for agency employees in Washington, D.C. and we now know that 17 of the 24 federal agencies are using less than a quarter of their space because of work from home employees,”said Rep. Newhouse.
Newhouse continued,“If agencies wish to allow their employees to work from home, that is within their right to do so. But if they do, then the government should not be paying locality bonuses to those employees and they should be treated like any other work from home federal employee that doesn’t receive such a bonus. Taxpayers pay for federal buildings and salaries; it is time to stop wasting their money on empty buildings and unneeded work from home bonuses.”
U.S. Senator Bill Cassidy (R-LA) said, “Federal employees get paid extra to work in higher-cost cities. But what if they don’t show up to work? Why should they get paid?” said Dr. Cassidy. “If you don’t show up for work, you don’t get paid at the same rate just for teleworking.”
The U.S. Government Accountability Office (GAO) found that 17 of the 24 federal agencies were using 25% or less of their headquarters building’s capacity at the beginning of 2023.
GAO identified six agencies that were on average 91% vacant while their employees still received a 16.44% locality bonus compared to the rest of the country, regardless of their in-office attendance. These agencies included the Social Security Administration, the Small Business Administration, and the Department of Housing and Urban Development.
The bill excludes certain federal employees who telework at least one day a week from receiving raises and special locality bonuses for their office location being in a high-cost-of-living area despite working from home.
In the bill, the term “covered employee” means “an employee who teleworks not fewer than 1 day, or in the case of an alternative work schedule, not less than 20 percent a week.” The term does not include an employee who teleworks not fewer than 1 day a week; is disabled and receives reasonable accommodations; is a member of the Foreign Service; Federal law enforcement; Armed Services; or any other employee, the official worksite of whom is not described in section 531.605(a)(1) of title 5.
If the employee meets the definition of “covered employee,” then they may not receive an annual adjustment under section 5303 of title 5. They shall be paid at the rate of basic pay under the applicable grade under the locality pay area designated as “Rest of U.S.”
Media are invited to attend the 2024 von Braun Space Exploration Symposium Monday Oct. 28 to Wednesday, Oct. 30 at the University of Alabama in Huntsville. Organized by the American Astronautical Society in collaboration with NASA’s Marshall Space Flight Center in Huntsville, the annual symposium gathers leaders from across government, industry, policy, and academia to discuss the current landscape of space exploration and chart a path forward amid the challenges that lie ahead. The theme of this year’s event is “Expanding Exploration: From Vision to Reality,” focusing on NASA’s and Marshall’s plans for the future and the broader discourse about exploration and discovery, technology, the workforce, and other elements of the space ecosystem. Media members interested should register with the astronautical society as a media representative under these guidelines for in-person or online attendance. Marshall Center Director Joseph Pelfrey will deliver opening remarks on Oct. 28, followed by panels on Artemis, artificial intelligence, and workforce development. NASA Deputy Associate Administrator Casey Swails will deliver a keynote address to close out the first day. Panels on, Oct. 29, will focus on space nuclear propulsion, science, and lunar logistics and mobility. Col. Eric Zarybnisky, Office of Space Launch director at the National Reconnaissance Office, will provide the luncheon keynote. The third and final day of the symposium Oct. 30, will include discussions on nuclear propulsion, space technology, and human exploration beyond low-Earth orbit. NASA Associate Administrator Jim Free and Wayne Hale, who retired in 2010 as the deputy associate administrator of strategic partnerships at NASA Headquarters in Washington, will lead a discussion and present awards at the closing luncheon. To arrange interviews with NASA Marshall speakers, contact Hannah Maginot, 256-932-1937, or Molly Porter, 256-424-5158. For more information on NASA’s Marshall Space Flight Center, visit: https://www.nasa.gov/marshall Hannah MaginotMarshall Space Flight Center, Huntsville, Ala.hannah.l.maginot@nasa.gov256-932-1937 Molly PorterMarshall Space Flight Center, Huntsville, Ala.molly.a.porter@nasa.gov256-424-5158
RUSTON, La., Oct. 23, 2024 (GLOBE NEWSWIRE) — Origin Bancorp, Inc. (NYSE: OBK) (“Origin,” “we,” “our” or the “Company”), the holding company for Origin Bank (the “Bank”), today announced net income of $18.6 million, or $0.60 diluted earnings per share for the quarter ended September 30, 2024, compared to net income of $21.0 million, or $0.67 diluted earnings per share, for the quarter ended June 30, 2024. Pre-tax, pre-provision (“PTPP”)(1) earnings was $28.3 million for the quarter ended September 30, 2024, compared to $32.0 million for the linked quarter.
“I am pleased with the balance sheet trends we showed in the third quarter,” said Drake Mills, chairman, president and CEO of Origin Bancorp, Inc. “I am confident these trends will continue and our bankers will capitalize on opportunities throughout our markets.”
(1) PTPP earnings is a non-GAAP financial measure, please see the last few pages of this document for a reconciliation of this alternative financial measure to its most directly comparable GAAP measure.
Financial Highlights
Total loans held for investment (“LHFI”) were $7.96 billion at both September 30, 2024, and June 30, 2024. LHFI, excluding mortgage warehouse lines of credit (“MW LOC”), were $7.46 billion at September 30, 2024, reflecting an increase of $8.9 million, or 0.12%, compared to June 30, 2024.
Noninterest-bearing deposits were $1.89 billion at September 30, 2024, reflecting an increase of $27.1 million, or 1.5%, compared to June 30, 2024.
Net interest income was $74.8 million for the quarter ended September 30, 2024, reflecting an increase of $914,000, or 1.2%, compared to the linked quarter.
Our book value per common share was $36.76 as of September 30, 2024, reflecting an increase of $1.53, or 4.3%, compared to June 30, 2024. Tangible book value per common share(1) was $31.37 at September 30, 2024, reflecting an increase of $1.60, or 5.4%, compared to June 30, 2024.
Stockholders’ equity was $1.15 billion at September 30, 2024, reflecting an increase of $49.8 million, or 4.5%, compared to June 30, 2024.
At September 30, 2024, and June 30, 2024, the ratio of Company-level common equity Tier 1 capital to risk-weighted assets was 12.46%, and 12.15%, respectively, the Tier 1 leverage ratio was 10.93% and 10.70%, respectively, and the total capital ratio was 15.45% and 15.16%, respectively. The ratio of tangible common equity to tangible assets(1) was 9.98% at September 30, 2024, compared to 9.47% at June 30, 2024.
(1) Tangible book value per common share and tangible common equity to tangible assets are non-GAAP financial measures. Please see the last few pages of this document for a reconciliation of these alternative financial measures to their most directly comparable GAAP measures.
Results of Operations for the Three Months EndedSeptember 30, 2024
Net Interest Income and Net Interest Margin
Net interest income for the quarter ended September 30, 2024, was $74.8 million, an increase of $914,000, or 1.2%, compared to the quarter ended June 30, 2024, $813,000 of which was driven by one additional day in the current quarter. Higher interest rates drove a net increase of $147,000 in net interest income, which was reflected in a $1.2 million increase in interest income earned on interest-earnings assets offset by a $1.1 million increase in interest expense paid on interest-bearing liabilities.
Higher interest rates on LHFI drove a $2.0 million increase in the yield for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, $1.5 million of which was driven by real estate-based loans. The average rate on LHFI increased to 6.67% for the quarter ended September 30, 2024, compared to 6.58% for the quarter ended June 30, 2024. Higher interest rates on savings and interest-bearing transaction accounts drove a $1.1 million increase in interest expense, compared to the quarter ended June 30, 2024. The average rate on interest-bearing deposits increased to 4.01% for the quarter ended September 30, 2024, compared to 3.95% for the quarter ended June 30, 2024.
The Federal Reserve Board sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions. The federal funds target rate range was reduced by 50 basis points on September 18, 2024, to a range of 4.75% to 5.00%, the first rate reduction since early 2020.
The NIM-FTE was 3.18% for the quarter ended September 30, 2024, representing a one- and a four-basis-point increase compared to the linked quarter and the prior year same quarter, respectively. The yield earned on interest-earning assets for the quarter ended September 30, 2024, was 6.09%, an increase of five and 40 basis points compared to the linked quarter and the prior year same quarter, respectively. The average rate paid on total interest-bearing liabilities for the quarter ended September 30, 2024, was 4.04%, representing a six- and 45-basis point increase compared to the linked quarter and the prior year same quarter, respectively.
As discussed in our June 30, 2024, Origin Bancorp, Inc. Earnings Release, we reversed $1.2 million of accrued loan interest during the quarter ended June 30, 2024, due to certain questioned activity involving a single banker, who has since been terminated, in our East Texas market. This reversal of accrued loan interest income negatively impacted the fully tax equivalent net interest margin (“NIM-FTE”) by five basis points for the linked quarter. Had we not experienced the reversal of the $1.2 million of accrued interest income during the quarter ended June 30, 2024, our NIM-FTE would have been 3.22% for the linked quarter, and we would have experienced a four-basis point decrease in our current NIM-FTE compared to the linked quarter. There was no equivalent interest income reversal during the current quarter and these loans remain on non-accrual.
Credit Quality
The table below includes key credit quality information:
At and For the Three Months Ended
Change
% Change
(Dollars in thousands, unaudited)
September 30, 2024
June 30, 2024
September 30, 2023
Linked Quarter
Linked Quarter
Past due LHFI
$
38,838
$
66,276
$
20,347
$
(27,438
)
(41.4)%
Allowance for loan credit losses (“ALCL”)
95,989
100,865
95,177
(4,876
)
(4.8
)
Classified loans
107,486
118,254
64,021
(10,768
)
(9.1
)
Total nonperforming LHFI
64,273
75,812
31,608
(11,539
)
(15.2
)
Provision for credit losses
4,603
5,231
3,515
(628
)
(12.0
)
Net charge-offs
9,520
2,946
2,686
6,574
223.2
Credit quality ratios(1):
ALCL to nonperforming LHFI
149.35
%
133.05
%
301.12
%
16.30
%
N/A
ALCL to total LHFI
1.21
1.27
1.26
(0.06
)
N/A
ALCL to total LHFI, adjusted(2)
1.28
1.34
1.30
(0.06
)
N/A
Classified loans to total LHFI
1.35
1.49
0.85
(0.14
)
N/A
Nonperforming LHFI to LHFI
0.81
0.95
0.42
(0.14
)
N/A
Net charge-offs to total average LHFI (annualized)
0.48
0.15
0.14
0.33
N/A
___________________________
(1)
Please see the Loan Data schedule at the back of this document for additional information.
(2)
The ALCL to total LHFI, adjusted, is calculated by excluding the ALCL for MW LOC loans from the total LHFI ALCL in the numerator and excluding the MW LOC loans from the LHFI in the denominator. Due to their low-risk profile, MW LOC loans require a disproportionately low allocation of the ALCL.
As discussed in our June 30, 2024, Origin Bancorp, Inc. Earnings Release, our credit metrics were negatively impacted by certain questioned activity involving a single banker, who has since been terminated, in our East Texas market. Our investigation of this activity remains ongoing and is not final; however, as a result of a forbearance agreement with one of our impacted customer relationships, our past due LHFI declined $26.4 million when compared to the quarter ended June 30, 2024. There was no material change in the level of our nonperforming or classified LHFI principal balances between the current quarter and the linked quarter as a result of the questioned activity. We continue to work with an outside forensic accounting firm to confirm the bank’s identification and reconciliation of the activity, targeting a conclusion of this analysis by the end of this year. At this time, we believe that any ultimate loss arising from the situation will not be material to our financial position.
Past due LHFI were $38.8 million for the quarter ended September 30, 2024, compared to $66.3 million at June 30, 2024. Of the $27.4 million decrease, $26.4 million were impacted by or related to the questioned activity. The remaining net decrease in past due LHFI was primarily due to charge-offs or payoffs in commercial and industrial past due loans during the quarter ended September 30, 2024.
Nonperforming LHFI decreased $11.5 million for the quarter reflecting a decrease in the percentage of nonperforming LHFI to LHFI to 0.81% compared to 0.95% for the linked quarter. The decrease in nonperforming loans was primarily driven by three commercial and industrial loan relationships totaling $14.6 million at June 30, 2024, $10.4 million of which were charged-off and $4.2 million were paid down during the current quarter.
Classified loans decreased $10.8 million to $107.5 million at September 30, 2024, reflecting 1.35% as a percentage of total LHFI, down 14 basis points from the linked quarter. The decrease in classified loans was primarily driven by the same three commercial and industrial loan relationships mentioned in the nonperforming loan paragraph directly above.
Noninterest Income
Noninterest income for the quarter ended September 30, 2024, was $16.0 million, a decrease of $6.5 million, or 28.8%, from the linked quarter. The decrease from the linked quarter was primarily driven by decreases of $5.2 million, $725,000 and $621,000 in the change in fair value of equity investments, mortgage banking revenue and other income, respectively.
The decrease in change in fair value of equity investments was due to a $5.2 million positive valuation adjustment on a non-marketable equity security recognized during the linked quarter with no comparable amount recognized during the current quarter.
The decrease in mortgage banking revenue was primarily due to an $833,000 combined decrease in the pipeline and interest rate lock commitment fair values during the current quarter compared to the linked quarter.
The decrease in other income was primarily due to an $818,000 gain on sale of bank property recognized in the linked quarter with no comparable amount recognized in the current quarter.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2024, was $62.5 million, a decrease of $1.9 million, or 2.9% from the linked quarter. The decrease was primarily driven by a decrease of $1.6 million and in other noninterest expense.
The decrease in other expenses resulted from recognizing contingent liabilities totaling approximately $1.2 million related to certain questioned activity involving a single banker, who has since been terminated, in our East Texas market, as described previously, in the linked quarter with no comparable liability incurred in the current quarter. Also, contributing to the quarter over quarter decline was a $357,000 decrease in corporate membership fees.
Financial Condition
Loans
Total LHFI were $7.96 billion at both September 30, 2024, and June 30, 2024, and reflected an increase of $388.7 million, or 5.1%, compared to September 30, 2023.
Total LHFI, excluding MW LOC, were $7.46 billion at September 30, 2024, representing an increase of $8.9 million, or 0.1%, from June 30, 2024, and an increase of $179.8 million, or 2.5%, from September 30, 2023.
During the quarter ended September 30, 2024, compared to the linked quarter, we experienced declines in construction/land/land development loans and MW LOC of $25.8 million and $11.3 million, respectively, partially offset by growth in multi-family real estate loans of $36.1 million.
Securities
Total securities were $1.18 billion at both September 30, 2024, and June 30, 2024, and reflected a decrease of $129.8 million, or 9.9%, compared to September 30, 2023.
Accumulated other comprehensive loss, net of taxes, primarily associated with the available for sale (“AFS”) portfolio, was $94.2 million at September 30, 2024, an improvement of $32.9 million, or 25.9%, from the linked quarter.
The weighted average effective duration for the total securities portfolio was 4.21 years as of September 30, 2024, compared to 4.28 years as of June 30, 2024.
Deposits
Total deposits at September 30, 2024, were $8.49 billion, a decrease of $24.3 million, or 0.3%, compared to the linked quarter, and represented an increase of $112.1 million, or 1.3%, from September 30, 2023. The decrease in the current quarter compared to the linked quarter was primarily due to a decrease of $205.2 million in brokered (which includes both brokered time and brokered interest-bearing demand) deposits. The decrease in brokered deposits was primarily replaced with customer deposits.
Excluding brokered deposits, total deposit increased $180.9 million, or 2.3%, to $8.05 billion, primarily due to increases of $87.0 million, $64.4 million and $27.1 million in money market deposits, interest-bearing demand deposits and noninterest-bearing demand deposits, respectively.
