NewzIntel.com

Category: Taxation

  • MIL-OSI United Kingdom: Charges to be introduced at on-street parking bays in St Albans and Harpenden, and a brand new Access Pass for older residents using the Council’s car parks

    Source: St Albans City and District

    Publication date:

    Charges are to be introduced at some limited waiting on-street parking bays in St Albans and Harpenden following an extensive public consultation.

    St Albans City and District Council’s original proposals have been modified in response to feedback from residents, Councillors, businesses and community groups.

    One aim of the proposals is to encourage active travel, such as cycling and walking, where possible, rather than car use, to improve the local environment.

    Another aim is to ensure a greater turnover of premium parking places and improve enforcement by enabling new methods such as Automatic Number Plate Recognition.

    Four new disabled bays are also being created to provide improved parking facilities for motorists with Blue Badges in Harpenden’s town centre. 

    The charges will affect an additional 243 bays in Harpenden and an additional 70 in St Albans, and are due to come into effect on Monday 17 February.

    Motorists will have several payment options, including contactless via pay and display machines with new equipment to be installed at key locations, the mobile phone app PayByPhone and, soon after implementation, by cash or chip and pin at PayPoint outlets.

    The decision to introduce charges required a Traffic Regulation Order authorised by the Council’s Strategic Director for Community and Place Delivery in consultation with Councillor Helen Campbell, Lead for Parking.

    Cllr Campbell said:

    I fully understand that some people will be disappointed at being charged for a service that they have been getting for free.

    In making the decision, we analysed the responses to the consultations and engaged with stakeholders such as ward Councillors and Harpenden Town Council.

    We listened to the feedback and we made some significant changes as a result, such as changing the start of the controlled hours to 9am in Harpenden to help parents dropping off for school, and meeting requests for a longer free period of 30 mins. In addition, we will also be improving access to Harpenden town centre for Blue Badge holders.

    Cllr Campbell added:

    The charges are benchmarked against other local authorities, with many towns of a similar size to Harpenden having long had charges for on-street bays. As with other parking charges, we will monitor the impact of the changes and review if necessary.

    The charges will:

    • Apply from 9am to 6pm in Harpenden and, reflecting local conditions, 8.30am to 6.30pm in St Albans, both Monday to Saturday, with no charge outside these hours.

    • Allow for a 30-minutes free period once a day.

    • Be £1.25 for 30 minutes, so the charge for a one-hour stay will be £1.25 while the two-hour cost will be £3.75, both including the free period.

    • Cover a maximum stay of two hours with no return for two hours.

    Charges will not be considered at bays in York Road, St Albans, as originally proposed, until a wider review of parking in the area takes place.

    Five limited waiting bays in Leyton Green, Harpenden, will be converted into resident parking bays for the benefit of local households.

    Revenue from charges will go towards the Council’s on-street car parking services budget, which is currently running at a deficit, and towards greater levels of parking enforcement.

    Cllr Campbell added:

    The Secretary of State is clear that parking services should be self-sufficient, funded by fees and charges, instead of subsidised by other Council services as is the case at the moment. The revenue generated will help reduce the on-street parking service deficit, which is in the interest of all Council taxpayers as it will ensure we can better protect some of our other services. 

    Should any surplus income arise from on-street car parking, it would have to be kept in a ring-fenced budget and only be invested in parking, highways and environmental improvements.

    ACCESS PASS 

    Alongside these changes to the way on street parking operates, the Council has also approved a brand new Access Pass to help older people who may have difficulties with digital applications. This pass will be made available for purchase from Thursday 13 February and will cover all the District Council car parks. 

    The pass will cost £190 a year and be valid for one visit a day for up to three hours.

    To be eligible for the pass, a person would need to be a resident of the District and aged 70 or over.

    Media contact:  John McJannet, Principal Communications Officer: 01727- 819533; john.mcjannet@stalbans.gov.uk.

     

    MIL OSI United Kingdom –

  • MIL-OSI Economics: VITARA Reference Guide: The Audit Program

    Source: International Monetary Fund

    Summary

    This VITARA Reference Guide provides a solid understanding of audit as a key tool available to a tax administration to promote and enforce compliance. The guide explains international good practices in designing and managing an effective audit program including the necessary legal powers, audit-related organization, and governance arrangements as well as the staff expertise and resources needed for audit and auditor performance evaluation. It focuses on practical issues such as how audit cases are selected, the different types and scope of audit, and audit methods that are available to staff. It also discusses the concepts of audit integrity, audit quality assurance, and the Random Audit Program as well as electronic audit tools and how they can be used in conducting audits. A potential annual operational performance dashboard that can be implemented to allow program monitoring throughout the fiscal year is also included. Finally, the guide highlights the key components of an audit process.

    Keywords: Audit, Audit program, Compliance, Compliance risk management, Revenue, Revenue administration, Revenue mobilization, Tax, Tax administration

    MIL OSI Economics –

  • MIL-Evening Report: As the ‘digital oligarchy’ grows in power, NZ will struggle to regulate its global reach and influence

    Source: The Conversation (Au and NZ) – By Alexandra Andhov, Chair in Law and Technology, University of Auckland, Waipapa Taumata Rau

    The images of President Donald Trump at his inauguration surrounded by the titans of the global tech industry is a warning of what could come: a global digital oligarchy dominated by a tiny tech elite.

    Companies like Meta, Google, Microsoft, Amazon, X Corp, and OpenAI (all based in the United States) now operate beyond the control of most governments. Countries like New Zealand are increasingly struggling to keep these companies in check.

    In the past decade, New Zealand has taken several measures to curb the influence of powerful tech companies through voluntary agreements and tax legislation.

    But the digital age has fundamentally changed national sovereignty – the right of individual countries to decide the rules within their own borders.

    Big tech companies are gradually taking on functions traditionally reserved for government institutions. For example, these companies have begun to function as the arbiters of speech, controlling the visibility of certain ideas and comments.

    As recently as this month, Meta obscured searches for left-leaning topics including “Democrats”, later blaming the issue on a “technical glitch”.

    And as was widely covered in the media, Amnesty International released a report claiming that Facebook’s algorithms “proactively amplified” anti-Rohingya content in Myanmar, substantially contributing to human rights violations against the ethnic group.

    New Zealand’s attempts to regulate big tech

    A number of governments are now facing the question of how to temper the influence of these companies within their current legal frameworks.

    As New Zealand (among others) has discovered in the past decade, influencing the behaviour of these companies is easier said than done. It has repeatedly found itself struggling to effectively manage big tech’s impact on its society and economy.

    In 2018, for example, New Zealand’s Privacy Commissioner said Facebook had failed to comply with its obligations under the New Zealand Privacy Act. The company told the commission the Privacy Act did not apply to it.

    When the Christchurch terrorist attack was livestreamed on Facebook (owned by Meta), New Zealand authorities found themselves largely powerless to prevent the video’s spread across global platforms.

    This crisis prompted then-prime minister Jacinda Ardern to launch the Christchurch Call initiative aimed at combating online extremism by fostering collaboration between governments and tech companies.

    The goal was to develop and enforce measures such as improved content moderation, removal of extremist material, and the creation of safer online environments.

    While gaining support from more than 120 countries and tech companies, its effect depends on voluntary ongoing cooperation. Recent events suggest this ongoing cooperation is unlikely.

    In January, Meta CEO Mark Zuckerberg announced plans to get rid of content moderation in the US and possibly elsewhere. Zuckerberg has also pushed back against European Union regulations, claiming the EU’s data laws censored social media.

    Taxing big tech

    In 2019, New Zealand proposed a 3% digital tax on big tech revenue. A similar measure was introduced by France in 2020 and by Canada and Australia last year.

    While these proposals signify important steps toward holding big tech accountable, their implementation remains uncertain.

    Although the relevant tax provisions have been adopted in New Zealand, the law includes clauses allowing tax collections to be deferred until as late as 2030.

    Meanwhile, big tech continues to push back aggressively against regulation in various ways. These have included threatening reduced services (such as the brief closure of TikTok in the US) to leveraging their relationships with the Trump government against other countries.

    Using competition regulation to rein in big tech

    In December 2024, the Australian government unveiled draft legislation on big tech to level the playing field.

    The proposed law seeks to foster fair competition, prevent price gouging, and give smaller tech and news companies a chance to thrive in a landscape increasingly dominated by global giants.

    The legislation would grant the Australian Competition and Consumer Commission the authority to investigate and penalise companies with fines of up to A$50 million for restricting competition.

    The targeted behaviour includes tactics such as restricting data transfers between platforms (for example, moving contacts or photos from iPhone to Android) and limiting third-party payment options in app stores.

    The proposed law aims to put an end to these unfair advantages, ensuring a level playing field where businesses of all sizes can compete and consumers have more choices.

    Democractic governance in the digital age

    The growing power of tech platforms raises critical questions about democratic governance in the digital age.

    There is an urgent need to reconcile the global influence of tech companies with local democratic processes and to create mechanisms that safeguard individual and national sovereignty in an increasingly digital world.

    Governments need to recognise these platforms are not immutable forces of nature, but human-created systems that can be challenged, reformed or dismantled. The same digital connectivity that has empowered these corporations can become the very tool of their transformation.

    Alexandra Andhov is conducting research on Big Tech Governance, funded by the Independent Research Fund Denmark under the Inge Lehmann Programme. The author is grateful for this support and wishes to acknowledge that the research was conducted entirely independently.

    – ref. As the ‘digital oligarchy’ grows in power, NZ will struggle to regulate its global reach and influence – https://theconversation.com/as-the-digital-oligarchy-grows-in-power-nz-will-struggle-to-regulate-its-global-reach-and-influence-247899

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI USA: CONSUMER ALERT: Watch out for charity scams seeking to profit from the California wildfires

    Source: Washington State News

    OLYMPIA — The Attorney General’s Office Consumer Protection Division is warning Washingtonians to be on the lookout for scammers targeting donations aiding those affected by the wildfires in California. Attorney General Nick Brown asks Washingtonians to report any suspicious solicitations to his office.

    “The catastrophic damage from these fires makes us want to support relief and recovery efforts,” Brown said. “I urge potential donors to give with caution and look out for potential scams or fraudulent solicitations. If you see charity solicitations that look suspicious, please file a complaint with my office.”

    Anyone who believes they have detected or been the victim of a charity scam can submit a complaint to the Attorney General’s Office using this online complaint form. If the charity is located in California, donors can also submit a complaint form, located here.

    The Attorney General’s Office reminds donors that they can help protect themselves from scams by slowing down and researching any charities they want to support. For instance, donors should pause and consider whether an advertised charity has an actual history of providing the type of work needed in response to a disaster.

    You can take additional steps to protect yourself from scams by doing the following:

    • Research the charity before giving. Ensure the charity is registered with the Washington Secretary of State at www.sos.wa.gov/charities. If the charity is registered, you can review a summary of its financial records and tax status. You can also check the charity’s rating on Charity Navigator at www.charitynavigator.org, Guidestar’s Nonprofit Directory at www.guidestar.org or use the IRS’s Tax Exempt Organization Search tool, located here, to verify the entity’s status.
    • Don’t give in to high-pressure tactics. If is someone is demanding immediate payment or sensitive personal information, it’s likely a scam.
    • Verify a Charity’s Tax Status: You should remember that giving to a specific individual or a family’s crowdfunding efforts presents more risk than giving to an established charity. Additionally, a donation to an individual or family is not a tax-deductible gift, in most circumstances. If you are unsure about the charity’s designation, use the IRS’s Tax Exempt Organization Search tool to verify the entity’s status.
    • Report Unwanted Robocalls and Robotexts: Generally, unsolicited robocalls and robotexts are illegal. Recipients of those calls and texts can report them using the Attorney General’s Telephone Scam Reporting Form, located here.
    • Watch Out for Imposters: Fraudulent organizations may use names that closely resemble those of well-established charitable organizations to mislead donors. Look out for fraudulent websites that have a slightly different web address than that of a legitimate charitable organization. Similar-looking web and email addresses are sometimes used by scammers to lure in donors.

    -30-

    Washington’s Attorney General serves the people and the state of Washington. As the state’s largest law firm, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.

    Media Contact:

    Email: press@atg.wa.gov

    Phone: (360) 753-2727

    General contacts: Click here

    Media Resource Guide & Attorney General’s Office FAQ

    MIL OSI USA News –

  • MIL-OSI USA: Governor Stein Announces Pratt & Whitney Will Expand Manufacturing Operations in Asheville

    Source: US State of North Carolina

    Headline: Governor Stein Announces Pratt & Whitney Will Expand Manufacturing Operations in Asheville

    Governor Stein Announces Pratt & Whitney Will Expand Manufacturing Operations in Asheville
    bwood

    Raleigh, NC

    Today, Governor Stein announced that Pratt & Whitney, an RTX business (NYSE: RTX), will expand its turbine airfoil manufacturing plant in Buncombe County, a significant vote of confidence in western North Carolina. The company’s expansion project will create 325 additional jobs and includes an additional investment of $285 million in Asheville.  

    “Western North Carolina’s economy took it on the chin after Hurricane Helene, yet still it remains an incredible place to work and do business,” said Governor Josh Stein. “Pratt & Whitney clearly sees the opportunities in North Carolina and the strength of our highly skilled workforce. We look forward to welcoming them here.” 

    Pratt & Whitney is a world leader in the design, manufacture, and service of aircraft engines and auxiliary power units.  More than 17,000 customers operating in more than 200 countries and territories use Pratt & Whitney engines, with more than 90,000 engines currently in service.  The company’s Asheville facility, first announced in October 2020, produces high-tech turbine airfoils, an important component in aircraft jet engines.  The company’s new project will expand its production capacity to meet growing customer demand.

    “Pratt & Whitney’s continued investment in Asheville is critical to meet the growing demand for our products, such as the GTF for the A320family and the F135 for the F-35 Lightning II,” said Asheville General Manager for Pratt & Whitney Dan Field. “We would like to thank the state, Buncombe County and Governor Stein for their support on this project. This latest round of investment allows us to add critical process elements for the manufacture of turbine airfoils and increase the overall delivery output of this facility, enabling us to deliver on our customer commitments while creating hundreds of new jobs in the Asheville community.” 

    “The aviation industry is a key driver of North Carolina’s economic success and Pratt & Whitney’s decision strengthens our aerospace ecosystem substantially,” said Commerce Secretary Lee Lilley.  “We will continue to invest in support systems, like our community colleges and universities, that help employers like Pratt & Whitney succeed in our state—and bolster Western NC’s economy.”

    The North Carolina Department of Commerce led the state’s support for the company during its site evaluation and decision-making process.

    The average salary for the new positions will be $62,413, compared with an average wage in Buncombe County of $55,416.  The new positions will bring an annual payroll impact to the community of more than $20 million per year. 

    The company’s project in North Carolina will be facilitated, in part, by a Job Development Investment Grant (JDIG) approved by the state’s Economic Investment Committee earlier today. Over the course of the 12-year term of this grant, the project is estimated to grow the state’s economy by nearly $2.1 billion. Using a formula that takes into account the new tax revenues generated by the new jobs and the capital investment, the JDIG agreement authorizes the potential reimbursement to the company of up to $4,202,250, spread over 12 years. State payments only occur following performance verification by the departments of Commerce and Revenue that the company has met its incremental job creation and investment targets. 

    The project’s projected return on investment of public dollars is 317 per cent, meaning for every dollar of potential cost, the state receives $4.17 in state revenue. JDIG projects result in positive net tax revenue to the state treasury, even after taking into consideration the grant’s reimbursement payments to a given company.  

    Because Pratt & Whitney chose to expand in Buncombe County, classified by the state’s economic tier system as Tier 3, the company’s JDIG agreement also calls for moving $1,400,750 into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities finance necessary infrastructure upgrades to attract future business. Even when new jobs are created in a Tier 3 county such as Buncombe, the new tax revenue generated through JDIG grants helps more economically challenged communities elsewhere in the state. 

    “Many local, regional, and state organizations have worked hard to bring this new economic development project to Buncombe County, all while working diligently through the many details of storm recovery,” said Representative Eric Ager. “We look forward to seeing Pratt & Whitney continue to thrive in our great community.” 

    Partnering with the North Carolina Department of Commerce and the Economic Development Partnership of North Carolina on this project were the North Carolina General Assembly, the North Carolina Community College System, the North Carolina Departments of Revenue and Transportation, N.C. Commerce’s Division of Workforce Solutions, the Office of Congressman Chuck Edwards, the Golden LEAF Foundation, Duke Energy, Asheville-Buncombe Technical Community College, Biltmore Farms, Buncombe County, the City of Asheville, and the Economic Development Coalition of Asheville and Buncombe County.  

    Jan 28, 2025

    MIL OSI USA News –

  • MIL-OSI: Philadelphia Union & Atomic Data Announce Multi-Year Partnership Extension

    Source: GlobeNewswire (MIL-OSI)

    CHESTER, Pa. and MINNEAPOLIS, Jan. 28, 2025 (GLOBE NEWSWIRE) — Philadelphia Union and Atomic Data announced today that they have extended their partnership for five more years, bringing a wide range of managed IT services to the Major League Soccer Club through 2029. Under the official IT partnership, Atomic Data and Game Day Technologies will continue to oversee all of the Union’s IT operations and security measures.

    “We are excited to announce the extension of our multi-year partnership with Atomic Data,” said Chief Revenue Officer Charlie Slonaker. “Since our collaboration began in 2022, Atomic Data has significantly enhanced our technology operations and IT resources. Their 24×7 support has been instrumental in helping us achieve several key club goals. We look forward to continuing to develop innovative strategies to drive growth over the next five years.”

    As the official IT provider for Philadelphia Union, Subaru Park, & WSFS Bank Sportsplex, Atomic Data manages their servers and endpoints, monitors their network around the clock, and provides 24×7 end-user help desk support. They also strengthen the team’s cybersecurity with advanced tools and offer on-site tech support for the organization as needed.

    Atomic Data’s Yagya Mahadevan, head of sports and entertainment division Game Day Technologies, commented: “This multi-year extension reaffirms the strong partnership we’ve built with Philadelphia Union over the past three years, and we’re thrilled to enter the next phase. Looking ahead, we’re committed to helping Philadelphia Union implement robust processes to enhance their technology operations and deliver world-class infrastructure for the WSFS Bank Sportsplex.”

    About Atomic Data & Game Day Technologies
    Atomic Data, trusted IT provider for hundreds of enterprises, sports teams, and large venues, is on a mission to deliver always-on, custom-tailored technology solutions and objective IT leadership.

    Game Day Technologies® powered by Atomic Data enables owners and teams to right size and modernize their venues, districts, training facilities, and back offices with objective, holistic technology oversight and activation.

    For more information, please visit www.philadelphiaunion.com.

    The MIL Network –

  • MIL-OSI USA: Crapo Supports Bessent for Treasury Secretary

    US Senate News:

    Source: United States Senator for Idaho Mike Crapo
    Washington, D.C.–The United States Senate today confirmed Scott Bessent to serve as Secretary of the U.S. Department of the Treasury by a bipartisan vote of 68-29.  In a speech on the Senate floor, U.S. Senate Finance Committee Chairman Mike Crapo (R-Idaho) highlighted Mr. Bessent’s qualifications and urged colleagues to support his nomination. 
    “Mr. Bessent is committed to restoring the prosperity and opportunity experienced under President Trump’s leadership,” Crapo said.  “I look forward to working closely with him to ensure we extend the policies that benefitted Americans of every income bracket and enabled families and businesses to get ahead.  If qualifications–and, I might add, character–are one’s test for supporting a nominee, voting to confirm Mr. Bessent is one of the easiest votes we could ever take.” 
    Mr. Bessent’s nomination was previously reported favorably out of the Senate Finance Committee by a bipartisan vote of 16 to 11. 

    Read Senator Crapo’s full remarks below:
    “I rise today to urge my colleagues to vote in favor of the confirmation of Mr. Scott Bessent, who has been nominated to serve as Secretary of the Treasury.
    “Over the weekend, the Senate voted with broad bipartisan support to advance Mr. Bessent’s nomination.  In fact, fifteen of my Democrat colleagues joined Republicans in advancing Mr. Bessent’s nomination.
    “Despite Mr. Bessent’s prolific experience and qualifications—which cannot be disputed—a few detractors frame their policy preferences as if these are compliance issues with respect to his taxes. 
    “Let me be clear: Mr. Bessent followed all applicable laws and met the Committee’s longstanding and rigorous diligence standard.  The Finance Committee has the most rigorous standard of vetting nominees of any committee in the Congress, including looking at their past tax returns and having tax experts come in and evaluate their tax returns with us.
    “His diligence matched that which has applied to nominees in previous administrations. 
    “Contrary to what you have heard, he provided extensive supporting material for all of the attacks on him, including more than 3,000 pages worth, and he and his staff spent countless hours with Republican and Democrat Senate Finance Committee members and staff going over all of these allegations and all of these claimed failures to pay taxes.  
    “He’s gone further by not only divesting all of his business ties, which is no small task, but by publicly committing that if there is any change in the law in the future on these policy arguments, that he would comply with those changes in the law.
    “Let me state this again, as clearly as it can be said, Scott Bessent paid his taxes.
    “I’ve heard it said twice on this floor that he did not pay his taxes.  Experts have gone over his tax returns, and he has complied with standard, prevailing interpretations of the tax code every time.
    “The issue here is that the IRS wants to change the interpretation of the tax code, but the IRS doesn’t get to decide what our tax code says.  Congress does, and Congress has not made the changes that the IRS wants to see.
    “Even in the face of that, arguing that he should have done what the IRS wanted him to do, in fact, they didn’t even say they wanted him to do it, they said it to other taxpayers, and other taxpayers have taken the IRS to court over this issue.  Mr. Bessent has said, if the IRS prevails and changes the tax code–the interpretation of the tax code–he will comply.
    “But the argument that he has not complied with long standing tax policy and interpretation is false, and I don’t know anybody who could go through a more rigorous standard than what we put him through in the Finance Committee.
    “As for the nominee, Mr. Bessent has worked for the last three decades as one of the sharpest minds in the global finance industry.  He has decades of academic, professional and leadership experience relevant to the position of Treasury Secretary.  
    “His performance at the Committee was stellar.  His background and training are tailor-made for this role, and he has the demeanor and character to be an effective Secretary.
    “Mr. Bessent is committed to restoring the prosperity and opportunity experienced under President Trump’s leadership. 
    “This includes ensuring that we avert an over-$4-trillion tax hike on the American people if the Trump tax cuts are allowed to expire, which he rightly described at his nomination hearing as a pass/fail exercise. 
    “There should be no question that we will extend these tax cuts.
    “I’ve also heard it argued on this floor here today that this is just a tax cut for rich billionaires.  The reality is that the vast majority of the tax cut goes to everyday people–to people making less than $400,000 a year.
    “The vast majority of those tax cuts go to people in the lower-and-middle income tax brackets. The tax cuts that we are talking about gave tax cuts to every single solitary income cohort in the tax code, and the greatest tax cuts went to those in the lower- and middle-income categories.
    “It would be terrible if we did not extend these tax cuts, and yet, Mr. Bessent is attacked for saying he supports extending these tax cuts.  It doesn’t make sense.  
    “I look forward to working closely with him to ensure we extend the policies that benefitted Americans of every income bracket and enabled families and businesses to get ahead.
    “I should also say that under this tax policy, when it was passed, the richest in America paid a greater percentage of the overall tax burden than they had before.  Yet he is attacked for wanting to extend these tax cuts that will hammer every single tax paying American if they are allowed to expire
    “If qualifications–and I might add, character–are one’s test for supporting a nominee, voting to confirm Mr. Bessent is one of the easiest we could ever take. 
    “In previous congresses, many of my Republican colleagues and I have voted for candidates we considered to be qualified to serve as Treasury Secretary, even when they were nominated by Democratic presidents and we disagreed with many of their policy positions.  
    “Mr. Bessent’s candidacy ought to enjoy similar bipartisan support and I encourage my colleagues on both sides of the aisle to join with me in confirming his nomination.
    “He is the right person for this job, and I commend President Trump in making such an excellent selection.”

