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Category: Taxation

  • MIL-OSI Security: Defense News: NAVFAC Southeast Awards $72.4 Million Contract for Airfield Repairs at NAS Key West

    Source: United States Navy

    The project will include critical repairs to airfield runway and taxiway pavement surfaces, including milling, resurfacing, joint sealing, and full-depth repairs as needed.

    “The comprehensive airfield pavement project will restore runways and taxiways used in support of the Chief of Naval Operations’ 2024 Navigation Plan—focusing on readiness for the possibility of war and enhancing the Navy’s long-term advantage by training warfighters,” said Lt. Cmdr. Aaron Buren, public works officer for Public Works Department Key West.

    NAS Key West is a vital hub for military aviation, supporting 79,000 flight hours for 1,220 aircraft in fiscal year 2024. It enables both readiness and advanced training for U.S. and coalition forces. The planned repairs will significantly extend the airfield’s operational life, ensuring its capability to support mission readiness, training, and national security operations for years to come.

    The scope of work includes milling and resurfacing of runways 4-22, 08-26, and 14-32, including overruns, blast pavements, and shoulders. Repairs to Taxiways A, B, C, D, E, F, G, and M will address milling, resurfacing, shoulder corrections, and pavement slope drop-offs where required.

    The contract includes two unexercised options which, if awarded, would increase the total contract value to $96.9 million.

    The contract was competitively procured using the Best Value Trade-Off Source Selection method, which evaluates technical factors alongside price to determine the best overall value to the government. Three offers were received, with Head/Diaz 2022 selected based on superior technical capability and competitive pricing.

    Work will be performed at NAS Key West, Florida, with an expected completion date of January 2027.

    NAVFAC Southeast, headquartered in Jacksonville, Florida, provides planning, design, construction, contracting, environmental services, public works, real estate, and facility maintenance for the U.S. Navy, Marine Corps, Army, Air Force, Space Force, and other federal agencies across the Southeast. Its area of responsibility covers installations from Charleston, South Carolina, to Corpus Christi, Texas, and extends south to Guantanamo Bay, Cuba.

    MIL Security OSI –

  • MIL-OSI USA: New Jersey Man Convicted for Conspiring to Traffic Fentanyl-Related Substances and Launder Money

    Source: US State of Vermont

    A federal jury in Newark convicted a New Jersey man on Jan. 27 for conspiring to traffic fentanyl-related substances and launder money.

    According to court documents and evidence presented at trial, from approximately January 2014 through September 2020, William Panzera, 51, of North Haledon, and other members of a drug trafficking organization, agreed to import and distribute controlled substances and controlled substance analogues, including fentanyl analogues, methylenedioxymethamphetamine (MDMA), methylone, and ketamine. Co-conspirators ordered controlled substances and analogues from a source in China and paid those sources hundreds of thousands of dollars via wire transfer and cryptocurrency. The conspirators distributed the substances throughout New Jersey in bulk and in the form of counterfeit pharmaceutical pills that actually contained fentanyl analogues. Eight other defendants have pleaded guilty in the case.

    The jury convicted Panzera of conspiracy to distribute and possess with intent to distribute 100 grams or more of furanyl fentanyl and 100 grams or more of 4 fluoroisobutyryl fentanyl and conspiracy to commit international promotional money laundering. Panzera faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison, and a fine of up to $10 million for the drug trafficking conspiracy charge, and a maximum penalty of 20 years in prison and a fine of up to $500,000 for the money laundering conspiracy charge. He is scheduled to be sentenced on June 25. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Acting U.S. Attorney Vikas Khanna for the District of New Jersey, and Special Agent in Charge Spiros Karabinas of Homeland Security Investigations (HSI) Newark made the announcement.

    HSI Newark is investigating the case. HSI Philadelphia, the FBI Newark Field Office, the U.S. Postal Inspection Service Newark Field Office, IRS Criminal Investigation, U.S. Customs and Border Protection, the Newark Police Department, and the Essex County Prosecutor’s Office provided valuable assistance.

    Money Laundering and Forfeiture Unit Chief Stephen Sola of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Sammi Malek and Special Assistant U.S. Attorney Alexander Hasapidis-Sferra for the District of New Jersey are prosecuting the case. Financial Investigator Kathryn Montemorra of the MLARS Special Financial Investigations Unit supported the investigation.

    This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

    MIL OSI USA News –

  • MIL-OSI Security: New Jersey Man Convicted for Conspiring to Traffic Fentanyl-Related Substances and Launder Money

    Source: United States Attorneys General 4

    A federal jury in Newark convicted a New Jersey man on Jan. 27 for conspiring to traffic fentanyl-related substances and launder money.

    According to court documents and evidence presented at trial, from approximately January 2014 through September 2020, William Panzera, 51, of North Haledon, and other members of a drug trafficking organization, agreed to import and distribute controlled substances and controlled substance analogues, including fentanyl analogues, methylenedioxymethamphetamine (MDMA), methylone, and ketamine. Co-conspirators ordered controlled substances and analogues from a source in China and paid those sources hundreds of thousands of dollars via wire transfer and cryptocurrency. The conspirators distributed the substances throughout New Jersey in bulk and in the form of counterfeit pharmaceutical pills that actually contained fentanyl analogues. Eight other defendants have pleaded guilty in the case.

    The jury convicted Panzera of conspiracy to distribute and possess with intent to distribute 100 grams or more of furanyl fentanyl and 100 grams or more of 4 fluoroisobutyryl fentanyl and conspiracy to commit international promotional money laundering. Panzera faces a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison, and a fine of up to $10 million for the drug trafficking conspiracy charge, and a maximum penalty of 20 years in prison and a fine of up to $500,000 for the money laundering conspiracy charge. He is scheduled to be sentenced on June 25. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Acting U.S. Attorney Vikas Khanna for the District of New Jersey, and Special Agent in Charge Spiros Karabinas of Homeland Security Investigations (HSI) Newark made the announcement.

    HSI Newark is investigating the case. HSI Philadelphia, the FBI Newark Field Office, the U.S. Postal Inspection Service Newark Field Office, IRS Criminal Investigation, U.S. Customs and Border Protection, the Newark Police Department, and the Essex County Prosecutor’s Office provided valuable assistance.

    Money Laundering and Forfeiture Unit Chief Stephen Sola of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Sammi Malek and Special Assistant U.S. Attorney Alexander Hasapidis-Sferra for the District of New Jersey are prosecuting the case. Financial Investigator Kathryn Montemorra of the MLARS Special Financial Investigations Unit supported the investigation.

    This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

    MIL Security OSI –

  • MIL-OSI Security: Passaic County Man Convicted Of Fentanyl Analogue Distribution And Money Laundering Conspiracies

    Source: Office of United States Attorneys

    NEWARK, N.J. – A Passaic County man was convicted by a jury in connection with his role in a drug trafficking organization responsible for the importation and distribution of hundreds of kilograms of fentanyl analogues, Acting U.S. Attorney Vikas Khanna announced.

    Defendant William Panzera, 51, of North Haledon, New Jersey was convicted of drug trafficking conspiracy and international promotional money laundering conspiracy by a jury in Newark, New Jersey. Eight other defendants have previously pleaded guilty in related cases.

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

    From approximately January 2014 through September 2020, William Panzera and other members of the drug trafficking organization agreed to import and distribute various controlled substances and controlled substance analogues, including fentanyl analogues, MDMA, methylone, and ketamine. Members of the conspiracy placed orders with a source in China and agreed to distribute, and did distribute, the controlled substances and analogues in New Jersey, both in bulk and in the form of counterfeit pharmaceutical pills that actually contained fentanyl analogues. In total, they imported over a metric ton of fentanyl and other drugs into the United States. They also sent hundreds of thousands of dollars to China using wire transfers and Bitcoin to pay for the drugs.

    The charge of drug trafficking conspiracy of which Panzera was found guilty carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a fine of up to $10 million. The charge of international promotional money laundering conspiracy of which Panzera was found guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $500,000. Sentencing is scheduled for June 25, 2025.

    Acting U.S. Attorney Khanna credited special agents of Homeland Security Investigations (“HSI”) – Newark, under the direction of Special Agent in Charge Spiros Karabinas, with the investigation leading to today’s guilty plea. He also thanked U.S. Customs and Border Protection in New Jersey, New York, and Kentucky, HSI in Philadelphia, the Federal Bureau of Investigation – Newark Division, U.S. Postal Inspection Service in Newark, IRS-Criminal Investigation, the Newark Police Department, and the Essex County Prosecutor’s Office for their assistance.

    The government is represented by Assistant U.S. Attorney Sammi Malek and Special Assistant U.S. Attorney Alexander Hasapidis-Sferra of the Criminal Division in Newark and Trial Attorney Stephen Sola, Chief of the Money Laundering and Forfeiture Unit of the Justice Department’s Money Laundering and Asset Recovery Section. Financial Investigator Kathryn Montemorra of the MLARS Special Financial Investigations Unit supported the investigation. The case is being prosecuted jointly by the United States Attorney’s Office, District of New Jersey and the Money Laundering and Asset Recovery Section (MLARS) of the United States Department of Justice.

    This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

                                                              ###

    Defense counsel: Jeffrey G. Garrigan, Esq.; Christopher L. Patella, Esq.

    MIL Security OSI –

  • MIL-OSI Security: Michigan Man Charged with Drug Distribution and Loan Fraud

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

    BOSTON – A Michigan man has been charged and has agreed to plead guilty in connection with a conspiracy to import and sell illegal pharmaceuticals, including opioids, and to fund the operation of the scheme by fraudulently obtaining a Covid pandemic relief loan.

    Donald Nchamukong, 37, was charged by Information with conspiracy to smuggle goods into the United States, to commit loan fraud and to distribute controlled substances.  Nchamukong will make an initial appearance in federal court in Boston on a date to be scheduled by the Court.

    According to the charging documents, starting in 2019 and continuing to 2022, Nchamukong and a co-conspirator, Doyal Kalita, conspired to distribute drugs to persons in the United States over the internet and using call centers in India. Nchamukong allegedly used shell companies, including a purported dietary supplements company and an auto parts supplier, and associated bank and merchant accounts to process sales of illegal foreign drugs, including the Schedule IV opioid, tramadol. Nchamukong and Kalita also received shipments of tramadol from India and reshipped the drug to customers across the United States, including in Massachusetts. When the Covid-19 pandemic hit, Nchamukong and Kalita allegedly fraudulently obtained a $200,000 Economic Injury Disaster Loan to fund their illegal drug scheme.  

    Kalita was convicted in 2024 and sentenced to 10 years in prison for orchestrating the online drug distribution scheme and a technical support fraud scheme and related money laundering.

    The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000, or twice the monetary gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

    United States Attorney Leah B. Foley; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office; and Fernando P. McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations made the announcement today. Valuable assistance was provided by Homeland Security Investigations in New York, Small Business Administration and the United States Attorney’s Office for the Eastern District of New York. Assistant U.S. Attorney Kriss Basil, Deputy Chief of the Securities, Financial, and Cyber Fraud Unit, is prosecuting the case.

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

    Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form.

    The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
     

    MIL Security OSI –

  • MIL-OSI: Signing Day Sports Executes Stock Purchase Agreement to Acquire Majority of Capital Stock of Dear Cashmere Group Holding Company d/b/a Swifty Global

    Source: GlobeNewswire (MIL-OSI)

    SCOTTSDALE, Arizona, Jan. 29, 2025 (GLOBE NEWSWIRE) — Signing Day Sports, Inc. (“Signing Day Sports” or the “Company”) (NYSE American: SGN), the developer of the Signing Day Sports app and platform to aid high school athletes in the recruitment process, today announced the signing of a Stock Purchase Agreement (SPA) to acquire 99.13% of the issued and outstanding capital stock of Dear Cashmere Group Holding Company (OTC: DRCR), doing business as Swifty Global.  

    Swifty Global is a global online sports and casino technologies company with a track record of revenue growth and profitability.

    Swifty Global’s strengths and growth strategies are expected to contribute significantly to the Company’s growth potential, including:

    • Strong Financial Performance: Swifty Global achieved revenues of over $128 million and a net profit of approximately $2.44 million for the fiscal year ended December 31, 2023, despite significant investments of nearly $3.1 million in software development and licensing.
    • Global Expansion Targeting High Growth Markets: Swifty Global continues to expand its international gambling operations with significant growth opportunities on the horizon. This strategy aligns with the shared vision of both companies to target high-growth markets as a core component of our long-term strategy.
    • Rapid Development of New Revenue Generating Technologies: Swifty Global plans to offer data feed services for the online sports gambling industry in the near future. These services are currently expensive and limited in choice, as many sports, such as boxing, have until recently had limited or no live data feed available to allow real-time betting. The Signing Day Sports team has significant experience working with critical sports datapoints and creating sports measurement technologies, which could assist Swifty Global in developing this revenue stream.

    Daniel Nelson, CEO of Signing Day Sports, commented, “We are thrilled to announce the signing of the SPA with Swifty Global, which reflects the shared vision and collaboration between our organizations. I extend my sincere appreciation to James Gibbons and Nick Link for their exceptional efforts throughout this process. We see the SPA as a significant step toward accelerated expansion, enabling us to leverage Swifty Global’s cutting-edge SaaS technology to enhance operational efficiency, reduce costs by over 50%, and accelerate product development. Together, we expect to increase user growth, retention, and new revenue opportunities while expanding into emerging markets across Europe, Africa, and the Middle East. Together, we are confident in our ability to build a stronger company, committed to innovation, positioned for global expansion, and powered by cutting-edge technology—delivering exceptional value to our shareholders and clients.”

    “Following the closing of the SPA, Swifty Global will operate as a subsidiary of Signing Day Sports, with its financial results fully integrated into our operations. Signing Day Sports’ pre-closing business will likewise operate within a subsidiary of Signing Day Sports.”

    James Gibbons, CEO of Swifty Global commented, “The Swifty Global team has worked extremely hard, demonstrating exceptional diligence and discipline in building an outstanding business with a solid foundation. We are excited about the future and look forward to working together to achieve great things.”

    Terms of the Transaction

    At the closing of the acquisition under the SPA, Signing Day Sports will acquire from James Gibbons and Nicolas Link (the “Sellers”) the common stock and preferred stock of Swifty Global held by them constituting 99.13% of the issued and outstanding capital stock of Swifty Global. Additional sellers holding Swifty Global common stock or preferred stock may enter into substantially identical agreements with Signing Day Sports and also sell their Swifty Global capital stock to Signing Day Sports, which would increase the aggregate percentage of Swifty Global acquired by Signing Day Sports.  

    At the closing, the Sellers will receive a number of shares of Signing Day Sports common stock that is equal to 19.99% of the issued and outstanding common stock of Signing Day Sports as of the date of the SPA. The balance of the shares that Signing Day Sports must issue to the sellers will be in the form of convertible preferred stock that will have no voting or dividend rights until shareholder approval of conversion and the clearance of an initial listing application with The Nasdaq Stock Market LLC (“Nasdaq”). Signing Day Sports legacy shareholders are expected to retain approximately 8.24% of the post-transaction company’s shares, with the remaining approximately 91.76% being issued to the sellers and the other stockholders of DRCR, based on the number of shares of Signing Day Sports common stock outstanding as of the date of the SPA, subject to adjustment as described below.

    At the closing, James Gibbons will become the Chief Executive Officer of Signing Day Sports and remain the Chief Executive Officer of Swifty Global. Signing Day Sports management will remain the management of the Signing Day Sports subsidiary that will be established in connection with the acquisition. One Signing Day Sports executive director will resign, and Mr. Gibbons will be elected to the Signing Day Sports board.

    After the closing, Signing Day Sports will consolidate Swifty Global’s financial statements and operate Swifty Global as a subsidiary. Signing Day Sports’ existing assets will be contributed into a newly formed subsidiary.

    After the closing, Signing Day Sports will hold a shareholder meeting to, among other things, approve the conversion of the preferred stock issued to the Sellers into common stock, and elect a new board of directors of Signing Day Sports. If the stockholders approve the proposals, the Sellers’ Signing Day Sports preferred stock will convert into 19,782,720 shares of Signing Day Sports common stock. In addition, the board will continue to consist of five members, consisting of one board member nominated by Signing Day Sports, two independent directors and one executive director nominated by Swifty Global’s pre-closing board, and one independent director jointly nominated by both Signing Day Sports and Swifty Global jointly.

    Signing Day Sports and Swifty Global will also seek all necessary stockholder, regulatory, and stock exchange consents or approvals, in order for Signing Day Sports to acquire the remaining outstanding equity ownership of Swifty Global not acquired from the Sellers under the SPA or additional stock purchase agreements through a merger of Swifty Global into Signing Day Sports or a wholly-owned subsidiary of Signing Day Sports (the “Merger”). Signing Day Sports will file a registration statement on Form S-4 relating to, among other things, the registration of the offer and sale of the shares of Signing Day Sports common stock to be issued to the stockholders of Swifty Global in the Merger.

    Both Signing Day Sports and Swifty Global will collectively seek to raise at least $2.0 million in financing as soon as possible, with the proceeds split equally. These funds will be used for the operations of each of Signing Day Sports and Swifty Global, and the payment of outstanding liabilities of Signing Day Sports, such that there will be no material liabilities of Signing Day Sports remaining at the time of the conversion of the preferred stock. If, at the effective time of the Merger, Signing Day Sports has any indebtedness for borrowed money or liabilities in excess of $150,000 relating to the period prior to the closing, then Signing Day Sports will issue to the legacy stockholders of Swifty Global, including the Sellers, as soon as practicable following the closing of the Merger, a number of shares of Signing Day Sports common stock equal to the aggregate Signing Day Sports liabilities divided by the Applicable Price Per Share (as defined in the SPA).

    Both Signing Day Sports and Swifty Global will complete due diligence before the closing under the SPA. The closing is subject to the satisfaction or waiver of closing conditions, including, without limitation, conditional approval from Nasdaq of an initial listing application that has been filed with such exchange, and no assurance can be given that the closing will occur, or that post-closing requirements for the acquisition will be met. From and after the closing, Signing Day Sports is expected to commence trading on the Nasdaq.

    The sellers and the officers and directors of Signing Day Sports will be subject to a three-month lock-up period following the closing.

    The SPA contains provisions for termination, representations, warranties, covenants, and mutual indemnification provisions.

    Advisors to the transaction include Maxim Group LLC, which is serving as exclusive financial advisor to Swifty Global. Lucosky Brookman LLP is serving as counsel to Swifty Global. Bevilacqua PLLC is serving as counsel to Signing Day Sports. 

    A copy of the SPA will be filed as an exhibit to a current report on Form 8-K to be filed by Signing Day Sports with the U.S. Securities and Exchange Commission (“SEC”) on or about the date of this press release. All parties desiring details regarding the terms and conditions of the proposed acquisition are urged to review that Form 8-K and the exhibits attached thereto, which will be available at the SEC’s website at www.sec.gov. 

    Signing Day Sports

    Signing Day Sports’ mission is to help student-athletes achieve their goal of playing college sports. Signing Day Sports’ app allows student-athletes to build their Signing Day Sports’ recruitment profile, which includes information college coaches need to evaluate and verify them through video technology. The Signing Day Sports app includes a platform to upload a comprehensive data set including video-verified measurables (such as height, weight, 40-yard dash, wingspan, and hand size), academic information (such as official transcripts and SAT/ACT scores), and technical skill videos (such as drills and mechanics that exemplify player mechanics, coordination, and development).  For more information about Signing Day Sports, go to https://bit.ly/SigningDaySports.

    Swifty Global

    Swifty Global is a technology company operating out of London, New York and Dubai developing ground-breaking technology solutions in the gambling and betting sector. Swifty Global aims to drive shareholder value through accelerated innovation and enhanced usability of the products it develops. With licenses spanning several jurisdictions, Swifty Global has successfully brought to market a suite of offerings. This includes the company’s proprietary swipe betting sports prediction application, as well as its traditional sportsbook and casino gaming platform. For more information about Swifty Global, go to https://www.otcmarkets.com/stock/DRCR/profile.

    Forward-Looking Statements

    This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, including without limitation, the Company’s ability to complete the acquisition of Swifty Global and integrate its business, the ability of the Company, the Sellers, and Swifty Global to obtain all necessary consents and approvals in connection with the acquisition, including Nasdaq clearance of an initial listing application in connection with the acquisition, obtain stockholder approval of the matters to be voted on at a stockholders’ meeting to approve matters required to be approved in connection with the SPA, the Company’s ability to obtain sufficient funding to maintain operations and develop additional services and offerings, market acceptance of the Company’s current products and services and planned offerings, competition from existing online and retail offerings or new offerings that may emerge, impacts from strategic changes to the Company’s business on its net sales, revenues, income from continuing operations, or other results of operations, the Company’s ability to attract new users and customers, increase the rate of subscription renewals, and slow the rate of user attrition, the Company’s ability to retain or obtain intellectual property rights, the Company’s ability to adequately support future growth, the Company’s ability to comply with user data privacy laws and other current or anticipated legal requirements, and the Company’s ability to attract and retain key personnel to manage its business effectively. These risks, uncertainties and other factors are described more fully in the section titled “Risk Factors” in the Company’s periodic reports which are filed with the SEC. These risks, uncertainties and other factors are, in some cases, beyond our control and could materially affect results. If one or more of these risks, uncertainties or other factors become applicable, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

    Investor Contact:
    Crescendo Communications, LLC
    212-671-1020
    SGN@crescendo-ir.com

    The MIL Network –

  • MIL-OSI: ES Bancshares, Inc. Announces Fourth Quarter 2024 Results; Continues Trend of Net Interest Margin Expansion and Asset Quality

    Source: GlobeNewswire (MIL-OSI)

    STATEN ISLAND, N.Y., Jan. 29, 2025 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today reported net income of $466 thousand, or $0.03 per diluted common share, for the quarter ended December 31, 2024, compared to a net income of $582 thousand or $0.08 per diluted common share for the quarter ended September 30, 2024.

     
    Key Quarterly Financial Data 2024 Highlights
    Performance Metrics   4Q24     3Q24     4Q23   •The Cost of Funds for the three months ended December 31, 2024, improved to 3.02% from 3.02% in the prior linked quarter.

    •For 3 months ended December 31, 2024, the Company’s net interest margin increased to 2.50% compared to 2.30% for the 3 months ended September 30, 2024.

    •The Company sold $3 million in SBA 7a loan during the quarter, resulting in a gain on loan sale.

    •The Company has replaced $56 million of higher-costing wholesale funding with lower cost organic deposits over the nine-months in 2024.

    •Total Revenues for the quarter ended December 31, 2024, totaled $8.4 million increasing for a second consecutive quarter.
    Return on average assets (%)   0.29     0.36     0.05  
    Return on average equity (%)   3.94     4.98     0.73  
    Return on average tangible equity (%)   3.99     5.04     0.74  
    Net interest margin (%)   2.50     2.30     2.28  
                       
    Income Statement (a)   4Q24     3Q24     4Q23  
    Net interest income $ 3,876   $ 3,567   $ 3,454  
    Non-interest income $ 372   $ 609   $ 322  
    Net income $ 466   $ 582   $ 84  
    Earnings per diluted common share $ 0.03   $ 0.08   $ 0.01  
                       
    Balance Sheet (a)   4Q24     3Q24     4Q23  
    Average total loans $ 566,031   $ 566,031   $ 569,515  
    Average total deposits $ 512,120   $ 512,120   $ 470,394  
    Book value per share $ 6.89   $ 6.85   $ 6.83  
    Tangible book value per share $ 6.81   $ 6.77   $ 6.74  
    (a) In thousands except for per share amounts              
                   

    Phil Guarnieri, Director, and Chief Executive Officer of ES Bancshares said, “We ended 2024 with positive trends over the last two quarters. The downward turn in interest rates has bolstered our net interest income. The Company’s net interest margin increased by twenty basis points, demonstrating growth for the past three quarters. This coupled with our cost containment program has bolstered our core earnings. The Company’s balance sheet and capital position remain a strength for our Company.”

    Selected Balance Sheet Information:

    December 31, 2024 vs. December 31, 2023

    As of December 31, 2024, total assets were $636.6 million, a decrease of $2.1 million, or 0.3%, as compared to total assets of $638.7 million on December 31, 2023. The decrease can be attributed to a slightly smaller loan portfolio.

    Loans receivable, net of Allowance for Credit Losses on Loans totaled $559.3 million, a decrease of 0.8% from December 31, 2023. As of December 31, 2024, the Allowance for Credit Losses on Loans as a percentage of gross loans was 0.91%.

    Nonperforming assets, which includes nonaccrual loans and foreclosed real estate were $5.3 million or 0.84% of total assets, as of December 31, 2024, increasing from $1.4 million or 0.22% of total assets at December 31, 2023. The ratio of nonaccrual loans to loans receivable was 0.94%, as of December 31, 2024, and 0.22% for December 31, 2023. The increase from December 31, 2023, was primarily due to one Commercial Real Estate and one 1-4 family investor loan being placed on non-accrual status. Both loans are deemed to be well collateralized and in total amount to $4.0 million.

    Total liabilities decreased $3.8 million to $589.1 million at December 31, 2024 from $592.9 million at December 31, 2023. The decrease can be attributed to repayments of brokered deposits and Federal Home Loan (FHLB) borrowings partially offset by growth in core deposits. The growth in deposits was driven by an increase in interest-bearing, non-maturity deposit accounts, as well as interest-bearing deposits.

    As of December 31, 2024, the Bank’s Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.31%, 13.68%, 13.68% and 14.93%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” During the Fourth quarter 2024 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.89 at December 31, 2024 compared to $6.83 at December 31, 2023. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.81 at December 31, 2024 compared to $6.74 at December 31, 2023.

    Financial Performance Overview:

    Three Months Ended December 31, 2024, vs. September 30, 2024

    For the three months ended December 31, 2024, the Company net income totaled $466 thousand compared to a net income of $582 thousand for the three months ended September 30, 2024. The decrease can be attributed to lower non-interest income and non-interest expense, partially offset by higher net interest income quarter over quarter.

    Net interest income for the three months ended December 31, 2024, increased $309 thousand, to $3.9 million from $3.6 million at three months ended September 30, 2024. The Company’s net interest margin widened by nine basis points to 2.50% for the three months ended December 31, 2024, as compared to 2.30% for the three months ended September 30, 2024. The increase in margin can be attributed to a reduction in the Company’s average cost for its interest-bearing liabilities.

    There was a $2 thousand provision for credit losses taken for the three months ended December 31, 2024, compared to a reversal for credit losses of $38 thousand for the three months ended September 30, 2024.

    Non-interest income decreased $237 thousand, to $372 thousand for the three months ended December 31, 2024, compared with non-interest income of $609 thousand for the three months ended September 30, 2024. The majority of the decrease can be attributed to lower service charges and fees and no gain on extinguishment of the Company’s subordinated debt, partially offset by the gain on loan sales.

    Non-interest expenses totaled $3.6 million for the three months ended December 31, 2024, compared to $3.4 million for the three months ended September 30, 2024. The largest fluctuations quarter over quarter were due to a $154 thousand increase in other expenses, due to a lack of a recovery of collection expenses that we realized in the September 2024 quarter, an increase in employment search fees, and other expenses. The $92 thousand increase in professional fees, due to higher legal and consulting fees as compared to the quarter ended September 30, 2024.

    Twelve months ended December 31, 2024 vs. December 31, 2023

    For the twelve months ended December 31, 2024, net income totaled $1.1 million in comparison to $1.5 million for the twelve months ended December 31, 2023. The decrease can mainly be attributed to higher costs paid on deposits which increased $5.1 million year over year.

    Net interest income for the twelve months ended December 31, 2024, decreased 11% or $1.8 million, to $14.1 million from $15.9 million at December 31, 2023. The decrease can be attributed to increased interest expense for deposits, partially offset by increased interest income earned on the loan portfolio.

    Provision for credit losses totaled $12 thousand for the twelve months ended December 31, 2024, compared to a $20 thousand provision for the twelve months ended December 31, 2023.

    Non-interest income totaled $1.2 million for the twelve months ended December 31, 2024, compared with noninterest income of $758 thousand for the twelve months ended December 31, 2023. The increase can be attributed to the gain recorded on extinguishment of sub-debt which is partially offset by decreased in gain on sale of loans period over period.

    Operating expenses totaled $14.0 million for the twelve months ended December 31, 2024, compared to $15.0 million for the twelve months ended December 31, 2023, or a decrease of 7.1%. The decrease in non-interest expense can be attributed to initiatives taking effect from the cost-cutting program launched in 2024.

    About ES Bancshares Inc.
    ES Bancshares, Inc. (the “Company”) is incorporated under Maryland law and serves as the holding company for Empire State Bank (the “Bank”). The Company is subject to regulation by the Board of Governors of the Federal Reserve System while the Bank is primarily subject to regulation and supervision by the New York State Department of Financial Services. Currently, the Company does not transact any material business other than through the Bank, its subsidiary.

    The Bank was organized under federal law in 2004 as a national bank regulated by the Office of the Comptroller of the Currency. The Bank’s deposits are insured up to legal limits by the FDIC. In March 2009, the Bank converted its charter to a New York State commercial bank charter. The Bank’s principal business is attracting commercial and retail deposits in New York and investing those deposits primarily in loans, consisting of commercial real estate loans, and other commercial loans including SBA and mortgage loans secured by one-to-four-family residences. In addition, the Bank invests in mortgage-backed securities, securities issued by the U.S. Government and agencies thereof, corporate securities and other investments permitted by applicable law and regulations.

    We operate from our five Banking Center locations, a Loan Production Office and our Corporate Headquarters located in Staten Island, New York. The Company’s website address is www.esbna.com. The Company’s annual report, quarterly earnings releases and all press releases are available free of charge through its website, as soon as reasonably practicable.

    Forward-Looking Statements

    This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within ES Bancshares, Inc’s. control. The forward-looking statements included in this release are made only as of the date of this release. We have no intention, and do not assume any obligation, to update these forward-looking statements.

    Investor Contact:
    Peggy Edwards, Corporate Secretary
    (845) 451-7825

     
    ES Bancshares, Inc.
    Consolidated Statements of Financial Condition
    (in thousands)
        December 31,   December 31,
    2024   2023
        |—-(unaudited)—-|    
    Assets        
    Cash and cash equivalents $ 26,713     32,728  
    Securities, net   22,336     15,220  
    Loans receivable, net:        
    Real estate mortgage loans   545,569     551,124  
    Commercial and Lines of Credit   14,418     13,301  
    Home Equity and Consumer Loans 398     349  
    Deferred costs   4,084     4,233  
    Allowance for Loan Credit Losses (5,137 )   (5,086 )
    Total loans receivable, net   559,330     563,920  
    Accrued interest receivable   2,628     2,625  
    Investment in restricted stock, at cost   4,335     5,191  
    Goodwill   581     581  
    Bank premises and equipment, net   4,845     5,600  
    Repossessed assets   –     –  
    Right of use lease assets   5,894     6,415  
    Bank Owned Life Insurance   5,489     5,341  
    Other Assets   4,471     1,129  
    Total Assets $ 636,622     638,750  
             
    Liabilities & Stockholders’ Equity        
    Non-Interest-Bearing Deposits   133,268     109,065  
    Interest-Bearing Deposits   359,816     328,479  
    Brokered Deposits   20,750     56,581  
    Total Deposits   513,834     494,125  
    Bond Issue, net of costs   11,787     13,708  
    Borrowed Money   50,084     70,805  
    Lease Liability   6,172     6,672  
    Other Liabilities   7,195     7,578  
    Total Liabilities   589,071     592,888  
    Stockholders’ equity   47,551     45,862  
    Total liabilities and stockholders’ equity $ 636,622     638,750  
     
       
      ES Bancshares, Inc.
      Consolidated Statements of Income
      (in thousands)
                   
      Three Months Ended   Twelve Months Ended
      December 31, 2024 September 30, 2024   December 31, 2023   December 31, 2024 December 31, 2023
      |————–(unaudited)————–|   |—-(unaudited)—-|
    Interest income              
    Loans $ 7,405 $ 7,315     $ 7,059     $ 29,273 $ 26,343
    Securities   224   218       110       678   446
    Other interest-earning assets   373   428       278       1,624   1,418
    Total Interest Income   8,002   7,961       7,447       31,576   28,207
    Interest expense              
    Deposits   3,436   3,674       2,945       14,531   9,052
    Borrowings   690   720       1,048       2,950   3,268
    Total Interest Expense   4,126   4,394       3,993       17,482   12,320
    Net Interest Income   3,876   3,567       3,454       14,094   15,887
    (Rev)Prov for Credit Losses   2   (38 )     (83 )     12   20
    Net Interest Income after (Rev)Prov for Credit Losses   3,874   3,605       3,537       14,082   15,867
    Non-interest income              
    Service charges and fees   192   264       254       828   762
    Gain on loan sales   139   –       30       140   168
    Gain on extinguishment of Sub-debt   –   245       –       245   –
    Other   42   100       38       314   149
    Total non-interest income   372   609       322       1,527   1,080
    Non-interest expenses              
    Compensation and benefits   1,662   1,719       1,745       6,830   7,408
    Occupancy and equipment   618   618       646       2,509   2,656
    Data processing service fees   295   315       357       1,253   1,396
    Professional fees   247   155       357       808   1,104
    FDIC & NYS Banking Assessments   132   100       88       428   272
    Advertising   64   84       101       308   406
    Insurance   56   55       51       208   190
    Other   518   365       405       1,622   1,603
    Total non-interest expense   3,592   3,411       3,750       13,966   15,035
    Income prior to tax expense   654   803       109       1,643   1,912
    Income taxes   188   221       25       539   440
    Net Income $ 466 $ 582     $ 84     $ 1,104 $ 1,472
                   
                       
      ES Bancshares, Inc.
      Average Balance Sheet Data
      For the Three Months Ended (dollars in thousands)
      December 31, 2024 September 30, 2024 June 30, 2024
      Avg Bal Interest Average Avg Bal Interest Average Avg Bal Interest Average
      Rolling Rolling Rolling Rolling Rolling Rolling
    Assets  3 Mos.  3 Mos. Yield/Cost  3 Mos.  3 Mos. Yield/Cost  3 Mos.  3 Mos. Yield/Cost
    Interest-earning assets:                  
    Loans receivable $ 564,745 $ 7,405 5.24 % $ 566,031 $ 7,315 5.17 % $ 569,515 $ 7,059 4.96 %
    Investment securities   22,898   224 3.91 %   22,480   218 3.87 %   15,957   110 2.75 %
    Other interest-earning assets   31,135   373 4.69 %   31,656   428 5.29 %   20,128   278 5.40 %
    Total interest-earning assets   618,778   8,002 5.17 %   620,167   7,961 5.13 %   605,600   7,447 4.92 %
    Non-interest earning assets   18,048       17,919       16,840    
    Total assets $ 636,826     $ 638,086     $ 622,440    
    Liabilities and Stockholders’ Equity                  
    Interest-bearing liabilities:                  
    Interest-bearing checking $ 32,800 $ 27 0.33 % $ 33,512 $ 55 0.65 % $ 25,368 $ 23 0.36 %
    Savings accounts   217,746   1,695 3.09 %   200,248   1,728 3.42 %   123,641   884 2.84 %
    Certificates of deposit   166,368   1,714 4.09 %   173,577   1,891 4.32 %   207,091   2,037 3.90 %
    Total interest-bearing deposits   416,914   3,436 3.27 %   407,337   3,674 3.58 %   356,101   2,945 3.28 %
    Borrowings   50,189   499 3.94 %   52,984   519 3.89 %   76,844   827 4.27 %
    Subordinated debenture   11,784   191 6.43 %   13,726   201 5.81 %   13,705   221 6.41 %
    Total interest-bearing liabilities   478,887   4,126 3.42 %   474,047   4,394 3.68 %   446,649   3,993 3.55 %
    Non-interest-bearing demand deposits   96,011       104,782       114,293    
    Other liabilities   14,580       13,045       15,803    
    Total non-interest-bearing liabilities   110,591       117,827       130,096    
    Stockholders’ equity   47,347       46,211       45,695    
    Total liabilities and stockholders’ equity $ 636,826     $ 638,086     $ 622,440    
    Net interest income   $ 3,874     $ 3,567     $ 3,454  
    Average interest rate spread      1.75 %     1.46 %     1.37 %
    Net interest margin      2.50 %     2.30 %     2.28 %
                       
                       
                   
    Five Quarter Performance Ratio Highlights Three Months Ended
    December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023  
    Performance Ratios (%) – annualized            
    Return(loss) on Average Assets   0.29     0.36     0.10     (0.07 )   0.05  
    Return(loss) on Average Equity   3.94     4.98     1.37     (0.90 )   0.73  
    Return(loss) on Average Tangible Equity   3.99     5.04     1.38     (0.91 )   0.74  
    Efficiency Ratio   84.58     81.70     92.86     101.08     99.31  
    Yields / Costs (%)            
    Average Yield – Interest Earning Assets   5.17     5.13     5.16     5.03     4.92  
    Average Cost – Interest-bearing Liabilities   3.42     3.69     3.86     3.82     3.55  
    Net Interest Margin   2.50     2.30     2.21     2.12     2.28  
    Capital Ratios (%)            
    Equity / Assets   7.47     7.44     7.12     7.34     7.18  
    Tangible Equity / Assets   7.38     7.36     7.03     7.26     7.09  
    Tier I leverage ratio (a)   9.31     9.18     9.30     9.52     9.45  
    Common equity Tier I capital ratio (a)   13.68     13.67     13.81     13.63     13.60  
    Tier 1 Risk-based capital ratio (a)   13.68     13.67     13.81     13.63     13.60  
    Total Risk-based capital ratio (a)   14.93     14.92     15.06     14.88     14.85  
    Stock Valuation            
    Book Value $ 6.89   $ 6.85   $ 6.74   $ 6.75   $ 6.83  
    Tangible Book Value $ 6.81   $ 6.77   $ 6.65   $ 6.67   $ 6.74  
    Shares Outstanding (b)   6,900     6,878     6,884     6,834     6,714  
    Asset Quality (%)            
    ACL / Total Loans   0.91     0.90     0.90     0.89     0.89  
    Non Performing Loans / Total Loans   0.94     0.91     0.22     0.24     0.22  
    Non Performing Assets / Total Assets   0.84     0.81     0.19     0.21     0.22  
                   
    (a) Ratios at Bank level                            (b) Shares information presented in thousands        
                   

    The MIL Network –

  • MIL-OSI: KraneShares Confirms New Caps of 20% and 40% For KWEB Buffer Strategies KPRO & KBUF, Respectively

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) — Today, Krane Funds Advisors, LLC (“KraneShares”), an asset management firm known for its global exchange-traded funds (ETFs) announced new Caps, Buffer periods, and name changes for the KPRO and KBUF 100% and 90% Buffer ETFs. KPRO is now the KraneShares 100% KWEB Defined Outcome January 2027 ETF (Ticker: KPRO), formerly Defined Outcome January 2026, and KBUF is now the KraneShares 90% KWEB Defined Outcome January 2027 ETF (Ticker: KBUF), also formerly Defined Outcome January 2026.

    These ETFs are designed to provide investors with the opportunity over a limited period (the “Outcome Period”) to benefit up to a certain extent (the “Cap”) from increases in the total return of the KraneShares CSI China Internet ETF (Ticker: KWEB) with a defined level of protection (the “Buffer”). The current Outcome Period for the Funds is from January 27, 2025 to January 22, 2027.

    The new performance Cap for KPRO over the Outcome Period will be 20.01% and the new Cap for KBUF will be 40.01%. The new Caps stem from a decision earlier this month to extend the Outcome Period for both Funds due to strong China Internet momentum.

    The Funds will retain the same buffers of 100% and 90%, respectively, based on KWEB’s price on January 25, 2025.

    “KWEB has exceeded performance expectations since KPRO and KBUF were launched in February 2024,” said Jonathan Shelon, KraneShares COO. “We believe that resetting the downside protection and increasing the upside potential by extending the outcome period, is a benefit to existing and new investors. We are extremely pleased with the results of these strategies and are excited to introduce these enhancements.”

    KPRO and KBUF have characteristics unlike many other traditional investment products and may not be suitable for all investors. The caps and buffers mentioned above do not reflect the effect of fees and assume the Funds are held from launch to the end of the outcome period (2 years). For more information regarding whether an investment in the Funds is right for you, please read each Fund’s prospectus, including “Investor Suitability Considerations.

    About KraneShares

    KraneShares is a specialist investment manager focused on China, Climate, and Uncorrelated Assets. KraneShares seeks to provide innovative, high-conviction, and first-to-market strategies based on the firm and its partners’ deep investing knowledge. KraneShares identifies and delivers groundbreaking capital market opportunities and believes investors should have cost-effective and transparent tools for attaining exposure to various asset classes. The firm was founded in 2013 and serves institutions and financial professionals globally. The firm is a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI).

    Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds’ full and summary prospectus, which may be obtained by visiting: www.kraneshares.com/kweb, www.kraneshares.com/kpro and www.kraneshares.com/kbuf. Read the prospectus carefully before investing.

    Risk Disclosures:

    Investing involves risk, including possible loss of principal. There can be no assurance that any of the Funds will achieve their stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

    This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Certain content represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice.

    A-Shares are issued by companies in mainland China and traded on local exchanges. They are available to domestic and certain foreign investors, including QFIs and those participating in Stock Connect Programs like Shanghai-Hong Kong and Shenzhen-Hong Kong. Foreign investments in A-Shares face various regulations and restrictions, including limits on asset repatriation. A-Shares may experience frequent trading halts and illiquidity, which can lead to volatility in the Funds’ share prices and increased trading halt risks. The Chinese economy is an emerging market, vulnerable to domestic and regional economic and political changes, often showing more volatility than developed markets. Companies face risks from potential government interventions, and the export-driven economy is sensitive to downturns in key trading partners, impacting the Funds. U.S.-China tensions raise concerns over tariffs and trade restrictions, which could harm China’s exports and the Funds. China’s regulatory standards are less stringent than in the U.S., resulting in limited information about issuers. Tax laws are unclear and subject to change, potentially impacting the Funds and leading to unexpected liabilities for foreign investors. Fluctuations in currency of foreign countries may have an adverse effect on domestic currency values.

    KPRO and KBUF have characteristics unlike many other traditional investment products and may not be suitable for all investors. An investment in any of the Funds may not be appropriate for investors who do not intend to hold Fund shares for the entire Outcome Period. In the event an investor purchases shares after the beginning of the Outcome Period or sells shares prior to the end of the Outcome Period, the returns realized by the investor may not match those that the Funds seek to provide. The Funds may not fully protect against KWEB losses if their share prices drop during the Outcome Period. Buying or selling shares during this time may affect the Buffer’s availability. Even if KWEB’s value rises, the Buffer won’t guard against any subsequent decrease.

    A new Cap is set at the start of each Outcome Period and depends on current market conditions. Therefore, the Cap may change between Outcome Periods and is unlikely to stay constant. Investors should keep track of Cap changes for each Outcome Period, details of which will be provided according to the process outlined in each Fund’s prospectus. The Funds aim to provide returns subject to a Cap, but there is no guarantee of success. If any Fund’s gains exceed the Cap, that Fund won’t appreciate beyond the Cap and will underperform. Due to the Cap, the Funds may significantly underperform KWEB. Buying shares after the Outcome Period starts may limit gains, exposing investors to potential losses. Selling shares before the Outcome Period ends may result in underperformance.

    The Funds may invest in derivatives, which are often more volatile than other investments and may magnify the Funds’ gains or losses. A derivative (i.e., futures/forward contracts, swaps, and options) is a contract that derives its value from the performance of an underlying asset. The primary risk of derivatives is that changes in the asset’s market value and the derivative may not be proportionate, and some derivatives can have the potential for unlimited losses. Derivatives are also subject to liquidity and counterparty risk. The Funds are subject to liquidity risk, meaning that certain investments may become difficult to purchase or sell at a reasonable time and price. If a transaction for these securities is large, it may not be possible to initiate, which may cause the Funds to suffer losses. Counterparty risk is the risk of loss in the event that the counterparty to an agreement fails to make required payments or otherwise comply with the terms of the derivative. KPRO and KBUF will use FLEX options from the Options Clearing Corporation (OCC). There’s a risk of the OCC failing to meet its obligations. The Funds may face challenges in less liquid FLEX options markets and have difficulty closing positions at desired times and prices. If the unlikely event the OCC becomes insolvent, the Funds could suffer losses. Failure by market participants to enter into FLEX options transactions that reflect market value could result in losses. Some FLEX options may expire worthless. The value of these options is associated with KWEB and influenced by factors such as market fluctuations and time until expiration.

    KPRO and KBUF are new and do not yet have a significant number of shares outstanding. If the Funds do not grow in size, they will be at greater risk than larger funds of wider bid-ask spreads for their shares, trading at a greater premium or discount to NAV, liquidation and/or a trading halt. Narrowly focused investments typically exhibit higher volatility. The Funds’ assets are expected to be concentrated in a sector, industry, market, or group of concentrations to the extent that the Underlying Index has such concentrations. The securities or futures in that concentration could react similarly to market developments. Thus, the Funds are subject to loss due to adverse occurrences that affect that concentration. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility. KWEB, KPRO and KBUF are non-diversified.

    ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Beginning 12/23/2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates the current NAV per share. Prior to that date, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time.

    The KraneShares ETFs and KFA Funds ETFs are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Funds, or any sub-advisers for the Funds.

    Contact:
    KraneShares Investor Relations
    info@kraneshares.com

    The MIL Network –

  • MIL-OSI: Blue Foundry Bancorp Reports Fourth Quarter and Year-End 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    RUTHERFORD, N.J., Jan. 29, 2025 (GLOBE NEWSWIRE) — Blue Foundry Bancorp (NASDAQ:BLFY) (the “Company”), the holding company for Blue Foundry Bank (the “Bank”), reported a net loss of $11.9 million, or $0.55 per diluted common share, for the year ended December 31, 2024 compared to a net loss of $7.4 million, or $0.31 per diluted common share for the year ended December 31, 2023.

    The Company reported a net loss of $2.7 million, or $0.13 per diluted common share, for the three months ended December 31, 2024 compared to a net loss of $4.0 million, or $0.19 per diluted common share for the three months ended September 30, 2024, and a net loss of $2.9 million, or $0.13 per diluted common share for the three months ended December 31, 2023.

    James D. Nesci, President and Chief Executive Officer, commented, “We are very pleased with both the deposit and loan growth achieved in the fourth quarter and look to carry this positive momentum into 2025.”

    Mr. Nesci also noted, “Credit quality remained strong and we continue to experience very low charge-offs. Our allowance to credit losses to total loans is 83 basis points and covers non-performing loans by over 2.5 times.”

    Highlights for the fourth quarter of 2024:

    • Loans totaled $1.58 billion, an increase of $32.5 million from the prior quarter end.
    • Deposits increased $24.7 million to $1.34 billion compared to the prior quarter.
    • Uninsured deposits to third-party customers totaled approximately 11% of total deposits at December 31, 2024.
    • Interest income for the quarter was $21.8 million, an increase of $253 thousand, or 1.2%, compared to the prior quarter.
    • Interest expense for the quarter was $12.3 million, a decrease of $133 thousand, or 1.1%, compared to the prior quarter.
    • Net interest margin increased seven basis points from the prior quarter to 1.89%.
    • The release of provision for credit losses of $301 thousand was primarily due to the decrease in unused lines of credit and releases of provision for loans of $37 thousand and for securities of $24 thousand.
    • Tangible book value per share was $14.74. See the “Supplemental Information – Non-GAAP Financial Measures” tables below for additional information regarding our non-GAAP measures.
    • 480,851 shares were repurchased under our share repurchase plans at a weighted average share price of $10.49 per share.
    • Credit metrics remained favorable with non-performing loans to total loans of 0.33%.

    Loans

    The Company continues to diversify its lending portfolio by focusing on growing the higher-yielding commercial portfolio. Gross loans increased $22.8 million during 2024 with increases in commercial real estate loans, construction loans, consumer and other loans, commercial and industrial loans and junior liens of $27.1 million, $25.1 million, $7.2 million, $4.5 million and $2.9 million, respectively, offset in part by reductions in the residential portfolio of $32.7 million and multifamily portfolio of $11.4 million.

    The details of the loan portfolio are below:

        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
        (Unaudited)   (Audited)
        (In thousands)
    Residential   $ 518,243   $ 516,754   $ 526,453   $ 540,427   $ 550,929
    Multifamily     671,116     666,304     671,185     671,011     682,564
    Commercial real estate     259,633     241,711     241,867     244,207     232,505
    Construction and land     85,546     80,081     71,882     63,052     60,414
    Junior liens     25,422     24,174     23,653     22,052     22,503
    Commercial and industrial     16,311     14,228     12,261     13,372     11,768
    Consumer and other     7,211     7,731     83     56     47
    Total loans     1,583,482     1,550,983     1,547,384     1,554,177     1,560,730
    Allowance for credit losses on loans     12,965     13,012     13,027     13,749     14,154
    Loans receivable, net   $ 1,570,517   $ 1,537,971   $ 1,534,357   $ 1,540,428   $ 1,546,576


    Deposits

    At December 31, 2024, total deposits were $1.34 billion, an increase of $98.4 million or 7.91% from December 31, 2023, mostly due to the increases of $110.7 million and $8.4 million in time deposits and NOW and demand accounts, partially offset by decreases in savings and non-interest bearing deposits of $19.0 million and $1.7 million, respectively. The Company’s strategy is to focus on attracting the full banking relationship of small- to medium-sized businesses through an extensive suite of deposit products. While there is strong competition for deposits in the northern New Jersey market, we were able to increase customer deposits by $78.0 million, or 7.0%, during the year. Brokered deposits increased $30.0 million since year end 2023.

    The details of deposits are below:

        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
        (Unaudited)   (Audited)
        (In thousands)
    Non-interest bearing deposits   $ 26,001   $ 22,254   $ 24,733   $ 25,342   $ 27,739
    NOW and demand accounts     369,554     357,503     368,386     373,172     361,139
    Savings     240,426     237,651     246,559     250,298     259,402
    Core deposits     635,981     617,408     639,678     648,812     648,280
    Time deposits     707,339     701,262     671,478     642,372     596,624
    Total deposits   $ 1,343,320   $ 1,318,670   $ 1,311,156   $ 1,291,184   $ 1,244,904


    Financial Performance Overview:            

    Fourth quarter of 2024 compared to the third quarter of 2024

    Net interest income compared to the third quarter of 2024:

    • Net interest income was $9.5 million for the fourth quarter of 2024 compared to $9.1 million for the third quarter of 2024, an increase of $386 thousand.
    • Net interest margin increased by seven basis points to 1.89%.
    • The yield on average interest-earning assets increased five basis points to 4.37%, while the cost of average interest-bearing liabilities decreased six basis points to 2.97% due to a decrease in rates paid on time deposits.
    • Average interest-earning assets increased by $10.1 million and average interest-bearing liabilities increased by $15.4 million.

    Non-interest income compared to the third quarter of 2024:

    • Non-interest income increased $33 thousand primarily due to increase in fees and service charges.

    Non-interest expense compared to the third quarter of 2024:

    • Non-interest expense decreased $386 thousand primarily driven by decreases of $363 thousand in compensation and benefits expenses, $76 thousand in professional fees and $36 thousand in occupancy and equipment, partially offset by an increase in data processing expense of $102 thousand.

    Income tax expense compared to the third quarter of 2024:

    • The Company did not record a tax benefit for the losses incurred during the third or fourth quarter of 2024 due to the full valuation allowance required on its deferred tax assets.
    • The Company’s current tax position reflects the full valuation allowance on its deferred tax assets. At December 31, 2024, the valuation allowance on deferred tax assets was $25.1 million.

    Fourth quarter of 2024 compared to the fourth quarter of 2023

    Net interest income compared to the fourth quarter of 2023:

    • Net interest income was $9.5 million, an increase of $277 thousand.
    • Net interest margin increased five basis point to 1.89%.
    • Yield on average interest-earning assets increased 31 basis points to 4.37%.
    • Cost of average interest-bearing deposits increased 38 basis points to 2.90%, reflecting the competitive rate environment in our primary market.
    • Average loans increased by $7.5 million and average interest-bearing deposits increased by $94.2 million.

    Non-interest income compared to the fourth quarter of 2023:

    • Non-interest income decreased $152 thousand, or 26.57%. The prior year period included gains on sales of loans and securities that were not present in the current period. In addition, there was a decline in fees and service charges from the prior period.

    Non-interest expense compared to the fourth quarter of 2023:

    • Non-interest expense was $12.9 million, an increase of $338 thousand driven by increases in professional services expense, compensation and benefit costs and occupancy and equipment expense of $106 thousand, $56 thousand and $54 thousand, respectively, partially offset by a decrease in advertising expense of $39 thousand. In addition, other expense increased $131 thousand when compared to the fourth quarter of 2023 due in part to increases in business development and postage expenses.

    Income tax expense compared to the fourth quarter of 2023:

    • The Company did not record a tax benefit for the loss incurred during the fourth quarter of 2024 or 2023 due to the full valuation allowance required on its deferred tax assets.
    • The Company’s current tax position reflects the full valuation allowance on its deferred tax assets. At December 31, 2024, the valuation allowance on deferred tax assets was $25.1 million.

    Year ended December 31, 2024 compared to the year ended December 31, 2023

    Net interest income compared to the year ended December 31, 2023:

    • Net interest income was $37.6 million, a decrease of $4.4 million.
    • Net interest margin decreased by 19 basis points to 1.90%.
    • Yield on average interest-earning assets increased 38 basis points to 4.32%.
    • Cost of average interest-bearing deposits increased 92 basis points to 2.89%, due to an increase in higher-cost time deposits and the competitive rate environment in our primary market.
    • Average loans decreased by $16.4 million and average interest-bearing deposits increased by $52.6 million.

    Non-interest income compared to the year ended December 31, 2023:

    • Non-interest income decreased $11 thousand, or 0.61%, largely due to the lack of gain on sale of loans and securities, offset in part by a gain on sale of an REO property in 2024.

    Non-interest expense compared to the year ended December 31, 2023:

    • Non-interest expense was $52.6 million, an increase of $1.0 million, primarily driven by increases in compensation and benefits of $994 thousand, occupancy and equipment of $528 thousand and FDIC premiums of $56 thousand, offset in part by decreases in data processing expense and professional services of $471 thousand and $118 thousand, respectively.

    Income tax expense compared to the year ended December 31, 2023:

    • The Company did not record a tax benefit for the loss incurred during 2024 or 2023 due to the full valuation allowance required on its deferred tax assets.
    • The Company’s current tax position reflects the previously established full valuation allowance on its deferred tax assets. At December 31, 2024, the valuation allowance on deferred tax assets was $25.1 million.

    Balance Sheet Summary:

    December 31, 2024 compared to December 31, 2023

    Securities available-for-sale:

    • Securities available-for-sale increased $13.3 million to $297.0 million due to purchases and a $3.3 million improvement in the unrealized loss position on the portfolio, partially offset by amortization, maturities and calls during the year.

    Other investments:

    • Other investments decreased during 2024 by $2.6 million due to a decrease in FHLB stock as a result of a reduction in FHLB borrowings.

    Total loans:

    • Gross loans held for investment increased $22.8 million to $1.58 billion.
    • Commercial real estate loans increased $27.1 million, construction loans increased $25.1 million, consumer and other category increased $7.2 million and commercial and industrial loans increased $4.5 million, while residential and multifamily loans decreased $32.7 million and $11.4 million, respectively.
    • Loan fundings totaled $108.4 million, including fundings of $35.7 million in commercial real estate loans, $33.7 million in construction loans, $12.2 million in multifamily loans and $11.2 million in commercial and industrial loans. In addition, the Company purchased $21.6 million of conforming residential mortgages in New Jersey and participated in a consumer loan participation of $8.0 million during the year.

    Deposits:

    • Deposits totaled $1.34 billion, an increase of $98.4 million since December 31, 2023, largely the result of increases in customer deposits.
    • Core deposits (defined as non-interest bearing checking, NOW and demand accounts and savings accounts) represented 47.3% of total deposits compared to 48.8% at December 31, 2023, as time deposits increased $110.7 million.
    • The increase in time deposits include $30.0 million in brokered deposits, bringing our total brokered deposit balance to $155.0 million at December 31, 2024.
    • Uninsured and uncollateralized deposits to third-party customers were $147.6 million, or 11% of total deposits, at the end of the fourth quarter.

    Borrowings:

    • FHLB borrowings decreased by $58.0 million to $339.5 million as we were able to pay off short-term borrowings with deposit growth that outpaced asset growth.
    • As of December 31, 2024, the Company had $270.6 million of additional borrowing capacity at the FHLB, $107.7 million in secured lines of credit at the Federal Reserve Bank and $30.0 million of other unsecured lines of credit.

    Capital:

    • Shareholders’ equity decreased by $23.4 million to $332.2 million. The decrease was primarily driven by the repurchase of shares at a cost of $19.4 million. Additionally, the year-to-date loss, partially offset by favorable changes in accumulated other comprehensive income, also contributed to the decrease.
    • Tangible equity to tangible assets was 16.11% and 17.37% at December 31, 2024 and 2023, respectively.
    • Tangible common equity per share outstanding was $14.74 at December 31, 2024 and $14.49 at December 31, 2023.
    • The Bank’s capital ratios remain above the FDIC’s “well capitalized” standards.