At September 30, 2024, noninterest-bearing deposits as a percentage of total deposits were 22.3%, compared to 21.9% and 24.0% at June 30, 2024, and September 30, 2023, respectively. Excluding brokered deposits, noninterest-bearing deposits as a percentage of total deposits were 23.5%, compared to 23.7% and 26.1% at June 30, 2024, and September 30, 2023, respectively.
Borrowings
FHLB advances and other borrowings at September 30, 2024, were $30.4 million, a decrease of $10.3 million, or 25.3%, compared to the linked quarter and represented an increase of $18.2 million, or 149.3%, from September 30, 2023.
Stockholders’ Equity
Stockholders’ equity was $1.15 billion at September 30, 2024, an increase of $49.8 million, or 4.5%, compared to $1.10 billion at June 30, 2024, and an increase of $146.7 million, or 14.7%, compared to September 30, 2023.
The increase in stockholders’ equity from the linked quarter is primarily due to a decrease in accumulated other comprehensive loss of $32.9 million and net income of $18.6 million, partially offset by dividends declared of $4.8 million during the current quarter.
Conference Call
Origin will hold a conference call to discuss its third quarter 2024 results on Thursday, October 24, 2024, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial +1 (929) 272-1574 (U.S. Local / International 1); +1 (857) 999-3259 (U.S. Local / International 2); +1 (800) 528-1066 (U.S. Toll Free), enter Conference ID: 84865 and request to be joined into the Origin Bancorp, Inc. (OBK) call. A simultaneous audio-only webcast may be accessed via Origin’s website at www.origin.bank under the investor relations, News & Events, Events & Presentations link or directly by visiting https://dealroadshow.com/e/ORIGINQ324.
If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin’s website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.
About Origin
Origin Bancorp, Inc. is a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912 in Choudrant, Louisiana. Deeply rooted in Origin’s history is a culture committed to providing personalized relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities it serves. Origin provides a broad range of financial services and currently operates more than 60 locations from Dallas/Fort Worth, East Texas, Houston, North Louisiana, Mississippi, South Alabama and the Florida Panhandle. For more information, visit www.origin.bank.
Non-GAAP Financial Measures
Origin reports its results in accordance with generally accepted accounting principles in the United States of America (“GAAP”). However, management believes that certain supplemental non-GAAP financial measures may provide meaningful information to investors that is useful in understanding Origin’s results of operations and underlying trends in its business. However, non-GAAP financial measures are supplemental and should be viewed in addition to, and not as an alternative for, Origin’s reported results prepared in accordance with GAAP. The following are the non-GAAP measures used in this release: PTPP earnings, adjusted NIM-FTE, PTPP ROAA, tangible book value per common share, adjusted tangible book value per common share, tangible common equity to tangible assets, ROATCE, and core efficiency ratio.
Please see the last few pages of this release for reconciliations of non-GAAP measures to the most directly comparable financial measures calculated in accordance with GAAP.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin’s future financial performance, business and growth strategies, projected plans and objectives, and any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including changes to interest rates by the Federal Reserve and the resulting impact on Origin’s results of operations, estimated forbearance amounts and expectations regarding the Company’s liquidity, including in connection with advances obtained from the FHLB, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin’s control. Statements or statistics preceded by, followed by or that otherwise include the words “assumes,” “anticipates,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects,” and similar expressions or future or conditional verbs such as “could,” “may,” “might,” “should,” “will,” and “would” and variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin’s future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: the impact of current and future economic conditions generally and in the financial services industry, nationally and within Origin’s primary market areas, including the effects of declines in the real estate market, high-profile bank failures, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers and changes to customer and client behavior as a result of the foregoing; changes in benchmark interest rates and the resulting impacts on net interest income; deterioration of Origin’s asset quality; factors that can impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin’s primary market areas; the financial health of Origin’s commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin’s loans; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; Origin’s ability to anticipate interest rate changes and manage interest rate risk (including the impact of higher interest rates on macroeconomic conditions, competition, and the cost of doing business and the impact of prolonged elevated interest rates on our financial projections, models and guidance); the effectiveness of Origin’s risk management framework and quantitative models; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; the impact of labor pressures; changes in Origin’s operation or expansion strategy or Origin’s ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin’s ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; significant turbulence or a disruption in the capital or financial markets and the effect of market disruption and interest rate volatility on our investment securities; increased competition in the financial services industry, particularly from regional and national institutions, as well as from fintech companies; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; Origin’s level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin’s loan portfolio; changes in laws, rules, regulations, interpretations or policies relating to financial institutions, and potential expenses associated with complying with such regulations; periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; a deterioration of the credit rating for U.S. long-term sovereign debt or actions that the U.S. government may take to avoid exceeding the debt ceiling; a potential U.S. federal government shutdown and the resulting impacts; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities, and tax matters; Origin’s ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin’s non-GAAP liquidity measurements and its underlying assumptions or estimates; possible changes in trade, monetary and fiscal policies, laws and regulations and other activities of governments, agencies and similar organizations; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities (including the impacts related to or resulting from Russia’s military action in Ukraine or the conflict in Israel and surrounding areas, including the imposition of additional sanctions and export controls, as well as the broader impacts to financial markets and the global macroeconomic and geopolitical environments), regional or national protests and civil unrest (including any resulting branch closures or property damage), widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; the impact of generative artificial intelligence; fraud or misconduct by internal or external actors (including Origin employees) which Origin may not be able to prevent, detect or mitigate, system failures, cybersecurity threats or security breaches and the cost of defending against them; Origin’s ability to maintain adequate internal controls over financial and non-financial reporting; and potential claims, damages, penalties, fines, costs and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Origin’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any updates to those sections set forth in Origin’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin’s underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin’s behalf may issue. Annualized, pro forma, adjusted, projected, and estimated numbers are used for illustrative purposes only, are not forecasts, and may not reflect actual results.
Origin Bancorp, Inc. Selected Quarterly Financial Data (Unaudited)
Three Months Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Income statement and share amounts
(Dollars in thousands, except per share amounts)
Net interest income
$
74,804
$
73,890
$
73,323
$
72,989
$
74,130
Provision for credit losses
4,603
5,231
3,012
2,735
3,515
Noninterest income
15,989
22,465
17,255
8,196
18,119
Noninterest expense
62,521
64,388
58,707
60,906
58,663
Income before income tax expense
23,669
26,736
28,859
17,544
30,071
Income tax expense
5,068
5,747
6,227
4,119
5,758
Net income
$
18,601
$
20,989
$
22,632
$
13,425
$
24,313
PTPP earnings(1)
$
28,272
$
31,967
$
31,871
$
20,279
$
33,586
Basic earnings per common share
0.60
0.68
0.73
0.43
0.79
Diluted earnings per common share
0.60
0.67
0.73
0.43
0.79
Dividends declared per common share
0.15
0.15
0.15
0.15
0.15
Weighted average common shares outstanding – basic
31,130,293
31,042,527
30,981,333
30,898,941
30,856,649
Weighted average common shares outstanding – diluted
31,239,877
31,131,829
31,078,910
30,995,354
30,943,860
Balance sheet data
Total LHFI
$
7,956,790
$
7,959,171
$
7,900,027
$
7,660,944
$
7,568,063
Total LHFI excluding MW LOC
7,461,602
7,452,666
7,499,032
7,330,978
7,281,770
Total assets
9,965,986
9,947,182
9,892,379
9,722,584
9,733,303
Total deposits
8,486,568
8,510,842
8,505,464
8,251,125
8,374,488
Total stockholders’ equity
1,145,673
1,095,894
1,078,853
1,062,905
998,945
Performance metrics and capital ratios
Yield on LHFI
6.67
%
6.58
%
6.58
%
6.46
%
6.35
%
Yield on interest-earnings assets
6.09
6.04
5.99
5.86
5.69
Cost of interest-bearing deposits
4.01
3.95
3.85
3.71
3.47
Cost of total deposits
3.14
3.08
2.99
2.84
2.61
NIM – fully tax equivalent (“FTE”)
3.18
3.17
3.19
3.19
3.14
Return on average assets (annualized) (“ROAA”)
0.74
0.84
0.92
0.55
0.96
PTPP ROAA (annualized)(1)
1.13
1.28
1.30
0.82
1.33
Return on average stockholders’ equity (annualized) (“ROAE”)
6.57
7.79
8.57
5.26
9.52
Book value per common share
$
36.76
$
35.23
$
34.79
$
34.30
$
32.32
Tangible book value per common share(1)
31.37
29.77
29.24
28.68
26.78
Adjusted tangible book value per common share(1)
34.39
33.86
33.27
32.59
32.37
Return on average tangible common equity (annualized) (“ROATCE”)(1)
7.74
%
9.25
%
10.24
%
6.36
%
11.48
%
Efficiency ratio(2)
68.86
66.82
64.81
75.02
63.59
Core efficiency ratio(1)
67.48
65.55
65.24
70.55
60.49
Common equity tier 1 to risk-weighted assets(3)
12.46
12.15
11.97
11.83
11.46
Tier 1 capital to risk-weighted assets(3)
12.64
12.33
12.15
12.01
11.64
Total capital to risk-weighted assets(3)
15.45
15.16
14.98
15.02
14.61
Tier 1 leverage ratio(3)
10.93
10.70
10.66
10.50
10.00
__________________________
(1)
PTPP earnings, PTPP ROAA, tangible book value per common share, adjusted tangible book value per common share, ROATCE, and core efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their most directly comparable GAAP measures, please see the last few pages of this release.
(2)
Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
(3)
September 30, 2024, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.
Origin Bancorp, Inc. Selected Year-To-Date Financial Data (Unaudited)
Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)
2024
2023
Income statement and share amounts
Net interest income
$
222,017
$
226,568
Provision for credit losses
12,846
14,018
Noninterest income
55,709
50,139
Noninterest expense
185,616
174,310
Income before income tax expense
79,264
88,379
Income tax expense
17,042
18,004
Net income
$
62,222
$
70,375
PTPP earnings(1)
$
92,110
$
102,397
Basic earnings per common share
2.00
2.29
Diluted earnings per common share
2.00
2.28
Dividends declared per common share
0.45
0.45
Weighted average common shares outstanding – basic
31,051,672
30,797,399
Weighted average common shares outstanding – diluted
31,160,867
30,903,222
Performance metrics
Yield on LHFI
6.61
%
6.19
%
Yield on interest-earning assets
6.04
5.50
Cost of interest-bearing deposits
3.94
3.03
Cost of total deposits
3.07
2.22
NIM-FTE
3.18
3.24
Adjusted NIM-FTE(2)
3.18
3.21
ROAA (annualized)
0.84
0.94
PTPP ROAA (annualized)(1)
1.24
1.37
ROAE (annualized)
7.62
9.45
ROATCE (annualized)(1)
9.04
11.47
Efficiency ratio(3)
66.83
62.99
Core efficiency ratio(1)
66.09
59.94
____________________________
(1)
PTPP earnings, PTPP ROAA, ROATCE, and core efficiency ratio are either non-GAAP financial measures or use a non-GAAP contributor in the formula. For a reconciliation of these alternative financial measures to their most directly comparable GAAP measures, please see the last few pages of this release.
(2)
Adjusted NIM-FTE is a non-GAAP financial measure and is calculated for nine months ended September 30, 2024, by removing the $20,000 net purchase accounting amortization from net interest income. And, for the nine months ended September 30, 2023, by removing the $2.2 million net purchase accounting accretion from net interest income.
(3)
Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.
Origin Bancorp, Inc. Consolidated Quarterly Statements of Income (Unaudited)
Three Months Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Interest and dividend income
(Dollars in thousands, except per share amounts)
Interest and fees on loans
$
133,195
$
129,879
$
127,186
$
123,673
$
121,204
Investment securities-taxable
6,536
6,606
6,849
7,024
8,194
Investment securities-nontaxable
905
893
910
1,124
1,281
Interest and dividend income on assets held in other financial institutions
3,621
4,416
3,756
3,664
4,772
Total interest and dividend income
144,257
141,794
138,701
135,485
135,451
Interest expense
Interest-bearing deposits
67,051
65,469
62,842
59,771
55,599
FHLB advances and other borrowings
482
514
518
220
3,207
Subordinated indebtedness
1,920
1,921
2,018
2,505
2,515
Total interest expense
69,453
67,904
65,378
62,496
61,321
Net interest income
74,804
73,890
73,323
72,989
74,130
Provision for credit losses
4,603
5,231
3,012
2,735
3,515
Net interest income after provision for credit losses
70,201
68,659
70,311
70,254
70,615
Noninterest income
Insurance commission and fee income
6,928
6,665
7,725
5,446
6,443
Service charges and fees
4,664
4,862
4,688
4,889
4,621
Other fee income
2,114
2,404
2,247
2,118
2,006
Mortgage banking revenue (loss)
1,153
1,878
2,398
(719
)
892
Swap fee income
106
44
57
196
366
Gain (loss) on sales of securities, net
221
—
(403
)
(4,606
)
(7,173
)
Change in fair value of equity investments
—
5,188
—
—
10,096
Other income
803
1,424
543
872
868
Total noninterest income
15,989
22,465
17,255
8,196
18,119
Noninterest expense
Salaries and employee benefits
38,491
38,109
35,818
35,931
34,624
Occupancy and equipment, net
6,298
7,009
6,645
6,912
6,790
Data processing
3,470
3,468
3,145
3,062
2,775
Office and operations
2,984
3,072
2,502
2,947
2,868
Intangible asset amortization
1,905
2,137
2,137
2,259
2,264
Regulatory assessments
1,791
1,842
1,734
1,860
1,913
Advertising and marketing
1,449
1,328
1,444
1,690
1,371
Professional services
2,012
1,303
1,231
1,440
1,409
Loan-related expenses
751
1,077
905
1,094
1,220
Electronic banking
1,308
1,238
1,239
1,103
1,384
Franchise tax expense
721
815
477
942
520
Other expenses
1,341
2,990
1,430
1,666
1,525
Total noninterest expense
62,521
64,388
58,707
60,906
58,663
Income before income tax expense
23,669
26,736
28,859
17,544
30,071
Income tax expense
5,068
5,747
6,227
4,119
5,758
Net income
$
18,601
$
20,989
$
22,632
$
13,425
$
24,313
Basic earnings per common share
$
0.60
$
0.68
$
0.73
$
0.43
$
0.79
Diluted earnings per common share
0.60
0.67
0.73
0.43
0.79
Origin Bancorp, Inc. Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Assets
Cash and due from banks
$
159,337
$
137,615
$
98,147
$
127,278
$
141,705
Interest-bearing deposits in banks
161,854
150,435
193,365
153,163
163,573
Total cash and cash equivalents
321,191
288,050
291,512
280,441
305,278
Securities:
AFS
1,160,965
1,160,048
1,190,922
1,253,631
1,290,839
Held to maturity, net of allowance for credit losses
11,096
11,616
11,651
11,615
10,790
Securities carried at fair value through income
6,533
6,499
6,755
6,808
6,772
Total securities
1,178,594
1,178,163
1,209,328
1,272,054
1,308,401
Non-marketable equity securities held in other financial institutions
Net charge-offs to total average LHFI (annualized)
0.48
0.15
0.13
0.10
0.14
____________________________
(1)
Nonperforming assets consist of nonperforming/nonaccrual loans and property acquired through foreclosures or repossession, as well as bank-owned property not in use and listed for sale.
(2)
Includes multi-family real estate.
(3)
Past due LHFI are defined as loans 30 days or more past due.
(4)
The ALCL to total LHFI, adjusted is calculated by excluding the ALCL for MW LOC loans from the total LHFI ALCL in the numerator and excluding the MW LOC loans from the LHFI in the denominator. Due to their low-risk profile, MW LOC loans require a disproportionately low allocation of the ALCL.