    MIL OSI USA News –

  • MIL-OSI Security: BATON ROUGE WOMAN SENTENCED TO 13 MONTHS IN FEDERAL PRISON FOR COVID-19 FRAUD

    Source: Office of United States Attorneys

    United States Attorney Ronald C. Gathe, Jr. announced that U.S. District Judge Brian A. Jackson sentenced Gernesia Williams, 47, of Baton Rouge, to 13 months in federal prison following her conviction for knowing conversion of government funds. The Court further sentenced Williams to serve three years of supervised release following her term of imprisonment and ordered her to pay $110,030.47 in restitution.

    According to admissions made as part of her guilty plea, between approximately April 2020 and January 2023, Williams knowingly converted more than $100,000 in loan proceeds she obtained as part of the U.S. Small Business Administration’s COVID-19 Economic Injury Disaster Loan (“EIDL”) program for her own use. As a condition to obtaining the loans, she promised to use the proceeds solely as working capital to alleviate economic injury caused by the COVID-19 pandemic. Nevertheless, Williams misspent at least $110,030.47 of the loan proceeds on herself and others, including more than $30,000 on jewelry and more than $20,000 on a destination wedding in Florida. 

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

    This matter was investigated by the Federal Bureau of Investigation and the U.S. Treasury Inspector General for Tax Administration, and was prosecuted by Assistant United States Attorney Ben Wallace. 

    MIL Security OSI –

  • MIL-OSI: Eagle Bancorp Montana Earns $3.4 Million, or $0.44 per Diluted Share, in the Fourth Quarter of 2024 and $9.8 Million, or $1.24 per Diluted Share for the Year 2024; Declares Quarterly Cash Dividend of $0.1425 Per Share

    Source: GlobeNewswire (MIL-OSI)

    HELENA, Mont., Jan. 28, 2025 (GLOBE NEWSWIRE) — Eagle Bancorp Montana, Inc. (NASDAQ: EBMT), (the “Company,” “Eagle”), the holding company of Opportunity Bank of Montana (the “Bank”), today reported net income of $3.4 million, or $0.44 per diluted share, in the fourth quarter of 2024, compared to $2.7 million, or $0.34 per diluted share, in the preceding quarter, and $2.2 million, or $0.28 per diluted share, in the fourth quarter of 2023. For the year ended December 31, 2024, net income was $9.8 million, or $1.24 per diluted share, compared to $10.1 million, or $1.29 per diluted share, in 2023.

    Eagle’s board of directors declared a quarterly cash dividend of $0.1425 per share on January 23, 2025. The dividend will be payable March 7, 2025, to shareholders of record February 14, 2025. The current dividend represents an annualized yield of 3.93% based on recent market prices.

    “Eagle’s fourth quarter operating results were highlighted by strong quarterly deposit growth, sound revenue generation, and net interest margin expansion,” said Laura F. Clark, President and CEO. “We continue to maintain a stable core deposit base, with non-CDs representing 72.4% of total deposits at year end. Additionally, we continue to maintain quality credit. While loan growth has moderated in recent quarters, we are anticipating steady single-digit loan growth in the year ahead.”

    Fourth Quarter 2024 Highlights (at or for the three-month period ended December 31, 2024, except where noted):

    • Net income increased 26.7% to $3.4 million, or $0.44 per diluted share, in the fourth quarter of 2024, compared to $2.7 million, or $0.34 per diluted share, in the preceding quarter, and increased 58.6% compared to $2.2 million, or $0.28 per diluted share, in the fourth quarter a year ago.
    • Net interest margin (“NIM”) was 3.59% in the fourth quarter of 2024, a 25 basis point increase compared to 3.34% in the preceding quarter and a 27 basis point increase compared to the fourth quarter a year ago.
    • Revenues (net interest income before the provision for credit losses, plus noninterest income) increased 2.8% to $21.4 million in the fourth quarter of 2024, compared to $20.8 million in the preceding quarter and increased 1.7% compared to $21.0 million in the fourth quarter a year ago.
    • Total loans increased 2.4% to $1.52 billion, at December 31, 2024, compared to $1.48 billion a year earlier, and decreased 0.9% compared to $1.53 billion at September 30, 2024.
    • Total deposits increased $46.0 million or 2.8% to $1.68 billion at December 31, 2024, compared to a year earlier, and increased $30.7 million or 1.9%, compared to September 30, 2024.
    • The allowance for credit losses represented 1.11% of portfolio loans and 437.7% of nonperforming loans at December 31, 2024, compared to 1.11% of portfolio loans and 195.2% of nonperforming loans at December 31, 2023.
    • The Company’s available borrowing capacity was approximately $404.0 million at December 31, 2024, compared to $398.5 million at December 31, 2023.
      December 31, 2024 December 31, 2023
    (Dollars in thousands)  Borrowings Outstanding    Remaining Borrowing Capacity    Borrowings Outstanding    Remaining Borrowing Capacity
    Federal Home Loan Bank advances $ 140,930   $ 276,664   $ 175,737   $ 266,017
    Federal Reserve Bank discount window   –     27,349     –     32,472
    Correspondent bank lines of credit   –     100,000     –     100,000
    Total $ 140,930   $ 404,013   $ 175,737   $ 398,489
             
    • The Company paid a quarterly cash dividend in the fourth quarter of $0.1425 per share on December 6, 2024, to shareholders of record November 15, 2024.

    Balance Sheet Results
    Eagle’s total assets increased 1.3% to $2.10 billion at December 31, 2024, compared to $2.08 billion a year ago, and decreased 2.0% compared to $2.15 billion three months earlier. The investment securities portfolio totaled $292.6 million at December 31, 2024, compared to $318.3 million a year ago, and $307.0 million at September 30, 2024.

    Eagle originated $68.1 million in new residential mortgages during the quarter and sold $64.0 million in residential mortgages, with an average gross margin on sale of mortgage loans of approximately 3.18%. This production compares to residential mortgage originations of $58.0 million in the preceding quarter with sales of $51.0 million and an average gross margin on sale of mortgage loans of approximately 3.31%. Mortgage volumes remain low as rates have continued to be elevated relative to rates on existing mortgages.

    Total loans increased $36.2 million, or 2.4%, compared to a year ago, and decreased $14.0 million, or 0.9%, from three months earlier. Commercial real estate loans increased 6.1% to $646.0 million at December 31, 2024, compared to $608.7 million a year earlier. Commercial real estate loans were comprised of 71.4% non-owner occupied and 28.6% owner occupied at December 31, 2024. Agricultural and farmland loans increased 4.9% to $281.0 million at December 31, 2024, compared to $267.9 million a year earlier. Residential mortgage loans decreased 1.8% to $153.7 million, compared to $156.6 million a year earlier. Commercial loans increased 8.5% to $144.0 million, compared to $132.7 million a year ago. Commercial construction and development loans decreased 21.5% to $124.2 million, compared to $158.1 million a year ago. Home equity loans increased 12.2% to $97.5 million, residential construction loans increased 5.2% to $45.7 million, and consumer loans decreased 5.4% to $28.5 million, compared to a year ago.

    “Similar to other community banks, our deposit mix has shifted towards higher yielding deposits over the last several quarters due to the higher interest rate environment. However, the recent Fed rate cuts have started to ease deposit pricing, and we anticipate this will continue as we move through this next rate cycle,” said Miranda Spaulding, CFO.

    Total deposits increased to $1.68 billion at December 31, 2024, compared to $1.64 billion at December 31, 2023, and $1.65 billion at September 30, 2024. Noninterest-bearing checking accounts represented 24.9%, interest-bearing checking accounts represented 13.2%, savings accounts represented 12.5%, money market accounts comprised 21.8% and time certificates of deposit made up 27.6% of the total deposit portfolio at December 31, 2024. There were no brokered certificates at December 31, 2024, compared to $72.2 million at December 31, 2023, and $22.1 million at September 30, 2024. The average cost of total deposits was 1.71% in the fourth quarter of 2024, compared to 1.76% in the preceding quarter and 1.49% in the fourth quarter of 2023. The estimated amount of uninsured deposits was approximately $323.0 million, or 19% of total deposits, at December 31, 2024, compared to $307.0 million, or 18% of total deposits, at September 30, 2024.

    Shareholders’ equity was $174.8 million at December 31, 2024, compared to $169.3 million a year earlier and $177.7 million three months earlier. Book value per share was $21.77 at December 31, 2024, compared to $21.11 a year earlier and $22.17 three months earlier. Tangible book value per share, a non-GAAP financial measure calculated by dividing shareholders’ equity, less goodwill and core deposit intangible, by common shares outstanding, was $16.88 at December 31, 2024, compared to $16.05 a year earlier and $17.23 three months earlier.

    Operating Results
    “The higher yields on interest earning assets combined with a lower cost of funds contributed to our 25 basis point NIM expansion during the quarter, compared to the preceding quarter,” said Spaulding. “We anticipate additional improvement in our cost of funds over the next several quarters.”

    Eagle’s NIM was 3.59% in the fourth quarter of 2024, a 25 basis point increase compared to 3.34% in the preceding quarter and a 27 basis point improvement compared to the fourth quarter a year ago. The interest accretion on acquired loans totaled $161,000 and resulted in a four basis-point increase in the NIM during the fourth quarter of 2024, compared to $167,000 and a three basis-point increase in the NIM during the preceding quarter. Funding costs for the fourth quarter of 2024 were 2.69%, compared to 2.89% in the third quarter of 2024 and 2.58% in the fourth quarter of 2023. Average yields on interest earning assets for the fourth quarter of 2024 increased to 5.70%, compared to 5.66% in the third quarter of 2024 and 5.36% in the fourth quarter a year ago. For the year, the NIM was 3.42% compared to 3.51% for 2023.

    Net interest income, before the provision for credit losses, increased 6.3% to $16.8 million in the fourth quarter of 2024, compared to $15.8 million in the third quarter of 2024, and increased 10.5% compared to $15.2 million in the fourth quarter of 2023. For the year, net interest income increased 1.5% to $63.4 million, compared to $62.5 million in 2023.

    Fourth quarter revenues increased 2.8% to $21.4 million, compared to $20.8 million in the preceding quarter and increased 1.7% compared to $21.0 million in the fourth quarter a year ago. For the year 2024, revenues were $81.2 million, compared to $85.2 million in 2023. The decrease compared to a year ago was largely due to lower volumes in mortgage banking activity.

    Total noninterest income decreased 8.2% to $4.6 million in the fourth quarter of 2024, compared to $5.0 million in the preceding quarter, and decreased 21.3% compared to $5.8 million in the fourth quarter a year ago. The decrease compared to the preceding quarter was largely due to income from bank owned life insurance of $724,000 recorded during the third quarter of 2024. Net mortgage banking income, the largest component of noninterest income, totaled $2.8 million in the fourth quarter of 2024, compared to $2.6 million in the preceding quarter and $3.7 million in the fourth quarter a year ago. This decrease compared to the fourth quarter a year ago was largely driven by a decline in net gain on sale of mortgage loans, which was impacted by lower mortgage loan volumes. For the year, noninterest income decreased 21.8% to $17.8 million, compared to $22.7 million in 2023. Net mortgage banking income decreased 33.1% to $10.0 million in 2024, compared to $15.0 million in 2023. These decreases were driven by a decline in net gain on sale of mortgage loans.

    Eagle’s fourth quarter noninterest expense was $17.7 million, an increase of 2.5% compared to $17.3 million in the preceding quarter and a 6.3% decrease compared to $18.9 million in the fourth quarter a year ago. Lower salaries and employee benefits contributed to the decrease compared to the year ago quarter. For the year, noninterest expense decreased 3.9% to $69.3 million, compared to $72.1 million in 2023.

    For the fourth quarter of 2024, the Company recorded income tax expense of $269,000. This compared to income tax expense of $529,000 in the preceding quarter and an income tax benefit of $315,000 in the fourth quarter of 2023. The effective tax rate for the year was 14.2% compared to 13.7% for the prior year and is due to the increase in proportion of tax-exempt income compared to pretax earnings, as well as tax credits from investments in low-income housing tax credit projects.

    Credit Quality
    Due to muted loan growth and positive economic factors within the CECL modeling, Eagle recorded a recapture in its provision for credit losses of $36,000 during the fourth quarter of 2024. This compared to a $277,000 provision for credit losses in the preceding quarter and $270,000 in the fourth quarter a year ago. The allowance for credit losses represented 437.7% of nonperforming loans at December 31, 2024, compared to 356.7% three months earlier and 195.2% a year earlier. Nonperforming loans were $3.9 million at December 31, 2024, $4.8 million at September 30, 2024, and $8.4 million a year earlier. Net loan charge-offs totaled $44,000 in the fourth quarter of 2024, compared to net loan charge-offs of $17,000 in the preceding quarter and net loan charge-offs of $10,000 in the fourth quarter a year ago. The allowance for credit losses was $16.9 million, or 1.11% of total loans, at December 31, 2024, compared to $17.1 million, or 1.12% of total loans, at September 30, 2024, and $16.4 million, or 1.11% of total loans, a year ago.

    Capital Management
    The ratio of tangible common shareholders’ equity (shareholders’ equity, less goodwill and core deposit intangible) to tangible assets (total assets, less goodwill and core deposit intangible) was 6.57% at December 31, 2024, up from 6.32% a year ago and 6.56% three months earlier. This ratio is a non-GAAP financial measure. For the most comparable GAAP financial measure, see “Reconciliation of Non-GAAP Financial Measures” below. As of December 31, 2024, the Bank’s regulatory capital was in excess of all applicable regulatory requirements and is deemed well capitalized. The Bank’s Tier 1 capital to adjusted total average assets was 10.07% as of December 31, 2024.

    About the Company
    Eagle Bancorp Montana, Inc. is a bank holding company headquartered in Helena, Montana, and is the holding company of Opportunity Bank of Montana, a community bank established in 1922 that serves consumers and small businesses in Montana through 29 banking offices. Additional information is available on the Bank’s website at www.opportunitybank.com. The shares of Eagle Bancorp Montana, Inc. are traded on the NASDAQ Global Market under the symbol “EBMT.”

    Forward Looking Statements
    This release may contain certain “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, and may be identified by the use of such words as “believe,” “will” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential.” These forward-looking statements include, but are not limited to statements of our goals, intentions, expectations and anticipations; statements regarding our business plans, prospects, mergers, growth and operating strategies; statements regarding the asset quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our 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. These factors include, but are not limited to, changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; general economic conditions and political events, either nationally or in our market areas, that are worse than expected; the emergence or continuation of widespread health emergencies or pandemics, including but not limited to vaccine efficacy and immunization rates, new variants, steps taken by governmental and other authorities to contain, mitigate and combat the pandemic, adverse effects on our employees, customers and third-party service providers, the increase in cyberattacks in the current work-from-home environment; the impact of volatility in the U.S. banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by governmental agencies in response thereto; the impact of any new regulatory, policy or enforcement developments resulting from the change in U.S. presidential administration; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; an inability to access capital markets or maintain deposits or borrowing costs; competition among banks, financial holding companies and other traditional and non-traditional financial service providers; loan demand or residential and commercial real estate values in Montana; the concentration of our business in Montana; our ability to continue to increase and manage our commercial real estate, commercial business and agricultural loans; the costs and effects of legal, compliance and regulatory actions, changes and developments, including the initiation and resolution of legal proceedings (including any securities, bank operations, consumer or employee litigation); inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets that lead to impairment in the value of our investment securities and goodwill; other economic, governmental, competitive, regulatory and technological factors that may affect our operations; our ability to implement new technologies and maintain secure and reliable technology systems including those that involve the Bank’s third-party vendors and service providers; cyber incidents, or theft or loss of Company or customer data or money; our ability to appropriately address social, environmental, and sustainability concerns that may arise from our business activities; the effect of our recent or future acquisitions, including the failure to achieve expected revenue growth and/or expense savings, the failure to effectively integrate their operations, the outcome of any legal proceedings and the diversion of management time on issues related to the integration.

    Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. All information set forth in this press release is current as of the date of this release and the company undertakes no duty or obligation to update this information.

    Use of Non-GAAP Financial Measures
    In addition to results presented in accordance with generally accepted accounting principles utilized in the United States, or GAAP, in this release, including the Financial Ratios and Other Data contains non-GAAP financial measures. Non-GAAP financial measures include: 1) core efficiency ratio, 2) tangible book value per share and 3) tangible common equity to tangible assets. The Company uses these non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance, performance trends and financial condition, and to enhance investors’ overall understanding of such financial performance. In particular, the use of tangible book value per share and tangible common equity to tangible assets is prevalent among banking regulators, investors and analysts.

    The numerator for the core efficiency ratio is calculated by subtracting acquisition costs and intangible asset amortization from noninterest expense. Tangible assets and tangible common shareholders’ equity are calculated by excluding intangible assets from assets and shareholders’ equity, respectively. For these financial measures, our intangible assets consist of goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. We believe that this measure is consistent with the capital treatment by our bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios and present this measure to facilitate the comparison of the quality and composition of our capital over time and in comparison, to our competitors.

    Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. 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. Further, the non-GAAP financial measure of tangible book value per share should not be considered in isolation or as a substitute for book value per share or total shareholders’ equity determined in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Eagle strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Reconciliation of the GAAP and non-GAAP financial measures are presented below.