    Asset quality:

    • The allowance for credit losses on loans represented 0.83% of total loans at December 31, 2024 compared to 0.91% at December 31, 2023. The allowance for credit losses on loans was 254.02% of non-performing loans compared to 239.98% at December 31, 2023.
    • The Company recorded a release of provision for credit losses of $301 thousand for the fourth quarter of 2024 and a release of provision for credit losses of $1.4 million for the year ended December 31, 2024. For the fourth quarter of 2024, there was a release of provision of $240 thousand, $37 thousand and $24 thousand in the ACL for off-balance-sheet commitments, loans and held-to-maturity securities, respectively. For the year ended December 31, 2024, there was a release of $1.1 million in the ACL for loans, $146 thousand in the ACL for off-balance-sheet commitments and $60 thousand in the ACL for held-to-maturity securities. The release was driven by the impact of the economic forecasts for the key drivers of our loan segments as well as a decrease in off-balance-sheet commitments.
    • Non-performing loans totaled $5.1 million, or 0.33% of total loans at December 31, 2024 compared to $5.9 million, or 0.38% of total loans at December 31, 2023.
    • Net charge-offs were $10 thousand and $46 thousand for the quarter and year ended December 31, 2024, respectively.

    About Blue Foundry

    Blue Foundry Bancorp is the holding company for Blue Foundry Bank, a place where things are made, purpose is formed, and ideas are crafted. Headquartered in Rutherford NJ, with a presence in Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset and Union counties, Blue Foundry Bank is a full-service, innovative bank serving the doers, movers, and shakers in our communities. We offer individuals and businesses alike the tailored products and services they need to build their futures. With a rich history dating back more than 145 years, Blue Foundry Bank has a longstanding commitment to its customers and communities. To learn more about Blue Foundry Bank visit BlueFoundryBank.com or call (888) 931-BLUE. Member FDIC.

    Conference Call Information

    A conference call discussing Blue Foundry’s fourth quarter and year ended December 31, 2024 financial results will be held today, Wednesday, January 29, 2025 at 11:00 a.m. (EST). To listen to the live call, please dial 1-833-470-1428 (toll free) or +1-404-975-4839 (international) and use access code 168429. Participants are encouraged to preregister to listen via webcast at https://events/q4inc.com/attendee/980680589. The conference call will be recorded and will be available on the Company’s website for one month.

    Contact:

    James D. Nesci
    President and Chief Executive Officer
    jnesci@bluefoundrybank.com
    201-972-8900

    Forward Looking Statements

    Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements, which are based on certain current assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

    Forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase in the level of defaults, losses and prepayments on loans we have made and make; general economic conditions, either nationally or in our market areas, that are worse than expected; changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; our ability to implement and change our business strategies; competition among depository and other financial institutions; adverse changes in the securities or secondary mortgage markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums; changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; changes in the quality or composition of our loan or investment portfolios; technological changes that may be more difficult or expensive than expected; a failure or breach of our operational or security systems or infrastructure, including cyber-attacks; the inability of third party providers to perform as expected; our ability to manage market risk, credit risk and operational risk in the current economic environment; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related there to; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; our ability to retain key employees; the current or anticipated impact of military conflict, terrorism or other geopolitical events; the ability of the U.S. Government to manage federal debt limits; and changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

    Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, we do not undertake, and we specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of the statements or to reflect the occurrence of anticipated or unanticipated events.

    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Statements of Financial Condition
     
        December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
        (Unaudited)   (Unaudited)   (Audited)
        (In thousands)
    ASSETS            
    Cash and cash equivalents   $ 42,502   $ 76,109   $ 46,025
    Securities available for sale, at fair value     297,028     290,806     283,766
    Securities held to maturity     33,076     33,119     33,254
    Other investments     17,791     18,203     20,346
    Loans, net     1,570,517     1,537,971     1,546,576
    Real estate owned, net     —     —     593
    Interest and dividends receivable     8,014     8,386     7,595
    Premises and equipment, net     29,486     30,161     32,475
    Right-of-use assets     23,470     24,190     25,172
    Bank owned life insurance     22,519     22,399     22,034
    Other assets     16,280     13,749     27,127
    Total assets   $ 2,060,683   $ 2,055,093   $ 2,044,963
                 
    LIABILITIES AND SHAREHOLDERS’ EQUITY            
    Liabilities            
    Deposits   $ 1,343,320   $ 1,318,670   $ 1,244,904
    Advances from the Federal Home Loan Bank     339,500     348,500     397,500
    Advances by borrowers for taxes and insurance     9,356     9,909     8,929
    Lease liabilities     25,168     25,870     26,777
    Other liabilities     11,141     12,845     11,213
    Total liabilities     1,728,485     1,715,794     1,689,323
    Shareholders’ equity     332,198     339,299     355,640
    Total liabilities and shareholders’ equity   $ 2,060,683   $ 2,055,093   $ 2,044,963
    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Statements of Operations
    (Dollars in thousands except per share data)
     
        Three months ended   Year Ended December 31,
        December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023    		     2024       2023  
        (unaudited)   (Unaudited)   (Audited)
    Interest income:                    
    Loans   $ 17,777     $ 17,646     $ 16,907     $ 70,185     $ 65,685  
    Taxable investment income     3,972       3,850       3,327       15,122       12,990  
    Non-taxable investment income     36       36       101       144       430  
    Total interest income     21,785       21,532       20,335       85,451       79,105  
    Interest expense:                    
    Deposits     9,573       9,712       7,755       36,830       24,116  
    Borrowed funds     2,739       2,733       3,384       11,071       13,070  
    Total interest expense     12,312       12,445       11,139       47,901       37,186  
    Net interest income     9,473       9,087       9,196       37,550       41,919  
    (Release of ) provision for credit losses     (301 )     248       156       (1,350 )     (441 )
    Net interest income after (release of ) provision for credit losses     9,774       8,839       9,040       38,900       42,360  
    Non-interest income:                    
    Fees and service charges     306       272       331       1,203       1,164  
    Gain on securities, net     —       —       20       —       20  
    Gain on sale of loans     —       —       72       36       231  
    Other income     114       115       149       555       390  
    Total non-interest income     420       387       572       1,794       1,805  
    Non-interest expense:                    
    Compensation and benefits     6,943       7,306       6,887       29,433       28,439  
    Occupancy and equipment     2,194       2,230       2,140       8,878       8,350  
    Data processing     1,514       1,412       1,510       5,648       6,119  
    Advertising     81       87       120       292       354  
    Professional services     737       813       631       2,903       3,021  
    Federal deposit insurance premiums     226       236       200       855       799  
    Other expense     1,186       1,183       1,055       4,596       4,480  
    Total non-interest expenses     12,881       13,267       12,543       52,605       51,562  
    Loss before income tax expense     (2,687 )     (4,041 )     (2,931 )     (11,911 )     (7,397 )
    Income tax expense     —       —       —       —       —  
    Net loss   $ (2,687 )   $ (4,041 )   $ (2,931 )   $ (11,911 )   $ (7,397 )
    Basic loss per share   $ (0.13 )   $ (0.19 )   $ (0.13 )   $ (0.55 )   $ (0.31 )
    Diluted loss per share   $ (0.13 )   $ (0.19 )   $ (0.13 )   $ (0.55 )   $ (0.31 )
    Weighted average shares outstanding-basic     20,826,845       21,263,482       22,845,252       21,477,429       23,925,724  
    Weighted average shares outstanding-diluted     20,826,845       21,263,482       22,845,252       21,477,429       23,925,724  
    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Consolidated Financial Highlights
    (Dollars in thousands except for share data) (Unaudited)
     
        Three months ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Performance Ratios (%)                    
    Loss on average assets     (0.52 )     (0.79 )     (0.47 )     (0.56 )     (0.57 )
    Loss on average equity     (3.17 )     (4.68 )     (2.71 )     (3.23 )     (3.25 )
    Interest rate spread (1)     1.40       1.29       1.43       1.40       1.33  
    Net interest margin (2)     1.89       1.82       1.96       1.92       1.84  
    Efficiency ratio (non-GAAP) (3)     130.20       140.04       130.73       134.19       128.41  
    Average interest-earning assets to average interest-bearing liabilities     120.84       121.37       122.28       122.50       122.93  
    Tangible equity to tangible assets (4)     16.11       16.50       16.88       17.25       17.37  
    Book value per share (5)   $ 14.75     $ 14.76     $ 14.70     $ 14.61     $ 14.51  
    Tangible book value per share (5)   $ 14.74     $ 14.74     $ 14.69     $ 14.60     $ 14.49  
                         
    Asset Quality                    
    Non-performing loans   $ 5,104     $ 5,146     $ 6,208     $ 6,691     $ 5,898  
    Real estate owned, net     —       —       —       593       593  
    Non-performing assets   $ 5,104     $ 5,146     $ 6,208     $ 7,284     $ 6,491  
    Allowance for credit losses on loans to total loans (%)     0.83       0.84       0.84       0.88       0.91  
    Allowance for credit losses on loans to non-performing loans (%)     254.02       252.86       209.84       205.48       239.98  
    Non-performing loans to total loans (%)     0.33       0.33       0.40       0.43       0.38  
    Non-performing assets to total assets (%)     0.25       0.25       0.30       0.36       0.32  
    Net charge-offs to average outstanding loans during the period (%)     —       —       —       —       —  

    (1) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (2) Net interest margin represents net interest income divided by average interest-earning assets.
    (3) Efficiency ratio represents adjusted non-interest expense divided by the sum of net interest income plus non-interest income.
    (4) Tangible equity equals $332.0 million, which excludes intangible assets ($244 thousand of capitalized software). Tangible assets equal $2.06 billion and exclude intangible assets.
    (5) Per share metrics are computed using 22,522,626 total shares outstanding.

    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Analysis of Net Interest Income
    (Unaudited)
     
        Three Months Ended
        December 31, 2024   September 30, 2024   December 31, 2023
        Average Balance   Interest   Average
    Yield/Cost    		   Average Balance   Interest   Average
    Yield/Cost    		   Average Balance   Interest   Average
    Yield/Cost
        (Dollars in thousands)
    Assets:                                    
    Loans (1)   $ 1,557,342   $ 17,777   4.57 %   $ 1,548,962   $ 17,646   4.53 %   $ 1,564,800   $ 16,907   4.29 %
    Mortgage-backed securities     185,382     1,254   2.71 %     181,596     1,186   2.60 %     165,471     904   2.17 %
    Other investment securities     164,392     1,573   3.83 %     173,008     1,527   3.51 %     190,507     1,486   3.09 %
    FHLB stock     17,153     411   9.58 %     17,666     406   9.15 %     20,970     477   9.02 %
    Cash and cash equivalents     68,536     770   4.50 %     61,507     767   4.96 %     45,895     561   4.85 %
    Total interest-bearing assets     1,992,805     21,785   4.37 %     1,982,739     21,532   4.32 %     1,987,643     20,335   4.06 %
    Non-interest earning assets     61,586             61,787             54,918        
    Total assets   $ 2,054,391           $ 2,044,526           $ 2,042,561        
    Liabilities and shareholders’ equity:                                    
    NOW, savings, and money market deposits   $ 614,623     1,988   1.29 %   $ 598,048     1,925   1.28 %   $ 634,257     1,989   1.24 %
    Time deposits     698,801     7,585   4.32 %     688,570     7,787   4.50 %     584,977     5,766   3.91 %
    Interest-bearing deposits     1,313,424     9,573   2.90 %     1,286,618     9,712   3.00 %     1,219,234     7,755   2.52 %
    FHLB advances     335,686     2,739   3.26 %     347,076     2,733   3.13 %     397,643     3,384   3.38 %
    Total interest-bearing liabilities     1,649,110     12,312   2.97 %     1,633,694     12,445   3.03 %     1,616,877     11,139   2.73 %
    Non-interest bearing deposits     24,945             23,421             26,629        
    Non-interest bearing other     43,016             43,713             41,780        
    Total liabilities     1,717,071             1,700,828             1,685,286        
    Total shareholders’ equity     337,320             343,698             357,275        
    Total liabilities and shareholders’ equity   $ 2,054,391           $ 2,044,526           $ 2,042,561        
    Net interest income       $ 9,473           $ 9,087           $ 9,196    
    Net interest rate spread (2)           1.40 %           1.29 %           1.33 %
    Net interest margin (3)           1.89 %           1.82 %           1.84 %

    (1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
    (2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (3) Net interest margin represents net interest income divided by average interest-earning assets.

    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Analysis of Net Interest Income continued
    (Unaudited)
     
        Year Ended December 31,
          2024       2023  
        Average Balance   Interest   Average
    Yield/Cost    		   Average Balance   Interest   Average
    Yield/Cost
        (Dollar in thousands)
    Assets:                        
    Loans (1)   $ 1,553,143   $ 70,185   4.52 %   $ 1,569,590   $ 65,685   4.18 %
    Mortgage-backed securities     173,691     4,276   2.46 %     172,405     3,693   2.14 %
    Other investment securities     174,172     6,440   3.70 %     195,754     6,010   3.07 %
    FHLB stock     18,038     1,756   9.73 %     21,249     1,582   7.45 %
    Cash and cash equivalents     58,261     2,794   4.80 %     46,245     2,135   4.62 %
    Total interest-bearing assets     1,977,305     85,451   4.32 %     2,005,243     79,105   3.94 %
    Non-interest earning assets     59,832             56,297        
    Total assets   $ 2,037,137           $ 2,061,540        
    Liabilities and shareholders’ equity:                        
    NOW, savings, and money market deposits   $ 610,172     7,803   1.28 %   $ 722,149     8,339   1.15 %
    Time deposits     665,740     29,027   4.36 %     501,124     15,777   3.15 %
    Interest-bearing deposits     1,275,912     36,830   2.89 %     1,223,273     24,116   1.97 %
    FHLB advances     348,306     11,071   3.18 %     396,265     13,070   3.30 %
    Total interest-bearing liabilities     1,624,218     47,901   2.95 %     1,619,538     37,186   2.30 %
    Non-interest bearing deposits     24,980             25,227        
    Non-interest bearing other     42,345             43,868        
    Total liabilities     1,691,543             1,688,633        
    Total shareholders’ equity     345,594             372,907        
    Total liabilities and shareholders’ equity   $ 2,037,137           $ 2,061,540        
    Net interest income       $ 37,550           $ 41,919    
    Net interest rate spread (2)           1.37 %           1.64 %
    Net interest margin (3)           1.90 %           2.09 %

    (1) Average loan balances are net of deferred loan fees and costs, and premiums and discounts, and include non-accrual loans.
    (2) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
    (3) Net interest margin represents net interest income divided by average interest-earning assets.

    BLUE FOUNDRY BANCORP AND SUBSIDIARY
    Adjusted Pre-Provision Net Loss (Non-GAAP)
    (Dollars in thousands except per share data) (Unaudited)

    This press release contains certain supplemental financial information, described in the table below, which has been determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”) that management uses in its analysis of Blue Foundry’s performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding Blue Foundry’s financial results. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results and Blue Foundry strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

    Net loss, as presented in the Consolidated Statements of Operations, includes the provision for credit losses and income tax expense while pre-provision net loss does not.

        Three months ended
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Pre-provision net loss and efficiency ratio, as adjusted:                
    Net interest income   $ 9,473     $ 9,087     $ 9,573     $ 9,417     $ 9,196  
    Other income     420       387       536       451       572  
          9,893       9,474       10,109       9,868       9,768  
    Operating expenses, as reported     12,881       13,267       13,215       13,242       12,543  
    Pre-provision net loss, as adjusted   $ (2,988 )   $ (3,793 )   $ (3,106 )   $ (3,374 )   $ (2,775 )
    Efficiency ratio     130.2 %     140.0 %     130.7 %     134.2 %     128.4 %
                         
    Core deposits:                    
    Total deposits   $ 1,343,320     $ 1,318,670     $ 1,311,156     $ 1,291,184     $ 1,244,904  
    Less: time deposits     707,339       701,262       671,478       642,372       596,624  
    Core deposits   $ 635,981     $ 617,408     $ 639,678     $ 648,812     $ 648,280  
    Core deposits to total deposits     47.3 %     46.8 %     48.8 %     50.2 %     52.1 %
                         
    Total assets   $ 2,060,683     $ 2,055,093     $ 2,045,452     $ 2,027,787     $ 2,044,963  
    Less: intangible assets     244       300       386       473       557  
    Tangible assets   $ 2,060,439     $ 2,054,793     $ 2,045,066     $ 2,027,314     $ 2,044,406  
                         
    Tangible equity:                    
    Shareholders’ equity   $ 332,198     $ 339,299     $ 345,597     $ 350,156     $ 355,640  
    Less: intangible assets     244       300       386       473       557  
    Tangible equity   $ 331,954     $ 338,999     $ 345,211     $ 349,683     $ 355,083  
                         
    Tangible equity to tangible assets     16.11 %     16.50 %     16.88 %     17.25 %     17.37 %
                         
    Tangible book value per share:                    
    Tangible equity   $ 331,954     $ 338,999     $ 345,211     $ 349,683     $ 355,083  
    Shares outstanding     22,522,626       22,990,908       23,505,357       23,958,888       24,509,950  
    Tangible book value per share   $ 14.74     $ 14.74     $ 14.69     $ 14.60     $ 14.49  

    The MIL Network –

  • MIL-OSI Security: Two Cousins Sentenced for Pandemic-Related Fraud

    Source: Office of United States Attorneys

    ATLANTA – Johnny Narcisse, and his cousin Johnson Dieujuste, have been sentenced to prison for their scheme to defraud the Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”) program of more than $2 million. 

    “These defendants brazenly stole funds from programs designed to help individuals and businesses suffering during the COVID-19 pandemic,” said Acting U.S. Attorney Richard S. Moultrie, Jr. “We are grateful to our law enforcement partners for identifying and investigating these individuals which led to their successful prosecution.”

    According to Acting U.S. Attorney Moultrie, Jr., the charges and other information presented in court: In July 2021, federal agents investigating a Florida resident for suspected tax crimes obtained and executed a search warrant for the home, computer and cellular phone of Johnny Narcisse in Georgia. The search of the computer and phone revealed a large volume of evidence showing that Narcisse and his cousin, Johnson Dieujuste, had been engaged in an extensive conspiracy with each other to recruit small business owners and then file fraudulent applications for COVID-19 relief loans, including both PPP and EIDL loans, on their behalf.

    Narcisse and Dieujuste, after obtaining the names, business names, and employer identification numbers from the would-be borrowers, simply invented the rest of the information needed to apply for the fraudulent loans. If the loan was approved, the borrowers kicked back a percentage of the loan proceeds to Narcisse and/or Dieujuste. Dozens of loans were applied for as part of the scheme, with over $2 million dispersed.

    Johnny Narcisse, 46, of Atlanta, Georgia, was sentenced by U.S. District Judge Eleanor L. Ross to two years, four months in prison followed by three years of supervised release. He was also ordered to pay restitution in the amount of $2,000,332. Narcisse was convicted on October 21, 2024, after he pleaded guilty to one count of conspiracy to commit wire fraud.

    Johnson Dieujuste, 37, of Loganville, Georgia, was sentenced by Judge Ross on January 8, 2025, to two years, eight months in prison followed by three years of supervised release. He was also ordered to pay restitution in the amount of $2,081,559. Dieujuste was convicted on September 24, 2024, after he pleaded guilty to one count of conspiracy to commit wire fraud.

    In addition to their conspiracy to file fraudulent loan applications on behalf of others, the evidence showed that Narcisse and Diejuste each independently filed for fraudulent COVID-19 loans for themselves. Both men were held accountable for those loans as well during the sentencing process, and the losses that resulted from this additional conduct were included in each defendant’s restitution order.

    This case was investigated by the U.S. Treasury Inspector General for Tax Administration and Small Business Administration, Office of Inspector General.

    Assistant U.S Attorney Alana R. Black, and Trial Attorneys Jennifer Bilinkas and David A. Peters of the Department of Justice Criminal Division’s Fraud Section, prosecuted the case.

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

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

    For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

    MIL Security OSI –

  • MIL-OSI United Kingdom: Chancellor vows to go further and faster to kickstart economic growth

    Source: United Kingdom – Executive Government & Departments

    Chancellor of the Exchequer Rachel Reeves spoke at Siemens Healthineers in Oxfordshire on 29 January 2025.

    Thank you everyone. 

    It’s fantastic to be here at Siemens at this amazing facility.  

    Today, I want to talk about economic growth. 

    Why it matters.  

    How we achieve it.  

    And what we are going to do further and faster to deliver it. 

    Before we came into office… 

    … the Prime Minister and I have said loud and clear:  

    Economic growth is the number one mission of this government.  

    Without growth, we cannot cut hospital waiting lists or put more police on the streets.  

    Without growth, we cannot meet our climate goals… 

    … or give the next generation the opportunities that they need to thrive. 

    But most of all… 

    … without economic growth… 

    … we cannot improve the lives of ordinary working people.  

    Because growth isn’t simply about lines on a graph. 

    It’s about the pounds in people’s pockets. 

    The vibrancy of our high streets. 

    And the thriving businesses that create wealth, jobs and new opportunities for us, for our children, and grandchildren.  

    We will have succeeded in our mission when working people are better off. 

    I know that the cost of living crisis is still very real for many families across Britain.  

    The sky high inflation and interest rates of the past few years have left a deep mark… 

    … with too many people still making sacrifices to pay the bills and to pay their mortgages.   

    But we have begun to turn this around.  

    Everything I see as I travel around the country gives me more belief in Britain. 

    And more optimism about our future. 

    Because we as a country have huge potential.  

    A country of strong communities, with small and local businesses at their heart.  

    We are at the forefront of some of the most exciting developments in the world… 

    … like artificial intelligence and life sciences…  

    … with great companies like DeepMind, AstraZeneca, Rolls Royce… and of course Siemens…  

    … delivering jobs and investment across Britain. 

    We have fundamental strengths – in our history, in our language, and in our legal system – to compete in a global economy.  

    But for too long, that potential has been held back.  

    For too long, we have accepted low expectations and accepted decline. 

    We no longer have to do that.  

    We can do so much better. 

    Low growth is not our destiny.  

    But growth will not come without a fight.  

    Without a government willing to take the right decisions now to change our country’s future for the better. 

    That’s what our Plan for Change is all about. 

    That is what drives me as Chancellor.  

    In my Mais lecture in March last year, I set out my approach to achieving economic growth… 

    … and identified the fundamental barriers to realising our full potential.  

    The productive capacity of the UK economy has become far too weak.  

    Productivity, the driver of living standards…   

    …has grown more slowly here than in countries like Germany and the US.  

    The supply side of our economy has suffered due to chronic underinvestment… 

    … and stifling and unpredictable regulation…  

    … not helped by the shocks we have faced in recent years. 

    [redacted political content]

    The strategy that I have consistently set out… 

    … is to grow the supply-side of our economy… 

    … recognising that first and foremost… 

    … it is businesses, investors and entrepreneurs who drive economic growth… 

    … a government that systematically removes the barriers that they face – one by one and has their back 

    This strategy has three essential elements: 

    First, stability in our politics, our public finances and our economy – the basic condition for secure economic growth. 

    Second, reform – reform which makes it easier for businesses to trade, to raise finance and to build.  

    And third, investment, the lifeblood of economic growth. 

    Let me explain each of those in turn.  

    Stability – the first line of our manifesto was a promise to bring stability to the public finances.  

    It is the rock upon which everything else is built. 

    And it is the essential foundation of our Plan for Change.  

    Because economic stability is the precondition for economic growth. 

    That’s why the first piece of legislation that we passed as a government was the Budget Responsibility Act… 

    … so never again will we see our independent forecaster sidelined.

    [redacted political content]

    At my first Budget in October… 

    … it was my duty as Chancellor… 

    … to fix the foundations of our economy, and repair the public finances that we inherited. 

    To restore stability and create the conditions for growth and investment.  

    I set out new fiscal rules which are non-negotiable, and will always be met. 

    We began to rebuild our NHS and our schools – the start of a programme of public service reform.  

    I capped the rate of corporation tax – and I extended our generous capital allowances for the duration of this parliament – as the CBI and the BCC have long called for.  

    And I protected working people after a cost of living crisis… 

    … by freezing fuel duty… 

    … and with no increases in their National Insurance, Income Tax or VAT. 

    But taking the right decisions and the responsible decisions does not always mean taking the easy decisions. 

    The increase in Employers’ National Insurance contributions has consequences on business and beyond.   

    I said that up front in my Budget speech. 

    I accept that there are costs to responsibility. 

    But the costs of irresponsibility would have been far higher. 

    Those who oppose my Budget know that too. 

    That is why, since October, I have seen no alternative put forward [redacted political content].

    No alternatives to deal with the challenges we face.  

    No alternatives to restoring economic stability… 

    … and therefore no plan for driving economic growth. 

    Alongside stability, we need to drive forward the reform which makes investment more likely… 

    … by removing the constraints on the supply side of our economy… 

    … making it easier for businesses to trade… 

    … to raise finance… 

    … and to build.  

    Let me first address our approach to trade.  

    We stand at a moment of global change.  

    In that context, we should be guided by one clear principle above all.  

    To act in the national interest… 

    … for our economy… 

    … for our businesses… 

    … and for the British people. 

    That means building on our special relationship with the United States under President Trump. 

    The Prime Minister discussed the vital importance of growth with the President last weekend…  

    … and I look forward to working with the new Treasury Secretary, Scott Bessent… 

    … to deepen our economic relationship in the months and the years ahead. 

    Acting in our national interest also means resetting our relationship with the EU – our nearest and our largest trading partner – to drive growth and support business.  

    We are pragmatic about the challenges that we have inherited from the last government’s failed Brexit deal.  

    But we are also ambitious in our goals.  

    [redacted political content]

    … we will prioritise proposals that are consistent with our manifesto commitments… 

    … and which contribute to British growth and British prosperity… 

    … because that is what the national interest demands.  

    Our approach to trade also means building stronger relationships with fast-growing economies all around the world. 

    That is why I led a delegation to China for the first Economic and Financial Dialogue since 2019… 

    … alongside world-leading financial service businesses, including HSBC, Standard Chartered and Schroders…  

    … unlocking £600 million of tangible benefits for the UK economy. 

    And I am pleased to confirm that the Business and Trade Secretary will shortly visit India … 

    … to restart talks on the free trade agreement and bilateral investment treaty [redacted political content].  

    Our businesses can only realise these opportunities if they can recruit the skilled staff that they need. 

    So we are reforming our employment system to create a national jobs and careers service. 

    We have created Skills England to meet the skills of the next decade in sectors like construction and engineering.  

    And we will deliver fundamental reform of our welfare system.  

    That includes looking at areas that have been ducked for too long… 

    … like the rising cost of health and disability benefits… 

    … and the Secretary of State for Work and Pensions will set out our plans to address this ahead of the Spring Statement.  

    Next, the Immigration White Paper, that will bring forward concrete proposals to bring the overall levels of net migration down. 

    But we know that the UK is in an international competition for talent in vital growth sectors.    

    That is why last week, I set out plans for attracting global talent. 

    We will look at the visa routes for very highly skilled people…  

    … so the best people in the world choose the UK to live, work and create wealth… 

    … bringing jobs and investment to Britain. 

    To help businesses access the finance and support they need to grow…  

    … we have delivered significant reforms to provide greater flexibility for firms and founders to raise finance on UK capital markets, by rewriting the UK’s listing rules.  

    In my Mansion House speech, I announced a series of reforms to our pensions system…  

    … including the creation of larger, consolidated funds… 

    … which have much greater capacity to invest in high growth British companies at the scale that we need them to.  

    The consultation on these reforms is already complete and the final report will be published in the Spring. 

    Yesterday we confirmed that we have plans to go further, whilst always protecting the important role that pension funds play in the gilt market. 

    We will introduce new flexibilities for well-funded Defined Benefit schemes… 

    … to release surplus funds where it is safe to do so… 

    … generating even more investment into some of our fastest growing industries. 

    I know too that businesses are held back by a complex and unpredictable regulatory system… 

    … and that is a drag on investment and innovation. 

    We have already provided new growth-focused remits to our financial services regulators… 

    … we have announced a new interim Chair of the Competition and Markets Authority…  

    … and we have established the Regulatory Innovation Office, with an initial focus on synthetic biology, space, AI, and connected and autonomous vehicles.  

    But we need to go further and we need to go faster.  

    So earlier this month, I met the Heads of some of our largest regulators. 

    They have already provided a range of options to drive growth in their sectors… 

    … and proposals for how they can be more agile and responsive to businesses… 

    … and we will publish that final action plan in March to make regulation work much better for our economy. 

    To get Britain building again… 

    … we have delivered the most significant reforms to our planning system in a generation.  

    I have been genuinely shocked about how slow our planning system is. 

    By how long it takes to get things done.  

    Take the decision to build a solar farm in Cambridgeshire – a decision the Energy Secretary took only a few weeks into the job in July… 

    [redacted political content]

    The Deputy Prime Minister has already driven significant progress across government in addressing these issues.   

    My colleagues have determined 13 major planning decisions in just six months… 

    … including for airports, data centres and major housing developments.   

    We have significantly raised housing targets across our country and made them mandatory, so that we can build one-and-a-half million homes in this parliament.  

    We have reformed decades-old “green belt” policies, making it easier to build on the “grey belt” land around our major cities. 

    And we have opened up our planning system to build new infrastructure – like onshore wind farms or data centres driving the AI revolution. 

    Having listened closely to calls from business groups like the Institute of Directors… 

    … and businesses across our economy about the need to speed up infrastructure delivery… 

    … including Mace, Skanska and Arup who are here today… 

    … and members of our British Infrastructure Taskforce like Lloyds, Blackrock and Phoenix… 

    … we have now set out plans to go even further. 

    Last week we confirmed our priorities for the Planning and Infrastructure Bill … 

    … to rapidly streamline the process for determining applications… 

    … to make the consultation process far less burdensome… 

    … and to fundamentally reform our approach to environmental regulation. 

    The problems in our economy… 

    … the lack of bold reform that we have seen over decades… 

    … can be summed up by a £100 million bat tunnel built for HS2… 

    … the type of decision that has made delivering major infrastructure in our country far too expensive and far too slow. 

    So we are reducing the environmental requirements placed on developers when they pay into the nature restoration fund that we have created… 

    …so they can focus on getting things built, and stop worrying about bats and newts.  

    And to build our new infrastructure like nuclear power plants, trainlines and windfarms more quickly… 

    … we are changing the rules to stop blockers getting in the way of development… 

    … through excessive use of Judicial Review. 

    This Bill, the Planning and Infrastructure Bill, is a priority for this government. 

    It will be introduced in the Spring… 

    … and we will work tirelessly in parliament to ensure its smooth, and speedy and rapid delivery.  

    By providing a foundation of economic stability… 

    … and by delivering the reforms needed to make it easier for businesses to succeed and grow… 

    … we will create the right conditions to increase investment in our economy – the final key element of our strategy. 

    Investment and innovation go hand in hand.  

    I want to see the sounds and the sights of the future arriving.    

    Delivered by amazing businesses like Wayve and Oxford Nanopore. 

    They are the future. 

    And Britain should be the best place in the world to be an entrepreneur. 

    That is why we protected funding for research and development… 

    … and it is why one of the first decisions I made as Chancellor… 

    … was to extend the Enterprise Investment Scheme and the Venture Capital Trust schemes for a further 10 years… 

    … to get more investment into new companies, driving their innovation and growth.  

    I am determined to make Britain the best place in the world to invest.  

    That was my message in Davos last week.  

    That ambition demands action. 

    The International Investment Summit that we hosted in October delivered £63 billion of investment right across our country… 

    … from Iberdrola doubling its investment in clean energy in places like Suffolk… 

    … Blackstone investing £10 billion in a data centre in Northumberland… 

    … and Eren Holdings investing £1 billion in advanced manufacturing in North Wales.  

    While the lifeblood of growth is business investment, a strategic state has a crucial role to play. 

    That is why we established the National Wealth Fund… 

    … to create that partnership between business, private investors and government to invest in the industries of the future…  

    … like clean energy. 

    Today I can announce two further investments by the National Wealth Fund. 

    First, a £65 million investment for Connected Kerb, to expand their electric vehicle charging network across the UK. 

    And second, a £28 million equity investment in Cornish Metals… 

    … providing the raw materials to be used in solar panels, wind turbines and electric vehicles… 

    … supporting growth and jobs in the South-West of England.  

    There is no trade-off between economic growth and net zero. 

    Quite the opposite. 

    Net zero is the industrial opportunity of the 21st century, and Britain must lead the way. 

    That is why we will publish a refreshed Carbon Budget Delivery Plan later this year, which alongside the Spending Review, will set out our plans to deliver Carbon Budget 6. 

    Today, I can also announce that we are removing barriers to deliver 16 gigawatts of offshore wind…   

    … by designating new Marine Protected Areas to enable the development of this technology in areas like East Anglia and Yorkshire… 

    … crowding in up to £30 billion of investment in homegrown clean power. 

    And there’s more. 

    Our industrial and manufacturing base, brilliantly represented by Make UK, have been banging their heads against the wall for years at the lack of a proper industrial strategy from government. 

    That is why we have launched our modern industrial strategy… 

    … to drive investment into the industries that will define our success in the years ahead. 

    We have already provided funding to unlock investment in sectors like aerospace, automotives and life sciences… 

    … and we have set out reforms to boost financial services, the AI sector and creative industries. 

    We are not wasting any time, and we will move forward with the next stages of the Industrial Strategy ahead of its publication in the Spring.  

    We will work with the private sector to deliver the infrastructure that our country desperately needs.  

    This includes the Lower Thames Crossing, which will improve connectivity at Port of Tilbury and Dover, London Gateway and Medway… 

    … alleviating severe congestion… 

    … as goods destined for export come from the North, and the Midlands and across the country to markets overseas.   

    To drive growth and deliver value for money for taxpayers, we are exploring options to privately finance this important project.  

    And we have changed course on public investment, too… 

    … with a new Investment Rule to ensure that we don’t just count the costs of investment – we count the benefits too.    

    We are now investing 2.6% of GDP on average over the next five years, compared to 1.9% planned by the previous government..  

    … delivering an additional £100 billion of growth-enhancing capital spending… 

    … which catalyses private sector investment… 

    … in more housing… 

    … better transport links… 

    … and clean energy.  

    These are significant steps in just six months… 

    … and we are seeing some encouraging signs in the British economy. 

    The IMF have upgraded our growth prospects for 2025… 

    … the only G7 country outside the US to see this happen.  

    This gives us the fastest growth of any major European economy this year.  

    And a global survey of CEOs by PWC, has shown Britain is now the second most attractive country in the world for businesses looking to invest.  

    The first time the UK has been in that position for 28 years.  

    This is all welcome news.  

    But there is still more that we can and will do.  

    I am not satisfied with the position we are in. 

    While we have huge amounts of potential, the structural problems in our economy run deep. 

    And the low growth of the last 14 years cannot just be turned around overnight. 

    This has to be our focus for the duration of the parliament.  

    Because the situation demands us to do more. 

    And today I will go further and faster in kickstarting economic growth. 

    Our mission to grow our economy is about raising living standards in every single part of the United Kingdom.  

    Manchester is home to the UK’s fastest growing tech sector.  

    Leeds is one of the largest financial services centres outside of London.  

    These great northern cities have so much potential and promise… 

    …which our brilliant metro mayors, Andy Burnham and Tracy Brabin, are working hard to realise…  

    … just like our other metro mayors are doing to deliver new opportunities in their areas.  

    And there is so much more that government can do to support our city regions.    

    To achieve this requires greater focus on two key areas: infrastructure and investment.  

    If we can improve connectivity between towns and cities across the North of England, we can unlock their true growth potential… 

    … by making it easier for people to live, travel and work across the area.  

    At the Budget, I set out funding for the Transpennine Route Upgrade… 

    … a multi-billion-pound programme of improvements that will connect towns and cities from Manchester to York via Stalybridge, Leeds and Huddersfield. 

    We are delivering railway schemes to improve journeys for people across the North… 

    … including upgrades at Bradford Forster Square and by electrifying the Wigan-Bolton line. 

    We have committed to supporting the delivery of a new mass transit system in West Yorkshire.  

    And in Spring, we will publish the Spending Review and a 10-Year Infrastructure Strategy… 

    … which will set out further detail of our plans for infrastructure right across the UK. 

    New transport infrastructure can also act as a catalyst for new housing. 

    We have already seen the benefits that unlocking untapped land around stations can deliver in places like Stockport… 

    … where joint work spearheaded by Andy Burnham and council leaders has delivered new housing and wider commercial opportunities. 

    We will introduce a new approach to planning decisions on land around stations, changing the default answer to yes. 

    We are working with the devolved governments to ensure the benefits of growth can be felt across Scotland, Wales and Northern Ireland… 

    … including by partnering with them on the Industrial Strategy to support their considerable sectoral strengths. 

    And in December, I met with Metro Mayors from across England.  

    They told me that more opportunities for investment are vital if their local economies are to grow in the years ahead. 

    We are listening closely to them. 

    As the Metro Mayor of Liverpool, Steve Rotherham, has called for… 

    … we will review the Green Book and how it is being used to provide objective, transparent advice on public investment across the country, including outside London and the Southeast.  

    This means that investment in all regions is given a fair hearing by the Treasury that I lead. 

    The Office for Investment is going to be working hand in hand with local areas… 

    … to develop a commercially attractive pipeline of investment opportunities for a global audience… 

    … starting with the Liverpool City Region and the North East Combined Authority, led by Kim McGuinness. 

    The National Wealth Fund is establishing strategic partnerships to provide deeper, more focused support for city regions, starting in Glasgow, West Yorkshire, the West Midlands, and Greater Manchester. 

    We are supporting key investment opportunities across the UK. 

    The government is backing Andy Burnham’s plans for the redevelopment of Old Trafford, which promises to create new housing and commercial development around a new stadium… 

    … to drive regeneration and growth in the area. 

    We are moving forward with the Wrexham and Flintshire Investment Zone… 

    … focusing on the area’s strengths in advanced manufacturing… 

    … backed by major businesses like Airbus and JCB… 

    … to leverage £1 billion of private investment in the next ten years… 

    … creating up to 6,000 jobs. 

    [redacted political content]

    So I can announce today that we will work with Doncaster Council and the Mayor of South Yorkshire, Oliver Coppard… 

    … to support their efforts to recreate South Yorkshire Airport City as a thriving regional airport.  

    And finally, I am pleased to announce a partnership between Prologis and Manchester Airport Group in the East Midlands, where the Metro Mayor Claire Ward is doing an excellent job growing the local economy there. 

    Prologis and MAG will work together to build a new advanced manufacturing and logistics park at East Midlands Airport … 

    … unlocking up to £1 billion of investment and 2,000 jobs at the site… 

    … a major investment from a global business into our country… 

    … representing a huge vote of confidence in the East Midlands and in the UK. 

    This is just the start of our work to get more investment into every nation and region of Britain. 

    Next, I want to set out further detail for plans for the area we are in today.  

    Oxford and Cambridge offer huge potential for our nation’s growth prospects. 

    Only 66 miles apart… 

    … these cities are home to two of the best universities in the world… 

    … and the area is a hub for globally renowned science and technology firms. 

    This area has the potential to be Europe’s Silicon Valley.  

    To make that a reality, we need a systematic approach to attract businesses to come here and to grow here. 

    At the moment, it takes over two and a half hours to travel between Oxford and Cambridge by train.  

    There is no way to commute directly by rail from places like Bedford and Milton Keynes to Cambridge. 

    And there is a lack of affordable housing right across the region.  

    In other words, the demand is there… 

    … but there are far too many supply side constraints on economic growth here.  

    We are going to fix that.  

    The Ox Cam arc was initially launched in 2003 – over 20 years ago.  

    [redacted political content]

    We are not prepared to miss out on the opportunities here any longer.  

    So working with the Deputy Prime Minister… 

    … who is already driving forward vital work in the region…  

    … we are going further and faster to unlock the potential of the Oxford-Cambridge Growth Corridor.   

    First, we are funding the transport links needed to make the Oxford Cambridge growth corridor a success… 

    … including East-West Rail, with new services between Oxford and Milton Keynes starting this year… 

    … and road upgrades to reduce journey times between Milton Keynes and Cambridge. 

    East West Rail will also support vibrant new and expanded communities along the route. 

    We have already received proposals for New Towns along the new railway… 

    … with 18 submissions for sizeable new developments. 

    At Tempsford – the nexus of the East Coast Mainline, the A1 and East West Rail… 

    …we will move quicker to deliver a mainline station, meaning journey times to London of under an hour…  

    … and to Cambridge in under 30 minutes when East West Rail is operational. 

     Second, we are ensuring that the area has the right infrastructure and public services in place to support the growth corridor as it expands. 

    A new Cambridge Cancer Research Hospital is being prioritised for investment as part of wave 1 of the New Hospital Programme.  

    Water infrastructure has also been a major hindrance to development. 

    So we have now agreed water resources management plans, unlocking £7.9 billion of investment in the next 5 years…  

    …including plans for the new Fens Reservoir serving Cambridge and the South East Strategic Reservoir near Oxford.  

    And I can confirm today that the Environment Agency have now lifted their objections to new development in Cambridge, following this government’s intervention to address water scarcity… 

    … which means 4,500 additional homes, new schools, and new office, retail and laboratory space can be built.  

    Third, I am delighted that Cambridge University have come forward with plans for a new flagship innovation hub at the centre of Cambridge… 

    … to attract global investment and foster a community that catalyses innovation, as other cities around the world like Boston and Paris have done.  

    Just yesterday, Moderna completed the build for their new vaccine production and R&D site in Harwell, right here in Oxfordshire, alongside a commitment to invest a further £1 billion in the UK.  

    And we are creating a new AI Growth Zone in Culham to speed up planning approvals for the rapid build-out of data centres.  

    And finally, to take this project forward at real pace… 

    … and catalyse private sector investment into the region… 

    … I am pleased to announce that the Deputy Prime Minister and I have asked Lord Patrick Vallance to be the champion for the Oxford Cambridge Growth Corridor.  

    Lord Vallance has extensive experience across the sciences, academia, and government. 

    He will work with local leaders and with the Housing and Planning Minister to deliver this exciting project… 

    … including with Peter Freeman, who is already doing excellent work in Cambridge… 

    … and a new Growth Commission for Oxford, which will help to accelerate growth in the city and its surrounding area.   

    This is the government’s modern Industrial Strategy in action. 

    With central government, local leaders and business working together… 

    … the Oxford and Cambridge Growth Corridor could add up to £78 billion to the UK economy by 2035 … 

    … driving investment, innovation and growth. 

    Finally, I come to the decision that perhaps more than any other… 

    … has been delayed… 

    … has been avoided… 

    … has been ducked. 

    The question of whether to give Heathrow … 

    … our only hub airport… 

    … a third runway… 

    … has run on for decades. 

    The last full length runway in Britain was built in the 1940s. 

    No progress in eighty years.  

    Why is this so damaging?  

    It’s because Heathrow is at the heart of the UK’s openness as a country.   

    It connects us to emerging markets all over the world, opening up new opportunities for growth. 

    Around three-quarters of all long-haul flights in the UK go from Heathrow. 

    Over 60% of UK air freight comes through Heathrow. 

    And about 15 million business travellers used Heathrow in 2023. 

    But for decades, its growth has been constrained.  

    Successive studies have shown that this really matters for our economy. 

    According to the most recent study from Frontier Economics, a third runway could increase potential GDP by 0.43% by 2050. 

    Over half – 60% of that boost, would go to areas outside London and the South-East. 

    … increasing trade opportunities for products like Scotch whiskey and Scottish salmon – already two of the biggest British exports out of Heathrow.  

    And a third runway could create over 100,000 jobs. 

    For international investors, persistent delays have cast doubt about our seriousness towards improving our economic prospects. 

    Business groups, like the CBI, the Federation of Small Businesses and the Chambers of Commerce right across the UK… 

    …as well trade unions like GMB and Unite are clear… 

    … a third runway is badly needed. 

    In 2018, the previous government steered its Airports National Policy Statement through parliament.  

    But no action was taken. 

    It simply sat on the shelf. 

    We are taking a totally different approach to airport expansion.  

    This Government has already given its support to expansion at City Airport and at Stansted.  

    And there are two live decisions on Luton and Gatwick which will be made by the Transport Secretary shortly.  

    But as our only hub airport, Heathrow is in a unique position – and we cannot duck the decision any longer.   

    I have always been clear that a third runway at Heathrow would unlock further growth… 

    … boost investment… 

    … increase exports… 

    … and make the UK more open and more connected.   

    And now, the case is stronger than ever… 

    … because our reforms to the economy… 

    … like speeding up the planning system… 

    … and our plans for modernised UK airspace…  

    … mean the delivery of this project is set up for success.  

    So I can confirm today that this Government supports a third runway at Heathrow… 

    … and is inviting proposals to be brought forward by the summer.  

    We will then take forward a full assessment through the Airport National Policy Statement. 

    That will ensure that the project is value for money – and our clear expectation is that any associated surface transport costs will be financed through private funding. 

    And it will ensure that a third runway is delivered in line with our legal, environmental and climate obligations.  

    Heathrow themselves are clear that their proposal for expansion will meet strict rules on noise, air quality and carbon emissions. 

    And we are already making great strides in transitioning to cleaner and greener aviation.  

    Sustainable Aviation Fuel reduces CO2 emissions compared to fossil fuel by around 70%. 

    At the start of this month, the Sustainable Aviation Fuel mandate became law.  

    And today I can announce that we are investing £63 million into the Advanced Fuels Fund over the next year… 

    … and we have today set out the details of how we will deliver a Revenue Certainty Mechanism to encourage investment into this growing industry. 

    These measures will encourage more investors to back production in the UK, bringing good, high-skilled jobs to areas like Teesside… 

    … demonstrating that investment in the right technology can help us deliver both our growth and our clean energy missions. 

    Now is the moment to grasp the opportunity in front of us. 

    By backing a third runway at Heathrow, we can make Britain the world’s best connected place to do business. 

    That is what it takes to make bold decisions in the national interest. 

    That is what I mean by going further and faster to kickstart economic growth. 

    The work of change has begun.  

    We have already made great progress.  

    But I am not satisfied.  

    And I know that there is more to be done.  

    We must go further and faster if we are to build a brighter future.  

    The prize on offer is immense.  

    The next generation with more opportunities than the last. 

    An engineer in Teesside, working in some of the most exciting industries of the future – from carbon capture to sustainable aviation fuel. 

    A scientist in Milton Keynes or Bedford, working in our life sciences industry to solve some of the most important medical challenges in the world.  

    A small business owner in Scotland, knowing that they can expand and export to new markets right across the globe.   

    Wealth created, and wealth shared, in every part of Britain.    

    This is a Government on the side of working people. 

    Taking the right decisions to secure their future, to secure our future. 

    Stepping up to the challenges we face. 

    Ending the era of low expectations. 

    Putting Britain on a different path. 

    Delivering for the British people. 

    And I am determined, this Government is determined, to do just that.  

    Thank you.

    Updates to this page

    Published 29 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI: CALIFORNIA BANCORP REPORTS NET INCOME OF $16.8 MILLION FOR THE FOURTH QUARTER AND $5.4 MILLION FOR THE FULL YEAR OF 2024

    Source: GlobeNewswire (MIL-OSI)

    San Diego, Calif., Jan. 29, 2025 (GLOBE NEWSWIRE) — California BanCorp (“us,” “we,” “our,” or the “Company”) (NASDAQ: BCAL), the holding company for California Bank of Commerce, N.A. (the “Bank”) announces its consolidated financial results for the fourth quarter and full year of 2024.

    The Company reported net income of $16.8 million, or $0.51 per diluted share, for the fourth quarter of 2024, compared to a net loss of $16.5 million, or $0.59 per diluted share for the third quarter of 2024, and net income of $4.4 million, or $0.24 per diluted share for the fourth quarter of 2023. The Company reported net income of $5.4 million, or $0.22 per diluted share, for the full year of 2024, compared to net income of $25.9 million, or $1.39 per diluted share for the full year of 2023.

    “I’m pleased to report our strong fourth quarter earnings of $16.8 million, the result of a full quarter of combined operations after our July 31, 2024, merger close,” said David Rainer, Executive Chairman of the Company and Bank. “We continue to derisk our consolidated balance sheet and are making significant headway in reducing our exposure in the Sponsor Finance portfolio. Additionally, we are rapidly reducing our reliance on brokered deposits, which despite the reduction of the high-yielding Sponsor Finance product, has allowed us to maintain a consistent, strong net interest margin. We are focused on building tangible book value, which increased to $11.71 in the fourth quarter, up $0.43 from the prior quarter, and up $0.79 in the five months since the merger close. While we are pleased to report these strong financial results, we, along with all our fellow Southern California residents, have been through a very difficult period due to the recent wildfires and we are working with all our constituents to assist them in any way we can.”

    “On behalf of the Company and the Bank, I want to express our condolences to all our neighbors, clients and employees that have been affected by the recent Southern California wildfires,” said Steven Shelton, CEO of the Company and the Bank. “You are in our thoughts and prayers and will remain so as we work to rebuild and recover going forward. Except for the one-day closure of one branch as a precautionary measure for the safety of our employees, I’m pleased to report there were no other disruptions to our operations and all other offices remained open. We are fortunate to report that the fires are expected to have a minimal impact on our loan portfolio, and we continue to focus on providing outstanding service to our combined client base throughout California, and on building shareholder value.”

    Fourth Quarter 2024 Highlights

    • Net income of $16.8 million or $0.51 diluted earnings per share for the fourth quarter; adjusted net income (non-GAAP1) was $17.2 million or $0.53 per share for the fourth quarter.
    • Net interest margin of 4.61%, compared with 4.43% in the prior quarter; average total loan yield of 6.84% compared with 6.79% in the prior quarter.
    • Reversal of provision for credit losses of $3.8 million for the fourth quarter, compared with a provision for credit losses of $23.0 million for the prior quarter, of which $21.3 million was due to the day one provision for credit losses on non-purchased credit deteriorated (“non-PCD”) loans and unfunded loan commitments related to the merger with California BanCorp (the “Merger”).
    • Return on average assets of 1.60%, compared with (1.82)% in the prior quarter.
    • Return on average common equity of 13.21%, compared with (15.28)% in the prior quarter.
    • Efficiency ratio (non-GAAP1) of 57.4% compared with 98.9% in the prior quarter; excluding Merger related expenses the efficiency ratio was 55.9%, compared with 60.5% in the prior quarter.
    • Tangible book value per common share (“TBV”) (non-GAAP1) of $11.71 at December 31, 2024, up $0.43 from $11.28 at September 30, 2024.
    • Total assets of $4.03 billion at December 31, 2024, compared with $4.36 billion at September 30, 2024.
    • Total loans, including loans held for sale of $3.16 billion at December 31, 2024, compared with $3.23 billion at September 30, 2024.
    • Nonperforming assets to total assets ratio of 0.76% at December 31, 2024, compared with 0.68% at September 30, 2024.
    • Allowance for credit losses (“ACL”) was 1.71% of total loans held for investment at December 31, 2024; allowance for loan losses (“ALL”) was 1.61% of total loans held for investment at December 31, 2024.
    • Total deposits of $3.40 billion at December 31, 2024, decreased $342.2 million or 9.1% compared with $3.74 billion at September 30, 2024.
    • Noninterest-bearing demand deposits of $1.26 billion at December 31, 2024, a decrease of $111.3 million or 8.1% from September 30, 2024; noninterest bearing deposits represented 37.0% of total deposits, compared with $1.37 billion, or 36.6% of total deposits at September 30, 2024.
    • Total brokered deposits of $121.1 million, a decrease of $101.5 million from September 30, 2024.
    • Cost of deposits was 1.87%, compared with 2.09% in the prior quarter.
    • Cost of funds was 1.99%, compared with 2.19% in the prior quarter.
    • The Company’s preliminary capital exceeds minimums required to be “well-capitalized,” the highest regulatory capital category.

    Full Year 2024 Highlights

    • Merger closed on July 31, 2024, whereby predecessor California BanCorp (“CALB”) merged with and into the Company and California Bank of Commerce merged with and into the Bank. CALB had total loans of $1.43 billion, total assets of $1.91 billion, and total deposits of $1.64 billion. The Merger created a bank holding company with approximately $4.25 billion in assets and 14 branches across California, with approximately 300 employees serving our communities. Total aggregate consideration paid for the Merger was approximately $216.6 million and resulted in approximately $74.7 million of preliminary goodwill, subject to adjustment in accordance with ASC 805.
    • Net income of $5.4 million, down $20.5 million, or 79.0% from the prior year largely due to the after-tax one-time day one provision for credit losses related to non-PCD loans and unfunded loan commitments of $15.0 million and merger related expenses of $12.0 million; adjusted net income (non-GAAP1) was $32.4 million or $1.32 per share for the year.
    • Diluted earnings per share of $0.22, down $1.17, or 84.2% from the prior year.
    • Total loan interest income increased to $160.0 million, up $46.0 million or 40.4% from the prior year largely due to the Merger.
    • Net interest margin of 4.28% for 2024, compared with 4.33% in the prior year; average loan yield was 6.55%, up from 5.94% in the prior year.
    • Efficiency ratio (non-GAAP1) of 76.6%, compared to 61.3% in the prior year; excluding merger related expenses the efficiency ratio was 63.8%, compared with 61.3% in the prior year.
    • Provision for credit losses of $21.7 million, of which $21.3 million was due to the day one provision for credit losses on non-PCD loans and unfunded loan commitments in connection with the Merger, compared to $915 thousand for the year ended December 31, 2023.
    • Total assets of $4.03 billion, up $1.7 billion or 70.8% from December 31, 2023, largely due to the Merger.
    • Total loans, including loans held for sale, increased to $3.16 billion, up $1.2 billion from December 31, 2023, largely due to the Merger, with the fair value of the acquired loans totaling $1.36 billion.
    • Total deposits of $3.40 billion, up $1.46 billion from December 31, 2023, largely due to the $1.64 billion of deposits acquired in the Merger.
    • Noninterest-bearing demand deposits were $1.26 billion, representing 37.0% of total deposits, compared to $675.1 million, or 34.7% of total deposits at December 31, 2023.
    • Cost of deposits was 2.01%, up from 1.37% in the prior year.
    • Tangible book value per common share (“TBV”) (non-GAAP1) of $11.71 at December 31, 2024, down $1.85 from December 31, 2023.

    Fourth Quarter Operating Results

    Net Income

    Net income for the fourth quarter of 2024 was $16.8 million, or $0.51 per diluted share, compared with a net loss of $16.5 million, or a loss of $0.59 per diluted share in the third quarter of 2024. Our third quarter results were negatively impacted by a day one $15.0 million after-tax current expected credit losses (“CECL”)-related provision for credit losses on non-PCD loans and unfunded loan commitments related to the merger, or $0.54 loss per diluted share, and $10.6 million of after-tax merger expenses, or $0.38 loss per diluted share. Pre-tax, pre-provision income (non-GAAP1) for the fourth quarter was $19.4 million, an increase of $19.0 million from the prior quarter. Excluding the merger and related expenses, the adjusted pre-tax, pre-provision income (non-GAAP1) for the fourth quarter was $20.1 million, an increase of $5.0 million from the prior quarter. The net income and diluted earnings per share increases for all of the periods presented were largely driven by the Merger and the operating results since the closing date of the Merger.

    Net Interest Income and Net Interest Margin

    Net interest income for the fourth quarter of 2024 was $44.5 million, compared with $36.9 million in the prior quarter. The increase in net interest income was primarily due to an $8.4 million increase in total interest and dividend income, partially offset by an $832 thousand increase in total interest expense in the fourth quarter of 2024, as compared to the prior quarter. During the fourth quarter of 2024, loan interest income increased $7.3 million, of which $6.1 million was related to accretion income from the net purchase accounting discounts on acquired loans, total debt securities income increased $10 thousand, and interest and dividend income from other financial institutions increased $1.2 million. The increase in interest income was mainly due to reporting a full quarter of combined operations for the fourth quarter of 2024 and primarily driven by the mix of interest-earning assets added by the Merger and the impact of the accretion and amortization of fair value interest rate marks. Average total interest-earning assets increased $526.5 million in the fourth quarter of 2024, the result of a $401.3 million increase in average total loans, a $260.4 million increase in average deposits in other financial institutions and a $5.8 million increase in average restricted stock investments and other bank stock, partially offset by a $1.3 million decrease in average total debt securities and a $139.8 million decrease in average Fed funds sold/resale agreements. The increase in interest expense for the fourth quarter of 2024 was primarily due to a $466 thousand increase in interest expense on interest-bearing deposits, the result of a $217.9 million increase in average interest-bearing deposits, coupled with a $17.2 million increase in average subordinated debt, partially offset by a 22 basis point decrease in average interest-bearing deposit costs, and a $9 thousand decrease in interest expense on Federal Home Loan Bank (“FHLB”) borrowings, the result of a $611 thousand decrease in average FHLB borrowings in the fourth quarter of 2024.

    Net interest margin for the fourth quarter of 2024 was 4.61%, compared with 4.43% in the prior quarter. The increase was primarily related to a 20 basis point decrease in the cost of funds, partially offset by a one basis point decrease in the total interest-earning assets yield. The yield on total average interest-earning assets in the fourth quarter of 2024 was 6.48%, compared with 6.49% in the prior quarter. The yield on average total loans in the fourth quarter of 2024 was 6.84%, an increase of five basis points from 6.79% in the prior quarter. Accretion income from the net purchase accounting discounts on acquired loans was $6.1 million, increasing the yield on average total loans by 76 basis points; the net amortization expense from the purchase accounting discounts on acquired subordinated debt and acquired time deposits premium increased the interest expense by $467 thousand, the combination of which increased the net interest margin by 58 basis points in the fourth quarter of 2024.