Origin Bancorp, Inc. Average Balances and Yields/Rates (Unaudited)
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
Average Balance
Yield/Rate
Average Balance
Yield/Rate
Average Balance
Yield/Rate
Assets
(Dollars in thousands)
Commercial real estate
$
2,507,566
5.93
%
$
2,497,490
5.91
%
$
2,428,969
5.73
%
Construction/land/land development
1,019,302
7.37
1,058,972
6.98
1,044,180
7.04
Residential real estate(1)
1,824,725
5.56
1,787,829
5.48
1,663,291
5.06
Commercial and industrial (“C&I”)
2,071,984
7.96
2,128,486
7.87
2,024,675
7.62
MW LOC
484,680
7.64
430,885
7.57
376,275
7.21
Consumer
22,739
7.93
22,396
8.06
23,704
7.74
LHFI
7,930,996
6.67
7,926,058
6.58
7,561,094
6.35
Loans held for sale
14,645
6.28
14,702
6.84
11,829
5.81
Loans receivable
7,945,641
6.67
7,940,760
6.58
7,572,923
6.35
Investment securities-taxable
1,038,634
2.50
1,046,301
2.54
1,310,459
2.48
Investment securities-nontaxable
146,619
2.46
143,232
2.51
216,700
2.35
Non-marketable equity securities held in other financial institutions
66,409
2.85
56,270
6.53
58,421
6.47
Interest-bearing balances due from banks
229,224
5.46
254,627
5.53
279,383
5.42
Total interest-earning assets
9,426,527
6.09
9,441,190
6.04
9,437,886
5.69
Noninterest-earning assets
559,309
567,035
597,678
Total assets
$
9,985,836
$
10,008,225
$
10,035,564
Liabilities and Stockholders’ Equity
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts
$
5,177,522
3.88
%
$
5,130,224
3.80
%
$
4,728,211
3.28
%
Time deposits
1,469,849
4.47
1,534,679
4.46
1,626,935
4.04
Total interest-bearing deposits
6,647,371
4.01
6,664,903
3.95
6,355,146
3.47
FHLB advances and other borrowings
40,331
4.75
41,666
4.96
230,815
5.51
Subordinated indebtedness
159,826
4.78
159,973
4.83
196,792
5.07
Total interest-bearing liabilities
6,847,528
4.04
6,866,542
3.98
6,782,753
3.59
Noninterest-bearing liabilities
Noninterest-bearing deposits
1,850,046
1,894,141
2,088,183
Other liabilities
162,565
163,273
151,716
Total liabilities
8,860,139
8,923,956
9,022,652
Stockholders’ Equity
1,125,697
1,084,269
1,012,912
Total liabilities and stockholders’ equity
$
9,985,836
$
10,008,225
$
10,035,564
Net interest spread
2.05
%
2.06
%
2.10
%
NIM
3.16
3.15
3.12
NIM-FTE(2)
3.18
3.17
3.14
____________________________
(1)
Includes multi-family real estate.
(2)
In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.
Origin Bancorp, Inc. Notable Items (Unaudited)
At and For the Three Months Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
$ Impact
EPS Impact(1)
$ Impact
EPS Impact(1)
$ Impact
EPS Impact(1)
$ Impact
EPS Impact(1)
$ Impact
EPS Impact(1)
(Dollars in thousands, except per share amounts)
Notable interest income items:
Interest income reversal on relationships impacted by questioned banker activity
$
—
$
—
$
(1,206
)
$
(0.03
)
$
—
$
—
$
—
$
—
$
—
$
—
Notable provision expense items:
Provision expense related to questioned banker activity
—
—
(3,212
)
(0.08
)
—
—
—
—
—
—
Provision expense on relationships impacted by questioned banker activity
—
—
(4,131
)
(0.10
)
—
—
—
—
—
—
Notable noninterest income items:
MSR gain (impairment)
—
—
—
—
410
0.01
(1,769
)
(0.05
)
—
—
Gain (loss) on sales of securities, net
221
0.01
—
—
(403
)
(0.01
)
(4,606
)
(0.12
)
(7,173
)
(0.18
)
Gain on sub-debt repurchase
—
—
81
—
—
—
—
—
—
—
Positive valuation adjustment on non-marketable equity securities
—
—
5,188
0.13
—
—
—
—
10,096
0.26
Gain on bank property sale
—
—
800
0.02
—
—
—
—
—
—
Notable noninterest expense items:
Operating expense related to questioned banker activity
(848
)
(0.02
)
(1,452
)
(0.04
)
—
—
—
—
—
—
Total notable items
$
(627
)
(0.02
)
$
(3,932
)
(0.10
)
$
7
—
$
(6,375
)
(0.16
)
$
2,923
0.07
____________________________
(1)
The diluted EPS impact is calculated using a 21% effective tax rate. The total of the diluted EPS impact of each individual line item may not equal the calculated diluted EPS impact on the total notable items due to rounding.
Origin Bancorp, Inc. Notable Items – Continued (Unaudited)
Nine Months Ended September 30,
2024
2023
$ Impact
EPS Impact(1)
$ Impact
EPS Impact(1)
(Dollars in thousands, except per share amounts)
Notable interest income items:
Interest income reversal on relationships impacted by questioned banker activity
$
(1,206
)
$
(0.03
)
$
—
$
—
Notable provision expense items:
Provision expense related to questioned banker activity
(3,212
)
(0.08
)
—
—
Provision expense on relationships impacted by questioned banker activity
(4,131
)
(0.10
)
—
—
Notable noninterest income items:
MSR gain
410
0.01
—
—
Loss on sales of securities, net
(182
)
—
(7,029
)
(0.18
)
Gain on sub-debt repurchase
81
—
471
0.01
Positive valuation adjustment on non-marketable equity securities
5,188
0.13
10,096
0.26
Gain on bank property sale
800
0.02
—
—
Notable noninterest expense items:
Operating expense related to questioned banker activity
(2,300
)
(0.06
)
—
—
Total notable items
$
(4,552
)
(0.12
)
$
3,538
0.09
____________________________
(1)
The diluted EPS impact is calculated using a 21% effective tax rate. The total of the diluted EPS impact of each individual line item may not equal the calculated diluted EPS impact on the total notable items due to rounding.
Origin Bancorp, Inc. Non-GAAP Financial Measures (Unaudited)
At and For the Three Months Ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
(Dollars in thousands, except per share amounts)
Calculation of PTPP earnings:
Net income
$
18,601
$
20,989
$
22,632
$
13,425
$
24,313
Provision for credit losses
4,603
5,231
3,012
2,735
3,515
Income tax expense
5,068
5,747
6,227
4,119
5,758
PTPP earnings (non-GAAP)
$
28,272
$
31,967
$
31,871
$
20,279
$
33,586
Calculation of PTPP ROAA:
PTPP earnings
$
28,272
$
31,967
$
31,871
$
20,279
$
33,586
Divided by number of days in the quarter
92
91
91
92
92
Multiplied by the number of days in the year
366
366
366
365
365
PTPP earnings, annualized
$
112,473
$
128,571
$
128,184
$
80,455
$
133,249
Divided by total average assets
$
9,985,836
$
10,008,225
$
9,861,236
$
9,753,847
$
10,035,564
ROAA (annualized) (GAAP)
0.74
%
0.84
%
0.92
%
0.55
%
0.96
%
PTPP ROAA (annualized) (non-GAAP)
1.13
1.28
1.30
0.82
1.33
Calculation of tangible common equity to tangible common assets, book value per common share and adjusted tangible book value per common share:
Total assets
$
9,965,986
$
9,947,182
$
9,892,379
$
9,722,584
$
9,733,303
Goodwill
(128,679
)
(128,679
)
(128,679
)
(128,679
)
(128,679
)
Other intangible assets, net
(39,272
)
(41,177
)
(43,314
)
(45,452
)
(42,460
)
Tangible assets
9,798,035
9,777,326
9,720,386
9,548,453
9,562,164
Total common stockholders’ equity
$
1,145,673
$
1,095,894
$
1,078,853
$
1,062,905
$
998,945
Goodwill
(128,679
)
(128,679
)
(128,679
)
(128,679
)
(128,679
)
Other intangible assets, net
(39,272
)
(41,177
)
(43,314
)
(45,452
)
(42,460
)
Tangible common equity
977,722
926,038
906,860
888,774
827,806
Accumulated other comprehensive loss
94,245
127,184
124,909
121,023
172,729
Adjusted tangible common equity
1,071,967
1,053,222
1,031,769
1,009,797
1,000,535
Divided by common shares outstanding at the end of the period
31,167,410
31,108,667
31,011,304
30,986,109
30,906,716
Book value per common share (GAAP)
$
36.76
$
35.23
$
34.79
$
34.30
$
32.32
Tangible book value per common share (non-GAAP)
31.37
29.77
29.24
28.68
26.78
Adjusted tangible book value per common share (non-GAAP)
34.39
33.86
33.27
32.59
32.37
Tangible common equity to tangible assets (non-GAAP)
9.98
%
9.47
%
9.33
%
9.31
%
8.66
%
Calculation of ROATCE:
Net income
$
18,601
$
20,989
$
22,632
$
13,425
$
24,313
Divided by number of days in the quarter
92
91
91
92
92
Multiplied by number of days in the year
366
366
366
365
365
Annualized net income
$
74,000
$
84,417
$
91,025
$
53,262
$
96,459
Total average common stockholders’ equity
$
1,125,697
$
1,084,269
$
1,062,705
$
1,013,286
$
1,012,912
Average goodwill
(128,679
)
(128,679
)
(128,679
)
(128,679
)
(128,679
)
Average other intangible assets, net
(40,487
)
(42,563
)
(44,700
)
(46,825
)
(43,901
)
Average tangible common equity
956,531
913,027
889,326
837,782
840,332
ROATCE (non-GAAP)
7.74
%
9.25
%
10.24
%
6.36
%
11.48
%
Calculation of core efficiency ratio:
Total noninterest expense
$
62,521
$
64,388
$
58,707
$
60,906
$
58,663
Insurance and mortgage noninterest expense
(8,448
)
(8,402
)
(8,045
)
(8,581
)
(8,579
)
Adjusted total noninterest expense
54,073
55,986
50,662
52,325
50,084
Net interest income
$
74,804
$
73,890
$
73,323
$
72,989
$
74,130
Insurance and mortgage net interest income
(2,578
)
(2,407
)
(2,795
)
(2,294
)
(2,120
)
Total noninterest income
15,989
22,465
17,255
8,196
18,119
Insurance and mortgage noninterest income
(8,081
)
(8,543
)
(10,123
)
(4,727
)
(7,335
)
Adjusted total revenue
80,134
85,405
77,660
74,164
82,794
Efficiency ratio (GAAP)
68.86
%
66.82
%
64.81
%
75.02
%
63.59
%
Core efficiency ratio (non-GAAP)
67.48
65.55
65.24
70.55
60.49
Origin Bancorp, Inc. Non-GAAP Financial Measures – Continued (Unaudited)
SUFFOLK, Va., Oct. 23, 2024 (GLOBE NEWSWIRE) — TowneBank (the “Company” or “Towne”) (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2024 of $42.95 million, or $0.57 per diluted share, compared to $44.86 million, or $0.60 per diluted share, for the quarter ended September 30, 2023. Excluding certain items affecting comparability, core earnings (non-GAAP) were $43.39 million, or $0.58 per diluted share, in the current quarter compared to $44.88 million, or $0.60 per diluted share, for the quarter ended September 30, 2023.
“Our third quarter results continued to deliver increased net interest income and noninterest income contributions from our diverse business model which were in line with expectations. We remain committed to prudent balance sheet management strategies. We were also excited to announce our partnership with Village Bank which will meaningfully enhance our Richmond presence, which is core to our franchise future growth. Lastly, the recently released FDIC Deposit Market Share Report for 2024 continues to demonstrate the strength of our Main Street banking model and core deposit franchise, resulting in the #1 market share, or 30%, in our legacy Virginia Beach-Norfolk-Newport News, VA-NC MSA,” said G. Robert Aston, Jr., Executive Chairman.
Highlights for Third Quarter 2024:
Total revenues were $174.52 million, an increase of $1.65 million, or 0.96%, compared to third quarter 2023. Noninterest income increased $2.43 million, driven by growth in residential mortgage banking income and insurance commissions. Partially offsetting the increase in noninterest income was a $0.78 million decline in net interest income.
Total deposits were $14.36 billion, an increase of $482.37 million, or 3.48%, compared to third quarter 2023. Total deposits increased 0.63%, or $90.58 million, in comparison to June 30, 2024, 2.52% on an annualized basis.
Noninterest-bearing deposits decreased 3.99%, to $4.27 billion, compared to third quarter 2023 and represented 29.71% of total deposits. Compared to the linked quarter, noninterest-bearing deposits decreased 0.84%.
Loans held for investment were $11.41 billion, an increase of $239.55 million, or 2.14%, compared to September 30, 2023, but a decrease of $39.23 million, or 0.34%, compared to June 30, 2024.
Annualized return on common shareholders’ equity was 8.18% compared to 9.04% in third quarter 2023. Annualized return on average tangible common shareholders’ equity (non-GAAP) was 11.54% compared to 13.11% in third quarter 2023.
Net interest margin was 2.90% for the quarter and tax-equivalent net interest margin (non-GAAP) was 2.93%, including purchase accounting accretion of 3 basis points, compared to the prior year quarter net interest margin of 2.95% and tax-equivalent net interest margin (non-GAAP) of 2.98%, including purchase accounting accretion of 5 basis points.
Compared to the linked quarter, net interest margin increased 4 bp and spread increased 6 bp.
The effective tax rate was 11.52% in the quarter compared to 17.34% in third quarter 2023 and 15.93% in the linked quarter. The lower effective tax rate in the current quarter was primarily due to the impact on state and federal taxes from the increase in credits and losses related to LIHTC investment properties placed in service during the period.
“Growth has certainly been challenging in the current environment but we believe our balance sheet is well positioned to support mid-single digit growth rates as we look ahead to next year. We plan to aggressively expand Towne Insurance and evaluate other opportunities to enhance our fee-based lines of business to further drive our differentiated business model,” stated William I. Foster III, President and Chief Executive Officer.
Quarterly Net Interest Income:
Net interest income was $112.28 million compared to $113.06 million for the quarter ended September 30, 2023. The decrease was driven by increased deposit costs, which were mostly offset by higher yields on earning assets.
On an average basis, loans held for investment, with a yield of 5.46%, represented 74.16% of earning assets at September 30, 2024 compared to a yield of 5.13% and 73.45% of earning assets in the third quarter of 2023.
The cost of interest-bearing deposits was 3.28% for the quarter ended September 30, 2024, compared to 2.77% in second quarter 2023. Interest expense on deposits increased $17.96 million, or 27.98%, over the prior year quarter driven by the increase in rate and growth in interest-bearing deposits.
Our total cost of deposits increased to 2.29% from 1.84% for the quarter ended September 30, 2023 due to a combination of higher interest-bearing deposit balances coupled with higher rates. The Federal Reserve Open Market Committee lowered the overnight funds rate late in the third quarter. Management is expecting the decrease to have favorable impact on deposit costs in the fourth quarter of 2024.
Average interest-earning assets totaled $15.40 billion at September 30, 2024 compared to $15.21 billion at September 30, 2023, an increase of 1.26%. The Company anticipates approximately $604 million of cash flows from its securities portfolio to be available for reinvestment in the next twenty-four months.
Average interest-bearing liabilities totaled $10.25 billion, an increase of $493.95 million, or 5.06%, from prior year, driven by deposit growth. Borrowings have declined between periods. There were no short term FHLB borrowings in the third quarter of 2024, compared to an average of $248.91 million in the prior year quarter.