    Balance Sheet      
    (Dollars in thousands, except per share data)   (Unaudited)  
      December 31, September 30, December 31,
      2024 2024 2023
           
    Assets:      
    Cash and due from banks $ 29,824   $ 22,954   $ 23,243  
    Interest bearing deposits in banks   1,735     19,035     1,302  
    Federal funds sold   –     200     –  
    Total cash and cash equivalents   31,559     42,189     24,545  
    Securities available-for-sale, at fair value   292,590     306,982     318,279  
    Federal Home Loan Bank (“FHLB”) stock   7,778     11,218     9,191  
    Federal Reserve Bank (“FRB”) stock   4,131     4,131     4,131  
    Mortgage loans held-for-sale, at fair value   13,368     13,429     11,432  
    Loans:      
    Real estate loans:      
    Residential 1-4 family   153,721     156,811     156,578  
    Residential 1-4 family construction   45,701     52,217     43,434  
    Commercial real estate   645,962     644,019     608,691  
    Commercial construction and development   124,211     125,323     158,132  
    Farmland   146,610     145,356     142,590  
    Other loans:      
    Home equity   97,543     93,646     86,932  
    Consumer   28,513     29,445     30,125  
    Commercial   144,039     143,190     132,709  
    Agricultural   134,346     144,645     125,298  
    Total loans   1,520,646     1,534,652     1,484,489  
    Allowance for credit losses   (16,850 )   (17,130 )   (16,440 )
    Net loans   1,503,796     1,517,522     1,468,049  
    Accrued interest and dividends receivable   12,890     14,844     12,485  
    Mortgage servicing rights, net   15,376     15,443     15,853  
    Assets held-for-sale, at cost   960     257     –  
    Premises and equipment, net   101,540     100,297     94,282  
    Cash surrender value of life insurance, net   53,232     52,852     47,939  
    Goodwill   34,740     34,740     34,740  
    Core deposit intangible, net   4,499     4,834     5,880  
    Other assets   26,631     26,375     28,860  
    Total assets $ 2,103,090   $ 2,145,113   $ 2,075,666  
           
    Liabilities:      
    Deposit accounts:      
    Noninterest bearing $ 419,211   $ 419,760   $ 418,727  
    Interest bearing   1,262,017     1,230,752     1,216,468  
    Total deposits   1,681,228     1,650,512     1,635,195  
    Accrued expenses and other liabilities   47,018     38,593     36,462  
    FHLB advances and other borrowings   140,930     219,167     175,737  
    Other long-term debt, net   59,149     59,111     58,999  
    Total liabilities   1,928,325     1,967,383     1,906,393  
           
    Shareholders’ Equity:      
    Preferred stock (par value $0.01 per share; 1,000,000 shares      
    authorized; no shares issued or outstanding)   –     –     –  
    Common stock (par value $0.01; 20,000,000 shares authorized;      
    8,507,429 shares issued; 8,027,177, 8,016,784 and 8,016,784      
    shares outstanding at December 31, 2024, September 30, 2024, and      
    December 31, 2023, respectively   85     85     85  
    Additional paid-in capital   108,334     109,040     108,819  
    Unallocated common stock held by Employee Stock Ownership Plan   (4,011 )   (4,154 )   (4,583 )
    Treasury stock, at cost (480,252, 490,645 and 490,645 shares at      
    December 31, 2024, September 30, 2024, and December 31, 2023, respectively)   (10,761 )   (11,124 )   (11,124 )
    Retained earnings   101,264     98,979     96,021  
    Accumulated other comprehensive loss, net of tax   (20,146 )   (15,096 )   (19,945 )
    Total shareholders’ equity   174,765     177,730     169,273  
    Total liabilities and shareholders’ equity $ 2,103,090   $ 2,145,113   $ 2,075,666  
           
    Income Statement   (Unaudited)     (Unaudited)
    (Dollars in thousands, except per share data) Three Months Ended   Years Ended
      December 31, September 30, December 31,   December 31,
      2024 2024 2023   2024 2023
    Interest and dividend income:            
    Interest and fees on loans $ 23,756   $ 23,802   $ 21,481     $ 92,282   $ 79,423  
    Securities available-for-sale   2,475     2,598     2,790       10,428     11,376  
    FRB and FHLB dividends   308     266     247       1,085     727  
    Other interest income   148     94     23       416     89  
    Total interest and dividend income   26,687     26,760     24,541       104,211     91,615  
    Interest expense:            
    Interest expense on deposits   7,216     7,190     6,090       27,838     17,857  
    FHLB advances and other borrowings   2,005     3,084     2,569       10,211     8,562  
    Other long-term debt   676     684     684       2,724     2,719  
    Total interest expense   9,897     10,958     9,343       40,773     29,138  
    Net interest income   16,790     15,802     15,198       63,438     62,477  
    (Recapture) provision for credit losses   (36 )   277     270       518     1,456  
    Net interest income after provision for credit losses   16,826     15,525     14,928       62,920     61,021  
                 
    Noninterest income:            
    Service charges on deposit accounts   387     430     444       1,645     1,757  
    Mortgage banking, net   2,818     2,602     3,718       10,014     14,970  
    Interchange and ATM fees   675     662     663       2,540     2,524  
    Appreciation in cash surrender value of life insurance   408     1,038     301       2,054     1,466  
    Net loss on sale of available-for-sale securities   (141 )   –     –       (141 )   (222 )
    Other noninterest income   425     251     686       1,664     2,227  
    Total noninterest income   4,572     4,983     5,812       17,776     22,722  
                 
    Noninterest expense:            
    Salaries and employee benefits   9,830     9,894     11,359       39,715     42,973  
    Occupancy and equipment expense   2,194     2,134     1,972       8,531     8,072  
    Data processing   1,715     1,587     1,673       6,209     5,943  
    Software subscriptions   576     511     519       2,127     2,064  
    Advertising   466     277     445       1,312     1,375  
    Amortization   337     337     386       1,391     1,587  
    Loan costs   372     385     461       1,567     1,887  
    FDIC insurance premiums   287     295     288       1,165     1,150  
    Professional and examination fees   596     438     438       1,941     1,922  
    Other noninterest expense   1,323     1,412     1,350       5,348     5,116  
    Total noninterest expense   17,696     17,270     18,891       69,306     72,089  
                 
    Income before provision for income taxes   3,702     3,238     1,849       11,390     11,654  
    Provision (benefit) for income taxes   269     529     (315 )     1,612     1,598  
    Net income $ 3,433   $ 2,709   $ 2,164     $ 9,778   $ 10,056  
                 
    Basic earnings per common share $ 0.44   $ 0.35   $ 0.28     $ 1.25   $ 1.29  
    Diluted earnings per common share $ 0.44   $ 0.34   $ 0.28     $ 1.24   $ 1.29  
                 
    Basic weighted average shares outstanding   7,862,279     7,836,921     7,809,274       7,838,822     7,793,352  
                 
    Diluted weighted average shares outstanding   7,868,507     7,860,138     7,815,022       7,853,792     7,798,244  
                 
    ADDITIONAL FINANCIAL INFORMATION   (Unaudited)  
    (Dollars in thousands, except per share data) Three Months Ended or Years Ended
      December 31, September 30, December 31,
      2024 2024 2023
           
    Mortgage Banking Activity (For the quarter):      
    Net gain on sale of mortgage loans $ 2,036   $ 1,691   $ 2,845  
    Net change in fair value of loans held-for-sale and derivatives   (3 )   159     (40 )
    Mortgage servicing income, net   785     752     913  
    Mortgage banking, net $ 2,818   $ 2,602   $ 3,718  
           
    Mortgage Banking Activity (Year-to-date):      
    Net gain on sale of mortgage loans $ 6,741     $ 11,396  
    Net change in fair value of loans held-for-sale and derivatives   (5 )     194  
    Mortgage servicing income, net   3,278       3,380  
    Mortgage banking, net $ 10,014     $ 14,970  
           
    Performance Ratios (For the quarter):      
    Return on average assets   0.65%   0.51%   0.42%
    Return on average equity   8.12%   6.56%   5.68%
    Yield on average interest earning assets   5.70%   5.66%   5.36%
    Cost of funds   2.69%   2.89%   2.58%
    Net interest margin   3.59%   3.34%   3.32%
    Core efficiency ratio*   81.26%   81.47%   88.08%
           
    Performance Ratios (Year-to-date):      
    Return on average assets   0.47%     0.50%
    Return on average equity   5.94%     6.33%
    Yield on average interest earning assets   5.62%     5.14%
    Cost of funds   2.76%     2.11%
    Net interest margin   3.42%     3.51%
    Core efficiency ratio*   83.62%     82.75%
           
    * The core efficiency ratio is a non-GAAP ratio that is calculated by dividing non-interest expense, exclusive of acquisition
    costs and intangible asset amortization, by the sum of net interest income and non-interest income.    
           
           
           
    ADDITIONAL FINANCIAL INFORMATION      
    (Dollars in thousands, except per share data)      
           
    Asset Quality Ratios and Data: As of or for the Three Months Ended
      December 31, September 30, December 31,
      2024 2024 2023
           
    Nonaccrual loans $ 3,227   $ 3,859   $ 8,395  
    Loans 90 days past due and still accruing   623     944     26  
    Total nonperforming loans   3,850     4,803     8,421  
    Other real estate owned and other repossessed assets   45     4     5  
    Total nonperforming assets $ 3,895   $ 4,807   $ 8,426  
           
    Nonperforming loans / portfolio loans   0.25%   0.31%   0.57%
    Nonperforming assets / assets   0.19%   0.22%   0.41%
    Allowance for credit losses / portfolio loans   1.11%   1.12%   1.11%
    Allowance for credit losses/ nonperforming loans   437.66%   356.65%   195.23%
    Gross loan charge-offs for the quarter $ 51   $ 22   $ 11  
    Gross loan recoveries for the quarter $ 7   $ 5   $ 1  
    Net loan charge-offs for the quarter $ 44   $ 17   $ 10  
           
           
      December 31, September 30, December 31,
      2024 2024 2023
    Capital Data (At quarter end):      
    Common shareholders’ equity (book value) per share $ 21.77   $ 22.17   $ 21.11  
    Tangible book value per share** $ 16.88   $ 17.23   $ 16.05  
    Shares outstanding   8,027,177     8,016,784     8,016,784  
    Tangible common equity to tangible assets***   6.57%   6.56%   6.32%
           
    Other Information:      
    Average investment securities for the quarter $ 300,088   $ 305,730   $ 306,678  
    Average investment securities year-to-date $ 306,538   $ 308,688   $ 328,533  
    Average loans for the quarter **** $ 1,533,686   $ 1,547,246   $ 1,494,181  
    Average loans year-to-date **** $ 1,523,384   $ 1,519,951   $ 1,436,672  
    Average earning assets for the quarter $ 1,858,078   $ 1,874,669   $ 1,817,419  
    Average earning assets year-to-date $ 1,850,120   $ 1,847,468   $ 1,780,727  
    Average total assets for the quarter $ 2,107,357   $ 2,116,839   $ 2,062,267  
    Average total assets year-to-date $ 2,092,051   $ 2,086,951   $ 2,015,586  
    Average deposits for the quarter $ 1,671,653   $ 1,622,254   $ 1,626,598  
    Average deposits year-to-date $ 1,636,390   $ 1,624,636   $ 1,603,861  
    Average equity for the quarter $ 169,054   $ 165,162   $ 152,516  
    Average equity year-to-date $ 164,591   $ 163,106   $ 158,807  
           
           
           
    ** The tangible book value per share is a non-GAAP ratio that is calculated by dividing shareholders’ equity,
    less goodwill and core deposit intangible, by common shares outstanding.
    *** The tangible common equity to tangible assets is a non-GAAP ratio that is calculated by dividing shareholders’
    equity, less goodwill and core deposit intangible, by total assets, less goodwill and core deposit intangible.
    **** Includes loans held for sale
    Reconciliation of Non-GAAP Financial Measures          
                 
    Core Efficiency Ratio   (Unaudited)     (Unaudited)
    (Dollars in thousands) Three Months Ended   Years Ended
      December 31, September 30, December 31,   December 31,
      2024 2024 2023   2024 2023
    Calculation of Core Efficiency Ratio:            
    Noninterest expense $ 17,696   $ 17,270   $ 18,891     $ 69,306   $ 72,089  
    Intangible asset amortization   (337 )   (337 )   (386 )     (1,391 )   (1,587 )
    Core efficiency ratio numerator   17,359     16,933     18,505       67,915     70,502  
                 
    Net interest income   16,790     15,802     15,198       63,438     62,477  
    Noninterest income   4,572     4,983     5,812       17,776     22,722  
    Core efficiency ratio denominator   21,362     20,785     21,010       81,214     85,199  
                 
    Core efficiency ratio (non-GAAP)   81.26%   81.47%   88.08%     83.62%   82.75%
                 
    Tangible Book Value and Tangible Assets (Unaudited)
    (Dollars in thousands, except per share data) December 31, September 30, December 31,
      2024 2024 2023
    Tangible Book Value:      
    Shareholders’ equity $ 174,765   $ 177,730   $ 169,273  
    Goodwill and core deposit intangible, net   (39,239 )   (39,574 ) $ (40,620 )
    Tangible common shareholders’ equity (non-GAAP) $ 135,526   $ 138,156   $ 128,653  
           
    Common shares outstanding at end of period   8,027,177     8,016,784     8,016,784  
           
    Common shareholders’ equity (book value) per share (GAAP) $ 21.77   $ 22.17   $ 21.11  
           
    Tangible common shareholders’ equity (tangible book value)      
    per share (non-GAAP) $ 16.88   $ 17.23   $ 16.05  
           
    Tangible Assets:      
    Total assets $ 2,103,090   $ 2,145,113   $ 2,075,666  
    Goodwill and core deposit intangible, net   (39,239 )   (39,574 )   (40,620 )
    Tangible assets (non-GAAP) $ 2,063,851   $ 2,105,539   $ 2,035,046  
           
    Tangible common shareholders’ equity to tangible assets      
    (non-GAAP)   6.57%   6.56%   6.32%
           
    Contacts: Laura F. Clark, President and CEO
    (406) 457-4007
    Miranda J. Spaulding, SVP and CFO
    (406) 441-5010
       

    The MIL Network –

  • MIL-OSI USA: Warren Writes Fox News Digital Op-ed Challenging Elon Musk to Cut $2 Trillion in Waste By Taking On Billionaires and Giant Corporations

    US Senate News:

    Source: United States Senator for Massachusetts – Elizabeth Warren
    January 28, 2025
    “Here’s something President Donald Trump, Elon Musk, and I agree on: the federal government throws away trillions of dollars on wasteful spending.”
    “Instead of cutting help for people who rely on Medicare, Social Security and the VA, let’s focus on the billionaires and billionaire corporations who are feasting off the American taxpayer.”
    Warren Op-Ed in Fox News Digital
    Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, published an op-ed outlining her recommendations for cutting government waste to make government more efficient and save taxpayers money. In a public letter last week, Warren proposed 30 recommendations for President Trump and Elon Musk, head of the Department of Government Efficiency, to cut at least $2 trillion in government waste over the next decade. 
    Musk has already walked back his goal of $2 trillion of cuts. Unlike the Republican plans, none of these recommendations would cut access to Medicare, Medicaid, Social Security, veterans’ benefits, and other programs that tens of millions of Americans count on–and instead focus on waste, fraud, and abuse in government spending. 
    Read the full op-ed here and below: 
    Senator Elizabeth Warren: Trump, Musk and I agree on something important. And I’ve got 30 ways to get it doneJanuary 28, 2025
    Here’s something President Donald Trump, Elon Musk, and I agree on: the federal government throws away trillions of dollars on wasteful spending. I have spent years trying to squeeze government waste out of our budget, and I’m ready to work with Musk to make government more efficient and save taxpayers money. But here’s the thing: we need to focus in the right place. Instead of cutting help for people who rely on Medicare, Social Security and the VA, let’s focus on the billionaires and billionaire corporations who are feasting off the American taxpayer.
    After promising his Department of Government Efficiency (DOGE) would cut $2 trillion in government waste, Musk’s ambition is rapidly shrinking. Within weeks, he cut his goal in half to $1 trillion– all before he’s actually cut a single dollar. I don’t want Musk to fold so quickly. I crunched the numbers and found $2 trillion that we could cut over the next 10 years by focusing on the guys who are getting rich off our government. Last week, I sent Musk my blueprint to do just that. 
    Congressional Republicans’ initial plans call for cuts to government programs that millions of Americans rely on to pay their bills each month – things like Social Security, money to cover nursing home costs, and help buying private health insurance. Scrapping essential services is not efficiency; it is cold-hearted cruelty. Tossing old folks out of nursing homes or telling people that their insurance has been cancelled won’t save money; it just makes lives tougher for the families that struggle to pick up the slack. If Musk and the Republicans take that route, it will be a disaster for working people and I will fight back.
    But we don’t have to cut the programs Americans rely on. We can eliminate at least $2 trillion of government waste over the next decade without cutting programs that help our grandparents, our veterans, and our children. In fact, I have 30 specific proposals to do just that. I’ll share a few of them now, but you can read all about them in my letter to Musk here.
    Here are a few examples of government waste we could start with. First, we could negotiate better contracts for the Department of Defense. In 2023, the DoD spent $440.7 billion on contracts – and giant contractors overcharge us on nearly everything. The Air Force pays over 7,500% more on soap dispensers than regular Americans do. The Army pays $71 for pins that should cost less than a nickel. Spending is so out of control at DoD that it is the only agency in government that cannot pass a simple audit. American taxpayers are sick of getting scammed by overpaid military contractors. My recommendations on Defense spending alone would save nearly $200 billion in the next 12 years. 
    Taxpayers are also getting swindled by for-profit health insurance companies. Right now, about half of all seniors have been lured into a privatized Medicare program called Medicare Advantage. This program was started to lower costs for seniors, but over time the insurers figured out how to boost their profits by manipulating claims and denying coverage. It’s so bad now that the non-partisan Medicare Payment Advisory Commission estimates that privatized Medicare insurers overcharged taxpayers by nearly $83 billion in 2024 alone, while other independent researchers put the dollar figure at $140 billion. Rooting out their dirty tactics could save more than a trillion dollars over ten years without cutting Medicare benefits by one penny.
    Cracking down on health care profiteering isn’t a partisan issue. I’ve partnered with Republican Josh Hawley of Missouri to claw back billions more from corporations that are cheating the government on health care costs. He’s not the only Republican who agrees that we need to stop corporations from overcharging taxpayers for lifesaving medications: President Trump has voiced support for another one of my proposals to cut wasteful spending, Medicare price negotiations. By expanding this program to bring the prices down for the most expensive drugs covered by Medicare, the government could save taxpayers another $200 billion over the next decade.
    We can bring down the deficit by cutting spending, but we can also improve our financial position by making millionaires and billionaires pay their fair share. Hedge funds and private equity companies use loopholes to avoid paying anywhere between $1.4 billion and $18 billion each year – that’s an easy fix. By closing just one big estate tax exemption loophole abused by the ultra-rich, the US government could save another $60 billion per year. We should close those loopholes – and fully fund the IRS to catch wealthy tax cheats who think they’re above the law.  
    My list of cuts and loophole closers will save $2 trillion. So where are Elon Musk, Donald Trump and the DOGE project? Why give up so quickly on beating back the defense contractors, health insurance giants, and other huge companies that are ripping off the American people? If Musk and Trump have the courage to cut this waste, I’ve got a plan and 30 specific recommendations to get it done.
    Democrat Elizabeth Warren represents Massachusetts in the United States Senate.

    MIL OSI USA News –

  • MIL-OSI: Coastal Financial Corporation Announces Fourth Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    EVERETT, Wash., Jan. 28, 2025 (GLOBE NEWSWIRE) — Coastal Financial Corporation (Nasdaq: CCB) (the “Company”, “Coastal”, “we”, “our”, or “us”), the holding company for Coastal Community Bank (the “Bank”), through which it operates a community-focused bank with an industry leading banking as a service (“BaaS”) segment, today reported unaudited financial results for the quarter ended December 31, 2024, including net income of $13.4 million, or $0.94 per diluted common share, compared to $13.5 million, or $0.97 per diluted common share, for the three months ended September 30, 2024 and $45.2 million, or $3.26 per diluted common share, for the year ended December 31, 2024, compared to $44.6 million, or $3.27 per diluted common share for the year ended December 31, 2023.

    Management Discussion of the Quarter and Full-year Results

    “2024 was highlighted by the completion of our $98.0 million capital raise during the fourth quarter, which we will utilize to support growth of the Bank including in our CCBX segment,” said CEO Eric Sprink. “We saw high quality net loan growth of $67.7 million despite selling $845.5 million in loans during the fourth quarter, and our CCBX program fee income continued to increase which was up 56.9% for full-year 2024 relative to the prior year. We continue to invest heavily in CCBX to support future growth, and we are pleased to have three letters of intent (“LOI”) signed going into 2025 with an active pipeline.”

    Key Points for Fourth Quarter and Our Go-Forward Strategy

    • Completed Capital Raise Allows CCBX Growth to Continue. During the fourth quarter of 2024, we completed a $98.0 million common equity raise, which was priced at $71.00/share. Proceeds will be used for general corporate purposes and to support growth of the Bank including in our CCBX segment. As of December 31, 2024 we had three signed LOIs and continue to have an active pipeline for 2025. The growth in common-equity tier 1 and total risk-based capital to 12.04% and 14.67%, respectively, includes the benefit of the capital raise.
    • Strong Annual Growth in CCBX Program Fees. Total BaaS program fee income was $25.6 million for the year ended December 31, 2024, an increase of $9.3 million, or 56.9%, from the year ended December 31, 2023, and is representative of growth in partner transaction activity and expanded product offerings within our CCBX operating segment. Trends in CCBX noninterest income were also positive during the quarter, with total program fees of $8.2 million for the three months ended December 31, 2024, an increase of $1.8 million, or 27.6%, from the three months ended September 30, 2024.
    • Investments for Growth Continues. Total non-interest expense of $64.2 million was down $1.4 million, or 2.1%, as compared to $65.6 million in the third quarter of 2024, mainly driven by lower BaaS loan expense, partially offset by higher salaries and employee benefits, point of sale expense, and legal and professional expenses. As we increase the number of new CCBX partners and programs launching in 2025, we expect that expenses will tend to be front-loaded with a focus on compliance and operational risk before any new program reaches significant revenues.
    • Off Balance Sheet Activity Update. During the fourth quarter of 2024, we sold $845.5 million of loans, the majority of which were credit card receivables, and swept $273.2 million of deposits off balance-sheet. We are able to retain a portion of the fee income on these sold credit card loans. As of December 31, 2024 there were 182,449 credit cards with fee earning potential, an increase of 101,023 compared to the quarter ended September 30, 2024 and an increase of 172,400 from December 31, 2023.
    • Continued Monitoring of CCBX Risk. We remain fully indemnified against fraud and 98.7% indemnified against credit risk with our CCBX partners as of year-end of 2024.

    Fourth Quarter 2024 Financial Highlights

    The tables below outline some of our key operating metrics.