    Cost of funds for the fourth quarter of 2024 was 1.99%, a decrease of 20 basis points from 2.19% in the prior quarter. The decrease was primarily driven by a 22 basis point decrease in the cost of average interest-bearing deposits, and an increase in average noninterest-bearing deposits, partially offset by an increase of 26 basis points in the cost of total borrowings, which was driven primarily by the amortization expense of $559 thousand from the purchase accounting discounts on acquired subordinated debt which increased the cost on total borrowing by 320 basis points. Average noninterest-bearing demand deposits increased $251.7 million to $1.28 billion and represented 36.3% of total average deposits for the fourth quarter of 2024, compared with $1.03 billion and 33.6%, respectively, in the prior quarter; average interest-bearing deposits increased $217.9 million to $2.26 billion during the fourth quarter of 2024. The total cost of deposits in the fourth quarter of 2024 was 1.87%, a decrease of 22 basis points from 2.09% in the prior quarter. The cost of total interest-bearing deposits decreased primarily due to the Company’s deposit repricing strategy and the ongoing pay off of high cost brokered deposits and California State certificates of deposit in the fourth quarter of 2024.

    Average total borrowings increased $16.6 million to $69.4 million in the fourth quarter of 2024, primarily due to an increase of $17.2 million in average subordinated debt acquired in the Merger, partially offset by a decrease of $611 thousand in average FHLB borrowings during the fourth quarter of 2024. The average cost of total borrowings was 7.97% for the fourth quarter of 2024, up from 7.71% in the prior quarter.

    (Reversal of) Provision for Credit Losses

    The Company recorded a reversal of provision for credit losses of $3.8 million in the fourth quarter of 2024, compared to a provision for credit losses of $23.0 million in the prior quarter. The decrease was largely related to the third quarter provision for credit losses including the effects of the Merger, and the resulting one-time initial provision for credit losses on acquired non-PCD loans of $18.5 million and unfunded loan commitments of $2.7 million. Total net charge-offs were $154.0 thousand in the fourth quarter of 2024, which included $103 thousand from an acquired consumer solar loan portfolio and $51 thousand from a commercial real-estate loan. The provision for credit losses in the fourth quarter of 2024 included a $1.0 million reversal of provision for unfunded loan commitments related to the decrease in unfunded loan commitments during the fourth quarter of 2024, coupled with lower loss rates, offset by higher average funding rates used to estimate the allowance for credit losses on unfunded commitments. Total unfunded loan commitments decreased $108.6 million to $925.3 million at December 31, 2024, compared to $1.03 billion in unfunded loan commitments at September 30, 2024.

    The reversal of provision for credit losses for loans held for investment in the fourth quarter of 2024 was $2.9 million, a decrease of $22.6 million for the fourth quarter of 2024 from a provision for credit losses of $19.7 million in the prior quarter. The decrease was driven primarily by the third quarter amount including the one-time initial provision for credit losses on acquired non-PCD loans and decreases in legacy special mention loans and loans held for investment. Additionally, qualitative factors, coupled with changes in the portfolio mix and in the reasonable and supportable forecast, primarily related to the economic outlook for California, which were partially offset by an increase in legacy substandard accruing loans, were factors related to the decrease in the provision for credit losses. The Company’s management continues to monitor macroeconomic variables related to increasing interest rates, inflation and the concerns of an economic downturn, and believes it has appropriately provisioned for the current environment.

    Noninterest Income

    The Company recorded noninterest income of $1.0 million in the fourth quarter of 2024, a decrease of $170 thousand compared to $1.2 million in the third quarter of 2024. The Company reported a loss on sale of loans of $1.1 million, related to the sale of certain Sponsor Finance loans, in the fourth quarter of 2024, compared to a gain on sale of loans of $8 thousand in the prior quarter. There was no gain on SBA 7A loan sales in the third and fourth quarters of 2024. Bank owned life insurance income of $823 thousand in the fourth quarter of 2024 increased $425 thousand from the prior quarter. Service charges and fees on deposit accounts of $911 thousand in the fourth quarter of 2024 decreased $225 thousand from the prior quarter, related to the one-time waiver of analysis charges for certain deposit accounts in light of the core system conversion. Other charges and fees income increased to $208 thousand in the fourth quarter of 2024, compared to a loss of $450 thousand in the prior quarter, primarily related to a $614 thousand valuation allowance on other real estate owned (“OREO”) due to a decline in the fair value of the underlying property in the third quarter of 2024. No comparable valuation allowance on OREO was recorded in the fourth quarter of 2024.

    Noninterest Expense

    Total noninterest expense for the fourth quarter of 2024 was $26.1 million, a decrease of $11.6 million from total noninterest expense of $37.7 million in the prior quarter, which was largely due to the decrease in merger related expenses.

    Salaries and employee benefits increased $689 thousand during the quarter to $16.1 million. The increase in salaries and employee benefits was primarily related to the growth in headcount due to the Merger, partially offset by the third quarter amount including the one-time costs associated with non-continuing directors, executives and employees of $1.4 million. Merger and related expenses in connection with the Merger decreased $14.0 million during the quarter to $643 thousand. Data processing and communications of $2.0 million in the fourth quarter of 2024 increased by $424 thousand, due primarily to increases in transaction volume from both organic growth and the Merger. Intangible assets amortization of $1.1 million in the fourth quarter of 2024 increased by $373 thousand, due primarily to a full quarter of amortization of the core deposit intangible asset acquired in the Merger, compared with only two months of amortization of the asset in the prior quarter. Other expenses of $2.1 million in the fourth quarter of 2024 increased by $443 thousand, due primarily to higher loan related expenses, customer service related expenses, travel expenses and insurance expenses.

    Efficiency ratio (non-GAAP1) for the fourth quarter of 2024 was 57.4%, compared to 98.9% in the prior quarter. Excluding the merger and related expenses of $643 thousand and $14.6 million, the efficiency ratio (non-GAAP1) for the fourth and third quarters of 2024 would have been 55.9% and 60.5%, respectively.

    Income Tax

    In the fourth quarter of 2024, the Company’s income tax expense was $6.5 million, compared with a $6.1 million income tax benefit in the third quarter of 2024. The effective rate was 27.9% for the fourth quarter of 2024 and 26.9% for the third quarter of 2024. The increase in the effective tax rate for the fourth quarter of 2024 was primarily attributable to the impact of the non-tax deductible portion of the merger expenses and the vesting and exercise of equity awards combined with changes in the Company’s stock price over time, partially offset by the impact of the tax on the excess executive compensation.

    Balance Sheet

    Assets

    Total assets at December 31, 2024 were $4.03 billion, a decrease of $331.1 million or 7.6% from September 30, 2024. The decrease in total assets from the prior quarter was primarily related to a decrease in cash and cash equivalents of $226.3 million and a decrease in loans, including loans held for sale, of $77.1 million as compared to the prior quarter. These decreases primarily relate to the decreases in wholesale funding sources and the Sponsor Finance portfolio from loan sales and payoffs.

    Loans

    Total loans held for investment were $3.14 billion at December 31, 2024, a decrease of $60.5 million, compared to September 30, 2024, primarily the result of Sponsor Finance loans sales and loan payoffs in the amount of $90.8 million. During the fourth quarter of 2024, there were new originations of $128.5 million and net advances of $25.6 million, offset by loan sales and payoffs of $214.5 million, and the partial charge-off of loans in the amount of $154 thousand. Total loans secured by real estate decreased by $5.1 million, construction and land development loans decreased by $20.6 million, commercial real estate and other loans increased by $11.8 million, 1-4 family residential loans increased by $11.9 million and multifamily loans decreased by $8.1 million. Commercial and industrial loans decreased by $54.5 million, and consumer loans decreased by $1.0 million. The Company had $17.2 million in loans held for sale at December 31, 2024, compared to $33.7 million at September 30, 2024.

    Deposits

    Total deposits at December 31, 2024 were $3.40 billion, a decrease of $342.2 million from September 30, 2024. The decrease primarily consisted of $111.3 million noninterest-bearing demand deposits, $73.9 million interest-bearing non-maturity deposits, and $157.0 million time deposits. Noninterest-bearing demand deposits at December 31, 2024, were $1.26 billion, or 37.0% of total deposits, compared with $1.37 billion, or 36.6% of total deposits at September 30, 2024. At December 31, 2024, total interest-bearing deposits were $2.14 billion, compared to $2.37 billion at September 30, 2024. At December 31, 2024, total brokered time deposits were $121.1 million, compared to $222.6 million at September 30, 2024. The Company offers the Insured Cash Sweep (ICS) product, Certificate of Deposit Account Registry Service (CDARS), and Reich & Tang Deposit Solutions (R&T) network, all of which provide reciprocal deposit placement services to fully qualified large customer deposits for FDIC insurance among other participating banks. At December 31, 2024, total reciprocal deposits were $754.4 million, or 22.2% of total deposits at December 31, 2024, compared to $839.7 million , or 22.4% of total deposits at September 30, 2024.

    Federal Home Loan Bank (“FHLB”) and Liquidity

    At December 31, 2024 and September 30, 2024, the Company had no overnight FHLB borrowings. There were no outstanding Federal Reserve Discount Window borrowings at December 31, 2024 or September 30, 2024.

    At December 31, 2024, the Company had available borrowing capacity from an FHLB secured line of credit of approximately $753.9 million and available borrowing capacity from the Federal Reserve Discount Window of approximately $318.5 million. The Company also had available borrowing capacity from four unsecured credit lines from correspondent banks of approximately $90.5 million at December 31, 2024, with no outstanding borrowings. Total available borrowing capacity was $1.16 billion at December 31, 2024. Additionally, the Company had unpledged liquid securities at fair value of approximately $129.4 million and cash and cash equivalents of $388.2 million at December 31, 2024.

    Asset Quality

    Total non-performing assets increased slightly to $30.6 million, or 0.76% of total assets at December 31, 2024, compared with $29.8 million, or 0.68% of total assets at September 30, 2024.

    There were no loans downgraded to nonaccrual during the fourth quarter of 2024. Non-performing assets in the fourth quarter of 2024 included OREO, net of valuation allowance, of $4.1 million related to a multifamily building, the same balance as the prior quarter.

    Total non-performing loans increased slightly to $26.5 million, or 0.85% of total loans held for investment at December 31, 2024, compared with $25.7 million, or 0.80% of total loans held for investment at September 30, 2024.

    Special mention loans decreased by $24.1 million during the fourth quarter of 2024 to $69.3 million, including $25.5 million of non-PCD loans and $10.1 million of purchase credit deteriorated (“PCD”) loans, at December 31, 2024. The decrease in the special mention loans was due mostly to a $9.0 million payoff, $24.5 million in downgrades to substandard accruing loans and $8.4 million in upgrades to Pass loans, partially offset by $18.1 million in downgrades from Pass loans. Substandard loans increased by $13.6 million during the fourth quarter of 2024 to $117.9 million, including $11.0 million of non-PCD loans, $55.9 million PCD loans and $14.1 million nonaccrual PCD loans, at December 31, 2024. The increase in the substandard loans was due primarily to $29.8 million in downgrades and $2.9 million in net advances, partially offset by a $17.3 million in payoffs, $1.7 million in upgrades to Pass and $103 thousand in charge-offs.

    The Company had $150 thousand in consumer solar loans that were over 90 days past due and still accruing interest at December 31, 2024, compared to $37 thousand in such delinquencies at September 30, 2024.

    There were $12.2 million in loan delinquencies (30-89 days past due, excluding nonaccrual loans) at December 31, 2024, compared to $19.1 million in such loan delinquencies at September 30, 2024.

    The allowance for credit losses, which is comprised of the allowance for loan losses (“ALL”) and reserve for unfunded loan commitments, totaled $53.6 million at December 31, 2024, compared to $57.6 million at September 30, 2024. The $4.0 million decrease in the allowance for credit losses included a $2.9 million and $968 thousand reversal of provision for credit losses for the loan portfolio and reserve for unfunded loan commitments, respectively, partially offset by total net charge-offs of $145 thousand for the quarter ended December 31, 2024.

    The ALL was $50.5 million, or 1.61% of total loans held for investment at December 31, 2024, compared with $53.6 million, or 1.67% at September 30, 2024.

    Capital

    Tangible book value (non-GAAP1) per common share at December 31, 2024, was $11.71, compared with $11.28 at September 30, 2024. In the fourth quarter of 2024, tangible book value was primarily impacted by net income of $16.8 million for the fourth quarter, stock-based compensation expense, and an increase in net of tax unrealized losses on available-for-sale debt securities. Other comprehensive losses related to unrealized losses, net of taxes, on available-for-sale debt securities increased by $3.8 million to $6.6 million at December 31, 2024, from $2.9 million at September 30, 2024. The increase in the unrealized losses, net of taxes, on available-for-sale debt securities was attributable to non-credit related factors , including an increase in bond prices at the long end of the yield curve, even as the Federal Reserve decreased the Fed funds rate by 25 basis points in December 2024. Tangible common equity (non-GAAP1) as a percentage of total tangible assets (non-GAAP1) at December 31, 2024, increased to 9.69% from 8.58% in the prior quarter, and unrealized losses, net of taxes, on available-for-sale debt securities as a percentage of tangible common equity (non-GAAP1) at December 31, 2024 increased to 1.8% from 0.8% in the prior quarter.

    The Company’s preliminary capital exceeds minimums required to be “well-capitalized” at December 31, 2024.

    ABOUT CALIFORNIA BANCORP

    California BanCorp (NASDAQ: BCAL) is a registered bank holding company headquartered in San Diego, California. California Bank of Commerce, N.A., a national banking association chartered under the laws of the United States (the “Bank”) and regulated by the Office of Comptroller of the Currency, is a wholly owned subsidiary of California BanCorp. Established in 2001 and headquartered in San Diego, California, the Bank offers a range of financial products and services to individuals, professionals, and small to medium-sized businesses through its 14 branch offices and four loan production offices serving Northern and Southern California. The Bank’s solutions-driven, relationship-based approach to banking provides accessibility to decision makers and enhances value through strong partnerships with its clients. Additional information is available at www.bankcbc.com.

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    In addition to historical information, this release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and other matters that are not historical facts. Examples of forward-looking statements include, among others, statements regarding expectations, plans or objectives for future operations, products or services, loan recoveries, projections, expectations regarding the adequacy of reserves for credit losses and statements about the benefits of the Merger, as well as forecasts relating to financial and operating results or other measures of economic performance. Forward-looking statements reflect management’s current view about future events and involve risks and uncertainties that may cause actual results to differ from those expressed in the forward-looking statement or historical results. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and often include the words or phrases such as “aim,” “can,” “may,” “could,” “predict,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “hope,” “intend,” “plan,” “potential,” “project,” “will likely result,” “continue,” “seek,” “shall,” “possible,” “projection,” “optimistic,” and “outlook,” and variations of these words and similar expressions.

    Factors that could cause or contribute to results differing from those in or implied in the forward-looking statements include but are not limited to risk related to the Merger, including the risks that costs may be greater than anticipated, cost savings may be less than anticipated, and difficulties in retaining senior management, employees or customers, the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks, changes in real estate markets and valuations; the impact on financial markets from geopolitical conflicts; inflation, interest rate, market and monetary fluctuations and general economic conditions, either nationally or locally in the areas in which the Company conducts business; increases in competitive pressures among financial institutions and businesses offering similar products and services; general credit risks related to lending, including changes in the value of real estate or other collateral, the financial condition of borrowers, the effectiveness of our underwriting practices and the risk of fraud; higher than anticipated defaults in the Company’s loan portfolio; changes in management’s estimate of the adequacy of the allowance for credit losses or the factors the Company uses to determine the allowance for credit losses; changes in demand for loans and other products and services offered by the Company; the
    costs and outcomes of litigation; legislative or regulatory changes or changes in accounting principles, policies or guidelines and other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) and other documents the Company may file with the SEC from time to time.

    Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and other documents the Company files with the SEC from time to time.

    Any forward-looking statement made in this release is based only on information currently available to management and speaks only as of the date on which it is made. The Company does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements or to conform such forward-looking statements to actual results or to changes in its opinions or expectations, except as required by law.

    California BanCorp and Subsidiary
    Financial Highlights (Unaudited)

        At or for the
    Three Months Ended    		     At or for the
    Year Ended    		  
        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		     December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands except share and per share data)  
    EARNINGS      
    Net interest income   $ 44,541     $ 36,942     $ 22,559     $ 122,984     $ 94,138  
    (Reversal of) provision for credit losses   $ (3,835 )   $ 22,963     $ 824     $ 21,690     $ 915  
    Noninterest income (expense)   $ 1,004     $ 1,174     $ (102 )   $ 4,760     $ 3,379  
    Noninterest expense   $ 26,125     $ 37,680     $ 15,339     $ 97,791     $ 59,746  
    Income tax expense (benefit)   $ 6,483     $ (6,063 )   $ 1,882     $ 2,830     $ 10,946  
    Net income (loss)   $ 16,772     $ (16,464 )   $ 4,412     $ 5,433     $ 25,910  
    Pre-tax pre-provision income (1)   $ 19,420     $ 436     $ 7,118     $ 29,953     $ 37,771  
    Adjusted pre-tax pre-provision income (1)   $ 20,063     $ 15,041     $ 7,118     $ 46,241     $ 37,771  
    Diluted earnings (loss) per share   $ 0.51     $ (0.59 )   $ 0.24     $ 0.22     $ 1.39  
    Shares outstanding at period end     32,265,935       32,142,427       18,369,115       32,265,935       18,369,115  
                                             
    PERFORMANCE RATIOS                                        
    Return on average assets     1.60 %     (1.82 )%     0.75 %     0.18 %     1.12 %
    Adjusted return on average assets (1)     1.64 %     1.01 %     0.75 %     1.05 %     1.12 %
    Return on average common equity     13.21 %     (15.28 )%     6.21 %     1.43 %     9.48 %
    Adjusted return on average common equity (1)     13.57 %     8.44 %     6.21 %     8.53 %     9.48 %
    Yield on total loans     6.84 %     6.79 %     6.08 %     6.55 %     5.94 %
    Yield on interest earning assets     6.48 %     6.49 %     5.85 %     6.26 %     5.69 %
    Cost of deposits     1.87 %     2.09 %     1.81 %     2.01 %     1.37 %
    Cost of funds     1.99 %     2.19 %     1.95 %     2.12 %     1.46 %
    Net interest margin     4.61 %     4.43 %     4.05 %     4.28 %     4.33 %
    Efficiency ratio (1)     57.36 %     98.86 %     68.30 %     76.55 %     61.27 %
    Adjusted efficiency ratio (1)     55.95 %     60.54 %     68.30 %     63.80 %     61.27 %
        As of  
        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		  
        ($ in thousands except share and per share data)  
    CAPITAL      
    Tangible equity to tangible assets (1)     9.69 %     8.58 %     10.73 %
    Book value (BV) per common share   $ 15.86     $ 15.50     $ 15.69  
    Tangible BV per common share (1)   $ 11.71     $ 11.28     $ 13.56  
                             
    ASSET QUALITY                        
    Allowance for loan losses (ALL)   $ 50,540     $ 53,552     $ 22,569  
    Reserve for unfunded loan commitments   $ 3,103     $ 4,071     $ 933  
    Allowance for credit losses (ACL)   $ 53,643     $ 57,623     $ 23,502  
    Allowance for loan losses to nonperforming loans     1.90 x     2.08 x     1.74 x
    ALL to total loans held for investment     1.61 %     1.67 %     1.15 %
    ACL to total loans held for investment     1.71 %     1.80 %     1.20 %
    30-89 days past due, excluding nonaccrual loans   $ 12,232     $ 19,110     $ 19  
    Over 90 days past due, excluding nonaccrual loans   $ 150     $ 37     $ —  
    Special mention loans   $ 69,339     $ 93,448     $ 2,996  
    Special mention loans to total loans held for investment     2.21 %     2.92 %     0.15 %
    Substandard loans   $ 117,926     $ 104,298     $ 19,502  
    Substandard loans to total loans held for investment     3.76 %     3.26 %     1.00 %
    Nonperforming loans   $ 26,536     $ 25,698     $ 13,004  
    Nonperforming loans to total loans held for investment     0.85 %     0.80 %     0.66 %
    Other real estate owned, net   $ 4,083     $ 4,083     $ —  
    Nonperforming assets   $ 30,619     $ 29,781     $ 13,004  
    Nonperforming assets to total assets     0.76 %     0.68 %     0.55 %
                             
    END OF PERIOD BALANCES                        
    Total loans, including loans held for sale   $ 3,156,345     $ 3,233,418     $ 1,964,791  
    Total assets   $ 4,031,654     $ 4,362,767     $ 2,360,252  
    Deposits   $ 3,398,760     $ 3,740,915     $ 1,943,556  
    Loans to deposits     92.9 %     86.4 %     101.1 %
    Shareholders’ equity   $ 511,836     $ 498,064     $ 288,152  
    (1 ) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.

    California BanCorp and Subsidiary
    Financial Highlights (Unaudited)

        At or for the
    Three Months Ended    		     At or for the
    Year Ended    		  
    ALLOWANCE for CREDIT LOSSES   December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		     December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands)  
    Allowance for loan losses                                        
    Balance at beginning of period   $ 53,552     $ 23,788     $ 22,705     $ 22,569     $ 17,099  
    Adoption of ASU 2016-13 (1)     —       —       —       —       5,027  
    Initial Allowance for PCD loans     —       11,216       —       11,216       —  
    (Reversal of) provision for credit losses (2)     (2,867 )     19,711       1,131       19,520       1,731  
    Charge-offs     (154 )     (1,163 )     (1,267 )     (2,774 )     (1,303 )
    Recoveries     9       —       —       9       15  
    Net charge-offs     (145 )     (1,163 )     (1,267 )     (2,765 )     (1,288 )
    Balance, end of period   $ 50,540     $ 53,552     $ 22,569     $ 50,540     $ 22,569  
    Reserve for unfunded loan commitments (3)                                        
    Balance, beginning of period   $ 4,071     $ 819     $ 1,240     $ 933     $ 1,310  
    Adoption of ASU 2016-13 (1)     —       —       —       —       439  
    (Reversal of) provision for credit losses (4)     (968 )     3,252       (307 )     2,170       (816 )
    Balance, end of period     3,103       4,071       933       3,103       933  
    Allowance for credit losses   $ 53,643     $ 57,623     $ 23,502     $ 53,643     $ 23,502  
                                             
    ALL to total loans held for investment     1.61 %     1.67 %     1.15 %     1.61 %     1.15 %
    ACL to total loans held for investment     1.71 %     1.80 %     1.20 %     1.71 %     1.20 %
    Net charge-offs to average total loans     (0.02 )%     (0.17 )%     (0.26 )%     (0.11 )%     (0.07 )%
    (1 ) Represents the impact of adopting ASU 2016-13, Financial Instruments – Credit Losses on January 1, 2023. As a result of adopting ASU 2016-13, our methodology to compute our allowance for credit losses is based on a current expected credit loss methodology, rather than the previously applied incurred loss methodology.
    (2 ) Includes $18.5 million for the three months ended September 30, 2024 and year ended December 31, 2024 related to the initial provision for credit losses for non-PCD loans acquired in the Merger.
    (3 ) Included in “Accrued interest and other liabilities” on the consolidated balance sheet.
    (4 ) Includes $2.7 million for the three months ended September 30, 2024 and year ended December 31, 2024 related to the initial provision for credit losses on unfunded commitments acquired in the Merger.

    California BanCorp and Subsidiary
    Balance Sheets (Unaudited)

        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		  
        ($ in thousands)  
    ASSETS                  
    Cash and due from banks   $ 60,471     $ 115,165     $ 33,008  
    Federal funds sold & interest-bearing balances     327,691       499,258       53,785  
    Total cash and cash equivalents     388,162       614,423       86,793  
                             
    Debt securities available-for-sale, at fair value (amortized cost of $151,429, $163,384 and $136,366 at December 31, 2024, September 30, 2024 and December 31, 2023)     142,001       159,330       130,035  
    Debt securities held-to-maturity, at cost (fair value of $47,823, $49,487 and $50,432 at December 31, 2024, September 30, 2024 and December 31, 2023)     53,280       53,364       53,616  
    Loans held for sale     17,180       33,704       7,349  
    Loans held for investment:                        
    Construction & land development     227,325       247,934       243,521  
    1-4 family residential     164,401       152,540       143,903  
    Multifamily     243,993       252,134       221,247  
    Other commercial real estate     1,767,727       1,755,908       1,024,243  
    Commercial & industrial     710,970       765,472       320,142  
    Other consumer     24,749       25,726       4,386  
    Total loans held for investment     3,139,165       3,199,714       1,957,442  
    Allowance for credit losses – loans     (50,540 )     (53,552 )     (22,569 )
    Total loans held for investment, net     3,088,625       3,146,162       1,934,873  
                             
    Restricted stock at cost     30,829       27,394       16,055  
    Premises and equipment     13,595       13,996       13,270  
    Right of use asset     14,350       15,310       9,291  
    Other real estate owned, net     4,083       4,083       —  
    Goodwill     111,787       112,515       37,803  
    Intangible assets     22,271       23,031       1,195  
    Bank owned life insurance     66,636       66,180       38,918  
    Deferred taxes, net     43,127       45,644       11,137  
    Accrued interest and other assets     35,728       47,631       19,917  
    Total assets   $ 4,031,654     $ 4,362,767     $ 2,360,252  
                             
    LIABILITIES AND SHAREHOLDERS’ EQUITY                        
    Deposits:                        
    Noninterest-bearing demand   $ 1,257,007     $ 1,368,303     $ 675,098  
    Interest-bearing NOW accounts     673,589       781,125       381,943  
    Money market and savings accounts     1,182,927       1,149,268       636,685  
    Time deposits     285,237       442,219       249,830  
    Total deposits     3,398,760       3,740,915       1,943,556  
                             
    Borrowings     69,725       69,142       102,865  
    Operating lease liability     18,310       19,211       12,117  
    Accrued interest and other liabilities     33,023       35,435       13,562  
    Total liabilities     3,519,818       3,864,703       2,072,100  
                             
    Shareholders’ Equity:                        
    Common stock – 50,000,000 shares authorized, no par value; issued and outstanding 32,265,935, 32,142,427 and 18,369,115 at December 31, 2024, September 30, 2024 and December 31, 2023)     442,469       441,684       222,036  
    Retained earnings     76,008       59,236       70,575  
    Accumulated other comprehensive loss – net of taxes     (6,641 )     (2,856 )     (4,459 )
    Total shareholders’ equity     511,836       498,064       288,152  
    Total liabilities and shareholders’ equity   $ 4,031,654     $ 4,362,767     $ 2,360,252  

    California BanCorp and Subsidiary
    Income Statements – Quarterly and Year-to-Date (Unaudited)

        Three Months Ended     Year Ended  
        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		     December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands except share and per share data)  
    INTEREST AND DIVIDEND INCOME                                        
    Interest and fees on loans   $ 54,791     $ 47,528     $ 29,968     $ 159,960     $ 113,951  
    Interest on debt securities     1,698       1,687       991       5,827       3,497  
    Interest on tax-exempted debt securities     305       306       353       1,223       1,655  
    Interest and dividends from other institutions     5,764       4,606       1,257       12,788       4,419  
    Total interest and dividend income     62,558       54,127       32,569       179,798       123,522  
                                             
    INTEREST EXPENSE                                        
    Interest on NOW, savings, and money market accounts     12,447       11,073       6,606       37,329       20,161  
    Interest on time deposits     4,179       5,087       2,331       15,432       6,704  
    Interest on borrowings     1,391       1,025       1,073       4,053       2,519  
    Total interest expense     18,017       17,185       10,010       56,814       29,384  
    Net interest income     44,541       36,942       22,559       122,984       94,138  
                                             
    (Reversal of) provisions for credit losses (1)     (3,835 )     22,963       824       21,690       915  
    Net interest income after (reversal of) provision for credit losses     48,376       13,979       21,735       101,294       93,223  
                                             
    NONINTEREST INCOME                                        
    Service charges and fees on deposit accounts     911       1,136       507       3,140       1,946  
    (Loss) gain on sale of loans     (1,095 )     8       —       (672 )     831  
    Bank owned life insurance income     823       398       253       1,748       946  
    Servicing and related income on loans     157       82       17       307       240  
    Loss on sale of debt securities     —       —       (1,008 )     —       (974 )
    Loss on sale of building and related fixed assets     —       —       —       (19 )     —  
    Other charges and fees     208       (450 )     129       256       390  
    Total noninterest income (expense)     1,004       1,174       (102 )     4,760       3,379  
                                             
    NONINTEREST EXPENSE                                        
    Salaries and employee benefits     16,074       15,385       9,598       49,845       39,249  
    Occupancy and equipment expenses     2,314       2,031       1,678       7,242       6,231  
    Data processing     1,960       1,536       1,158       5,832       4,534  
    Legal, audit and professional     817       669       1,161       2,559       3,211  
    Regulatory assessments     436       544       320       1,714       1,508  
    Director and shareholder expenses     458       520       207       1,410       849  
    Merger and related expenses     643       14,605       —       16,288       —  
    Intangible assets amortization     1,060       687       80       1,877       389  
    Other real estate owned expense     220       3       —       5,246       —  
    Other expense     2,143       1,700       1,137       5,778       3,775  
    Total noninterest expense     26,125       37,680       15,339       97,791       59,746  
    Income (loss) before income taxes     23,255       (22,527 )     6,294       8,263       36,856  
    Income tax expense (benefit)     6,483       (6,063 )     1,882       2,830       10,946  
    Net income (loss)   $ 16,772     $ (16,464 )   $ 4,412     $ 5,433     $ 25,910  
                                             
    Net income (loss) per share – basic   $ 0.52     $ (0.59 )   $ 0.24     $ 0.22     $ 1.42  
    Net income (loss) per share – diluted   $ 0.51     $ (0.59 )   $ 0.24     $ 0.22     $ 1.39  
    Weighted average common shares-diluted     32,698,714       27,705,844       18,727,519       24,623,397       18,656,742  
    Pre-tax, pre-provision income (2)   $ 19,420     $ 436     $ 7,118     $ 29,953     $ 37,771  
    (1 ) Included (reversal of) provision for unfunded loan commitments of $(1.0) million, $3.3 million and $(307) thousand for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, and $2.2 million and $(816) thousand for the years ended December 31, 2024 and 2023, respectively
    (2 ) Non-GAAP measure. See – GAAP to Non-GAAP reconciliation.

    California BanCorp and Subsidiary
    Average Balance Sheets and Yield Analysis
    (Unaudited)

        Three Months Ended  
        December 31, 2024     September 30, 2024     December 31, 2023  
        Average Balance     Income/
    Expense    		     Yield/
    Cost    		     Average Balance     Income/
    Expense    		     Yield/
    Cost    		     Average Balance     Income/
    Expense    		     Yield/
    Cost    		  
        ($ in thousands)  
    Assets                                                      
    Interest-earning assets:                                                                        
    Total loans   $ 3,184,918     $ 54,791       6.84   %   $ 2,783,581     $ 47,528       6.79 %   $ 1,954,396     $ 29,968       6.08 %
    Taxable debt securities     147,895       1,698       4.57   %     149,080       1,687       4.50 %     113,375       991       3.47 %
    Tax-exempt debt securities (1)     53,607       305       2.87   %     53,682       306       2.87 %     58,644       353       3.02 %
    Deposits in other financial institutions     422,032       5,123       4.83   %     161,616       2,215       5.45 %     56,313       759       5.35 %
    Fed funds sold/resale agreements     3,353       38       4.51   %     143,140       1,886       5.24 %     9,008       125       5.51 %
    Restricted stock investments and other bank stock     30,341       603       7.91   %     24,587       505       8.17 %     16,394       373       9.03 %
    Total interest-earning assets     3,842,146       62,558       6.48   %     3,315,686       54,127       6.49 %     2,208,130       32,569       5.85 %
    Total noninterest-earning assets     326,601                       277,471                       137,193                  
    Total assets   $ 4,168,747                     $ 3,593,157                     $ 2,345,323                  
                                                                             
    Liabilities and Shareholders’ Equity                                                                        
    Interest-bearing liabilities:                                                                        
    Interest-bearing NOW accounts   $ 704,017     $ 3,784       2.14   %   $ 617,373     $ 2,681       1.73 %   $ 362,579     $ 1,860       2.04 %
    Money market and savings accounts     1,192,692       8,663       2.89   %     999,322       8,392       3.34 %     669,391       4,746       2.81 %
    Time deposits     359,111       4,179       4.63   %     421,241       5,087       4.80 %     208,700       2,331       4.43 %
    Total interest-bearing deposits     2,255,820       16,626       2.93   %     2,037,936       16,160       3.15 %     1,240,670       8,937       2.86 %
    Borrowings:                                                                        
    FHLB advances     —       —       — %       611       9       5.86 %     56,380       802       5.64 %
    Subordinated debt     69,420       1,391       7.97   %     52,246       1,016       7.74 %     17,854       271       6.02 %
    Total borrowings     69,420       1,391       7.97   %     52,857       1,025       7.71 %     74,234       1,073       5.73 %
    Total interest-bearing liabilities     2,325,240       18,017       3.08   %     2,090,793       17,185       3.27 %     1,314,904       10,010       3.02 %
                                                                             
    Noninterest-bearing liabilities:                                                                        
    Noninterest-bearing deposits (2)     1,283,591                       1,031,844                       721,169                  
    Other liabilities     55,007                       41,962                       27,178                  
    Shareholders’ equity     504,909                       428,558                       282,072                  
    Total Liabilities and Shareholders’ Equity   $ 4,168,747                     $ 3,593,157                     $ 2,345,323                  
                                                                             
    Net interest spread                     3.40   %                     3.22 %                     2.83 %
    Net interest income and margin           $ 44,541       4.61   %           $ 36,942       4.43 %           $ 22,559       4.05 %
    Cost of deposits   $ 3,539,411     $ 16,626       1.87   %   $ 3,069,780     $ 16,160       2.09 %   $ 1,961,839     $ 8,937       1.81 %
    Cost of funds   $ 3,608,831     $ 18,017       1.99   %   $ 3,122,637     $ 17,185       2.19 %   $ 2,036,073     $ 10,010       1.95 %
    (1 ) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
    (2 ) Average noninterest-bearing deposits represent 36.27%, 33.61% and 36.76% of average total deposits for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

    California BanCorp and Subsidiary
    Average Balance Sheets and Yield Analysis
    (Unaudited)

        Year Ended  
        December 31, 2024     December 31, 2023  
        Average Balance     Income/
    Expense    		     Yield/
    Cost    		     Average Balance     Income/
    Expense    		     Yield/
    Cost    		  
        ($ in thousands)  
    Assets                                    
    Interest-earning assets:                                                
    Total loans   $ 2,443,127     $ 159,960       6.55 %   $ 1,918,443     $ 113,951       5.94 %
    Taxable debt securities     136,984       5,827       4.25 %     107,021       3,497       3.27 %
    Tax-exempt debt securities (1)     53,721       1,223       2.88 %     65,674       1,655       3.19 %
    Deposits in other financial institutions     171,939       8,692       5.06 %     46,826       2,434       5.20 %
    Fed funds sold/resale agreements     43,990       2,319       5.27 %     18,114       923       5.10 %
    Restricted stock investments and other bank stock     22,137       1,777       8.03 %     15,930       1,062       6.67 %
    Total interest-earning assets     2,871,898       179,798       6.26 %     2,172,008       123,522       5.69 %
    Total noninterest-earning assets     224,018                       134,225                  
    Total assets   $ 3,095,916                     $ 2,306,233                  
                                                     
    Liabilities and Shareholders’ Equity                                                
    Interest-bearing liabilities:                                                
    Interest-bearing NOW accounts   $ 511,425     $ 10,644       2.08 %   $ 308,537     $ 5,161       1.67 %
    Money market and savings accounts     911,684       26,685       2.93 %     673,176       15,000       2.23 %
    Time deposits     324,249       15,432       4.76 %     180,219       6,704       3.72 %
    Total interest-bearing deposits     1,747,358       52,761       3.02 %     1,161,932       26,865       2.31 %
    Borrowings:                                                
    FHLB advances     19,543       1,103       5.64 %     26,390       1,434       5.43 %
    Subordinated debt     39,479       2,950       7.47 %     17,818       1,085       6.09 %
    Total borrowings     59,022       4,053       6.87 %     44,208       2,519       5.70 %
    Total interest-bearing liabilities     1,806,380       56,814       3.15 %     1,206,140       29,384       2.44 %
                                                     
    Noninterest-bearing liabilities:                                                
    Noninterest-bearing deposits (2)     873,043                       801,882                  
    Other liabilities     36,677                       24,865                  
    Shareholders’ equity     379,816                       273,346                  
    Total Liabilities and Shareholders’ Equity   $ 3,095,916                     $ 2,306,233                  
                                                     
    Net interest spread                     3.11 %                     3.25 %
    Net interest income and margin           $ 122,984       4.28 %           $ 94,138       4.33 %
    Cost of deposits   $ 2,620,401     $ 52,761       2.01 %   $ 1,963,814     $ 26,865       1.37 %
    Cost of funds   $ 2,679,423     $ 56,814       2.12 %   $ 2,008,022     $ 29,384       1.46 %
    (1 ) Tax-exempt debt securities yields are presented on a tax equivalent basis using a 21% tax rate.
    (2 ) Average noninterest-bearing deposits represent 33.32%, and 40.83% of average total deposits for the year ended December 31, 2024 and December 31, 2023, respectively.

    California BanCorp and Subsidiary
    GAAP to Non-GAAP Reconciliation
    (Unaudited)

    The following tables present a reconciliation of non-GAAP financial measures to GAAP measures for: (1) adjusted net income (loss), (2) efficiency ratio, (3) adjusted efficiency ratio, (4) pre-tax pre-provision income, (5) adjusted pre-tax pre-provision income, (6) average tangible common equity, (7) adjusted return on average assets, (8) adjusted return on average equity, (9) return on average tangible common equity, (10) adjusted return on average tangible common equity, (11) tangible common equity, (12) tangible assets, (13) tangible common equity to tangible asset ratio, and (14) tangible book value per share. We believe the presentation of certain non-GAAP financial measures provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our peers. These non-GAAP financial measures complement our GAAP reporting and are presented below to provide investors and others with information that we use to manage the business each period. Because not all companies use identical calculations, the presentation of these non-GAAP financial measures may not be comparable to other similarly titled measures used by other companies. These non-GAAP measures should be taken together with the corresponding GAAP measures and should not be considered a substitute of the GAAP measures.

        Three Months Ended     Year Ended  
        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		     December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands)  
    Adjusted net income                                        
    Net income (loss)   $ 16,772     $ (16,464 )   $ 4,412     $ 5,433     $ 25,910  
    Add: After-tax Day1 provision for non PCD loans and unfunded loan commitments (1)     —       14,978       —       14,978       —  
    Add: After-tax merger and related expenses (1)     453       10,576       —       11,988       —  
    Adjusted net income (non-GAAP)   $ 17,225     $ 9,090     $ 4,412     $ 32,399     $ 25,910  
                                             
    Efficiency Ratio                                        
    Noninterest expense   $ 26,125     $ 37,680     $ 15,339     $ 97,791     $ 59,746  
    Deduct: Merger and related expenses     643       14,605       —       16,288       —  
    Adjusted noninterest expense     25,482       23,075       15,339       81,503       59,746  
                                             
    Net interest income     44,541       36,942       22,559       122,984       94,138  
    Noninterest income (expense)     1,004       1,174       (102 )     4,760       3,379  
    Total net interest income and noninterest income   $ 45,545     $ 38,116     $ 22,457     $ 127,744     $ 97,517  
    Efficiency ratio (non-GAAP)     57.4 %     98.9 %     68.3 %     76.6 %     61.3 %
    Adjusted efficiency ratio (non-GAAP)     55.9 %     60.5 %     68.3 %     63.8 %     61.3 %
                                             
    Pre-tax pre-provision income                                        
    Net interest income   $ 44,541     $ 36,942     $ 22,559     $ 122,984     $ 94,138  
    Noninterest income (expense)     1,004       1,174       (102 )     4,760       3,379  
    Total net interest income and noninterest income     45,545       38,116       22,457       127,744       97,517  
    Less: Noninterest expense     26,125       37,680       15,339       97,791       59,746  
    Pre-tax pre-provision income (non-GAAP)     19,420       436       7,118       29,953       37,771  
    Add: Merger and related expenses     643       14,605       —       16,288       —  
    Adjusted pre-tax pre-provision income (non-GAAP)   $ 20,063     $ 15,041     $ 7,118     $ 46,241     $ 37,771  
    (1 ) After-tax Day 1 provision for non-PCD loans and unfunded commitments and merger and related expenses are presented using a 29.56% tax rate.
        Three Months Ended     Year Ended  
        December 31,
    2024    		     September 30,
    2024    		     December 31,
    2023    		     December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands)  
    Return on Average Assets, Equity, and Tangible Equity                              
    Net income (loss)   $ 16,772     $ (16,464 )   $ 4,412     $ 5,433     $ 25,910  
    Adjusted net income (non-GAAP)   $ 17,225     $ 9,090     $ 4,412     $ 32,399     $ 25,910  
                                             
    Average assets   $ 4,168,747     $ 3,593,157     $ 2,345,323     $ 3,095,916     $ 2,306,233  
    Average shareholders’ equity     504,909       428,558       282,072       379,816       273,346  
    Less: Average intangible assets     135,073       104,409       39,035       79,366       39,195  
    Average tangible common equity (non-GAAP)   $ 369,836     $ 324,149     $ 243,037     $ 300,450     $ 234,151  
                                             
    Return on average assets     1.60 %     (1.82 %)     0.75 %     0.18 %     1.12 %
    Adjusted return on average assets (non-GAAP)     1.64 %     1.01 %     0.75 %     1.05 %     1.12 %
    Return on average equity     13.21 %     (15.28 %)     6.21 %     1.43 %     9.48 %
    Adjusted return on average equity (non-GAAP)     13.57 %     8.44 %     6.21 %     8.53 %     9.48 %
    Return on average tangible common equity (non-GAAP)     18.04 %     (20.21 %)     7.20 %     1.81 %     11.07 %
    Adjusted return on average tangible common equity (non-GAAP)     18.53 %     11.16 %     7.20 %     10.78 %     11.07 %
        December 31,
    2024    		     December 31,
    2023    		  
        ($ in thousands except share and per share data)  
    Tangible Common Equity Ratio/Tangible Book Value Per Share                
    Shareholders’ equity   $ 511,836     $ 288,152  
    Less: Intangible assets     134,058       38,998  
    Tangible common equity (non-GAAP)   $ 377,778     $ 249,154  
                     
    Total assets   $ 4,031,654     $ 2,360,252  
    Less: Intangible assets     134,058       38,998  
    Tangible assets (non-GAAP)   $ 3,897,596     $ 2,321,254  
                     
    Equity to asset ratio     12.70 %     12.21 %
    Tangible common equity to tangible asset ratio (non-GAAP)     9.69 %     10.73 %
    Book value per share   $ 15.86     $ 15.69  
    Tangible book value per share (non-GAAP)   $ 11.71     $ 13.56  
    Shares outstanding     32,265,935       18,369,115  

    INVESTOR RELATIONS CONTACT
    Kevin Mc Cabe
    California Bank of Commerce, N.A.
    kmccabe@bankcbc.com
    818.637.7065

    1 Reconciliations of non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.

    The MIL Network –

  • MIL-OSI: Scality launches Cloud & Service Provider Program with Pay-as-you-Go licensing for Veeam Partner Ecosystem

    Source: GlobeNewswire (MIL-OSI)

    SAN FRANCISCO, Jan. 29, 2025 (GLOBE NEWSWIRE) — Scality, a global leader in cyber-resilient storage software for the AI era, today announced the launch of its Pay-as-you-Go licensing model for Scality Cloud & Service Providers (SCSP). Specifically optimized for Veeam cloud service providers, this program features Scality ARTESCA as a 100% software storage backup target for Veeam® Backup-as-a-Service offerings. This groundbreaking initiative delivers scalable, future-proof cloud backup solutions that boost revenue and customer satisfaction.

    ARTESCA for Veeam Cloud & Service Providers provides unmatched scale and cyber resiliency

    Scality ARTESCA’s pricing model is aligned with Veeam’s pay-as-you-go licensing framework and takes customers beyond immutability to deliver a CORE5 cyber-resilient backup with unlimited scale and no performance degradation. The new licensing model minimizes sales friction, streamlines order processing, and enhances backup functionality with reduced complexity, making ARTESCA the premier storage solution for service providers who offer Veeam Backup-as-a-Service.

    “Our joint customers appreciate a bundled Veeam + Scality solution offering, which provides solid data resilience capabilities. It’s exciting to now see Scality launch its own global Cloud Service Provider Program, as it’s a go-to-market model that has seen continuous growth over the years. At Veeam, we are particularly proud of our network of Veeam Cloud & Service Provider (VCSP) partners and the quality of service they offer to hundreds of thousands of customers,” said Amaury Dutilleul-Francoeur, vice president of EMEA channels and alliances at Veeam.

    Empowering Service Providers with Scality’s flexible pay-as-you-go licensing model

    Scality offers a flexible pay-as-you-go software licensing model, designed to help SCSPs keep operations streamlined while boosting Annual Recurring Revenue (ARR). Key features include:

    • Flexible term commitment options: Choose a 1-, 2-, or 3-year ARR commitment.
    • Dynamic monthly billing: Only pay based on utilized storage capacity, allowing costs to align directly with monthly revenue.

    The new Scality ARTESCA pay-as-you-go licensing model is designed specifically for Cloud & Service Providers who integrate Veeam into their offerings. By positioning ARTESCA as the go-to backup target solution, service providers can provide reliable and scalable storage that adapts quickly to their customers’ evolving needs.

    “ARTESCA’s unprecedented growth in 2024 underscored its flexibility, simplicity, and impact. With this launch, we’re enabling Veeam Cloud & Service Providers and partners worldwide to deliver comprehensive security, performance, scalability, and cost efficiency to their customers. This program represents a bold step in redefining Backup-as-a-Service, empowering businesses to protect their data with confidence and thrive in an era of constant change,” said Eric LeBlanc, GM of ARTESCA and Channel Chief.

    Why Cloud & Service Providers will benefit with Scality ARTESCA

    • Peace of mind for customers: Takes solution beyond immutability with CORE5 cyber resiliency.
    • More business revenue: Upsell and modernize with ARTESCA on existing Veeam solution to build a solid ARR model as capacity increases over time.
    • Greater market competitiveness: Benefit from software-defined storage on low-cost servers, reducing expenses by up to 59% over five years (source: IDC Business Review).
    • Usage-based billing aligned to the business: Pay only for the capacity used, aligning expenses directly with revenue.
    • Start small and grow: Start with as little as 50 TB and expand infinitely as customers’ storage needs grow, making ARTESCA ideal for both small and large deployments.

    Autodata, a certified Platinum Veeam Cloud & Service Provider partner, highlighted the benefits they’ve experienced as one of the first Veeam partners to join Scality’s Cloud & Service Provider program.

    “Scality beat out strong competition to become our preferred object-storage solution for truly immutable on-premise backup,” said Ant Bucknor, Head of Data Centre and Cloud Services at Autodata. “ARTESCA offers unlimited scale, unmatched performance, and unbreakable cyber resilience. The flexible pricing model sealed the deal – we only pay for the capacity our customers need. Scality’s software-only solution also helped us maintain strong discounts with our preferred hardware vendor, and its easy deployment with Supermicro servers made implementation seamless. We immediately saw a 50% saving compared to other solutions. We’re also excited to be the first certified Veeam Cloud and Service Provider to join Scality’s Service Provider Program – one of the best revenue-generating programs we’ve seen in a long time!”

    Availability
    The ARTESCA pay-as-you-go software solution for Veeam Cloud & Service Providers and partners is available now globally through select distribution partners. Learn more about our Scality ARTESCA and our new Pay-as-you-Go licensing model here: https://www.artesca.scality.com/scsp/

    About Scality
    Scality solves organizations’ biggest data storage challenges — security, performance, and cost. Designed to provide the strongest form of immutability plus end-to-end cyber resilience, Scality solutions safeguard data at five core levels for unbreakable ransomware protection. Delivering utmost resilience, Scality makes storage infrastructures limitlessly scalable in all critical dimensions. The world’s most discerning companies trust Scality so they can grow faster and execute AI data-driven ideas quicker — while increasing efficiency and avoiding lock-in. Scality S3 object storage software is reliable, secure and sustainable. Follow us on Twitter and LinkedIn. Visit www.scality.com and our blog.

    Media Contact:
    Lisa Williams
    A3 Communications
    +1 339-788-0067
    lisa.williams@a3communicationspr.com

    The MIL Network –

  • MIL-OSI USA: Governor Newsom announces appointments 1.28.25

    Source: US State of California 2

    Jan 28, 2025

    SACRAMENTO – Governor Gavin Newsom today announced the following appointments:

    Deborah Hoffman, of Sacramento, has been appointed Chief Deputy Director at the Office of Tax Appeals. Hoffman has been Special Advisor at the California Department of Veterans Affairs since 2020, where she was previously Senior Advisor for Communications from 2019 to 2020. She was Undersecretary of the California Business, Consumer Services, and Housing Agency from 2017 to 2019. Hoffman was Deputy Press Secretary in the Office of Governor Brown from 2015 to 2017. She was Assistant Secretary of Public and Employee Communications at the California Department of Corrections from 2012 to 2015. Hoffman was Deputy Secretary of Communications and External Affairs at the California Environmental Protection Agency from 2011 to 2012. She was Communications Director and Policy Consultant in the Office of Senator Fran Pavley from 2009 to 2011. Hoffman was a Reporter at KXTV ABC10 News Sacramento from 1995 to 2009. She earned a Bachelor of Arts degree in Journalism from California State University, Northridge. This position does not require Senate confirmation, and the compensation is $187,104. Hoffman is registered without party preference.

    Krista Dunzweiler, of Sacramento, has been appointed Chief Deputy General Counsel in the Office of Legal Affairs at the Department of Corrections and Rehabilitation, where she has been Chief Deputy General Counsel since 2019. Dunzweiler held several positions at the California Department of Justice from 2014 to 2019 including Deputy Attorney General IV and Deputy Attorney General III. She was an Associate at Locke Lord LLP from 2011 to 2014, Bullivant Houser Bailey from 2008 to 2011, Diepenbrock Harrison from 2006 to 2008, and at Weinstraub Genshlea Chediak from 2004 to 2006. Dunzweiler earned a Juris Doctor degree from the University of the Pacific, McGeorge School of Law, and a Master of Arts degree in Communications and a Bachelor of Arts degree in History and Psychology from the University of the Pacific. This position does not require Senate confirmation, and the compensation is $229,236. Dunzweiler is a Democrat.

    Todd Gloria, of San Diego, has been appointed to the California Air Resources Board. Gloria has been the Mayor of the City of San Diego since 2020. He was an Assemblymember with the California State Assembly from 2016 to 2020. Gloria was a Councilmember, District 3 in the City of San Diego from 2008 to 2016. He was a District Director in the Office of Congresswoman Susan A. Davis from 2001 to 2008. Gloria was a San Diego Housing Commissioner on the San Diego Housing Commission from 2005 to 2008. He was Board Chair at San Diego LGBT Community Center from 2002 to 2007. Gloria earned his Bachelor of the Arts degree in Political Science and History from the University of San Diego. This position requires Senate confirmation, and the compensation is $100 per diem. Gloria is a Democrat.

    Roxanne Messina Captor, of Redondo Beach, has been reappointed to the California Arts Council, where she has been serving since 2022. Captor has been Associate Faculty at Santa Monica College since 1986, an Emmy-nominated Filmmaker at Messina Captor Films Inc. since 1994, and a teacher at the New York Film Academy since 2022. She was a Faculty Member at Emerson College LA and CalArts from 2000 to 2019. Captor was Executive Director for the San Francisco International Film Festival and Society from 2001 to 2006. She is a member of the Academy of Television Arts and Sciences, Who’s Who of America, Greenlight Women, and the National Association of Television Program Executives. Captor earned a Master of Fine Arts degree in Directing for Cinema from Columbia College of Chicago and a Bachelor of Fine Arts degree in Theatre Arts from Julliard School of Music. This position requires Senate confirmation, and the compensation is $100 per diem. Captor is a Democrat.

    Press Releases, Recent News

    Recent news

    Jan 28, 2025

    News What you need to know: Governor Newsom met today with leaders of the Pacific Palisades synagogue Kehillat Israel, which still stands after the fire. Los Angeles, California – Today, Governor Gavin Newsom met with clergy, staff, and board members of Kehillat…

    Jan 28, 2025

    News Dodgers Chairman Mark Walter, Mark Walter Family Foundation, and Los Angeles Dodgers Foundation will provide an initial commitment of up to $100 million   LA Rises will support city and county efforts to help accelerate recovery LOS ANGELES — In the wake of one…

    Jan 27, 2025

    News LOS ANGELES — Scientists, water managers, state leaders, and experts throughout the state are calling out the federal administration’s ongoing misinformation campaign on water management in California. Here is a snapshot of what water leaders and media are saying…

    MIL OSI USA News –

  • MIL-OSI Europe: Briefing – Filling the gap: The EU’s fight against VAT fraud – 29-01-2025

    Source: European Parliament

    Value added tax (VAT) is a crucial revenue stream for both EU and national budgets. However, substantial losses resulting from domestic and cross-border VAT fraud make its enforcement an essential priority amid growing financial demands. Fraudsters, who are regularly part of organised criminal networks, exploit weaknesses in the VAT system, causing government revenue losses worth billions of euros. Over the years, the EU and its Member States have taken a variety of measures to close VAT loopholes, adopting innovative digital tools to facilitate exchange of information and detect and stop fraudulent transactions as fast as possible. Member States have also committed to cooperating more closely, through bodies such as the European Public Prosecutor’s Office and Eurofisc; this has led to the successful dismantling of major VAT fraud networks responsible for billions of euros of damage. While progress has been made, the involvement of multiple actors in combating VAT fraud has raised questions about how to optimise cooperation between these bodies. European Commissioner for Taxation, Wopke Hoekstra, has been tasked with maintaining ambitious efforts to combat tax fraud in the EU, while the Commissioner for Budget, Piotr Serafin, is leading a review of the EU’s anti-fraud structures with a view to enhancing efficiency and cooperation.

    MIL OSI Europe News –

  • MIL-OSI: Nasdaq Reports Fourth Quarter and Full Year 2024 Results; A Year of Strong Financial Performance and Strategic Execution

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) — Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the fourth quarter and full year of 2024

    • 2024 net revenues1 were $4.6 billion, or $4.7 billion on a non-GAAP basis2, an increase of 19% over 2023, or up 9% on an adjusted3 basis. This included Solutions4 revenue increasing 25%, or up 10% on an adjusted basis.
    • Fourth quarter 2024 net revenue was $1.2 billion, an increase of 10% over the fourth quarter of 2023. This included Solutions revenue increasing 10%, or up 9% on an adjusted basis.
    • Annualized Recurring Revenue (ARR)5 of $2.8 billion increased 7% over the fourth quarter of 2023. Annualized SaaS revenues increased 14% and represented 37% of ARR.
    • Financial Technology revenue of $438 million increased 10% over the fourth quarter of 2023, or up 7% on an adjusted basis.
    • Index revenue of $188 million grew 29%, with $80 billion of net inflows over the trailing twelve months and $28 billion in the fourth quarter.
    • GAAP diluted earnings per share fell 7% in 2024 and grew 72% in the fourth quarter of 2024. Non-GAAP diluted earnings per share was flat in 2024 and grew 5% in the fourth quarter of 2024, or grew 11% and 10% on organic6 basis, respectively.
    • In the fourth quarter of 2024, the company returned $138 million to shareholders through dividends. The company also repurchased $181 million of senior unsecured notes in the fourth quarter of 2024.

    Fourth Quarter and Full Year 2024 Highlights

    (US$ millions,
    except per share,
    % changes YoY)    		 4Q24 Change % Adjusted
    change    3%    		 Organic
    change %    		 2024 Change % Adjusted
    change    3%    		 Organic
    change %
    GAAP Solutions revenue $949 10%     $3,593 25%    
    Non-GAAP Solutions revenue $949 10% 9% 9% $3,627 26% 10% 10%
    Market Services net revenue $268 8% 12% 8% $1,020 3% 4% 3%
    GAAP net revenue $1,227 10%     $4,649 19%    
    Non-GAAP net revenue $1,227 10% 10% 9% $4,683 20% 9% 8%
    GAAP operating income $517 47%     $1,798   14%  
    Non-GAAP operating income $671 10% 13% 12% $2,521 22% 11% 9%
    ARR $2,768 7% 7% 7% $2,768 7% 7% 7%
    GAAP diluted EPS $0.61 72%     $1.93 (7)%    
    Non-GAAP diluted EPS $0.76 5%   10% $2.82 0%   11%


    Adena Friedman, Chair and CEO     said, “2024 was a transformative year for Nasdaq. With the integration of AxiomSL and Calypso largely complete, we’ve made substantial progress as a scalable platform company. We are executing well across our strategic priorities, including driving cross-sell opportunities, innovating across our solutions, and expanding client relationships with our One Nasdaq strategy.

    Looking to 2025, we are well positioned to provide more value to our clients while driving profitable and durable growth as the trusted fabric of the world’s financial system.”

    Sarah Youngwood, Executive Vice President and CFO said, “After setting ambitious targets, Nasdaq delivered strong revenue growth and profitability across 2024 and is tracking ahead of schedule against our deleveraging and cost synergy targets.

    Our achievements this year reflect our team’s relentless focus on our clients and our ability to deliver outsized, long-term growth within our large and expanding market opportunity.”