Quarterly Provision for Credit Losses:
The quarterly provision for credit losses was a benefit of $1.10 million compared to an expense of $1.01 million in the prior year quarter and a benefit of $177 thousand in the linked quarter.
The allowance for credit losses on loans decreased $2.36 million in third quarter 2024, compared to the linked quarter. The decrease in the allowance was driven by a modest decline in the loan portfolio, primarily in higher-risk real estate construction and development loans, combined with continued strength in credit quality, and improvements in macroeconomic forecast scenarios utilized in our model.
Net loan charge-offs were $0.68 million in the quarter compared to net recoveries of $1.07 million in the prior year quarter and $19 thousand in the linked quarter. Year-to-date 2024, net loan charge-offs were $1.18 million compared to net loan charge-offs of $2.81 million in first nine months of 2023.
The ratio of net charge-offs to average loans on an annualized basis was 0.02% in third quarter 2024, compared to (0.04)% in third quarter 2023 and 0.00% in the linked quarter.
The allowance for credit losses on loans represented 1.08% of total loans at September 30, 2024, compared to 1.12% at September 30, 2023, and 1.10% at June 30, 2024. The allowance for credit losses on loans was 18.70 times nonperforming loans compared to 17.60 times at September 30, 2023 and 19.08 times at June 30, 2024.
Quarterly Noninterest Income:
Total noninterest income was $62.24 million compared to $59.81 million in 2023, an increase of $2.43 million, or 4.06%.
Residential mortgage banking income was $11.79 million compared to $10.65 million in third quarter 2023. Loan volume increased to $598.18 million in third quarter 2024 from $520.41 million in third quarter 2023. Both, the number of loans originated and the per-loan average balance increased in third quarter 2024 compared to third quarter 2023. Refinance activities increased in the quarter after more than a year of low activity. Residential purchase activity was 91.49% of production volume in the third quarter of 2024 compared to 95.96% in third quarter 2023. Management expects mortgage production volumes to be positively impacted by any additional reductions in the Federal Reserve overnight rate.
While level with the linked quarter at 3.28%, gross margins on residential mortgage sales increased 11 basis points from 3.17% in third quarter 2023.
Total net insurance commissions increased $1.95 million, or 8.20%, to $25.73 million in third quarter 2024 compared to 2023. This increase was primarily attributable to increases in property and casualty commissions, which were driven by organic growth.
Property management fee revenue decreased 12.34%, or $1.58 million, to $11.22 million in third quarter 2024 compared to 2023. Reservation levels declined compared to the prior year.
Quarterly Noninterest Expense:
Total noninterest expense was $126.90 million compared to $117.70 million in 2023, an increase of $9.20 million, or 7.81%. This increase was primarily attributable to growth in salaries and employee benefits of $4.87 million, professional fees of $1.95 million, software of $0.66 million, data processing of $0.56 million, and advertising and marketing of $0.51 million.
Salaries and benefits expense increases were driven by an increase in banking personnel and production incentives.
Investment in technology related to banking services and information monitoring continued to drive both direct and indirect costs. Professional fees increased due to consulting and outside services. Software costs increased due to higher core system costs, while data processing increased due to higher processing costs and merchant fee increases.
Advertising and marketing increased, driven by business development.
Consolidated Balance Sheet Highlights:
Management is focused on strategic balance sheet management with a concentration on controlled loan growth and maintaining strong levels of liquidity.
Total assets were $17.19 billion for the quarter ended September 30, 2024, a $119.18 million increase compared to $17.07 billion at June 30, 2024. Total assets increased $507.66 million, or 3.04%, from $16.68 billion at September 30, 2023.
Loans held for investment declined $39.23 million, or 0.34%, compared to the linked quarter but increased $239.55 million, or 2.14%, compared to prior year. There were declines in several loan categories from the linked quarter, with the most significant decline in the real estate construction and development category. The Company continued to maintain strong credit discipline throughout the period.
Mortgage loans held for sale increased $76.27 million, or 40.56%, compared to prior year and $63.56 million, or 31.66%, compared to the linked quarter, driven by the increase in production.
Total deposits increased $482.37 million, or 3.48%, primarily in interest-bearing demand and time deposits, compared to prior year. In the linked quarter comparison, total deposits increased $90.58 million, or 2.52% on an annualized basis.
Noninterest-bearing deposits decreased $177.23 million, or 3.99%, compared to prior year and $36.15 million, or 0.84%, compared to the linked quarter, primarily in commercial and escrow accounts.
Total borrowings decreased $116.22 million, or 28.55%, compared to third quarter 2023 and $4.35 million, or 1.47%, compared to the linked quarter. Short-term FHLB advances were zero at each of September 30, 2024, and the linked quarter end, compared to $100 million at September 30, 2023.
Investment Securities:
Total investment securities were $2.60 billion compared to $2.49 billion at June 30, 2024 and $2.54 billion at September 30, 2023. The weighted average duration of the portfolio at September 30, 2024 was 3.1 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $110.62 million at September 30, 2024, compared to $172.93 million at June 30, 2024 and $238.52 million at September 30, 2023, with the changes in fair value due to the change in interest rates.
Loans and Asset Quality:
Total loans held for investment were $11.41 billion at September 30, 2024, $11.45 billion June 30, 2024, and $11.17 billion at September 30, 2023.
Nonperforming assets were $7.47 million, or 0.04% of total assets, compared to $7.88 million, or 0.05%, at September 30, 2023, and $7.16 million, or 0.04%, in the linked quarter end.
Nonperforming loans were 0.06% of period end loans at September 30, 2024, September 30, 2023, and the linked quarter end.
Foreclosed property consisted of $884 thousand in repossessed autos at September 30, 2024, compared to $276 thousand in other real estate owned and $490 thousand in repossessed autos, for a total of $766 thousand in foreclosed property at September 30, 2023.
Deposits and Borrowings:
Total deposits were $14.36 billion compared to $14.27 billion at June 30, 2024 and $13.88 billion at September 30, 2023.
The ratio of period end loans held for investment to deposits was 79.46% compared to 80.24% at June 30, 2024 and 80.49% at September 30, 2023.
Noninterest-bearing deposits were 29.71% of total deposits at September 30, 2024 compared to 30.15% at June 30, 2024 and 32.02% at September 30, 2023. Noninterest-bearing deposits declined $177.23 million, or 3.99%, compared to September 30, 2023, and $36.15 million, or 0.84%, compared to the linked quarter.
Total borrowings were $290.82 million compared to $295.17 million at June 30, 2024 and $407.03 million at September 30, 2023.
Capital:
Common equity tier 1 capital ratio of 12.63%(1).
Tier 1 leverage capital ratio of 10.38%(1).
Tier 1 risk-based capital ratio of 12.75%(1).
Total risk-based capital ratio of 15.53% (1) .
Book value per common share was $28.59 compared to $27.62 at June 30, 2024 and $26.28 at September 30, 2023.
Tangible book value per common share (non-GAAP) was $21.65 compared to $20.65 at June 30, 2024 and $19.28 at September 30, 2023.
(1) Preliminary.
About TowneBank: Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.
Now celebrating 25 years, TowneBank operates 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $17.19 billion as of September 30, 2024, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures: This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such non-GAAP financial measures include the following: fully tax-equivalent net interest margin, core operating earnings, core net income, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio. Management uses these non-GAAP financial measures to assess the performance of TowneBank’s core business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.
Forward-Looking Statements: This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional terms, such as “will,” “would,” “should,” “could,” “may,” “likely,” “probably,” or “possibly.” These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; our ability to close the transaction with Village Bank when expected or at all because required approvals and other conditions to closing are not received or satisfied on the proposed terms or on the anticipated schedule; our integration of Village Bank’s business to the extent that it may take longer or be more difficult, time-consuming or costly to accomplish than expected; deposit attrition, operating costs, customer losses and business disruption following the Village Bank transaction, including adverse effects on relationships with employees and customers; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected growth opportunities or cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the “Risk Factors” in TowneBank’s Annual Report on Form 10-K for the year ended December 31, 2023, and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.
Media contact: G. Robert Aston, Jr., Executive Chairman, 757-638-6780 William I. Foster III, President and Chief Executive Officer, 757-417-6482
Investor contact: William B. Littreal, Chief Financial Officer, 757-638-6813
TOWNEBANK
Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
Income and Performance Ratios:
Total revenue
$
174,518
$
174,970
$
167,102
$
155,546
$
172,864
Net income
43,126
43,039
35,127
28,545
44,745
Net income available to common shareholders
42,949
42,856
34,687
28,804
44,862
Net income per common share – diluted
0.57
0.57
0.46
0.39
0.60
Book value per common share
28.59
27.62
27.33
27.24
26.28
Book value per common share – tangible (non-GAAP)
21.65
20.65
20.31
20.28
19.28
Return on average assets
1.00
%
1.01
%
0.83
%
0.68
%
1.06
%
Return on average assets – tangible (non-GAAP)
1.09
%
1.11
%
0.92
%
0.77
%
1.17
%
Return on average equity
8.12
%
8.43
%
6.84
%
5.75
%
8.96
%
Return on average equity – tangible (non-GAAP)
11.42
%
12.03
%
9.87
%
8.53
%
12.97
%
Return on average common equity
8.18
%
8.49
%
6.89
%
5.79
%
9.04
%
Return on average common equity – tangible (non-GAAP)
11.54
%
12.16
%
9.98
%
8.62
%
13.11
%
Noninterest income as a percentage of total revenue
35.66
%
37.68
%
38.23
%
30.74
%
34.60
%
Regulatory Capital Ratios (1):
Common equity tier 1
12.63
%
12.43
%
12.20
%
12.18
%
12.19
%
Tier 1
12.75
%
12.55
%
12.32
%
12.29
%
12.31
%
Total
15.53
%
15.34
%
15.10
%
15.06
%
15.09
%
Tier 1 leverage ratio
10.38
%
10.25
%
10.15
%
10.17
%
10.06
%
Asset Quality:
Allowance for credit losses on loans to nonperforming loans
18.70x
19.08x
18.01x
18.48x
17.60x
Allowance for credit losses on loans to period end loans
1.08
%
1.10
%
1.10
%
1.12
%
1.12
%
Nonperforming loans to period end loans
0.06
%
0.06
%
0.06
%
0.06
%
0.06
%
Nonperforming assets to period end assets
0.04
%
0.04
%
0.05
%
0.05
%
0.05
%
Net charge-offs (recoveries) to average loans (annualized)
0.02
%
—
%
0.02
%
—
%
(0.04
)%
Net charge-offs (recoveries)
$
677
$
(19
)
$
520
$
68
$
(1,074
)
Nonperforming loans
$
6,588
$
6,582
$
6,987
$
6,843
$
7,110
Foreclosed property
884
581
780
908
766
Total nonperforming assets
$
7,472
$
7,163
$
7,767
$
7,751
$
7,876
Loans past due 90 days and still accruing interest
$
510
$
368
$
323
$
735
$
970
Allowance for credit losses on loans
$
123,191
$
125,552
$
125,835
$
126,461
$
125,159
Mortgage Banking:
Loans originated, mortgage
$
421,571
$
430,398
$
289,191
$
302,616
$
348,387
Loans originated, joint venture
176,612
196,583
135,197
126,332
172,021
Total loans originated
$
598,182
$
626,981
$
424,388
$
428,948
$
520,408
Number of loans originated
1,637
1,700
1,247
1,237
1,487
Number of originators
159
169
176
181
192
Purchase %
91.49
%
94.85
%
95.66
%
95.06
%
95.96
%
Loans sold
$
526,998
$
605,134
$
410,895
$
468,014
$
567,291
Rate lock asset
$
1,548
$
1,930
$
1,681
$
895
$
1,348
Gross realized gain on sales and fees as a % of loans originated
3.28
%
3.28
%
3.34
%
3.06
%
3.17
%
Other Ratios:
Net interest margin
2.90
%
2.86
%
2.72
%
2.83
%
2.95
%
Net interest margin-fully tax-equivalent (non-GAAP)
2.93
%
2.89
%
2.75
%
2.86
%
2.98
%
Average earning assets/total average assets
90.43
%
90.36
%
90.52
%
90.48
%
90.73
%
Average loans/average deposits
80.07
%
80.80
%
81.48
%
80.72
%
80.75
%
Average noninterest deposits/total average deposits
30.19
%
30.06
%
30.25
%
31.69
%
33.50
%
Period end equity/period end total assets
12.58
%
12.24
%
12.24
%
12.21
%
11.90
%
Efficiency ratio (non-GAAP)
70.93
%
68.98
%
73.25
%
76.17
%
66.21
%
(1) Current reporting period regulatory capital ratios are preliminary.
TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
Investment Securities
% Change
Q3
Q3
Q2
Q3 24 vs.
Q3 24 vs.
Available-for-sale securities, at fair value
2024
2023
2024
Q3 23
Q2 24
U.S. agency securities
$
291,814
$
300,161
$
281,934
(2.78
)%
3.50
%
U.S. Treasury notes
28,655
26,721
27,701
7.24
%
3.44
%
Municipal securities
455,722
484,587
442,474
(5.96
)%
2.99
%
Trust preferred and other corporate securities
91,525
74,024
88,228
23.64
%
3.74
%
Mortgage-backed securities issued by GSEs and GNMA
1,496,631
1,079,303
1,411,883
38.67
%
6.00
%
Allowance for credit losses
(1,171
)
(1,343
)
(1,541
)
(12.81
)%
(24.01
)%
Total
$
2,363,176
$
1,963,453
$
2,250,679
20.36
%
5.00
%
Gross unrealized gains (losses) reflected in financial statements
Total gross unrealized gains
$
6,703
$
475
$
1,983
1,311.16
%
238.02
%
Total gross unrealized losses
(117,319
)
(238,993
)
(174,911
)
(50.91
)%
(32.93
)%
Net unrealized gains (losses) and other adjustments on AFS securities
$
(110,616
)
$
(238,518
)
$
(172,928
)
(53.62
)%
(36.03
)%
Held-to-maturity securities, at amortized cost
U.S. agency securities
$
102,428
$
101,659
$
102,234
0.76
%
0.19
%
U.S. Treasury notes
96,942
433,015
97,171
(77.61
)%
(0.24
)%
Municipal securities
5,342
5,249
5,318
1.77
%
0.45
%
Trust preferred corporate securities
2,133
2,185
2,147
(2.38
)%
(0.65
)%
Mortgage-backed securities issued by GSEs
5,577
5,746
5,618
(2.94
)%
(0.73
)%
Allowance for credit losses
(77
)
(85
)
(79
)
(9.41
)%
(2.53
)%
Total
$
212,345
$
547,769
$
212,409
(61.23
)%
(0.03
)%
Total gross unrealized gains
$
323
$
82
$
175
293.90
%
84.57
%
Total gross unrealized losses
(7,929
)
(23,505
)
(12,880
)
(66.27
)%
(38.44
)%
Net unrealized gains (losses) in HTM securities
$
(7,606
)
$
(23,423
)
$
(12,705
)
(67.53
)%
(40.13
)%
Total unrealized gains (losses) on AFS and HTM securities
$
(118,222
)
$
(261,941
)
$
(185,633
)
(54.87
)%
(36.31
)%
% Change
Loans Held For Investment
Q3
Q3
Q2
Q3 24 vs.
Q3 24 vs.