      Three Months Ended
    (Dollars in thousands, except share and per share data; unaudited) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Income Statement Data:                  
    Interest and dividend income $ 96,587     $ 105,079     $ 97,487     $ 90,472     $ 88,243  
    Interest expense   30,071       32,892       31,250       29,536       28,586  
    Net interest income   66,516       72,187       66,237       60,936       59,657  
    Provision for credit losses   61,867       70,257       62,325       83,158       60,789  
    Net interest (expense)/ income after provision for credit losses   4,649       1,930       3,912       (22,222 )     (1,132 )
    Noninterest income   76,756       80,068       69,918       86,955       64,694  
    Noninterest expense   64,206       65,616       58,809       56,018       51,703  
    Provision for income tax   3,832       2,926       3,425       1,915       2,847  
    Net income   13,367       13,456       11,596       6,800       9,012  
                       
      As of and for the Three Month Period
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Balance Sheet Data:                  
    Cash and cash equivalents $ 452,513     $ 484,026     $ 487,245     $ 515,128     $ 483,128  
    Investment securities   47,321       48,620       49,213       50,090       150,364  
    Loans held for sale   20,600       7,565       —       797       —  
    Loans receivable   3,486,565       3,418,832       3,326,460       3,199,554       3,026,092  
    Allowance for credit losses   (176,994 )     (170,263 )     (147,914 )     (139,258 )     (116,958 )
    Total assets   4,121,208       4,065,821       3,961,546       3,865,258       3,753,366  
    Interest bearing deposits   3,057,808       3,047,861       2,949,643       2,888,867       2,735,161  
    Noninterest bearing deposits   527,524       579,427       593,789       574,112       625,202  
    Core deposits (1)   3,123,434       3,190,869       3,528,339       3,447,864       3,342,004  
    Total deposits   3,585,332       3,627,288       3,543,432       3,462,979       3,360,363  
    Total borrowings   47,884       47,847       47,810       47,771       47,734  
    Total shareholders’ equity   438,704       331,930       316,693       303,709       294,978  
                       
    Share and Per Share Data (2):                  
    Earnings per share – basic $ 0.97     $ 1.00     $ 0.86     $ 0.51     $ 0.68  
    Earnings per share – diluted $ 0.94     $ 0.97     $ 0.84     $ 0.50     $ 0.66  
    Dividends per share   —       —       —       —       —  
    Book value per share (3) $ 29.37     $ 24.51     $ 23.54     $ 22.65     $ 22.17  
    Tangible book value per share (4) $ 29.37     $ 24.51     $ 23.54     $ 22.65     $ 22.17  
    Weighted avg outstanding shares – basic   13,828,605       13,447,066       13,412,667       13,340,997       13,286,828  
    Weighted avg outstanding shares – diluted   14,268,229       13,822,270       13,736,508       13,676,917       13,676,513  
    Shares outstanding at end of period   14,935,298       13,543,282       13,453,805       13,407,320       13,304,339  
    Stock options outstanding at end of period   186,354       198,370       286,119       309,069       354,969  

    See footnotes that follow the tables below

      As of and for the Three Month Period
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Credit Quality Data:                  
    Nonperforming assets (5) to total assets   1.52 %     1.63 %     1.34 %     1.42 %     1.43 %
    Nonperforming assets (5) to loans receivable and OREO   1.80 %     1.94 %     1.60 %     1.71 %     1.78 %
    Nonperforming loans (5) to total loans receivable   1.80 %     1.94 %     1.60 %     1.71 %     1.78 %
    Allowance for credit losses to nonperforming loans   282.5 %     256.5 %     278.1 %     253.8 %     217.2 %
    Allowance for credit losses to total loans receivable   5.08 %     4.98 %     4.45 %     4.35 %     3.86 %
    Gross charge-offs $ 61,585     $ 53,305     $ 55,207     $ 58,994     $ 47,652  
    Gross recoveries $ 5,646     $ 4,069     $ 1,973     $ 1,776     $ 2,781  
    Net charge-offs to average loans (6)   6.51 %     5.65 %     6.57 %     7.34 %     5.92 %
                       
    Capital Ratios:                  
    Company                  
    Tier 1 leverage capital   10.78 %     8.40 %     8.31 %     8.24 %     8.10 %
    Common equity Tier 1 risk-based capital   12.04 %     9.24 %     9.03 %     8.98 %     9.10 %
    Tier 1 risk-based capital   12.14 %     9.34 %     9.13 %     9.08 %     9.20 %
    Total risk-based capital   14.67 %     11.89 %     11.70 %     11.70 %     11.87 %
    Bank                  
    Tier 1 leverage capital   10.64 %     9.29 %     9.24 %     9.19 %     9.06 %
    Common equity Tier 1 risk-based capital   11.99 %     10.34 %     10.15 %     10.14 %     10.30 %
    Tier 1 risk-based capital   11.99 %     10.34 %     10.15 %     10.14 %     10.30 %
    Total risk-based capital   13.28 %     11.63 %     11.44 %     11.43 %     11.58 %

    (1) Core deposits are defined as all deposits excluding brokered and time deposits.
    (2) Share and per share amounts are based on total actual or average common shares outstanding, as applicable.
    (3) We calculate book value per share as total shareholders’ equity at the end of the relevant period divided by the outstanding number of our common shares at the end of each period.
    (4) Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets as of any of the dates indicated. As a result, tangible book value per share is the same as book value per share as of each of the dates indicated.
    (5) Nonperforming assets and nonperforming loans include loans 90+ days past due and accruing interest.
    (6) Annualized calculations.

    Key Performance Ratios

    Return on average assets (“ROA”) was 1.30% for the quarter ended December 31, 2024 compared to 1.34% and 0.97% for the quarters ended September 30, 2024 and December 31, 2023, respectively.  ROA for the quarter ended December 31, 2024, decreased 0.04% and increased 0.33% compared to September 30, 2024 and December 31, 2023, respectively. Noninterest expenses were lower for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 largely due to a decrease in BaaS loan expense, which is directly related to the amount of interest earned on CCBX loans, and higher than the quarter ended December 31, 2023 largely due to an increase in salaries and employee benefits, data processing and software licenses, legal and professional expenses and point of sale expenses, all of which are related to the growth of Company and investments in technology and risk management.

    Yield on earning assets and yield on loans receivable decreased 1.14% and 0.99%, respectively, for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024. This decrease is due to a combination of factors. We continue to refine our credit approach with partners, widening the scope of loans that we are moving to nonaccrual, which decreased loan interest income in the quarter ended December 31, 2024 as compared to prior quarters. Average loans receivable as of December 31, 2024 decreased $45.4 million compared to September 30, 2024 as we continue to sell CCBX loans as part of our on-going strategy to manage the loan portfolio and credit quality. New loans are being booked with enhanced credit standards, which typically results in a lower interest rate than some of the higher risk loans that have paid off or we have chosen to sell.

    The following table shows the Company’s key performance ratios for the periods indicated.  

        Three Months Ended   Twelve Months Ended
    (unaudited)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
                                 
    Return on average assets (1)   1.30%   1.34%   1.21%   0.73%   0.97%   1.15%   1.28%
    Return on average equity (1)   14.90%   16.67%   15.22%   9.21%   12.35%   14.11%   16.41%
    Yield on earnings assets (1)   9.65%   10.79%   10.49%   10.07%   9.77%   10.25%   9.82%
    Yield on loans receivable (1)   10.44%   11.43%   11.23%   10.85%   10.71%   10.99%   10.60%
    Cost of funds (1)   3.24%   3.62%   3.60%   3.52%   3.39%   3.49%   2.91%
    Cost of deposits (1)   3.21%   3.59%   3.58%   3.49%   3.36%   3.46%   2.87%
    Net interest margin (1)   6.65%   7.41%   7.13%   6.78%   6.61%   6.99%   7.10%
    Noninterest expense to average assets (1)   6.23%   6.54%   6.14%   6.04%   5.56%   6.24%   5.90%
    Noninterest income to average assets (1)   7.45%   7.98%   7.30%   9.38%   6.95%   8.00%   5.97%
    Efficiency ratio   44.81%   43.10%   43.19%   37.88%   41.58%   42.21%   45.92%
    Loans receivable to deposits (2)   97.82%   94.46%   93.88%   92.42%   90.05%   97.8%   90.1%

    (1) Annualized calculations shown for quarterly periods presented.
    (2) Includes loans held for sale.

    Management Outlook; CEO Eric Sprink

    “As we look forward to 2025, our strategy involves selectively expanding our current base of CCBX partners while continuing to invest in and enhance our technology and risk management infrastructure. This will enable us to support the next phase of growth within CCBX more efficiently. Additionally, we are focused on growing noninterest income through increased transaction activity and new product offerings with our established partners. We plan to continue selling credit card loans while retaining a portion of the fee income for our role in processing transactions, which offers an additional source of noninterest income without adding on-balance-sheet risk. We believe that by increasing noninterest income, we can mitigate the uncertainties associated with fluctuating interest rates and provide a more stable income stream in the future.” said CEO Eric Sprink.

    Coastal Financial Corporation Overview

    The Company has one main subsidiary, the Bank which consists of three segments: CCBX, the community bank and treasury & administration.  The CCBX segment includes all of our BaaS activities, the community bank segment includes all community banking activities, and the treasury & administration segment includes treasury management, overall administration and all other aspects of the Company.  

    CCBX Performance Update

    Our CCBX segment continues to evolve, and we have 24 relationships, at varying stages, including three signed letters of intent as of December 31, 2024.  We continue to refine the criteria for CCBX partnerships, exploring relationships with larger more established partners, with experienced management teams, existing customer bases and strong financial positions and will continue to exit relationships where it makes sense for us to do so.

    As we explore relationships with new partners we plan to continue expanding product offerings with our existing CCBX partners. As we become more proficient in the BaaS space we aim to cultivate new relationships that align with our long-term goals. We believe that a strategy of adding new partnerships and launching new products with existing partners positions us to reach a wide and established customer base with a modest increase in regulatory risk given that we have already vetted existing partners and have an operational history. Increases in partner activity/transaction counts is positively impacting noninterest income and we expect that trend to continue as products launched earlier in the year gain traction. We plan to continue selling loans as part of our strategy to balance partner and lending limits, and manage the loan portfolio and credit quality. We retain a portion of the fee income for our role in processing transactions on sold credit card balances, and plan to continue this strategy to provide an on-going and passive revenue stream with no on balance sheet risk.

    The following table illustrates the activity and evolution in CCBX relationships for the periods presented.

      As of
    (unaudited) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023
    Active 19 19 19
    Friends and family / testing 1 1 1
    Implementation / onboarding 1 1 1
    Signed letters of intent 3 1 0
    Wind down – active but preparing to exit relationship 0 0 0
    Total CCBX relationships 24 22 21
           

    CCBX loans increased $82.3 million, or 5.4%, to $1.60 billion despite selling $845.5 million loans during the three months ended December 31, 2024. In accordance with the program agreement for one partner, effective April 1, 2024, the portion of the CCBX portfolio that we are responsible for losses on decreased from 10% to 5%. At December 31, 2024 the portion of this portfolio for which we are responsible represented $20.6 million in loans.

    The following table details the CCBX loan portfolio:

    CCBX   As of
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands; unaudited)   Balance   % to Total   Balance   % to Total   Balance   % to Total
    Commercial and industrial loans:                        
    Capital call lines   $ 109,017     6.8 %   $ 103,924     6.8 %   $ 87,494     7.3 %
    All other commercial & industrial loans     33,961     2.1       36,494     2.4       54,298     4.5  
    Real estate loans:                        
    Residential real estate loans     267,707     16.7       265,402     17.5       238,035     19.9  
    Consumer and other loans:                        
    Credit cards     528,554     33.0       633,691     41.6       505,837     42.3  
    Other consumer and other loans     664,780     41.4       482,228     31.7       310,574     26.0  
    Gross CCBX loans receivable     1,604,019     100.0 %     1,521,739     100.0 %     1,196,238     100.0 %
    Net deferred origination (fees) costs     (442 )         (447 )         (300 )    
    Loans receivable   $ 1,603,577         $ 1,521,292         $ 1,195,938      
    Loan Yield – CCBX (1)(2)     15.28 %         17.35 %         17.36 %    
                             

    (1) CCBX yield does not include the impact of BaaS loan expense.  BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
    (2) Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.

    The increase in CCBX loans in the quarter ended December 31, 2024, includes an increase of $77.4 million or 6.9%, in consumer and other loans, an increase of $5.1 million, or 4.9%, in capital call lines as a result of normal balance fluctuations and business activities, and an increase of $2.3 million, or 0.9%, in residential real estate loans. We continue to monitor and manage the CCBX loan portfolio, and sold $845.5 million in CCBX loans during the quarter ended December 31, 2024 compared to sales of $423.7 million in the quarter ended September 30, 2024. We continue to reposition ourselves by managing CCBX credit and concentration levels in an effort to optimize our loan portfolio and generate off balance sheet fee income.

    CCBX loan yield decreased 2.06% for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 as a result of our widening the scope of loans that we are moving to nonaccrual, which decreased loan interest income in the quarter ended December 31, 2024. Also contributing to the decrease are lower interest rates on new CCBX loans, which are replacing higher risk and higher rate loans that have paid off or were sold as part of our strategy to manage the loan portfolio and credit quality. The recent decrease in the Fed funds interest rate further contributed to the change.

    The following chart show the growth in credit card accounts that we are able to generate fee income from. This includes accounts with balances, which are included in our loan totals, and accounts that have been sold and have no corresponding balance in our loan totals, but that we are still able to generate fee income on.

    The following table details the CCBX deposit portfolio:

    CCBX   As of
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands; unaudited)   Balance   % to Total   Balance   % to Total   Balance   % to Total
    Demand, noninterest bearing   $ 55,686     2.7 %   $ 60,655     2.9 %   $ 63,630     3.4 %
    Interest bearing demand and
    money market    		     1,958,459     94.9       1,991,858     94.6       1,794,168     96.3  
    Savings     5,710     0.3       5,204     0.3       4,964     0.3  
    Total core deposits     2,019,855     97.9       2,057,717     97.8       1,862,762     100.0  
    Other deposits     44,233     2.1       47,046     2.2       —     —  
    Total CCBX deposits   $ 2,064,088     100.0 %   $ 2,104,763     100.0 %   $ 1,862,762     100.0 %
    Cost of deposits (1)     4.19 %         4.82 %         4.90 %    

    (1)  Cost of deposits is annualized for the three months ended for each period presented.

    CCBX deposits decreased $40.7 million, or 1.9%, in the three months ended December 31, 2024 to $2.06 billion as a result of normal balance fluctuations. This excludes the $273.2 million in CCBX deposits that were transferred off balance sheet for increased Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and sweep purposes, compared to $214.5 million for the quarter ended September 30, 2024. Amounts in excess of FDIC insurance coverage are transferred, using a third party facilitator/vendor sweep product, to participating financial institutions.

    Community Bank Performance Update

    In the quarter ended December 31, 2024, the community bank saw net loans decrease $14.6 million, or 0.8%, to $1.88 billion.

    The following table details the Community Bank loan portfolio:

    Community Bank   As of
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands; unaudited)   Balance   % to Total   Balance   % to Total   Balance   % to Total
    Commercial and industrial loans   $ 150,395     8.0 %   $ 152,161     8.0 %   $ 149,502     8.2 %
    Real estate loans:                        
    Construction, land and land development loans     148,198     7.8       163,051     8.6       157,100     8.5  
    Residential real estate loans     202,064     10.7       212,467     11.2       225,391     12.3  
    Commercial real estate loans     1,374,801     72.8       1,362,452     71.5       1,303,533     70.9  
    Consumer and other loans:                        
    Other consumer and other loans     13,542     0.7       14,173     0.7       1,628     0.1  
    Gross Community Bank loans receivable     1,889,000     100.0 %     1,904,304     100.0 %     1,837,154     100.0 %
    Net deferred origination fees     (6,012 )         (6,764 )         (7,000 )    
    Loans receivable   $ 1,882,988         $ 1,897,540         $ 1,830,154      
    Loan Yield(1)     6.53 %         6.64 %         6.32 %    

    (1) Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.

    Community bank loans decreased $14.9 million in construction, land and land development loans, decreased $1.8 million in commercial and industrial loans and decreased $631,000 in consumer and other loans, and were partially offset by an increase in commercial real estate loans of $12.3 million during the quarter ended December 31, 2024.

    The following table details the community bank deposit portfolio:

    Community Bank   As of
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands; unaudited)   Balance   % to Total   Balance   % to Total   Balance   % to Total
    Demand, noninterest bearing   $ 471,838     31.0 %   $ 518,772     34.1 %   $ 561,572     37.5 %
    Interest bearing demand and money market     570,625     37.5       552,108     36.3       846,072     56.5  
    Savings     61,116     4.0       62,272     4.1       71,598     4.8  
    Total core deposits     1,103,579     72.5       1,133,152     74.5       1,479,242     98.8  
    Other deposits     400,118     26.3       373,681     24.5       1     0.0  
    Time deposits less than $100,000     5,920     0.4       6,305     0.4       8,109     0.5  
    Time deposits $100,000 and over     11,627     0.8       9,387     0.6       10,249     0.7  
    Total Community Bank deposits   $ 1,521,244     100.0 %   $ 1,522,525     100.0 %   $ 1,497,601     100.0 %
    Cost of deposits(1)     1.86 %         1.92 %         1.57 %    

    (1) Cost of deposits is annualized for the three months ended for each period presented.

    Community bank deposits decreased $1.3 million, or 0.1%, during the three months ended December 31, 2024 to $1.52 billion as result of normal balance fluctuations. The community bank segment includes noninterest bearing deposits of $471.8 million, or 31.0%, of total community bank deposits, resulting in a cost of deposits of 1.86%, which compared to 1.92% for the quarter ended September 30, 2024, largely due to the decreases in the Fed funds rate late in the third quarter and during the fourth quarter of 2024. The cost of community bank deposits are projected to decline further as the Fed funds rate had a decrease of 0.25%, which occurred in December 2024 and the full quarterly effect of that decrease will not be recognized until the first quarter of 2025.

    Net Interest Income and Margin Discussion

    Net interest income was $66.5 million for the quarter ended December 31, 2024, a decrease of $5.7 million, or 7.9%, from $72.2 million for the quarter ended September 30, 2024, and an increase of $6.9 million, or 11.5%, from $59.7 million for the quarter ended December 31, 2023. The decrease in net interest income compared to September 30, 2024, was a result of a decrease in average loans receivable as a result of selling $845.5 million in CCBX loans during the quarter ended December 31, 2024, the recent decrease in the Fed funds interest rate, and continued enhancements to our partner credit practices that resulted in a reduction of interest income on loans. The increase in net interest income compared to December 31, 2023 was largely related to increased yield on loans resulting from higher interest rates and growth in higher yielding loans, partially offset by an increase in cost of funds relating to higher interest rates and growth in interest bearing deposits.  

    Net interest margin was 6.65% for the three months ended December 31, 2024, compared to 7.41% for the three months ended September 30, 2024, largely due to lower loan yield. Net interest margin, net of BaaS loan expense, (A reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release.) was 4.16% for the three months ended December 31, 2024, compared to 4.06% for the three months ended September 30, 2024. Net interest margin was 6.61% for the three months ended December 31, 2023. The increase in net interest margin for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was largely due to an increase in loan yield, partially offset by higher interest rates on interest bearing deposits. Interest and fees on loans receivable decreased $9.9 million, or 9.9%, to $89.7 million for the three months ended December 31, 2024, compared to $99.6 million for the three months ended September 30, 2024, as a result of loan sales and a decrease in the Fed funds interest rate. Additionally, as we continue to refine our credit approach with partners, we are widening the scope of loans that we are moving to nonaccrual which decreased interest income in the quarter ended December 31, 2024 and lowered loan yield and net interest margin; however this also decreased BaaS loan expense (which is in noninterest expense) resulting in no impact to net income. Interest and fees on loans receivable increased $8.6 million, or 10.5%, compared to $81.2 million for the three months ended December 31, 2023, due to an increase in outstanding balances and higher interest rates. Net interest margin, net of Baas loan expense (A reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release.) increased 0.10% for the three months ended December 31, 2024, compared to the three months ended September 30, 2024 and increased 0.25% compared the three months ended December 31, 2023.

    The following tables illustrate how net interest margin and loan yield is affected by BaaS loan expense:

    Consolidated   As of and for the Three Months Ended As of and for the Twelve
    Months Ended
    (dollars in thousands; unaudited)   December 31
    2024    		   September 30
    2024    		   December 31
    2023    		 December 31
    2024    		   December 31
    2023
    Net interest margin, net of BaaS loan expense:              
    Net interest margin (1)     6.65 %     7.41 %     6.61 %   6.99 %     7.10 %
    Earning assets     3,980,078       3,875,911       3,581,772     3,802,275       3,364,406  
    Net interest income (GAAP)     66,516       72,187       59,657     265,876       238,727  
    Less: BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net interest income, net of BaaS loan expense(2)   $ 41,657     $ 39,575     $ 35,347   $ 154,492     $ 151,827  
    Net interest margin, net of BaaS loan expense (1)(2)     4.16 %     4.06 %     3.92 %   4.06 %     4.51 %
    Loan income net of BaaS loan expense divided by average loans:         
    Loan yield (GAAP)(1)     10.44 %     11.43 %     10.71 %   10.99 %     10.60 %
    Total average loans receivable   $ 3,419,476     $ 3,464,871     $ 3,007,289   $ 3,320,582     $ 2,936,908  
    Interest and earned fee income on loans (GAAP)     89,714       99,590       81,159     364,869       311,441  
    BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net loan income(2)   $ 64,855     $ 66,978     $ 56,849   $ 253,485     $ 224,541  
    Loan income, net of BaaS loan expense, divided by average loans (1)(2)     7.55 %     7.69 %     7.50 %   7.63 %     7.65 %

    (1) Annualized calculations shown for periods presented.
    (2) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.

    Average investment securities decreased $820,000 to $48.2 million compared to the three months ended September 30, 2024 and decreased $101.5 million compared to the three months ended December 31, 2023 as a result of principal paydowns and maturing securities.

    Cost of funds was 3.24% for the quarter ended December 31, 2024, a decrease of 38 basis points from the quarter ended September 30, 2024 and a decrease of 16 basis points from the quarter ended December 31, 2023. Cost of deposits for the quarter ended December 31, 2024 was 3.21%, compared to 3.59% for the quarter ended September 30, 2024, and 3.36% for the quarter ended December 31, 2023. The decreased cost of funds and deposits compared to September 30, 2024 and December 31, 2023 was largely due to the recent reductions in the Fed funds rate.

    The following table summarizes the average yield on loans receivable and cost of deposits:

      For the Three Months Ended
      December 31, 2024   September 30, 2024   December 31, 2023
      Yield on
    Loans (2)    		   Cost of
    Deposits (2)    		   Yield on
    Loans (2)    		   Cost of
    Deposits (2)    		   Yield on
    Loans (2)    		   Cost of
    Deposits (2)
    Community Bank 6.53%   1.86%   6.64%   1.92%   6.32%   1.57%
    CCBX (1) 15.28%   4.19%   17.35%   4.82%   17.36%   4.90%
    Consolidated 10.44%   3.21%   11.43%   3.59%   10.71%   3.36%

    (1) Annualized calculations for periods shown for credit and fraud enhancements and originating & servicing CCBX loans.  To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income which can be compared to interest income on the Company’s community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
    (2) Annualized calculations for periods shown.

    The following table illustrates how BaaS loan interest income is affected by BaaS loan expense resulting in net BaaS loan income and the associated yield:

        For the Three Months Ended
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands, unaudited)   Income /
    Expense    		   Income /
    expense divided
    by average
    CCBX loans     (2)    		   Income /
    Expense    		   Income /
    expense divided
    by average
    CCBX loans    (2)    		   Income /
    Expense    		   Income /
    expense divided
    by average
    CCBX loans     (2)
    BaaS loan interest income   $ 58,671   15.28%   $ 67,692   17.35 %   $ 52,327   17.36%
    Less: BaaS loan expense     24,859   6.48%     32,612   8.36 %     24,310   8.06%
    Net BaaS loan income (1)   $ 33,812   8.81%   $ 35,080   8.99 %   $ 28,017   9.30%
    Average BaaS Loans(3)   $ 1,527,178       $ 1,552,443       $ 1,196,137    

    (1) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.
    (2) Annualized calculations shown for quarterly periods presented.
    (3) Includes loans held for sale.