    FINANCIAL REVIEW

    • 2024 net revenue was $4,649 million, reflecting 19% growth versus the prior year period while non-GAAP net revenue was $4,683 million. Adjusted net revenue growth was 9%.
    • Fourth quarter 2024 net revenue was $1,227 million, reflecting 10% growth versus the prior year period. Adjusted net revenue growth was also 10%.
    • Solutions revenue was $949 million in the fourth quarter of 2024, up 10% versus the prior year period, or up 9% on an adjusted basis, reflecting strong growth from Index and Financial Technology.
    • ARR grew 7% year over year in the fourth quarter of 2024 with 11% ARR growth for Financial Technology, or 12% on an organic basis, and 3% ARR growth for Capital Access Platforms.
    • Market Services net revenue was $268 million in the fourth quarter of 2024, up 8% versus the prior year period, or 12% growth on an adjusted basis. The increase was primarily driven by a $15 million increase in U.S. equity derivatives and a $14 million increase in U.S. cash equities, partly offset by a $4 million decrease in U.S. tape plan revenue.
    • 2024 GAAP operating expenses were $2,851 million, an increase of 23% versus the prior year period. The increase for the year was due to expenses related to the acquisition of Adenza, which resulted in an incremental $288 million in amortization expense of acquired intangible assets, $220 million of other AxiomSL and Calypso operating expenses, as well as organic growth driven by increased investments in technology and people to drive innovation and long-term growth, partially offset by lower merger and strategic initiative costs.
    • Fourth quarter 2024 GAAP operating expenses were $710 million, a decrease of 7% versus the prior year period. The decrease in the fourth quarter was primarily due to lower merger and strategic initiative costs and lower general and administrative expense, partially offset by expenses related to the acquisition of Adenza, which resulted in an incremental $29 million in amortization expense of acquired intangible assets, $24 million of other AxiomSL and Calypso operating expenses, as well as organic growth driven by increased investments in technology and people to drive innovation and long-term growth.
    • 2024 non-GAAP operating expenses were $2,162 million, an increase of 18% over 2023, or 6% growth on an adjusted basis. Fourth quarter 2024 non-GAAP operating expenses were $556 million, reflecting 10% growth versus the prior year period, or 6% growth on an adjusted basis. The increase for the full year and fourth quarter included $220 million and $24 million, respectively, of AxiomSL and Calypso operating expenses. The increases for the year and quarter on an adjusted basis reflected growth driven by increased investments in technology and people to drive innovation and long-term growth, as well as increased regulatory costs, partially offset by the benefit of synergies.
    • Cash flow from operations was $705 million for the fourth quarter and $1,939 million for 2024, enabling the company to make additional progress on its deleveraging plan. In the fourth quarter, the company returned $138 million to shareholders through dividends. The company also repurchased $181 million of senior unsecured notes in the fourth quarter of 2024. As of December 31, 2024, there was $1.7 billion remaining under the board authorized share repurchase program.

    2025 EXPENSE AND TAX GUIDANCE UPDATE7

    • The company is initiating its 2025 non-GAAP operating expense guidance at a range of $2,245 million to $2,325 million, and its 2025 non-GAAP tax rate guidance to be in the range of 22.5% to 24.5%.

    STRATEGIC AND BUSINESS UPDATES

    • Strong execution across Financial Technology led to double-digit ARR growth in the fourth quarter. Financial Technology ARR growth was up 12% on an organic basis, in the fourth quarter with 120 new clients, 127 upsells, and 4 cross-sells. Division revenue increased 7% on an adjusted basis. Financial Technology had an exceptional year for new bookings, including a number of sizeable and strategic enterprise deals, underscoring its leadership position and expanding Nasdaq’s right to win across its products. Fourth quarter highlights included:
      • Financial Technology continued its international expansion with several strategic enterprise deals. In the fourth quarter, Nasdaq signed a long-term agreement to provide a future-proof, regulatory management solution through AxiomSL to AuRep, a collaborative joint venture of banks and financial service providers in Austria. The companies will provide additional details on this important partnership in the coming weeks. AxiomSL also secured an upsell with Société Générale to manage its domestic regulatory reporting needs. During the quarter, Calypso also expanded its reach with international customers through upsells with a large European bank and a Middle Eastern bank.
      • Financial Crime Management Technology generated 23% ARR growth with 114% net revenue retention. In the fourth quarter, Nasdaq Verafin added 102 new SMB clients, completed a new cross-sell with a Tier 1 bank, and launched in Europe. Nasdaq Verafin’s data consortium continues to benefit from strong growth in its client base, which now represents nearly $10 trillion in assets.
      • AxiomSL and Calypso accelerated cloud bookings. Cloud bookings as a percent of AxiomSL and Calypso’s combined new annual contract value was 52% for 2024 and 60% in the fourth quarter, increasing the combined business’ cloud mix of ARR to 27% at year end.
    • Index delivered another quarter of outstanding performance benefiting from its growth strategy across innovation, globalization, and institutional client expansion. In 2024, Nasdaq’s Index business launched a record 116 new products with its clients, more than half of which were international, 27 were within the institutional insurance annuity space, and 30 were launched in partnership with new Index clients. For the year, the business had $80 billion of net inflows, including $28 billion in the fourth quarter, and reported its fifth consecutive record quarter in ETP AUM, reaching $647 billion at quarter end.
    • Nasdaq extended listing leadership in 2024 with its sixth consecutive year as the top U.S. exchange by number of IPOs and proceeds raised. For the year, Nasdaq welcomed 180 IPOs, representing $23 billion in total proceeds raised. New listings included 130 operating companies, headlined by Lineage, the largest IPO of the year. In 2024, Nasdaq had an 80% win rate among eligible operating company IPOs in the U.S. In the third quarter, Nasdaq celebrated its 500th listing transfer, bringing the cumulative market capitalization at transfer to nearly $3 trillion. The company had 14 new transfers in the fourth quarter, including Palantir, the largest transfer on a U.S. exchange in 2024, bringing the total to 30 new switches with over $180 billion in market value for the year.  
    • Market Services achieved record fourth quarter and full year net revenue. Fourth quarter net revenue benefited from momentum in U.S. cash equities, including the Closing Cross reaching a new record in fourth quarter share volume, and record U.S. equity derivatives volumes. 2024 Market Services net revenue growth reflected healthy growth in U.S. cash equities, with the Closing Cross setting full year records in both share volume and notional value traded, and index options revenue more than doubling.
    • Nasdaq successfully delivered on its 2024 strategic priorities – Integrate, Innovate, Accelerate – positioning the company to capitalize on opportunities for sustainable, scalable, and resilient growth.
      • Integrate – Nasdaq finished the year ahead of its net expense synergy and deleveraging goals. The company has fully actioned the $80 million net expense synergies goal that was announced with the acquisition of AxiomSL and Calypso, a year ahead of the initial target. Nasdaq is broadening its efficiency program beyond the Financial Technology division and now expects to action annual cost savings of $140 million by the end of 2025, inclusive of the net expense synergies related to the AxiomSL and Calypso acquisition.
      • Innovate – In 2024, Nasdaq demonstrated its innovation leadership with the launch of AI-powered solutions and product enhancements across its divisions. Nasdaq has a robust pipeline of new AI capabilities to deliver through our software and analytics solutions, with several feature launches planned for 2025. The company has advanced its focus from “exploration and experimentation” to driving “impact” as it targets AI-driven productivity enhancements across the organization.
      • Accelerate – The company continues to make progress on its One Nasdaq strategy, with 17 cross-sell deals since the Adenza acquisition across solutions such as Nasdaq Surveillance, AxiomSL, and Verafin. Nasdaq remains on track to exceed $100 million in run-rate revenue from cross-sells by the end of 2027.

    ____________
    1 Represents revenue less transaction-based expenses.
    2 Refer to our reconciliations of U.S. GAAP to non-GAAP Solutions revenue, net revenue, net income attributable to Nasdaq, diluted earnings per share, operating income, operating expenses and organic impacts included in the attached schedules.
    3Adjusted change reflects AxiomSL and Calypso on a pro forma basis (including ratable revenue recognition for AxiomSL in 2024 and 2023). Adjusted change also excludes the impacts of foreign currency except for AxiomSL and Calypso, which will be calculated on an organic basis beginning in 2025, and the previously announced one-time revenue benefits in Market Services in 4Q23 and Index in 1Q24. These results are not calculated, and do not intend to be calculated, in a manner consistent with the pro forma requirements in Article 11 of Regulation S-X. Preparation of this information in accordance with Article 11 would differ from results presented in this earnings release.
    4 Constitutes revenue from our Capital Access Platforms and Financial Technology segments.
    5 Annualized Recurring Revenue (ARR) for a given period is the current annualized value derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. For AxiomSL and Calypso recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for AxiomSL and Calypso recurring revenue contracts that include annual values that increase over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
    6 Organic changes reflect adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates, and (ii) the revenue, expenses and operating income associated with acquisitions and divestitures for the twelve month period following the date of the acquisition or divestiture.
    7 U.S. GAAP operating expense and tax rate guidance are not provided due to the inherent difficulty in quantifying certain amounts due to a variety of factors including the unpredictability in the movement in foreign currency rates, as well as future charges or reversals outside of the normal course of business.

    ABOUT NASDAQ

    Nasdaq (Nasdaq: NDAQ) is a global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on X @Nasdaq, or at www.nasdaq.com.

    NON-GAAP INFORMATION

    In addition to disclosing results determined in accordance with U.S. GAAP, Nasdaq also discloses certain non-GAAP results of operations, including, but not limited to, non-GAAP Solutions revenue, non-GAAP net revenue, non-GAAP net income attributable to Nasdaq, non-GAAP diluted earnings per share, non-GAAP operating income, and non-GAAP operating expenses, that include certain adjustments or exclude certain charges and gains that are described in the reconciliation table of U.S. GAAP to non-GAAP information provided at the end of this release. Management uses this non-GAAP information internally, along with U.S. GAAP information, in evaluating our performance and in making financial and operational decisions. We believe our presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparisons of results as the items described below in the reconciliation tables do not reflect ongoing operating performance.

    These measures are not in accordance with, or an alternative to, U.S. GAAP, and may be different from non-GAAP measures used by other companies. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces their usefulness as a comparative measure. Investors should not rely on any single financial measure when evaluating our business. This information should be considered as supplemental in nature and is not meant as a substitute for our operating results in accordance with U.S. GAAP. We recommend investors review the U.S. GAAP financial measures included in this earnings release. When viewed in conjunction with our U.S. GAAP results and the accompanying reconciliations, we believe these non-GAAP measures provide greater transparency and a more complete understanding of factors affecting our business than U.S. GAAP measures alone.

    We understand that analysts and investors regularly rely on non-GAAP financial measures, such as those noted above, to assess operating performance. We use these measures because they highlight trends more clearly in our business that may not otherwise be apparent when relying solely on U.S. GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our ongoing operating performance.

    Organic revenue and expense growth, organic change and organic impact are non-GAAP measures that reflect adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates, and (ii) the revenue, expenses and operating income associated with acquisitions and divestitures for the twelve month period following the date of the acquisition or divestiture. Reconciliations of these measures are described within the body of this release or in the reconciliation tables at the end of this release.

    Foreign exchange impact: In countries with currencies other than the U.S. dollar, revenue and expenses are translated using monthly average exchange rates. Certain discussions in this release isolate the impact of year-over-year foreign currency fluctuations to better measure the comparability of operating results between periods. Operating results excluding the impact of foreign currency fluctuations are calculated by translating the current period’s results by the prior period’s exchange rates.

    Restructuring programs: In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program to optimize our efficiencies as a combined organization. We further expanded this program in the fourth quarter of 2024 to accelerate our momentum and further optimize our efficiencies (efficiency program). We have incurred costs principally related to employee-related costs, contract terminations, real estate impairments and other related costs and expect to incur additional costs in these areas in an effort to accelerate efficiencies through location strategy and enhanced AI capabilities. Actions taken as part of this program will be complete by the end of 2025, while certain costs may be recognized in the first half of 2026. We expect to achieve benefits primarily in the form of expense synergies. In October 2022, following our September announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In connection with the program, we expect to incur pre-tax charges principally related to employee-related costs, consulting, asset impairments and contract terminations over a two-year period. We expect to achieve benefits in the form of both increased customer engagement and operating efficiencies. Costs related to the Adenza restructuring and the divisional alignment programs are recorded as “restructuring charges” in our consolidated statements of income. We exclude charges associated with these programs for purposes of calculating non-GAAP measures as they are not reflective of ongoing operating performance or comparisons in Nasdaq’s performance between periods.

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

    Information set forth in this communication contains forward-looking statements that involve a number of risks and uncertainties. Nasdaq cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to (i) projections relating to our future financial results, total shareholder returns, growth, dividend program, trading volumes, products and services, ability to transition to new business models or implement our new corporate structure, taxes and achievement of synergy targets, (ii) statements about the closing or implementation dates and benefits of certain acquisitions, divestitures and other strategic, restructuring, technology, environmental, deleveraging and capital allocation initiatives, (iii) statements about our integrations of our recent acquisitions, (iv) statements relating to any litigation or regulatory or government investigation or action to which we are or could become a party, and (v) other statements that are not historical facts. Forward-looking statements involve a number of risks, uncertainties or other factors beyond Nasdaq’s control. These factors include, but are not limited to, Nasdaq’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, geopolitical instability, government and industry regulation, interest rate risk, U.S. and global competition. Further information on these and other factors are detailed in Nasdaq’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q, which are available on Nasdaq’s investor relations website at http://ir.nasdaq.com and the SEC’s website at www.sec.gov. Nasdaq undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

    WEBSITE DISCLOSURE

    Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations.

    Media Relations Contact
    Nick Jannuzzi
    +1.973.760.1741
    Nicholas.Jannuzzi.@Nasdaq.com

    Investor Relations Contact
    Ato Garrett
    +1.212.401.8737
    Ato.Garrett@Nasdaq.com

    NDAQF

    Nasdaq, Inc.
    Condensed Consolidated Statements of Income
    (in millions, except per share amounts)
     
               
      Three Months Ended   Year Ended
      December 31,   December 31,   December 31,   December 31,
       2024     2023     2024     2023 
        (unaudited)   (unaudited)   (unaudited)    
    Revenues:              
    Capital Access Platforms $ 511     $ 461     $ 1,972     $ 1,770  
    Financial Technology   438       399       1,621       1,099  
    Market Services   1,070       778       3,771       3,156  
    Other Revenues   10       10       36       39  
      Total revenues   2,029       1,648       7,400       6,064  
    Transaction-based expenses:              
    Transaction rebates   (548 )     (462 )     (2,026 )     (1,838 )
    Brokerage, clearance and exchange fees   (254 )     (69 )     (725 )     (331 )
    Revenues less transaction-based expenses   1,227       1,117       4,649       3,895  
                   
    Operating Expenses:              
    Compensation and benefits   324       305       1,324       1,082  
    Professional and contract services   44       36       152       128  
    Technology and communication infrastructure   75       65       281       233  
    Occupancy   28       30       112       129  
    General, administrative and other   24       52       109       113  
    Marketing and advertising   20       16       54       47  
    Depreciation and amortization   152       125       613       323  
    Regulatory   18       8       55       34  
    Merger and strategic initiatives   12       97       35       148  
    Restructuring charges   13       31       116       80  
      Total operating expenses   710       765       2,851       2,317  
    Operating income   517       352       1,798       1,578  
    Interest income   8       30       28       115  
    Interest expense   (101 )     (111 )     (414 )     (284 )
    Other income (loss)   7       5       21       (1 )
    Net income (loss) from unconsolidated investees   9       2       16       (7 )
    Income before income taxes   440       278       1,449       1,401  
    Income tax provision   85       81       334       344  
    Net income   355       197       1,115       1,057  
    Net loss attributable to noncontrolling interests   —       —       2       2  
    Net income attributable to Nasdaq $ 355     $ 197     $ 1,117     $ 1,059  
                   
    Per share information:              
    Basic earnings per share $ 0.62     $ 0.36     $ 1.94     $ 2.10  
    Diluted earnings per share $ 0.61     $ 0.36     $ 1.93     $ 2.08  
    Cash dividends declared per common share $ 0.24     $ 0.22     $ 0.94     $ 0.86  
                   
    Weighted-average common shares outstanding              
    for earnings per share:              
    Basic   574.8       547.1       575.4       504.9  
    Diluted   579.7       550.6       579.2       508.4  
                     
    Nasdaq, Inc.
    Revenue Detail
    (in millions)
     
               
      Three Months Ended   Year Ended
      December 31,   December 31,   December 31,   December 31,
       2024     2023     2024     2023 
      (unaudited)   (unaudited)   (unaudited)    
    CAPITAL ACCESS PLATFORMS              
    Data and Listing Services revenues $ 192     $ 189     $ 754     $ 749  
    Index revenues   188       146       706       528  
    Workflow and Insights revenues   131       126       512       493  
    Total Capital Access Platforms revenues   511       461       1,972       1,770  
                   
    FINANCIAL TECHNOLOGY              
    Financial Crime Management Technology revenues   73       60       273       223  
    Regulatory Technology revenues   98       110       352       212  
    Capital Markets Technology revenues   267       229       996       664  
    Total Financial Technology revenues   438       399       1,621       1,099  
                   
    MARKET SERVICES              
    Market Services revenues   1,070       778       3,771       3,156  
    Transaction-based expenses:              
    Transaction rebates   (548 )     (462 )     (2,026 )     (1,838 )
    Brokerage, clearance and exchange fees   (254 )     (69 )     (725 )     (331 )
    Total Market Services revenues, net   268       247       1,020       987  
                   
    OTHER REVENUES   10       10       36       39  
                   
    REVENUES LESS TRANSACTION-BASED EXPENSES $ 1,227     $ 1,117     $ 4,649     $ 3,895  
                   
                   
    Nasdaq, Inc.
    Condensed Consolidated Balance Sheets
    (in millions)
               
          December 31,   December 31,
           2024     2023 
    Assets   (unaudited)    
    Current assets:        
      Cash and cash equivalents   $ 592     $ 453  
      Restricted cash and cash equivalents     31       20  
      Default funds and margin deposits     5,664       7,275  
      Financial investments     184       188  
      Receivables, net     1,022       929  
      Other current assets     293       231  
    Total current assets     7,786       9,096  
    Property and equipment, net     593       576  
    Goodwill     13,957       14,112  
    Intangible assets, net     6,905       7,443  
    Operating lease assets     375       402  
    Other non-current assets     779       665  
    Total assets   $ 30,395     $ 32,294  
               
    Liabilities        
    Current liabilities:        
      Accounts payable and accrued expenses   $ 269     $ 332  
      Section 31 fees payable to SEC     319       84  
      Accrued personnel costs     325       303  
      Deferred revenue     711       594  
      Other current liabilities     215       146  
      Default funds and margin deposits     5,664       7,275  
      Short-term debt     399       291  
    Total current liabilities     7,902       9,025  
    Long-term debt     9,081       10,163  
    Deferred tax liabilities, net     1,594       1,642  
    Operating lease liabilities     388       417  
    Other non-current liabilities     230       220  
    Total liabilities     19,195       21,467  
             
    Commitments and contingencies        
    Equity        
    Nasdaq stockholders’ equity:        
      Common stock     6       6  
      Additional paid-in capital     5,530       5,496  
      Common stock in treasury, at cost     (647 )     (587 )
      Accumulated other comprehensive loss     (2,099 )     (1,924 )
      Retained earnings     8,401       7,825  
    Total Nasdaq stockholders’ equity     11,191       10,816  
      Noncontrolling interests     9       11  
    Total equity     11,200       10,827  
    Total liabilities and equity   $ 30,395     $ 32,294  
               
    Nasdaq, Inc.
    Reconciliation of U.S. GAAP to Non-GAAP Net Income Attributable to Nasdaq and Diluted Earnings Per Share
    (in millions, except per share amounts)
    (unaudited)
                       
                   
           Three Months Ended   Year Ended
          December 31,   December 31,   December 31,   December 31,
           2024     2023     2024     2023 
                       
    U.S. GAAP net income attributable to Nasdaq   $ 355     $ 197     $ 1,117     $ 1,059  
    Non-GAAP adjustments:                
      Adenza purchase accounting adjustment (1)     —       —       34       —  
      Amortization expense of acquired intangible assets (2)     122       95       488       206  
      Merger and strategic initiatives expense (3)     12       97       35       148  
      Restructuring charges (4)     13       31       116       80  
      Lease asset impairments (5)     —       1       —       25  
      Net (income) loss from unconsolidated investees (6)     (9 )     (2 )     (16 )     7  
      Extinguishment of debt (7)     4       —       4       —  
      Legal and regulatory matters (8)     2       23       20       12  
      Pension settlement charge (9)     —       9       23       9  
      Other (income) loss (10)     (6 )     3       (15 )     21  
      Total non-GAAP adjustments     138       257       689       508  
      Non-GAAP adjustment to the income tax provision (11)     (55 )     (59 )     (208 )     (134 )
      Tax on intra-group transfer of intellectual property assets (12)     —       —       33       —  
      Total non-GAAP adjustments, net of tax     83       198       514       374  
    Non-GAAP net income attributable to Nasdaq   $ 438     $ 395     $ 1,631     $ 1,433  
                       
    U.S. GAAP diluted earnings per share   $ 0.61     $ 0.36     $ 1.93     $ 2.08  
      Total adjustments from non-GAAP net income above     0.15       0.36       0.89       0.74  
    Non-GAAP diluted earnings per share   $ 0.76     $ 0.72     $ 2.82     $ 2.82  
                       
    Weighted-average diluted common shares outstanding for earnings per share:     579.7       550.6       579.2       508.4  
                       
                       
    (1) During the third quarter of 2024, as part of finalizing the purchase accounting of the Adenza acquisition, we implemented a change to the accounting treatment of the revenues associated with AxiomSL on-premises subscription contracts, which are included in the Regulatory Technology business within the Financial Technology segment. Starting in the third quarter of 2024, we began recognizing AxiomSL’s subscription-based revenues on a ratable basis over the contract term. As a result of this change, we recognized a one-time revenue reduction of $32 million in the third quarter of 2024, reflecting the net impact of the accounting change since the date of the Adenza acquisition. The adjustment of $34 million reflects the prior year impact of this change.
           
    (2) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
           
    (3) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three months and years ended December 31, 2024 and December 31, 2023, these costs primarily relate to the Adenza acquisition. For the year ended December 31, 2024, these costs were partially offset by a termination payment recognized in the second quarter of 2024 relating to the proposed divestiture of our Nordic power trading and clearing business.
                       
    (4) In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program to optimize our efficiencies as a combined organization. In connection with this program, we expect to incur pre-tax charges principally related to employee-related costs, contract terminations, real estate impairments and other related costs. We expect to achieve benefits primarily in the form of expense and revenue synergies. In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In September 2024, we completed our divisional alignment program and recognized total pre-tax charges of $139 million over a two-year period.
                       
    (5) During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the year ended December 31, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.
                       
    (6) We exclude our share of the earnings and losses of our equity method investments. This provides a more meaningful analysis of Nasdaq’s ongoing operating performance or comparisons in Nasdaq’s performance between periods.
                       
    (7) For the three months and year ended December 31, 2024, we recorded costs related to the early extinguishment of debt. This charge is recorded in general, administrative expense in our Condensed Consolidated Statements of Income.
                       
    (8) For the year ended December 31, 2024, these items primarily included the settlement of a Swedish Financial Supervisory Authority (SFSA) fine and accruals related to certain legal matters. For the three months and year ended December 31, 2023, these charges primarily included accruals related to certain legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income. For the year ended December 31, 2023, these accruals were offset with insurance recoveries related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income.
                       
    (9) For the years ended December 31, 2024 and 2023 and for the three months ended December 31, 2023, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The loss was recorded in compensation and benefits in the Condensed Consolidated Statements of Income.
                       
    (10) For the three months and year ended December 31, 2024, other items include net gains from strategic investments entered into through our corporate venture program, which are included in other income (loss) in our Consolidated Statements of Income. For the three months and year ended December 31, 2023, other items included certain financing costs related to the Adenza acquisition and a net loss from a strategic investments entered into through our corporate venture program.
                       
    (11) The non-GAAP adjustment to the income tax provision primarily includes the tax impact of each non-GAAP adjustment. For the three months and year ended December 31, 2024, we recorded a tax benefit related to return to provision adjustments and release of tax reserves due to lapse in statute of limitations.
                       
    (12) For the year ended December 31, 2024, the completion of an intra-group transfer of intellectual property assets to U.S. headquarters resulted in a net tax expense of $33 million.
                       
    Nasdaq, Inc.
    Reconciliation of U.S. GAAP to Non-GAAP Revenues Less Transaction-Based Expenses
    (in millions)
    (unaudited)
           
      Year Ended
      December 31, 2024
      U.S. GAAP Revenues
    Less Transaction-
    Based Expenses    		 Adenza purchase
    accounting
    adjustment     (1)    		 Non-GAAP Revenues
    Less Transaction-
    Based Expenses
    CAPITAL ACCESS PLATFORMS $ 1,972 $ — $ 1,972
           
    FINANCIAL TECHNOLOGY      
    Financial Crime Management Technology revenues   273   —   273
    Regulatory Technology revenues (1)   352   34   386
    Capital Markets Technology revenues   996   —   996
    Total Financial Technology revenues   1,621   34   1,655
    SOLUTIONS REVENUES   3,593   34   3,627
           
    MARKET SERVICES REVENUES, NET   1,020   —   1,020
    OTHER REVENUES   36   —   36
    REVENUES LESS TRANSACTION-BASED EXPENSES $ 4,649 $ 34 $ 4,683
           
           
    (1) During the third quarter of 2024, as part of finalizing the purchase accounting of the Adenza acquisition, we implemented a change to the accounting treatment of the revenues associated with AxiomSL on-premises subscription contracts, which are included in the Regulatory Technology business within the Financial Technology segment. Starting in the third quarter of 2024, we began recognizing AxiomSL’s subscription-based revenues on a ratable basis over the contract term. As a result of this change, we recognized a one-time revenue reduction of $32 million in the third quarter of 2024, reflecting the net impact of the accounting change since the date of the Adenza acquisition. The adjustment of $34 million reflects the prior year impact of this change.
           
    Nasdaq, Inc.
    Reconciliation of U.S. GAAP to Non-GAAP Operating Income and Operating Margin
    (in millions)
    (unaudited)
                   
           Three Months Ended   Year Ended
          December 31,   December 31,   December 31,   December 31,
           2024     2023     2024     2023 
                       
    U.S. GAAP operating income   $ 517     $ 352     $ 1,798     $ 1,578  
    Non-GAAP adjustments:                
      Adenza purchase accounting adjustment (1)     —       —       34       —  
      Amortization expense of acquired intangible assets (2)     122       95       488       206  
      Merger and strategic initiatives expense (3)     12       97       35       148  
      Restructuring charges (4)     13       31       116       80  
      Lease asset impairments (5)     —       1       —       25  
      Extinguishment of debt (6)     4       —       4       —  
      Legal and regulatory matters (7)     2       23       20       12  
      Pension settlement charge (8)     —       9       23       9  
      Other loss     1       5       3       7  
      Total non-GAAP adjustments     154       261       723       487  
    Non-GAAP operating income   $ 671     $ 613     $ 2,521     $ 2,065  
                     
    U.S. GAAP revenues less transaction-based expenses   $ 1,227     $ 1,117     $ 4,649     $ 3,895  
                       
    Non-GAAP revenues less transaction-based expenses   $ 1,227     $ 1,117     $ 4,683     $ 3,895  
                       
    U.S. GAAP operating margin (9)     42 %     32 %     39 %     41 %
                       
    Non-GAAP operating margin (10)     55 %     55 %     54 %     53 %
                       
    Note: The current period percentages are calculated based on exact dollars, and therefore may not recalculate exactly using rounded numbers as presented in US$ millions.
                       
    (1) During the third quarter of 2024, as part of finalizing the purchase accounting of the Adenza acquisition, we implemented a change to the accounting treatment of the revenues associated with AxiomSL on-premises subscription contracts, which are included in the Regulatory Technology business within the Financial Technology segment. Starting in the third quarter of 2024, we began recognizing AxiomSL’s subscription-based revenues on a ratable basis over the contract term. As a result of this change, we recognized a one-time revenue reduction of $32 million in the third quarter of 2024, reflecting the net impact of the accounting change since the date of the Adenza acquisition. The adjustment of $34 million reflects the prior year impact of this change.
           
    (2) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
                       
    (3) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three months and years ended December 31, 2024 and December 31, 2023, these costs primarily relate to the Adenza acquisition. For the year ended December 31, 2024, these costs were partially offset by a termination payment recognized in the second quarter of 2024 relating to the proposed divestiture of our Nordic power trading and clearing business.
                       
    (4) In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program to optimize our efficiencies as a combined organization. In connection with this program, we expect to incur pre-tax charges principally related to employee-related costs, contract terminations, real estate impairments and other related costs. We expect to achieve benefits primarily in the form of expense and revenue synergies. In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In September 2024, we completed our divisional alignment program and recognized total pre-tax charges of $139 million over a two-year period.
                       
    (5) During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the year ended December 31, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.
                       
    (6) For the three months and year ended December 31, 2024, we recorded costs related to the early extinguishment of debt. This charge is recorded in general, administrative expense in our Condensed Consolidated Statements of Income.
                       
    (7) For the year ended December 31, 2024, these items primarily included the settlement of a SFSA fine and accruals related to certain legal matters. For the three months and year ended December 31, 2023, these charges primarily included accruals related to certain legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income. For the year ended December 31, 2023, these accruals were offset with insurance recoveries related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income.
                       
    (8) For the years ended December 31, 2024 and 2023 and for the three months ended December 31, 2023, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The loss was recorded in compensation and benefits in the Condensed Consolidated Statements of Income.
                       
    (9) U.S. GAAP operating margin equals U.S. GAAP operating income divided by revenues less transaction-based expenses.
                       
    (10) Non-GAAP operating margin equals non-GAAP operating income divided by non-GAAP revenues less transaction-based expenses.
                       
    Nasdaq, Inc.
    Reconciliation of U.S. GAAP to Non-GAAP Operating Expenses
    (in millions)
    (unaudited)
                   
           Three Months Ended   Year Ended
          December 31,   December 31,   December 31,   December 31,
           2024     2023     2024     2023 
                       
    U.S. GAAP operating expenses   $ 710     $ 765     $ 2,851     $ 2,317  
    Non-GAAP adjustments:                
      Amortization expense of acquired intangible assets (1)     (122 )     (95 )     (488 )     (206 )
      Merger and strategic initiatives expense (2)     (12 )     (97 )     (35 )     (148 )
      Restructuring charges (3)     (13 )     (31 )     (116 )     (80 )
      Lease asset impairments (4)     —       (1 )     —       (25 )
      Extinguishment of debt (5)     (4 )     —       (4 )     —  
      Legal and regulatory matters (6)     (2 )     (23 )     (20 )     (12 )
      Pension settlement charge (7)     —       (9 )     (23 )     (9 )
      Other (loss)     (1 )     (5 )     (3 )     (7 )
      Total non-GAAP adjustments     (154 )     (261 )     (689 )     (487 )
    Non-GAAP operating expenses   $ 556     $ 504     $ 2,162     $ 1,830  
                       
                       
    (1) We amortize intangible assets acquired in connection with various acquisitions. Intangible asset amortization expense can vary from period to period due to episodic acquisitions completed, rather than from our ongoing business operations.
           
    (2) We have pursued various strategic initiatives and completed acquisitions and divestitures in recent years which have resulted in expenses which would not have otherwise been incurred. These expenses generally include integration costs, as well as legal, due diligence and other third party transaction costs. The frequency and amount of such expenses vary significantly based on the size, timing and complexity of the transaction. For the three months and years ended December 31, 2024 and December 31, 2023, these costs primarily relate to the Adenza acquisition. For the year ended December 31, 2024, these costs were partially offset by a termination payment recognized in the second quarter of 2024 relating to the proposed divestiture of our Nordic power trading and clearing business.
                       
    (3) In the fourth quarter of 2023, following the closing of the Adenza acquisition, our management approved, committed to and initiated a restructuring program to optimize our efficiencies as a combined organization. In connection with this program, we expect to incur pre-tax charges principally related to employee-related costs, contract terminations, real estate impairments and other related costs. We expect to achieve benefits primarily in the form of expense and revenue synergies. In October 2022, following our September 2022 announcement to realign our segments and leadership, we initiated a divisional alignment program with a focus on realizing the full potential of this structure. In September 2024, we completed our divisional alignment program and recognized total pre-tax charges of $139 million over a two-year period.
                       
    (4) During the first quarter of 2023, we initiated a review of our real estate and facility capacity requirements due to our new and evolving work models. As a result, for the year ended December 31, 2023, we recorded impairment charges related to our operating lease assets and leasehold improvements associated with vacating certain leased office space, which are recorded in occupancy expense and depreciation and amortization expense in our Condensed Consolidated Statements of Income.
                       
    (5) For the three months and year ended December 31, 2024, we recorded costs related to the early extinguishment of debt. This charge is recorded in general, administrative expense in our Condensed Consolidated Statements of Income.
                       
    (6) For the year ended December 31, 2024, these items primarily included the settlement of a SFSA fine and accruals related to certain legal matters. For the three months and year ended December 31, 2023, these charges primarily included accruals related to certain legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income. For the year ended December 31, 2023, these accruals were offset with insurance recoveries related to legal matters recorded in general, administrative and other expense and professional and contract services expense in our Condensed Consolidated Statements of Income.
                       
    (7) For the years ended December 31, 2024 and 2023 and for the three months ended December 31, 2023, we recorded a pre-tax charge as a result of settling our U.S. pension plan. The plan was terminated and partially settled in 2023, with final settlement occurring during the first quarter of 2024. The loss was recorded in compensation and benefits in the Condensed Consolidated Statements of Income.
                       
    Nasdaq, Inc.
    Reconciliation of Adjusted Impacts for U.S. Non-GAAP Revenues less transaction-based expenses, Non-GAAP Operating Expenses,
    Non-GAAP Operating Income, and Non-GAAP Operating Margin
    (in millions)
    (unaudited)
                                       
      Three Months Ended                    
      December 31,
    2024    		   December 31,
    2023    		   Total Variance   FX & Other (2)   Adjusted YoY
      Non-GAAP   Non-GAAP   Adenza   Pro Forma (1)   $   %   $   $   %
    CAPITAL ACCESS PLATFORMS                                  
    data                                  
    listings                                  
    Data and Listing Services revenues $ 192     $ 189     $ —     $ 189     $ 3     2 %   $ —     $ 3     2 %
    Index revenues   188       146       —       146       42     29 %     —       42     29 %
    Workflow and insights revenues   131       126       —       126       5     4 %     —       5     4 %
    Total Capital Access Platforms revenues   511       461       —       461       50     11 %     —       50     11 %
                                       
    FINANCIAL TECHNOLOGY                                  
    Financial Crime Management Technology revenues   73       60       —       60       13     22 %     —       13     22 %
    Regulatory Technology revenues   98       110       (16 )     94       4     5 %     (1 )     5     6 %
    Capital Markets Technology revenues   267       229       26       255       12     4 %     —       12     4 %
    Total Financial Technology revenues   438       399       10       409       29     7 %     (1 )     30     7 %
                                       
    Non-GAAP Solutions revenues (3)   949       860       10       870       79     9 %     (1 )     80     9 %
                                       
    Market Services, net revenues   268       247       —       247       21     8 %     (8 )     29     12 %
    Other revenues   10       10       —       10       —     (1 )%     —       —     (2 )%
    Non-GAAP Revenues less transaction-based expenses   1,227       1,117       10       1,127       100     9 %     (9 )     109     10 %
                                       
    Non-GAAP operating expenses   556       504       23       527       29     5 %     (3 )     32     6 %
    Non-GAAP operating income $ 671     $ 613     $ (13 )   $ 600     $ 71     12 %   $ (6 )   $ 77     13 %
    Non-GAAP operating margin   55 %     56 %         53 %                    
                                       
                                       
      Year Ended                    
      December 31,
    2024    		   December 31,
    2023    		   Total Variance   FX & Other (2)   Adjusted YoY
      Non-GAAP   Non-GAAP   Adenza   Pro Forma (1)   $   %   $   $   %
    CAPITAL ACCESS PLATFORMS                                  
    Data and Listing Services revenues $ 754     $ 749     $ —     $ 749     $ 5     1 %   $ —     $ 5     1 %
    Index revenues   706       528       —       528       178     34 %     16       162     31 %
    Workflow and insights revenues   512       493       —       493       19     4 %     1       18     4 %
    Total Capital Access Platforms revenues   1,972       1,770       —       1,770       202     11 %     17       185     10 %
                                       
    FINANCIAL TECHNOLOGY                                  
    Financial Crime Management Technology revenues   273       223       —       223       50     22 %     —       50     22 %
    Regulatory Technology revenues   286       212       149       361       25     7 %     1       24     7 %
    Capital Markets Technology revenues   996       664       257       921       75     8 %     1       74     8 %
    Total Financial Technology revenues   1,655       1,099       406       1,505       150     10 %     2       148     10 %
                                       
    Non-GAAP Solutions revenues (3)   3,627       2,869       406       3,275       352     11 %     19       333     10 %
                                       
    Market Services, net revenues   1,020       987       —       987       33     3 %     (8 )     41     4 %
    Other revenues   36       39       —       39       (3 )   (9 )%     (2 )     (1 )   (5 )%
    Non-GAAP Revenues less transaction-based expenses   4,683       3,895       406       4,301       382     9 %     9       373     9 %
                                       
    Operating expenses   2,162       1,830       217       2,047       115     6 %     (4 )     119     6 %
    Operating income $ 2,521     $ 2,065     $ 189     $ 2,254     $ 267     12 %   $ 13     $ 254     11 %
    Operating margin   54 %     53 %         52 %                    
                                       
                                       
                                       
    (1) Includes the pro forma results for AxiomSL and Calypso and are presented assuming AxiomSL and Calypso were included in the entire prior year quarterly and full year results and revenue for AxiomSL on-premises contracts were recognized ratably for 2024 and 2023.
    (2) Reflects the impacts from changes in foreign currency exchange rates (except for AxiomSL and Calypso, which will be calculated on an organic basis beginning in 2025) and the exclusion of a non-recurring payment received in 4Q23 recorded within our Market Services business. In addition, the full year also excludes the impact of a one-time revenue benefit related to a legal settlement to recoup revenue recorded within Index in 1Q24.
    (3) Represents Capital Access Platforms and Financial Technology Segments.
                                       
    Note: The pro forma results above are not calculated, and do not intend to be calculated, in a manner consistent with the pro forma requirements in Article 11 of Regulation S-X. Preparation of this information in accordance with Article 11 would differ from results presented in this press release. The current period percentages are calculated based on exact dollars, and therefore may not recalculate exactly using rounded numbers as presented in US$ millions.
                                       
    Nasdaq, Inc.
    Reconciliation of Organic Impacts for U.S. Non-GAAP Revenues less transaction-based expenses, Non-GAAP Operating Expenses,
    Non-GAAP Operating Income, and Non-GAAP Diluted Earnings Per Share
    (in millions)
    (unaudited)
                                   
      Three Months Ended                        
      December 31,
    2024    		   December 31,
    2023    		   Total Variance   Other Impacts (1)   Organic Impact (2)
      Non-GAAP   Non-GAAP   $   %   $   %   $   %
    CAPITAL ACCESS PLATFORMS                              
    Data and Listing Services revenues $ 192   $ 189   $ 3     2 %   $ —     — %   $ 3     2 %
    Index revenues   188     146     42     29 %     —     — %     42     29 %
    Workflow and Insights revenues   131     126     5     4 %     —     — %     5     4 %
    Total Capital Access Platforms revenues   511     461     50     11 %     —     — %     50     11 %
                                   
    FINANCIAL TECHNOLOGY                              
    Financial Crime Management Technology revenues   73     60     13     22 %     —     — %     13     22 %
    Regulatory Technology revenues   98     110     (12 )   (10 )%     (15 )   (13 )%     3     4 %
    Capital Markets Technology revenues   267     229     38     16 %     27     12 %     11     5 %
    Total Financial Technology revenues   438     399     39     10 %     12     3 %     27     7 %
                                   
    Non-GAAP Solutions revenues (3)   949     860     89     10 %     12     1 %     77     9 %
                                   
    Market Services, net revenues   268     247     21     8 %     —     — %     21     8 %
                                   
    Other revenues   10     10     —     (1 )%     —     — %     —     (2 )%
                                   
    Non-GAAP Revenues less transaction-based expenses $ 1,227   $ 1,117   $ 110     10 %   $ 12     1 %   $ 98     9 %
                                   
    Non-GAAP Operating Expenses $ 556   $ 504   $ 52     10 %   $ 21     4 %   $ 31     6 %
                                   
    Non-GAAP Operating Income $ 671   $ 613   $ 58     10 %   $ (9 )   (1 )%   $ 67     12 %
                                   
    Non-GAAP diluted earnings per share $ 0.76   $ 0.72   $ 0.04     5 %   $ (0.03 )   (5 )%   $ 0.07     10 %
                                   
      Year Ended                        
      December 31,
    2024    		   December 31,
    2023    		   Total Variance   Other Impacts (1)   Organic Impact (2)
      Non-GAAP   Non-GAAP   $   %   $   %   $   %
    CAPITAL ACCESS PLATFORMS                              
    Data and Listing Services revenues $ 754   $ 749   $ 5     1 %   $ —     — %   $ 5     1 %
    Index revenues   706     528     178     34 %     —     — %     178     34 %
    Workflow and Insights revenues   512     493     19     4 %     1     — %     18     4 %
    Total Capital Access Platforms revenues   1,972     1,770     202     11 %     1     — %     201     11 %
                                   
    FINANCIAL TECHNOLOGY                              
    Financial Crime Management Technology revenues   273     223     50     22 %     —     — %     50     22 %
    Regulatory Technology revenues   386     212     174     83 %     165     78 %     9     5 %
    Capital Markets Technology revenues   996     664     332     50 %     316     48 %     16     2 %
    Total Financial Technology revenues   1,655     1,099     556     51 %     481     44 %     75     7 %
                                   
    Non-GAAP Solutions revenues (3)   3,627     2,869     758     26 %     482     17 %     276     10 %
                                   
    Market Services, net revenues   1,020     987     33     3 %     —     — %     33     3 %
                                   
    Other revenues   36     39     (3 )   (9 )%     (2 )   (4 )%     (1 )   (5 )%
                                   
    Non-GAAP Revenues less transaction-based expenses $ 4,683   $ 3,895   $ 788     20 %   $ 480     12 %   $ 308     8 %
                                   
    Non-GAAP Operating Expenses $ 2,162   $ 1,830   $ 332     18 %   $ 216     12 %   $ 116     6 %
                                   
    Non-GAAP Operating Income $ 2,521   $ 2,065   $ 456     22 %   $ 264     13 %   $ 192     9 %
                                   
    Non-GAAP diluted earnings per share $ 2.82   $ 2.82   $ —     — %   $ (0.31 )   (11 )%   $ 0.31     11 %
                                   
    Note: The current period percentages are calculated based on exact dollars, and therefore may not recalculate exactly using rounded numbers as presented in US$ millions. The sum of the percentage changes may not tie to the percentage change in total variance due to rounding.
                                   
    (1) Primarily includes the impacts of the Adenza acquisition and changes in FX rates. The revenue adjustments related to the Adenza acquisition reflect an additional $514 million of total revenue recorded in FY 2024 and $48 million for 4Q24, partially offset by an adjustment to reported 2023 revenues related to AxiomSL ratable revenue recognition of $34 million.
    (2) Organic impact reflects adjustments for: (i) the impact of period-over-period changes in foreign currency exchange rates, and (ii) the revenue, expenses and operating income associated with acquisitions and divestitures for the twelve month period following the date of the acquisition or divestiture.
    (3) Represents Capital Access Platforms and Financial Technology Segments.
                                   
    Nasdaq, Inc.
    Key Drivers Detail
    (unaudited)
                     
        Three Months Ended   Year Ended
        December 31,   December 31,   December 31,   December 31,
         2024     2023     2024     2023 
    Capital Access Platforms              
      Annualized recurring revenues (in millions) (1) $ 1,268     $ 1,235     $ 1,268     $ 1,235  
      Initial public offerings              
      The Nasdaq Stock Market (2)   66       28       180       130  
      Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic   7       4       14       7  
      Total new listings              
      The Nasdaq Stock Market (2)   162       100       463       330  
      Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (3)   13       7       31       23  
      Number of listed companies              
      The Nasdaq Stock Market (4)   4,075       4,044       4,075       4,044  
      Exchanges that comprise Nasdaq Nordic and Nasdaq Baltic (5)   1,174       1,218       1,174       1,218  
      Index              
      Number of licensed exchange traded products (6)   401       364       401       364  
      Period end ETP assets under management (AUM) tracking Nasdaq indexes (in billions) $ 647     $ 473     $ 647     $ 473  
      Total average ETP AUM tracking Nasdaq indexes (in billions) $ 632     $ 436     $ 558     $ 396  
      TTM (7) net inflows ETP AUM tracking Nasdaq indexes (in billions) $ 80     $ 31     $ 80     $ 31  
      TTM (7) net appreciation ETP AUM tracking Nasdaq indexes (in billions) $ 110     $ 128     $ 110     $ 128  
                     
    Financial Technology              
      Annualized recurring revenues (in millions) (1)              
      Financial Crime Management Technology $ 278     $ 226     $ 278     $ 226  
      Regulatory Technology   354       325       354       325  
      Capital Markets Technology   868       799       868       799  
      Total Financial Technology $ 1,500     $ 1,350     $ 1,500     $ 1,350  
                     
    Market Services              
      Equity Derivative Trading and Clearing              
      U.S. equity options              
      Total industry average daily volume (in millions)   47.5       40.2       44.4       40.4  
      Nasdaq PHLX matched market share   10.5 %     11.5 %     10.0 %     11.3 %
      The Nasdaq Options Market matched market share   5.2 %     5.5 %     5.5 %     6.1 %
      Nasdaq BX Options matched market share   1.8 %     2.4 %     2.1 %     3.3 %
      Nasdaq ISE Options matched market share   7.2 %     6.1 %     6.9 %     5.9 %
      Nasdaq GEMX Options matched market share   2.6 %     2.7 %     2.6 %     2.4 %
      Nasdaq MRX Options matched market share   3.0 %     2.6 %     2.7 %     2.0 %
      Total matched market share executed on Nasdaq’s exchanges   30.3 %     30.8 %     29.8 %     31.0 %
      Nasdaq Nordic and Nasdaq Baltic options and futures              
      Total average daily volume of options and futures contracts (8)   228,955       327,680       233,610       301,320  
                     
      Cash Equity Trading              
      Total U.S.-listed securities              
      Total industry average daily share volume (in billions)   13.6       11.2       12.2       11.0  
      Matched share volume (in billions)   125.2       113.3       479.4       455.6  
      The Nasdaq Stock Market matched market share   14.0 %     15.4 %     15.1 %     15.8 %
      Nasdaq BX matched market share   0.3 %     0.4 %     0.3 %     0.4 %
      Nasdaq PSX matched market share   0.1 %     0.3 %     0.2 %     0.3 %
      Total matched market share executed on Nasdaq’s exchanges   14.4 %     16.1 %     15.6 %     16.5 %
      Market share reported to the FINRA/Nasdaq Trade Reporting Facility   47.6 %     40.9 %     44.3 %     36.7 %
      Total market share (9)   62.0 %     57.0 %     59.9 %     53.2 %
      Nasdaq Nordic and Nasdaq Baltic securities              
      Average daily number of equity trades executed on Nasdaq’s exchanges   669,234       637,403       651,455       666,411  
      Total average daily value of shares traded (in billions) $ 4.5     $ 4.5     $ 4.5     $ 4.5  
      Total market share executed on Nasdaq’s exchanges   70.9 %     72.0 %     71.9 %     71.0 %
                     
      Fixed Income and Commodities Trading and Clearing              
      Fixed Income              
      Total average daily volume of Nasdaq Nordic and Nasdaq Baltic fixed income contracts   91,471       93,128       93,747       95,625  
                     
      (1) Annualized Recurring Revenue (ARR) for a given period is the current annualized value derived from subscription contracts with a defined contract value. This excludes contracts that are not recurring, are one-time in nature, or where the contract value fluctuates based on defined metrics. ARR is currently one of our key performance metrics to assess the health and trajectory of our recurring business. ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. For AxiomSL and Calypso recurring revenue contracts, the amount included in ARR is consistent with the amount that we invoice the customer during the current period. Additionally, for AxiomSL and Calypso recurring revenue contracts that include annual values that increase over time, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
      (2) New listings include IPOs, issuers that switched from other listing venues, closed-end funds and separately listed ETPs. For the three months ended December 31, 2024 and 2023, IPOs included 22 and 8 SPACs, respectively. For the years ended December 31, 2024 and 2023, IPOs included 50 and 27 SPACs, respectively.
      (3) New listings include IPOs and represent companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
      (4) Number of total listings on The Nasdaq Stock Market for the twelve months ended December 31, 2024 and December 31, 2023 included 768 and 600 ETPs, respectively.
      (5) Represents companies listed on the Nasdaq Nordic and Nasdaq Baltic exchanges and companies on the alternative markets of Nasdaq First North.
      (6) The number of listed ETPs as of December 31, 2023 has been updated to reflect a revised methodology whereby an ETP listed on multiple exchanges is counted as one product, rather than formerly being counted per exchange. This change has no impact on reported AUM.
      (7) Trailing 12-months.
      (8) Includes Finnish option contracts traded on Eurex for which Nasdaq and Eurex had a revenue sharing arrangement, which ended in the fourth quarter of 2023.
      (9) Includes transactions executed on The Nasdaq Stock Market’s, Nasdaq BX’s and Nasdaq PSX’s systems plus trades reported through the Financial Industry Regulatory Authority/Nasdaq Trade Reporting Facility.

    The MIL Network –

  • MIL-OSI: Virtu Announces Fourth Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) — Virtu Financial, Inc. (NASDAQ: VIRT), a leading provider of financial services and products that leverages cutting edge technology to deliver innovative, transparent trading solutions to its clients and liquidity to the global markets, today reported results for the fourth quarter ended December 31, 2024.

    Fourth Quarter and Full Year Selected Highlights

    Fourth Quarter 2024:

    • Net income of $176.1 million; Normalized Adjusted Net Income1 of $182.2 million
    • Basic and diluted earnings per share of $1.03; Normalized Adjusted EPS1 of $1.14
    • Total revenues of $834.3 million; Trading income, net, of $544.0 million; Net income Margin of 21.1%2
      • Adjusted Net Trading Income1 of $457.7 million
    • Adjusted EBITDA1 of $283.5 million; Adjusted EBITDA Margin1 of 61.9%
    • Share buybacks of $57.1 million, or 1.7 million shares, under the Share Repurchase Program3

    Full Year 2024:

    • Net income of $534.5 million; Normalized Adjusted Net Income1 of $573.9 million
    • Basic and diluted earnings per share of $2.98 and $2.97, respectively; Normalized Adjusted EPS1 of $3.55
    • Total revenues of $2,876.9 million; Trading income, net of $1,822.4 million; Net income Margin of 18.6%2
      • Adjusted Net Trading Income1 of $1,597.7 million
    • Adjusted EBITDA1 of $918.7 million; Adjusted EBITDA Margin1 of 57.5%
    • Share buybacks of $172.2 million, or 6.7 million shares, under the Share Repurchase Program3

    The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on March 17, 2025 to shareholders of record as of February 28, 2025.

    Note 1: Non-GAAP financial measures. Please see “Non-GAAP Financial Measures and Other Items” for more information.
    Note 2: Calculated by dividing Net income by Total revenue
    Note 3: Shares repurchased calculated on a settlement date basis.

    Financial Results

    Fourth Quarter 2024:

    Total revenues increased 55.7% to $834.3 million for this quarter, compared to $536.0 million for the same period in 2023. Trading income, net, increased 104.0% to $544.0 million for the quarter compared to $266.6 million for the same period in 2023. Net income totaled $176.1 million for this quarter, compared to net income of $6.7 million in the prior year quarter.

    Basic and diluted earnings per share for this quarter were $1.03, compared to basic and diluted earnings per share of $0.05 for the same period in 2023.

    Adjusted Net Trading Income increased 75.4% to $457.7 million for this quarter, compared to $260.9 million for the same period in 2023. Adjusted EBITDA increased 186.4% to $283.5 million for this quarter, compared to $99.0 million for the same period in 2023. Normalized Adjusted Net Income, removing one-time and non-cash items, increased 313.5% to $182.2 million for this quarter, compared to $44.1 million for the same period in 2023.

    Assuming all non-controlling interests had been exchanged for common stock, and the Company’s Normalized Adjusted Net Income before income taxes was subject to corporation taxes, Normalized Adjusted EPS was $1.14 for this quarter, compared to $0.27 for the same period in 2023.

    Full Year 2024:

    Total revenues increased 25.4% to $2,876.9 million for this year, compared to $2,293.4 million for 2023. Trading income, net, increased 40.0% to $1,822.4 million for this year, compared to $1,301.3 million for 2023. Net income totaled $534.5 million for this year, compared to net income of $263.9 million for 2023.

    Basic and diluted earnings per share were $2.98 and $2.97, respectively, for 2024, compared to basic and diluted earnings per share of $1.42 for 2023.

    Adjusted Net Trading Income increased 32.0% to $1,597.7 million for this year, compared to $1,210.7 million for 2023. Adjusted EBITDA increased 61.7% to $918.7 million for this year, compared to $568.0 million for 2023. Normalized Adjusted Net Income increased 86.3% to $573.9 million for this year, compared to $308.1 million for 2023.

    Assuming all non-controlling interests had been exchanged for common stock, and the Company’s Normalized Adjusted Net Income before income taxes was subject to corporation taxes, Normalized Adjusted EPS was $3.55 for 2024, compared to $1.84 for 2023.

    Operating Segment Information

    The Company has two operating segments: Market Making and Execution Services; and one non-operating segment: Corporate.

    Market Making principally consists of market making in the cash, futures and options markets across global equities, fixed income, currencies, cryptocurrencies, and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions.

    Execution Services comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. The Company also provides proprietary technology and infrastructure, workflow technology, and trading analytics services to select third parties. The segment also includes the results of the Company’s capital markets business, in which the Company acts as an agent for issuers in connection with at-the-market offerings and buyback programs.

    Corporate contains the Company’s investments, principally in strategic trading-related opportunities, and maintains corporate overhead expenses.

    The following tables show the trading income, net, total revenues and Adjusted Net Trading Income by segment for the three months and full years ended December 31, 2024 and 2023.

    Total revenues by segment
    (in thousands, unaudited)

        Three Months Ended December 31, 2024   Three Months Ended December 31, 2023
        Market Making   Execution Services   Corporate   Total   Market Making   Execution Services   Corporate   Total
    Trading income, net   $ 534,728   $ 9,222     $ —     $ 543,950   $ 262,501   $ 4,079     $ —   $ 266,580
    Commissions, net and technology services     13,173     127,277       —       140,450     6,894     107,481       —     114,375
    Interest and dividends income     121,151     2,632       —       123,783     151,773     2,877       —     154,650
    Other, net     37,594     (2,476 )     (9,016 )     26,102     833     (7,940 )     7,479     372
    Total Revenues   $ 706,646   $ 136,655     $ (9,016 )   $ 834,285   $ 422,001   $ 106,497     $ 7,479   $ 535,977
                                                           
                                     
        Year Ended December 31, 2024   Year Ended December 31, 2023
        Market Making   Execution Services   Corporate   Total   Market Making   Execution Services   Corporate   Total
    Trading income, net   $ 1,798,942   $ 23,495     $ —     $ 1,822,437   $ 1,283,680   $ 17,664     $ —   $ 1,301,344
    Commissions, net and technology services     42,376     474,407       —       516,783     29,571     426,027       —     455,598
    Interest and dividends income     451,329     10,741       —       462,070     451,859     10,707       —     462,566
    Other, net     81,449     (1,413 )     (4,377 )     75,659     78,413     (7,856 )     3,308     73,865
    Total Revenues   $ 2,374,096   $ 507,230     $ (4,377 )   $ 2,876,949   $ 1,843,523   $ 446,542     $ 3,308   $ 2,293,373
                                                           

    Reconciliation of trading income, net to Adjusted Net Trading Income by operating segment
    (in thousands, unaudited)

        Three Months Ended December 31, 2024   Three Months Ended December 31, 2023
        Market Making   Execution Services   Corporate   Total   Market Making   Execution Services   Corporate   Total
    Trading income, net   $ 534,728     $ 9,222     $ —   $ 543,950     $ 262,501     $ 4,079     $ —   $ 266,580  
    Commissions, net and technology services     13,173       127,277       —     140,450       6,894       107,481       —     114,375  
    Interest and dividends income     121,151       2,632       —     123,783       151,773       2,877       —     154,650  
    Brokerage, exchange, clearance fees and payments for order flow, net     (179,228 )     (27,867 )     —     (207,095 )     (96,740 )     (20,380 )     —     (117,120 )
    Interest and dividends expense     (141,958 )     (1,428 )     —     (143,386 )     (156,941 )     (630 )     —     (157,571 )
    Adjusted Net Trading Income   $ 347,866     $ 109,836     $ —   $ 457,702     $ 167,487     $ 93,427     $ —   $ 260,914  
                                                                 
        Year Ended December 31, 2024   Year Ended December 31, 2023
        Market Making   Execution Services   Corporate   Total   Market Making   Execution Services   Corporate   Total
    Trading income, net   $ 1,798,942     $ 23,495     $ —   $ 1,822,437     $ 1,283,680     $ 17,664     $ —   $ 1,301,344  
    Commissions, net and technology services     42,376       474,407       —     516,783       29,571       426,027       —     455,598  
    Interest and dividends income     451,329       10,741       —     462,070       451,859       10,707       —     462,566  
    Brokerage, exchange, clearance fees and payments for order flow, net     (573,382 )     (101,044 )     —     (674,426 )     (420,608 )     (87,750 )     —     (508,358 )
    Interest and dividends expense     (524,158 )     (5,019 )     —     (529,177 )     (497,895 )     (2,572 )     —     (500,467 )
    Adjusted Net Trading Income   $ 1,195,107     $ 402,580     $ —   $ 1,597,687     $ 846,607     $ 364,076     $ —   $ 1,210,683  
                                                                 

    Financial Condition

    As of December 31, 2024, Virtu had $914.0 million in cash, cash equivalents and restricted cash, and total long-term debt outstanding in an aggregate principal amount of $1,767.3 million.