2024
2023
2024
Q3 23
Q2 24
Real estate – construction and development
$
1,118,669
$
1,325,976
$
1,190,768
(15.63
)%
(6.05
)%
Commercial real estate – owner occupied
1,655,345
1,686,888
1,673,582
(1.87
)%
(1.09
)%
Commercial real estate – non owner occupied
3,179,699
3,025,985
3,155,958
5.08
%
0.75
%
Real estate – multifamily
750,906
542,611
682,537
38.39
%
10.02
%
Residential 1-4 family
1,891,216
1,818,843
1,887,420
3.98
%
0.20
%
HELOC
408,565
371,861
408,273
9.87
%
0.07
%
Commercial and industrial business (C&I)
1,256,511
1,237,524
1,297,538
1.53
%
(3.16
)%
Government
521,681
523,456
517,954
(0.34
)%
0.72
%
Indirect
546,887
548,621
558,216
(0.32
)%
(2.03
)%
Consumer loans and other
83,039
91,206
79,501
(8.95
)%
4.45
%
Total
$
11,412,518
$
11,172,971
$
11,451,747
2.14
%
(0.34
)%
% Change
Deposits
Q3
Q3
Q2
Q3 24 vs.
Q3 24 vs.
2024
2023
2024
Q3 23
Q2 24
Noninterest-bearing demand
$
4,267,628
$
4,444,861
$
4,303,773
(3.99
)%
(0.84
)%
Interest-bearing:
Demand and money market accounts
6,990,103
6,764,415
6,940,086
3.34
%
0.72
%
Savings
319,970
350,031
312,881
(8.59
)%
2.27
%
Certificates of deposits
2,785,469
2,321,498
2,715,848
19.99
%
2.56
%
Total
14,363,170
13,880,805
14,272,588
3.48
%
0.63
%
TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
Three Months Ended
Three Months Ended
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
Interest
Average
Interest
Average
Interest
Average
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate (1)
Balance
Expense
Rate (1)
Balance
Expense
Rate (1)
Assets:
Loans (net of unearned income and deferred costs)
$
11,419,428
$
156,610
5.46
%
$
11,471,669
$
155,374
5.45
%
$
11,169,924
$
144,457
5.13
%
Taxable investment securities
2,376,102
20,940
3.53
%
2,368,476
21,671
3.66
%
2,373,731
18,645
3.14
%
Tax-exempt investment securities
168,768
1,686
4.00
%
156,503
1,521
3.89
%
206,639
1,993
3.86
%
Total securities
2,544,870
22,626
3.56
%
2,524,979
23,192
3.67
%
2,580,370
20,638
3.20
%
Interest-bearing deposits
1,226,445
15,249
4.95
%
1,182,816
14,512
4.93
%
1,230,582
15,031
4.85
%
Mortgage loans held for sale
208,513
3,247
6.23
%
165,392
2,945
7.12
%
227,426
3,928
6.91
%
Total earning assets
15,399,256
197,732
5.11
%
15,344,856
196,023
5.14
%
15,208,302
184,054
4.80
%
Less: allowance for loan losses
(125,331
)
(126,792
)
(125,553
)
Total nonearning assets
1,754,216
1,764,418
1,680,110
Total assets
$
17,028,141
$
16,982,482
$
16,762,859
Liabilities and Equity:
Interest-bearing deposits
Demand and money market
$
6,917,622
$
48,896
2.81
%
$
6,896,176
$
48,161
2.81
%
$
6,605,853
$
41,381
2.49
%
Savings
315,338
842
1.06
%
317,774
845
1.07
%
356,116
938
1.05
%
Certificates of deposit
2,723,437
32,390
4.73
%
2,715,615
33,017
4.89
%
2,236,102
21,852
3.88
%
Total interest-bearing deposits
9,956,397
82,128
3.28
%
9,929,565
82,023
3.32
%
9,198,071
64,171
2.77
%
Borrowings
33,867
(25
)
(0.29
)%
100,165
1,627
6.43
%
299,105
3,382
4.42
%
Subordinated debt, net
256,309
2,237
3.49
%
256,093
2,236
3.49
%
255,446
2,245
3.52
%
Total interest-bearing liabilities
10,246,573
84,340
3.27
%
10,285,823
85,886
3.36
%
9,752,622
69,798
2.84
%
Demand deposits
4,305,783
4,267,590
4,633,856
Other noninterest-bearing liabilities
370,736
383,447
389,912
Total liabilities
14,923,092
14,936,860
14,776,390
Shareholders’ equity
2,105,049
2,045,622
1,986,469
Total liabilities and equity
$
17,028,141
$
16,982,482
$
16,762,859
Net interest income (tax-equivalent basis) (4)
$
113,392
$
110,137
$
114,256
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment
(1,110
)
(1,089
)
(1,198
)
Net interest income (GAAP)
$
112,282
$
109,048
$
113,058
Interest rate spread (2)(4)
1.84
%
1.78
%
1.96
%
Interest expense as a percent of average earning assets
2.18
%
2.25
%
1.82
%
Net interest margin (tax-equivalent basis) (3)(4)
2.93
%
2.89
%
2.98
%
Total cost of deposits
2.29
%
2.32
%
1.84
%
(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%.
(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent.
(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent.
(4) Non-GAAP.
TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
Nine Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
Interest
Average
Interest
Average
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate (1)
Balance
Expense
Rate (1)
Assets:
Loans (net of unearned income and deferred costs)
$
11,423,458
$
463,794
5.42
%
$
11,159,329
$
417,808
5.01
%
Taxable investment securities
2,395,007
61,327
3.41
%
2,420,634
52,656
2.90
%
Tax-exempt investment securities
162,294
4,756
3.91
%
201,535
5,883
3.89
%
Total securities
2,557,301
66,083
3.45
%
2,622,169
58,539
2.98
%
Interest-bearing deposits
1,192,319
43,995
4.93
%
1,179,952
40,168
4.55
%
Mortgage loans held for sale
163,755
7,908
6.44
%
168,822
8,079
6.38
%
Total earning assets
15,336,833
581,780
5.07
%
15,130,272
524,594
4.64
%
Less: allowance for loan losses
(126,508
)
(120,420
)
Total nonearning assets
1,748,215
1,637,952
Total assets
$
16,958,540
$
16,647,804
Liabilities and Equity:
Interest-bearing deposits
Demand and money market
$
6,880,752
$
145,042
2.82
%
$
6,349,422
$
96,742
2.04
%
Savings
320,696
2,569
1.07
%
376,282
2,676
0.95
%
Certificates of deposit
2,674,509
94,928
4.74
%
1,964,718
47,358
3.22
%
Total interest-bearing deposits
9,875,957
242,539
3.28
%
8,690,422
146,776
2.26
%
Borrowings
115,171
4,679
5.34
%
505,856
17,644
4.60
%
Subordinated debt, net
256,094
6,710
3.49
%
253,612
6,650
3.50
%
Total interest-bearing liabilities
10,247,222
253,928
3.31
%
9,449,890
171,070
2.42
%
Demand deposits
4,265,971
4,873,945
Other noninterest-bearing liabilities
381,547
353,459
Total liabilities
14,894,740
14,677,294
Shareholders’ equity
2,063,800
1,970,510
Total liabilities and equity
$
16,958,540
$
16,647,804
Net interest income (tax-equivalent basis)(4)
$
327,852
$
353,524
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment
(3,304
)
(3,477
)
Net interest income (GAAP)
$
324,548
$
350,047
Interest rate spread (2)(4)
1.76
%
2.22
%
Interest expense as a percent of average earning assets
2.21
%
1.51
%
Net interest margin (tax-equivalent basis) (3)(4)
2.86
%
3.12
%
Total cost of deposits
2.29
%
1.45
%
(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory rate of 21%.
(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax-equivalent.
(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax-equivalent.
(4) Non-GAAP.
TOWNEBANK
Consolidated Balance Sheets
(dollars in thousands, except share data)
September 30,
December 31,
2024
2023
(unaudited)
(audited)
ASSETS
Cash and due from banks
$
131,068
$
85,584
Interest-bearing deposits at FRB
1,061,596
939,356
Interest-bearing deposits in financial institutions
103,400
103,417
Total Cash and Cash Equivalents
1,296,064
1,128,357
Securities available for sale, at fair value (amortized cost of $2,474,963 and $2,292,963, and allowance for credit losses of $1,171 and $1,498 at September 30, 2024 and December 31, 2023, respectively)
2,363,176
2,129,342
Securities held to maturity, at amortized cost (fair value $204,816 and $462,656 at September 30, 2024 and December 31, 2023, respectively)
212,422
477,592
Less: Allowance for credit losses
(77
)
(84
)
Securities held to maturity, net of allowance for credit losses
212,345
477,508
Other equity securities
12,681
13,792
FHLB stock
12,134
21,372
Total Securities
2,600,336
2,642,014
Mortgage loans held for sale
264,320
149,987
Loans, net of unearned income and deferred costs
11,412,518
11,329,021
Less: allowance for credit losses
(123,191
)
(126,461
)
Net Loans
11,289,327
11,202,560
Premises and equipment, net
365,764
337,598
Goodwill
457,619
456,335
Other intangible assets, net
63,265
64,634
BOLI
279,325
277,445
Other assets
572,000
576,109
TOTAL ASSETS
$
17,188,020
$
16,835,039
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand
$
4,267,628
$
4,342,701
Interest-bearing:
Demand and money market accounts
6,990,103
6,757,619
Savings
319,970
336,492
Certificates of deposit
2,785,469
2,456,394
Total Deposits
14,363,170
13,893,206
Advances from the FHLB
3,405
203,958
Subordinated debt, net
256,444
255,796
Repurchase agreements and other borrowings
30,970
32,826
Total Borrowings
290,819
492,580
Other liabilities
371,316
393,375
TOTAL LIABILITIES
15,025,305
14,779,161
Preferred stock, authorized and unissued shares – 2,000,000
—
—
Common stock, $1.667 par value: 150,000,000 shares authorized;
75,068,662 and 74,893,462 shares issued at
September 30, 2024 and December 31, 2023, respectively
125,139
124,847
Capital surplus
1,117,279
1,112,761
Retained earnings
985,343
921,126
Common stock issued to deferred compensation trust, at cost:
1,056,823 and 1,004,717 shares at September 30, 2024 and December 31, 2023, respectively
(22,224
)
(20,813
)
Deferred compensation trust
22,224
20,813
Accumulated other comprehensive income (loss)
(81,482
)
(118,762
)
TOTAL SHAREHOLDERS’ EQUITY
2,146,279
2,039,972
Noncontrolling interest
16,436
15,906
TOTAL EQUITY
2,162,715
2,055,878
TOTAL LIABILITIES AND EQUITY
$
17,188,020
$
16,835,039
TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
INTEREST INCOME:
Loans, including fees
$
155,792
$
143,605
$
461,316
$
415,351
Investment securities
22,334
20,292
65,257
57,519
Interest-bearing deposits in financial institutions and federal funds sold
15,249
15,031
43,995
40,168
Mortgage loans held for sale
3,247
3,928
7,908
8,079
Total interest income
196,622
182,856
578,476
521,117
INTEREST EXPENSE:
Deposits
82,128
64,171
242,539
146,776
Advances from the FHLB
29
3,438
3,408
16,838
Subordinated debt, net
2,237
2,245
6,710
6,650
Repurchase agreements and other borrowings
(54
)
(56
)
1,271
806
Total interest expense
84,340
69,798
253,928
171,070
Net interest income
112,282
113,058
324,548
350,047
PROVISION FOR CREDIT LOSSES
(1,100
)
1,007
(2,154
)
16,232
Net interest income after provision for credit losses
113,382
112,051
326,702
333,815
NONINTEREST INCOME:
Residential mortgage banking income, net
11,786
10,648
35,685
31,380
Insurance commissions and related income, net
25,727
23,777
75,297
69,098
Property management income, net
11,221
12,800
42,306
40,433
Real estate brokerage income, net
—
(63
)
—
3,562
Service charges on deposit accounts
3,117
2,823
9,548
8,577
Credit card merchant fees, net
1,830
2,006
5,042
5,232
Investment commissions, net
2,835
2,363
7,759
6,581
BOLI
1,886
1,814
6,966
5,196
Gain on sale of equity investment
20
554
20
9,386
Other income
3,814
3,084
9,345
9,083
Net gain/(loss) on investment securities
—
—
74
—
Total noninterest income
62,236
59,806
192,042
188,528
NONINTEREST EXPENSE:
Salaries and employee benefits
72,123
67,258
214,849
204,124
Occupancy
9,351
9,027
28,490
27,579
Furniture and equipment
4,657
4,100
13,769
12,733
Amortization – intangibles
3,130
3,610
9,675
10,744
Software
6,790
6,130
19,947
17,922
Data processing
4,701
4,140
13,223
11,504
Professional fees
4,720
2,770
11,689
8,948
Advertising and marketing
4,162
3,653
12,268
12,012
Other expenses
17,266
17,014
52,565
61,762
Total noninterest expense
126,900
117,702
376,475
367,328
Income before income tax expense and noncontrolling interest
48,718
54,155
142,269
155,015
Provision for income tax expense
5,592
9,410
20,977
28,424
Net income
$
43,126
$
44,745
$
121,292
$
126,591
Net income attributable to noncontrolling interest
(177
)
117
(800
)
(1,680
)
Net income attributable to TowneBank
$
42,949
$
44,862
$
120,492
$
124,911
Per common share information
Basic earnings
$
0.57
$
0.60
$
1.61
$
1.67
Diluted earnings
$
0.57
$
0.60
$
1.61
$
1.67
Cash dividends declared
$
0.25
$
0.25
$
0.75
$
0.73
TOWNEBANK
Consolidated Balance Sheets – Five Quarter Trend
(dollars in thousands, except share data)
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
(unaudited)
(unaudited)
(unaudited)
(audited)
(unaudited)
ASSETS
Cash and due from banks
$
131,068
$
140,028
$
75,802
$
85,584
$
83,949
Interest-bearing deposits at FRB
1,061,596
1,062,115
926,635
939,356
1,029,276
Interest-bearing deposits in financial institutions
103,400
99,303
98,673
103,417
102,527
Total Cash and Cash Equivalents
1,296,064
1,301,446
1,101,110
1,128,357
1,215,752
Securities available for sale
2,363,176
2,250,679
2,204,101
2,129,342
1,963,453
Securities held to maturity
212,422
212,488
312,510
477,592
547,854
Less: allowance for credit losses
(77
)
(79
)
(82
)
(84
)
(85
)
Securities held to maturity, net of allowance for credit losses
212,345
212,409
312,428
477,508
547,769
Other equity securities
12,681
13,566
13,661
13,792
14,062
FHLB stock
12,134
12,134
12,139
21,372
16,634
Total Securities
2,600,336
2,488,788
2,542,329
2,642,014
2,541,918
Mortgage loans held for sale
264,320
200,762
150,727
149,987
188,048
Loans, net of unearned income and deferred costs
11,412,518
11,451,747
11,452,343
11,329,021
11,172,971
Less: Allowance for credit losses
(123,191
)
(125,552
)
(125,835
)
(126,461
)
(125,159
)
Net Loans
11,289,327
11,326,195
11,326,508
11,202,560
11,047,812
Premises and equipment, net
365,764
340,348
342,569
337,598
335,522
Goodwill
457,619
457,619
457,619
456,335
456,684
Other intangible assets, net
63,265
65,460
68,758
64,634
67,496
BOLI
279,325
277,434
279,293
277,445
275,240
Other assets
572,000
610,791
615,324
576,109
551,884
TOTAL ASSETS
$
17,188,020
$
17,068,843
$
16,884,237
$
16,835,039
$
16,680,356
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand
$
4,267,628
$
4,303,773
$
4,194,132
$
4,342,701
$
4,444,861
Interest-bearing:
Demand and money market accounts
6,990,103
6,940,086
6,916,701
6,757,619
6,764,415
Savings
319,970
312,881
326,179
336,492
350,031
Certificates of deposit
2,785,469
2,715,848
2,689,062
2,456,394
2,321,498
Total Deposits
14,363,170
14,272,588
14,126,074
13,893,206
13,880,805
Advances from the FHLB
3,405
3,591
3,775
203,958
104,139
Subordinated debt, net
256,444
256,227
256,011
255,796
255,580
Repurchase agreements and other borrowings
30,970
35,351
31,198
32,826
47,315
Total Borrowings
290,819
295,169
290,984
492,580
407,034
Other liabilities
371,316
411,770
401,307
393,375
408,305
TOTAL LIABILITIES
15,025,305
14,979,527
14,818,365
14,779,161
14,696,144
Preferred stock
—
—
—
—
—
Common stock, $1.667 par value
125,139
125,090
125,009
124,847
124,837
Capital surplus
1,117,279
1,115,759
1,114,038
1,112,761