    Noninterest Income Discussion

    Noninterest income was $76.8 million for the three months ended December 31, 2024, a decrease of $3.3 million from $80.1 million for the three months ended September 30, 2024, and an increase of $12.1 million from $64.7 million for the three months ended December 31, 2023. The decrease in noninterest income for the quarter ended December 31, 2024 as compared to the quarter ended September 30, 2024 was primarily due to a decrease of $3.3 million in total BaaS income. The $3.3 million decrease in total BaaS income included an $8.0 million decrease in BaaS credit enhancements related to the provision for credit losses, partially offset by a a $3.0 million increase in BaaS fraud enhancements and an increase of $1.8 million in BaaS program income. The $1.8 million increase in BaaS program income is largely due to higher reimbursement of expenses as well as an increase in transaction fees and interchange fees, our primary BaaS source for recurring fee income, as well as higher reimbursement of expenses (see “Appendix B” for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements).

    The $12.1 million increase in noninterest income over the quarter ended December 31, 2023 was primarily due to a $7.9 million increase in BaaS credit and fraud enhancements and an increase of $3.8 million in BaaS program income.

    Noninterest Expense Discussion
    Total noninterest expense decreased $1.4 million to $64.2 million for the three months ended December 31, 2024, compared to $65.6 million for the three months ended September 30, 2024, and increased $12.5 million from $51.7 million for the three months ended December 31, 2023. The decrease in noninterest expense for the quarter ended December 31, 2024, as compared to the quarter ended September 30, 2024, was primarily due to a $4.8 million decrease in BaaS expense from a $7.8 million decrease in BaaS loan expense, partially offset by a $3.0 million increase in BaaS fraud expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner’s customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners. Other variances that partially offset the net decrease in noninterest expense include an increase of $1.4 million in point of sale expenses as a result of increased partner transaction activity, an increase of $893,000 in salaries and employee benefits and an increase of $1.0 million in legal and professional fees as part of our continued investments in technology and risk management.

    The increase in noninterest expenses for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023 was largely due to an increase of $4.8 million in BaaS partner expense primarily from a $4.3 million increase in BaaS fraud expense, a $549,000 increase in BaaS loan expense, a $2.0 million increase in legal and professional expenses, a $1.8 million increase in point of sale expenses, a $1.5 million increase in salary and employee benefits, and a $1.2 million increase in data processing and software licenses due to enhancements in technology.

    Certain noninterest expenses are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and all reimbursement of expenses from our CCBX partner in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist the understanding of how the increases in noninterest expense are related to expenses incurred for and reimbursed by CCBX partners:

        Three Months Ended
        December 31,   September 30,   December 31,
    (dollars in thousands; unaudited)   2024   2024   2023
    Total noninterest expense (GAAP)   $ 64,206   $ 65,616   $ 51,703
    Less: BaaS loan expense     24,859     32,612     24,310
    Less: BaaS fraud expense     5,043     2,084     779
    Less: Reimbursement of expenses (Baas)     3,468     1,843     1,076
    Noninterest expense, net of Baas loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) (1)   $ 30,836   $ 29,077   $ 25,538

    (1) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.

    Provision for Income Taxes

    The provision for income taxes was $3.8 million for the three months ended December 31, 2024, $2.9 million for the three months ended September 30, 2024 and $2.8 million for the fourth quarter of 2023.  The income tax provision was higher for the three months ended December 31, 2024 compared to the quarter ended September 30, 2024 as a result of the deductibility of certain equity awards which reduced tax expense during the quarter ended September 30, 2024 compared to the quarter ended December 31, 2024 despite net income being higher fairly even, and higher than the quarter ended December 31, 2023, primarily due to higher net income compared to that quarter, partially offset by the deductibility of certain equity awards.

    The Company is subject to various state taxes that are assessed as CCBX activities and employees expand into other states, which has increased the overall tax rate used in calculating the provision for income taxes in the current and future periods. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 2.63% for calculating the provision for state income taxes.

    Financial Condition Overview

    Total assets increased $55.4 million, or 1.4%, to $4.12 billion at December 31, 2024 compared to $4.07 billion at September 30, 2024.  The increase is primarily due to stronger loan growth, partially offset by lower cash balances. Total loans receivable increased $67.7 million to $3.49 billion at December 31, 2024, from $3.42 billion at September 30, 2024.

    As of December 31, 2024, the Company had the capacity to borrow up to a total of $642.1 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, and an additional $50.0 million from a correspondent bank. There were no borrowings outstanding on these lines as of December 31, 2024.

    The Company completed a $98.0 million capital raise during the quarter ended December 31, 2024. After contributing $50.0 million to the Bank, the Company had a cash balance of $47.7 million as of December 31, 2024, which is retained for general operating purposes, including debt repayment, and for funding $480,000 in commitments to bank technology investment funds.  

    Uninsured deposits were $543.0 million as of December 31, 2024, compared to $542.2 million as of September 30, 2024.

    Total shareholders’ equity as of December 31, 2024 increased $106.8 million since September 30, 2024.  The increase in shareholders’ equity was primarily due to an increase of $93.4 million in common stock outstanding as a result of the aforementioned capital raise and, to a lessor extent, equity awards exercised during the three months ended December 31, 2024 combined with $13.4 million in net earnings.

    The Company and the Bank remained well capitalized at December 31, 2024, as summarized in the following table.

    (unaudited)   Coastal Community
    Bank    		   Coastal Financial
    Corporation    		   Minimum Well
    Capitalized Ratios
    under Prompt
    Corrective Action     (1)
    Tier 1 Leverage Capital (to average assets)   10.64%   10.78%   5.00%
    Common Equity Tier 1 Capital (to risk-weighted assets)   11.99%   12.04%   6.50%
    Tier 1 Capital (to risk-weighted assets)   11.99%   12.14%   8.00%
    Total Capital (to risk-weighted assets)   13.28%   14.67%   10.00%

    (1) Presents the minimum capital ratios for an insured depository institution, such as the Bank, to be considered well capitalized under the Prompt Corrective Action framework. The minimum requirements for the Company to be considered well capitalized under Regulation Y include to maintain, on a consolidated basis, a total risk-based capital ratio of 10.0 percent or greater and a tier 1 risk-based capital ratio of 6.0 percent or greater.

    Asset Quality

    The total allowance for credit losses was $177.0 million and 5.08% of loans receivable at December 31, 2024 compared to $170.3 million and 4.98% at September 30, 2024 and $117.0 million and 3.86% at December 31, 2023. The allowance for credit loss allocated to the CCBX portfolio was $158.1 million and 9.86% of CCBX loans receivable at December 31, 2024, with $18.9 million of allowance for credit loss allocated to the community bank or 1.00% of total community bank loans receivable.

    The following table details the allocation of the allowance for credit loss as of the period indicated:

        As of December 31, 2024   As of September 30, 2024   As of December 31, 2023
    (dollars in thousands; unaudited)   Community
    Bank    		   CCBX   Total   Community
    Bank    		   CCBX   Total   Community
    Bank    		   CCBX   Total
    Loans receivable   $ 1,882,988     $ 1,603,577     $ 3,486,565     $ 1,897,540     $ 1,521,292     $ 3,418,832     $ 1,830,154     $ 1,195,938     $ 3,026,092  
    Allowance for credit losses     (18,924 )     (158,070 )     (176,994 )     (20,132 )     (150,131 )     (170,263 )     (21,595 )     (95,363 )     (116,958 )
    Allowance for credit losses to total loans receivable     1.00 %     9.86 %     5.08 %     1.06 %     9.87 %     4.98 %     1.18 %     7.97 %     3.86 %
                                                                             

    Net charge-offs totaled $55.9 million for the quarter ended December 31, 2024, compared to $49.2 million for the quarter ended September 30, 2024 and $44.9 million for the quarter ended December 31, 2023. Net charge-offs as a percent of average loans increased to 6.51% for the quarter ended December 31, 2024 compared to 5.65% for the quarter ended September 30, 2024. CCBX partner agreements provide for a credit enhancement that covers the net-charge-offs on CCBX loans and negative deposit accounts by indemnifying or reimbursing incurred losses, except in accordance with the program agreement for one partner where the Company was responsible for credit losses on approximately 5% of a $324.6 million loan portfolio. At December 31, 2024, our portion of this portfolio represented $20.6 million in loans. Net charge-offs for this $20.6 million in loans were $1.1 million for the three months ended December 31, 2024, compared to $1.1 million for the three months ended September 30, 2024 and $1.5 million for the three months ended December 31, 2023.

    The following table details net charge-offs for the community bank and CCBX for the period indicated:

        Three Months Ended
        December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands; unaudited)   Community
    Bank    		   CCBX   Total   Community
    Bank    		   CCBX   Total   Community
    Bank    		   CCBX   Total
    Gross charge-offs   $ 139     $ 61,446     $ 61,585     $ 398     $ 52,907     $ 53,305     $ 2     $ 47,650     $ 47,652  
    Gross recoveries     (3 )     (5,643 )     (5,646 )     (3 )     (4,066 )     (4,069 )     (4 )     (2,777 )     (2,781 )
    Net charge-offs   $ 136     $ 55,803     $ 55,939     $ 395     $ 48,841     $ 49,236     $ (2 )   $ 44,873     $ 44,871  
    Net charge-offs to average loans (1)     0.03 %     14.54 %     6.51 %     0.08 %     12.52 %     5.65 %     0.00 %     14.88 %     5.92 %

    (1) Annualized calculations shown for periods presented.

    During the quarter ended December 31, 2024, a $63.7 million provision for credit losses was recorded for CCBX partner loans, compared to the $72.1 million provision for credit losses was recorded for CCBX partner loans for the quarter ended September 30, 2024, the provision was based on management’s analysis, bringing the CCBX allowance for credit losses to $158.1 million at December 31, 2024 compared to $150.1 million at September 30, 2024. The increase in the allowance is due to the addition of new loans, partially offset by loan sales. CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. Agreements with our CCBX partners provide for a credit enhancement which protects the Bank by indemnifying or reimbursing incurred losses.

    In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts. When the provision for CCBX credit losses and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements). Expected losses are recorded in the allowance for credit losses. The credit enhancement asset is relieved when credit enhancement recoveries are received from the CCBX partner. If our partner is unable to fulfill their contracted obligations then the Bank could be exposed to additional credit losses. Management regularly evaluates and manages this counterparty risk.

    The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of $1.1 million and was needed for the quarter ended December 31, 2024 compared to a provision recapture of $519,000 and provision of $277,000 for the quarters ended September 30, 2024 and December 31, 2023, respectively. The recapture in the current period was due to the decrease in the community bank loan portfolio combined with an improvement in the forward look, which is driven by the future projected unemployment and GDP curves, which flattened since last quarter, lessening the impact of this factor.

    The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated:

        Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Community bank   $ (1,071 )   $ (519 )   $ 277
    CCBX     63,741       72,104       60,467
    Total provision expense   $ 62,670     $ 71,585     $ 60,744

    A recapture for unfunded commitments of $803,000 was recorded for the quarter ended December 31, 2024 as a result of a decrease in the overall available balance combined with an improvement in the reserve rates.

    At December 31, 2024, our nonperforming assets were $62.7 million, or 1.52%, of total assets, compared to $66.4 million, or 1.63%, of total assets, at September 30, 2024, and $53.8 million, or 1.43%, of total assets, at December 31, 2023. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of December 31, 2024, $60.8 million of the $62.6 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above.

    Nonperforming assets decreased $3.7 million during the quarter ended December 31, 2024, compared to the quarter ended September 30, 2024. This change is due to a decrease in CCBX and community bank nonaccrual loans. Community bank nonperforming loans decreased $1.0 million from September 30, 2024 to $100,000 as of December 31, 2024, and CCBX nonperforming loans decreased $2.7 million to $62.6 million from September 30, 2024. The decrease in CCBX nonperforming loans is due to an decrease of $570,000 in nonaccrual loans from September 30, 2024 to $19.5 million. Some CCBX partners have a collection practice that places certain loans on nonaccrual status to improve collectability. $17.2 million of these loans are less than 90 days past due as of December 31, 2024. Additionally, there was a $2.2 million decrease in CCBX loans that are past due 90 days or more and still accruing interest. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners we anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners will continue to accrue interest until 120 and 180 days past due, respectively and are reported as substandard, 90 days or more days past due and still accruing. There were no repossessed assets or other real estate owned at December 31, 2024. Our nonperforming loans to loans receivable ratio was 1.80% at December 31, 2024, compared to 1.94% at September 30, 2024, and 1.78% at December 31, 2023.

    For the quarter ended December 31, 2024, there were $136,000 community bank net charge-offs and $55.8 million in net charge-offs were recorded on CCBX loans. These CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses.

    The following table details the Company’s nonperforming assets for the periods indicated.

    Consolidated As of
    (dollars in thousands; unaudited) December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Nonaccrual loans:          
    Commercial and industrial loans $ 334     $ 531     $ —  
    Real estate loans:          
    Residential real estate   —       44       170  
    Commercial real estate   —       831       7,145  
    Consumer and other loans:          
    Credit cards   10,262       7,987       —  
    Other consumer and other loans   8,967       11,713       —  
    Total nonaccrual loans   19,563       21,106       7,315  
    Accruing loans past due 90 days or more:          
    Commercial & industrial loans   1,006       1,566       2,086  
    Real estate loans:          
    Residential real estate loans   2,608       3,025       1,115  
    Consumer and other loans:          
    Credit cards   34,490       34,562       34,835  
    Other consumer and other loans   4,989       6,111       8,488  
    Total accruing loans past due 90 days or more   43,093       45,264       46,524  
    Total nonperforming loans   62,656       66,370       53,839  
    Real estate owned   —       —       —  
    Repossessed assets   —       —       —  
    Total nonperforming assets $ 62,656     $ 66,370     $ 53,839  
    Total nonaccrual loans to loans receivable   0.56 %     0.62 %     0.24 %
    Total nonperforming loans to loans receivable   1.80 %     1.94 %     1.78 %
    Total nonperforming assets to total assets   1.52 %     1.63 %     1.43 %
                           

    The following tables detail the CCBX and community bank nonperforming assets which are included in the total nonperforming assets table above.

    CCBX As of
    (dollars in thousands; unaudited) December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Nonaccrual loans:          
    Commercial and industrial loans:          
    All other commercial & industrial loans $ 234     $ 333     $ —  
    Consumer and other loans:          
    Credit cards   10,262       7,987       —  
    Other consumer and other loans   8,967       11,713       —  
    Total nonaccrual loans   19,463       20,033       —  
    Accruing loans past due 90 days or more:          
    Commercial & industrial loans   1,006       1,566       2,086  
    Real estate loans:          
    Residential real estate loans   2,608       3,025       1,115  
    Consumer and other loans:          
    Credit cards   34,490       34,562       34,835  
    Other consumer and other loans   4,989       6,111       8,488  
    Total accruing loans past due 90 days or more   43,093       45,264       46,524  
    Total nonperforming loans   62,556       65,297       46,524  
    Other real estate owned   —       —       —  
    Repossessed assets   —       —       —  
    Total nonperforming assets $ 62,556     $ 65,297     $ 46,524  
    Total CCBX nonperforming assets to total consolidated assets   1.52 %     1.61 %     1.24 %
    Community Bank As of
    (dollars in thousands; unaudited) December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Nonaccrual loans:          
    Commercial and industrial loans $ 100   $ 198     $ —  
    Real estate:          
    Residential real estate   —     44       170  
    Commercial real estate   —     831       7,145  
    Total nonaccrual loans   100     1,073       7,315  
    Accruing loans past due 90 days or more:          
    Total accruing loans past due 90 days or more   —     —       —  
    Total nonperforming loans   100     1,073       7,315  
    Other real estate owned   —     —       —  
    Repossessed assets   —     —       —  
    Total nonperforming assets $ 100   $ 1,073     $ 7,315  
    Total community bank nonperforming assets to total consolidated assets < 0.01%     0.03 %     0.19 %
                       

    About Coastal Financial

    Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC.  The $4.12 billion Bank provides service through 14 branches in Snohomish, Island, and King Counties, the Internet and its mobile banking application.  The Bank provides banking as a service to broker-dealers, digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank’s CCBX segment.  To learn more about the Company visit www.coastalbank.com.

    CCB-ER

    Contact

    Eric Sprink, Chief Executive Officer, (425) 357-3659
    Joel Edwards, Executive Vice President & Chief Financial Officer, (425) 357-3687

    Forward-Looking Statements

    This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the most recent period filed and in any of our subsequent filings with the Securities and Exchange Commission.

    If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.

    COASTAL FINANCIAL CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (Dollars in thousands; unaudited)

    ASSETS
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Cash and due from banks $ 36,533     $ 45,327     $ 59,995     $ 32,790     $ 31,345  
    Interest earning deposits with other banks   415,980       438,699       427,250       482,338       451,783  
    Investment securities, available for sale, at fair value   35       38       39       41       99,504  
    Investment securities, held to maturity, at amortized cost   47,286       48,582       49,174       50,049       50,860  
    Other investments   10,800       10,757       10,664       10,583       10,227  
    Loans held for sale   20,600       7,565       —       797       —  
    Loans receivable   3,486,565       3,418,832       3,326,460       3,199,554       3,026,092  
    Allowance for credit losses   (176,994 )     (170,263 )     (147,914 )     (139,258 )     (116,958 )
    Total loans receivable, net   3,309,571       3,248,569       3,178,546       3,060,296       2,909,134  
    CCBX credit enhancement asset   181,890       167,251       143,485       137,276       107,921  
    CCBX receivable   14,138       16,060       11,520       10,369       9,088  
    Premises and equipment, net   27,431       25,833       24,526       22,995       22,090  
    Lease right-of-use assets   5,219       5,427       5,635       5,756       5,932  
    Accrued interest receivable   21,104       23,664       23,617       24,681       26,819  
    Bank-owned life insurance, net   13,375       13,255       13,132       12,991       12,870  
    Deferred tax asset, net   3,600       3,083       2,221       2,221       3,806  
    Other assets   13,646       11,711       11,742       12,075       11,987  
    Total assets $ 4,121,208     $ 4,065,821     $ 3,961,546     $ 3,865,258     $ 3,753,366  
                       
    LIABILITIES AND SHAREHOLDERS’ EQUITY
    LIABILITIES                  
    Deposits $ 3,585,332     $ 3,627,288     $ 3,543,432     $ 3,462,979     $ 3,360,363  
    Subordinated debt, net   44,293       44,256       44,219       44,181       44,144  
    Junior subordinated debentures, net   3,591       3,591       3,591       3,590       3,590  
    Deferred compensation   332       369       405       442       479  
    Accrued interest payable   962       1,070       999       1,061       892  
    Lease liabilities   5,398       5,609       5,821       5,946       6,124  
    CCBX payable   29,171       39,188       34,536       33,095       33,651  
    Other liabilities   13,425       12,520       11,850       10,255       9,145  
    Total liabilities   3,682,504       3,733,891       3,644,853       3,561,549       3,458,388  
    SHAREHOLDERS’ EQUITY                  
    Common Stock   228,177       134,769       132,989       131,601       130,136  
    Retained earnings   210,529       197,162       183,706       172,110       165,311  
    Accumulated other comprehensive loss, net of tax   (2 )     (1 )     (2 )     (2 )     (469 )
    Total shareholders’ equity   438,704       331,930       316,693       303,709       294,978  
    Total liabilities and shareholders’ equity $ 4,121,208     $ 4,065,821     $ 3,961,546     $ 3,865,258     $ 3,753,366  

    COASTAL FINANCIAL CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (Dollars in thousands, except per share amounts; unaudited)

      Three Months Ended
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    INTEREST AND DIVIDEND INCOME                  
    Interest and fees on loans $ 89,714   $ 99,590   $ 90,944     $ 84,621     $ 81,159  
    Interest on interest earning deposits with other banks   6,021     4,781     5,683       4,780       5,687  
    Interest on investment securities   661     675     686       1,034       1,225  
    Dividends on other investments   191     33     174       37       172  
    Total interest income   96,587     105,079     97,487       90,472       88,243  
    INTEREST EXPENSE                  
    Interest on deposits   29,404     32,083     30,578       28,867       27,916  
    Interest on borrowed funds   667     809     672       669       670  
    Total interest expense   30,071     32,892     31,250       29,536       28,586  
    Net interest income   66,516     72,187     66,237       60,936       59,657  
    PROVISION FOR CREDIT LOSSES   61,867     70,257     62,325       83,158       60,789  
    Net interest income/(expense) after provision for credit losses   4,649     1,930     3,912       (22,222 )     (1,132 )
    NONINTEREST INCOME                  
    Service charges and fees   932     952     946       908       957  
    Loan referral fees   —     —     —       168       —  
    Unrealized gain (loss) on equity securities, net   1     2     9       15       80  
    Other income   473     486     257       308       60  
    Noninterest income, excluding BaaS program income and BaaS indemnification income   1,406     1,440     1,212       1,399       1,097  
    Servicing and other BaaS fees   1,043     1,044     1,525       1,131       1,015  
    Transaction fees   1,783     1,696     1,309       1,122       1,006  
    Interchange fees   1,916     1,853     1,625       1,539       1,272  
    Reimbursement of expenses   3,468     1,843     1,637       1,033       1,076  
    BaaS program income   8,210     6,436     6,096       4,825       4,369  
    BaaS credit enhancements   62,097     70,108     60,826       79,808       58,449  
    BaaS fraud enhancements   5,043     2,084     1,784       923       779  
    BaaS indemnification income   67,140     72,192     62,610       80,731       59,228  
    Total noninterest income   76,756     80,068     69,918       86,955       64,694  
    NONINTEREST EXPENSE                  
    Salaries and employee benefits   17,994     17,101     17,005       17,984       16,490  
    Occupancy   958     964     985       1,029       976  
    Data processing and software licenses   4,010     4,297     3,625       3,381       2,781  
    Legal and professional expenses   4,606     3,597     3,631       3,672       2,649  
    Point of sale expense   2,745     1,351     852       869       899  
    Excise taxes   778     762     (706 )     320       449  
    Federal Deposit Insurance Corporation (“FDIC”) assessments   750     740     690       683       665  
    Director and staff expenses   683     559     470       400       478  
    Marketing   28     67     14       53       138  
    Other expense   1,752     1,482     1,383       1,867       1,089  
    Noninterest expense, excluding BaaS loan and BaaS fraud expense   34,304     30,920     27,949       30,258       26,614  
    BaaS loan expense   24,859     32,612     29,076       24,837       24,310  
    BaaS fraud expense   5,043     2,084     1,784       923       779  
    BaaS loan and fraud expense   29,902     34,696     30,860       25,760       25,089  
    Total noninterest expense   64,206     65,616     58,809       56,018       51,703  
    Income before provision for income taxes   17,199     16,382     15,021       8,715       11,859  
    PROVISION FOR INCOME TAXES   3,832     2,926     3,425       1,915       2,847  
    NET INCOME $ 13,367   $ 13,456   $ 11,596     $ 6,800     $ 9,012  
    Basic earnings per common share $ 0.97   $ 1.00   $ 0.86     $ 0.51     $ 0.68  
    Diluted earnings per common share $ 0.94   $ 0.97   $ 0.84     $ 0.50     $ 0.66  
    Weighted average number of common shares outstanding:                  
    Basic   13,828,605     13,447,066     13,412,667       13,340,997       13,286,828  
    Diluted   14,268,229     13,822,270     13,736,508       13,676,917       13,676,513  