    Share Repurchase Program

    Since inception of the program in November 2020 through settlement date January 27, 2025, the Company repurchased approximately 50.7 million shares of Class A Common Stock and Virtu Financial Units for approximately $1,296.2 million. The Company has approximately $423.8 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

    Earnings Conference Call Information

    Virtu Financial will host a conference call to review its fourth quarter 2024 financial performance today, January 29th, at 8:30 a.m. ET. Members of the public may listen to the conference call through an audio webcast through the Investor Relations section of the firm’s website ir.virtu.com/investor-relations. 

    Website Information

    We routinely post important information for investors on the Investor Relations section of our website, ir.virtu.com/investor-relations and also from time to time may use social media channels, including our X account (x.com/virtufinancial) and our LinkedIn account (linkedin.com/company/virtu-financial), as an additional means of disclosing public information to investors, the media and others interested in us. It is possible that certain information we post on our website and on social media could be deemed to be material information, and we encourage investors, the media and others interested in us to review the business and financial information we post on our website and on the social media channels identified above, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website and our social media channels is not incorporated by reference into, and is not a part of, this document.

    Non-GAAP Financial Measures and Other Items

    To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:

    • “Adjusted Net Trading Income”, which is the amount of revenue we generate from our market making activities, or trading income, net, plus commissions, net and technology services, plus interest and dividends income and expense, net, less direct costs associated with those revenues, including brokerage, exchange, clearance fees and payments for order flow, net. Management believes that this measurement is useful for comparing general operating performance from period to period. Although we use Adjusted Net Trading Income as a financial measure to assess the performance of our business, the use of Adjusted Net Trading Income is limited because it does not include certain material costs that are necessary to operate our business. Our presentation of Adjusted Net Trading Income should not be construed as an indication that our future results will be unaffected by revenues or expenses that are not directly associated with our core business activities.
    • “EBITDA”, which measures our operating performance by adjusting Net Income to exclude Financing interest expense on long-term borrowings, Debt issue cost related to debt refinancing, prepayment, and commitment fees, Depreciation and amortization, Amortization of purchased intangibles and acquired capitalized software, and Income tax expense, and “Adjusted EBITDA”, which measures our operating performance by further adjusting EBITDA to exclude severance, transaction advisory fees and expenses, termination of office leases, charges related to share-based compensation and other expenses, which includes reserves for legal matters, and Other, net, which includes gains and losses from strategic investments and the sales of businesses.
    • “Normalized Adjusted Net Income”, “Normalized Adjusted Net Income before income taxes”, “Normalized provision for income taxes”, and “Normalized Adjusted EPS”, which we calculate by adjusting Net Income to exclude certain items, and other non-cash items, assuming that all vested and unvested Virtu Financial Units have been exchanged for Class A Common Stock, and applying an effective tax rate, which was approximately 24%.
    • “Adjusted Operating Expenses”, which we calculate by adjusting total operating expenses to exclude severance, share based compensation, reserves for legal matters, termination of office leases, connectivity early termination and write-down of assets.

    Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, and Normalized Adjusted EPS and Adjusted Operating Expenses are non-GAAP financial measures used by management in evaluating operating performance and in making strategic decisions. Additional information provided regarding the breakdown of Total Adjusted Net Trading Income by category is also a non-GAAP financial measure but is not used by the Company in evaluating operating performance and in making strategic decisions. In addition, these non-GAAP financial measures or similar non-GAAP measures are used by research analysts, investment bankers and lenders to assess our operating performance. Management believes that the presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide useful information to investors regarding our results of operations because they assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide indicators of general economic performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period. Furthermore, our credit agreement contains tests based on metrics similar to Adjusted EBITDA. Other companies may define Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS differently, and as a result our measures of Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS may not be directly comparable to those of other companies. Although we use these non-GAAP financial measures as financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business.

    Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS should be considered in addition to, and not as a substitute for, Net Income in accordance with U.S. GAAP as a measure of performance. Our presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Adjusted Net Trading Income, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted EPS and our EBITDA-based measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

    • they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
    • our EBITDA-based measures do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
    • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirement for such replacements or improvements;
    • they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
    • they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and
    • they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us.

    Because of these limitations, Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS are not intended as alternatives to Net Income as indicators of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. These U.S. GAAP measurements include Net Income, cash flows from operations and cash flow data. See below a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure.

    Virtu Financial, Inc. and Subsidiaries
    Condensed Consolidated Statements of Comprehensive Income (Unaudited)

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (in thousands, except share and per share data)     2024       2023       2024       2023  
                     
    Revenues:                
    Trading income, net   $ 543,950     $ 266,580     $ 1,822,437     $ 1,301,344  
    Interest and dividends income     123,783       154,650       462,070       462,566  
    Commissions, net and technology services     140,450       114,375       516,783       455,598  
    Other, net     26,102       372       75,659       73,865  
    Total revenues     834,285       535,977       2,876,949       2,293,373  
                     
    Operating Expenses:                
    Brokerage, exchange, clearance fees and payments for order flow, net     207,095       117,120       674,426       508,358  
    Communication and data processing     59,336       59,923       236,446       230,760  
    Employee compensation and payroll taxes     120,638       97,825       434,823       394,039  
    Interest and dividends expense     143,386       157,571       529,177       500,467  
    Operations and administrative     27,656       26,768       97,002       98,972  
    Depreciation and amortization     17,176       16,230       65,816       63,306  
    Amortization of purchased intangibles and acquired capitalized software     11,783       15,953       50,471       63,960  
    Termination of office leases     16,174       141       16,224       455  
    Debt issue cost related to debt refinancing, prepayment and commitment fees     1,739       2,573       29,479       8,317  
    Transaction advisory fees and expenses     49       284       313       314  
    Financing interest expense on long-term borrowings     26,648       24,795       97,802       99,294  
    Total operating expenses     631,680       519,183       2,231,979       1,968,242  
                     
    Income before income taxes and noncontrolling interest     202,605       16,794       644,970       325,131  
    Provision for income taxes     26,518       10,093       110,435       61,210  
    Net income   $ 176,087     $ 6,701     $ 534,535     $ 263,921  
                     
    Noncontrolling interest     (82,027 )     (1,163 )     (258,120 )     (121,885 )
                     
    Net income available for common stockholders   $ 94,060     $ 5,538     $ 276,415     $ 142,036  
                     
    Earnings per share:                
    Basic   $ 1.03     $ 0.05     $ 2.98     $ 1.42  
    Diluted   $ 1.03     $ 0.05     $ 2.97     $ 1.42  
                     
    Weighted average common shares outstanding                
    Basic     85,662,686       90,217,295       87,482,162       94,076,165  
    Diluted     86,066,968       90,217,295       87,821,576       94,076,165  
                     
    Comprehensive income:                
    Net income   $ 176,087     $ 6,701     $ 534,535     $ 263,921  
    Other comprehensive income                
    Foreign exchange translation adjustment, net of taxes     (12,793 )     4,787       (9,048 )     4,957  
    Net change in unrealized cash flow hedges gain (loss), net of taxes     (1,320 )     (24,381 )     (32,251 )     (36,993 )
    Comprehensive income   $ 161,974     $ (12,893 )   $ 493,236     $ 231,885  
    Less: Comprehensive income attributable to noncontrolling interest     (75,941 )     11,151       (240,931 )     (104,406 )
    Comprehensive income available for common stockholders   $ 86,033     $ (1,742 )   $ 252,305     $ 127,479  
                                     

    Virtu Financial, Inc. and Subsidiaries
    Reconciliation to Non-GAAP Operating Data (Unaudited)

    The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, and selected Operating Margins.

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (in thousands, except percentages)     2024       2023       2024       2023  
                     
    Reconciliation of Trading income, net to Adjusted Net Trading Income                
    Trading income, net   $ 543,950     $ 266,580     $ 1,822,437     $ 1,301,344  
    Commissions, net and technology services     140,450       114,375       516,783       455,598  
    Interest and dividends income     123,783       154,650       462,070       462,566  
    Brokerage, exchange, clearance fees and payments for order flow, net     (207,095 )     (117,120 )     (674,426 )     (508,358 )
    Interest and dividends expense     (143,386 )     (157,571 )     (529,177 )     (500,467 )
    Adjusted Net Trading Income   $ 457,702     $ 260,914     $ 1,597,687     $ 1,210,683  
                     
    Reconciliation of Net Income to EBITDA and Adjusted EBITDA                
    Net income     176,087       6,701       534,535       263,921  
    Financing interest expense on long-term borrowings     26,648       24,795       97,802       99,294  
    Debt issue cost related to debt refinancing, prepayment and commitment fees     1,739       2,573       29,479       8,317  
    Depreciation and amortization     17,176       16,230       65,816       63,306  
    Amortization of purchased intangibles and acquired capitalized software     11,783       15,953       50,471       63,960  
    Provision for income taxes     26,518       10,093       110,435       61,210  
    EBITDA   $ 259,951     $ 76,345     $ 888,538     $ 560,008  
    Severance     4,279       3,537       7,930       8,793  
    Transaction advisory fees and expenses     49       284       313       314  
    Termination of office leases     16,174       141       16,224       455  
    Other     (21,461 )     1,860       (69,795 )     (65,536 )
    Share based compensation     24,534       16,825       75,475       63,933  
    Adjusted EBITDA   $ 283,526     $ 98,992     $ 918,685     $ 567,967  
                     
    Selected Operating Margins                
    GAAP Net income Margin (1)     21.1 %     1.3 %     18.6 %     11.5 %
    Non-GAAP Net income Margin (2)     38.5 %     2.6 %     33.5 %     21.8 %
    EBITDA Margin (3)     56.8 %     29.3 %     55.6 %     46.3 %
    Adjusted EBITDA Margin (4)     61.9 %     37.9 %     57.5 %     46.9 %
                     
    1 Calculated by dividing Net income by Total revenue.                
    2 Calculated by dividing Net income by Adjusted Net Trading Income.                
    3 Calculated by dividing EBITDA by Adjusted Net Trading Income.                
    4 Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income.                
                     

    Virtu Financial, Inc. and Subsidiaries
    Reconciliation to Non-GAAP Operating Data (Unaudited)
    (Continued)

    The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS.

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (in thousands, except share and per share data)     2024       2023     2024       2023  
                     
    Reconciliation of Net Income to Normalized Adjusted Net Income                
    Net income   $ 176,087     $ 6,701   $ 534,535     $ 263,921  
    Provision for income taxes     26,518       10,093     110,435       61,210  
    Income before income taxes and noncontrolling interest   $ 202,605     $ 16,794   $ 644,970     $ 325,131  
    Amortization of purchased intangibles and acquired capitalized software     11,783       15,953     50,471       63,960  
    Debt issue cost related to debt refinancing, prepayment and commitment fees     1,739       2,573     29,479       8,317  
    Severance     4,279       3,537     7,930       8,793  
    Transaction advisory fees and expenses     49       284     313       314  
    Termination of office leases     16,174       141     16,224       455  
    Other     (21,461 )     1,860     (69,795 )     (65,536 )
    Share based compensation     24,534       16,825     75,475       63,933  
    Normalized Adjusted Net Income before income taxes   $ 239,702     $ 57,967   $ 755,067     $ 405,367  
    Normalized provision for income taxes (1)     57,529       13,912     181,217       97,286  
    Normalized Adjusted Net Income   $ 182,173     $ 44,055   $ 573,850     $ 308,081  
                     
    Weighted Average Adjusted shares outstanding (2)     160,183,679       163,869,845     161,845,371       167,782,513  
                     
    Normalized Adjusted EPS   $ 1.14     $ 0.27   $ 3.55     $ 1.84  
                     
    (1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for all periods presented.
    (2) Assumes that (1) holders of all vested and unvested non-vesting Virtu Financial Units (together with corresponding shares of the Company’s Class C common stock, par value $0.00001 per share (the “Class C Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of Class A Common Stock on a one-for-one basis, (2) holders of all Virtu Financial Units (together with corresponding shares of the Company’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of the Company’s Class B common stock, par value $0.00001 per share (the “Class B Common Stock”) on a one-for-one basis, and subsequently exercised their right to convert the shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis. Includes additional shares from the dilutive impact of options, restricted stock units and restricted stock awards outstanding under the Amended and Restated 2015 Management Incentive Plan during the three months and full years ended December 31, 2024 and 2023.
     

    Virtu Financial, Inc. and Subsidiaries
    Condensed Consolidated Statements of Financial Condition (Unaudited)

    (in thousands, except share data)   December 31,
    2024    		   December 31,
    2023
             
    Assets        
    Cash and cash equivalents   $ 872,513   $ 820,436  
    Cash and securities segregated under regulations and other     41,478     35,024  
    Securities borrowed     2,294,529     1,722,440  
    Securities purchased under agreements to resell     983,941     1,512,114  
    Receivables from broker-dealers and clearing organizations     1,054,378     737,724  
    Receivables from customers     149,804     106,245  
    Trading assets, at fair value     7,802,652     7,358,611  
    Property, equipment and capitalized software, net     91,415     100,365  
    Operating lease right-of-use assets     175,046     229,499  
    Goodwill     1,148,926     1,148,926  
    Intangibles (net of accumulated amortization)     203,188     257,520  
    Deferred taxes     135,046     133,760  
    Assets of business held for sale     4,615     —  
    Other assets     386,811     303,720  
    Total assets     15,344,342     14,466,384  
             
    Liabilities and equity        
    Liabilities        
    Short-term borrowings, net     38,541     —  
    Securities loaned     2,431,878     1,329,446  
    Securities sold under agreements to repurchase     1,271,788     1,795,994  
    Payables to broker-dealers and clearing organizations     901,165     1,167,712  
    Payables to customers     46,112     23,229  
    Trading liabilities, at fair value     6,440,971     6,071,352  
    Tax receivable agreement obligations     196,592     216,480  
    Accounts payable and accrued expenses and other liabilities     558,100     451,293  
    Operating lease liabilities     229,825     278,317  
    Long-term borrowings, net     1,740,467     1,727,205  
    Liabilities of business held for sale     1,526     —  
    Total liabilities     13,856,965     13,061,028  
             
    Total equity     1,487,377     1,405,356  
             
    Total liabilities and equity   $ 15,344,342   $ 14,466,384  
             
        As of December 31, 2024
    Ownership of Virtu Financial LLC Interests:   Interests   %
    Virtu Financial, Inc. – Class A Common Stock and Restricted Stock Units     90,540,857     56.9 %
    Non-controlling Interests (Virtu Financial LLC)     68,653,710     43.1 %
    Total Virtu Financial LLC Interests     159,194,567     100.0 %
                   

    About Virtu Financial, Inc.

    Virtu is a leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients and deliver liquidity to the global markets. Leveraging its global market making expertise and infrastructure, Virtu provides a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. Virtu’s product offerings allow clients to trade on hundreds of venues across 50+ countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income and myriad other commodities. In addition, Virtu’s integrated, multi-asset analytics platform provides a range of pre and post-trade services, data products and compliance tools that clients rely upon to invest, trade and manage risk across global markets.

    Cautionary Note Regarding Forward-Looking Statements

    This press release may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Virtu Financial, Inc.’s (“Virtu’s”, the “Company’s” or “our”) business that are not historical facts are forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, and if the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties, some or all of which are not predictable or within Virtu’s control, that could cause actual performance or results to differ materially from those expressed in the statements. Those risks and uncertainties include, without limitation: risks relating to fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties, clients, and various clearing houses to perform their obligations to us; the performance and reliability of our customized trading platform; the risk of material trading losses from our market making activities; swings in valuations in securities or other instruments in which we hold positions; increasing competition and consolidation in our industry; the risk that cash flow from our operations and other available sources of liquidity will not be sufficient to fund our various ongoing obligations, including operating expenses, short-term funding requirements, margin requirements, capital expenditures, debt service and dividend payments; potential consequences of pending SEC proposals by the prior administration focused on equity markets which may, if adopted, result in reduced overall and off-exchange trading volumes and market making opportunities, impose additional or heightened regulatory obligations on market makers and other market participants, and generally increase the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; regulatory and legal uncertainties and potential changes associated with our industry, particularly in light of increased attention from media, regulators and lawmakers to market structure and related issues including but not limited to the retail trading environment, wholesale market making and off exchange trading more generally and payment for order flow arrangements; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensure that the technology we utilize is not vulnerable to security risks, hacking and cyber-attacks; risks associated with third party software and technology infrastructure. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in forward-looking statements, see Virtu’s Securities and Exchange Commission filings, including but not limited to Virtu’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

    CONTACT         

    Investor & Media Relations
    Andrew Smith
    investor_relations@virtu.com
    media@virtu.com

    The MIL Network –

  • MIL-OSI: First Northwest Bancorp Reports Fourth Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    PORT ANGELES, Wash., Jan. 29, 2025 (GLOBE NEWSWIRE) — First Northwest Bancorp (Nasdaq: FNWB) (“First Northwest” or the “Company”) today reported a net loss of $2.8 million for the fourth quarter of 2024, compared to a net loss of $2.0 million for the third quarter of 2024 and a net loss of $5.5 million for the fourth quarter of 2023. Basic and diluted loss per share were $0.32 for the fourth quarter of 2024, compared to basic and diluted loss per share of $0.23 for the third quarter of 2024 and basic and diluted loss per share of $0.62 for the fourth quarter of 2023.

    In the fourth quarter of 2024, the Company recorded adjusted pre-tax, pre-provision net revenue (“PPNR”)(1) of $1.2 million, compared to a $49,000 adjusted PPNR loss for the preceding quarter and adjusted PPNR of $327,000 for the fourth quarter of 2023.

    The Board of Directors of First Northwest declared a quarterly cash dividend of $0.07 per common share, payable on February 28, 2025, to shareholders of record as of the close of business on February 14, 2025.

    Quote from First Northwest President and CEO, Matthew P. Deines:
    “Although financial results in 2024 were adversely impacted by elevated credit costs, we are optimistic for continued improvement in asset quality in early 2025. During the fourth quarter, our pre-provision net revenue (1) grew to $1.2 million with modest margin improvement as we successfully reduced FHLB borrowings. As we look ahead to 2025, we are laser focused on growing core commercial and retail customer relationships while resolving problem assets, improving profitability and maintaining our strong capital position. Highlights for 2024 include the termination of our compliance Consent Order with the FDIC, reduction of core operating expenses and improvement in our liquidity position with the loan to deposit ratio below 100% at year-end. I’d like to thank all our employees for their efforts and contributions in 2024, and for making a positive impact in the communities we serve.”

    Key Points for Fourth Quarter and Going Forward

    Provision for credit losses:

    • The Company recorded a $3.8 million provision for credit losses on loans in the fourth quarter of 2024, primarily due to charge-offs of six commercial business loans. This compares to loan credit loss provisions of $3.1 million for the preceding quarter and $1.2 million for the fourth quarter of 2023. 
    • We believe the reserve on individually analyzed loans does not represent a universal decline in the collectability of all loans in the portfolio. We continue to work on resolution plans for all troubled borrowers. The provision for credit losses on loans had a significant negative impact on net income for the fourth quarter of 2024.

    First Fed Bank’s (“First Fed” or the “Bank”) balance sheet restructure continues to have a positive impact:

    • The fair value hedge on loans, tied to the compounded overnight index swap using the secured overnight financing rate index, which was established in the first quarter of 2024, added $1.1 million to interest income for the year. The hedge successfully reduced the Bank’s liability sensitivity, and lowered the overall interest rate risk profile. The hedge also enhanced earnings due to a favorable contract position during the 2024 interest rate environment. The Bank expects to maintain a positive carry on its derivative for up to an additional 25-basis points of rate cuts. 
    • During 2024, bank-owned life insurance policies (“BOLI”) were reinvested into higher yielding products. In the fourth quarter of 2024, a $8.5 million policy was surrendered and reinvested into a policy earning 6.01% and a $922,000 policy earning 1.64% was exchanged and reinvested into a policy earning 3.99%. Total policy conversions during 2024 increased the annual pre-tax net yield earned on the total BOLI portfolio by 74-basis points. The remaining surrender transaction is expected to be completed during the first quarter of 2025. 
    • Investment security purchases during the fourth quarter of 2024 totaled $47.1 million, carrying a weighted-average yield of 6.7% at purchase and a weighted-average life of 3.1 years. The annualized interest income on these securities is anticipated to provide $2.6 million in revenue for 2025.

    (1) See reconciliation of Non-GAAP Financial Measures later in this release.

    Selected Quarterly Financial Ratios:

      As of or For the Quarter Ended  
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    Performance ratios: (1)                              
    Return on average assets   -0.51 %   -0.36 %   -0.40 %   0.07 %   -1.03 %
    Adjusted PPNR return on average assets (2)   0.22     -0.01     0.10     0.34     -0.06  
    Return on average equity   -6.92     -4.91     -5.47     0.98     -14.05  
    Net interest margin (3)   2.73     2.70     2.76     2.76     2.84  
    Efficiency ratio (4)   92.2     100.3     72.3     88.8     150.8  
    Equity to total assets   6.89     7.13     7.17     7.17     7.42  
    Book value per common share $ 16.45   $ 17.17   $ 16.81   $ 17.00   $ 16.99  
    Tangible performance ratios: (1)                              
    Tangible common equity to tangible assets (2)   6.83 %   7.06 %   7.10 %   7.10 %   7.35 %
    Return on average tangible common equity (2)   -6.99     -4.96     -5.53     0.99     -14.20  
    Tangible book value per common share (2) $ 16.29   $ 17.00   $ 16.64   $ 16.83   $ 16.83  
    Capital ratios (First Fed): (5)                              
    Tier 1 leverage   9.4 %   9.4 %   9.4 %   9.7 %   9.9 %
    Common equity Tier 1 capital   12.4     12.2     12.4     12.6     13.1  
    Total risk-based   13.6     13.4     13.5     13.6     14.1  
    (1 ) Performance ratios are annualized, where appropriate.
    (2 ) See reconciliation of Non-GAAP Financial Measures later in this release.
    (3 ) Net interest income divided by average interest-earning assets.
    (4 ) Total noninterest expense as a percentage of net interest income and total other noninterest income.
    (5 ) Current period capital ratios are preliminary and subject to finalization of the FDIC Call Report.


    Adjusted Pre-tax, Pre-Provision Net Revenue     (1)

    Adjusted PPNR for the fourth quarter of 2024 increased $1.3 million to $1.2 million, compared to an adjusted PPNR loss of $49,000 for the preceding quarter, and increased $1.5 million from an adjusted PPNR $327,000 loss in the fourth quarter one year ago.

        For the Quarter Ended   For the Year Ended  
    (Dollars in thousands)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023    		  
    Net interest income   $ 14,137   $ 14,020   $ 14,235   $ 13,928   $ 14,195   $ 56,320   $ 61,432  
    Total noninterest income     1,300     1,779     7,347     2,188     (2,929 )   12,614     4,020  
    Total revenue     15,437     15,799     21,582     16,116     11,266     68,934     65,452  
    Total noninterest expense     14,233     15,848     15,609     14,303     16,990     59,993     61,454  
    PPNR (1)     1,204     (49 )   5,973     1,813     (5,724 )   8,941     3,998  
    Selected nonrecurring adjustments to PPNR                                            
    Less: Net gain on sale of premises and equipment     —     —     7,919     —     —     7,919     —  
    Sale leaseback taxes and assessments included in occupancy and equipment     —     —     (359 )   —     —     (359 )   —  
    Net loss on sale of investment securities     —     —     (2,117 )   —     (5,397 )   (2,117 )   (5,397 )
    Adjusted PPNR (1)   $ 1,204   $ (49 ) $ 530   $ 1,813   $ (327 ) $ 3,498   $ 9,395  

    (1) See reconciliation of Non-GAAP Financial Measures later in this release.

    • Total interest income was relatively unchanged at $28.2 million for the fourth quarter of 2024, compared to the previous quarter, and increased $1.9 million compared to $26.3 million in the fourth quarter of 2023. Interest income decreased in the fourth quarter of 2024 primarily due to a decrease in the income earned on the securities derivative combined with lower FHLB dividends and reduced interest income received on Company deposit accounts. Higher yields on performing loans during the fourth quarter of 2024 were partially offset by nonaccrual interest adjustments totaling $46,000. Interest and fees on loans increased year-over-year as the loan portfolio grew. Loan yields increased over the prior year due to higher rates on new originations as well as the repricing of variable and adjustable-rate loans.
    • The net interest margin increased to 2.73% for the fourth quarter of 2024, from 2.70% for the prior quarter, and decreased 11-basis points from 2.84% for the fourth quarter of 2023. The Company reported reduced rates and declining volume of borrowings during the quarter which lowered costs; however, these savings were partially offset by an increase in cost due to a higher volume of customer deposits. The decrease in net interest margin from the same quarter one year ago is due to higher funding costs for deposits and borrowed funds. 
    • Noninterest income included a $1.8 million write down on an equity investment in an organization that is involved in a lawsuit, partially offset by a $1.5 million BOLI death benefit payment received due to the passing of an employee. 
    • Noninterest expense for the fourth quarter of 2024 decreased mainly due to a $1.2 million reduction in compensation related to nonrecurring payouts in the previous quarter combined with a reduced incentive accrual and lower headcount in the fourth quarter of 2024. FDIC assessment, state taxes, advertising and other discretionary spending also decreased from the previous quarter.

    Allowance for Credit Losses on Loans (“ACLL”) and Credit Quality

    The allowance for credit losses on loans (“ACLL”) decreased $1.5 million to $20.5 million at December 31, 2024, from $22.0 million at September 30, 2024. The ACLL as a percentage of total loans was 1.21% at December 31, 2024, a decrease from 1.27% at September 30, 2024, and an increase from 1.05% one year earlier. The pooled loan reserve decreased $1.5 million during the fourth quarter of 2024, primarily due to the decreases in multi-family, construction, and consumer loan balances combined with decreases resulting from lower loss factors applied to commercial business and commercial real estate loans, partially offset by higher loss factors applied to one-to-four family and other consumer loans.

    Nonperforming loans totaled $30.5 million at December 31, 2024, an increase of $139,000 from September 30, 2024. ACLL to nonperforming loans decreased to 67% at December 31, 2024, from 72% at September 30, 2024, and 94% at December 31, 2023. This ratio continued to decline as higher balances of real estate loans are included in nonperforming assets with no significant corresponding increase to the ACLL as these collateral dependent loans were considered adequately reserved for based on information available at each period end.

    Classified loans decreased $4.4 million to $42.5 million at December 31, 2024, from $46.9 million at September 30, 2024, primarily due to charge-offs totaling $3.9 million on six commercial business loans during the fourth quarter. An $11.4 million construction loan relationship, which became a classified loan in the fourth quarter of 2022; an $8.1 million commercial construction loan relationship, which became classified in the second quarter of 2024; and a $6.2 million commercial loan relationship, which became classified in the fourth quarter of 2023, account for 61% of the classified loan balance at December 31, 2024. The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in two of these three collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 15 loans totaling $2.2 million included in classified loans at December 31, 2024, and an additional eight loans totaling $2.8 million included in the special mention risk grading category.

      For the Quarter Ended  
    ACLL ($ in thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    Balance at beginning of period $ 21,970   $ 19,343   $ 17,958   $ 17,510   $ 16,945  
    Charge-offs:                              
    Construction and land   (411 )   —     (3,978 )   —     —  
    Home equity   —     —     —     —     1  
    Auto and other consumer   (364 )   (492 )   (832 )   (806 )   (655 )
    Commercial business   (4,596 )   (24 )   (2,643 )   (33 )   —  
    Total charge-offs   (5,371 )   (516 )   (7,453 )   (839 )   (654 )
    Recoveries:                              
    One-to-four family   —     42     —     2     5  
    Commercial real estate   2     —     —     —     —  
    Home equity   —     —     —     —     10  
    Auto and other consumer   52     24     198     46     42  
    Commercial business   36     —     —     —     —  
    Total recoveries   90     66     198     48     57  
    Net loan charge-offs   (5,281 )   (450 )   (7,255 )   (791 )   (597 )
    Provision for credit losses   3,760     3,077     8,640     1,239     1,162  
    Balance at end of period $ 20,449   $ 21,970   $ 19,343   $ 17,958   $ 17,510  
                                   
    Average total loans   1,708,232     1,718,402     1,717,830     1,678,656     1,645,418  
    Annualized net charge-offs to average outstanding loans   1.23 %   0.10 %   1.70 %   0.19 %   0.14 %
    Asset Quality ($ in thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    Nonaccrual loans:                              
    One-to-four family $ 1,477   $ 1,631   $ 1,750   $ 1,237   $ 1,844  
    Multi-family   —     —     708     708     —  
    Commercial real estate   5,598     5,634     14     22     28  
    Construction and land   19,544     19,382     19,292     14,440     14,986  
    Home equity   55     116     118     121     123  
    Auto and other consumer   700     894     746     1,012     786  
    Commercial business   3,141     2,719     1,003     1,941     877  
    Total nonaccrual loans   30,515     30,376     23,631     19,481     18,644  
    Other real estate owned   —     —     —     —     —  
    Total nonperforming assets $ 30,515   $ 30,376   $ 23,631   $ 19,481   $ 18,644  
                                   
    Nonaccrual loans as a % of total loans (1)   1.80 %   1.75 %   1.39 %   1.14 %   1.12 %
    Nonperforming assets as a % of total assets (2)   1.37     1.35     1.07     0.87     0.85  
    ACLL as a % of total loans   1.21     1.27     1.14     1.05     1.05  
    ACLL as a % of nonaccrual loans   67.01     72.33     81.85     92.18     93.92  
    Total past due loans to total loans   1.98     1.92     1.45     1.91     0.94  
    (1 ) Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due.
    (2 ) Nonperforming assets consists of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), real estate owned and repossessed assets.


    Financial Condition and Capital

    Investment securities increased $29.5 million, or 9.5%, to $340.3 million at December 31, 2024, compared to $310.9 million three months earlier, and increased $44.7 million compared to $295.6 million at December 31, 2023. The market value of the portfolio decreased $5.8 million during the fourth quarter of 2024. The estimated average life of the securities portfolio was approximately 6.9 years at December 31, 2024, 7.4 years at the prior quarter end and 7.7 years at the end of the fourth quarter of 2023. The effective duration of the portfolio was approximately 3.9 years at December 31, 2024, compared to 3.9 years at the prior quarter end and 4.8 years at the end of the fourth quarter of 2023. Investment purchases at the beginning of 2024 were primarily floating rate securities to take advantage of higher short-term rates above those offered on cash at that time and to reduce our liability sensitivity. Purchases in the fourth quarter were primarily fixed to rebalance our securities portfolio position for 2025.

    Investment Securities ($ in thousands)  December 31,
    2024    		    September 30,
    2024    		    December 31,
    2023    		   Three Month
    % Change    		   One Year
    % Change    		  
    Available for Sale at Fair Value                          
    Municipal bonds $ 77,876   $ 81,363   $ 87,761   -4.3 % -11.3 %
    U.S. government agency issued asset-backed securities (ABS agency)   12,876     13,296     11,782   -3.2   9.3  
    Corporate issued asset-backed securities (ABS corporate)   16,122     16,391     5,286   -1.6   205.0  
    Corporate issued debt securities (Corporate debt)   54,491     54,058     51,454   0.8   5.9  
    U.S. Small Business Administration securities (SBA)   8,666     9,317     —   -7.0   100.0  
    Mortgage-backed securities:                          
    U.S. government agency issued mortgage-backed securities (MBS agency)   98,697     78,549     63,247   25.7   56.1  
    Non-agency issued mortgage-backed securities (MBS non-agency)   71,616     57,886     76,093   23.7   -5.9  
    Total securities available for sale $ 340,344   $ 310,860   $ 295,623   9.5   15.1  

    Net loans, excluding loans held for sale, decreased $39.2 million, or 2.3%, to $1.68 billion at December 31, 2024, from $1.71 billion at September 30, 2024, and increased $32.7 million, or 2.0%, from $1.64 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $18.3 million. Loan payoffs of $73.9 million, regular payments of $35.3 million and charge-offs totaling $5.3 million outpaced new loan funding totaling $55.6 million and draws on existing loans totaling $19.7 million.

    Loans ($ in thousands)  December 31,
    2024    		    September 30,
    2024    		    December 31,
    2023    		   Three Month
    % Change    		   One Year
    % Change    		  
    Real Estate:                          
    One-to-four family $ 395,315   $ 395,792   $ 378,432   -0.1 % 4.5 %
    Multi-family   332,596     353,813     333,094   -6.0   -0.1  
    Commercial real estate   390,379     376,008     387,983   3.8   0.6  
    Construction and land   78,110     95,709     129,691   -18.4   -39.8  
    Total real estate loans   1,196,400     1,221,322     1,229,200   -2.0   -2.7  
    Consumer:                          
    Home equity   79,054     76,960     69,403   2.7   13.9  
    Auto and other consumer   268,876     281,198     249,130   -4.4   7.9  
    Total consumer loans   347,930     358,158     318,533   -2.9   9.2  
    Commercial business   151,493     155,327     112,295   -2.5   34.9  
    Total loans receivable   1,695,823     1,734,807     1,660,028   -2.2   2.2  
    Less:                          
    Derivative basis adjustment   188     (1,579 )   —   111.9   100.0  
    Allowance for credit losses on loans   20,449     21,970     17,510   -6.9   16.8  
    Total loans receivable, net $ 1,675,186   $ 1,714,416   $ 1,642,518   -2.3   2.0  

    Total deposits decreased $23.6 million to $1.69 billion at December 31, 2024, compared to $1.71 billion at September 30, 2024, and increased $11.1 million, or 0.7%, compared to $1.68 billion one year ago. During the fourth quarter of 2024, total customer deposit balances decreased $2.8 million and brokered deposit balances decreased $20.8 million. Overall, the current rate environment continues to contribute to greater competition for deposits. As a result, the Bank continues offering deposit rate specials to attract new funds.

    Deposits ($ in thousands)  December 31,
    2024    		    September 30,
    2024    		    December 31,
    2023    		   Three Month
    % Change    		   One Year
    % Change    		  
    Noninterest-bearing demand deposits $ 256,416   $ 252,999   $ 252,083   1.4 % 1.7 %
    Interest-bearing demand deposits   164,891     167,202     169,418   -1.4   -2.7  
    Money market accounts   413,822     433,307     362,205   -4.5   14.3  
    Savings accounts   205,055     212,763     242,148   -3.6   -15.3  
    Certificates of deposit, customer   464,928     441,665     443,412   5.3   4.9  
    Certificates of deposit, brokered   182,914     203,705     207,626   -10.2   -11.9  
    Total deposits $ 1,688,026   $ 1,711,641   $ 1,676,892   -1.4   0.7  

    Total shareholders’ equity decreased to $153.9 million at December 31, 2024, compared to $160.8 million three months earlier, due to a decrease in the after-tax fair market values of the available-for-sale investment securities portfolio of $4.5 million, a net loss of $2.8 million and dividends declared of $656,000, partially offset by an increase in the after-tax fair market values of derivatives of $952,000.

    Capital levels for both the Company and its operating bank, First Fed, remain in excess of applicable regulatory requirements and the Bank was categorized as “well-capitalized” at December 31, 2024. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at December 31, 2024, were 12.4% and 13.6%, respectively.

    First Northwest continued to return capital to our shareholders through cash dividends during the fourth quarter of 2024. The Company paid cash dividends totaling $656,000 in the fourth quarter of 2024. No shares of common stock were repurchased under the Company’s April 2024 Stock Repurchase Plan (“Repurchase Plan”) during the quarter ended December 31, 2024. There are 846,123 shares that remain available for repurchase under the Repurchase Plan.

    Awards/Recognition
    The Company received several accolades as a leader in the community in the last year.

    In September 2024, the First Fed team was recognized in the 2024 Best of Olympic Peninsula surveys, winning Best Bank and Best Lender in Clallam County; Best Bank and Best Financial Advisor in the West End; and Best Lender in Jefferson County. First Fed was also a finalist for Best Bank, Best Customer Service, Best Employer and Best Financial Advisor in Jefferson County; Best Customer Service, Best Employer and Best Financial Advisor in Clallam County; and Best Customer Service and Best Employer in the West End.
    In May 2024, First Fed, along with the First Fed Community Foundation, were honored to be ranked second on the Puget Sound Business Journal Midsize Corporate Philanthropists list.
    In October 2023, the First Fed team was honored to bring home the Gold for Best Bank in the Best of the Northwest survey hosted by Bellingham Alive for the second year in a row.
    In September 2023, the First Fed team was recognized in the 2023 Best of Olympic Peninsula surveys as a finalist for Best Employer in Kitsap County and Best Bank and Best Financial Institution in Bainbridge.


    We recommend reading this earnings release in conjunction with the Fourth Quarter 2024 Investor Presentation, located at http://investor.ourfirstfed.com/quarterly-reports and included as an exhibit to our January 29, 2025, Current Report on Form 8-K.

    About the Company
    First Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 16 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. In 2022, First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm. Additionally, First Northwest focuses on strategic partnerships to provide modern financial services such as digital payments and marketplace lending. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington.

    Forward-Looking Statements
    Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance, perceived opportunities in the market, potential future credit experience, including our ability to collect, the outcome of litigation and statements regarding our mission and vision, and include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements often identified by words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions. These forward-looking statements are based upon current management beliefs and expectations and may, therefore, involve risks and uncertainties, many of which are beyond our control. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; pressures on liquidity, including as a result of withdrawals of deposits or declines in the value of our investment portfolio; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the section entitled “Risk Factors,” and other filings with the Securities and Exchange Commission (“SEC”),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov.

    Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company’s operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2024 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company’s operations and stock price performance.

    For More Information Contact:
    Matthew P. Deines, President and Chief Executive Officer
    Geri Bullard, EVP, Chief Financial Officer and Chief Operating Officer
    IRGroup@ourfirstfed.com
    360-457-0461

    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, except share data) (Unaudited)
     
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    ASSETS                                
    Cash and due from banks   $ 16,811   $ 17,953   $ 19,184   $ 15,562   $ 19,845  
    Interest-earning deposits in banks     55,637     64,769     63,995     61,784     103,324  
    Investment securities available for sale, at fair value     340,344     310,860     306,714     325,955     295,623  
    Loans held for sale     472     378     1,086     988     753  
    Loans receivable (net of allowance for credit losses on loans $20,449, $21,970, $19,343, $17,958, and $17,510)     1,675,186     1,714,416     1,677,764     1,692,774     1,642,518  
    Federal Home Loan Bank (FHLB) stock, at cost     14,435     14,435     13,086     15,876     13,664  
    Accrued interest receivable     8,159     8,939     9,466     8,909     7,894  
    Premises held for sale, net     —     —     —     6,751     18,049  
    Premises and equipment, net     10,129     10,436     10,714     11,028     —  
    Servicing rights on sold loans, at fair value     3,281     3,584     3,740     3,820     3,793  
    Bank-owned life insurance, net     41,150     41,429     41,113     34,681     40,578  
    Equity and partnership investments     13,229     14,912     15,085     15,121     14,794  
    Goodwill and other intangible assets, net     1,082     1,083     1,084     1,085     1,086  
    Deferred tax asset, net     13,738     10,802     12,216     12,704     13,001  
    Right-of-use (“ROU”) asset, net     17,001     17,315     17,627     5,841     6,047  
    Prepaid expenses and other assets     21,352     24,175     23,088     27,141     20,828  
    Total assets   $ 2,232,006   $ 2,255,486   $ 2,215,962   $ 2,240,020   $ 2,201,797  
                                     
    LIABILITIES AND SHAREHOLDERS’ EQUITY                                
    Deposits   $ 1,688,026   $ 1,711,641   $ 1,708,288   $ 1,666,624   $ 1,676,892  
    Borrowings     336,014     334,994     302,575     371,455     320,936  
    Accrued interest payable     3,295     2,153     3,143     2,830     3,396  
    Lease liability, net     17,535     17,799     18,054     6,227     6,428  
    Accrued expenses and other liabilities     31,770     25,625     23,717     29,980     29,545  
    Advances from borrowers for taxes and insurance     1,484     2,485     1,304     2,398     1,260  
    Total liabilities     2,078,124     2,094,697     2,057,081     2,079,514     2,038,457  
                                     
    Shareholders’ Equity                                
    Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding     —     —     —     —     —  
    Common stock, $0.01 par value, 75,000,000 shares authorized; issued and outstanding at each period end: 9,353,348; 9,365,979; 9,453,247; 9,442,796; and 9,611,876     93     94     94     94     96  
    Additional paid-in capital     93,357     93,218     93,985     93,763     95,784  
    Retained earnings     97,198     100,660     103,322     106,202     107,349  
    Accumulated other comprehensive loss, net of tax     (30,172 )   (26,424 )   (31,597 )   (32,465 )   (32,636 )
    Unearned employee stock ownership plan (ESOP) shares     (6,594 )   (6,759 )   (6,923 )   (7,088 )   (7,253 )
    Total shareholders’ equity     153,882     160,789     158,881     160,506     163,340  
    Total liabilities and shareholders’ equity   $ 2,232,006   $ 2,255,486   $ 2,215,962   $ 2,240,020   $ 2,201,797  
    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Dollars in thousands, except per share data) (Unaudited)
     
        For the Quarter Ended   For the Year Ended  
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023    		  
    INTEREST INCOME                                            
    Interest and fees on loans receivable   $ 23,716   $ 23,536   $ 23,733   $ 22,767   $ 22,083   $ 93,752   $ 84,614  
    Interest on investment securities     3,658     3,786     3,949     3,632     3,393     15,025     13,279  
    Interest on deposits in banks     550     582     571     645     581     2,348     2,126  
    FHLB dividends     273     302     358     282     252     1,215     880  
    Total interest income     28,197     28,206     28,611     27,326     26,309     112,340     100,899  
    INTEREST EXPENSE                                            
    Deposits     11,175     10,960     10,180     10,112     8,758     42,427     27,019  
    Borrowings     2,885     3,226     4,196     3,286     3,356     13,593     12,448  
    Total interest expense     14,060     14,186     14,376     13,398     12,114     56,020     39,467  
    Net interest income     14,137     14,020     14,235     13,928     14,195     56,320     61,432  
    PROVISION FOR CREDIT LOSSES                                            
    Provision for credit losses on loans     3,760     3,077     8,640     1,239     1,162     16,716     2,357  
    (Recapture of) provision for credit losses on unfunded commitments     (105 )   57     99     (269 )   (10 )   (218 )   (1,034 )
    Provision for credit losses     3,655     3,134     8,739     970     1,152     16,498     1,323  
    Net interest income after provision for credit losses     10,482     10,886     5,496     12,958     13,043     39,822     60,109  
    NONINTEREST INCOME                                            
    Loan and deposit service fees     1,054     1,059     1,076     1,102     1,068     4,291     4,341  
    Sold loan servicing fees and servicing rights mark-to-market     (115 )   10     74     219     276     188     676  
    Net gain on sale of loans     52     58     150     52     33     312     438  
    Net loss on sale of investment securities     —     —     (2,117 )   —     (5,397 )   (2,117 )   (5,397 )
    Net gain on sale of premises and equipment     —     —     7,919     —     —     7,919     —  
    Increase in cash surrender value of bank-owned life insurance     328     315     293     243     260     1,179     928  
    Income from death benefit on bank-owned life insurance, net     1,536     —     —     —     —     1,536     —  
    Other (loss) income     (1,555 )   337     (48 )   572     831     (694 )   3,034  
    Total noninterest income     1,300     1,779     7,347     2,188     (2,929 )   12,614     4,020  
    NONINTEREST EXPENSE                                            
    Compensation and benefits     7,367     8,582     8,588     8,128     7,397     32,665     31,209  
    Data processing     2,065     2,085     2,008     1,944     2,107     8,102     8,170  
    Occupancy and equipment     1,559     1,553     1,799     1,240     1,262     6,151     4,858  
    Supplies, postage, and telephone     296     360     317     293     351     1,266     1,433  
    Regulatory assessments and state taxes     460     548     457     513     376     1,978     1,635  
    Advertising     362     409     377     309     235     1,457     2,706  
    Professional fees     813     698     684     910     1,119     3,105     3,738  
    FDIC insurance premium     491     533     473     386     418     1,883     1,357  
    Other expense     820     1,080     906     580     3,725     3,386     6,348  
    Total noninterest expense     14,233     15,848     15,609     14,303     16,990     59,993     61,454  
    Loss before provision (benefit) for income taxes     (2,451 )   (3,183 )   (2,766 )   843     (6,876 )   (7,557 )   2,675  
    Provision (benefit) for income taxes     359     (1,203 )   (547 )   447     (1,354 )   (944 )   549  
    Net (loss) income   $ (2,810 ) $ (1,980 ) $ (2,219 ) $ 396   $ (5,522 ) $ (6,613 ) $ 2,286  
                                                 
    Basic and diluted (loss) earnings per common share   $ (0.32 ) $ (0.23 ) $ (0.25 ) $ 0.04   $ (0.62 ) $ (0.75 ) $ 0.26  
                                                 
    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    ADDITIONAL INFORMATION
    (Dollars in thousands) (Unaudited)
     
    Selected Loan Detail   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    Construction and land loans breakout                                
    1-4 Family construction   $ 39,319   $ 43,125   $ 56,514   $ 69,075   $ 68,029  
    Multifamily construction     15,407     29,109     43,341     45,776     50,431  
    Nonresidential construction     16,857     17,500     1,015     3,374     3,756  
    Land and development     6,527     5,975     6,403     7,122     7,475  
    Total construction and land loans   $ 78,110   $ 95,709   $ 107,273   $ 125,347   $ 129,691  
                                     
    Auto and other consumer loans breakout                                
    Triad Manufactured Home loans   $ 128,231   $ 129,600   $ 110,510   $ 105,525   $ 105,057  
    Woodside auto loans     117,968     126,129     131,151     128,072     124,401  
    First Help auto loans     14,283     15,971     17,427     8,326     4,516  
    Other auto loans     1,647     2,064     2,690     3,313     4,158  
    Other consumer loans     6,747     7,434     23,845     23,598     10,998  
    Total auto and other consumer loans   $ 268,876   $ 281,198   $ 285,623   $ 268,834   $ 249,130  
                                     
    Commercial business loans breakout                                
    Northpointe Bank MPP   $ 36,230   $ 38,155   $ 9,150   $ 15,047   $ 9,502  
    Secured lines of credit     35,701     37,686     28,862     41,014     35,815  
    Unsecured lines of credit     1,717     1,571     1,133     1,001     456  
    SBA loans     7,044     7,219     7,146     8,944     9,115  
    Other commercial business loans     70,801     70,696     70,803     70,291     57,407  
    Total commercial business loans   $ 151,493   $ 155,327   $ 117,094   $ 136,297   $ 112,295  
    Loans by Collateral and Unfunded Commitments   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		  
    One-to-four family construction   $ 44,468   $ 51,607   $ 49,440   $ 70,100   $ 60,211  
    All other construction and land     34,290     45,166     58,346     55,286     69,484  
    One-to-four family first mortgage     466,046     469,053     434,840     436,543     426,159  
    One-to-four family junior liens     15,090     14,701     13,706     12,608     12,250  
    One-to-four family revolving open-end     51,481     48,459     44,803     45,536     42,479  
    Commercial real estate, owner occupied:                                
    Health care     29,129     29,407     29,678     29,946     22,523  
    Office     17,756     17,901     19,215     17,951     18,468  
    Warehouse     14,948     11,645     14,613     14,683     14,758  
    Other     78,170     64,535     56,292     55,063     61,304  
    Commercial real estate, non-owner occupied:                                
    Office     49,417     49,770     50,158     53,099     53,548  
    Retail     49,591     49,717     50,101     50,478     51,384  
    Hospitality     61,919     62,282     62,628     66,982     67,332  
    Other     81,640     82,573     84,428     93,040     94,822  
    Multi-family residential     333,419     354,118     350,382     339,907     333,428  
    Commercial business loans     77,381     86,904     79,055     90,781     76,920  
    Commercial agriculture and fishing loans     21,833     15,369     14,411     10,200     5,422  
    State and political subdivision obligations     369     404     405     405     405  
    Consumer automobile loans     133,789     144,036     151,121     139,524     132,877  
    Consumer loans secured by other assets     131,429     132,749     129,293     122,895     108,542  
    Consumer loans unsecured     3,658     4,411     5,209     6,415     7,712  
    Total loans   $ 1,695,823   $ 1,734,807   $ 1,698,124   $ 1,711,442   $ 1,660,028  
                                     
    Unfunded commitments under lines of credit or existing loans   $ 163,827   $ 166,446   $ 155,005   $ 148,736   $ 149,631  
    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    NET INTEREST MARGIN ANALYSIS
    (Dollars in thousands) (Unaudited)
     
        Three Months Ended December 31,  
        2024   2023  
        Average   Interest         Average   Interest        
        Balance   Earned/   Yield/   Balance   Earned/   Yield/  
        Outstanding   Paid   Rate   Outstanding   Paid   Rate  
        (Dollars in thousands)  
    Interest-earning assets:                                      
    Loans receivable, net (1) (2)   $ 1,688,239   $ 23,716     5.59 % $ 1,628,718   $ 22,083     5.38 %
    Investment securities     313,759     3,658     4.64     297,020     3,393     4.53  
    FHLB dividends     11,762     273     9.23     12,514     252     7.99  
    Interest-earning deposits in banks     45,358     550     4.82     41,974     581     5.49  
    Total interest-earning assets (3)     2,059,118     28,197     5.45     1,980,226     26,309     5.27  
    Noninterest-earning assets     146,384                 147,429              
    Total average assets   $ 2,205,502               $ 2,127,655              
    Interest-bearing liabilities:                                      
    Interest-bearing demand deposits   $ 162,954   $ 210     0.51   $ 172,013   $ 197     0.45  
    Money market accounts     442,481     2,773     2.49     362,366     1,351     1.48  
    Savings accounts     206,605     721     1.39     247,744     963     1.54  
    Certificates of deposit, customer     461,136     4,925     4.25     424,722     4,197     3.92  
    Certificates of deposit, brokered     192,018     2,546     5.27     172,214     2,050     4.72  
    Total interest-bearing deposits (4)     1,465,194     11,175     3.03     1,379,059     8,758     2.52  
    Advances     236,576     2,491     4.19     256,560     2,962     4.58  
    Subordinated debt     39,504     394     3.97     39,425     394     3.96  
    Total interest-bearing liabilities     1,741,274     14,060     3.21     1,675,044     12,114     2.87  
    Noninterest-bearing deposits (4)     256,715                 259,845              
    Other noninterest-bearing liabilities     45,953                 36,795              
    Total average liabilities     2,043,942                 1,971,684              
    Average equity     161,560                 155,971              
    Total average liabilities and equity   $ 2,205,502               $ 2,127,655              
                                           
    Net interest income         $ 14,137               $ 14,195        
    Net interest rate spread                 2.24                 2.40  
    Net earning assets   $ 317,844               $ 305,182              
    Net interest margin (5)                 2.73                 2.84  
    Average interest-earning assets to average interest-bearing liabilities     118.3 %               118.2 %            

    (1) The average loans receivable, net balances include nonaccrual loans.
    (2) Interest earned on loans receivable includes net deferred fees (costs) of $103,000 and ($151,000) for the three months ended December 31, 2024 and 2023, respectively.
    (3) Includes interest-earning deposits (cash) at other financial institutions.
    (4) Cost of all deposits, including noninterest-bearing demand deposits, was 2.58% and 2.12% for the three months ended December 31, 2024 and 2023, respectively.
    (5) Net interest income divided by average interest-earning assets.

    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    ADDITIONAL INFORMATION
    (Dollars in thousands) (Unaudited)

    Non-GAAP Financial Measures
    This press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Non-GAAP measures are presented where management believes the information will help investors understand the Company’s results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below.

    Calculations Based on PPNR and Adjusted PPNR:

        For the Quarter Ended   For the Year Ended  
    (Dollars in thousands)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023    		  
    Net (loss) income   $ (2,810 ) $ (1,980 ) $ (2,219 ) $ 396   $ (5,522 ) $ (6,613 ) $ 2,286  
    Plus: provision for credit losses     3,655     3,134     8,739     970     1,152     16,498     1,323  
    Provision (benefit) for income taxes     359     (1,203 )   (547 )   447     (1,354 )   (944 )   549  
    PPNR (1)     1,204     (49 )   5,973     1,813     (5,724 )   8,941     4,158  
    Selected nonrecurring adjustments to PPNR                                            
    Less: Net gain on sale of premises and equipment     —     —     7,919     —     —     7,919     —  
    Sale leaseback taxes and assessments included in occupancy and equipment     —     —     (359 )   —     —     (359 )   —  
    Net loss on sale of investment securities     —     —     (2,117 )   —     (5,397 )   (2,117 )   (5,397 )
    Adjusted PPNR (1)   $ 1,204   $ (49 ) $ 530   $ 1,813   $ (327 ) $ 3,498   $ 9,555  
                                                 
    Average total assets   $ 2,205,502   $ 2,209,333   $ 2,219,370   $ 2,166,187   $ 2,127,655   $ 2,200,138   $ 2,109,200  
    Return on average assets (GAAP)     -0.51 %   -0.36 %   -0.40 %   0.07 %   -1.03 %   -0.30 %   0.11 %
    Adjusted PPNR return on average assets (Non-GAAP) (1)     0.22 %   -0.01 %   0.10 %   0.34 %   -0.06 %   0.16 %   0.45 %
    (1) We believe these non-GAAP metrics are useful to evaluate the relative strength of the Company’s performance.
    FIRST NORTHWEST BANCORP AND SUBSIDIARY
    ADDITIONAL INFORMATION
    (Dollars in thousands) (Unaudited)
     
    Calculations Based on Tangible Common Equity:
     
        For the Quarter Ended   For the Year Ended  
        December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023    		  
        (Dollars in thousands, except per share data)  
    Total shareholders’ equity   $ 153,882   $ 160,789   $ 158,881   $ 160,506   $ 163,340   $ 153,882   $ 163,340  
    Less: Goodwill and other intangible assets     1,082     1,083     1,084     1,085     1,086     1,082     1,086  
    Disallowed non-mortgage loan servicing rights     423     489     517     489     481     423     481  
    Total tangible common equity   $ 152,377   $ 159,217   $ 157,280   $ 158,932   $ 161,773   $ 152,377   $ 161,773  
                                                 
    Total assets   $ 2,232,006   $ 2,255,486   $ 2,215,962   $ 2,240,020   $ 2,201,797   $ 2,232,006   $ 2,201,797  
    Less: Goodwill and other intangible assets     1,082     1,083     1,084     1,085     1,086     1,082     1,086  
    Disallowed non-mortgage loan servicing rights     423     489     517     489     481     423     481  
    Total tangible assets   $ 2,230,501   $ 2,253,914   $ 2,214,361   $ 2,238,446   $ 2,200,230   $ 2,230,501   $ 2,200,230  
                                                 
    Average shareholders’ equity   $ 161,560   $ 160,479   $ 163,079   $ 161,867   $ 155,971   $ 161,742   $ 159,413  
    Less: Average goodwill and other intangible assets     1,083     1,084     1,085     1,085     1,086     1,084     1,087  
    Average disallowed non-mortgage loan servicing rights     489     517     489     481     608     494     670  
    Total average tangible common equity   $ 159,988   $ 158,878   $ 161,505   $ 160,301   $ 154,277   $ 160,164   $ 157,656  
                                                 
    Net (loss) income   $ (2,810 ) $ (1,980 ) $ (2,219 ) $ 396   $ (5,522 ) $ (6,613 ) $ 2,286  
    Common shares outstanding     9,353,348     9,365,979     9,453,247     9,442,796     9,611,876     9,353,348     9,611,876  
    GAAP Ratios:                                            
    Equity to total assets     6.89 %   7.13 %   7.17 %   7.17 %   7.42 %   6.89 %   7.42 %
    Return on average equity     -6.92 %   -4.91 %   -5.47 %   0.98 %   -14.05 %   -4.09 %   1.43 %
    Book value per common share   $ 16.45   $ 17.17   $ 16.81   $ 17.00   $ 16.99   $ 16.45   $ 16.99  
    Non-GAAP Ratios:                                            
    Tangible common equity to tangible assets (1)     6.83 %   7.06 %   7.10 %   7.10 %   7.35 %   6.83 %   7.35 %
    Return on average tangible common equity (1)     -6.99 %   -4.96 %   -5.53 %   0.99 %   -14.20 %   -4.13 %   1.45 %
    Tangible book value per common share (1)   $ 16.29   $ 17.00   $ 16.64   $ 16.83   $ 16.83   $ 16.29   $ 16.83  
    (1 ) We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles.

    The MIL Network –

  • MIL-OSI: Stifel Reports Fourth Quarter and Full Year Results

    Source: GlobeNewswire (MIL-OSI)

    ST. LOUIS, Jan. 29, 2025 (GLOBE NEWSWIRE) — Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.36 billion for the three months ended December 31, 2024, compared with $1.15 billion a year ago. Net income available to common shareholders of $234.7 million, or $2.09 per diluted common share, compared with $153.2 million, or $1.38 per diluted common share for the fourth quarter of 2023. Non-GAAP net income available to common shareholders of $249.7 million, or $2.23 per diluted common share for the fourth quarter of 2024.