1,111,152
Retained earnings
985,343
961,162
937,065
921,126
911,042
Common stock issued to deferred compensation trust, at cost
(22,224
)
(22,756
)
(20,915
)
(20,813
)
(20,740
)
Deferred compensation trust
22,224
22,756
20,915
20,813
20,740
Accumulated other comprehensive income (loss)
(81,482
)
(129,224
)
(126,586
)
(118,762
)
(179,043
)
TOTAL SHAREHOLDERS’ EQUITY
2,146,279
2,072,787
2,049,526
2,039,972
1,967,988
Noncontrolling interest
16,436
16,529
16,346
15,906
16,224
TOTAL EQUITY
2,162,715
2,089,316
2,065,872
2,055,878
1,984,212
TOTAL LIABILITIES AND EQUITY
$
17,188,020
$
17,068,843
$
16,884,237
$
16,835,039
$
16,680,356
TOWNEBANK
Consolidated Statements of Income – Five Quarter Trend (unaudited)
(dollars in thousands, except share data)
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
INTEREST INCOME:
Loans, including fees
$
155,792
$
154,549
$
150,974
$
146,810
$
143,605
Investment securities
22,334
22,928
19,996
20,464
20,292
Interest-bearing deposits in financial institutions and federal funds sold
15,249
14,512
14,234
13,967
15,031
Mortgage loans held for sale
3,247
2,945
1,716
2,886
3,928
Total interest income
196,622
194,934
186,920
184,127
182,856
INTEREST EXPENSE:
Deposits
82,128
82,023
78,388
73,200
64,171
Advances from the FHLB
29
942
2,438
917
3,438
Subordinated debt, net
2,237
2,236
2,236
2,236
2,245
Repurchase agreements and other borrowings
(54
)
685
640
41
(56
)
Total interest expense
84,340
85,886
83,702
76,394
69,798
Net interest income
112,282
109,048
103,218
107,733
113,058
PROVISION FOR CREDIT LOSSES
(1,100
)
(177
)
(877
)
2,446
1,007
Net interest income after provision for credit losses
113,382
109,225
104,095
105,287
112,051
NONINTEREST INCOME:
Residential mortgage banking income, net
11,786
13,422
10,477
8,035
10,648
Insurance commissions and related income, net
25,727
24,031
25,539
21,207
23,777
Property management income, net
11,221
14,312
16,773
7,358
12,800
Real estate brokerage income, net
—
—
—
(32
)
(63
)
Service charges on deposit accounts
3,117
3,353
3,079
3,056
2,823
Credit card merchant fees, net
1,830
1,662
1,551
1,476
2,006
Investment commissions, net
2,835
2,580
2,343
2,380
2,363
BOLI
1,886
3,238
1,842
2,206
1,814
Other income
3,834
3,324
2,206
2,127
3,638
Net gain/(loss) on investment securities
—
—
74
—
—
Total noninterest income
62,236
65,922
63,884
47,813
59,806
NONINTEREST EXPENSE:
Salaries and employee benefits
72,123
71,349
71,377
66,035
67,258
Occupancy
9,351
9,717
9,422
9,308
9,027
Furniture and equipment
4,657
4,634
4,478
4,445
4,100
Amortization – intangibles
3,130
3,298
3,246
3,411
3,610
Software
6,790
7,056
6,100
6,743
6,130
Data processing
4,701
4,606
3,916
3,529
4,140
Professional fees
4,720
3,788
3,180
3,339
2,770
Advertising and marketing
4,162
3,524
4,582
3,377
3,653
Other expenses
17,266
16,012
19,290
21,708
17,014
Total noninterest expense
126,900
123,984
125,591
121,895
117,702
Income before income tax expense and noncontrolling interest
48,718
51,163
42,388
31,205
54,155
Provision for income tax expense
5,592
8,124
7,261
2,660
9,410
Net income
43,126
43,039
35,127
28,545
44,745
Net income attributable to noncontrolling interest
(177
)
(183
)
(440
)
259
117
Net income attributable to TowneBank
$
42,949
$
42,856
$
34,687
$
28,804
$
44,862
Per common share information
Basic earnings
$
0.57
$
0.57
$
0.46
$
0.39
$
0.60
Diluted earnings
$
0.57
$
0.57
$
0.46
$
0.39
$
0.60
Basic weighted average shares outstanding
74,940,827
74,925,877
74,816,420
74,773,335
74,750,294
Diluted weighted average shares outstanding
75,141,661
75,037,955
74,979,501
74,793,557
74,765,515
Cash dividends declared
$
0.25
$
0.25
$
0.25
$
0.25
$
0.25
TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)
Three Months Ended
Nine Months Ended
Increase/(Decrease)
September 30,
June 30,
September 30,
YTD 2024 over 2023
2024
2023
2024
2024
2023
Amount
Percent
Revenue
Net interest income
$
111,569
$
112,189
$
108,029
$
322,280
$
349,165
$
(26,885
)
(7.70
)%
Service charges on deposit accounts
3,117
2,823
3,352
9,548
8,577
971
11.32
%
Credit card merchant fees
1,830
2,006
1,662
5,042
5,232
(190
)
(3.63
)%
Investment commissions, net
2,835
2,363
2,580
7,759
6,581
1,178
17.90
%
Other income
4,828
4,224
4,840
13,096
12,012
1,084
9.02
%
Subtotal
12,610
11,416
12,434
35,445
32,402
3,043
9.39
%
Net gain/(loss) on investment securities
—
—
—
74
—
74
N/M
Total noninterest income
12,610
11,416
12,434
35,519
32,402
3,117
9.62
%
Total revenue
124,179
123,605
120,463
357,799
381,567
(23,768
)
(6.23
)%
Provision for credit losses
(1,043
)
1,206
(170
)
(2,189
)
16,442
(18,631
)
(113.31
)%
Expenses
Salaries and employee benefits
47,148
42,727
46,640
140,261
128,161
12,100
9.44
%
Occupancy
6,963
6,637
7,194
21,217
19,717
1,500
7.61
%
Furniture and equipment
3,878
3,273
3,810
11,336
10,150
1,186
11.68
%
Amortization of intangible assets
1,072
1,296
1,117
3,352
3,918
(566
)
(14.45
)%
Other expenses
26,674
22,595
23,587
77,215
80,215
(3,000
)
(3.74
)%
Total expenses
85,735
76,528
82,348
253,381
242,161
11,220
4.63
%
Income before income tax, corporate allocation and noncontrolling interest
39,487
45,871
38,285
106,607
122,964
(16,357
)
(13.30
)%
Corporate allocation
1,223
1,291
1,232
3,524
3,763
(239
)
(6.35
)%
Income before income tax provision and noncontrolling interest
40,710
47,162
39,517
110,131
126,727
(16,596
)
(13.10
)%
Provision for income tax expense
3,495
7,440
5,130
12,731
21,204
(8,473
)
(39.96
)%
Net income
37,215
39,722
34,387
97,400
105,523
(8,123
)
(7.70
)%
Noncontrolling interest
(29
)
—
(58
)
34
—
34
N/M
Net income attributable to TowneBank
$
37,186
$
39,722
$
34,329
$
97,434
$
105,523
$
(8,089
)
(7.67
)%
Efficiency ratio (non-GAAP)
68.18
%
60.86
%
67.43
%
69.89
%
62.44
%
7.45
%
11.93
%
TOWNEBANK
Realty Segment Financial Information (unaudited)
(dollars in thousands)
Three Months Ended
Nine Months Ended
Increase/(Decrease)
September 30,
June 30,
September 30,
YTD 2024 over 2023
2024
2023
2024
2024
2023
Amount
Percent
Revenue
Residential mortgage brokerage income, net
$
12,211
$
10,955
$
13,996
$
37,006
$
32,964
$
4,042
12.26
%
Real estate brokerage income, net
—
(63
)
—
—
3,562
(3,562
)
(100.00
)%
Title insurance and settlement fees
—
—
—
—
443
(443
)
(100.00
)%
Property management fees, net
11,221
12,800
14,312
42,306
40,433
1,873
4.63
%
Income (loss) from unconsolidated subsidiary
51
(63
)
67
148
(884
)
1,032
116.74
%
Gain on equity investment
—
—
—
—
8,833
(8,833
)
(100.00
)%
Net interest and other income
906
1,163
1,317
3,007
1,984
1,023
51.56
%
Total revenue
24,389
24,792
29,692
82,467
87,335
(4,868
)
(5.57
)%
Provision for credit losses
(57
)
(199
)
(7
)
35
(210
)
245
116.67
%
Expenses
Salaries and employee benefits
12,355
12,881
12,370
36,913
41,670
(4,757
)
(11.42
)%
Occupancy
1,638
1,669
1,811
5,019
5,559
(540
)
(9.71
)%
Furniture and equipment
604
600
596
1,794
1,933
(139
)
(7.19
)%
Amortization of intangible assets
637
742
781
2,094
2,166
(72
)
(3.32
)%
Other expenses
8,839
9,544
9,136
26,174
27,319
(1,145
)
(4.19
)%
Total expenses
24,073
25,436
24,694
71,994
78,647
(6,653
)
(8.46
)%
Income before income tax, corporate allocation and noncontrolling interest
373
(445
)
5,005
10,438
8,898
1,540
17.31
%
Corporate allocation
(484
)
(600
)
(490
)
(1,322
)
(1,800
)
478
(26.56
)%
Income before income tax provision and noncontrolling interest
(111
)
(1,045
)
4,515
9,116
7,098
2,018
28.43
%
Provision for income tax expense
18
(99
)
1,163
2,336
1,769
567
32.05
%
Net income
(129
)
(946
)
3,352
6,780
5,329
1,451
27.23
%
Noncontrolling interest
(148
)
117
(125
)
(834
)
(1,680
)
846
(50.36
)%
Net income attributable to TowneBank
$
(277
)
$
(829
)
$
3,227
$
5,946
$
3,649
$
2,297
62.95
%
Efficiency ratio excluding gain on equity investment (non-GAAP)
96.09
%
99.61
%
80.54
%
84.76
%
97.43
%
(12.67
)%
(13.00
)%
TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)
Three Months Ended
Nine Months Ended
Increase/(Decrease)
September 30,
June 30,
September 30,
YTD 2024 over 2023
2024
2023
2024
2024
2023
Amount
Percent
Commission and fee income
Property and casualty
$
23,157
$
22,103
$
22,225
$
66,104
$
60,259
$
5,845
9.70
%
Employee benefits
4,483
4,245
4,404
13,712
13,393
319
2.38
%
Specialized benefit services
—
133
—
10
445
(435
)
(97.75
)%
Total commissions and fees
27,640
26,481
26,629
79,826
74,097
5,729
7.73
%
Contingency and bonus revenue
2,731
2,335
2,951
10,185
9,343
842
9.01
%
Other income
25
557
6
41
573
(532
)
(92.84
)%
Total revenue
30,396
29,373
29,586
90,052
84,013
6,039
7.19
%
Employee commission expense
4,446
4,906
4,771
13,728
14,340
(612
)
(4.27
)%
Revenue, net of commission expense
25,950
24,467
24,815
76,324
69,673
6,651
9.55
%
Salaries and employee benefits
12,620
11,650
12,339
37,675
34,293
3,382
9.86
%
Occupancy
750
721
712
2,254
2,303
(49
)
(2.13
)%
Furniture and equipment
175
227
228
639
650
(11
)
(1.69
)%
Amortization of intangible assets
1,421
1,572
1,400
4,229
4,660
(431
)
(9.25
)%
Other expenses
2,126
1,568
2,263
6,303
4,614
1,689
36.61
%
Total operating expenses
17,092
15,738
16,942
51,100
46,520
4,580
9.85
%
Income before income tax, corporate allocation and noncontrolling interest
8,858
8,729
7,873
25,224
23,153
2,071
8.94
%
Corporate allocation
(739
)
(691
)
(742
)
(2,202
)
(1,963
)
(239
)
12.18
%
Income before income tax provision and noncontrolling interest
8,119
8,038
7,131
23,022
21,190
1,832
8.65
%
Provision for income tax expense
2,079
2,069
1,831
5,910
5,451
459
8.42
%
Net income
6,040
5,969
5,300
17,112
15,739
1,373
8.72
%
Noncontrolling interest
—
—
—
—
—
—
—
%
Net income attributable to TowneBank
$
6,040
$
5,969
$
5,300
$
17,112
$
15,739
$
1,373
8.72
%
Provision for income taxes
2,079
2,069
1,831
5,910
5,451
459
8.42
%
Depreciation, amortization and interest expense
1,550
1,726
1,529
4,632
5,115
(483
)
(9.44
)%
EBITDA (non-GAAP)
$
9,669
$
9,764
$
8,660
$
27,654
$
26,305
$
1,349
5.13
%
Efficiency ratio (non-GAAP)
60.44
%
59.21
%
62.63
%
61.43
%
60.55
%
0.88
%
1.45
%
TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
June 30,
September 30,
September 30,
2024
2023
2024
2024
2023
Return on average assets (GAAP)
1.00
%
1.06
%
1.01
%
0.95
%
1.00
%
Impact of excluding average goodwill and other intangibles and amortization
0.09
%
0.11
%
0.10
%
0.09
%
0.11
%
Return on average tangible assets (non-GAAP)
1.09
%
1.17
%
1.11
%
1.04
%
1.11
%
Return on average equity (GAAP)
8.12
%
8.96
%
8.43
%
7.80
%
8.48
%
Impact of excluding average goodwill and other intangibles and amortization
3.30
%
4.01
%
3.60
%
3.31
%
3.87
%
Return on average tangible equity (non-GAAP)
11.42
%
12.97
%
12.03
%
11.11
%
12.35
%
Return on average common equity (GAAP)
8.18
%
9.04
%
8.49
%
7.86
%
8.54
%
Impact of excluding average goodwill and other intangibles and amortization
3.36
%
4.07
%
3.67
%
3.37
%
3.95
%
Return on average tangible common equity (non-GAAP)
11.54
%
13.11
%
12.16
%
11.23
%
12.49
%
Book value (GAAP)
$
28.59
$
26.28
$
27.62
$
28.59
$
26.28
Impact of excluding average goodwill and other intangibles and amortization
(6.94
)
(7.00
)
(6.97
)
(6.94
)
(7.00
)
Tangible book value (non-GAAP)
$
21.65
$
19.28
$
20.65
$
21.65
$
19.28
Efficiency ratio (GAAP)
72.71
%
68.09
%
70.86
%
72.88
%
68.20
%
Impact of exclusions
(1.78
)%
(1.88
)%
(1.88
)%
(1.86
)%
(0.82
)%
Efficiency ratio (non-GAAP)
70.93
%
66.21
%
68.98
%
71.02
%
67.38
%
Average assets (GAAP)
$
17,028,141
$
16,762,859
$
16,982,482
$
16,958,540
$
16,647,804
Less: average goodwill and intangible assets
522,219
526,445
525,122
523,335
526,375
Average tangible assets (non-GAAP)
$
16,505,922
$
16,236,414
$
16,457,360
$
16,435,205
$
16,121,429
Average equity (GAAP)
$
2,105,049
$
1,986,469
$
2,045,622
$
2,063,800
$
1,970,510
Less: average goodwill and intangible assets
522,219
526,445
525,122
523,335
526,375
Average tangible equity (non-GAAP)
$
1,582,830
$
1,460,024
$
1,520,500
$
1,540,465
$
1,444,135
Average common equity (GAAP)
$
2,088,674
$
1,969,898
$
2,029,150
$
2,047,482
$
1,954,850
Less: average goodwill and intangible assets
522,219
526,445
525,122
523,335
526,375
Average tangible common equity (non-GAAP)
$
1,566,455
$
1,443,453
$
1,504,028
$
1,524,147
$
1,428,475
Net income (GAAP)
$
42,949
$
44,862
$
42,856
$
120,492
$
124,911
Amortization of intangibles, net of tax
2,473
2,852
2,605
7,643
8,488
Tangible net income (non-GAAP)
$
45,422
$
47,714
$
45,461
$
128,135
$
133,399
Total revenue (GAAP)
$
174,518
$
172,864
$
174,970
$
516,590
$
538,575
Net (gain)/loss on investment securities
—
—
—
(74
)
—
Other nonrecurring (income) loss
(20
)
(554
)
—
(20
)
(9,386
)
Total Revenue for efficiency calculation (non-GAAP)
$
174,498
$
172,310
$
174,970
$
516,496
$
529,189
Noninterest expense (GAAP)
$
126,900
$
117,702
$
123,984
$
376,475
$
367,328
Less: amortization of intangibles
3,130
3,610
3,298
9,675
10,744
Noninterest expense net of amortization (non-GAAP)
$
123,770
$
114,092
$
120,686
$
366,800
$
356,584
TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability
Three Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2023
2023
2023
Net income (GAAP)
$
42,949
$
42,856
$
34,687
$
28,804
$
44,862
Adjustments
Plus: Acquisition-related expenses, net of tax
460
18
564
56
458
Plus: FDIC special assessment, net of tax
—
(310
)
1,021
4,083
—
Less: Gain on sale of equity investments, net of noncontrolling interest
(16
)
—
—
(1,846
)
(438
)
Core operating earnings, excluding certain items affecting comparability (non-GAAP)
$
43,393
$
42,564
$
36,272
$
31,097
$
44,882
Weighted average diluted shares
75,141,661
75,037,955
74,979,501
74,793,557
74,765,515
Diluted EPS (GAAP)
$
0.57
$
0.57
$
0.46
$
0.39
$
0.60
Diluted EPS, excluding certain items affecting comparability (non-GAAP)
$
0.58
$
0.57
$
0.48
$
0.42
$
0.60
Average assets
$
17,028,141
$
16,982,482
$
16,864,235
$
16,683,041
$
16,762,859
Average tangible equity
$
1,582,830
$
1,520,500
1,517,600
$
1,465,216
$
1,460,024
Average common tangible equity
$
1,566,455
$
1,504,028
$
1,501,494
$
1,449,052
$
1,443,453
Return on average assets, excluding certain items affecting comparability (non-GAAP)
1.01
%
1.01
%
0.87
%
0.74
%
1.06
%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)
11.53
%
11.95
%
10.29
%
9.15
%
12.97
%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)
11.65
%