    COASTAL FINANCIAL CORPORATION
    AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
    (Dollars in thousands; unaudited)

      For the Three Months Ended
      December 31, 2024   September 30, 2024   December 31, 2023
      Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)
    Assets                                  
    Interest earning assets:                                  
    Interest earning deposits with other banks $ 501,654     $ 6,021   4.77 %   $ 350,915     $ 4,781   5.42 %   $ 413,127     $ 5,687   5.46 %
    Investment securities, available for sale (2)   39       —   —       40       —   —       100,204       546   2.16  
    Investment securities, held to maturity (2)   48,126       661   5.46       48,945       675   5.49       49,469       679   5.45  
    Other investments   10,783       191   7.05       11,140       33   1.18       11,683       172   5.84  
    Loans receivable (3)   3,419,476       89,714   10.44       3,464,871       99,590   11.43       3,007,289       81,159   10.71  
    Total interest earning assets   3,980,078       96,587   9.65       3,875,911       105,079   10.79       3,581,772       88,243   9.77  
    Noninterest earning assets:                                  
    Allowance for credit losses   (156,687 )             (151,292 )             (95,391 )        
    Other noninterest earning assets   277,922               268,903               204,052          
    Total assets $ 4,101,313             $ 3,993,522             $ 3,690,433          
                                       
    Liabilities and Shareholders’ Equity                                  
    Interest bearing liabilities:                                  
    Interest bearing deposits $ 3,068,357     $ 29,404   3.81 %   $ 2,966,527     $ 32,083   4.30 %   $ 2,660,235     $ 27,916   4.16 %
    FHLB advances and other borrowings   —       1   —       9,717       140   5.73       3       —   —  
    Subordinated debt   44,272       599   5.38       44,234       598   5.38       44,121       598   5.38  
    Junior subordinated debentures   3,591       67   7.42       3,591       71   7.87       3,590       72   7.96  
    Total interest bearing liabilities   3,116,220       30,071   3.84       3,024,069       32,892   4.33       2,707,949       28,586   4.19  
    Noninterest bearing deposits   577,453               588,178               640,424          
    Other liabilities   50,824               60,101               52,450          
    Total shareholders’ equity   356,816               321,174               289,612          
    Total liabilities and shareholders’ equity $ 4,101,313             $ 3,993,522             $ 3,690,435          
    Net interest income     $ 66,516           $ 72,187           $ 59,657    
    Interest rate spread         5.82 %           6.46 %           5.59 %
    Net interest margin (4)         6.65 %           7.41 %           6.61 %

    (1) Yields and costs are annualized.
    (2) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
    (3) Includes loans held for sale and nonaccrual loans.
    (4) Net interest margin represents net interest income divided by the average total interest earning assets.

    COASTAL FINANCIAL CORPORATION
    SELECTED AVERAGE BALANCES, YIELDS, AND RATES – BY SEGMENT – QUARTERLY
    (Dollars in thousands; unaudited)

      For the Three Months Ended
      December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands, unaudited) Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)
    Community Bank                                  
    Assets                                  
    Interest earning assets:                                  
    Loans receivable (2) $ 1,892,298   $ 31,043   6.53 %   $ 1,912,428   $ 31,898   6.64 %   $ 1,811,152   $ 28,832   6.32 %
    Total interest earning assets   1,892,298     31,043   6.53       1,912,428     31,898   6.64       1,811,152     28,832   6.32  
    Liabilities                                  
    Interest bearing liabilities:                                
    Interest bearing deposits   1,029,346     7,161   2.77 %     982,280     7,264   2.94 %     951,148     6,090   2.54 %
    Intrabank liability   357,442     4,290   4.77       406,641     5,540   5.42       275,995     3,799   5.46  
    Total interest bearing liabilities   1,386,788     11,451   3.28       1,388,921     12,804   3.67       1,227,143     9,889   3.20  
    Noninterest bearing deposits   505,510             523,507             584,009        
    Net interest income     $ 19,592           $ 19,094           $ 18,943    
    Net interest margin(3)         4.12 %           3.97 %           4.15 %
                                       
    CCBX                                  
    Assets                                  
    Interest earning assets:                                  
    Loans receivable (2)(4) $ 1,527,178   $ 58,671   15.28 %   $ 1,552,443   $ 67,692   17.35 %   $ 1,196,137   $ 52,327   17.36 %
    Intrabank asset   583,776     7,007   4.78       496,475     6,764   5.42       569,365     7,837   5.46  
    Total interest earning assets   2,110,954     65,678   12.38       2,048,918     74,456   14.46       1,765,502     60,164   13.52  
    Liabilities                                  
    Interest bearing liabilities:                            
    Interest bearing deposits   2,039,011     22,243   4.34 %     1,984,247     24,819   4.98 %     1,709,087     21,826   5.07 %
    Total interest bearing liabilities   2,039,011     22,243   4.34       1,984,247     24,819   4.98       1,709,087     21,826   5.07  
    Noninterest bearing deposits   71,943             64,671             56,415        
    Net interest income     $ 43,435           $ 49,637           $ 38,338    
    Net interest margin(3)         8.19 %           9.64 %           8.62 %
    Net interest margin, net of Baas loan expense (5)         3.50 %           3.31 %           3.15 %
      For the Three Months Ended
      December 31, 2024   September 30, 2024   December 31, 2023
    (dollars in thousands, unaudited) Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)    		   Average
    Balance    		   Interest &
    Dividends    		   Yield /
    Cost (1)
    Treasury & Administration                            
    Assets                                  
    Interest earning assets:                                  
    Interest earning deposits with other banks $ 501,654   $ 6,021   4.77 %   $ 350,915   $ 4,781   5.42 %   $ 413,127   $ 5,687   5.46 %
    Investment securities, available for sale (6)   39     —   —       40     —   —       100,204     546   2.16  
    Investment securities, held to maturity (6)   48,126     661   5.46       48,945     675   5.49       49,469     679   5.45  
    Other investments   10,783     191   7.05       11,140     33   1.18       11,683     172   5.84  
    Total interest earning assets   560,602     6,873   4.88 %     411,040 —   5,489   5.31 %     574,483     7,084   4.89 %
    Liabilities                                  
    Interest bearing liabilities:                                  
    FHLB advances and borrowings $ —   $ 1   — %     9,717     140   5.73 %     3     —   — %
    Subordinated debt   44,272     599   5.38 %     44,234     598   5.38 %     44,121     598   5.38 %
    Junior subordinated debentures   3,591     67   7.42       3,591     71   7.87       3,590     72   7.96  
    Intrabank liability, net (7)   226,334     2,717   4.78       89,834     1,224   5.42       293,370     4,038   5.46  
    Total interest bearing liabilities   274,197     3,384   4.91       147,376     2,033   5.49       341,084     4,708   5.48  
    Net interest income     $ 3,489           $ 3,456           $ 2,376    
    Net interest margin(3)         2.48 %           3.34 %           1.64 %

    (1) Yields and costs are annualized.
    (2) Includes loans held for sale and nonaccrual loans.
    (3) Net interest margin represents net interest income divided by the average total interest earning assets.
    (4) CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
    (5) Net interest margin, net of BaaS loan expense, includes the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release.
    (6) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
    (7) Intrabank assets and liabilities are consolidated for period calculations and presented as intrabank asset, net or intrabank liability, net in the table above.

    Non-GAAP Financial Measures

    The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance.

    However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies.

    The following non-GAAP measures are presented to illustrate the impact of BaaS loan expense on net loan income and yield on loans and CCBX loans and the impact of BaaS loan expense on net interest income and net interest margin.

    Loan income, net of BaaS loan expense, divided by average loans, is a non-GAAP measure that includes the impact BaaS loan expense on loan income and the yield on loans. The most directly comparable GAAP measure is yield on loans.

    Net BaaS loan income divided by average CCBX loans is a non-GAAP measure that includes the impact BaaS loan expense on net BaaS loan income and the yield on CCBX loans. The most directly comparable GAAP measure is yield on CCBX loans.

    Net interest income, net of BaaS loan expense, is a non-GAAP measure that includes the impact BaaS loan expense on net interest income. The most directly comparable GAAP measure is net interest income.

    CCBX net interest margin, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest rate margin. The most directly comparable GAAP measure is CCBX net interest margin.

    Reconciliations of the GAAP and non-GAAP measures are presented below.

    CCBX   As of and for the Three Months Ended As of and for the Twelve Months Ended
    (dollars in thousands; unaudited)   December 31
    2024    		   September 30
    2024    		   December 31
    2023    		 December 31
    2024    		   December 31
    2023
    Net BaaS loan income divided by average CCBX loans:      
    CCBX loan yield (GAAP)(1)     15.28 %     17.35 %     17.36 %   16.89 %     16.89 %
    Total average CCBX loans receivable   $ 1,527,178     $ 1,552,443     $ 1,196,137   $ 1,427,571     $ 1,210,413  
    Interest and earned fee income on CCBX loans (GAAP)     58,671       67,692       52,327     241,134       204,458  
    BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net BaaS loan income   $ 33,812     $ 35,080     $ 28,017   $ 129,750     $ 117,558  
    Net BaaS loan income divided by average CCBX loans (1)     8.81 %     8.99 %     9.30 %   9.09 %     9.71 %
    CCBX net interest margin, net of BaaS loan expense:              
    CCBX net interest margin (1)     8.19 %     9.64 %     8.62 %   8.87 %     9.65 %
    CCBX earning assets     2,110,954       2,048,918       1,765,502     1,999,695       1,574,334  
    Net interest income (GAAP)     43,435       49,637       38,338     177,320       151,883  
    Less: BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net interest income, net of BaaS loan expense   $ 18,576     $ 17,025     $ 14,028   $ 65,936     $ 64,983  
    CCBX net interest margin, net of BaaS loan expense (1)     3.50 %     3.31 %     3.15 %   3.30 %     4.13 %
    Consolidated   As of and for the Three Months Ended As of and for the Twelve Months Ended
    (dollars in thousands; unaudited)   December 31
    2024    		   September 30
    2024    		   December 31
    2023    		 December 31
    2024    		   December 31
    2023
    Net interest margin, net of BaaS loan expense:              
    Net interest margin (1)     6.65 %     7.41 %     6.61 %   6.99 %     7.10 %
    Earning assets     3,980,078       3,875,911       3,581,772     3,802,275       3,364,406  
    Net interest income (GAAP)     66,516       72,187       59,657     265,876       238,727  
    Less: BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net interest income, net of BaaS loan expense   $ 41,657     $ 39,575     $ 35,347   $ 154,492     $ 151,827  
    Net interest margin, net of BaaS loan expense (1)     4.16 %     4.06 %     3.92 %   4.06 %     4.51 %
    Loan income net of BaaS loan expense divided by average loans:          
    Loan yield (GAAP)(1)     10.44 %     11.43 %     10.71 %   10.99 %     10.60 %
    Total average loans receivable   $ 3,419,476     $ 3,464,871     $ 3,007,289   $ 3,320,582     $ 2,936,908  
    Interest and earned fee income on loans (GAAP)     89,714       99,590       81,159     364,869       311,441  
    BaaS loan expense     (24,859 )     (32,612 )     (24,310 )   (111,384 )     (86,900 )
    Net loan income   $ 64,855     $ 66,978     $ 56,849   $ 253,485     $ 224,541  
    Loan income, net of BaaS loan expense, divided by average loans (1)     7.55 %     7.69 %     7.50 %   7.63 %     7.65 %

    (1) Annualized calculations for periods presented.

    The following non-GAAP measure is presented to illustrate the impact of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) on noninterest expense. The most comparable GAAP measure is noninterest expense.

        As of and for the Three Months Ended
    (dollars in thousands, unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Noninterest expense, net of reimbursement of expenses (BaaS)
    Noninterest expense (GAAP)   $ 64,206   $ 65,616   $ 51,703
    Less: BaaS loan expense     24,859     32,612     24,310
    Less: BaaS fraud expense     5,043     2,084     779
    Less: Reimbursement of expenses     3,468     1,843     1,076
    Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses   $ 30,836   $ 29,077   $ 25,538


    APPENDIX A –
    As of December 31, 2024

    Industry Concentration

    We have a diversified loan portfolio, representing a wide variety of industries. Our major categories of loans are commercial real estate, consumer and other loans, residential real estate, commercial and industrial, and construction, land and land development loans. Together they represent $3.49 billion in outstanding loan balances. When combined with $1.96 billion in unused commitments the total of these categories is $5.46 billion.

    Commercial real estate loans represent the largest segment of our loans, comprising 39.4% of our total balance of outstanding loans as of December 31, 2024. Unused commitments to extend credit represents an additional $34.2 million, and the combined total in commercial real estate loans represents $1.41 billion, or 25.8% of our total outstanding loans and loan commitments.

    The following table summarizes our loan commitment by industry for our commercial real estate portfolio as of December 31, 2024:

    (dollars in thousands; unaudited)   Outstanding
    Balance    		   Available
    Loan
    Commitments    		   Total
    Outstanding
    Balance &
    Available
    Commitment    		   % of Total
    Loans
    (Outstanding
    Balance &
    Available
    Commitment)    		   Average Loan
    Balance    		   Number of
    Loans
    Apartments   $ 405,561   $ 4,953   $ 410,514   7.5 %   $ 3,937   103
    Hotel/Motel     154,691     68     154,759   2.8       6,726   23
    Convenience Store     139,735     575     140,310   2.6       2,329   60
    Office     122,897     7,687     130,584   2.4       1,366   90
    Retail     103,312     414     103,726   1.9       993   104
    Warehouse     103,130     —     103,130   1.9       1,748   59
    Mixed use     91,607     5,365     96,972   1.8       1,160   79
    Mini Storage     80,837     10,183     91,020   1.7       3,674   22
    Strip Mall     43,894     —     43,894   0.8       6,271   7
    Manufacturing     37,617     1,200     38,817   0.7       1,297   29
    Groups < 0.70% of total     91,520     3,777     95,297   1.7       1,173   78
    Total   $ 1,374,801   $ 34,222   $ 1,409,023   25.8 %   $ 2,102   654
                                       

    Consumer loans comprise 34.6% of our total balance of outstanding loans as of December 31, 2024. Unused commitments to extend credit represents an additional $735.8 million, and the combined total in consumer and other loans represents $1.94 billion, or 35.6% of our total outstanding loans and loan commitments. As illustrated in the table below, our CCBX partners bring in a large number of mostly smaller dollar loans, resulting in an average consumer loan balance of just $1,000. CCBX consumer loans are underwritten to CCBX credit standards and underwriting of these loans is regularly tested, including quarterly testing for partners with portfolio balances greater than $10.0 million.

    The following table summarizes our loan commitment by industry for our consumer and other loan portfolio as of December 31, 2024:

    (dollars in thousands; unaudited)   Outstanding
    Balance    		   Available
    Loan
    Commitments     (1)    		   Total
    Outstanding
    Balance &
    Available
    Commitment     (1)    		   % of Total
     Loans
    (Outstanding
    Balance &
    Available
    Commitment)    		   Average Loan
    Balance    		   Number of
    Loans
    CCBX consumer loans
    Credit cards   $ 528,554   $ 717,198   $ 1,245,752   22.8 %   $ 1.8   301,799
    Installment loans     656,797     15,806     672,603   12.3       1.0   690,596
    Lines of credit     722     1     723   0.0       1.4   524
    Other loans     7,261     —     7,261   0.1       —   163,026
    Community bank consumer loans
    Installment loans     1,917     2     1,919   0.1       68.5   28
    Lines of credit     181     344     525   0.0       5.7   32
    Other loans     11,444     2,400     13,844   0.3       30.6   374
    Total   $ 1,206,876   $ 735,751   $ 1,942,627   35.6 %   $ 1.0   1,156,379

    (1)  Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.

    Residential real estate loans comprise 13.4% of our total balance of outstanding loans as of December 31, 2024. Unused commitments to extend credit represents an additional $499.5 million, and the combined total in residential real estate loans represents $969.3 million, or 17.8% of our total outstanding loans and loan commitments.

    The following table summarizes our loan commitment by industry for our residential real estate loan portfolio as of December 31, 2024:

    (dollars in thousands; unaudited)   Outstanding
    Balance    		   Available
    Loan
    Commitments     (1)    		   Total
    Outstanding
    Balance &
    Available
    Commitment     (1)    		   % of Total 
    Loans
    (Outstanding
    Balance &
    Available
    Commitment)    		   Average Loan
    Balance    		   Number of
    Loans
    CCBX residential real estate loans
    Home equity line of credit   $ 267,707   $ 453,369   $ 721,076   13.2 %   $ 27   10,092
    Community bank residential real estate loans
    Closed end, secured by first liens     165,433     2,080     167,513   3.1       537   308
    Home equity line of credit     25,506     43,102     68,608   1.3       109   234
    Closed end, second liens     11,125     965     12,090   0.2       371   30
    Total   $ 469,771   $ 499,516   $ 969,287   17.8 %   $ 44   10,664

    (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.

    Commercial and industrial loans comprise 8.4% of our total balance of outstanding loans as of December 31, 2024. Unused commitments to extend credit represents an additional $645.5 million, and the combined total in commercial and industrial loans represents $938.9 million, or 17.2% of our total outstanding loans and loan commitments. Included in commercial and industrial loans is $109.0 million in outstanding capital call lines, with an additional $550.9 million in available loan commitments which is limited to a $350.0 million portfolio maximum. Capital call lines are provided to venture capital firms through one of our CCBX BaaS clients. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards and the underwriting is reviewed by the Bank on every capital call line.

    The following table summarizes our loan commitment by industry for our commercial and industrial loan portfolio as of December 31, 2024:

    (dollars in thousands; unaudited)   Outstanding
    Balance    		   Available
    Loan
    Commitments     (1)    		   Total
    Outstanding
    Balance &
    Available
    Commitment     (1)    		   % of Total
    Loans
    (Outstanding
    Balance &
    Available
    Commitment)    		   Average Loan
    Balance    		   Number of
    Loans
    Consolidated C&I loans
    Capital Call Lines   $ 109,017   $ 550,948   $ 659,965   12.1 %   $ 808   135
    Construction/Contractor Services     24,367     36,343     60,710   1.1       121   202
    Financial Institutions     48,648     —     48,648   0.9       4,054   12
    Retail     28,533     5,664     34,197   0.6       14   2,052
    Manufacturing     5,604     4,581     10,185   0.2       147   38
    Medical / Dental / Other Care     7,074     2,641     9,715   0.2       544   13
    Groups < 0.20% of total     70,130     45,360     115,490   2.1       55   1,275
    Total   $ 293,373   $ 645,537   $ 938,910   17.2 %   $ 79   3,727

    (1)  Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.

    Construction, land and land development loans comprise 4.2% of our total balance of outstanding loans as of December 31, 2024. Unused commitments to extend credit represents an additional $47.8 million, and the combined total in construction, land and land development loans represents $196.0 million, or 3.6% of our total outstanding loans and loan commitments.

    The following table details our loan commitment for our construction, land and land development portfolio as of December 31, 2024:

    (dollars in thousands; unaudited)   Outstanding
    Balance    		   Available
    Loan
    Commitments    		   Total
    Outstanding
    Balance &
    Available
    Commitment    		   % of Total
    Loans
    (Outstanding
    Balance &
    Available
    Commitment)    		   Average Loan
    Balance    		   Number of
    Loans
    Commercial construction   $ 83,216   $ 30,500   $ 113,716   2.1 %   $ 6,935   12
    Residential construction     40,940     10,873     51,813   0.9       2,408   17
    Developed land loans     8,305     456     8,761   0.2       489   17
    Undeveloped land loans     8,665     4,816     13,481   0.2       619   14
    Land development     7,072     1,157     8,229   0.2       643   11
    Total   $ 148,198   $ 47,802   $ 196,000   3.6 %   $ 2,087   71
                                       

    Exposure and risk in our construction, land and land development portfolio is declining compared to previous periods as indicated in the following table:

        Outstanding Balance as of
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Commercial construction   $ 83,216   $ 97,792   $ 110,372   $ 102,099   $ 81,489
    Residential construction     40,940     35,822     34,652     28,751     34,213
    Undeveloped land loans     8,665     8,606     8,372     8,190     7,890
    Developed land loans     8,305     14,863     13,954     14,307     20,515
    Land development     7,072     5,968     5,714     7,515     12,993
    Total   $ 148,198   $ 163,051   $ 173,064   $ 160,862   $ 157,100
                                   

    Commitments to extend credit total $1.96 billion at December 31, 2024,   however we do not anticipate our customers using the $1.96 billion that is showing as available due to CCBX partner and portfolio limits.