    Net revenues of $4.97 billion for the year ended December 31, 2024 compared to $4.35 billion a year ago. Net income available to common shareholders of $694.1 million, or $6.25 per diluted common share, compared with $485.3 million, or $4.28 per diluted common share in 2023. Non-GAAP net income available to common shareholders of $755.9 million, or $6.81 per diluted common share in 2024.

    Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Stifel generated record net revenue and the second highest earnings per share in our history in 2024. The fact that we accomplished this level of performance in a year when our Institutional segment was rebounding from a very difficult operating environment in 2023 is a testament to the strength and diversity of our business model. Given our long history of profitable growth, Stifel is well positioned to capitalize on improving market conditions in 2025 and to achieve our short and long term targets.”

    Full Year Highlights

    • The Company reported record net revenues of $4.97 billion driven by higher investment banking revenues, asset management revenues, and transactional revenues, partially offset by lower net interest income.
    • Non-GAAP net income available to common shareholders of $6.81.
    • Record asset management revenues, up 18% over 2023.
    • Record client assets of $501.4 billion, up 13% over 2023.
    • Recruited 100 financial advisors during the year, including 34 experienced employee advisors and 12 experienced independent advisors.
    • Non-GAAP pre-tax margin of 20%.
    • Return on average tangible common equity (ROTCE) (5) of 23%.
    • Tangible book value per common share (7) of $34.99, up 12% from prior year.


    Fourth Quarter Highlights

    • Quarterly record net revenues of $1.36 billion.
    • Non-GAAP net income available to common shareholders of $2.23.
    • Investment banking revenue increased 48% over the year-ago quarter, driven by higher advisory and capital raising revenues.
      • Capital raising revenues increased 50% over the year-ago quarter.
      • Advisory revenues increased 47% over the year-ago quarter.
    • Non-GAAP pre-tax margin of 21%.
    • Annualized ROTCE (5) of 28%.

    Other Highlights

    • Board of Directors authorized a 10% increase in common stock dividend starting in the first quarter of 2025.
    • Announced the acquisition of Bryan, Garnier, & Co.
    Financial Summary (Unaudited)
    (000s) 4Q 2024 4Q 2023 FY 2024 FY 2023
    GAAP Financial Highlights:      
    Net revenues $1,364,682   $1,146,379   $4,970,320   $4,348,944  
    Net income (1) $234,685   $153,164   $694,098   $485,255  
    Diluted EPS (1) $2.09   $1.38   $6.25   $4.28  
    Comp. ratio 58.3%   58.8%   58.7%   58.7%  
    Non-comp. ratio 22.2%   23.2%   22.6%   25.1%  
    Pre-tax margin 19.5%   18.0%   18.7%   16.2%  
    Non-GAAP Financial Highlights:      
    Net revenues $1,364,721   $1,146,419   $4,971,051   $4,348,958  
    Net income (1)(2) $249,710   $166,587   $755,896   $531,524  
    Diluted EPS (1) (2) $2.23   $1.50   $6.81   $4.68  
    Comp. ratio (2) 58.0%   58.0%   58.0%   58.0%  
    Non-comp. ratio (2) 21.3%   22.6%   21.9%   24.3%  
    Pre-tax margin (3) 20.7%   19.4%   20.1%   17.7%  
    ROCE (4) 20.1%   14.6%   15.9%   11.5%  
    ROTCE (5) 28.3%   21.3%   22.7%   16.6%  
    Global Wealth Management (assets and loans in millions)  
    Net revenues $865,209   $766,028   $3,283,960   $3,049,962  
    Pre-tax net income $316,318   $301,360   $1,207,942   $1,215,822  
    Total client assets $501,402   $444,318      
    Fee-based client assets $192,705   $165,301      
    Bank loans, net (6) $21,311   $19,730      
    Institutional Group        
    Net revenues $478,335   $359,292   $1,592,833   $1,226,317  
    Equity $280,159   $200,915   $926,729   $709,286  
    Fixed Income $198,176   $158,377   $666,104   $517,031  
    Pre-tax net income $95,681   $7,771   $223,400   $2,100  

    Global Wealth Management

    Fourth Quarter Results

    Global Wealth Management reported record net revenues of $865.2 million for the three months ended December 31, 2024 compared with $766.0 million during the fourth quarter of 2023. Pre-tax net income was $316.3 million compared with $301.4 million in the fourth quarter of 2023.

    Highlights

    • Client assets of $501.4 billion, up 13% over the year-ago quarter.
    • Fee-based client assets of $192.7 billion, up 17% over the year-ago quarter.
    • Recruited 8 financial advisors during the quarter, including 4 experienced employee advisors with total trailing 12 month production of $8 million.

    Net revenues increased 13% from a year ago:

    • Transactional revenues increased 18% over the year-ago quarter reflecting an increase in client activity.
    • Asset management revenues increased 23% over the year-ago quarter reflecting higher asset values as a result of improved market conditions and net cash inflows.
    • Net interest income decreased 1% from the year-ago quarter primarily as a result of lower rates, partially offset by balance sheet growth.

    Total Expenses:

    • Compensation expense as percent of net revenues increased to 48.5% primarily as a result of higher compensable revenues.
    • Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.
    • Non-compensation operating expenses as a percent of net revenues increased to 14.9% primarily as a result of higher litigation-related expenses and an increase in the provision for credit losses, partially offset by revenue growth.
    Summary Results of Operations  
    (000s) 4Q 2024 4Q 2023  
    Net revenues $865,209   $766,028    
    Transactional revenues   200,564     169,471    
    Asset management   405,800     330,498    
    Net interest income   254,337     257,920    
    Investment banking   5,198     4,562    
    Other income   (690)     3,577    
    Total expenses $548,891   $464,668    
    Compensation expense   419,466     359,376    
    Provision for credit losses   11,893     (37)    
    Non-comp. opex   117,532     105,329    
    Pre-tax net income $316,318   $301,360    
    Compensation ratio   48.5%     46.9%    
    Non-compensation ratio   14.9%     13.8%    
    Pre-tax margin   36.6%     39.3%    

    Institutional Group

    Fourth Quarter Results

    Institutional Group reported net revenues of $478.3 million for the three months ended December 31, 2024 compared with $359.3 million during the fourth quarter of 2023. Pre-tax net income was $95.7 million compared with $7.8 million in the fourth quarter of 2023.

    Highlights

    Investment banking revenues increased 49% from a year ago:

    • Advisory revenues of $189.9 million increased 47% from the year-ago quarter driven by higher levels of completed advisory transactions.
    • Fixed income capital raising revenues increased 53% over the year-ago quarter primarily driven by higher bond issuances.
    • Equity capital raising revenues increased 52% over the year-ago quarter driven by higher volumes.

    Fixed income transactional revenues increased 16% from a year ago:

    • Fixed income transactional revenues increased from the year-ago quarter driven by improved client engagement and realized trading gains.

    Equity transactional revenues increased 5% from a year ago:

    • Equity transactional revenues increased from the year-ago quarter primarily driven by an increase in equities trading commissions.

    Total Expenses:

    • Compensation expense as a percent of net revenues decreased to 58.6% primarily as a result of higher revenues.
    • Non-compensation operating expenses as a percent of net revenues decreased to 21.4% primarily as a result of revenue growth.
    Summary Results of Operations  
    (000s)  4Q 2024  4Q 2023  
    Net revenues $478,335   $359,292    
    Investment banking   299,221     201,102    
    Advisory   189,912     129,378    
    Fixed income capital raising   61,424     40,214    
    Equity capital raising   47,885     31,510    
    Fixed income transactional   118,700     102,019    
    Equity transactional   59,409     56,501    
    Other   1,005     (330)    
    Total expenses $382,654   $351,521    
    Compensation expense   280,261     248,970    
    Non-comp. opex.   102,393     102,551    
    Pre-tax net income $95,681   $7,771    
    Compensation ratio   58.6%     69.3%    
    Non-compensation ratio   21.4%     28.5%    
    Pre-tax margin   20.0%     2.2%    

    Global Wealth Management

    Full Year Results

    Global Wealth Management reported record net revenues of $3.3 billion for the year ended December 31, 2024 compared with $3.0 billion in 2023. Pre-tax net income of $1.2 billion decreased 1% from 2023.

    Highlights

    • Recruited 100 financial advisors during the year, including 34 experienced employee advisors and 12 experienced independent advisors with total trailing 12 month production of $37 million.

    Net revenues increased 8% from prior year:

    • Transactional revenues increased 15% from prior year reflecting an increase in client activity.
    • Asset management revenues increased 18% from prior year reflecting higher asset values as a result of improved market conditions and net cash inflows.
    • Net interest income decreased 11% from prior year primarily driven by changes in the deposit mix, partially offset by lending growth and higher rates.

    Total Expenses:

    • Compensation expense as a percent of net revenues increased to 48.9% primarily as a result of higher compensable revenues.
    • Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.
    • Non-compensation operating expenses as a percent of net revenues increased to 14.3% primarily as a result of higher litigation-related expenses and an increase in the provision for credit losses, partially offset by revenue growth.
    Summary Results of Operations  
    (000s) FY 2024 FY 2023  
    Net revenues $3,283,960   $3,049,962    
    Transactional revenues   752,352     654,231    
    Asset management   1,536,296     1,299,361    
    Net interest income   967,712     1,086,628    
    Investment banking   21,475     16,680    
    Other income   6,125     (6,938)    
    Total expenses $2,076,018   $1,834,140    
    Compensation expense   1,605,148     1,415,210    
    Provision for credit losses   25,102     22,699    
    Non-comp. opex   445,768     396,231    
    Pre-tax net income $1,207,942   $1,215,822    
    Compensation ratio   48.9%     46.4%    
    Non-compensation ratio   14.3%     13.7%    
    Pre-tax margin   36.8%     39.9%    

    Institutional Group

    Full Year Results

    Institutional Group reported net revenues of $1.6 billion for the year ended December 31, 2024 compared with $1.2 billion in 2023. Pre-tax net income was $223.4 million compared with $2.1 million in 2023.

    Highlights

    Investment banking revenues increased 36% from prior year:

    • Advisory revenues of $577.4 million increased 24% from prior year driven by higher levels of completed advisory transactions.
    • Fixed income capital raising revenues increased 48% from prior year driven by an increase in our corporate debt issuance business.
    • Equity capital raising revenues increased 74% from prior year driven by higher volumes.

    Fixed income transactional revenues increased 27% from prior year:

    • Fixed income transactional revenues increased from prior year driven by improved client engagement, market volatility, and realized trading gains.

    Equity transactional revenues increased 7% from prior year:

    • Equity transactional revenues increased from prior year driven by an increase in equities trading commissions.

    Total Expenses:

    • Compensation expense as a percent of net revenues decreased to 60.2% primarily as a result of higher revenues.
    • Non-compensation operating expenses as a percent of net revenues decreased to 25.8% as a result of revenue growth and expense discipline.
    Summary Results of Operations  
    (000s)  FY 2024 FY 2023  
    Net revenues $1,592,833   $1,226,317    
    Investment banking   973,356     714,575    
    Advisory   577,432     465,588    
    Fixed income capital raising   209,047     141,647    
    Equity capital raising   186,877     107,340    
    Fixed income transactional   393,013     308,393    
    Equity transactional   215,223     201,413    
    Other   11,241     1,936    
    Total expenses $1,369,433   $1,224,217    
    Compensation expense   959,602     841,671    
    Non-comp. opex.   409,831     382,546    
    Pre-tax net income $223,400   $2,100    
    Compensation ratio   60.2%     68.6%    
    Non-compensation ratio   25.8%     31.2%    
    Pre-tax margin   14.0%     0.2%    

    Other Matters

    Highlights

    • Total assets increased $2.1 billion, or 6%, over the year-ago quarter.
    • The Board of Directors approved a 10% increase in the quarterly dividend to $0.46 per common share starting in the first quarter of 2025.
    • The Company repurchased $45.5 million of its outstanding common stock during the fourth quarter. During 2024, the Company repurchased $242.6 million of its outstanding common stock.
    • Weighted average diluted shares outstanding increased from the year-ago quarter as a result of the increase in share price and a decrease in share repurchases over the comparable period.
    • The effective tax rate was primarily impacted by the benefit related to the tax impact on stock-based compensation.
    • The Board of Directors declared a $0.42 quarterly dividend per share payable on December 16, 2024 to common shareholders of record on December 2, 2024.
    • The Board of Directors declared a quarterly dividend on the outstanding shares of the Company’s preferred stock payable on December 16, 2024 to shareholders of record on December 2, 2024.
      4Q 2024 4Q 2023 FY 2024 FY 2023
    Common stock repurchases      
    Repurchases (000s) $45,461   $141,138   $242,628   $518,296  
    Number of shares (000s)   408     2,345     3,140     8,475  
    Average price $111.30   $60.18   $77.28   $61.16  
    Period end shares (000s)   102,171     101,062     102,171     101,062  
    Weighted average diluted shares outstanding (000s)   112,089     111,330     110,975     113,453  
    Effective tax rate   8.3%     21.1%     21.2%     26.1%  
    Stifel Financial Corp. (8)
    Tier 1 common capital ratio   15.4%     14.2%      
    Tier 1 risk based capital ratio   18.2%     17.2%      
    Tier 1 leverage capital ratio   11.4%     10.5%      
    Tier 1 capital (MM) $4,331   $3,916      
    Risk weighted assets (MM) $23,742   $22,748      
    Average assets (MM) $38,073   $37,451      
    Quarter end assets (MM) $39,896   $37,727      
    Agency Rating Outlook    
    Fitch Ratings BBB+ Stable    
    S&P Global Ratings BBB Stable    

    Conference Call Information

    Stifel Financial Corp. will host its fourth quarter and full year 2024 financial results conference call on Wednesday, January 29, 2025, at 9:30 a.m. Eastern Time. The conference call may include forward-looking statements.

    All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (866) 409-1555 and referencing conference ID 7408307. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company’s web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

    Company Information

    Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners and Miller Buckfire business divisions; Keefe, Bruyette & Woods, Inc.; and Stifel Independent Advisors, LLC; in Canada through Stifel Nicolaus Canada Inc.; and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. The Company’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company’s website at www.stifel.com. For global disclosures, please visit www.stifel.com/investor-relations/press-releases.

    A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the financial supplement. Both the earnings release and the financial supplement are available online in the Investor Relations section at www.stifel.com/investor-relations.

    The information provided herein and in the financial supplement, including information provided on the Company’s earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial supplement, both of which are available online in the Investor Relations section at www.stifel.com/investor-relations.

    Cautionary Note Regarding Forward-Looking Statements

    This earnings release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies’ operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Forward-looking statements speak only as to the date they are made. The Company disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

    Summary Results of Operations (Unaudited)

      Three Months Ended   Year Ended
    (000s, except per share amounts) 12/31/2024 12/31/2023 % Change 9/30/2024 % Change 12/31/2024 12/31/2023 % Change
    Revenues:                
    Commissions $ 203,786 $ 173,614 17.4   $ 183,445 11.1   $ 756,024 $ 673,597 12.2  
    Principal transactions   174,887   154,377 13.3     137,089 27.6     604,564   490,440 23.3  
    Investment banking   304,419   205,664 48.0     243,182 25.2     994,831   731,255 36.0  
    Asset management   405,825   330,536 22.8     382,616 6.1     1,536,674   1,299,496 18.3  
    Other income   3,294   9,687 (66.0 )   18,705 (82.4 )   43,129   8,747 393.1  
    Operating revenues   1,092,211   873,878 25.0     965,037 13.2     3,935,222   3,203,535 22.8  
    Interest revenue   500,661   516,213 (3.0 )   510,823 (2.0 )   2,016,464   1,955,745 3.1  
    Total revenues   1,592,872   1,390,091 14.6     1,475,860 7.9     5,951,686   5,159,280 15.4  
    Interest expense   228,190   243,712 (6.4 )   251,192 (9.2 )   981,366   810,336 21.1  
    Net revenues   1,364,682   1,146,379 19.0     1,224,668 11.4     4,970,320   4,348,944 14.3  
    Non-interest expenses:                
    Compensation and benefits   795,750   674,437 18.0     718,065 10.8     2,916,229   2,554,581 14.2  
    Non-compensation operating expenses   302,731   265,947 13.8     289,945 4.4     1,125,647   1,087,671 3.5  
    Total non-interest expenses   1,098,481   940,384 16.8     1,008,010 9.0     4,041,876   3,642,252 11.0  
    Income before income taxes   266,201   205,995 29.2     216,658 22.9     928,444   706,692 31.4  
    Provision for income taxes   22,196   43,511 (49.0 )   58,153 (61.8 )   197,065   184,156 7.0  
    Net income   244,005   162,484 50.2     158,505 53.9     731,379   522,536 40.0  
    Preferred dividends   9,320   9,320 0.0     9,320 0.0     37,281   37,281 0.0  
    Net income available to common shareholders $ 234,685 $ 153,164 53.2   $ 149,185 57.3   $ 694,098 $ 485,255 43.0  
    Earnings per common share:                
    Basic $ 2.26 $ 1.47 53.7   $ 1.43 58.0   $ 6.67 $ 4.55 46.6  
    Diluted $ 2.09 $ 1.38 51.4   $ 1.34 56.0   $ 6.25 $ 4.28 46.0  
    Cash dividends declared per common share $ 0.42 $ 0.36 16.7   $ 0.42 0.0   $ 1.68 $ 1.44 16.7  
    Weighted average number of common shares outstanding:          
    Basic   103,856   103,934 (0.1 )   103,966 (0.1 )   104,066   106,661 (2.4 )
    Diluted   112,089   111,330 0.7     110,994 1.0     110,975   113,453 (2.2 )

    Non-GAAP Financial Measures (9)

      Three Months Ended Year Ended
    (000s, except per share amounts) 12/31/2024 12/31/2023 12/31/2024 12/31/2023
    GAAP net income $244,005   $162,484   $731,379   $522,536  
    Preferred dividend   9,320     9,320     37,281     37,281  
    Net income available to common shareholders   234,685     153,164     694,098     485,255  
             
    Non-GAAP adjustments:        
    Merger-related (10)   16,820     16,921     60,745     63,222  
    Restructuring and severance (11)   (430)     —     10,792     —  
    Provision for income taxes (12)   (1,365)     (3,498)     (9,739)     (16,953)  
    Total non-GAAP adjustments   15,025     13,423     61,798     46,269  
    Non-GAAP net income available to common shareholders $249,710   $166,587   $755,896   $531,524  
             
    Weighted average diluted shares outstanding   112,089     111,330     110,975     113,453  
             
    GAAP earnings per diluted common share $2.18   $1.46   $6.59   $4.61  
    Non-GAAP adjustments   0.14     0.12     0.56     0.40  
    Non-GAAP earnings per diluted common share $2.32   $1.58   $7.15   $5.01  
             
    GAAP earnings per diluted common share available to common shareholders $2.09   $1.38   $6.25   $4.28  
    Non-GAAP adjustments   0.14     0.12     0.56     0.40  
    Non-GAAP earnings per diluted common share available to common shareholders $2.23   $1.50   $6.81   $4.68  


    GAAP to Non-GAAP Reconciliation     (9)

      Three Months Ended Year Ended
    (000s) 12/31/2024 12/31/2023 12/31/2024 12/31/2023
    GAAP compensation and benefits $795,750   $674,437   $2,916,229   $2,554,581  
    As a percentage of net revenues   58.3%     58.8%     58.7%     58.7%  
    Non-GAAP adjustments:        
    Merger-related (10)   (4,641)     (9,203)     (22,039)     (32,150)  
    Restructuring and severance (11)   430     —     (10,792)     —  
    Total non-GAAP adjustments   (4,211)     (9,203)     (32,831)     (32,150)  
    Non-GAAP compensation and benefits $791,539   $665,234   $2,883,398   $2,522,431  
    As a percentage of non-GAAP net revenues   58.0%     58.0%     58.0%     58.0%  
             
    GAAP non-compensation expenses $302,731   $265,947   $1,125,647   $1,087,671  
    As a percentage of net revenues   22.2%     23.2%     22.6%     25.1%  
    Non-GAAP adjustments:        
    Merger-related (10)   (12,140)     (7,678)     (37,975)     (31,058)  
    Non-GAAP non-compensation expenses $290,591   $258,269   $1,087,672   $1,056,613  
    As a percentage of non-GAAP net revenues   21.3%     22.6%     21.9%     24.3%  
    Total adjustments $16,390   $16,921   $71,537   $63,222  

    Footnotes

    (1)   Represents available to common shareholders.

    (2)   Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.”

    (3)   Non-GAAP pre-tax margin is calculated by adding total non-GAAP adjustments and dividing it by non-GAAP net revenues. See “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.”

    (4)   Return on average common equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity.

    (5)   Return on average tangible common equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders’ equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also a non-GAAP financial measure, equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $80.3 million and $71.1 million as of December 31, 2024 and 2023, respectively.

    (6)   Includes loans held for sale.

    (7)   Tangible book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding. Tangible common shareholders’ equity equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets.

    (8)   Capital ratios are estimates at time of the Company’s earnings release, January 29, 2025.

    (9)   The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company’s financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure.

    (10)   Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business.

    (11)   The Company recorded severance costs associated with workforce reductions in certain of its foreign subsidiaries.

    (12)   Primarily represents the Company’s effective tax rate for the period applied to the non-GAAP adjustments.

    Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271- 3610 | www.stifel.com/investor-relations 

    The MIL Network –

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

    Source: GlobeNewswire (MIL-OSI)

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

    Unaudited Financial Information

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

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

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

    Consolidated Year-To-Date Operating Results Overview

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

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

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

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

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

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

    Consolidated Fourth Quarter Operating Results Overview

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

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

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

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

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

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

    Consolidated Balance Sheet & Asset Quality Overview

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

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

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

    Asset Quality

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

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

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

    Non-GAAP Financial Measures

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

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

    Forward-looking statements

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

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

      ■ local, regional and national economic conditions and changes thereto;
      ■ the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
      ■ the risks of changes and volatility of interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks;
      ■ securities markets and monetary fluctuations and volatility;
      ■ disruption of credit and equity markets;
      ■ impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;
      ■ governmental monetary and fiscal policies, as well as legislative and regulatory changes;
      ■ effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;
      ■ the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
      ■ the impact of new or changes in existing laws and regulations, including laws and regulations concerning taxes, banking, securities and insurance and their application with which the Company and its subsidiaries must comply;
      ■ the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters;
      ■ the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;
      ■  the effects of economic conditions of any pandemic, epidemic or other health-related crisis such as COVID-19 and responses thereto on current customers and the operations of the Company, specifically the effect of the economy on loan customers’ ability to repay loans;
      ■  the effects of bank failures, banking system instability, deposit fluctuations, loan and securities value changes;
      ■  technological changes;
      ■  the interruption or breach in security of our information systems, continually evolving cybersecurity and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses;
      ■  acquisitions and integration of acquired businesses;
      ■  the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
      ■  acts of war or terrorism; and
      ■  the risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

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

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

    FIDELITY D & D BANCORP, INC.
    Unaudited Condensed Consolidated Balance Sheets
    (dollars in thousands)
     
    At Period End:   December 31, 2024     December 31, 2023  
    Assets                
    Cash and cash equivalents   $ 83,353     $ 111,949  
    Investment securities     557,221       568,273  
    Restricted investments in bank stock     3,961       3,905  
    Loans and leases     1,800,856       1,686,555  
    Allowance for credit losses on loans     (19,666 )     (18,806 )
    Premises and equipment, net     35,914       34,232  
    Life insurance cash surrender value     58,069       54,572  
    Goodwill and core deposit intangible     20,504       20,812  
    Other assets     44,404       41,667  
                     
    Total assets   $ 2,584,616     $ 2,503,159  
                     
    Liabilities                
    Non-interest-bearing deposits   $ 533,935     $ 536,143  
    Interest-bearing deposits     1,806,885       1,622,282  
    Total deposits     2,340,820       2,158,425  
    Short-term borrowings     –       117,000  
    Secured borrowings     6,266       7,372  
    Other liabilities     33,561       30,883  
    Total liabilities     2,380,647       2,313,680  
                     
    Shareholders’ equity     203,969       189,479  
                     
    Total liabilities and shareholders’ equity   $ 2,584,616     $ 2,503,159  
    Average Year-To-Date Balances:   December 31, 2024     December 31, 2023  
    Assets                
    Cash and cash equivalents   $ 55,773     $ 35,462  
    Investment securities     557,537       597,359  
    Restricted investments in bank stock     3,960       4,212  
    Loans and leases     1,741,349       1,635,286  
    Allowance for credit losses on loans     (19,391 )     (18,680 )
    Premises and equipment, net     35,580       32,215  
    Life insurance cash surrender value     56,455       54,085  
    Goodwill and core deposit intangible     20,641       20,977  
    Other assets     41,755       44,180  
                     
    Total assets   $ 2,493,659     $ 2,405,096  
                     
    Liabilities                
    Non-interest-bearing deposits   $ 527,825     $ 558,962  
    Interest-bearing deposits     1,697,529       1,586,527  
    Total deposits     2,225,354       2,145,489  
    Short-term borrowings     32,446       49,860  
    Secured borrowings     6,830       7,489  
    Other liabilities     32,471       29,881  
    Total liabilities     2,297,101       2,232,719  
                     
    Shareholders’ equity     196,558       172,377  
                     
    Total liabilities and shareholders’ equity   $ 2,493,659     $ 2,405,096  
    FIDELITY D & D BANCORP, INC.
    Unaudited Condensed Consolidated Statements of Income
    (dollars in thousands)
     
        Three Months Ended     Twelve Months Ended  
        Dec. 31, 2024     Dec. 31, 2023     Dec. 31, 2024     Dec. 31, 2023  
    Interest income                                
    Loans and leases   $ 24,584     $ 21,406     $ 93,269     $ 80,629  
    Securities and other     3,475       3,434       13,753       13,206  
                                     
    Total interest income     28,059       24,840       107,022       93,835  
                                     
    Interest expense                                
    Deposits     (11,468 )     (9,232 )     (43,165 )     (28,945 )
    Borrowings and debt     (217 )     (707 )     (1,992 )     (2,843 )
                                     
    Total interest expense     (11,685 )     (9,939 )     (45,157 )     (31,788 )
                                     
    Net interest income     16,374       14,901       61,865       62,047  
                                     
    Provision for credit losses on loans     (250 )     (111 )     (1,325 )     (1,491 )
    Net benefit (provision) for credit losses on unfunded loan commitments     85       65       (140 )     165  
    Non-interest income (loss)     4,847       (1,944 )     19,013       11,405  
    Non-interest expense     (14,395 )     (12,804 )     (55,541 )     (51,870 )
                                     
    Income before income taxes     6,661       107       23,872       20,256  
                                     
    (Provision) benefit for income taxes     (826 )     361       (3,078 )     (2,046 )
    Net income   $ 5,835     $ 468     $ 20,794     $ 18,210  
        Three Months Ended  
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Interest income                                        
    Loans and leases   $ 24,584     $ 24,036     $ 22,516     $ 22,133     $ 21,406  
    Securities and other     3,475       3,263       3,523       3,492       3,434  
                                             
    Total interest income     28,059       27,299       26,039       25,625       24,840  
                                             
    Interest expense                                        
    Deposits     (11,468 )     (11,297 )     (10,459 )     (9,941 )     (9,232 )
    Borrowings and debt     (217 )     (571 )     (463 )     (741 )     (707 )
                                             
    Total interest expense     (11,685 )     (11,868 )     (10,922 )     (10,682 )     (9,939 )
                                             
    Net interest income     16,374       15,431       15,117       14,943       14,901  
                                             
    Provision for credit losses on loans     (250 )     (675 )     (275 )     (125 )     (111 )
    Net benefit (provision) for credit losses on unfunded loan commitments     85       (135 )     (140 )     50       65  
    Non-interest income (loss)     4,847       4,979       4,615       4,572       (1,944 )
    Non-interest expense     (14,395 )     (13,840 )     (13,616 )     (13,689 )     (12,804 )
                                             
    Income before income taxes     6,661       5,760       5,701       5,751       107  
                                             
    (Provision) benefit for income taxes     (826 )     (793 )     (766 )     (694 )     361  
    Net income   $ 5,835     $ 4,967     $ 4,935     $ 5,057     $ 468  
    FIDELITY D & D BANCORP, INC.
    Unaudited Condensed Consolidated Balance Sheets
    (dollars in thousands)
     
    At Period End:   Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Assets                                        
    Cash and cash equivalents   $ 83,353     $ 120,169     $ 78,085     $ 72,733     $ 111,949  
    Investment securities     557,221       559,819       552,495       559,016       568,273  
    Restricted investments in bank stock     3,961       3,944       3,968       3,959       3,905  
    Loans and leases     1,800,856       1,795,548       1,728,509       1,697,299       1,686,555  
    Allowance for credit losses on loans     (19,666 )     (19,630 )     (18,975 )     (18,886 )     (18,806 )
    Premises and equipment, net     35,914       36,057       35,808       34,899       34,232  
    Life insurance cash surrender value     58,069       57,672       57,278       54,921       54,572  
    Goodwill and core deposit intangible     20,504       20,576       20,649       20,728       20,812  
    Other assets     44,404       41,778       42,828       44,227       41,667  
                                             
    Total assets   $ 2,584,616     $ 2,615,933     $ 2,500,645     $ 2,468,896     $ 2,503,159  
                                             
    Liabilities                                        
    Non-interest-bearing deposits   $ 533,935     $ 549,710     $ 527,572     $ 537,824     $ 536,143  
    Interest-bearing deposits     1,806,885       1,792,796       1,641,558       1,678,172       1,622,282  
    Total deposits     2,340,820       2,342,506       2,169,130       2,215,996       2,158,425  
    Short-term borrowings     –       25,000       98,120       25,000       117,000  
    Secured borrowings     6,266       6,323       7,237       7,299       7,372  
    Other liabilities     33,561       34,843       30,466       28,966       30,883  
    Total liabilities     2,380,647       2,408,672       2,304,953       2,277,261       2,313,680  
                                             
    Shareholders’ equity     203,969       207,261       195,692       191,635       189,479  
                                             
    Total liabilities and shareholders’ equity   $ 2,584,616     $ 2,615,933     $ 2,500,645     $ 2,468,896     $ 2,503,159  
    Average Quarterly Balances:   Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Assets                                        
    Cash and cash equivalents   $ 67,882     $ 41,991     $ 58,351     $ 54,887     $ 42,176  
    Investment securities     560,453       554,578       551,445       563,674       558,423  
    Restricted investments in bank stock     3,957       3,965       3,983       3,934       3,854  
    Loans and leases     1,797,023       1,763,254       1,707,598       1,696,669       1,664,905  
    Allowance for credit losses on loans     (20,050 )     (19,323 )     (19,171 )     (19,013 )     (19,222 )
    Premises and equipment, net     36,065       36,219       35,433       34,591       33,629  
    Life insurance cash surrender value     57,919       57,525       55,552       54,796       54,449  
    Goodwill and core deposit intangible     20,529       20,602       20,677       20,759       20,844  
    Other assets     41,454       41,734       42,960       40,871       46,028  
                                             
    Total assets   $ 2,565,232     $ 2,500,545     $ 2,456,828     $ 2,451,168     $ 2,405,086  
                                             
    Liabilities                                        
    Non-interest-bearing deposits   $ 538,506     $ 522,827     $ 530,048     $ 519,856     $ 533,663  
    Interest-bearing deposits     1,769,265       1,702,187       1,670,211       1,647,615       1,616,826  
    Total deposits     2,307,771       2,225,014       2,200,259       2,167,471       2,150,489  
    Short-term borrowings     10,326       37,220       28,477       53,952       48,490  
    Secured borrowings     6,297       6,429       7,269       7,335       7,412  
    Other liabilities     34,695       31,999       30,734       32,434       30,745  
    Total liabilities     2,359,089       2,300,662       2,266,739       2,261,192       2,237,136  
                                             
    Shareholders’ equity     206,143       199,883       190,089       189,976       167,950  
                                             
    Total liabilities and shareholders’ equity   $ 2,565,232     $ 2,500,545     $ 2,456,828     $ 2,451,168     $ 2,405,086  
    FIDELITY D & D BANCORP, INC.
    Selected Financial Ratios and Other Financial Data
     
        Three Months Ended  
        Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Selected returns and financial ratios                                        
    Basic earnings per share   $ 1.02     $ 0.87     $ 0.86     $ 0.88     $ 0.08  
    Diluted earnings per share   $ 1.01     $ 0.86     $ 0.86     $ 0.88     $ 0.08  
    Dividends per share   $ 0.40     $ 0.38     $ 0.38     $ 0.38     $ 0.38  
    Yield on interest-earning assets (FTE)*     4.68 %     4.68 %     4.58 %     4.52 %     4.36 %
    Cost of interest-bearing liabilities     2.60 %     2.70 %     2.58 %     2.51 %     2.36 %
    Cost of funds     2.00 %     2.08 %     1.96 %     1.93 %     1.79 %
    Net interest spread (FTE)*     2.08 %     1.98 %     2.00 %     2.01 %     2.00 %
    Net interest margin (FTE)*     2.78 %     2.70 %     2.71 %     2.69 %     2.66 %
    Return on average assets     0.90 %     0.79 %     0.81 %     0.83 %     0.08 %
    Pre-provision net revenue to average assets*     1.06 %     1.05 %     1.00 %     0.96 %     0.03 %
    Return on average equity     11.26 %     9.89 %     10.44 %     10.71 %     1.10 %
    Return on average tangible equity*     12.50 %     11.02 %     11.72 %     12.02 %     1.26 %
    Efficiency ratio (FTE)*     65.48 %     65.33 %     66.47 %     67.56 %     63.74 %
    Expense ratio     1.48 %     1.41 %     1.47 %     1.50 %     2.43 %
        Years ended  
        Dec. 31, 2024     Dec. 31, 2023  
    Basic earnings per share   $ 3.63     $ 3.21  
    Diluted earnings per share   $ 3.60     $ 3.19  
    Dividends per share   $ 1.54     $ 1.46  
    Yield on interest-earning assets (FTE)*     4.62 %     4.18 %
    Cost of interest-bearing liabilities     2.60 %     1.93 %
    Cost of funds     1.99 %     1.44 %
    Net interest spread (FTE)*     2.02 %     2.25 %
    Net interest margin (FTE)*     2.72 %     2.81 %
    Return on average assets     0.83 %     0.76 %
    Pre-provision net revenue to average assets*     1.02 %     0.90 %
    Return on average equity     10.58 %     10.56 %
    Return on average tangible equity*     11.82 %     12.03 %
    Efficiency ratio (FTE)*     66.19 %     62.67 %
    Expense ratio     1.47 %     1.69 %
    FIDELITY D & D BANCORP, INC.
    Selected Financial Ratios and Other Financial Data
     
    Non-GAAP Measures   Three Months Ended     Twelve Months Ended  
    (dollars in thousands except per share data)   Dec. 31, 2024     Dec. 31, 2023     Dec. 31, 2024     Dec. 31, 2023  
    Net income   $ 5,835     $ 468     $ 20,794     $ 18,210  
    Loss (gain) on the sale of available-for-sale debt securities, net of income taxes     –       5,109       –       5,110  
    Adjusted net income*   $ 5,835     $ 5,577     $ 20,794     $ 23,320  
    Adjusted basic earnings per share*   $ 1.02     $ 0.98     $ 3.63     $ 4.11  
    Adjusted diluted earnings per share*   $ 1.01     $ 0.97     $ 3.60     $ 4.08  
    Adjusted return on average assets*     0.90 %     0.92 %     0.83 %     0.97 %
    Adjusted return on average tangible equity*     12.51 %     15.04 %     11.82 %     15.40 %
    Other financial data   At period end:  
    (dollars in thousands except per share data)   Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    Assets under management   $ 921,994     $ 942,190     $ 906,861     $ 900,964     $ 876,287  
    Book value per share   $ 35.56     $ 36.13     $ 34.12     $ 33.41     $ 33.22  
    Tangible book value per share*   $ 31.98     $ 32.55     $ 30.52     $ 29.80     $ 29.57  
    Equity to assets     7.89 %     7.92 %     7.83 %     7.76 %     7.57 %
    Tangible common equity ratio*     7.16 %     7.19 %     7.06 %     6.98 %     6.79 %
    Allowance for credit losses on loans to:                                        
    Total loans     1.09 %     1.09 %     1.10 %     1.11 %     1.12 %
    Non-accrual loans   2.68x     2.77x     2.75x     5.31x     5.68x  
    Non-accrual loans to total loans     0.41 %     0.39 %     0.40 %     0.21 %     0.20 %
    Non-performing assets to total assets     0.30 %     0.29 %     0.28 %     0.15 %     0.13 %
    Net charge-offs to average total loans     0.03 %     0.02 %     0.03 %     0.01 %     0.04 %
                                             
    Capital Adequacy Ratios                                        
    Total risk-based capital ratio     14.78 %     14.56 %     14.69 %     14.68 %     14.67 %
    Common equity tier 1 risk-based capital ratio     13.60 %     13.38 %     13.52 %     13.47 %     13.42 %
    Tier 1 risk-based capital ratio     13.60 %     13.38 %     13.52 %     13.47 %     13.42 %
    Leverage ratio     9.22 %     9.30 %     9.30 %     9.15 %     9.15 %

    * Non-GAAP Financial Measures – see reconciliations below

    FIDELITY D & D BANCORP, INC.
    Reconciliations of Non-GAAP Financial Measures to GAAP
           
    Reconciliations of Non-GAAP Measures to GAAP   Three Months Ended  
    (dollars in thousands)   Dec. 31, 2024     Sep. 30, 2024     Jun. 30, 2024     Mar. 31, 2024     Dec. 31, 2023  
    FTE net interest income (non-GAAP)                                        
    Interest income (GAAP)   $ 28,059     $ 27,299     $ 26,039     $ 25,625     $ 24,840  
    Adjustment to FTE     764       775       751       747       664  
    Interest income adjusted to FTE (non-GAAP)     28,823       28,074       26,790       26,372       25,504  
    Interest expense (GAAP)     11,685       11,868       10,922       10,682       9,939  
    Net interest income adjusted to FTE (non-GAAP)   $ 17,138       16,206     $ 15,868       15,690       15,565  
                                             
    Efficiency Ratio (non-GAAP)                                        
    Non-interest expenses (GAAP)   $ 14,395     $ 13,840     $ 13,616     $ 13,689     $ 12,804  
                                             
    Net interest income (GAAP)     16,374       15,431       15,117       14,943       14,901  
    Plus: taxable equivalent adjustment     764       775       751       747       664  
    Non-interest income (GAAP)     4,847       4,979       4,615       4,572       (1,944 )
    Less: (Loss) gain on sales of securities     –       –       –       –       (6,467 )
    Net interest income (FTE) plus adjusted non-interest income (non-GAAP)   $ 21,985     $ 21,185     $ 20,483     $ 20,262     $ 20,088  
    Efficiency ratio (non-GAAP) (1)     65.47 %     65.33 %     66.48 %     67.56 %     63.74 %
    (1) The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest (loss) income.                                        
                                             
    Tangible Book Value per Share/Tangible Common Equity Ratio (non-GAAP)                                        
    Total assets (GAAP)   $ 2,584,616     $ 2,615,933     $ 2,500,645     $ 2,468,896     $ 2,503,159  
    Less: Intangible assets, primarily goodwill     (20,504 )     (20,576 )     (20,649 )     (20,728 )     (20,812 )
    Tangible assets     2,564,112       2,595,357       2,479,996       2,448,168       2,482,347  
    Total shareholders’ equity (GAAP)     203,969       207,261       195,692       191,635       189,479  
    Less: Intangible assets, primarily goodwill     (20,504 )     (20,576 )     (20,649 )     (20,728 )     (20,812 )
    Tangible common equity     183,465       186,685       175,043       170,907       168,667  
                                             
    Common shares outstanding, end of period     5,736,252       5,736,025       5,735,728       5,735,732       5,703,636  
    Tangible Common Book Value per Share   $ 31.98     $ 32.55     $ 30.52     $ 29.80     $ 29.57  
    Tangible Common Equity Ratio     7.16 %     7.19 %     7.06 %     6.98 %     6.79 %
                                             
    Pre-Provision Net Revenue to Average Assets                                        
    Income before taxes (GAAP)   $ 6,661     $ 5,760     $ 5,701     $ 5,751     $ 107  
    Plus: Provision for credit losses     165       810       415       75       47  
    Total pre-provision net revenue (non-GAAP)     6,826       6,570       6,116       5,826       154  
    Total (annualized) (non-GAAP)   $ 27,157     $ 26,423     $ 24,600     $ 23,432     $ 609  
                                             
    Average assets   $ 2,565,232     $ 2,500,545     $ 2,456,828     $ 2,451,168     $ 2,405,086  
    Pre-Provision Net Revenue to Average Assets (non-GAAP)     1.06 %     1.05 %     1.00 %     0.96 %     0.03 %
    FIDELITY D & D BANCORP, INC.
    Reconciliations of Non-GAAP Financial Measures to GAAP
     
    Reconciliations of Non-GAAP Measures to GAAP   Years ended  
    (dollars in thousands)   Dec. 31, 2024     Dec. 31, 2023  
    FTE net interest income (non-GAAP)                
    Interest income (GAAP)   $ 107,022     $ 93,835  
    Adjustment to FTE     3,036       2,850  
    Interest income adjusted to FTE (non-GAAP)     110,058       96,685  
    Interest expense (GAAP)     45,157       31,788  
    Net interest income adjusted to FTE (non-GAAP)   $ 64,901       64,897  
                     
    Efficiency Ratio (non-GAAP)                
    Non-interest expenses (GAAP)   $ 55,541     $ 51,870  
                     
    Net interest income (GAAP)     61,865       62,047  
    Plus: taxable equivalent adjustment     3,036       2,850  
    Non-interest income (GAAP)     19,013       11,405  
    Less: (Loss) gain on sales of securities     –       (6,468 )
    Net interest income (FTE) plus non-interest income (non-GAAP)   $ 83,914     $ 82,770  
    Efficiency ratio (non-GAAP) (1)     66.19 %     62.67 %
    (1) The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest (loss) income.                
                     
    Pre-Provision Net Revenue to Average Assets                
    Income before taxes (GAAP)   $ 23,873     $ 20,256  
    Plus: Provision for credit losses     1,465       1,327  
    Total pre-provision net revenue (non-GAAP)   $ 25,338     $ 21,583  
                     
    Average assets   $ 2,493,659     $ 2,405,096  
    Pre-Provision Net Revenue to Average Assets (non-GAAP)     1.02 %     0.90 %
    Contacts:  
       
    Daniel J. Santaniello Salvatore R. DeFrancesco, Jr.
    President and Chief Executive Officer Treasurer and Chief Financial Officer
    570-504-8035 570-504-8000

    The MIL Network –

  • MIL-OSI United Kingdom: Government backs Heathrow expansion to kickstart economic growth

    Source: United Kingdom – Executive Government & Departments

    Lift-off for growth as government backs expansion at Britain’s busiest and only hub airport.

    • Plan could create over 100,000 direct jobs, boost a better-connected British economy by billions, and lead to cheaper fares and fewer delays for families as part of Plan for Change.
    • Expansion must be delivered in line with UK’s legal, environmental and climate obligations.

    Working people and businesses across Britain will benefit from a government going “further and faster” to kickstart economic growth, as the Chancellor today [29 January] announced the government’s support for a third runway at Heathrow.

    Speaking to an audience of business chiefs at Siemens in North Oxfordshire this morning, the Chancellor set out the government’s latest set of reforms to kickstart economic growth and drive up living standards across the UK by driving investment, getting Britain building and tackling regulatory barriers. This included the announcement that the government supports and is inviting proposals for a third runway at Heathrow.

    The Chancellor confirmed that the government will move at speed to review the Airports National Policy Statement (ANPS). This provides the basis for decision making on granting development consent for a new runway at Heathrow, to ensure that any scheme is delivered in line with our legal, environmental and climate obligations.

    In her speech, Chancellor of the Exchequer Rachel Reeves said:

    I have always been clear that a third runway at Heathrow would unlock further growth, boost investment, increase exports, and make the UK more open and more connected as part of our Plan for Change.

    And now the case is stronger than ever because our reforms to the economy – like speeding up our planning system, and our strengthened plans to modernise UK airspace – mean the delivery of this project is set up for success.

    So I can confirm today that this Government supports a third runway at Heathrow and is inviting proposals to be brought forward by the summer.

    As well as creating over 100,000 jobs in the local area and many more indirectly, research published today by Frontier Economics finds that 60% of the economic boost from a third runway would be felt by areas outside of London and the South East – putting more money in the pockets of working people across the UK through lower fares and greater choice for passengers as part of our Plan for Change.

    During the speech, Reeves announced that the Transport Secretary Heidi Alexander is expected to take decisions on expansion plans at Gatwick and Luton shortly, and that the government will work with Doncaster Council and the Mayor of South Yorkshire to support their efforts to reopen Doncaster Sheffield Airport as a thriving regional airport.

    The Chancellor also announced that a new partnership between global logistics giant Prologis and East Midlands Airport to build a new advanced manufacturing park within the East Midlands Freeport zone to unlock £1 billion of investment and 2,000 jobs. It follows this government’s swift approval of similarly stalled plans for London City Airport to expand to nine million passengers per year by 2031 and a £1.1 billion investment at Stansted Airport to extend its terminal and create 5,000 jobs.

    After delivering stability to the public finances and wider economy as the basic precondition for economic growth, the pace of investment and reform demonstrates the government’s willingness to secure the future of the UK’s world-class aviation sector and the sustainable growth it can provide. Air freight represented 57% of the UK’s non-EU exports by value in 2023, with over 60% of freight coming through the UK doing so through Heathrow. International connectivity also supports vital tourism and business links, with overseas visitors spending £31 billion on their visits to the UK in 2023 and 15 million business travellers using Heathrow in the same year.

    It comes after reforms to speed up the planning system and a presumption to ‘back the builders over the blockers’ were set out by the Prime Minister Keir Starmer last week. The government has committed to making decisions on 150 major economic infrastructure applications over this Parliament, having already made decisions on multiple significant projects within its first six months spanning airports, data centres, energy farms, and major housing developments. The Planning and Infrastructure Bill to be introduced in Spring will enact further sweeping reforms and take an axe to the red tape that slows down approval of infrastructure projects.

    Alongside these reforms and plans to modernise UK airspace, the government is taking great strides in transitioning to greener aviation. Sustainable Aviation Fuel reduces CO2 emissions compared to fossil jet fuel by around 70% and the Chancellor announced that the government is supporting UK producers by investing £63 million in 2025-26 into the Advanced Fuels Fund and setting out details of a Revenue Certainty Mechanism. This will support investment and high-skilled green jobs in plants across the UK – with previous winners of the Fund ranging from across the north of England to South Wales – and follows the Sustainable Aviation Fuel Mandate coming into law at the start of 2025. Taken together, our commitments to SAF will support thousands of jobs in places like Teesside and Humberside, bring down our transport emissions, and help make the UK a clean energy superpower as part of our Plan for Change.

    The government is also assessing options for privately financing the Lower Thames Crossing, which will improve connectivity across vital ports and alleviate congestion as goods to be exported come from across the country to markets overseas. 

    In further recognition that the Government’s clean energy superpower mission is helping to drive the UK’s economic growth mission, Reeves announced that the government will designate new Marine Protected Areas to enable offshore wind, whilst protecting our marine environment. In doing so, barriers to 16 gigawatts of offshore wind will be unblocked – as much electricity as was produced by all gas power plants in 2024 – and up to £30 billion of private investment in homegrown clean power will be unlocked, creating thousands of good clean energy jobs in the offshore wind sector in areas like East Anglia and Yorkshire.

    A new approach to the Oxford-Cambridge Growth Corridor – a centre of innovation which could become Europe’s answer to Silicon Valley – will be spearheaded by Sir Patrick Vallance as a Ministerial Champion. The economic potential of this region will be unlocked through leveraging the strengths it boasts in sectors across Britain’s new modern Industrial Strategy, from life sciences and tech to advanced manufacturing.

    The Chancellor set out the government’s plans to increase investment across the whole of the UK. She stressed that the government would do more to support city regions and local leaders outside of London and the South East, in recognition that bringing the productivity of major cities like Manchester, Birmingham and Leeds to the national average would deliver an extra £33 billion in output for the UK economy.

    Reeves confirmed the backing of the Mayor of Greater Manchester’s plans for the regeneration of the area around Old Trafford, including new housing and commercial development, and the new approach to planning decisions on land around stations, changing the default to yes. The Office for Investment is expanding its support to local leaders across the UK to help develop and promote their investment plans, and new strategic partnerships from the National Wealth Fund (NWF) will provide deeper, more focused support for city regions starting in Glasgow, West Yorkshire, the West Midlands, and Greater Manchester.

    NWF and Aviva have today invested £65 million in Connected Kerb to back plans for the electric vehicle smart charging infrastructure company to expand its UK EV charging network towards 40,000 sockets – up from 9,000 as of the end of 2024. This substantial investment into the UK’s public charging infrastructure – one of the NWF’s priority sectors – is crucial for delivering the forecast requirement of at least 300,000 public EV chargers by 2030. NWF is also investing £28 million in Cornish Metals to provide the raw materials to be used in solar panels, wind turbines and electric vehicles, supporting growth and jobs in the South West of England.

    Reeves announced that the Treasury will review the Green Book and how it is being used to provide objective, transparent advice on public investment across the country, including outside London and the South East. There were also further details announced on Investment Zones, with the Wrexham and Flintshire Investment Zone to focus on the area’s strengths in advanced manufacturing. Backed by the likes of Airbus and JCB, this is expected to crowd in £1 billion of private investment over a decade and create up to 6,000 jobs.

    The Chancellor said that the Business and Trade Secretary Jonathan Reynolds will visit India next month to relaunch talks on a free-trade agreement and bilateral investment treaty, She set out that the guiding principle the government will take in its approach to trade is acting in the national interest of Britain’s economy, its businesses and working people. A trade deal with India, as one of the fastest growing economies in the world and one which is projected to be the fourth largest global importer by 2035, is in line with this approach.

    Notes to Editors

    • The Chancellor’s speech can be found on gov.uk later today here.
    • As part of the ANPS review, government will engage the Climate Change Committee on how aviation expansion can be made consistent with our net zero framework.

    Stakeholder reaction

    Kenton Jarvis, CEO of easyJet, said:

    I welcome the Government’s pro-growth agenda and their recognition of the importance of aviation and the crucial role it plays as an enabler of economic growth. As an island nation, this industry provides much-needed connectivity as well as creating many skilled jobs which contribute to the wider prosperity of the country. 

    Expansion at Heathrow will provide consumer and economic benefits and represents a unique opportunity for easyJet to operate from the airport at scale for the first time and bring with it lower fares for consumers.

    Paul Weston, Regional Head of Prologis UK said:

    The Chancellor’s announcements reflect a drive to support enhanced UK economic growth, which underscores Prologis’ global partnership with East Midlands Airport to unlock investment at the nation’s only inland Freeport site.

    We are focused on delivering a new Advanced Manufacturing and Logistics park at pace and in partnership, harnessing the site’s unique potential.

    Prologis, as a partner of choice, continues to commit to opportunities across the UK that underpin growth, building the foundations that support economic opportunities and on-the-ground benefits, with central, regional and local government.

    Gordon Sanghera, Chief Executive Officer, Oxford Nanopore Technologies said:

    The attention given to the innovation potential in the Oxford-Cambridge Growth Corridor is welcome. This is an opportunity to strengthen the UK’s tech infrastructure, expand access to talent, and attract investment—the foundations of innovation—so we can turn more pioneering UK life science start-ups into global scale-ups. The UK can be the best place in the world for breakthrough technologies.

    Tim Knowles, Founder and Managing Director of FI Real Estate Management, said:

    As an investor in Wrexham for almost 20 years, we’re delighted to see the announcement that Wrexham and Flintshire will receive Advanced Manufacturing Investment Zone status, with three of our schemes on Wrexham Industrial Estate – Wrexham 1M, Wrexham 152, and Bridgeway Centre – forming part of the designated zone.

    Across these sites, we’ll be investing £115m to create new, high-quality industrial accommodation, supporting the creation of over 1,000 new jobs and delivering an estimated economic value of £1.2bn in Wrexham over the next 10 years.

    Mark Turner, JCB’s Chief Operating Officer said:

    JCB has been a prominent feature of the industrial and economic landscape in Wrexham and Flintshire for over 45 years. Innovation is the lifeblood of our business and we welcome the creation of an Investment Zone in North Wales and hope that it will attract many other businesses to the area. As an advanced manufacturer of precision engineering components, JCB Transmissions looks forward to other advanced manufacturing businesses coming to the area. This could go a long way towards building the supply chain resilience of existing manufacturing businesses in the area, such as JCB.

    We place a lot of values on skills in our business and we look forward to the Investment Zone positively supporting skills development in the future. JCB continues to invest in our business in Wrexham and today’s IZ announcement bodes well for the economic development of the area in the future.

    Updates to this page

    Published 29 January 2025

    MIL OSI United Kingdom –

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

    Source: GlobeNewswire (MIL-OSI)

    • Fourth quarter net income of $21.8 million;
    • Fourth quarter earnings per diluted common share of $0.71;
    • Annualized return on fourth quarter average assets of 1.03%;
    • Annualized return on fourth quarter average tangible common equity of 14.12%(1); and
    • Nonperforming assets decreased to 0.04% of total assets.

    TYLER, Texas, Jan. 29, 2025 (GLOBE NEWSWIRE) — Southside Bancshares, Inc. (“Southside” or the “Company”) (NYSE: SBSI) today reported its financial results for the quarter and year ended December 31, 2024.  Southside reported net income of $21.8 million for the three months ended December 31, 2024, an increase of $4.5 million, or 25.8%, compared to $17.3 million for the same period in 2023.  Earnings per diluted common share increased $0.14, or 24.6%, to $0.71 for the three months ended December 31, 2024, from $0.57 for the same period in 2023.  The annualized return on average shareholders’ equity for the three months ended December 31, 2024, was 10.54%, compared to 9.31% for the same period in 2023.  The annualized return on average assets was 1.03% for the three months ended December 31, 2024, compared to 0.85% for the same period in 2023.

    “For the year ended December 31, 2024, net income increased $1.8 million to $88.5 million when compared to 2023, earnings per share increased $0.09 to $2.91, and the return on average tangible common equity was 14.92%. For 2024, loan growth was 3.0% and linked quarter loans increased $83.5 million, or 7.3% annualized, most of which occurred in December,” stated Lee R. Gibson, Chief Executive Officer of Southside.  “We recorded losses of $540,000 associated with two branch closures during 2024. Linked quarter our net interest margin decreased 12 basis points. Asset quality metrics remain solid with the nonperforming assets to total assets ratio decreasing to 0.04%.  Late fourth quarter loan growth combined with anticipated mid-single digit 2025 loan growth should lead to an increasing net interest margin during 2025.”

    Operating Results for the Three Months Ended December 31, 2024

    Net income was $21.8 million for the three months ended December 31, 2024, compared to $17.3 million for the same period in 2023, an increase of $4.5 million, or 25.8%.  Earnings per diluted common share were $0.71 and $0.57 for the three months ended December 31, 2024 and 2023, respectively.  The increase in net income was a result of the increase in noninterest income and the decrease in the provision for credit losses, partially offset by increases in noninterest expense and income tax expense and a decrease in net interest income.  Annualized returns on average assets and average shareholders’ equity for the three months ended December 31, 2024 were 1.03% and 10.54%, respectively, compared to 0.85% and 9.31%, respectively, for the three months ended December 31, 2023.  Our efficiency ratio and tax-equivalent efficiency ratio(1) were 56.08% and 54.00%, respectively, for the three months ended December 31, 2024, compared to 53.30% and 50.86%, respectively, for the three months ended December 31, 2023, and 53.94% and 51.90%, respectively, for the three months ended September 30, 2024. 

    Net interest income for the three months ended December 31, 2024 was $53.7 million, a decrease of $0.8 million, or 1.4%, from the same period in 2023.  The decrease in net interest income was due to the decrease in the average yield of interest earning assets and increases in the average rate paid on and average balance of our interest bearing liabilities, partially offset by the increase in the average balance of interest earning assets.  Linked quarter, net interest income decreased $1.8 million, or 3.2%, compared to $55.5 million for the three months ended September 30, 2024, due to the decrease in the average yield of interest earning assets, partially offset by the decrease in the average rate paid on our interest bearing liabilities, the increase in the average balance of interest earning assets and the change in the mix of our interest bearing liabilities.

    Our net interest margin and tax-equivalent net interest margin(1) decreased to 2.70% and 2.83%, respectively, for the three months ended December 31, 2024, compared to 2.83% and 2.99%, respectively, for the same period in 2023.  Linked quarter, net interest margin and tax-equivalent net interest margin(1) decreased from 2.82% and 2.95%, respectively, for the three months ended September 30, 2024.

    Noninterest income was $12.3 million for the three months ended December 31, 2024, an increase of $9.8 million, or 391.0%, compared to $2.5 million for the same period in 2023. The increase was due to a decrease in net loss on sale of securities available for sale (“AFS”) and an increase in other noninterest income, partially offset by a decrease in bank owned life insurance (“BOLI”) income. The decrease in net loss on sale of securities AFS was due to a net loss of $10.4 million for the three months ended December 31, 2023, related to the strategic repositioning of the securities portfolio. On a linked quarter basis, noninterest income increased $4.1 million, or 50.3%, compared to the three months ended September 30, 2024.  The increase was primarily due to an increase in other noninterest income and a decrease in net loss on sale of securities AFS.  The increase in other noninterest income was primarily due to an increase in swap fee income for the three months ended December 31, 2024, and an impairment charge of $868,000 on the sale of approximately $10 million of AFS municipal securities and the unwind of the related fair value swaps realized during the three months ended September 30, 2024.