12.08
%
10.40
%
9.25
%
13.13
%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)
72.45
%
70.85
%
74.84
%
78.33
%
67.76
%
TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability
Nine Months Ended
September 30,
September 30,
2024
2023
Net income (GAAP)
$
120,492
$
124,911
Adjustments
Plus: Acquisition-related expenses, net of tax
1,040
7,718
Plus: FDIC special assessment, net of tax
711
—
Plus: Initial provision for acquired loans, net of tax
—
3,166
Less: Gain on sale of equity investments, net of noncontrolling interest and tax
(16
)
(5,951
)
Core operating earnings, excluding certain items affecting comparability (non-GAAP)
$
122,227
$
129,844
Weighted average diluted shares
75,043,848
74,618,743
Diluted EPS (GAAP)
$
1.61
$
1.67
Diluted EPS, excluding certain items affecting comparability (non-GAAP)
$
1.63
$
1.74
Average assets
$
16,958,540
$
16,647,804
Average tangible equity
$
1,540,465
$
1,444,135
Average tangible common equity
$
1,524,147
$
1,428,475
Return on average assets, excluding certain items affecting comparability (non-GAAP)
0.96
%
1.04
%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)
11.26
%
12.81
%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)
11.38
%
12.95
%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)
WILMINGTON, N.C., Oct. 23, 2024 (GLOBE NEWSWIRE) — Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported third quarter of 2024 net income of $13.0 million, or $0.28 per diluted share.
“Live Oak delivered historic production levels this quarter as our teams continue to put capital into the hands of business owners across the country,” said Live Oak Chairman and Chief Executive Officer James S. (Chip) Mahan III. “We believe our business momentum is in an exciting place and our conservative approach to growth is driving positive operating leverage, revenue, and deeper customer relationships.”
Third Quarter 2024 Key Measures
(Dollars in thousands, except per share data)
Increase (Decrease)
3Q 2024
2Q 2024
Dollars
Percent
3Q 2023
Total revenue(1)
$
129,932
$
125,479
$
4,453
3.5
%
$
127,301
Total noninterest expense
77,589
77,656
(67
)
(0.1
)
74,262
Income before taxes
17,841
36,058
(18,217
)
(50.5
)
42,760
Effective tax rate
27.0
%
25.2
%
n/a
n/a
6.9
%
Net income
$
13,025
$
26,963
$
(13,938
)
(51.7
)%
$
39,793
Diluted earnings per share
0.28
0.59
(0.31
)
(52.5
)
0.88
Loan and lease production:
Loans and leases originated
$
1,757,856
$
1,171,141
$
586,715
50.1
%
$
1,073,255
% Fully funded
42.4
%
38.2
%
n/a
n/a
52.2
%
Total loans and leases:
$
10,191,868
$
9,535,766
$
656,102
6.9
%
$
8,775,235
Total assets:
12,607,346
11,868,570
738,776
6.2
10,950,460
Total deposits:
11,400,547
10,707,031
693,516
6.5
10,003,642
(1) Total revenue consists of net interest income and total noninterest income.
Loans and Leases
As of September 30, 2024, the total loan and lease portfolio was $10.19 billion, 6.9% above its level at June 30, 2024, and 16.1% above its level a year ago. Excluding historical Paycheck Protection Program loans, the third quarter of 2024 was the Company’s highest loan production quarter of all time. Compared to the second quarter of 2024, loans and leases held for investment increased $659.8 million, or 7.2%, to $9.83 billion while loans held for sale decreased $3.7 million, or 1.0%, to $360.0 million. Average loans and leases were $9.76 billion during the third quarter of 2024 compared to $9.38 billion during the second quarter of 2024.
The total loan and lease portfolio at September 30, 2024, and June 30, 2024, was comprised of 34.5% and 36.4% of guaranteed loans, respectively.
Loan and lease originations totaled $1.76 billion during the third quarter of 2024, an increase of $586.7 million, or 50.1%, from the second quarter of 2024. Loan and lease originations increased $684.6 million, or 63.8%, from the third quarter of 2023.
Deposits
Total deposits increased to $11.40 billion at September 30, 2024, an increase of $693.5 million compared to June 30, 2024, and an increase of $1.40 billion compared to September 30, 2023. The increase in total deposits from prior periods was to support growth in the loan and lease portfolio as well as the Company’s targeted liquidity levels.
Average total interest-bearing deposits for the third quarter of 2024 increased $287.5 million, or 2.8%, to $10.56 billion, compared to $10.27 billion for the second quarter of 2024. The ratio of average total loans and leases to average interest-bearing deposits was 92.5% for the third quarter of 2024, compared to 91.4% for the second quarter of 2024.
Borrowings
Borrowings totaled $115.4 million at September 30, 2024 compared to $117.7 million and $25.8 million at June 30, 2024, and September 30, 2023, respectively. During the first quarter of 2024, the Company increased long-term borrowings by $100.0 million through an unsecured 5.95% fixed rate 60-month term loan with a third party correspondent bank. This increase in borrowings was to strategically enhance capital levels in order to accommodate future growth expectations.
Net Interest Income
Net interest income for the third quarter of 2024 was $97.0 million compared to $91.3 million for the second quarter of 2024 and $89.4 million for the third quarter of 2023. The net interest margin for the third quarter of 2024 and second quarter of 2024 was 3.33% and 3.28%, respectively, an increase of five basis points quarter over quarter. During the third quarter of 2024, the average cost of interest-bearing liabilities increased by two basis points, while the average yield on interest-earning assets increased by six basis points.
The increase in net interest income for the third quarter of 2024 compared to the third quarter of 2023 was largely driven by growth in average loans and leases held for investment. Partially mitigating this increase was a decrease in the net interest margin by four basis points arising from an increase in deposits and borrowings, combined with the increase in average cost of funds, outpacing the increase in average yield on interest-earning assets.
Noninterest Income
Noninterest income for the third quarter of 2024 was $32.9 million, a decrease of $1.2 million compared to the second quarter of 2024, and a decrease of $5.0 million compared to the third quarter of 2023. The primary drivers in noninterest income changes are outlined below.
The loan servicing asset revaluation resulted in a loss of $4.2 million for the third quarter of 2024 compared to a $11.3 million gain for the third quarter of 2023. This decrease between periods was principally due to the third quarter of 2023 change in valuation techniques used to estimate the fair value of servicing rights which resulted in a nonrecurring gain of $13.7 million during that period.
Net gains on sales of loans was $16.6 million, a $2.3 million increase compared to the second quarter of 2024 and a $4.0 million increase compared to the third quarter of 2023. The increase in net gains on sales of loans for both compared periods was the result of higher levels of market premiums combined with increased loan sale volumes. The average guaranteed loan sale premium was 107%, 106% and 105% for the third and second quarters of 2024 and third quarter of 2023, respectively. The volume of guaranteed loans sold was $266.3 million for the third quarter of 2024 compared to $250.5 million sold in the second quarter of 2024 and $225.6 million sold in the third quarter of 2023.
Loans accounted for under the fair value option had a net gain of $2.3 million for the third quarter of 2024, compared to a net gain of $172 thousand for the second quarter of 2024 and a net loss of $568 thousand for the third quarter of 2023. The increased levels of net gains arising from the valuation of loans accounted for under the fair value option compared to the second quarter of 2024 was largely associated with lower market interest rates. The increase in net gains when compared to the third quarter of 2023 was principally due to the third quarter of 2023 change in valuation techniques used to estimate the fair value of loans measured at fair value, which resulted in a nonrecurring gain of $1.3 million during that period.
Management fee income decreased by $2.2 million, as compared to both the second quarter of 2024 and third quarter of 2023. This decrease was the result of a restructuring of the Canapi Funds in the third quarter of 2024. In connection with that restructuring, the Company’s subsidiary Canapi Advisors voluntarily withdrew as an advisor to the funds. The Company remains an investor in the Canapi Funds and continues its focus on new and emerging financial technology companies.
Other noninterest income for the third quarter of 2024 totaled $7.1 million compared to $11.0 million for the second quarter of 2024 and $3.5 million for the third quarter of 2023. The quarter over quarter decrease of $3.9 million was largely related to a $6.7 million gain arising from the sale of one of the Company’s aircraft in the second quarter of 2024, partially offset by a $2.4 million gain from the sale of a building in the third quarter of 2024. The $3.6 million increase compared to the third quarter of 2023 was largely related to the above mentioned $2.4 million gain from the sale of an idle building and accompanying land that was determined earlier in 2024 not to be best suited to serve the Company’s future expansion plans.
Noninterest Expense
Noninterest expense for the third quarter of 2024 totaled $77.6 million compared to $77.7 million for the second quarter of 2024 and $74.3 million for the third quarter of 2023. Compared to the third quarter of 2023, the increase in noninterest expense was principally impacted by smaller balance increases in various expense categories, partially offset by $2.2 million in decreased levels of FDIC insurance expense. The decrease in FDIC insurance expense was the product of favorable changes in the Company’s FDIC assessment rates.
Asset Quality
During the third quarter of 2024, the Company recognized net charge-offs for loans carried at historical cost of $1.7 million, compared to $8.3 million in the second quarter of 2024 and $9.1 million in the third quarter of 2023. Net charge-offs as a percentage of average held for investment loans and leases carried at historical cost, annualized, for the quarters ended September 30, 2024, June 30, 2024, and September 30, 2023, was 0.08%, 0.38% and 0.48%, respectively.
Unguaranteed nonperforming (nonaccrual) loans and leases, excluding $8.7 million and $9.6 million accounted for under the fair value option at September 30, 2024, and June 30, 2024, respectively, increased to $49.4 million, or 0.52% of loans and leases held for investment which are carried at historical cost, at September 30, 2024, compared to $37.3 million, or 0.42%, at June 30, 2024.
Provision for Credit Losses
The provision for credit losses for the third quarter of 2024 totaled $34.5 million compared to $11.8 million for the second quarter of 2024 and $10.3 million for the third quarter of 2023. The level of provision expense in the third quarter of 2024 was primarily the result of specific reserve increases on individually evaluated loans and continued growth of the loan and lease portfolio. Provision expense for three individually evaluated loan relationships amounted to $13.6 million, or 60.0% and 56.3% of the increase in the total provision for loan and lease losses when compared to the second quarter of 2024 and third quarter of 2023, respectively.
The allowance for credit losses on loans and leases totaled $168.7 million at September 30, 2024, compared to $137.9 million at June 30, 2024. The allowance for credit losses on loans and leases as a percentage of total loans and leases held for investment carried at historical cost was 1.78% and 1.57% at September 30, 2024, and June 30, 2024, respectively.
Income Tax
Income tax expense and related effective tax rate was $4.8 million and 27.0% for the third quarter of 2024, $9.1 million and 25.2% for the second quarter of 2024 and $3.0 million and 6.9% for the third quarter of 2023, respectively. The lower level of income tax expense for the third quarter of 2024 compared to the second quarter of 2024 was primarily the result of the decreased level of pretax income. The higher level of income tax expense for the third quarter of 2024 as compared to the third quarter of 2023 was primarily the result of lower levels of anticipated investment tax credits in 2024 as compared to the prior year.
Conference Call
Live Oak will host a conference call to discuss the Company’s financial results and business outlook tomorrow, October 24, 2024, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 04478. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:
Webcast Link: investor.liveoakbank.com Registration: Name and Email Required Multi-Factor Code: Provided After Registration
Important Note Regarding Forward-Looking Statements
Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company’s status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; the impacts of global health crises and pandemics, such as the Coronavirus Disease 2019 (COVID-19) pandemic, on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; a reduction in or the termination of the Company’s ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems or those of its third-party service providers; technological risks and developments, including cyber threats, attacks, or events; competition from other lenders; the Company’s ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company’s business; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company’s ability to comply with regulatory requirements and expectations; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
About Live Oak Bancshares, Inc.
Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoakbank.com.
Contacts:
Walter J. Phifer | CFO | Investor Relations | 910.202.6926 Claire Parker | Corporate Communications | Media Relations | 910.597.1592
Live Oak Bancshares, Inc. Quarterly Statements of Income (unaudited) (Dollars in thousands, except per share data)
Three Months Ended
3Q 2024 Change vs.