    The following table presents outstanding commitments to extend credit as of December 31, 2024:

    Consolidated    
    (dollars in thousands; unaudited)   As of December 31, 2024
    Commitments to extend credit:    
    Commercial and industrial loans   $ 94,589
    Commercial and industrial loans – capital call lines     550,948
    Construction – commercial real estate loans     36,873
    Construction – residential real estate loans     10,929
    Residential real estate loans     499,516
    Commercial real estate loans     34,222
    Credit cards     717,198
    Consumer and other loans     18,553
    Total commitments to extend credit   $ 1,962,828
           

    We have individual CCBX partner portfolio limits with our each of our partners to manage loan concentration risk, liquidity risk, and counter-party partner risk. For example, as of December 31, 2024, capital call lines outstanding balance totaled $109.0 million, and while commitments totaled $550.9 million, the commitments are limited to a maximum of $350.0 million by agreement with the partner. If a CCBX partner goes over their individual limit, it would be a breach of their contract and the Bank may impose penalties and would have the choice to fund the loan.

    See the table below for CCBX portfolio maximums and related available commitments:

    CCBX                
    (dollars in thousands; unaudited)   Balance   Percent of CCBX
    loans receivable    		 Available
    Commitments     (1)    		   Maximum Portfolio
    Size    		 Cash
    Reserve/Pledge
    Account Amount     (2)
    Commercial and industrial loans:            
    Capital call lines   $ 109,017     6.8 % $ 550,948   $ 350,000 $ —
    All other commercial & industrial loans     33,961     2.1     19,104     480,000   834
    Real estate loans:                
    Home equity lines of credit (3)     267,707     16.7     453,369     375,000   36,241
    Consumer and other loans:            
    Credit cards – cash secured     211         —       —
    Credit cards – unsecured     528,343         717,198       26,742
    Credit cards – total     528,554     33.0     717,198     807,484   26,742
    Installment loans – cash secured     127,014         15,806       —
    Installment loans – unsecured     529,783         —       5,332
    Installment loans – total     656,797     40.9     15,806     1,787,118   5,332
    Other consumer and other loans     7,983     0.5     1     5,398   196
    Gross CCBX loans receivable     1,604,019     100.0 %   1,756,426     3,805,000 $ 69,345
    Net deferred origination fees     (442 )            
    Loans receivable   $ 1,603,577              

    (1) Remaining commitment available, net of outstanding balance.
    (2) Balances are as of January 8, 2025.
    (3) These home equity lines of credit are secured by residential real estate and are accessed by using a credit card, but are classified as 1-4 family residential properties per regulatory guidelines.

    APPENDIX B –
    As of December 31, 2024

    CCBX – BaaS Reporting Information

    During the quarter ended December 31, 2024, $62.1 million was recorded in BaaS credit enhancements related to the provision for credit losses – loans and reserve for unfunded commitments for CCBX partner loans and negative deposit accounts. Agreements with our CCBX partners provide for a credit enhancement provided by the partner which protects the Bank by indemnifying or reimbursing incurred losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans, unfunded commitments and negative deposit accounts. When the provision for credit losses – loans and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements) in recognition of the CCBX partner legal commitment to indemnify or reimburse losses. The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the CCBX partner or taken from the partner’s cash reserve account. Agreements with our CCBX partners also provide protection to the Bank from fraud by indemnifying or reimbursing incurred fraud losses. BaaS fraud includes noncredit fraud losses on loans and deposits originated through partners. Fraud losses are recorded when incurred as losses in noninterest expense, and the enhancement received from the CCBX partner is recorded in noninterest income, resulting in a net impact of zero to the income statement. Many CCBX partners also pledge a cash reserve account at the Bank which the Bank can collect from when losses occur that is then replenished by the partner on a regular interval. Although agreements with our CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses by indemnifying or reimbursing incurred credit and fraud losses, if our partner is unable to fulfill their contracted obligation then the bank would be exposed to additional loan and deposit losses if the cash flows on the loans were not sufficient to fund the reimbursement of loan losses, as a result of this counterparty risk. If a CCBX partner does not replenish their cash reserve account the Bank may consider an alternative plan for funding the cash reserve. This may involve the possibility of adjusting the funding amounts or timelines to better align with the partner’s specific situation. If a mutually agreeable funding plan is not agreed to, the Bank could declare the agreement in default, take over servicing and cease paying the partner for servicing the loan and providing credit enhancements. The Bank would evaluate any remaining credit enhancement asset from the CCBX partner in the event the partner failed to determine if a write-off is appropriate. If a write-off occurs, the Bank would retain the full yield and any fee income on the loan portfolio going forward, and our BaaS loan expense would decrease once default occurred and payments to the CCBX partner were stopped.

    The Bank records contractual interest earned from the borrower on CCBX partner loans in interest income, adjusted for origination costs which are paid or payable to the CCBX partner. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine net revenue (Net BaaS loan income) earned from CCBX loan relationships, the Bank takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income (A reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release.) which can be compared to interest income on the Company’s community bank loans.

    The following table illustrates how CCBX partner loan income and expenses are recorded in the financial statements:

    Loan income and related loan expense   Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Yield on loans (1)     15.28 %     17.35 %     17.36 %
    BaaS loan interest income   $ 58,671     $ 67,692     $ 52,327  
    Less: BaaS loan expense     24,859       32,612       24,310  
    Net BaaS loan income (2)   $ 33,812     $ 35,080     $ 28,017  
    Net BaaS loan income divided by average BaaS loans (1)(2)     8.81 %     8.99 %     9.30 %

    (1) Annualized calculation for quarterly periods shown.
    (2) A reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release.

    A decrease in average CCBX loans receivable resulted in decreased interest income on CCBX loans during the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024. The decrease in average CCBX loans receivable was primarily due to loan sales in the CCBX loan portfolio as part of our strategy to optimize the CCBX loan portfolio and strengthen our balance sheet through originating higher quality new loans and enhanced credit standards. These higher quality loans also have lower stated rates and expected losses. As a result, our yield on loans and our BaaS loan expense decrease by similar amounts. We continue to reposition ourselves by managing CCBX credit and concentration levels in an effort to optimize our loan portfolio and generate off balance sheet fee income. Growth in CCBX loans and deposits has resulted in increases in interest income and expense for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023.

    The following tables are a summary of the interest components, direct fees, and expenses of BaaS for the periods indicated and are not inclusive of all income and expense related to BaaS.

    Interest income   Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    Loan interest income   $ 58,671   $ 67,692   $ 52,327
    Total BaaS interest income   $ 58,671   $ 67,692   $ 52,327
    Interest expense   Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    BaaS interest expense   $ 22,243   $ 24,819   $ 21,826
    Total BaaS interest expense   $ 22,243   $ 24,819   $ 21,826
    BaaS income   Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    BaaS program income:            
    Servicing and other BaaS fees   $ 1,043   $ 1,044   $ 1,015
    Transaction fees     1,783     1,696     1,006
    Interchange fees     1,916     1,853     1,272
    Reimbursement of expenses     3,468     1,843     1,076
    BaaS program income     8,210     6,436     4,369
    BaaS indemnification income:            
    BaaS credit enhancements     62,097     70,108     58,449
    BaaS fraud enhancements     5,043     2,084     779
    BaaS indemnification income     67,140     72,192     59,228
    Total noninterest BaaS income   $ 75,350   $ 78,628   $ 63,597

    Servicing and other BaaS fees decreased $1,000 in the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 while transaction fees and interchange fees increased $87,000 and $63,000, respectively. We expect servicing and other BaaS fees to decrease and transaction and interchange fees to increase as partner activity grows and contracted minimum fees are replaced with recurring fees and then exceed those minimum fees. Increases in BaaS reimbursement of fees offsets increases in noninterest expense from BaaS expenses covered by CCBX partners.

    BaaS loan and fraud expense:   Three Months Ended
    (dollars in thousands; unaudited)   December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023
    BaaS loan expense   $ 24,859   $ 32,612   $ 24,310
    BaaS fraud expense     5,043     2,084     779
    Total BaaS loan and fraud expense   $ 29,902   $ 34,696   $ 25,089

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/20c5a089-a44b-483e-acb5-fccbbe07fc10

    The MIL Network –

  • MIL-OSI: Rightworks joins Wolters Kluwer’s CCH® Marketplace

    Source: GlobeNewswire (MIL-OSI)

    NASHUA, N.H., Jan. 28, 2025 (GLOBE NEWSWIRE) — Rightworks, the only intelligent cloud services provider purpose-built for accounting firms and professionals, today announced it has joined Wolters Kluwer’s CCH® Marketplace. The collaboration empowers accounting firms using Wolters Kluwer solutions to give their employees secure, remote access to all their tax apps, including CCH Axcess™, thus enabling them to work from anywhere. Additionally, using Rightworks OneSpace, Wolters Kluwer’s users can simplify firm operations, secure their data, connect with clients and scale their practice—all in one place.

    “We are excited to welcome Rightworks into our CCH® Marketplace,” said Cathy Rowe, Senior Vice President and Segment Leader, US Professional Market, Wolters Kluwer Tax & Accounting North America. “Accounting firms will be able to make the most of our suite of offerings from within Rightworks’ intelligent cloud, elevating the user experience and ultimately working with their clients securely and more collaboratively.”

    Rightworks OneSpace helps accounting firms resolve staffing, technology and security challenges while enabling them to leverage a simplified, fully managed cloud with quick access to every application. With this latest collaboration, accounting professionals have the flexibility to work remotely with secure web-based access to desktop and cloud apps within Wolters Kluwer’s CCH® ProSystem fx® and CCH Axcess™ Suite supporting modules that span audit, tax and firm management.

    “Part of creating a future-forward accounting practice is ensuring firms have access to the profession’s best tools that help them, in turn, offer the superior experiences that their clients increasingly expect,” said Piyum Samaraweera, Chief Product Officer at Rightworks. “Our relationship with Wolters Kluwer gives firms access to a cloud platform that is purpose-built for the accounting profession.”

    To learn more about Rightworks on CCH Marketplace, click here.

    Connect with Rightworks
    Visit our newsroom; read our blog; and follow us on LinkedIn, Facebook and Instagram.

    About Rightworks
    Rightworks enables accounting firms and businesses to significantly simplify operations and expand their value to clients via our award-winning intelligent cloud and learning resources. This is possible with Rightworks OneSpace, the only secure cloud environment purpose-built for the accounting and tax profession, and Rightworks Academy, the premier community for firm optimization, growth and professional development. The Academy offers access to thought leadership, events, peer communities and extensive learning resources. Founded in 2002, we’ve grown to serve over 10,000 accounting firms in the US—from single practitioners to Top 10 firms. For more information, please visit rightworks.com or follow us on LinkedIn, Facebook and Instagram.

    The MIL Network –

  • MIL-OSI Global: Donors are down, but dollars are up – how US charitable giving is changing

    Source: The Conversation – USA – By Una Osili, Professor of Economics and Philanthropic Studies; Associate Dean for Research and International Programs, Lilly Family School of Philanthropy, Indiana University

    Although the pie is shrinking, the remaining slices are giving more.
     Say-Cheese/iStock via Getty Images Plus

    Although the US$557 billion Americans gave to charity in 2023 marked a 2.1% decline in inflation-adjusted terms, U.S. donations have increased significantly over the past two decades. Giving has grown by about 42% since 2003, according to the annual Giving USA report – which our team at the Indiana University Lilly Family School of Philanthropy researches and writes in partnership with the Giving USA Foundation.

    While overall charitable funds have expanded according to the most recent data available, the share of Americans who give to charitable causes has fallen. It plummeted from 66.2% of all U.S. adults in 2000 to 45.8% in 2020, our team determined in a different study we released in 2024. In short, the number of dollars is up, while the share of Americans who are donors is down.

    As the second Trump administration gets underway, having fewer people donating more is one reason why scholars of philanthropy like us are watching how the federal government handles tax policy and other measures that could influence charitable giving.

    Decline continued when the COVID-19 pandemic began

    Our latest study regarding the donors’ side of the American giving equation included data from 2020 – the first year of the COVID-19 pandemic.

    We found that a long-term decline in Americans’ participation in charitable giving accelerated during the first year of the pandemic. The share of Americans who gave to charity fell from 49.6% in 2018, the prior year for which data is available, to 45.8% in 2020 – a nearly 4-percentage-point decline in two years. This data is only available for every other year.

    Those findings may appear to contradict many anecdotal reports about charitable activity and other acts of generosity being on the rise at that time.

    The share of Americans who give to charity had fallen by 3.5 percentage points in the prior two-year period – a sign that the pandemic may have sped up the decline in the giving participation rate.

    Giving is growing more concentrated

    How can the total amount contributed rise while the share of donors declines?

    The answer is simple: The donors who still give to charity are giving more than they used to, even after adjusting for inflation.

    The total amount the typical U.S. donor gave in a year rose from $3,131 in 2018 to $3,651 in 2020. That’s an 16.6% increase in just two years.

    We also found that American donors with higher incomes, more education and more wealth are giving larger amounts than they used to.

    Bouts of economic volatility and, in recent years, inflation running at levels not seen since the 1980s may have left many American families with less money to donate to charities.

    Other factors include cultural shifts, a decline in religious affiliation and a loss of trust in institutions of all kinds.

    What’s around the corner

    Changes enacted during the first Trump administration have been reverberating in recent years, and the second Trump administration’s policies are also likely to influence giving trends.

    Most of the taxpayers who had previously been able to take advantage of the charitable deduction, which reduces taxable income in accordance to the value of a taxpayer’s donations, stopped itemizing and instead took advantage of the standard deduction after President Donald Trump signed the Tax Cuts and Jobs Act into law in late 2017.

    That’s because the 2017 tax reforms increased the standard deduction. As a result, many people stopped itemizing their tax returns and started using the standard deduction instead.

    About 30% of taxpayers itemized in 2017, which meant they could benefit from the charitable deduction. But since 2018, only about 10% of them have been itemizing. A recent study one of us worked on determined that the tax changes reduced charitable giving by $20 billion in 2018 alone.

    The White House could attempt to address the sustained decline in the share of Americans making charitable donations by considering policies that have the potential to encourage more people to give to charity.

    The shrinking ranks of American donors matters because philanthropy plays a prominent role in fulfilling Americans’ spiritual, intellectual and material needs and aspirations for people of all backgrounds.

    Una Osili receives funding from Bill and Melinda Foundation, Charles Stewart Mott Foundation, Fidelity Charitable Catalyst Fund, John Templeton Foundation, Google.org

    Xiao “Jimmy” Han receives funding from Bill & Melinda Gates Foundation, Charles Stewart Mott Foundation, Fidelity Charitable Catalyst Fund, Google.org Charitable Giving Fund, and the John Templeton Foundation.

    – ref. Donors are down, but dollars are up – how US charitable giving is changing – https://theconversation.com/donors-are-down-but-dollars-are-up-how-us-charitable-giving-is-changing-246473

    MIL OSI – Global Reports –

  • MIL-OSI Security: Former Deputy Sheriff And DEA Task Force Officer Sentenced To More Than 17 Years In Federal Prison For Conspiring To Distribute Narcotics, Defrauding The United States, And Tax Evasion

    Source: Office of United States Attorneys

    Jacksonville, Florida – United States District Judge Wendy W. Berger today sentenced James Darrell Hickox (38, Callahan) to 17 years and 6 months in federal prison for multiple federal offenses including conspiring to distribute narcotics, conspiring to defraud the United States, and tax evasion. The court also ordered Hickox to forfeit or abandon the money, firearms, and ammunition involved in these offenses. Hickox pleaded guilty on May 15, 2024.

    According to court documents, while employed as a deputy with the Nassau County Sheriff’s and designated Task Force Officer with the Drug Enforcement Administration, Hickox and a co-conspirator engaged in extensive corrupt activity from 2017 – 2023. These acts included the theft of money and illegal drugs that were seized as evidence during criminal investigations; providing illegal drugs (including fentanyl and cocaine) to others to distribute on his behalf; and hiding from the Internal Revenue Service (IRS) more than $420,000 in cash he had received because of his criminal activities. Hickox and his co-conspirator stole more than 1,000 pounds of marijuana from evidence and provided the drugs to others to sell on their behalf. They had covered up the theft by submitting falsified paperwork showing that the marijuana had been destroyed. Similarly, they stole a kilogram of cocaine from evidence and then gave it to a drug dealer to sell for them.

    When Hickox’s residence was searched pursuant to a federal search warrant on March 10, 2023, agents found approximately 263 grams of a powder containing fentanyl, as well as cocaine. Hickox intended to distribute these substances. Agents also found a rifle that Hickox had illegally modified to function as a machinegun, as well as four additional firearms that had been seized during law enforcement investigations and should have been in evidence or lawfully destroyed. Hickox had drilled out and obliterated the serial number of one of these firearms. The agents also located more than $195,000 in cash proceeds from Hickox’s illicit activities. A search of Hickox’s workspace at the Nassau County Sheriff’s Office revealed another 260 pills containing methamphetamine.

    “Law enforcement officers who operate as though they are above the law betray the badge and the citizens they swore to protect,” said FBI Jacksonville Special Agent in Charge Kristin Rehler. “This case exemplifies the FBI’s commitment to holding public servants accountable if they violate the very laws they promised to uphold.”

    “He betrayed the oath he took to become a police officer and lost his career. He also let down his co-workers and our community,” said Nassau County Sheriff Bill Leeper. “Its law enforcement officers who do stupid things like this that erodes the confidence and trust in our profession by our citizens. His poor judgement and criminal behavior should not reflect negatively on all the good men and women at NCSO who go out every day and do it the right way to keep our citizens safe.”

    “As a sworn law enforcement officer, Hickox took an oath to uphold the law,” said Ron Loecker, Special Agent in Charge of IRS-Criminal Investigation’s Tampa Field Office. “Instead, he turned his back on that oath and profited from the very crimes he was tasked with investigating.  We commend our fellow law enforcement partners for their great work coming together to put a stop to this illegal betrayal of public trust. We will continue to investigate allegations of public corruption and follow the money to prosecute any individuals that abuse their position of trust for personal gain.”

    This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation, with assistance from U.S. Customs and Border Protection. It was prosecuted by Assistant United States Attorney William S. Hamilton. The United States Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service–Criminal Investigation, and United States Customs and Border Protection wish to thank the Florida Highway Patrol, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Nassau County Sheriff’s Office for their cooperation during this investigation.

    MIL Security OSI –

  • MIL-OSI: First Financial Northwest, Inc. Reports Net Income of $1.2 Million or $0.13 per Diluted Share for the Fourth Quarter and $1.1 Million or $0.12 per Diluted Share for the Year Ended December 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    RENTON, Wash., Jan. 28, 2025 (GLOBE NEWSWIRE) — First Financial Northwest, Inc. (the “Company”) (NASDAQ GS: FFNW), the holding company for First Financial Northwest Bank (the “Bank”), today reported net income for the quarter ended December 31, 2024, of $1.2 million, or $0.13 per diluted share, compared to a net loss of $608,000, or $(0.07) per diluted share, for the quarter ended September 30, 2024, and net income of $1.2 million, or $0.13 per diluted share, for the quarter ended December 31, 2023. For the twelve months ended December 31, 2024, the Company reported net income of $1.1 million, or $0.12 per diluted share, compared to net income of $6.3 million, or $0.69 per diluted share, for the year ended December 31, 2023.

    The improved performance in the current quarter compared to the quarter ended September 30, 2024, was due primarily to a $1.3 million recapture of provision for credit losses. This compares to a provision for credit losses of $1.6 million in the prior quarter that mainly related to two participation loans to a single borrowing entity totaling approximately $6.0 million, where we were not the lead lender. During the quarter ended December 31, 2024, one of the two loans was paid in full and the borrower paid down the balance on the other loan using proceeds from the sale of another property. Subsequently, we received an updated appraisal of the property securing the remaining loan that confirmed a value sufficient to support the recapture of the previously allocated specific reserve for this loan.

    “I am pleased to report that our net loans receivable increased $14.0 million in the quarter as our lending teams continue to focus on growing our loan portfolio. In addition, our credit quality remained strong, with only $842,000 in nonaccrual loans, representing 0.07% of our $1.16 billion total loan portfolio,” stated Joseph W. Kiley III, President and CEO.

    “We continue to prepare for the closing of the sale of the Bank to Global Federal Credit Union (“Global”), as we await the final required approval from Global’s primary regulator, the National Credit Union Administration, before we can proceed towards closing the transaction,” concluded Kiley.

    Highlights for the quarter and year ended December 31, 2024:

    • Net loans receivable totaled $1.14 billion at December 31, 2024, compared to $1.13 billion at September 30, 2024, and $1.18 billion at December 31, 2023.
    • Book value per common share was $17.50 at December 31, 2024, compared to $17.39 at September 30, 2024, and $17.61 at December 31, 2023.
    • The Bank’s Tier 1 leverage and total capital ratios were 11.2% and 16.7% at December 31, 2024, compared to 10.9% and 16.7% at September 30, 2024, and 10.2% and 16.2% at December 31, 2023, respectively.
    • Credit quality remained strong with nonaccrual loans totaling $842,000, or 0.07% of total loans at December 31, 2024.
    • A $1.3 million recapture of provision for credit losses was recorded in the current quarter, compared to a $1.6 million and no provision for credit losses recorded during the prior quarter and the same quarter a year ago, respectively. We recorded a $50,000 recapture of provision for credit losses for the year ended December 31, 2024, compared to a $208,000 recapture of provision for credit losses for the year ended December 31, 2023.

    Deposits decreased $36.0 million to $1.13 billion at December 31, 2024, compared to $1.17 billion at September 30, 2024, and decreased $62.7 million compared to $1.19 billion at December 31, 2023. The decrease in deposits at December 31, 2024, compared to September 30, 2024, was due primarily to a $19.7 million decrease in noninterest-bearing demand deposits and a $15.5 million decrease in money market deposits. The decrease in deposits at December 31, 2024, from December 31, 2023, reflects declines in all deposit categories except for retail certificates of deposit which increased $91.8 million.