    Noninterest expense increased $3.0 million, or 8.5%, to $38.2 million for the three months ended December 31, 2024, compared to $35.2 million for the same period in 2023, due to increases in salaries and employee benefits, other noninterest expense, professional fees and software and data processing expense, partially offset by decreases in advertising, travel and entertainment expense.  On a linked quarter basis, noninterest expense increased by $1.8 million, or 5.0%, compared to the three months ended September 30, 2024, due to increases in salaries and employee benefits expense, other noninterest expense and professional fees.

    Income tax expense increased $2.5 million, or 111.2%, for the three months ended December 31, 2024, compared to the same period in 2023.  On a linked quarter basis, income tax expense increased $0.3 million, or 6.1%.  Our effective tax rate (“ETR”) increased to 17.6% for the three months ended December 31, 2024, compared to 11.3% for the three months ended December 31, 2023.  On a linked quarter basis, the ETR was 17.6% for both the three months ended September 30, 2024 and December 31, 2024.  The higher ETR for the three months ended December 31, 2024 compared to the same period in 2023, was primarily due to a decrease in net tax-exempt income as a percentage of pre-tax income.

    Operating Results for the Year Ended December 31, 2024

    Net income was $88.5 million for the year ended December 31, 2024, compared to $86.7 million for the same period in 2023, an increase of $1.8 million, or 2.1%.  Earnings per diluted common share were $2.91 for the year ended December 31, 2024, compared to $2.82 for the same period in 2023, an increase of 3.2%.  The increase in net income was primarily a result of the increase in noninterest income, decrease in provision for credit losses and the increase in net interest income, partially offset by the increases in noninterest expense and income tax expense.  Returns on average assets and average shareholders’ equity for the year ended December 31, 2024 were 1.06% and 11.03%, respectively, compared to 1.11% and 11.50%, respectively, for the year ended December 31, 2023.  Our efficiency ratio and tax-equivalent efficiency ratio(1) were 55.69% and 53.52%, respectively, for the year ended December 31, 2024, compared to 53.81% and 51.30%, respectively, for the year ended December 31, 2023. 

    Net interest income was $216.1 million for the year ended December 31, 2024, compared to $215.0 million for the same period in 2023, an increase of $1.1 million, or 0.5%, due to increases in the average balance and the average yield of interest earning assets, partially offset by increases in the average rate paid on and average balance of our interest bearing liabilities.

    Our net interest margin and tax-equivalent net interest margin(1) were 2.74% and 2.88%, respectively, for the year ended December 31, 2024, compared to 2.92% and 3.09%, respectively, for the same period in 2023.

    Noninterest income was $41.7 million for the year ended December 31, 2024, an increase of $5.9 million, or 16.5%, compared to $35.8 million for the same period in 2023.  The increase was primarily due to a decrease in net loss on sale of securities AFS and an increase in brokerage services income, partially offset by decreases in the net gain on sale of equity securities, BOLI income and deposit services income.

    Noninterest expense was $147.1 million for the year ended December 31, 2024, compared to $140.6 million for the same period in 2023, an increase of $6.6 million, or 4.7%.  The increase was primarily due to increases in salaries and employee benefits, software and data processing expense and other noninterest expense, partially offset by decreases in advertising, travel and entertainment expense and amortization of intangibles.

    Income tax expense increased $4.4 million, or 30.8%, for the year ended December 31, 2024, compared to the same period in 2023.  Our ETR was approximately 17.6% and 14.3% for the year ended December 31, 2024 and 2023, respectively.  The higher ETR for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to a decrease in net tax-exempt income as a percentage of pre-tax income.

    Balance Sheet Data

    At December 31, 2024, Southside had $8.52 billion in total assets, compared to $8.28 billion at December 31, 2023 and $8.36 billion at September 30, 2024.

    Loans at December 31, 2024 were $4.66 billion, an increase of $137.1 million, or 3.0%, compared to $4.52 billion at December 31, 2023.  Linked quarter, loans increased $83.5 million, or 1.8%, due to increases of $157.1 million in commercial real estate loans and $4.3 million in commercial loans. These increases were partially offset by decreases of $48.0 million in construction loans, $15.0 million in 1-4 family residential loans, $11.1 million in municipal loans and $3.8 million in loans to individuals.

    Securities at December 31, 2024 were $2.81 billion, an increase of $209.8 million, or 8.1%, compared to $2.60 billion at December 31, 2023.  Linked quarter, securities increased $116.3 million, or 4.3%, from $2.70 billion at September 30, 2024. 

    Deposits at December 31, 2024 were $6.65 billion, an increase of $104.6 million, or 1.6%, compared to $6.55 billion at December 31, 2023.  Linked quarter, deposits increased $218.5 million, or 3.4%, from $6.44 billion at September 30, 2024.  During the three months ended December 31, 2024, public fund deposits increased $156.8 million, or 14.6%, compared to September 30, 2024.

    At December 31, 2024, we had 178,662 total deposit accounts with an average balance of $33,000.  Our estimated uninsured deposits were 38.1% of total deposits as of December 31, 2024.  When excluding affiliate deposits (Southside-owned deposits) and public fund deposits (all collateralized), our total estimated deposits without insurance or collateral was 19.5% as of December 31, 2024.  Our noninterest bearing deposits represent approximately 20.4% of total deposits. Linked quarter, our cost of interest bearing deposits decreased nine basis points from 3.01% in the prior quarter to 2.92%.  Linked quarter, our cost of total deposits decreased seven basis points from 2.38% in the prior quarter to 2.31%.

    Our cost of interest bearing deposits increased 64 basis points, from 2.34% for the year ended December 31, 2023, to 2.98% for the year ended December 31, 2024. Our cost of total deposits increased 59 basis points, from 1.77% for the year ended December 31, 2023, to 2.36% for the year ended December 31, 2024.

    Capital Resources and Liquidity

    Our capital ratios and contingent liquidity sources remain solid.  During the fourth quarter ended December 31, 2024, we did not purchase any common stock pursuant to our Stock Repurchase Plan.  Under this plan, repurchases of our outstanding common stock may be carried out in open market purchases, privately negotiated transactions or pursuant to any trading plan that might be adopted in accordance with Rule 10b5-1 of The Securities Exchange Act of 1934, as amended.  The Company has no obligation to repurchase any shares under the Stock Repurchase Plan and may modify, suspend or discontinue the plan at any time.  We have not purchased any common stock pursuant to the Stock Repurchase Plan subsequent to December 31, 2024. 

    As of December 31, 2024, our total available contingent liquidity, net of current outstanding borrowings, was $2.23 billion, consisting of FHLB advances, Federal Reserve Discount Window and correspondent bank lines of credit.

    Asset Quality

    Nonperforming assets at December 31, 2024 were $3.6 million, or 0.04% of total assets, a decrease of $0.4 million, or 10.3%, compared to $4.0 million, or 0.05% of total assets, at December 31, 2023.  Linked quarter, nonperforming assets decreased $4.1 million, or 53.1%, from $7.7 million at September 30, 2024 due to a $4.1 million decrease in nonaccrual loans primarily from the payoff of one commercial real estate loan. Classified loans totaled $48.0 million on December 31, 2024, compared to $42.0 million at September 30, 2024 and $19.2 million at December 31, 2023.

    The allowance for loan losses totaled $44.9 million, or 0.96% of total loans, at December 31, 2024, compared to $44.3 million, or 0.97% of total loans, at September 30, 2024.  The allowance for loan losses was $42.7 million, or 0.94% of total loans, at December 31, 2023.

    For the three months ended December 31, 2024, we recorded a provision for credit losses for loans of $1.6 million, compared to a provision of $2.2 million and $2.3 million for the three months ended December 31, 2023 and September 30, 2024, respectively. Net charge-offs were $1.0 million for the three months ended December 31, 2024, compared to net charge-offs of $1.3 million and $0.4 million for the three months ended December 31, 2023 and September 30, 2024, respectively. Net charge-offs were $1.9 million for the year ended December 31, 2024, compared to net charge-offs of $2.8 million for the year ended December 31, 2023.

    We recorded a reversal of provision for credit losses on off-balance-sheet credit exposures of $0.2 million for the three months ended December 31, 2024, compared to a provision for credit losses on off-balance-sheet credit exposures $0.1 million for both of the three-month periods ended December 31, 2023 and September 30, 2024.  We recorded a reversal of provision for credit losses for off-balance-sheet credit exposures of $0.8 million for the year ended December 31, 2024, compared to a provision for credit losses on off-balance-sheet credit exposures of $0.2 million for the year ended December 31, 2023.  The balance of the allowance for off-balance-sheet credit exposures was $3.1 million and $3.9 million at December 31, 2024 and 2023, respectively, and is included in other liabilities.

    Dividend

    Southside Bancshares, Inc. declared a fourth quarter cash dividend of $0.36 per share on November 7, 2024, which was paid on December 6, 2024, to all shareholders of record as of November 21, 2024.

    _______________

    (1)  Refer to “Non-GAAP Financial Measures” below and to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for more information and for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.

    Conference Call

    Southside’s management team will host a conference call to discuss its fourth quarter and year ended December 31, 2024 financial results on Wednesday, January 29, 2025 at 11:00 a.m. CST.  The conference call can be accessed by webcast, for listen-only mode, on the company website, https://investors.southside.com, under Events.

    Those interested in participating in the question and answer session, or others who prefer to call-in, can register at https://register.vevent.com/register/BI54b435198f6143e589b32994aed51233 to receive the dial-in number and unique code to access the conference call seamlessly. While not required, it is recommended that those wishing to participate, register 10 minutes prior to the conference call to ensure a more efficient registration process.

    For those unable to attend the live event, a webcast recording will be available on the company website, https://investors.southside.com, for at least 30 days, beginning approximately two hours following the conference call.

    Non-GAAP Financial Measures

    Our accounting and reporting policies conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry.  However, certain non-GAAP measures are used by management to supplement the evaluation of our performance.  These include the following fully taxable-equivalent measures (“FTE”): (i) Net interest income (FTE), (ii) net interest margin (FTE), (iii) net interest spread (FTE), and (iv) efficiency ratio (FTE), which include the effects of taxable-equivalent adjustments using a federal income tax rate of 21% to increase tax-exempt interest income to a tax-equivalent basis.  Interest income earned on certain assets is completely or partially exempt from federal income tax.  As such, these tax-exempt instruments typically yield lower returns than taxable investments.

    Net interest income (FTE), net interest margin (FTE) and net interest spread (FTE).  Net interest income (FTE) is a non-GAAP measure that adjusts for the tax-favored status of net interest income from certain loans and investments and is not permitted under GAAP in the consolidated statements of income.  We believe that this measure is the preferred industry measurement of net interest income and that it enhances comparability of net interest income arising from taxable and tax-exempt sources.  The most directly comparable financial measure calculated in accordance with GAAP is our net interest income.  Net interest margin (FTE) is the ratio of net interest income (FTE) to average earning assets.  The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin.  Net interest spread (FTE) is the difference in the average yield on average earning assets on a tax-equivalent basis and the average rate paid on average interest bearing liabilities.  The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

    Efficiency ratio (FTE).  The efficiency ratio (FTE) is a non-GAAP measure that provides a measure of productivity in the banking industry.  This ratio is calculated to measure the cost of generating one dollar of revenue.  The ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue.  We calculate this ratio by dividing noninterest expense, excluding amortization expense on intangibles and certain nonrecurring expense by the sum of net interest income (FTE) and noninterest income, excluding net gain (loss) on sale of securities available for sale and certain nonrecurring impairments.  The most directly comparable financial measure calculated in accordance with GAAP is our efficiency ratio.

    These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently.  Whenever we present a non-GAAP financial measure in an SEC filing, we are also required to present the most directly comparable financial measure calculated and presented in accordance with GAAP and reconcile the differences between the non-GAAP financial measure and such comparable GAAP measure.

    Management believes adjusting net interest income, net interest margin and net interest spread to a fully taxable-equivalent basis is a standard practice in the banking industry as these measures provide useful information to make peer comparisons.  Tax-equivalent adjustments are reflected in the respective earning asset categories as listed in the “Average Balances with Average Yields and Rates” tables.

    A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

    About Southside Bancshares, Inc.

    Southside Bancshares, Inc. is a bank holding company with approximately $8.52 billion in assets as of December 31, 2024, that owns 100% of Southside Bank.  Southside Bank currently has 53 branches in Texas and operates a network of 72 ATMs/ITMs.  

    To learn more about Southside Bancshares, Inc., please visit our investor relations website at https://investors.southside.com.  Our investor relations site provides a detailed overview of our activities, financial information and historical stock price data.  To receive email notification of company news, events and stock activity, please register on the website under Resources and Investor Email Alerts.  Questions or comments may be directed to Lindsey Bailes at (903) 630-7965, or lindsey.bailes@southside.com.

    Forward-Looking Statements

    Certain statements of other than historical fact that are contained in this press release and in other written materials, documents and oral statements issued by or on behalf of the Company may be considered to be “forward-looking statements” within the meaning of and subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date.  These statements may include words such as “expect,” “estimate,” “project,” “anticipate,” “appear,” “believe,” “could,” “should,” “may,” “might,” “will,” “would,” “seek,” “intend,” “probability,” “risk,” “goal,” “target,” “objective,” “plans,” “potential,” and similar expressions.  Forward-looking statements are statements with respect to the Company’s beliefs, plans, expectations, objectives, goals, anticipations, assumptions, estimates, intentions and future performance and are subject to significant known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from the results discussed in the forward-looking statements.  For example, benefits of the Share Repurchase Plan, trends in asset quality, capital, liquidity, the Company’s ability to sell nonperforming assets, expense reductions, planned operational efficiencies and earnings from growth and certain market risk disclosures, including the impact of interest rates and our expectations regarding rate increases, tax reform, inflation, the impacts related to or resulting from other economic factors are based upon information presently available to management and are dependent on choices about key model characteristics and assumptions and are subject to various limitations.  By their nature, certain of the market risk disclosures are only estimates and could be materially different from what actually occurs in the future.  Accordingly, our results could materially differ from those that have been estimated.  The most significant factor that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, interest rate fluctuations and general economic concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations, our ability to manage liquidity in a rapidly changing and unpredictable market, labor shortages and changes in interest rates by the Federal Reserve.

    Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under “Part I – Item 1. Forward Looking Information” and “Part I – Item 1A. Risk Factors” and in the Company’s other filings with the Securities and Exchange Commission.  The Company disclaims any obligation to update any factors or to announce publicly the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

    Southside Bancshares, Inc.
    Consolidated Financial Summary (Unaudited)
    (Dollars in thousands)
       
      As of
        2024       2023  
      Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
    ASSETS                  
    Cash and due from banks $        91,409     $      130,147     $      114,283     $        96,744     $      122,021  
    Interest earning deposits          281,945              333,825              272,469              307,257              391,719  
    Federal funds sold            52,807                22,325                65,244                65,372                46,770  
    Securities available for sale, at estimated fair value       1,533,894           1,408,437           1,405,944           1,405,221           1,296,294  
    Securities held to maturity, at net carrying value       1,279,234           1,288,403           1,305,975           1,306,898           1,307,053  
    Total securities       2,813,128           2,696,840           2,711,919           2,712,119           2,603,347  
    Federal Home Loan Bank stock, at cost            33,818                40,291                32,991                27,958                11,936  
    Loans held for sale              1,946                     768                  1,352                     756                10,894  
    Loans       4,661,597           4,578,048           4,589,365           4,577,368           4,524,510  
    Less: Allowance for loan losses          (44,884 )            (44,276 )            (42,407 )            (43,557 )            (42,674 )
    Net loans       4,616,713           4,533,772           4,546,958           4,533,811           4,481,836  
    Premises & equipment, net          141,648              138,811              138,489              139,491              138,950  
    Goodwill          201,116              201,116              201,116              201,116              201,116  
    Other intangible assets, net              1,754                  2,003                  2,281                  2,588                  2,925  
    Bank owned life insurance          138,313              137,489              136,903              136,604              136,330  
    Other assets          142,851              124,876              133,697              130,047              137,070  
    Total assets $   8,517,448     $   8,362,263     $   8,357,702     $   8,353,863     $   8,284,914  
                       
    LIABILITIES AND SHAREHOLDERS’ EQUITY                  
    Noninterest bearing deposits $   1,357,152     $   1,377,022     $   1,366,924     $   1,358,827     $   1,390,407  
    Interest bearing deposits       5,297,096           5,058,680           5,129,008           5,186,933           5,159,274  
    Total deposits       6,654,248           6,435,702           6,495,932           6,545,760           6,549,681  
    Other borrowings and Federal Home Loan Bank borrowings          808,352              865,856              763,700              770,151              722,468  
    Subordinated notes, net of unamortized debt
    issuance costs    		            92,042                92,006                91,970                93,913                93,877  
    Trust preferred subordinated debentures, net of unamortized debt issuance costs            60,274                60,273                60,272                60,271                60,270  
    Other liabilities            90,590              103,172              144,858                95,846                85,330  
              Total liabilities       7,705,506           7,557,009           7,556,732           7,565,941           7,511,626  
    Shareholders’ equity          811,942              805,254              800,970              787,922              773,288  
    Total liabilities and shareholders’ equity $   8,517,448     $   8,362,263     $   8,357,702     $   8,353,863     $   8,284,914  
    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars and shares in thousands, except per share data)
       
      Three Months Ended
        2024       2023  
      Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
    Income Statement:                  
    Total interest and dividend income $    101,689     $ 105,703     $ 104,186     $ 102,758     $    98,939  
    Total interest expense          47,982          50,239          50,578           49,410            44,454  
    Net interest income          53,707          55,464          53,608           53,348            54,485  
    Provision for (reversal of) credit losses            1,384            2,389             (485 )                58              2,281  
    Net interest income after provision for (reversal of) credit losses          52,323          53,075          54,093           53,290            52,204  
    Noninterest income                  
    Deposit services            6,084            6,199            6,157             5,985              6,305  
    Net gain (loss) on sale of securities available for sale                 —          (1,929  )           (563 )              (18 )        (10,386 )
    Gain (loss) on sale of loans               138               115               220              (436 )               178  
    Trust fees            1,773            1,628            1,456             1,336              1,431  
    Bank owned life insurance               848               857            1,767                784              2,602  
    Brokerage services            1,054            1,068            1,081             1,014                 944  
    Other            2,384               233            1,439             1,059              1,427  
    Total noninterest income          12,281            8,171          11,557             9,724              2,501  
    Noninterest expense                  
    Salaries and employee benefits          22,960          22,233          21,984           23,113            21,152  
    Net occupancy            3,629            3,613            3,750             3,362              3,474  
    Advertising, travel & entertainment               884               734               795                950              1,127  
    ATM expense               378               412               368                325                 318  
    Professional fees            1,645            1,206            1,075             1,154              1,315  
    Software and data processing            2,931            2,951            2,860             2,856              2,644  
    Communications               320               423               410                449                 435  
    FDIC insurance               931               939               977                943                 892  
    Amortization of intangibles               249               278               307                337                 370  
    Other            4,232            3,543            3,239             3,392              3,456  
    Total noninterest expense          38,159          36,332          35,765           36,881            35,183  
    Income before income tax expense          26,445          24,914          29,885           26,133            19,522  
    Income tax expense            4,659            4,390            5,212             4,622              2,206  
    Net income $      21,786     $ 20,524     $ 24,673     $   21,511     $    17,316  
                       
    Common Share Data:      
    Weighted-average basic shares outstanding          30,343          30,286          30,280           30,262            30,235  
    Weighted-average diluted shares outstanding          30,459          30,370          30,312           30,305            30,276  
    Common shares outstanding end of period          30,379          30,308          30,261           30,284            30,249  
    Earnings per common share                  
    Basic $          0.72     $      0.68     $      0.81     $       0.71     $        0.57  
    Diluted              0.71              0.68              0.81               0.71                 0.57  
    Book value per common share            26.73            26.57            26.47             26.02              25.56  
    Tangible book value per common share            20.05            19.87            19.75             19.29              18.82  
    Cash dividends paid per common share              0.36              0.36              0.36               0.36                0.37  
                       
    Selected Performance Ratios:                  
    Return on average assets   1.03 %     0.98 %     1.19 %     1.03 %     0.85 %
    Return on average shareholders’ equity   10.54       10.13       12.46       11.02       9.31  
    Return on average tangible common equity (1)   14.12       13.69       16.90       15.07       13.10  
    Average yield on earning assets (FTE) (1)   5.24       5.51       5.45       5.38       5.30  
    Average rate on interest bearing liabilities   3.12       3.28       3.32       3.22       3.04  
    Net interest margin (FTE) (1)   2.83       2.95       2.87       2.86       2.99  
    Net interest spread (FTE) (1)   2.12       2.23       2.13       2.16       2.26  
    Average earning assets to average interest bearing liabilities   129.55       128.51       128.62       127.71       131.65  
    Noninterest expense to average total assets   1.80       1.73       1.72       1.77       1.73  
    Efficiency ratio (FTE) (1)   54.00       51.90       52.71       55.54       50.86  
    (1) Refer to “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars in thousands)
       
      Three Months Ended
        2024       2023  
      Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
    Nonperforming Assets: $      3,589     $         7,656     $         6,918     $         7,979     $         4,001  
    Nonaccrual loans          3,185                 7,254                 6,110                 7,709                 3,889  
    Accruing loans past due more than 90 days               —                      —                      —                      —                      —  
    Restructured loans                 2                      —                    145                    151                      13  
    Other real estate owned             388                    388                    648                    119                      99  
    Repossessed assets               14                      14                      15                      —                      —  
                       
    Asset Quality Ratios:                  
    Ratio of nonaccruing loans to:                  
    Total loans   0.07 %     0.16 %     0.13 %     0.17 %     0.09 %
    Ratio of nonperforming assets to:                  
    Total assets   0.04       0.09       0.08       0.10       0.05  
    Total loans   0.08       0.17       0.15       0.17       0.09  
    Total loans and OREO   0.08       0.17       0.15       0.17       0.09  
    Ratio of allowance for loan losses to:                  
    Nonaccruing loans   1,409.23       610.37       694.06       565.01       1,097.30  
    Nonperforming assets   1,250.60       578.32       613.00       545.90       1,066.58  
    Total loans   0.96       0.97       0.92       0.95       0.94  
    Net charge-offs (recoveries) to average loans outstanding   0.08       0.04       0.02       0.03       0.11  
                       
    Capital Ratios:                  
    Shareholders’ equity to total assets   9.53       9.63       9.58       9.43       9.33  
    Common equity tier 1 capital   13.04       13.07       12.72       12.43       12.28  
    Tier 1 risk-based capital   14.07       14.12       13.76       13.47       13.32  
    Total risk-based capital   16.49       16.59       16.16       15.92       15.73  
    Tier 1 leverage capital   9.67       9.61       9.40       9.22       9.39  
    Period end tangible equity to period end tangible assets (1)   7.33       7.38       7.33       7.17       7.04  
    Average shareholders’ equity to average total assets   9.76       9.67       9.52       9.35       9.13  
    (1) Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars in thousands)
       
      Three Months Ended
        2024       2023  
    Loan Portfolio Composition Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
    Real Estate Loans:                  
    Construction $         537,827     $         585,817     $         546,040     $         599,464     $        789,744  
    1-4 Family Residential             740,396                 755,406                 738,037                 720,508                696,738  
    Commercial          2,579,735              2,422,612              2,472,771              2,413,345             2,168,451  
    Commercial Loans             363,167                 358,854                 359,807                 358,053                366,893  
    Municipal Loans             390,968                 402,041                 416,986                 427,225                441,168  
    Loans to Individuals               49,504                   53,318                   55,724                   58,773                  61,516  
    Total Loans $      4,661,597     $      4,578,048     $      4,589,365     $      4,577,368     $     4,524,510  
                       
    Summary of Changes in Allowances:                  
    Allowance for Loan Losses                  
    Balance at beginning of period $           44,276     $           42,407     $           43,557     $           42,674     $          41,760  
    Loans charged-off               (1,232 )                    (773 )                    (721 )                    (634 )                (1,572 )
    Recoveries of loans charged-off                    277                        365                        444                        347                       284  
      Net loans (charged-off) recovered                  (955 )                    (408 )                    (277 )                    (287 )                (1,288 )
    Provision for (reversal of) loan losses                 1,563                     2,277                      (873 )                   1,170                    2,202  
    Balance at end of period $           44,884     $           44,276     $           42,407     $           43,557     $          42,674  
                       
    Allowance for Off-Balance-Sheet Credit Exposures                  
    Balance at beginning of period $             3,320     $             3,208     $             2,820     $             3,932     $            3,853  
    Provision for (reversal of) off-balance-sheet credit exposures                  (179 )                      112                        388                   (1,112 )                       79  
    Balance at end of period $             3,141     $             3,320     $             3,208     $             2,820     $            3,932  
    Total Allowance for Credit Losses $           48,025     $           47,596     $           45,615     $           46,377     $          46,606  
    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars in thousands)
       
      Year ended
      December 31,
        2024       2023  
    Income Statement:      
    Total interest and dividend income $        414,336     $        359,741  
    Total interest expense            198,209                144,714  
    Net interest income            216,127                215,027  
    Provision for (reversal of) credit losses                3,346                    9,154  
    Net interest income after provision for (reversal of) credit losses            212,781                205,873  
    Noninterest income      
    Deposit services              24,425                  25,497  
    Net gain (loss) on sale of securities available for sale              (2,510 )              (15,976 )
    Net gain on sale of equity securities                     —                    5,058  
    Gain (loss) on sale of loans                     37                       563  
    Trust fees                6,193                    5,910  
    Bank owned life insurance                4,256                    5,823  
    Brokerage services                4,217                    3,305  
    Other                5,115                    5,654  
    Total noninterest income              41,733                  35,834  
    Noninterest expense      
    Salaries and employee benefits              90,290                  85,625  
    Net occupancy              14,354                  14,694  
    Advertising, travel & entertainment                3,363                    4,093  
    ATM expense                1,483                    1,351  
    Professional fees                5,080                    5,351  
    Software and data processing              11,598                    9,395  
    Communications                1,602                    1,469  
    FDIC insurance                3,790                    3,558  
    Amortization of intangibles                1,171                    1,697  
    Other              14,406                  13,345  
    Total noninterest expense            147,137                140,578  
    Income before income tax expense            107,377                101,129  
    Income tax expense              18,883                  14,437  
    Net income $          88,494     $          86,692  
    Common Share Data:      
    Weighted-average basic shares outstanding              30,293                  30,704  
    Weighted-average diluted shares outstanding              30,369                  30,759  
    Common shares outstanding end of period              30,379                  30,249  
    Earnings per common share      
    Basic $              2.92     $              2.82  
    Diluted                  2.91                      2.82  
    Book value per common share                26.73                    25.56  
    Tangible book value per common share                20.05                    18.82  
    Cash dividends paid per common share                  1.44                      1.42  
           
    Selected Performance Ratios:      
    Return on average assets   1.06 %     1.11 %
    Return on average shareholders’ equity   11.03       11.50  
    Return on average tangible common equity (1)   14.92       16.03  
    Average yield on earning assets (FTE) (1)   5.40       5.06  
    Average rate on interest bearing liabilities   3.24       2.64  
    Net interest margin (FTE) (1)   2.88       3.09  
    Net interest spread (FTE) (1)   2.16       2.42  
    Average earning assets to average interest bearing liabilities   128.60       134.07  
    Noninterest expense to average total assets   1.76       1.80  
    Efficiency ratio (FTE) (1)   53.52       51.30  
    (1) Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
    Southside Bancshares, Inc.
    Consolidated Financial Highlights (Unaudited)
    (Dollars in thousands)
       
      Year ended
      December 31,
        2024       2023  
    Nonperforming Assets: $           3,589     $           4,001  
    Nonaccrual loans               3,185                   3,889  
    Accruing loans past due more than 90 days                    —                        —  
    Restructured loans                      2                        13  
    Other real estate owned                  388                        99  
    Repossessed assets                    14                        —     
           
    Asset Quality Ratios:      
    Ratio of nonaccruing loans to:      
    Total loans   0.07 %     0.09 %
    Ratio of nonperforming assets to:      
    Total assets   0.04       0.05  
    Total loans   0.08       0.09  
    Total loans and OREO   0.08       0.09  
    Ratio of allowance for loan losses to:      
    Nonaccruing loans   1,409.23       1,097.30  
    Nonperforming assets   1,250.60       1,066.58  
    Total loans   0.96       0.94  
    Net charge-offs (recoveries) to average loans outstanding   0.04       0.06  
           
    Capital Ratios:      
    Shareholders’ equity to total assets   9.53       9.33  
    Common equity tier 1 capital   13.04       12.28  
    Tier 1 risk-based capital   14.07       13.32  
    Total risk-based capital   16.49       15.73  
    Tier 1 leverage capital   9.67       9.39  
    Period end tangible equity to period end tangible assets (1)   7.33       7.04  
    Average shareholders’ equity to average total assets   9.58       9.63  
    (1) Refer to the “Non-GAAP Reconciliation” at the end of the financial statement tables in this Earnings Release for a reconciliation of this non-GAAP financial measure to the nearest GAAP financial measure.
      Year ended
      December 31,
    Loan Portfolio Composition   2024       2023  
    Real Estate Loans:      
    Construction $        537,827     $        789,744  
    1-4 Family Residential            740,396                696,738  
    Commercial         2,579,735             2,168,451  
    Commercial Loans            363,167                366,893  
    Municipal Loans            390,968                441,168  
    Loans to Individuals              49,504                  61,516  
    Total Loans $     4,661,597     $     4,524,510  
           
    Summary of Changes in Allowances:      
    Allowance for Loan Losses      
    Balance at beginning of period $          42,674     $          36,515  
    Loans charged-off               (3,360 )                (4,204 )
    Recoveries of loans charged-off                1,433                    1,454  
      Net loans (charged-off) recovered               (1,927 )                (2,750 )
    Provision for (reversal of) loan losses                4,137                    8,909  
    Balance at end of period $          44,884     $          42,674  
           
    Allowance for Off-Balance-Sheet Credit Exposures      
    Balance at beginning of period $            3,932     $            3,687  
    Provision for (reversal of) off-balance-sheet credit exposures                  (791 )                     245  
    Balance at end of period $            3,141     $            3,932  
    Total Allowance for Credit Losses $          48,025     $          46,606  

    The tables that follow show average earning assets and interest bearing liabilities together with the average yield on the earning assets and the average rate of the interest bearing liabilities for the periods presented.  The interest and related yields presented are on a fully taxable-equivalent basis and are therefore non-GAAP measures.  See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” for more information.

    Southside Bancshares, Inc.
    Average Balances and Average Yields and Rates (Annualized) (Unaudited)
    (Dollars in thousands)
     
      Three Months Ended
      December 31, 2024   September 30, 2024
      Average Balance   Interest   Average Yield/Rate   Average Balance   Interest   Average Yield/Rate
    ASSETS                      
    Loans (1) $   4,604,175     $        70,155   6.06 %   $   4,613,028     $        72,493   6.25 %
    Loans held for sale             1,562                       23   5.86 %                   871                      11   5.02 %
    Securities:                      
    Taxable investment securities (2)          784,321                  6,949   3.52 %            791,914                 7,150   3.59 %
    Tax-exempt investment securities (2)       1,138,271                10,793   3.77 %         1,174,445                11,825   4.01 %
    Mortgage-backed and related securities (2)       1,031,187                12,043   4.65 %            886,325                11,976   5.38 %
    Total securities       2,953,779                29,785   4.01 %         2,852,684                30,951   4.32 %
    Federal Home Loan Bank stock, at cost, and equity investments            37,078                     591   6.34 %              41,159                    582   5.63 %
    Interest earning deposits          273,656                  3,160   4.59 %            281,313                 3,798   5.37 %
    Federal funds sold            43,121                     508   4.69 %              33,971                    488   5.71 %
    Total earning assets       7,913,371              104,222   5.24 %         7,823,026              108,323   5.51 %
    Cash and due from banks          102,914                      100,578          
    Accrued interest and other assets          454,387                      455,091          
    Less:  Allowance for loan losses          (44,418 )                     (42,581 )        
    Total assets $   8,426,254             $   8,336,114          
    LIABILITIES AND SHAREHOLDERS’ EQUITY                      
    Savings accounts $      594,196                  1,456   0.97 %   $      598,116                 1,490   0.99 %
    Certificates of deposit       1,187,800                13,537   4.53 %         1,087,613                12,647   4.63 %
    Interest bearing demand accounts       3,459,122                23,468   2.70 %         3,409,911                24,395   2.85 %
    Total interest bearing deposits       5,241,118                38,461   2.92 %         5,095,640                38,532   3.01 %
    Federal Home Loan Bank borrowings          572,993                  5,557   3.86 %            618,708                 6,488   4.17 %
    Subordinated notes, net of unamortized debt issuance costs            92,024                     945   4.09 %              91,988                    937   4.05 %
    Trust preferred subordinated debentures, net of unamortized debt issuance costs            60,274                  1,095   7.23 %              60,273                 1,180   7.79 %
    Repurchase agreements            80,891                     782   3.85 %              83,297                    899   4.29 %
    Other borrowings            61,196                  1,142   7.42 %            137,482                 2,203   6.37 %
    Total interest bearing liabilities       6,108,496                47,982   3.12 %         6,087,388                50,239   3.28 %
    Noninterest bearing deposits       1,383,204                   1,344,165          
    Accrued expenses and other liabilities          112,320                        98,331          
    Total liabilities       7,604,020                   7,529,884          
    Shareholders’ equity          822,234                      806,230          
    Total liabilities and shareholders’ equity $   8,426,254             $   8,336,114          
    Net interest income (FTE)     $        56,240           $        58,084    
    Net interest margin (FTE)         2.83 %           2.95 %
    Net interest spread (FTE)         2.12 %           2.23 %
    1. Interest on loans includes net fees on loans that are not material in amount.
    2. For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.

    Note:  As of December 31, 2024 and September 30, 2024, loans totaling $3.2 million and $7.3 million, respectively, were on nonaccrual status.  Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

    Southside Bancshares, Inc.
    Average Balances and Average Yields and Rates (Annualized) (Unaudited)
    (Dollars in thousands)
     
      Three Months Ended
      June 30, 2024   March 31, 2024
      Average
    Balance    		   Interest   Average Yield/
    Rate    		   Average
    Balance    		   Interest   Average Yield/
    Rate
    ASSETS                      
    Loans (1) $   4,595,980     $        70,293   6.15 %   $   4,559,602     $        68,849   6.07 %
    Loans held for sale             1,489                       24   6.48 %                8,834                      18   0.82 %
    Securities:                      
    Taxable investment securities (2)          783,856                  7,009   3.60 %            780,423                 6,967   3.59 %
    Tax-exempt investment securities (2)       1,254,097                12,761   4.09 %         1,285,922                13,168   4.12 %
    Mortgage-backed and related securities (2)          830,504                11,084   5.37 %            764,713                10,119   5.32 %
    Total securities       2,868,457                30,854   4.33 %         2,831,058                30,254   4.30 %
    Federal Home Loan Bank stock, at cost, and equity investments            40,467                     573   5.69 %              40,063                    333   3.34 %
    Interest earning deposits          300,047                  4,105   5.50 %            380,181                 5,202   5.50 %
    Federal funds sold            75,479                  1,021   5.44 %              62,599                    838   5.38 %
    Total earning assets       7,881,919              106,870   5.45 %         7,882,337              105,494   5.38 %
    Cash and due from banks          110,102                      114,379          
    Accrued interest and other assets          424,323                      441,783          
    Less:  Allowance for loan losses          (43,738 )                     (42,973 )        
    Total assets $   8,372,606             $   8,395,526          
    LIABILITIES AND SHAREHOLDERS’ EQUITY                      
    Savings accounts $      604,753                  1,454   0.97 %   $      604,529                 1,424   0.95 %
    Certificates of deposit       1,020,099                11,630   4.59 %            941,947                10,341   4.42 %
    Interest bearing demand accounts       3,513,068                25,382   2.91 %         3,634,936                26,433   2.92 %
    Total interest bearing deposits       5,137,920                38,466   3.01 %         5,181,412                38,198   2.97 %
    Federal Home Loan Bank borrowings          606,851                  6,455   4.28 %            607,033                 5,950   3.94 %
    Subordinated notes, net of unamortized debt issuance costs            92,017                     936   4.09 %              93,895                    956   4.10 %
    Trust preferred subordinated debentures, net of unamortized debt issuance costs            60,271                  1,171   7.81 %              60,270                 1,175   7.84 %
    Repurchase agreements            88,007                     955   4.36 %              92,177                    967   4.22 %
    Other borrowings          143,169                  2,595   7.29 %            137,287                 2,164   6.34 %
    Total interest bearing liabilities       6,128,235                50,578   3.32 %         6,172,074                49,410   3.22 %
    Noninterest bearing deposits       1,346,274                   1,338,384          
    Accrued expenses and other liabilities          101,399                      100,014          
    Total liabilities       7,575,908                   7,610,472          
    Shareholders’ equity          796,698                      785,054          
    Total liabilities and shareholders’ equity $   8,372,606             $   8,395,526          
    Net interest income (FTE)     $        56,292           $        56,084    
    Net interest margin (FTE)         2.87 %           2.86 %
    Net interest spread (FTE)         2.13 %           2.16 %
    1. Interest on loans includes net fees on loans that are not material in amount.
    2. For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.

    Note:  As of June 30, 2024 and March 31, 2024, loans totaling $6.1 million and $7.7 million, respectively, were on nonaccrual status.  Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

    Southside Bancshares, Inc.
    Average Balances and Average Yields and Rates (Annualized) (Unaudited)
    (Dollars in thousands)
     
      Three Months Ended
      December 31, 2023
      Average
    Balance    		   Interest   Average Yield/
    Rate
    ASSETS          
    Loans (1) $   4,473,618     $        67,886   6.02 %
    Loans held for sale             1,858                       27   5.77 %
    Securities:          
    Taxable investment securities (2)          852,023                  7,970   3.71 %
    Tax-exempt investment securities (2)       1,456,187                15,688   4.27 %
    Mortgage-backed and related securities (2)          581,548                  6,865   4.68 %
    Total securities       2,889,758                30,523   4.19 %
    Federal Home Loan Bank stock, at cost, and equity investments            24,674                     296   4.76 %
    Interest earning deposits          150,763                  2,054   5.41 %
    Federal funds sold            93,149                  1,286   5.48 %
    Total earning assets       7,633,820              102,072   5.30 %
    Cash and due from banks          110,380          
    Accrued interest and other assets          374,120          
    Less:  Allowance for loan losses          (41,822 )        
    Total assets $   8,076,498          
    LIABILITIES AND SHAREHOLDERS’ EQUITY          
    Savings accounts $      610,453                  1,432   0.93 %
    Certificates of deposit          910,759                  9,691   4.22 %
    Interest bearing demand accounts       3,469,120                24,498   2.80 %
    Total interest bearing deposits       4,990,332                35,621   2.83 %
    Federal Home Loan Bank borrowings          262,709                  1,430   2.16 %
    Subordinated notes, net of unamortized debt issuance costs            93,859                     965   4.08 %
    Trust preferred subordinated debentures, net of unamortized debt issuance costs            60,269                  1,195   7.87 %
    Repurchase agreements            96,622                  1,008   4.14 %
    Other borrowings          294,683                  4,235   5.70 %
    Total interest bearing liabilities       5,798,474                44,454   3.04 %
    Noninterest bearing deposits       1,424,961          
    Accrued expenses and other liabilities          115,388          
    Total liabilities       7,338,823          
    Shareholders’ equity          737,675          
    Total liabilities and shareholders’ equity $   8,076,498          
    Net interest income (FTE)     $        57,618    
    Net interest margin (FTE)         2.99 %
    Net interest spread (FTE)         2.26 %
    1. Interest on loans includes net fees on loans that are not material in amount.
    2. For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.

    Note:  As of December 31, 2023, loans totaling $3.9 million were on nonaccrual status.  Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

    Southside Bancshares, Inc.
    Average Balances and Average Yields and Rates (Unaudited)
    (Dollars in thousands)
     
      Year ended
      December 31, 2024   December 31, 2023
      Average
    Balance    		   Interest   Average Yield/
    Rate    		   Average
    Balance    		   Interest   Average Yield/
    Rate
    ASSETS                      
    Loans (1) $ 4,593,280     $    281,790   6.13 %   $ 4,300,138     $    247,431   5.75 %
    Loans held for sale            3,179                     76   2.39 %              1,681                     96   5.71 %
    Securities:                      
    Taxable investment securities (2)        785,145              28,075   3.58 %          845,907              31,186   3.69 %
    Tax-exempt investment securities (2)     1,212,844              48,547   4.00 %       1,554,519              64,568   4.15 %
    Mortgage-backed and related securities (2)        878,623              45,222   5.15 %          470,692              19,450   4.13 %
    Total securities     2,876,612            121,844   4.24 %       2,871,118            115,204   4.01 %
    Federal Home Loan Bank stock, at cost, and equity investments          39,688                2,079   5.24 %            24,971                1,185   4.75 %
    Interest earning deposits        308,628              16,265   5.27 %            83,343                4,364   5.24 %
    Federal funds sold          53,709                2,855   5.32 %            79,948                4,124   5.16 %
    Total earning assets     7,875,096            424,909   5.40 %       7,361,199            372,404   5.06 %
    Cash and due from banks        106,965                    107,018          
    Accrued interest and other assets        443,733                    397,860          
    Less:  Allowance for loan losses         (43,428 )                   (37,890 )        
    Total assets $ 8,382,366             $ 7,828,187          
    LIABILITIES AND SHAREHOLDERS’ EQUITY                      
    Savings accounts $    600,375                5,824   0.97 %   $    636,603                5,633   0.88 %
    Certificates of deposit     1,059,793              48,155   4.54 %          862,211              30,906   3.58 %
    Interest bearing demand accounts     3,503,878              99,678   2.84 %       3,122,319              71,618   2.29 %
    Total interest bearing deposits     5,164,046            153,657   2.98 %       4,621,133            108,157   2.34 %
    Federal Home Loan Bank borrowings        601,366              24,450   4.07 %          276,584                6,777   2.45 %
    Subordinated notes, net of unamortized debt issuance costs          92,478                3,774   4.08 %            96,024                3,920   4.08 %
    Trust preferred subordinated debentures, net of unamortized debt issuance costs          60,272                4,621   7.67 %            60,267                4,504   7.47 %
    Repurchase agreements          86,071                3,603   4.19 %            91,132                3,431   3.76 %
    Other borrowings        119,672                8,104   6.77 %          345,544              17,925   5.19 %
    Total interest bearing liabilities     6,123,905            198,209   3.24 %       5,490,684            144,714   2.64 %
    Noninterest bearing deposits     1,353,065                 1,485,896          
    Accrued expenses and other liabilities        102,778                      97,509          
    Total liabilities     7,579,748                 7,074,089          
    Shareholders’ equity        802,618                    754,098          
    Total liabilities and shareholders’ equity $ 8,382,366             $ 7,828,187          
    Net interest income (FTE)     $    226,700           $    227,690    
    Net interest margin (FTE)         2.88 %           3.09 %
    Net interest spread (FTE)         2.16 %           2.42 %
    1. Interest on loans includes net fees on loans that are not material in amount.
    2. For the purpose of calculating the average yield, the average balance of securities is presented at historical cost.

    Note:  As of December 31, 2024 and 2023, loans totaling $3.2 million and $3.9 million, respectively, were on nonaccrual status. Our policy is to reverse previously accrued but unpaid interest on nonaccrual loans; thereafter, interest income is recorded to the extent received when appropriate.

    The following tables set forth the reconciliation of return on average common equity to return on average tangible common equity, book value per share to tangible book value per share, net interest income to net interest income adjusted to a fully taxable-equivalent basis assuming a 21% marginal tax rate for interest earned on tax-exempt assets such as municipal loans and investment securities, along with the calculation of total revenue, adjusted noninterest expense, efficiency ratio (FTE), net interest margin (FTE) and net interest spread (FTE) for the applicable periods presented.

    Southside Bancshares, Inc.
    Non-GAAP Reconciliation (Unaudited)
    (Dollars and shares in thousands, except per share data)
     
        Three Months Ended   Year ended
          2024       2023       2024       2023  
        Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,   Dec 31,   Dec 31,
    Reconciliation of return on average common
    equity to return on average tangible common
    equity:    		                            
    Net income   $     21,786     $     20,524     $     24,673     $     21,511     $     17,316     $     88,494     $     86,692  
    After-tax amortization expense               196                 220                 243                 266                 292                 925              1,341  
    Adjusted net income available to common shareholders   $     21,982     $     20,744     $     24,916     $     21,777     $     17,608     $     89,419     $     88,033  
                                 
    Average shareholders’ equity   $   822,234     $   806,230     $   796,698     $   785,054     $   737,675     $   802,618     $   754,098  
    Less: Average intangibles for the period       (203,020 )       (203,288 )       (203,581 )       (203,910 )       (204,267 )       (203,448 )       (204,887 )
       Average tangible shareholders’ equity   $   619,214     $   602,942     $   593,117     $   581,144     $   533,408     $   599,170     $   549,211  
                                 
    Return on average tangible common equity     14.12 %     13.69 %     16.90 %     15.07 %     13.10 %     14.92 %     16.03 %
                                 
    Reconciliation of book value per share to tangible book value per share:                            
    Common equity at end of period   $   811,942     $   805,254     $   800,970     $   787,922     $   773,288     $   811,942     $   773,288  
    Less: Intangible assets at end of period       (202,870 )       (203,119 )       (203,397 )       (203,704 )       (204,041 )       (202,870 )       (204,041 )
    Tangible common shareholders’ equity at end of period   $   609,072     $   602,135     $   597,573     $   584,218     $   569,247     $   609,072     $   569,247  
                                 
    Total assets at end of period   $ 8,517,448     $ 8,362,263     $ 8,357,702     $ 8,353,863     $ 8,284,914     $ 8,517,448     $ 8,284,914  
    Less: Intangible assets at end of period       (202,870 )       (203,119 )       (203,397 )       (203,704 )       (204,041 )       (202,870 )       (204,041 )
    Tangible assets at end of period   $ 8,314,578     $ 8,159,144     $ 8,154,305     $ 8,150,159     $ 8,080,873     $ 8,314,578     $ 8,080,873  
                                 
    Period end tangible equity to period end tangible assets     7.33 %     7.38 %     7.33 %     7.17 %     7.04 %     7.33 %     7.04 %
                                 
    Common shares outstanding end of period           30,379            30,308             30,261            30,284             30,249             30,379             30,249  
    Tangible book value per common share   $      20.05     $      19.87     $      19.75     $      19.29     $      18.82     $      20.05     $      18.82  
                                 
    Reconciliation of efficiency ratio to efficiency ratio (FTE), net interest margin to net interest margin (FTE) and net interest spread to net interest spread (FTE):                            
    Net interest income (GAAP)   $     53,707     $     55,464     $     53,608     $     53,348     $     54,485     $   216,127     $   215,027  
    Tax-equivalent adjustments:                            
    Loans               598                 608                 633                 656                 680              2,495              2,724  
    Tax-exempt investment securities            1,935              2,012              2,051              2,080              2,453              8,078              9,939  
    Net interest income (FTE) (1)           56,240             58,084             56,292             56,084             57,618           226,700           227,690  
    Noninterest income           12,281              8,171             11,557              9,724              2,501             41,733             35,834  
    Nonrecurring income (2)               (25 )            2,797                (576 )                 18              8,376              2,214              7,370  
    Total revenue   $     68,496     $     69,052     $     67,273     $     65,826     $     68,495     $   270,647     $   270,894  
                                 
    Noninterest expense   $     38,159     $     36,332     $     35,765     $     36,881     $     35,183     $   147,137     $   140,578  
    Pre-tax amortization expense              (249 )              (278 )              (307 )              (337  )              (370 )           (1,171 )           (1,697 )
    Nonrecurring expense (3)              (919 )              (219 )                   2                   17                   22             (1,119 )                 78  
    Adjusted noninterest expense   $     36,991     $     35,835     $     35,460     $     36,561     $     34,835     $   144,847     $   138,959  
                                 
    Efficiency ratio     56.08 %     53.94 %     54.90 %     57.95 %     53.30 %     55.69 %     53.81 %
    Efficiency ratio (FTE) (1)     54.00 %     51.90 %     52.71 %     55.54 %     50.86 %     53.52 %     51.30 %
                                 
    Average earning assets   $ 7,913,371     $ 7,823,026     $ 7,881,919     $ 7,882,337     $ 7,633,820     $ 7,875,096     $ 7,361,199  
                                 
    Net interest margin     2.70 %     2.82 %     2.74 %     2.72 %     2.83 %     2.74 %     2.92 %
    Net interest margin (FTE) (1)     2.83 %     2.95 %     2.87 %     2.86 %     2.99 %     2.88 %     3.09 %
                                 
    Net interest spread     1.99 %     2.10 %     2.00 %     2.02 %     2.10 %     2.02 %     2.25 %
    Net interest spread (FTE) (1)     2.12 %     2.23 %     2.13 %     2.16 %     2.26 %     2.16 %     2.42 %
    1. These amounts are presented on a fully taxable-equivalent basis and are non-GAAP measures.
    2. These adjustments may include net gain or loss on sale of securities available for sale, net gain on sale of equity securities, BOLI income related to death benefits realized and other investment income or loss in the periods where applicable.
    3. These adjustments may include foreclosure expenses and branch closure expenses, in the periods where applicable.

    The MIL Network –

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    MIL Security OSI –

  • MIL-OSI: Riber: 2024 business growth in line with guidance 

    Source: GlobeNewswire (MIL-OSI)

    2024 business growth in line with guidance 

    Revenues up +5% to €41.2m
    Order book at end-2024: €21.7m

    Bezons (France), January 29, 2025 – 8:00 am (CET) – RIBER, a global market leader for MBE equipment serving the semiconductor industry, is reporting its full-year revenues for 2024.

    Change in revenues

    €m 2024 2023 Change
    First quarter 4.5 3.7 +20%
    Second quarter 9.3 8.5 +10%
    Third quarter 4.7 4.0 +19%
    Fourth quarter 22.7 23.1 -2%
    Full year 41.2 39.2 +5%
           
    €m 2024 2023 Change
    Systems 31.0 29.0 +7%
    Services and accessories 10.2 10.3 -1%
    Full year 41.2 39.2 +5%

    2024 full-year revenues amounted to €41.2m, up 5% from 2023. This performance is fully aligned with the announced ambitions. In the fourth quarter of 2024, business remained strong, with revenues remaining steady despite a high basis of comparison with the fourth quarter of 2023.

    This commercial dynamism demonstrates the strengthening of RIBER’s positions in the MBE market for both research and industrial production.

    MBE systems revenues reached €31.0m, up 7%. A total of 12 systems were delivered over the year, compared with 13 in 2023.

    Revenues for services and accessories came to €10.2m, virtually unchanged from 2023.

    The geographical breakdown of revenues for 2024 full-year was as follows: Asia 57.3%, Europe 35.7%, and North America 7.1%.

    Order book developments

    At December 31 (€m) 2024 2023 Change
    Systems 16,7 20.2 -17%1
    Services and accessories 5,0 6.1 -18%
    Full year 21,7 26.3 -17%

    At December 31, 2024, the consolidated order book remained at a solid level of €21.7m, reflecting the sustained deliveries at the end of the year.

    The order book for MBE systems came to €16.7m with a total of 7 systems, including 5 production machines. It increases after factoring in the two orders announced in January 2025 for a production system in Europe and a research system in the USA, both scheduled for delivery in 2025.

    Orders for services and accessories amounted to €5.0m.

    Outlook

    Given its solid revenue growth, RIBER reaffirms its objective of achieving further earnings growth in 2024.

    In an environment marked by accelerating technological innovation and growing demand for advanced semiconductor materials, RIBER is pursuing its ambitious growth strategy based on enhancing its technological leadership and expanding its markets through the integration of the silicon photonics sector and the development of high value-added solutions for quantum materials.

    For 2025, given the composition of the order book at December 31, 2024, and the outlook for orders to be delivered this year, RIBER is forecasting further growth in revenues compared with 2024.

    Next date: RIBER will announce its 2024 full-year earnings on April 9, 2025 (before start of trading).

    About RIBER

    Founded in 1964, RIBER is the global market leader for MBE – molecular beam epitaxy – equipment. It designs and produces equipment for the semiconductor industry, and provides scientific and technical support for its clients (hardware and software), maintaining their equipment and optimizing their performance and output levels.
    Accelerating the performance of electronics, RIBER’s equipment performs an essential role in the development of advanced semiconductor systems that are used in numerous applications, from information technologies to photonics (lasers, sensors, etc.), 5G telecommunications networks and research, including quantum computing.

    RIBER is a BPI France-approved innovative company and is listed on the Euronext Growth Paris market (ISIN: FR0000075954).
    www.riber.com

    Contacts

    RIBER : Annie Geoffroy| tel: +33 (0)1 39 96 65 00 | invest@riber.com
    CALYPTUS : Cyril Combe | tel: +33 (0)1 53 65 68 68 | cyril.combe@calyptus.net

    1 Increasing when factoring in the two orders recorded in January 2025.

    Attachment

    The MIL Network –

  • MIL-OSI Russia: New ground transport stops will appear in 11 districts of the capital from February 1

    Translartion. Region: Russians Fedetion –

    Source: Moscow Government – Government of Moscow –

    From February 1, a number of public transport routes in several districts of the capital will be adjusted. For the convenience of passengers, new stops will be added, and some will have their locations changed. This was reported by the Deputy Mayor of Moscow for Transport and Industry Maxim Liksutov.

    “Starting February 1, we will add new stops for buses and electric buses in 11 districts of the capital. Transport will come closer to residential buildings, social facilities and rail frame stations, and in Novye Vatutinki in TiNAO we will extend the express route. We continue to develop the network of ground transport routes of the capital on the instructions of Sergei Sobyanin,” said Maxim Liksutov.

    Thus, the express route E151 in Novye Vatutinki will be adjusted. Now the buses will go clockwise through their eastern part. This will allow them to cover more residential buildings. Thus, city residents will be able to get to the nearest metro stations faster.

    Buses E151 will go towards the metro station “Teply Stan” along 3rd and 1st Novovatutinsky streets. Residents of the Central microdistrict will find it more convenient to get to the metro.

    A stop called “Women’s Health Center” will be added to route #48 in both directions, as well as for buses #291 and 294 heading towards Salyam Adilya Street.

    Buses #172 going in both directions will have a stop called “Institute of Polymer Materials”. In addition, a stop will be added at exit #2 of the General Tyuleneva metro station for route #188, and a stop called “KPP” towards the stop “Promzona Kuryanovo” for route #438.

    Buses #570 will stop at exit #2 of the Vodny Stadion metro station, and #587 will stop at exit #3 of the Bibirevo metro station (the same place where buses #282, 284, 353, 618, 705 and H9 stop).

    At exit No. 4 of the Sokolniki metro station, a stop will also be added for routes E66, No. 78, 265 and 975 – where buses M60, T32, No. 604, H15 and 1716 stop. And for route C17, the stop “Ulitsa Obrucheva” will start operating in both directions.

    In addition, the location of the public transport stop on Aviamotornaya Street will change. Thus, for routes M6, C679, No. 690 and 695, the stop “3-ya Kabelnaya Street” in the direction of the metro station “Aviamotornaya” will be moved behind the intersection with Prud-Klyuchiki Street. On route No. 624, a stop “3-ya Kabelnaya Street” will appear in the direction of “Aviamotornaya”. And buses M6, C679, No. 624, 690 and 695 will start stopping at exit No. 8 of this metro station in the direction of Shosse Entuziastov.

    Buses C949, No. 925, 940, 956 and 998 (towards Stepana Erzya Street), as well as No. 969 and 969k (both ways) will pick up and drop off passengers at the new stop – “Novostroevskaya Street”.

    And for buses M6, C679, No. 690, 695 the stop “8th Taxi Park” will be replaced with a new one – “Institute of Radio Electronics”.

    In addition, in connection with the completion of the improvement works, the stops at the Ukhtomskaya station of the third Moscow Central Diameter will be changed.

    You can quickly find out about all route changes in telegram channel.

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

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

    https: //vv.mos.ru/nevs/ite/149421073/

    MIL OSI Russia News –

  • MIL-OSI Australia: Key considerations for renewable energy developers seeking private capital to fund expansion

    Source: Allens Insights

    Establishing renewable energy platforms and capital partnerships 8 min read

    As renewable energy developers look to expand their project pipelines and operational portfolios, many are turning to private capital sources to help fund their expansion plans. Increasingly, that capital is being sought through newly established platforms between developers and investors that jointly own the renewable projects through a legal ownership structure separate from the developer’s remaining business.

    Establishing renewable energy platforms and capital partnerships requires a strategic balance of risk mitigation and the optimisation of growth opportunities in an increasingly competitive environment. Each platform and capital partnership is unique, necessitating customisation based on the objectives and risk tolerance levels of the parties involved. With robust planning and transparent communication from day one, these capital partnerships can help drive the energy transition while delivering attractive returns for investors.

    In this Insight, we explore the key issues for developers and investors to consider when establishing a capital partnership for a new renewable energy platform.