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
2Q 2024
3Q 2023
Interest income
%
%
Loans and fees on loans
$
192,170
$
181,840
$
176,010
$
169,531
$
162,722
5.7
18.1
Investment securities, taxable
9,750
9,219
8,954
8,746
8,701
5.8
12.1
Other interest earning assets
7,016
7,389
7,456
8,259
9,188
(5.0
)
(23.6
)
Total interest income
208,936
198,448
192,420
186,536
180,611
5.3
15.7
Interest expense
Deposits
110,174
105,358
101,998
96,695
90,914
4.6
21.2
Borrowings
1,762
1,770
311
265
287
(0.5
)
513.9
Total interest expense
111,936
107,128
102,309
96,960
91,201
4.5
22.7
Net interest income
97,000
91,320
90,111
89,576
89,410
6.2
8.5
Provision for credit losses
34,502
11,765
16,364
8,995
10,279
193.3
235.7
Net interest income after provision for credit losses
62,498
79,555
73,747
80,581
79,131
(21.4
)
(21.0
)
Noninterest income
Loan servicing revenue
8,040
7,347
7,624
7,342
6,990
9.4
15.0
Loan servicing asset revaluation
(4,207
)
(2,878
)
(2,744
)
(3,974
)
11,335
(46.2
)
(137.1
)
Net gains on sales of loans
16,646
14,395
11,502
12,891
12,675
15.6
31.3
Net gain (loss) on loans accounted for under the fair value option
2,255
172
(219
)
(170
)
(568
)
1211.0
497.0
Equity method investments (loss) income
(1,393
)
(1,767
)
(5,022
)
47
(1,034
)
21.2
(34.7
)
Equity security investments gains (losses), net
909
161
(529
)
(384
)
(783
)
464.6
216.1
Lease income
2,424
2,423
2,453
2,439
2,498
—
(3.0
)
Management fee income
1,116
3,271
3,271
3,309
3,277
(65.9
)
(65.9
)
Other noninterest income
7,142
11,035
9,761
8,607
3,501
(35.3
)
104.0
Total noninterest income
32,932
34,159
26,097
30,107
37,891
(3.6
)
(13.1
)
Noninterest expense
Salaries and employee benefits
44,524
46,255
47,275
44,274
42,947
(3.7
)
3.7
Travel expense
2,344
2,328
2,438
1,544
2,197
0.7
6.7
Professional services expense
3,287
3,061
1,878
3,052
1,762
7.4
86.5
Advertising and marketing expense
2,473
3,004
3,692
2,501
3,446
(17.7
)
(28.2
)
Occupancy expense
2,807
2,388
2,247
2,231
2,129
17.5
31.8
Technology expense
9,081
7,996
7,723
8,402
7,722
13.6
17.6
Equipment expense
3,472
3,511
3,074
3,480
3,676
(1.1
)
(5.5
)
Other loan origination and maintenance expense
4,872
3,659
3,911
3,937
3,498
33.2
39.3
Renewable energy tax credit investment impairment (recovery)
115
170
(927
)
14,575
—
(32.4
)
100.0
FDIC insurance
1,933
2,649
3,200
4,091
4,115
(27.0
)
(53.0
)
Other expense
2,681
2,635
3,226
5,117
2,770
1.7
(3.2
)
Total noninterest expense
77,589
77,656
77,737
93,204
74,262
(0.1
)
4.5
Income before taxes
17,841
36,058
22,107
17,484
42,760
(50.5
)
(58.3
)
Income tax expense (benefit)
4,816
9,095
(5,479
)
1,321
2,967
(47.0
)
62.3
Net income
$
13,025
$
26,963
$
27,586
$
16,163
$
39,793
(51.7
)
(67.3
)
Earnings per share
Basic
$
0.28
$
0.60
$
0.62
$
0.36
$
0.89
(53.3
)
(68.5
)
Diluted
$
0.28
$
0.59
$
0.60
$
0.36
$
0.88
(52.5
)
(68.2
)
Weighted average shares outstanding
Basic
45,073,482
44,974,942
44,762,308
44,516,646
44,408,997
Diluted
45,953,947
45,525,082
45,641,210
45,306,506
45,268,745
Live Oak Bancshares, Inc. Quarterly Balance Sheets (unaudited) (Dollars in thousands)
As of the quarter ended
3Q 2024 Change vs.
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
2Q 2024
3Q 2023
Assets
%
%
Cash and due from banks
$
666,585
$
615,449
$
597,394
$
582,540
$
534,774
8.3
24.6
Certificates of deposit with other banks
250
250
250
250
3,750
—
(93.3
)
Investment securities available-for-sale
1,233,466
1,151,195
1,120,622
1,126,160
1,099,878
7.1
12.1
Loans held for sale
359,977
363,632
310,749
387,037
572,604
(1.0
)
(37.1
)
Loans and leases held for investment(1)
9,831,891
9,172,134
8,912,561
8,633,847
8,202,631
7.2
19.9
Allowance for credit losses on loans and leases
(168,737
)
(137,867
)
(139,041
)
(125,840
)
(121,273
)
(22.4
)
(39.1
)
Net loans and leases
9,663,154
9,034,267
8,773,520
8,508,007
8,081,358
7.0
19.6
Premises and equipment, net
267,032
267,864
258,071
257,881
258,041
(0.3
)
3.5
Foreclosed assets
8,015
8,015
8,561
6,481
6,701
—
19.6
Servicing assets
52,553
51,528
49,343
48,591
47,127
2.0
11.5
Other assets
356,314
376,370
387,059
354,476
346,227
(5.3
)
2.9
Total assets
$
12,607,346
$
11,868,570
$
11,505,569
$
11,271,423
$
10,950,460
6.2
15.1
Liabilities and shareholders’ equity
Liabilities
Deposits:
Noninterest-bearing
$
258,844
$
264,013
$
226,668
$
259,270
$
239,536
(2.0
)
8.1
Interest-bearing
11,141,703
10,443,018
10,156,693
10,015,749
9,764,106
6.7
14.1
Total deposits
11,400,547
10,707,031
10,383,361
10,275,019
10,003,642
6.5
14.0
Borrowings
115,371
117,745
120,242
23,354
25,847
(2.0
)
346.4
Other liabilities
83,672
82,745
74,248
70,384
70,603
1.1
18.5
Total liabilities
11,599,590
10,907,521
10,577,851
10,368,757
10,100,092
6.3
14.8
Shareholders’ equity
Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding
—
—
—
—
—
—
—
Class A common stock (voting)
361,925
356,381
349,648
344,568
340,929
1.6
6.2
Class B common stock (non-voting)
—
—
—
—
—
—
—
Retained earnings
707,026
695,172
669,307
642,817
627,759
1.7
12.6
Accumulated other comprehensive loss
(61,195
)
(90,504
)
(91,237
)
(84,719
)
(118,320
)
32.4
48.3
Total shareholders’ equity
1,007,756
961,049
927,718
902,666
850,368
4.9
18.5
Total liabilities and shareholders’ equity
$
12,607,346
$
11,868,570
$
11,505,569
$
11,271,423
$
10,950,460
6.2
15.1
(1) Includes $343.4 million, $363.0 million, $379.2 million, $388.0 million and $410.1 million measured at fair value for the quarters ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.
Live Oak Bancshares, Inc. Statements of Income (unaudited) (Dollars in thousands, except per share data)
Nine Months Ended
September 30, 2024
September 30, 2023
Interest income
Loans and fees on loans
$
550,020
$
454,136
Investment securities, taxable
27,923
24,751
Other interest earning assets
21,861
22,852
Total interest income
599,804
501,739
Interest expense
Deposits
317,530
243,512
Borrowings
3,843
2,498
Total interest expense
321,373
246,010
Net interest income
278,431
255,729
Provision for credit losses
62,631
42,328
Net interest income after provision for credit losses
215,800
213,401
Noninterest income
Loan servicing revenue
23,011
20,057
Loan servicing asset revaluation
(9,829
)
8,860
Net gains on sales of loans
42,543
33,654
Net gain (loss) on loans accounted for under the fair value option
2,208
(3,369
)
Equity method investments (loss) income
(8,182
)
(6,041
)
Equity security investments gain (losses), net
541
(585
)
Lease income
7,300
7,568
Management fee income
7,658
10,015
Other noninterest income
27,938
11,467
Total noninterest income
93,188
81,626
Noninterest expense
Salaries and employee benefits
138,054
130,778
Travel expense
7,110
7,378
Professional services expense
8,226
4,685
Advertising and marketing expense
9,169
10,058
Occupancy expense
7,442
6,259
Technology expense
24,800
23,456
Equipment expense
10,057
11,517
Other loan origination and maintenance expense
12,442
10,867
Renewable energy tax credit investment (recovery) impairment
(642
)
69
FDIC insurance
7,782
12,579
Other expense
8,542
12,035
Total noninterest expense
232,982
229,681
Income before taxes
76,006
65,346
Income tax expense
8,432
7,611
Net income
$
67,574
$
57,735
Earnings per share
Basic
$
1.50
$
1.30
Diluted
$
1.48
$
1.28
Weighted average shares outstanding
Basic
44,937,409
44,298,798
Diluted
45,707,245
45,023,739
Live Oak Bancshares, Inc. Quarterly Selected Financial Data (Dollars in thousands, except per share data)
As of and for the three months ended
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
Income Statement Data
Net income
$
13,025
$
26,963
$
27,586
$
16,163
$
39,793
Per Common Share
Net income, diluted
$
0.28
$
0.59
$
0.60
$
0.36
$
0.88
Dividends declared
0.03
0.03
0.03
0.03
0.03
Book value
22.32
21.35
20.64
20.23
19.12
Tangible book value(1)
22.24
21.28
20.57
20.15
19.04
Performance Ratios
Return on average assets (annualized)
0.43
%
0.93
%
0.98
%
0.58
%
1.46
%
Return on average equity (annualized)
5.21
11.39
11.93
7.36
18.68
Net interest margin
3.33
3.28
3.33
3.32
3.37
Efficiency ratio(1)
59.72
61.89
66.89
77.88
58.34
Noninterest income to total revenue
25.35
27.22
22.46
25.16
29.76
Selected Loan Metrics
Loans and leases originated
$
1,757,856
$
1,171,141
$
805,129
$
981,703
$
1,073,255
Outstanding balance of sold loans serviced
4,452,750
4,292,857
4,329,097
4,238,328
4,028,575
Asset Quality Ratios
Allowance for credit losses to loans and leases held for investment(3)
1.78
%
1.57
%
1.63
%
1.53
%
1.56
%
Net charge-offs(3)
$
1,710
$
8,253
$
3,163
$
4,428
$
9,122
Net charge-offs to average loans and leases held for investment(2) (3)
0.08
%
0.38
%
0.15
%
0.22
%
0.48
%
Nonperforming loans and leases at historical cost(3)
Unguaranteed
$
49,398
$
37,340
$
43,117
$
39,285
$
33,255
Guaranteed
166,177
122,752
105,351
95,678
65,837
Total
215,575
160,092
148,468
134,963
99,092
Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment(3)
0.52
%
0.42
%
0.51
%
0.48
%
0.43
%
Nonperforming loans at fair value(4)
Unguaranteed
$
8,672
$
9,590
$
7,942
$
7,230
$
6,518
Guaranteed
49,822
51,570
47,620
41,244
39,378
Total
58,494
61,160
55,562
48,474
45,896
Unguaranteed nonperforming fair value loans to fair value loans held for investment(4)
2.53
%
2.64
%
2.09
%
1.86
%
1.59
%
Capital Ratios
Common equity tier 1 capital (to risk-weighted assets)
11.19
%
11.85
%
11.89
%
11.73
%
11.63
%
Tier 1 leverage capital (to average assets)
8.60
8.71
8.69
8.58
8.56
Notes to Quarterly Selected Financial Data (1) See accompanying GAAP to Non-GAAP Reconciliation. (2) Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized. (3) Loans and leases at historical cost only (excludes loans measured at fair value). (4) Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).
Live Oak Bancshares, Inc. Quarterly Average Balances and Net Interest Margin (Dollars in thousands)
Three Months Ended September 30, 2024
Three Months Ended June 30, 2024
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
Interest-earning assets:
Interest-earning balances in other banks
$
519,340
$
7,016
5.37
%
$
555,570
$
7,389
5.35
%
Investment securities
1,287,410
9,750
3.01
1,263,675
9,219
2.93
Loans held for sale
409,902
9,859
9.57
387,824
9,329
9.67
Loans and leases held for investment(1)
9,354,522
182,311
7.75
8,997,164
172,511
7.71
Total interest-earning assets
11,571,174
208,936
7.18
11,204,233
198,448
7.12
Less: Allowance for credit losses on loans and leases
(137,285
)
(136,668
)
Noninterest-earning assets
567,098
562,488
Total assets
$
12,000,987
$
11,630,053
Interest-bearing liabilities:
Interest-bearing checking
$
350,239
$
4,892
5.56
%
$
304,505
$
4,267
5.64
%
Savings
5,043,930
51,516
4.06
4,804,037
48,617
4.07
Money market accounts
134,481
190
0.56
128,625
186
0.58
Certificates of deposit
5,028,830
53,576
4.24
5,032,856
52,288
4.18
Total deposits
10,557,480
110,174
4.15
10,270,023
105,358
4.13
Borrowings
116,925
1,762
6.00
119,321
1,770
5.97
Total interest-bearing liabilities
10,674,405
111,936
4.17
10,389,344
107,128
4.15
Noninterest-bearing deposits
237,387
223,026
Noninterest-bearing liabilities
90,079
70,667
Shareholders’ equity
999,116
947,016
Total liabilities and shareholders’ equity
$
12,000,987
$
11,630,053
Net interest income and interest rate spread
$
97,000
3.01
%
$
91,320
2.97
%
Net interest margin
3.33
3.28
Ratio of average interest-earning assets to average interest-bearing liabilities
108.40
%
107.84
%
(1) Average loan and lease balances include non-accruing loans and leases.
Live Oak Bancshares, Inc. GAAP to Non-GAAP Reconciliation (Dollars in thousands)
As of and for the three months ended
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
Total shareholders’ equity
$
1,007,756
$
961,049
$
927,718
$
902,666
$
850,368
Less:
Goodwill
1,797
1,797
1,797
1,797
1,797
Other intangible assets
1,606
1,644
1,682
1,721
1,759
Tangible shareholders’ equity (a)
$
1,004,353
$
957,608
$
924,239
$
899,148
$
846,812
Shares outstanding (c)
45,151,691
45,003,856
44,938,673
44,617,673
44,480,215
Total assets
$
12,607,346
$
11,868,570
$
11,505,569
$
11,271,423
$
10,950,460
Less:
Goodwill
1,797
1,797
1,797
1,797
1,797
Other intangible assets
1,606
1,644
1,682
1,721
1,759
Tangible assets (b)
$
12,603,943
$
11,865,129
$
11,502,090
$
11,267,905
$
10,946,904
Tangible shareholders’ equity to tangible assets (a/b)
7.97
%
8.07
%
8.04
%
7.98
%
7.74
%
Tangible book value per share (a/c)
$
22.24
$
21.28
$
20.57
$
20.15
$
19.04
Efficiency ratio:
Noninterest expense (d)
$
77,589
$
77,656
$
77,737
$
93,204
$
74,262
Net interest income
97,000
91,320
90,111
89,576
89,410
Noninterest income
32,932
34,159
26,097
30,107
37,891
Total revenue (e)
$
129,932
$
125,479
$
116,208
$
119,683
$
127,301
Efficiency ratio (d/e)
59.72
%
61.89
%
66.89
%
77.88
%
58.34
%
Pre-provision net revenue (e-d)
$
52,343
$
47,823
$
38,471
$
26,479
$
53,039
This press release presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company’s business, for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