    Key takeaways

    • Commitment to the platform: each party should seek a form of commitment to the platform from the other. We are increasingly seeing both developers and investors be willing to provide that commitment in the form of an exclusivity undertaking, pursuant to which the parties are prohibited from developing or funding projects outside of the platform (subject to certain carveouts).
    • Operational model: new platforms are typically structured as either a standalone business or a simple ownership vehicle where operational functionality is outsourced back to the developer. Alignment between the parties on the preferred approach, and how it impacts key issues such as revenue strategy and exit, is a key to success.
    • Funding obligations: the parties’ funding obligations to the platform should be designed to ensure the platform receives sufficient funding to develop, acquire and operate projects. However, while certainty of funding is important, the parties should avoid rigid frameworks (which set out precise financial and operational criteria for investment in new projects), which run the risk of stifling growth (particularly when dealing with seasoned developers with a track record of bringing projects to market).
    • Governance and regulatory considerations: when evaluating potential investors/platform partners, developers should consider the regulatory implications relevant to each investor (in particular in relation to tax, FIRB, AFSL and ACCC requirements), and how those implications may affect the day-to-day operation of the platform.
    • Debt financing strategy: the platform’s debt financing structure must be adaptable to accommodate new projects and multiple funding sources, ensuring room for future growth without excessive lender restrictions.
    • Funding and compensation: any platform must be structured in a way that recognises the different initial and ongoing contributions from both the developer and the investor. In particular, developers should ensure they are properly compensated for the seed assets vended into the platform.

    Key considerations

    Commitment to the platform

    Notwithstanding the specific technology focus of the platform, such as solar, wind, BESS, other forms of generation and storage, or all of the above, each party should seek a form of commitment to the platform from the other with respect to the relevant technology focus. While it might be expected that the developer provides a stronger form of commitment, limiting their ability to develop projects of the applicable technology outside the platform, investors are increasingly also willing to ‘put all their eggs in one basket’ and accept a form of exclusive commitment. This is often based on the understanding that, through diligence and alignment with the developer on key principles, the platform is their best means of investing in that technology in Australia. If an investor is willing to make such a commitment, establishing carveouts to ensure they are not inappropriately constrained is essential. Investors will often seek to ensure the commitment does not cover existing investments, projects outside the geography, investments via other funds and projects beyond a specific capacity range.

    Structuring your operating model

    When establishing a new platform, developers have two primary operational model options to consider: standalone platforms and ownership vehicles. Each model has distinct characteristics, benefits and challenges that can significantly impact the platform’s success.

    Standalone platforms operate as independent businesses with their own management teams and operational autonomy. For standalone platforms, a key focus should be on selecting the right management team. This process typically takes time, so it’s important to establish a robust transition plan in which the developer provides the necessary support until the management team is fully onboarded.

    Ownership vehicles function through a network of development and service agreements where operational functionality is outsourced back to the developer. This model leverages existing capabilities within the developer’s organisation but operates under a separate legal structure.

    Whatever the operational structure, a key to success is ensuring alignment between the developer and investor from the outset—particularly on headline issues such as revenue strategy (especially important for BESS assets, which offer a variety of potential revenue options, eg tolling agreements, Capacity Investment Scheme agreements, system support agreements, merchant operations, etc) and exit strategy.

    Certainty of funding

    As a vehicle designed to fund both seed and future projects, funding obligations are often the most heavily negotiated elements of platform arrangements. In an ideal scenario for developers, they would retain full control over financial investment decisions (FID) and funding decisions, allowing them to call for capital as needed. Meanwhile, in a perfect world for investors, they would have complete discretion over which projects their capital is used to fund.

    To avoid potential deadlocks with respect to funding decisions, including through the exercise of veto rights, one approach is for the investor to make an upfront capital commitment. This requires them to fund a pre-agreed amount (at a pre-agreed valuation) for a set of seed and pipeline assets, which they diligence at the outset. Once this initial capital is provided, future funding can be provided on a pre-emptive basis, potentially tied to target return criteria and procedural milestones that must be met before a project is onboarded to the platform or funded via FID.

    While this strategy helps prevent deadlocks that could hinder platform growth, it’s important to recognise that a one-size-fits-all approach may not be ideal. In our experience, rigid procedures around project onboarding and funding may not serve the platform’s best interests, particularly when developers have a proven track record of managing development and construction risks in a more flexible manner. Retaining flexibility with regards to milestone requirements to take FID may enable the platform to reprioritise projects in response to shifting market demands and opportunities.

    Managing governance and regulatory requirements

    When evaluating potential investors, developers should consider a range of factors beyond simply choosing the one with the deepest pockets. Issues such as Foreign Investment Review Board (FIRB) implications (particularly whether an investor’s involvement will characterise the platform as a ‘foreign government investor’ or FGI), Australian Financial Services Licence (AFSL) requirements and complex competition law concerns can create significant challenges for the platform if not addressed and managed at the outset.

    Tax implications must also be considered. For example, upcoming changes to the foreign resident capital gains tax regime in Australia—specifically how ‘taxable Australian real property’ is defined in the context of renewable energy assets—may affect after-tax returns for foreign developers and investors.

    These changes, expected to come into effect on 1 July 2025, could have substantial impacts on renewable energy platforms and should be closely monitored.

    Implementing your debt financing strategy

    The initial debt financing required to establish the platform and transition seed and early-stage assets to the platform will depend on the number and characteristics of those assets, including the technology type and whether the assets are operational or under construction, merchant or contracted, etc.

    Whatever the makeup of that initial financing, flexibility for growth is key. In particular, the debt financing structure must be flexible enough to accommodate:

    • the inclusion of new greenfield and operating assets (with a focus on minimising lender consent rights);
    • construction financing for greenfield projects, either within the portfolio financing structure or separately financed outside the portfolio through an excluded subsidiary mechanism and brought in once the project is operational (subject to risk tolerance on a case-by-case basis); and
    • multisource financing options (including bank debt, private long-term credit and note issuance) with the necessary intercreditor mechanics.

    Funding structure

    The platform will need to be structured in a way that recognises the different initial contributions from both the developer and the investor. In most platforms, the developer provides seed and pipeline assets, while the investor supplies capital for the development and construction of those assets.

    An investor’s capital contribution typically needs to be structured so that the platform can draw down the capital over time, on an as-needed basis to fund project capex. This can be achieved through various methods, such as partly paid shares or equity ‘catch up’ or ‘farm-in’ regimes, with the optimum approach usually driven by the investor’s requirement regarding governance rights from day one, FIRB considerations and any potential requirement to ‘return’ capital commitments in the future.

    From the developer’s perspective, it is essential to ensure that they are properly compensated for the seed assets transferred into the platform. Whether that compensation takes the form of equity in the platform or proceeds from the transfer of assets, it would typically reflect (for each asset/project) all devex spent on the project, fees for the origination and development services provided and, where applicable, a development premium.

    Key questions to ask

    • Asset strategy: what technology should the platform focus on? Solar, wind, BESS, other forms of generation and storage, or all of the above? Whatever the technology, what level of commitment is each party willing to give to the platform and what carve outs to the commitment are needed?
    • Operational model: should the platform be structured as a standalone business with its own management team and operational autonomy, or as an ownership vehicle that, through a network of development and services agreements, outsources operational functionality to the developer?
    • Funding obligations: what level of capital commitment is required from both parties at the outset? How will future funding needs be determined and agreed upon? Are there predefined criteria or milestones that need to be met for additional funding to be provided?
    • Governance and regulatory: are FIRB, AFSL, ACCC and tax requirements fully understood and planned for?
    • Debt financing strategy: how flexible is the debt financing structure in accommodating new assets and various stages of project development? Are there multisource financing options (ie bank debt, private long-term credit or note issuance) and how will the necessary intercreditor mechanics be managed?
    • Funding structure: how will initial contributions from both developer and investor be recognised within the platform structure? What methods (eg partly paid shares, equity ‘catch up’, farm-in regimes) will facilitate drawdown of capital over time? How will developers be compensated for seed assets transferred into the platform?

    MIL OSI News –

  • MIL-OSI USA: Senator Marshall Releases Statement on President Trump’s Executive Order Protecting Children from Chemical and Surgical Mutilation

    US Senate News:

    Source: United States Senator for Kansas Roger Marshall

    WASHINGTON, D.C. – U.S. Senator Roger Marshall, M.D. released the following statement in response to President Trump’s Executive Order to protect minors from chemical and surgical mutilation procedures and put biology over ideology. 
    Last Congress, Senator Marshall introduced the Safeguarding the Overall Protection of Minors Act to protect America’s children from irreversible physical and emotional harm caused by transgender procedures pushed by the radical Left. 
    “Under President Trump’s leadership, common sense and dignity have returned to the White House. This is another promise made, promise kept by the President and his unwavering commitment to protecting our children from transgender activists in what can only be described as child abuse. President Trump’s Executive Order rightfully prohibits the castration, mutilation, and use of dangerous irreversible therapy treatments on children,” Senator Marshall said.
    Specifically, the Executive Order will: 
    Order agencies to use every available means to cut off federal financial participation in institutions that provide chemical and surgical mutilation of children.
    Taxpayers will no longer fund the chemical and surgical mutilation of children through federal employees’ insurance plans.
    DOJ is ordered to prioritize investigations of those who would subject young women to these barbaric acts under the federal government’s existing statutes which prohibit female genital mutilation and to investigate consumer deception and fraud. 
    It sets in motion Congressional action to empower detransitioners to receive justice against those who so callously led them down this path.
    Background: 
    In December, Senator Marshall introduced landmark legislation, the Safeguarding the Overall Protection of Minors Act which would protect America’s children from the medical dangers of the radical Left’s transgender agenda. 
    The Safeguarding the Overall Protection of Minors Act is a major pillar in Senator Marshall’s fight against the transgender industrial complex that is preying on America’s children. Along with this legislation, Senator Marshall also recently led the Defining Male and Female Act to ensure the legal definition of sex is based on facts, not feelings, which would protect exclusive spaces for women like bathrooms and locker rooms. 
    In November 2024, Senator Marshall brought together a coalition to sound the alarm on the extreme gender ideology war being waged against America’s children and to talk about solutions, including the Safeguarding the Overall Protection of Minors Act. You may click HERE to watch the event hosted by Senator Marshall. 

    MIL OSI USA News –

  • MIL-OSI: First Savings Financial Group, Inc. Reports Financial Results for the First Fiscal Quarter Ended December 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    JEFFERSONVILLE, Ind., Jan. 28, 2025 (GLOBE NEWSWIRE) — First Savings Financial Group, Inc. (NASDAQ: FSFG – news) (the “Company”), the holding company for First Savings Bank (the “Bank”), today reported net income of $6.2 million, or $0.89 per diluted share, for the quarter ended December 31, 2024, compared to net income of $920,000, or $0.13 per diluted share, for the quarter ended December 31, 2023. Excluding nonrecurring items, the Company reported net income of $4.3 million (non-GAAP measure)(1) and net income per diluted share of $0.62 (non-GAAP measure)(1) for the quarter ended December 31, 2024 compared to $920,000, or $0.13 per diluted share for the quarter ended December 31, 2023. The core banking segment reported net income of $6.4 million, or $0.91 per diluted share, for the quarter ended December 31, 2024, compared to $4.0 million, or $0.59 per diluted share, for the quarter ended December 31, 2023. Excluding nonrecurring items, the core banking segment reported net income of $4.5 million, or $0.64 per diluted share for the quarter ended December 31, 2024 (non-GAAP measure)(1) compared to $4.0 million, or $0.59 per diluted share for the quarter ended December 31, 2023.

    Commenting on the Company’s performance, Larry W. Myers, President and CEO, stated “We are pleased with the first fiscal quarter, which included a bulk sale of first lien home equity lines of credit and continued improvement in our net interest margin. The bulk sale is part of a strategic initiative to transition the first lien home equity line of credit business to an originate for sale model during fiscal 2025 in order to enhance noninterest income, moderate the loan to deposit ratio, decrease reliance on noncore funding, and generate capital. The surplus capital generated from the bulk sale and potential future flow sales may be used to retire high-cost subordinated debt and repurchase Company common shares. We are optimistic regarding the remainder of fiscal 2025 as we continue to focus on asset quality, select loan growth opportunities, and capital and liquidity management. We’ll continue to evaluate options and strategies that we believe will maximize shareholder value.”

    (1) Non-GAAP net income and net income per diluted share exclude certain nonrecurring items. A reconciliation to GAAP and discussion of the use of non-GAAP measures is included in the table at the end of this release.

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

    Net interest income increased $1.3 million, or 9.6%, to $15.5 million for the three months ended December 31, 2024 as compared to the same period in 2023. The tax equivalent net interest margin for the three months ended December 31, 2024 was 2.75% as compared to 2.69% for the same period in 2023. The increase in net interest income was due to a $3.8 million increase in interest income, partially offset by a $2.4 million increase in interest expense. A table of average balance sheets, including average asset yields and average liability costs, is included at the end of this release.

    The Company recognized a reversal of provision for credit losses for loans and securities of $490,000 and $7,000, respectively, and a provision for unfunded lending commitments of $46,000 for the three months ended December 31, 2024, compared to a provision for credit losses for loans of $470,000 and reversal of provision for unfunded lending commitments of $58,000 for the same period in 2023. The reversal of provisions during the 2024 period was due primarily to the bulk sale of approximately $87.2 million of home equity lines of credit during the quarter ended December 31, 2024, which resulted in the reversals of $980,000 in allowance for credit losses for loans and $129,000 in allowance for unfunded lending commitments. The Company recognized net charge-offs totaling $119,000 for the three months ended December 31, 2024, of which $52,000 was related to unguaranteed portions of SBA loans, compared to net charge-offs of $9,000 in 2023. Nonperforming loans, which consist of nonaccrual loans and loans over 90 days past due and still accruing interest, decreased $374,000 from $16.9 million at September 30, 2024 to $16.6 million at December 31, 2024.

    Noninterest income increased $3.3 million for the three months ended December 31, 2024 as compared to the same period in 2023. The increase was due primarily to a $2.5 million net gain on sale of loans due to the aforementioned bulk loan sale and $403,000 in net gains on equity securities during the three months ended December 31, 2024 with no corresponding gains for 2023.

    Noninterest expense decreased $1.1 million for the three months ended December 31, 2024 as compared to the same period in 2023. The decrease was due primarily to decreases in compensation and benefits, occupancy and equipment and professional fee expenses of $487,000, $405,000 and $385,000, respectively. These decreases were primarily due to the cessation of national mortgage banking operations in the quarter ended December 31, 2023.

    The Company recognized income tax expense of $848,000 for the three months ended December 30, 2024 as compared to income tax benefit of $476,000 for the same period in 2023. The increase is due primarily to higher taxable income in the 2024 period, due primarily to the aforementioned net gain on sale of loans. The effective tax rate for 2024 was 12.0%. The effective tax rate is well below the statutory tax rate primarily due to the recognition of investment tax credits related to solar projects in both the 2024 and 2023 periods.

    Comparison of Financial Condition at December 31, 2024 and September 30, 2024

    Total assets decreased $61.6 million, from $2.45 billion at September 30, 2024 to $2.39 billion at December 31, 2024. Net loans held for investment decreased $79.3 million during the three months ended December 31, 2024 due primarily to the $87.2 million bulk sale of residential real estate home equity line of credit loans.

    Total liabilities decreased $60.5 million due primarily to decreases in total deposits of $48.1 million, which included a decrease in brokered deposits of $72.1 million and a decrease in FHLB borrowings of $6.6 million. The decrease in brokered deposits and FHLB borrowings was due primary to repayments as a result of the aforementioned bulk loan sale. As of December 31, 2024, deposits exceeding the FDIC insurance limit of $250,000 per insured account were 31.1% of total deposits and 13.7% of total deposits when excluding public funds insured by the Indiana Public Deposit Insurance Fund.

    Total stockholders’ equity decreased $1.1 million, from $177.1 million at September 30, 2024 to $176.0 million at December 31, 2024, due primarily to a $6.6 million increase in accumulated other comprehensive loss, partially offset by an increase in retained net income of $5.2 million. The increase in accumulated other comprehensive loss was due primarily to increasing long-term market interest rates during the three months ended December 31, 2024, which resulted in a decrease in the fair value of securities available for sale. At December 31, 2024 and September 30, 2024, the Bank was considered “well-capitalized” under applicable regulatory capital guidelines.

    First Savings Bank is an entrepreneurial community bank headquartered in Jeffersonville, Indiana, which is directly across the Ohio River from Louisville, Kentucky, and operates fifteen depository branches within Southern Indiana. The Bank also has two national lending programs, including single-tenant net lease commercial real estate and SBA lending, with offices located predominately in the Midwest. The Bank is a recognized leader, both in its local communities and nationally for its lending programs. The employees of First Savings Bank strive daily to achieve the organization’s vision, We Expect To Be The BEST community BANK, which fuels our success. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “FSFG.”

    This release may contain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts; rather, they are statements based on the Company’s current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions.

    Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company’s actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions; changes in market interest rates; changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company’s filings with the Securities and Exchange Commission.

    Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this report or made elsewhere from time to time by the Company or on its behalf. Except as may be required by applicable law or regulation, the Company assumes no obligation to update any forward-looking statements.

    Contact:
    Tony A. Schoen, CPA
    Chief Financial Officer
    812-283-0724

    FIRST SAVINGS FINANCIAL GROUP, INC.
    CONSOLIDATED FINANCIAL HIGHLIGHTS
    (Unaudited)
           
           
      Three Months Ended
    OPERATING DATA: December 31,
    (In thousands, except share and per share data)   2024       2023  
           
    Total interest income $ 32,449     $ 28,655  
    Total interest expense   16,987       14,542  
           
    Net interest income   15,462       14,113  
           
    Provision (credit) for credit losses – loans   (490 )     470  
    Provision (credit) for unfunded lending commitments   46       (58 )
    Credit for credit losses – securities   (7 )     –  
           
    Total provision (credit) for credit losses   (451 )     412  
           
    Net interest income after provision (credit) for credit losses   15,913       13,701  
           
    Total noninterest income   6,103       2,782  
    Total noninterest expense   14,943       16,039  
           
    Income before income taxes   7,073       444  
    Income tax expense (benefit)   848       (476 )
           
    Net income $ 6,225     $ 920  
           
    Net income per share, basic $ 0.91     $ 0.13  
    Weighted average shares outstanding, basic   6,851,153       6,823,948  
           
    Net income per share, diluted $ 0.89     $ 0.13  
    Weighted average shares outstanding, diluted   6,969,223       6,839,704  
           
           
    Performance ratios (annualized)  
    Return on average assets   1.02 %     0.16 %
    Return on average equity   14.07 %     2.42 %
    Return on average common stockholders’ equity   14.07 %     2.42 %
    Net interest margin (tax equivalent basis)   2.75 %     2.69 %
    Efficiency ratio   69.29 %     94.93 %
           
              QTD
    FINANCIAL CONDITION DATA: December 31,
    		   September 30,
    		   Increase
    (In thousands, except per share data)   2024       2024     (Decrease)
               
    Total assets $ 2,388,735     $ 2,450,368     $ (61,633 )
    Cash and cash equivalents   76,224       52,142       24,082  
    Investment securities   242,634       249,719       (7,085 )
    Loans held for sale   24,441       25,716       (1,275 )
    Gross loans   1,905,199       1,985,146       (79,947 )
    Allowance for credit losses   20,685       21,294       (609 )
    Interest earning assets   2,234,258       2,277,512       (43,254 )
    Goodwill   9,848       9,848       –  
    Core deposit intangibles   357       398       (41 )
    Loan servicing rights   2,661       2,754       (93 )
    Noninterest-bearing deposits   183,239       191,528       (8,289 )
    Interest-bearing deposits (retail)   1,212,527       1,180,196       32,331  
    Interest-bearing deposits (brokered)   437,008       509,157       (72,149 )
    Federal Home Loan Bank borrowings   295,000       301,640       (6,640 )
    Subordinated debt and other borrowings   48,642       48,603       39  
    Total liabilities   2,212,708       2,273,253       (60,545 )
    Accumulated other comprehensive loss   (17,789 )     (11,195 )     (6,594 )
    Total stockholders’ equity   176,027       177,115       (1,088 )
               
    Book value per share $ 25.48     $ 25.72       (0.24 )
    Tangible book value per share (non-GAAP) (1)   24.00       24.23       (0.23 )
               
    Non-performing assets:        
    Nonaccrual loans – SBA guaranteed $ 4,444     $ 5,036     $ (592 )
    Nonaccrual loans   12,124       11,906       218  
    Total nonaccrual loans $ 16,568     $ 16,942     $ (374 )
    Accruing loans past due 90 days   –       –       –  
    Total non-performing loans   16,568       16,942       (374 )
    Foreclosed real estate   444       444       –  
    Total non-performing assets $ 17,012     $ 17,386     $ (374 )
               
    Asset quality ratios:        
    Allowance for credit losses as a percent of total gross loans   1.09 %     1.07 %     0.01 %
    Allowance for credit losses as a percent of nonperforming loans   124.85 %     125.69 %     (0.84 %)
    Nonperforming loans as a percent of total gross loans   0.87 %     0.85 %     0.02 %
    Nonperforming assets as a percent of total assets   0.71 %     0.71 %     0.00 %
               
    (1) See reconciliation of GAAP and non-GAAP financial measures for additional information relating to calculation of this item.
    RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED):
    The following non-GAAP financial measures used by the Company provide information useful to investors in understanding the Company’s performance. The Company believes the financial measures presented below are important because of their widespread use by investors as a means to evaluate capital adequacy and earnings. The following table summarizes the non-GAAP financial measures derived from amounts reported in the Company’s consolidated financial statements and reconciles those non-GAAP financial measures with the comparable GAAP financial measures.
             
      Three Months Ended
    Net Income December 31,
    (In thousands)   2024       2023  
             
    Net income attributable to the Company (non-GAAP) $ 4,308     $ 920  
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect   1,869       –  
    Plus: Reversal of provision for credit losses, loans, net of tax effect   735       –  
    Plus: Reversal of provision for credit losses, unfunded commitments, net of tax effect   97       –  
    Plus: Gain on sale of equity securities (Visa Class B-2 shares), net of tax effect   302        
    Less: Adjustments to sick pay contingent liability, net of tax effect   (296 )      
    Less: Compensation expense associated with loan sale, net of tax effect   (790 )      
    Net income attributable to the Company (GAAP) $ 6,225     $ 920  
             
    Net Income per Share, Diluted    
             
    Net income per share attributable to the Company, diluted (non-GAAP) $ 0.62     $ 0.13  
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect   0.26       –  
    Plus: Reversal of provision for credit losses, loans, net of tax effect   0.11       –  
    Plus: Reversal of provision for credit losses, unfunded commitments, net of tax effect   0.01       –  
    Plus: Gain on sale of equity securities (Visa Class B-2 shares), net of tax effect   0.04        
    Less: Adjustments to sick pay contingent liability, net of tax effect   (0.04 )      
    Less: Compensation expense associated with loan sale, net of tax effect   (0.11 )      
    Net income per share, diluted (GAAP) $ 0.89     $ 0.13  
             
    Core Bank Segment Net Income    
    (In thousands)      
             
    Net income attributable to the Core Bank (non-GAAP) $ 4,452     $ 4,048  
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect   1,869       –  
    Plus: Reversal of provision for credit losses, loans, net of tax effect   735       –  
    Plus: Reversal of provision for credit losses, unfunded commitments, net of tax effect   97       –  
    Plus: Gain on sale of equity securities (Visa Class B-2 shares), net of tax effect   302       –  
    Less: Adjustments to sick pay contingent liability, net of tax effect   (296 )     –  
    Less: Compensation expense associated with loan sale, net of tax effect   (790 )     –  
    Net income attributable to the Core Bank (GAAP) $ 6,369     $ 4,048  
             
    Core Bank Segment Net Income per Share, Diluted
             
    Core Bank net income per share, diluted (non-GAAP) $ 0.64     $ 0.59  
    Plus: Gain on sale of loans, home equity lines of credit, net of tax effect   0.26       –  
    Plus: Reversal of provision for credit losses, loans, net of tax effect   0.11       –  
    Plus: Reversal of provision for credit losses, unfunded commitments, net of tax effect   0.01       –  
    Plus: Gain on sale of equity securities (Visa Class B-2 shares), net of tax effect   0.04       –  
    Less: Adjustments to sick pay contingent liability, net of tax effect   (0.04 )     –  
    Less: Compensation expense associated with loan sale, net of tax effect   (0.11 )     –  
    Core Bank net income per share, diluted (GAAP) $ 0.91     $ 0.59  
             
               
    RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (UNAUDITED) (CONTINUED): Three Months Ended    
    Efficiency Ratio   2024      
    (In thousands)   2024       2023      
               
    Net interest income (GAAP) $ 15,462     $ 14,113      
               
    Noninterest income (GAAP)   6,103       2,782      
               
    Noninterest expense (GAAP)   14,943       16,039      
               
    Efficiency ratio (GAAP)   69.29 %     94.93 %    
               
    Noninterest income (GAAP) $ 6,103     $ 2,782      
    Less: Gain on sale of loans, home equity lines of credit   (2,492 )     –      
    Less: Gain on sale of equity securities (Visa Class B-2 shares)   (403 )     –      
    Noninterest income (Non-GAAP)   3,208       2,782      
               
    Noninterest expense (GAAP) $ 14,943     $ 16,039      
    Less: Adjustments to sick pay contingent liability   (395 )     –      
    Less: Compensation expense associated with loan sale   (1,053 )     –      
    Noninterest expense (Non-GAAP) $ 13,495     $ 16,039      
               
    Efficiency ratio (excluding nonrecurring items) (non-GAAP)   72.28 %     94.93 %    
               
    Tangible Book Value Per Share December 31,
    		   September 30,
    		   Increase
    (In thousands, except share and per share data)   2024       2024     (Decrease)
               
    Stockholders’ equity (GAAP) $ 176,027     $ 177,115     $ (1,088 )
    Less: goodwill and core deposit intangibles   (10,205 )     (10,246 )     41  
    Tangible stockholders’ equity (non-GAAP) $ 165,822     $ 166,869     $ (1,047 )
               
    Outstanding common shares   6,909,173       6,887,106     $ 22,067  
               
    Tangible book value per share (non-GAAP) $ 24.00     $ 24.23     $ (0.23 )
               
    Book value per share (GAAP) $ 25.48     $ 25.72     $ (0.24 )
               
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED): As of
    Summarized Consolidated Balance Sheets December 31,
    		   September 30,
    		   June 30,
    		   March 31,   December 31,
    (In thousands, except per share data)   2024       2024       2024       2024       2023  
                       
    Total cash and cash equivalents $ 76,224     $ 52,142     $ 42,423     $ 62,969     $ 33,366  
    Total investment securities   242,634       249,719       238,785       240,142       246,801  
    Total loans held for sale   24,441       25,716       125,859       19,108       22,866  
    Total loans, net of allowance for credit losses   1,884,514       1,963,852       1,826,980       1,882,458       1,841,953  
    Loan servicing rights   2,661       2,754       2,860       3,028       3,711  
    Total assets   2,388,735       2,450,368       2,393,491       2,364,983       2,308,092  
                       
    Retail deposits $ 1,395,766     $ 1,371,724     $ 1,312,997     $ 1,239,271     $ 1,180,951  
    Brokered deposits   437,008       509,157       399,151       548,175       502,895  
    Total deposits   1,832,774       1,880,881       1,712,148       1,787,446       1,683,846  
    Federal Home Loan Bank borrowings   295,000       301,640       425,000       315,000       356,699  
                       
    Common stock and additional paid-in capital $ 28,382     $ 27,725     $ 27,592     $ 27,475     $ 27,397  
    Retained earnings – substantially restricted   178,526       173,337       170,688       167,648       163,753  
    Accumulated other comprehensive loss   (17,789 )     (11,195 )     (17,415 )     (17,144 )     (13,606 )
    Unearned stock compensation   (973 )     (901 )     (999 )     (1,096 )     (1,194 )
    Less treasury stock, at cost   (12,119 )     (11,851 )     (11,866 )     (11,827 )     (11,827 )
    Total stockholders’ equity   176,027       177,115       168,000       165,056       164,523  
                       
    Outstanding common shares   6,909,173       6,887,106       6,883,656       6,883,160       6,883,160  
                       
                       
      Three Months Ended
    Summarized Consolidated Statements of Income December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands, except per share data)   2024       2024       2024       2024       2023  
                       
    Total interest income $ 32,449     $ 32,223     $ 31,094     $ 30,016     $ 28,655  
    Total interest expense   16,987       17,146       16,560       15,678       14,542  
    Net interest income   15,462       15,077       14,534       14,338       14,113  
    Provision (credit) for credit losses – loans   (490 )     1,808       501       713       470  
    Provision (credit) for unfunded lending commitments   46       (262 )     158       (259 )     (58 )
    Provision (credit) for credit losses – securities   (7 )     (86 )     84       23       –  
    Total provision (credit) for credit losses   (451 )     1,460       743       477       412  
                       
    Net interest income after provision for credit losses   15,913       13,617       13,791       13,861       13,701  
                       
    Total noninterest income   6,103       2,842       3,196       3,710       2,782  
    Total noninterest expense   14,943       12,642       12,431       11,778       16,039  
    Income before income taxes   7,073       3,817       4,556       5,793       444  
    Income tax expense (benefit)   848       145       483       866       (476 )
    Net income   6,225       3,672       4,073       4,927       920  
                       
                       
    Net income per share, basic $ 0.91     $ 0.54     $ 0.60     $ 0.72     $ 0.13  
    Weighted average shares outstanding, basic   6,851,153       6,832,626       6,832,452       6,832,130       6,823,948  
                       
    Net income per share, diluted $ 0.89     $ 0.53     $ 0.60     $ 0.72     $ 0.13  
    Weighted average shares outstanding, diluted   6,969,223       6,894,532       6,842,336       6,859,611       6,839,704  
                       
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended
    Noninterest Income Detail December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands)   2024       2024       2024       2024       2023  
                       
    Service charges on deposit accounts $ 567     $ 552     $ 538     $ 387     $ 473  
    ATM and interchange fees   665       642       593       585       449  
    Net unrealized gain on equity securities   78       28       419       6       38  
    Net gain on equity securities   403       –       –       –       –  
    Net gain on sales of loans, Small Business Administration   711       647       581       951       834  
    Net gain on sales of loans, home equity lines of credit   2,492       –       –       –       –  
    Mortgage banking income   78       6       49       53       89  
    Increase in cash surrender value of life insurance   361       363       353       333       329  
    Gain on life insurance   108       –       –       –       –  
    Commission income   210       294       220       220       222  
    Real estate lease income   121       122       154       115       115  
    Net gain (loss) on premises and equipment   45       (4 )     –       120       –  
    Other income   264       192       289       940       233  
    Total noninterest income $ 6,103     $ 2,842     $ 3,196     $ 3,710     $ 2,782  
                       
                       
      Three Months Ended
      December 31,   September 30,
    		   June 30,   March 31,   December 31,
    Consolidated Performance Ratios (Annualized)   2024       2024       2024       2024       2023  
                       
    Return on average assets   1.02 %     0.61 %     0.69 %     0.92 %     0.16 %
    Return on average equity   14.07 %     8.52 %     9.86 %     13.06 %     2.42 %
    Return on average common stockholders’ equity   14.07 %     8.52 %     9.86 %     13.06 %     2.42 %
    Net interest margin (tax equivalent basis)   2.75 %     2.72 %     2.67 %     2.66 %     2.69 %
    Efficiency ratio   69.29 %     70.55 %     70.11 %     65.26 %     94.93 %
                       
                       
      As of or for the Three Months Ended
      December 31,   September 30,
    		   June 30,   March 31,   December 31,
    Consolidated Asset Quality Ratios   2024       2024       2024       2024       2023  
                       
    Nonperforming loans as a percentage of total loans   0.87 %     0.85 %     0.91 %     0.82 %     0.83 %
    Nonperforming assets as a percentage of total assets   0.71 %     0.71 %     0.72 %     0.68 %     0.69 %
    Allowance for credit losses as a percentage of total loans   1.09 %     1.07 %     1.07 %     1.02 %     1.01 %
    Allowance for credit losses as a percentage of nonperforming loans   124.85 %     125.69 %     118.12 %     124.01 %     121.16 %
    Net charge-offs to average outstanding loans   0.01 %     0.02 %     0.01 %     0.01 %     0.00 %
                       
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended
    Segmented Statements of Income Information December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands)   2024       2024       2024       2024       2023  
                       
    Core Banking Segment:              
    Net interest income $ 13,756     $ 14,083     $ 13,590     $ 13,469     $ 13,113  
    Provision (credit) for credit losses – loans   (745 )     1,339       320       909       (49 )
    Provision (credit) for unfunded lending commitments   (75 )     78       64       (259 )     –  
    Provision (credit) for credit losses – securities   (7 )     (86 )     84       23       –  
    Net interest income after provision for credit losses   14,583       12,752       13,122       12,796       13,162  
    Noninterest income   5,253       2,042       2,474       2,537       1,679  
    Noninterest expense   12,574       10,400       10,192       10,093       10,252  
    Income before income taxes   7,262       4,394       5,404       5,240       4,589  
    Income tax expense   893       301       689       729       541  
    Net income $ 6,369     $ 4,093     $ 4,715     $ 4,511     $ 4,048  
                       
    SBA Lending Segment (Q2):              
    Net interest income $ 1,706     $ 994     $ 944     $ 869     $ 1,003  
    Provision (credit) for credit losses – loans   255       469       181       (196 )     461  
    Provision (credit) for unfunded lending commitments   121       (340 )     94       –       –  
    Net interest income after provision for credit losses   1,330       865       669       1,065       542  
    Noninterest income   850       800       722       1,173       1,003  
    Noninterest expense   2,369       2,242       2,239       1,685       2,146  
    Income (loss) before income taxes   (189 )     (577 )     (848 )     553       (601 )
    Income tax expense (benefit)   (45 )     (156 )     (206 )     137       (131 )
    Net income (loss) $ (144 )   $ (421 )   $ (642 )   $ 416     $ (470 )
                       
    Mortgage Banking Segment: (2)              
    Net interest income (loss) $ –     $ –     $ –     $ –     $ (3 )
    Provision for credit losses – loans   –       –       –       –       –  
    Provision for unfunded lending commitments   –       –       –       –       –  
    Net interest income (loss) after provision for credit losses   –       –       –       –       (3 )
    Noninterest income   –       –       –       –       100  
    Noninterest expense   –       –       –       –       3,641  
    Loss before income taxes   –       –       –       –       (3,544 )
    Income tax benefit   –       –       –       –       (886 )
    Net loss $ –     $ –     $ –     $ –     $ (2,658 )
                       
    (2) National mortgage banking operations were ceased in the quarter ended December 31, 2023 and subsequent immaterial mortgage lending activity is reported within the Core Banking segment.
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended
    Segmented Statements of Income Information December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands, except percentage data)   2024       2024       2024       2024       2023  
                       
    Net Income (Loss) Per Share by Segment            
    Net income per share, basic – Core Banking $ 0.93     $ 0.60     $ 0.69     $ 0.66     $ 0.59  
    Net income (loss) per share, basic – SBA Lending (Q2)   (0.02 )     (0.06 )     (0.09 )     0.06       (0.07 )
    Net loss per share, basic – Mortgage Banking   0.00       0.00       0.00       0.00       (0.40 )
    Total net income (loss) per share, basic $ 0.91     $ 0.54     $ 0.60     $ 0.72     $ 0.12  
                       
    Net Income (Loss) Per Diluted Share by Segment          
    Net income per share, diluted – Core Banking $ 0.91     $ 0.59     $ 0.69     $ 0.66     $ 0.59  
    Net income (loss) per share, diluted – SBA Lending (Q2)   (0.02 )     (0.06 )     (0.09 )     0.06       (0.07 )
    Net loss per share, diluted – Mortgage Banking   0.00       0.00       0.00       0.00       (0.40 )
    Total net income (loss) per share, diluted $ 0.89     $ 0.53     $ 0.60     $ 0.72     $ 0.12  
                       
    Return on Average Assets by Segment (annualized) (3)          
    Core Banking   1.09 %     0.71 %     0.83 %     0.80 %     0.73 %
    SBA Lending   (0.55 %)     (1.71 %)     (2.91 %)     1.81 %     (2.11 %)
                       
    Efficiency Ratio by Segment (annualized) (3)            
    Core Banking   66.15 %     64.50 %     63.45 %     63.06 %     69.31 %
    SBA Lending   92.68 %     124.97 %     134.39 %     82.52 %     106.98 %
                       
                       
      Three Months Ended
    Noninterest Expense Detail by Segment December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands)   2024       2024       2024       2024       2023  
                       
    Core Banking Segment:              
    Compensation $ 7,245     $ 5,400     $ 5,587     $ 5,656     $ 5,691  
    Occupancy   1,577       1,554       1,573       1,615       1,481  
    Advertising   338       399       253       205       189  
    Other   3,414       3,047       2,779       2,617       2,891  
    Total Noninterest Expense $ 12,574     $ 10,400     $ 10,192     $ 10,093     $ 10,252  
                       
    SBA Lending Segment (Q2):              
    Compensation $ 1,931     $ 1,854     $ 1,893     $ 1,933     $ 1,826  
    Occupancy   59       55       51       58       91  
    Advertising   14       17       12       7       10  
    Other   365       316       283       (313 )     219  
    Total Noninterest Expense $ 2,369     $ 2,242     $ 2,239     $ 1,685     $ 2,146  
                       
    Mortgage Banking Segment: (2)              
    Compensation $ –     $ –     $ –     $ –     $ 2,146  
    Occupancy   –       –       –       –       469  
    Advertising   –       –       –       –       119  
    Other   –       –       –       –       907  
    Total Noninterest Expense $ –     $ –     $ –     $ –     $ 3,641  
                       
    (3) Ratios for Mortgage Banking Segment are not considered meaningful due to cessation of national mortgage banking operations in the quarter ended December 31, 2023.
                       
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED):    
      Three Months Ended
    SBA Lending (Q2) Data December 31,   September 30,   June 30,   March 31,    December 31,
    (In thousands, except percentage data) 2024   2024    2024   2024   2023
                                 
    Final funded loans guaranteed portion sold, SBA $ 10,785     $ 10,880     $ 7,515     $ 15,144     $ 14,098  
                                 
    Gross gain on sales of loans, SBA $ 1,141     $ 1,029     $ 811     $ 1,443     $ 1,303  
    Weighted average gross gain on sales of loans, SBA 10.58 %   9.46 %   10.79 %   9.53 %   9.24 %
                                 
    Net gain on sales of loans, SBA (4) $ 711     $ 647     $ 581     $ 951     $ 834  
    Weighted average net gain on sales of loans, SBA 6.59 %   5.95 %   7.73 %   6.28 %   5.92 %
                                 
                                 
    (4) Inclusive of gains on servicing assets and net of commissions, referral fees, SBA repair fees and discounts on unguaranteed portions held-for-investment.
    SUMMARIZED FINANCIAL INFORMATION (UNAUDITED) (CONTINUED): Three Months Ended
    Summarized Consolidated Average Balance Sheets December 31,   September 30,
    		   June 30,   March 31,   December 31,
    (In thousands)   2024       2024       2024       2024       2023  
    Interest-earning assets                
    Average balances:                
    Interest-bearing deposits with banks $ 21,102     $ 16,841     $ 26,100     $ 24,587     $ 20,350  
    Loans   2,010,082       1,988,997       1,943,716       1,914,609       1,857,654  
    Investment securities – taxable   101,960       99,834       101,350       102,699       103,728  
    Investment securities – nontaxable   160,929       158,917       157,991       157,960       159,907  
    FRB and FHLB stock   24,986       24,986       24,986       24,986       24,968  
    Total interest-earning assets $ 2,319,059     $ 2,289,575     $ 2,254,143     $ 2,224,841     $ 2,166,607  
                       
    Interest income (tax equivalent basis):            
    Interest-bearing deposits with banks $ 210     $ 209     $ 324     $ 261     $ 249  
    Loans   29,617       29,450       28,155       27,133       26,155  
    Investment securities – taxable   914       910       918       923       942  
    Investment securities – nontaxable   1,715       1,685       1,665       1,662       1,687  
    FRB and FHLB stock   493       471       519       499       74  
    Total interest income (tax equivalent basis) $ 32,949     $ 32,725     $ 31,581     $ 30,478     $ 29,107  
                       
    Weighted average yield (tax equivalent basis, annualized):          
    Interest-bearing deposits with banks   3.98 %     4.96 %     4.97 %     4.25 %     4.89 %
    Loans   5.89 %     5.92 %     5.79 %     5.67 %     5.63 %
    Investment securities – taxable   3.59 %     3.65 %     3.62 %     3.59 %     3.63 %
    Investment securities – nontaxable   4.26 %     4.24 %     4.22 %     4.21 %     4.22 %
    FRB and FHLB stock   7.89 %     7.54 %     8.31 %     7.99 %     1.19 %
    Total interest-earning assets   5.68 %     5.72 %     5.60 %     5.48 %     5.37 %
                       
    Interest-bearing liabilities              
    Interest-bearing deposits $ 1,671,156     $ 1,563,258     $ 1,572,871     $ 1,549,012     $ 1,389,384  
    Federal Home Loan Bank borrowings   315,583       378,956       351,227       333,275       440,786  
    Subordinated debt and other borrowings   48,616       48,576       48,537       48,497       48,458  
    Total interest-bearing liabilities $ 2,035,355     $ 1,990,790     $ 1,972,635     $ 1,930,784     $ 1,878,628  
                       
    Interest expense:                
    Interest-bearing deposits $ 13,606     $ 12,825     $ 12,740     $ 12,546     $ 9,989  
    Federal Home Loan Bank borrowings   2,617       3,521       3,021       2,298       3,769  
    Subordinated debt and other borrowings   764       800       799       833       784  
    Total interest expense $ 16,987     $ 17,146     $ 16,560     $ 15,677     $ 14,542  
                       
    Weighted average cost (annualized):            
    Interest-bearing deposits   3.26 %     3.28 %     3.24 %     3.24 %     2.88 %
    Federal Home Loan Bank borrowings   3.32 %     3.72 %     3.44 %     2.76 %     3.42 %
    Subordinated debt and other borrowings   6.29 %     6.59 %     6.58 %     6.87 %     6.47 %
    Total interest-bearing liabilities   3.34 %     3.45 %     3.36 %     3.25 %     3.10 %
                       
    Net interest income (taxable equivalent basis) $ 15,962     $ 15,579     $ 15,021     $ 14,801     $ 14,565  
    Less: taxable equivalent adjustment   (500 )     (502 )     (487 )     (463 )     (452 )
    Net interest income $ 15,462     $ 15,077     $ 14,534     $ 14,338     $ 14,113  
                       
    Interest rate spread (tax equivalent basis, annualized)   2.34 %     2.27 %     2.24 %     2.23 %     2.27 %
                       
    Net interest margin (tax equivalent basis, annualized)   2.75 %     2.72 %     2.67 %     2.66 %     2.69 %

    The MIL Network –

  • MIL-Evening Report: What is the 90-year-old tax rule Trump could use to double US taxes on foreigners?

    Source: The Conversation (Au and NZ) – By Miranda Stewart, Professor of Law, The University of Melbourne

    US President Franklin D. Roosevelt. National Archives and Records Administration/Wikimedia Commons

    US President Donald Trump isn’t happy about the way some countries are taxing American citizens and companies. He has made clear he’s willing to retaliate, threatening to double taxes for their own citizens and companies.

    Can Trump really do that, unilaterally, as president? It turns out he can, under a 90-year-old provision of the US tax code – Section 891.

    In an executive memo signed on January 20 outlining his “America First Trade Policy”, Trump instructed US Treasury to:

    investigate whether any foreign country subjects United States citizens or corporations to discriminatory or extraterritorial taxes pursuant to Section 891 of Title 26, United States Code.

    A sweeping power

    Section 891 of the US Internal Revenue Code is short, but it is in sweeping terms.

    If the president finds that US citizens or corporations are being subjected to “discriminatory or extraterritorial taxes” under the laws of any foreign country, he “shall so proclaim” this. US income tax rates on the citizens or corporations of that country are then automatically doubled.

    The extra tax that could be collected is capped at 80% of the US taxable income of the taxpayer. The president can revoke a proclamation, if the foreign country reverses its “discriminatory or extraterritorial” taxation.

    Section 891 is an extraordinary provision – but it has never been applied. As far as I know, no other country has legislated such a rule. Importantly, it would only apply to a person or business subject to income taxation by the US.

    Take, for example, a foreign national earning a wage in the US. If this individual’s home country became subject to a proclamation under Section 891, their individual tax rate in the US would be doubled – to as much as 74%.

    A foreign company earning taxable profits in the US would face a doubling of the company tax rate from 21% to 42%.

    A bit of history

    A version of Section 891 has been in the US tax code since 1934, an earlier troubled time of tax disputes and economic depression.

    It was signed into law by Democratic President Franklin D. Roosevelt on May 10 1934, amid a tax dispute between the US and France.

    US President Franklin D. Roosevelt signed Section 891 into law in 1934, putting pressure on France to end a tax dispute.
    Vincenzo Laviosa/Wikimedia Commons

    According to US tax historian Joseph Thorndike, the move followed attempts by France to levy additional taxes on US companies operating there, beginning in the mid-1920s.

    France had tried to use an 1873 law to tax US companies operating in France on profits earned in the parent company back in the US, and in other subsidiaries around the world, not just the French company profits.

    The aim was to counter international profit-shifting, which could be used to reduce the tax payable by US subsidiaries operating in France by claiming deductions or shifting income to other group companies outside France.

    The dispute was long-standing and France tried to assess taxes going back decades for some US companies. The potentially massive tax bill (it seems the tax was never actually collected) became a geopolitical issue, and the companies asked the US government to intervene on their behalf.

    Thorndike explains that a bilateral tax treaty was negotiated between the US and France to remedy this “double tax” situation. But the French legislature refused to ratify it.

    In retaliation, US Congress passed Section 891, and six months later, France ratified its bilateral tax treaty with the US.

    Parallels with today

    In 1934, there were no digital multinational enterprises like Meta or Google. But that tax dispute nevertheless has parallels with modern concerns about taxing companies internationally.

    The French government was trying, with a rather heavy hand, to counter international profit-shifting by large US multinationals.

    Section 891 was re-enacted in later US tax codes, up to today, with minor amendments and no attempt to invoke it. It has remained in the background as a potential exercise of US fiscal and market power, supported by both sides of US politics.

    Tax professor Itai Grinberg, who worked in the Biden administration on the OECD tax deal, suggested it could be applied to the European Union decision that taxes Apple in Ireland.

    The US tech giants are only the latest in a long line of powerful American multinational corporations.
    Tada Images/Shutterstock

    What might Trump do?

    President Trump has specifically targeted the OECD global tax negotiations with this threat, just a month after Australia has legislated the global minimum tax under “Pillar Two” of the OECD Global Tax Deal.

    The OECD deal aims to ensure large multinational enterprises pay a minimum 15% effective tax rate in all the jurisdictions in which they operate, by applying a top-up tax and under-taxed profit tax.

    Trump asserted in a memorandum that the OECD Global Tax Deal is “extraterritorial”, instructing the US Secretary of the Treasury and the US Trade Representative to investigate it.

    Could Australia be singled out?

    Trump’s memorandum also ordered an investigation into “other discriminatory foreign tax practices” that may harm US companies.

    This includes whether any foreign countries are not complying with their US tax treaties or have, or are likely to put in place, any tax rules that “disproportionately affect American companies”.

    Notably, this could put Australia’s proposed “news bargaining incentive” in the crosshairs.

    Under this proposal, digital platforms (many of which are US-owned) would have to pay a new levy, which could be offset if they negotiate or renew deals with Australian news media publishers to pay for hosting news content.

    Section 891 could apply to such taxes if they were found by Trump to be “discriminatory” against US companies. What “discriminatory” means is not clear.

    Its been suggested that foreign citizens or companies could be protected from Section 891 by their country’s tax treaty with the US, under the standard approach that a later treaty prevails over an older code section. But Australia’s tax treaty with the US took effect in 1983, before the most recent re-enactment of Section 891 in the US tax code.



    Read more:
    News bargaining incentive: the latest move in the government’s ‘four-dimensional chess’ battle with Meta

    Miranda Stewart receives funding from the Australian Research Council. Miranda is on the Permanent Scientific Committee of the International Fiscal Association.

    – ref. What is the 90-year-old tax rule Trump could use to double US taxes on foreigners? – https://theconversation.com/what-is-the-90-year-old-tax-rule-trump-could-use-to-double-us-taxes-on-foreigners-248154

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Bolivia

    Source: IMF – News in Russian

    January 28, 2025

    Washington, DC: On March 22nd, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 for Bolivia. This also included a discussion of the findings of the Financial Sector Assessment Program (FSAP) exercise for Bolivia.[1]

    Bolivia’s growth momentum moderated in 2023, to 2.5 percent, from declining natural gas production, less public investment, and financial market turmoil. Price controls, food and fuel subsidies, export restrictions, and strong agricultural production held inflation below 2 percent at year-end. However, the combination of lower natural gas exports, high fuel imports, a large fiscal deficit―increasingly financed by the central bank―and an overvalued exchange rate contributed to a wider current account deficit (estimated at 5 percent of GDP for 2023) and near-depletion of international reserves. Public debt increased to nearly 84 percent of GDP by end-2023. Sovereign spreads rose sharply in early 2023 as the foreign exchange (FX) shortage became apparent and a mid-sized bank (Banco Fassil) failed. Consequently, banks were forced to restrict the withdrawal of FX deposits, heightening financial sector stability risks.

    Growth is anticipated to decelerate to 1.6 percent in 2024, holding at around 2.2-2.3 percent in the medium term under the continuation of the current policies. Inflation is forecast to reach 4.5 percent in 2024, stabilizing around 4 percent thereafter. The outlook is however predicated on significantly improved access to external financing, without which the risk of disorderly fiscal and/or exchange rate adjustment is elevated. External factors such as reduced demand, intensified global conflicts disrupting trade routes, commodity price volatility, or a renewed tightening of financial conditions could worsen fiscal and external imbalances, impede growth, and destabilize the domestic financial sector.

    Additionally, extreme weather events, like the 2023 droughts and recent floods, pose a risk to Bolivia’s agricultural sector and critical infrastructure. Domestically, a faster decline in hydrocarbon production, higher inflation due to FX scarcity, or confidence shocks could further impact growth, hurt real incomes and exacerbate financial stability risks. Social unrest stemming from inequality and security concerns remains a concern, as evidenced by the prolonged road blockages of early 2024. On the upside, Bolivia could potentially benefit from the global shift towards green energy due to its vast lithium resources, although developing the lithium sector and scaling up domestic production capacity will likely take time.

    Executive Board Assessment[2]

    Executive Directors agreed with the thrust of the staff appraisal. They welcomed Bolivia’s socioeconomic progress over the past several years but expressed concerns about the difficult financial situation Bolivia currently finds itself in, with low reserves, uncertain fiscal financing, and pressures in parallel exchange markets. Directors stressed the urgency of a shift from current unsustainable policies to avoid a disorderly adjustment that would exert significant social and economic hardship.

    Directors called for continued constructive engagement on a sustainable policy mix that is likely to require both fiscal adjustment phased in over the next few years and an up front step devaluation to more quickly address the external imbalance and allow for a build up of reserves. They emphasized the importance of improving the social safety net to shield poorer households from inflation pressures following a realignment of the exchange rate. Directors also emphasized the importance of strengthening fiscal institutions to underpin the credibility of the planned adjustment and to improve central bank governance in support of a shift to a crawling peg and, eventually, to inflation targeting.

    Directors recommended a strengthening of the central banks’ capacity to conduct sterilization operations and to lift lending rate caps to improve the allocation of capital and enhance monetary policy transmission. They also underscored the need to improve crisis preparedness and contingency planning in line with FSAP recommendations to safeguard financial stability.

    Directors recommended a range of supply side reforms to unlock private investment, boost productivity and enhance competitiveness. These should include phasing out export ceilings and price controls and better prioritizing public investment projects. A stronger regulatory framework for hydrocarbon and lithium exploration could be instrumental in increasing investment in those sectors. Directors also called for enhancing AML/CFT framework and ensuring the timely publication of key macroeconomic data.

     

    Table 1. Bolivia: Selected Economic and Social Indicators, 2022–2026

    Population (millions, 2021)

    11.8

    Poverty rate (percent, 2021)

    36.3

    Population growth rate (percent, 2021)

    1.4

    Adult literacy rate (percent, 2021)

    94.8

    Life expectancy at birth (years, 2021)

    72

    GDP per capita (US$, 2021)

    3,437

    Total unemployment rate (2021)

    7.0

    IMF Quota (SDR, millions)

    240.1

    Est.

    2022

    2023

    2024

    2025

    2026

    Income and prices

    Real GDP

    3.6

    2.5

    1.6

    2.2

    2.2

    Nominal GDP

    8.9

    4.9

    6.2

    6.5

    6.2

    CPI inflation (period average)

    1.7

    2.6

    4.5

    4.2

    3.9

    CPI inflation (end of period)

    3.1

    2.1

    4.8

    4.0

    3.9

    Investment and savings 1/

    Total investment

    15.1

    15.9

    16.6

    16.3

    16.0

    Of which: Public sector

    5.7

    5.0

    6.0

    6.0

    6.0

    Gross national savings

    12.5

    8.6

    10.5

    10.3

    10.5

    Of which: Public sector

    -1.4

    -2.0

    -1.9

    -1.5

    -1.2

    Combined public sector

    Revenues and grants

    28.9

    28.3

    27.6

    27.4

    27.1

    Of which: Hydrocarbon related revenue

    6.0

    5.4

    4.3

    3.9

    3.5

    Expenditure

    36.0

    35.3

    35.5

    34.8

    34.3

    Current

    30.3

    30.3

    29.5

    28.8

    28.3

    Capital 2/

    5.7

    5.0

    6.0

    6.0

    6.0

    Net lending/borrowing (overall balance)

    -7.1

    -7.0

    -7.9

    -7.5

    -7.2

    Of which: Non-hydrocarbon balance

    -12.8

    -12.2

    -12.0

    -11.2

    -10.5

    Total gross NFPS debt 3/

    80.4

    83.6

    86.7

    88.9

    90.9

    External sector

    Current account 1/

    -0.4

    -5.0

    -5.7

    -5.8

    -5.6

    Exports of goods and services

    32.6

    28.5

    27.0

    26.9

    26.5

    Of which: Natural gas

    6.7

    3.8

    3.4

    3.0

    2.7

    Imports of goods and services

    32.9

    34.4

    33.6

    33.6

    32.7

    Capital account

    0.0

    0.0

    0.0

    0.0

    0.0

    Financial account (-= net inflow)

    -1.5

    -0.5

    -5.3

    -5.8

    -5.6

    Of which: Direct investment net

    -0.8

    -0.6

    -0.6

    -0.9

    -0.9

    Of which: Other investment, net

    -0.3

    -0.3

    -4.6

    -4.7

    -5.1

    Net errors and omissions

    -3.0

    0.0

    0.0

    0.0

    0.0

    Terms of trade index (percent change)

    -1.6

    1.2

    -0.6

    0.0

    0.2

    Central Bank gross foreign reserves 4/ 5/ 6/

    In millions of U.S. dollars

    3,796

    1,808

    1,653

    1,555

    1,556

    In months of imports of goods and services

    2.8

    1.3

    1.1

    1.0

    1.0

    In percent of GDP

    8.6

    3.9

    3.4

    3.0

    2.8

    In percent of ARA

    44.5

    20.8

    18.2

    16.2

    15.5

    Money and credit

    Credit to the private sector (percent change)

    6.3

    -0.4

    3.0

    4.3

    5.1

    Credit to the private sector (percent of GDP)

    74.2

    70.5

    68.4

    67.0

    66.3

    Broad money (percent of GDP)

    85.2

    82.8

    81.2

    80.0

    78.9

    Memorandum items:

    Nominal GDP (in billions of U.S. dollars)

    44.3

    46.5

    49.3

    52.5

    55.8

    Bolivianos/U.S. dollar (end-of-period) 7/

    6.9

    6.9

    …

    …

    …

    REER, period average (percent change) 8/

    -0.9

    -1.9

    …

    …

    …

    Oil prices (in U.S. dollars per barrel)

    96.4

    80.6

    77.7

    73.8

    70.9

    Energy-related subsidies to SOEs (percent of GDP) 9/

    4.4

    4.0

    3.5

    2.7

    2.4

    Sources: Bolivian authorities (MEFP, Ministry of Planning, BCB, INE, UDAPE); IMF; Fund staff calculations.
    1/ The discrepancy between the current account and the savings-investment balance reflects methodological differences. For the projection years, the discrepancy is assumed to remain constant in dollar value.
    2/ Includes nationalization costs and net lending.
    3/ Public debt includes SOE’s borrowing from the BCB (but not from other domestic institutions) and BCB loans to FINPRO and FNDR.
    4/ Excludes reserves from the Latin American Reserve Fund (FLAR) and Offshore Liquidity Requirements (RAL).
    5/ All foreign assets valued at market prices.
    6/ Includes a repurchase line of US$99.2 million maturing in 2025.
    7/ Official (buy) exchange rate.
    8/ The REER based on authorities’ methodology is different from that of the IMF (see 2018 and 2017 Staff Reports).
    9/ Includes the cost of subsidy borne by public enterprises and incentives for hydrocarbon exploration investments in the projection period.

    1 Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [1] The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth assessment of a country’s financial sector. FSAPs provide input for Article IV consultations and thus enhance Fund surveillance. FSAPs are mandatory for the 47 jurisdictions with systemically important financial sectors and otherwise conducted upon request from member countries. The key findings of an FSAP are summarized in a Financial System Stability Assessment (FSSA).

    [2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.


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