    Federal Home Loan Bank (“FHLB”) advances totaled $110.0 million at December 31, 2024, compared to $100.0 million at September 30, 2024, and $125.0 million at December 31, 2023. Of the total FHLB advances at December 31, 2024, $100.0 million were tied to cash flow hedge agreements under which the Bank pays a fixed rate and receives a variable rate in return to assist in the Bank’s interest rate risk management efforts. These cash flow hedge agreements had a weighted average remaining term of 27.8 months and a weighted average fixed interest rate of 1.93% as of December 31, 2024. The average cost of borrowings was 2.35% for the quarter ended December 31, 2024, compared to 3.19% for the quarter ended September 30, 2024, and 2.40% for the quarter ended December 31, 2023.

    The following table presents a breakdown of our total deposits (unaudited):

      Dec 31,
    2024    		   Sep 30,
    2024    		   Dec 31,
    2023    		   Three
    Month
    Change    		   One
    Year
    Change
    Deposits: (Dollars in thousands)
    Noninterest-bearing demand $ 80,772   $ 100,466   $ 100,899   $ (19,694 )   $ (20,127 )
    Interest-bearing demand   56,957     55,506     56,968     1,451       (11 )
    Savings   16,277     17,031     18,886     (754 )     (2,609 )
    Money market   480,520     495,978     529,411     (15,458 )     (48,891 )
    Certificates of deposit, retail   448,974     447,474     357,153     1,500       91,821  
    Brokered deposits   47,900     50,900     130,790     (3,000 )     (82,890 )
    Total deposits $ 1,131,400   $ 1,167,355   $ 1,194,107   $ (35,955 )   $ (62,707 )

    The following tables present an analysis of total deposits by branch office (unaudited):

    December 31, 2024
      Noninterest-
    bearing
    demand    		 Interest-
    bearing
    demand    		 Savings Money
    market    		 Certificates
    of deposit,
    retail    		 Brokered
    deposits    		 Total
      (Dollars in thousands)
    King County              
    Renton $ 26,242 $ 14,786 $ 10,197 $ 284,670 $ 309,858 $ – $ 645,753
    Landing   3,245   1,359   170   7,958   14,965   –   27,697
    Woodinville   1,738   3,168   620   8,834   11,511   –   25,871
    Bothell   2,792   930   408   1,421   6,762   –   12,313
    Crossroads   11,075   2,762   86   29,208   18,772   –   61,903
    Kent   3,766   4,873   40   18,673   8,471   –   35,823
    Kirkland   5,524   1,924   208   11,574   1,855   –   21,085
    Issaquah   1,244   238   13   2,298   6,562   –   10,355
    Total King County   55,626   30,040   11,742   364,636   378,756   –   840,800
    Snohomish County              
    Mill Creek   3,184   3,496   342   16,135   12,487   –   35,644
    Edmonds   7,316   8,542   338   16,482   13,003   –   45,681
    Clearview   4,909   5,653   1,494   17,934   13,778   –   43,768
    Lake Stevens   3,633   5,946   1,314   24,571   17,004   –   52,468
    Smokey Point   2,544   1,800   1,032   36,950   9,619   –   51,945
    Total Snohomish County   21,586   25,437   4,520   112,072   65,891   –   229,506
    Pierce County              
    University Place   1,837   54   1   2,113   2,122   –   6,127
    Gig Harbor   1,723   1,426   14   1,699   2,205   –   7,067
    Total Pierce County   3,560   1,480   15   3,812   4,327   –   13,194
                   
    Brokered deposits   –   –   –   –   –   47,900   47,900
                   
    Total deposits $ 80,772 $          56,957 $         16,277 $      480,520 $       448,974 $         47,900 $    1,131,400
    September 30, 2024
      Noninterest-
    bearing
    demand    		 Interest-
    bearing
    demand    		 Savings Money
    market    		 Certificates
    of deposit,
    retail    		 Brokered
    deposits    		 Total
      (Dollars in thousands)
    King County               
    Renton $ 29,388 $ 14,153 $ 10,654 $ 305,836 $ 315,721 $ – $ 675,752
    Landing   3,442   1,660   237   8,348   12,733   –   26,420
    Woodinville   1,968   2,234   959   8,852   11,522   –   25,535
    Bothell   2,965   1,151   401   1,536   5,918   –   11,971
    Crossroads   14,770   2,039   107   31,665   18,136   –   66,717
    Kent   5,417   10,502   44   16,053   8,562   –   40,578
    Kirkland   10,967   1,890   206   11,243   2,240   –   26,546
    Issaquah   1,186   294   18   2,547   6,580   –   10,625
    Total King County   70,103   33,923   12,626   386,080   381,412   –   884,144
    Snohomish County              
    Mill Creek   3,990   2,171   384   14,628   10,312   –   31,485
    Edmonds   9,254   6,831   330   18,549   13,281   –   48,245
    Clearview   5,587   5,242   1,462   21,206   12,251   –   45,748
    Lake Stevens   3,970   4,282   1,244   23,257   15,571   –   48,324
    Smokey Point   2,994   1,664   969   29,353   11,387   –   46,367
    Total Snohomish County   25,795   20,190   4,389   106,993   62,802   –   220,169
    Pierce County              
    University Place   2,940   53   4   1,848   1,458   –   6,303
    Gig Harbor   1,628   1,340   12   1,057   1,802   –   5,839
    Total Pierce County   4,568   1,393   16   2,905   3,260   –   12,142
                   
    Brokered deposits   –   –   –   –   –   50,900   50,900
                   
    Total deposits $ 100,466 $ 55,506 $ 17,031 $ 495,978 $ 447,474 $ 50,900 $ 1,167,355
     

    Net loans receivable totaled $1.14 billion at December 31, 2024, compared to $1.13 billion at September 30, 2024, and $1.18 billion at December 31, 2023. The increase in the current quarter compared to the quarter ended September 30, 2024, was due to growth in non-residential commercial real estate, construction/land, consumer and one-to-four family residential loans, partially offset by declines in multifamily and business lending. The average balance of net loans receivable totaled $1.13 billion for both the quarters ended December 31, 2024, and September 30, 2024, compared to $1.17 billion for the quarter ended December 31, 2023. For the year ended December 31, 2024, the average balance of net loans receivable was $1.14 billion, compared to $1.17 billion for the year ended December 31, 2023.

    The allowance for credit losses (“ACL”) represented 1.30% of total loans receivable at December 31, 2024, compared to 1.42% of total loans receivable at September 30, 2024, and 1.28% at December 31, 2023. The change in the ACL at December 31, 2024, compared to September 30, 2024, related primarily to activity on the single lending relationship discussed above.

    Nonaccrual loans totaled $842,000 at December 31, 2024, compared to $853,000 at September 30, 2024, and $220,000 at December 31, 2023. There was no other real estate owned at December 31, 2024, September 30, 2024, or December 31, 2023.

    Net interest income totaled $8.4 million for the quarter ended December 31, 2024, compared to $8.5 million for the quarter ended September 30, 2024, and $9.3 million for the quarter ended December 31, 2023. The decrease in the current quarter compared to the quarter ended September 30, 2024, was primarily due to declines in interest from earning assets, partially offset by declines in interest expense. For the year ended December 31, 2024, net interest income totaled $34.8 million, compared to $40.5 million for the year ended December 31, 2023, as total interest expense increased by $5.0 million and total interest income declined by $800,000.

    Total interest income decreased $419,000 to $19.0 million for the quarter ended December 31, 2024, compared to $19.4 million for the quarter ended September 30, 2024, and decreased $1.3 million compared to $20.3 million for the quarter ended December 31, 2023. The decrease in total interest income during the current quarter compared to the prior quarter was primarily due to a $250,000 or 29.0% decline in interest income earned on interest-earning deposits held with banks. This decline resulted from a 54 basis point decrease in the average yield earned on these deposits, coupled with a $13.6 million reduction in their average balance. Additionally, interest income on loans, including fees, declined by $146,000 or 0.9%, primarily due to a $2.5 million decrease in the average balance of loans and, to a lesser extent, a four basis point decrease in the yield earned on loans. The decrease in total interest income during the current quarter compared to the comparable quarter in 2023 was primarily due to declines in interest income on loans, including fees, of $631,000, investments of $449,000, and interest-earning deposits with banks of $267,000, partially offset by an increase in dividends on FHLB stock of $56,000.

    Yield on loans, the largest component of our interest-earning assets, declined to 5.82% during the recent quarter, compared to 5.86% and 5.83% for the quarters ended September 30, 2024, and December 31, 2023, respectively. The yield on investment securities for the current quarter was 4.29%, down slightly from 4.30% last quarter and up from 4.11% a year ago.

    Total interest expense was $10.6 million for the quarter ended December 31, 2024, down from $11.0 million for both quarters ended September 30, 2024, and December 31, 2023. The decrease from the quarter ended September 30, 2024, was due to lower interest expense related to FHLB advances and other borrowings, which declined due to a decline in the average balance of FHLB advances and other borrowings, partially offset by higher interest expense on deposits driven by an increase in the average balance of interest-bearing deposits. The decrease from the quarter ended December 31, 2023, was due to lower interest expense on deposits and FHLB advances and other borrowings, primarily as a result of lower average balances of these liabilities.

    Net interest margin was 2.50% for the quarter ended December 31, 2024, compared to 2.46% for the quarter ended September 30, 2024, and 2.54% for the quarter ended December 31, 2023. The increase in the net interest margin for the quarter ended December 31, 2024, compared to the prior quarter was primarily due to a decline in the average balance of total interest-earning assets, as net interest income was relatively unchanged during the periods. The decrease in the net interest margin for the quarter ended December 31, 2024, compared to the same quarter a year ago was primarily due to a decline in net interest income, which was partially offset by a decline in the average balance of total interest-earning assets. The net interest margin for the month of December 2024 was 2.55%.

    Noninterest income for the quarter ended December 31, 2024, totaled $658,000, down from $677,000 for the quarter ended September 30, 2024, and up from $633,000 for the quarter ended December 31, 2023. The decrease compared to the quarter ended September 30, 2024, was primarily due to lower loan and deposit related fees and BOLI income, partially offset by an increase in wealth management revenue. Noninterest income remained nearly flat at $2.8 million for both the years ended December 31, 2024, and December 31, 2023, as increases in BOLI income, wealth management revenue and loan related fees in the current year were nearly entirely offset by decreases in deposit related fees and other noninterest income.

    Noninterest expense totaled $8.9 million for the quarter ended December 31, 2024, compared to $8.5 million for the quarter ended September 30, 2024, and $8.4 million for the quarter ended December 31, 2023. The increase from the quarter ended September 30, 2024, was primarily due to a $860,000 increase in salaries and employee benefits due to 2025 merit increases implemented in December 2024, as well as year-end accruals related to incentive compensation, partially offset by decreases in nearly all other categories, most notably professional fees and other general and administrative expenses. Incentive compensation increased due to the project that modified certain loans that would have otherwise been ineligible for Global Federal Credit Union to hold on their balance sheet. The increase compared to the quarter ended December 31, 2023, was primarily due to a $644,000 increase in salaries and employee benefits and an $87,000 increase in data processing expenses, partially offset by decreases across other expense categories. Noninterest expense totaled $36.7 million for the year ended December 31, 2024, compared to $35.7 million for the year ended December 31, 2023. The year-over-year increase was primarily due to an increase in professional fees, data processing and salaries and employee benefits, partially offset by lower marketing and other general and administrative expenses and regulatory assessments.

    First Financial Northwest, Inc. is the parent company of First Financial Northwest Bank; an FDIC insured Washington State-chartered commercial bank headquartered in Renton, Washington, serving the Puget Sound Region through 15 full-service banking offices. For additional information about us, please visit our website at ffnwb.com and click on the “Investor Relations” link at the bottom of the page.

    Forward-looking statements:

    When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events many of which are inherently uncertain and outside of our control. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, our pending transaction with Global Federal Credit Union (“Global”) whereby Global, pursuant to the definitive purchase and assumption agreement (the “P&A Agreement”), will acquire substantially all of the assets and assume substantially all of the liabilities of the Bank, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based on current management expectations and may, therefore, involve risks and uncertainties. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements made by, or on behalf of, us and could negatively affect our operating and stock performance. Factors that could cause our actual results to differ materially from those described in the forward-looking statements, include, but are not limited to, the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or all of the parties to terminate the P&A Agreement; delays in completing the P&A Agreement; the failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to the Global transaction, including the P&A Agreement, on a timely basis or at all; delays or other circumstances arising from the dissolution of the Bank and the Company following completion of the P&A Agreement; diversion of management’s attention from ongoing business operations and opportunities during the pending Global transaction; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the Global transaction; adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a recession or slowed economic growth; changes in the interest rate environment, including increases or decreases in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on our market position, loan, and deposit products; legislative and regulatory changes; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; effects of critical accounting policies and judgments, including the use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; the potential effects of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to the Securities and Exchange Commission – that are available on our website at www.ffnwb.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 are based upon management’s beliefs and assumptions at the time they are made and may turn out to be wrong because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. 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.

    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Consolidated Balance Sheets
    (Dollars in thousands)
    (Unaudited)
    Assets Dec 31,
    2024    		   Sep 30,
    2024    		   Dec 31,
    2023    		   Three
    Month
    Change    		   One
    Year
    Change
                       
    Cash on hand and in banks $ 9,535     $ 8,423     $ 8,391     13.2 %   13.6 %
    Interest-earning deposits with banks   36,182       72,884       22,138     (50.4 )   63.4  
    Investments available-for-sale, at fair value   151,642       156,609       207,915     (3.2 )   (27.1 )
    Investments held-to-maturity, at amortized cost   2,468       2,462       2,456     0.2     0.5  
    Loans receivable, net of allowance of $15,066, $16,265 and $15,306, respectively   1,140,186       1,126,146       1,175,925     1.2     (3.0 )
    Federal Home Loan Bank (“FHLB”) stock, at cost   5,853       5,403       6,527     8.3     (10.3 )
    Accrued interest receivable   6,108       6,638       7,359     (8.0 )   (17.0 )
    Deferred tax assets, net   2,582       2,690       2,648     (4.0 )   (2.5 )
    Premises and equipment, net   18,166       18,584       19,667     (2.2 )   (7.6 )
    Bank owned life insurance (“BOLI”), net   38,950       38,661       37,653     0.7     3.4  
    Prepaid expenses and other assets   9,676       8,898       10,478     8.7     (7.7 )
    Right of use asset (“ROU”), net   2,357       2,473       2,617     (4.7 )   (9.9 )
    Goodwill   889       889       889     0.0     0.0  
    Core deposit intangible, net   295       326       419     (9.5 )   (29.6 )
    Total assets $ 1,424,889     $ 1,451,086     $ 1,505,082     (1.8 )   (5.3 )
                       
    Liabilities and Stockholders’ Equity                  
                       
    Deposits                  
    Noninterest-bearing deposits $ 80,772     $ 100,466     $ 100,899     (19.6 )   (19.9 )
    Interest-bearing deposits   1,050,628       1,066,889       1,093,208     (1.5 )   (3.9 )
    Total deposits   1,131,400       1,167,355       1,194,107     (3.1 )   (5.3 )
    FHLB advances   110,000       100,000       125,000     10.0     (12.0 )
    Advance payments from borrowers for taxes and insurance   2,873       5,211       2,952     (44.9 )   (2.7 )
    Lease liability, net   2,550       2,673       2,806     (4.6 )   (9.1 )
    Accrued interest payable   526       294       2,739     78.9     (80.8 )
    Other liabilities   15,985       15,340       15,818     4.2     1.1  
    Total liabilities   1,263,334       1,290,873       1,343,422     (2.1 )   (6.0 )
                       
    Commitments and contingencies                  
                       
    Stockholders’ Equity                  
    Preferred stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding   –       –       –     n/a     n/a  
    Common stock, $0.01 par value; authorized 90,000,000 shares; issued and outstanding 9,230,010 shares at December 31, 2024, 9,213,969 shares at September 30, 2024, and 9,179,510 shares at December 31, 2023   93       92       92     1.1     1.1  
    Additional paid-in capital   72,823       72,916       73,035     (0.1 )   (0.3 )
    Retained earnings   94,892       93,692       96,206     1.3     (1.4 )
    Accumulated other comprehensive loss, net of tax   (6,253 )     (6,487 )     (7,673 )   (3.6 )   (18.5 )
    Total stockholders’ equity   161,555       160,213       161,660     0.8     (0.1 )
    Total liabilities and stockholders’ equity $ 1,424,889     $ 1,451,086     $ 1,505,082     (1.8 )%   (5.3 )%
     
    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Consolidated Income Statements
    (Dollars in thousands, except per share data)
    (Unaudited)
      Quarter Ended        
      Dec 31,
    2024    		   Sep 30,
    2024    		   Dec 31,
    2023    		   Three
    Month
    Change    		   One
    Year
    Change
    Interest income                  
    Loans, including fees $ 16,512     $ 16,658     $ 17,143   (0.9 )%   (3.7 )%
    Investments   1,694       1,744       2,143   (2.9 )   (21.0 )
    Interest-earning deposits with banks   613       863       880   (29.0 )   (30.3 )
    Dividends on FHLB Stock   177       150       121   18.0     46.3  
    Total interest income   18,996       19,415       20,287   (2.2 )   (6.4 )
    Interest expense                  
    Deposits   9,956       9,748       10,281   2.1     (3.2 )
    FHLB advances and other borrowings   600       1,213       731   (50.5 )   (17.9 )
    Total interest expense   10,556       10,961       11,012   (3.7 )   (4.1 )
    Net interest income   8,440       8,454       9,275   (0.2 )   (9.0 )
    (Recapture of provision) provision for credit losses   (1,250 )     1,575       –   (179.4 )   n/a  
    Net interest income after (recapture of provision) provision for credit losses   9,690       6,879       9,275   40.9     4.5  
                       
    Noninterest income                  
    BOLI income   289       295       255   (2.0 )   13.3  
    Wealth management revenue   88       42       60   109.5     46.7  
    Deposit related fees   226       236       234   (4.2 )   (3.4 )
    Loan related fees   44       96       60   (54.2 )   (26.7 )
    Other   11       8       24   37.5     (54.2 )
    Total noninterest income   658       677       633   (2.8 )   3.9  
                       
    Noninterest expense                  
    Salaries and employee benefits   5,466       4,606       4,822   18.7     13.4  
    Occupancy and equipment   1,154       1,183       1,231   (2.5 )   (6.3 )
    Professional fees   377       585       431   (35.6 )   (12.5 )
    Data processing   805       838       718   (3.9 )   12.1  
    Regulatory assessments   160       165       196   (3.0 )   (18.4 )
    Insurance and bond premiums   114       113       113   0.9     0.9  
    Marketing   24       46       70   (47.8 )   (65.7 )
    Other general and administrative   834       952       858   (12.4 )   (2.8 )
    Total noninterest expense   8,934       8,488       8,439   5.3     5.9  
    Income before federal income tax provision (benefit)   1,414       (932 )     1,469   (251.7 )   (3.7 )
    Federal income tax provision (benefit)   214       (324 )     275   (166.0 )   (22.2 )
    Net income (loss) $ 1,200     $ (608 )   $ 1,194   (297.4 )%   0.5 %
                       
    Basic earnings (loss) per share $ 0.13     $ (0.07 )   $ 0.13        
    Diluted earnings (loss) per share $ 0.13     $ (0.07 )   $ 0.13        
    Weighted average number of common shares outstanding   9,220,593       9,190,146       9,151,892        
    Weighted average number of diluted shares outstanding   9,238,565       9,190,146       9,176,724        
                                 
    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Consolidated Income Statements
    (Dollars in thousands, except per share data)
    (Unaudited)
      Year Ended December 31,    
        2024       2023     One Year
    Change
    Interest income          
    Loans, including fees $ 66,941     $ 66,938     0.0 %
    Investments   7,388       8,474     (12.8 )
    Interest-earning deposits with banks   2,444       2,261     8.1  
    Dividends on FHLB Stock   597       485     23.1  
    Total interest income   77,370       78,158     (1.0 )
    Interest expense          
    Deposits   39,117       34,407     13.7  
    FHLB advances and other borrowings   3,490       3,208     8.8  
    Total interest expense   42,607       37,615     13.3  
    Net interest income   34,763       40,543     (14.3 )
    Recapture of provision for credit losses   (50 )     (208 )   (76.0 )
    Net interest income after recapture of provision for credit losses   34,813       40,751     (14.6 )
               
    Noninterest income          
    BOLI   1,245       1,081     15.2  
    Wealth management revenue   279       253     10.3  
    Deposit accounts related fees   923       956     (3.5 )
    Loan related fees   296       275     7.6  
    Other   53       208     (74.5 )
    Total noninterest income   2,796       2,773     0.8  
               
    Noninterest expense          
    Salaries and employee benefits   20,652       20,366     1.4  
    Occupancy and equipment   4,789       4,748     0.9  
    Professional fees   3,011       2,288     31.6  
    Data processing   3,285       2,857     15.0  
    Regulatory assessments   662       763     (13.2 )
    Insurance and bond premiums   477       468     1.9  
    Marketing   179       343     (47.8 )
    Other general and administrative   3,638       3,833     (5.1 )
    Total noninterest expense   36,693       35,666     2.9  
    Income before federal income tax (benefit) provision   916       7,858     (88.3 )
    Federal income tax (benefit) provision   (156 )     1,553     (110.0 )
    Net income $ 1,072     $ 6,305     (83.0 )%
               
    Basic earnings per share $ 0.12     $ 0.69      
    Diluted earnings per share $ 0.12     $ 0.69      
    Weighted average number of common shares outstanding   9,183,900       9,126,209      
    Weighted average number of diluted shares outstanding   9,238,016       9,152,617      
                       

    The following table presents a breakdown of the loan portfolio (unaudited):

      December 31, 2024 September 30, 2024 December 31, 2023
      Amount   Percent   Amount   Percent   Amount   Percent
      (Dollars in thousands)
    Commercial real estate:                      
    Residential:                      
    Multifamily $ 126,303     10.9 %   $ 132,811     11.6 %   $ 138,149     11.6 %
    Total multifamily residential   126,303     10.9       132,811     11.6       138,149     11.6  
                           
    Non-residential:                      
    Retail   110,787     9.6       118,840     10.4       124,172     10.4  
    Office   73,306     6.3       73,778     6.5       72,778     6.1  
    Hotel / motel   72,434     6.3       54,716     4.8       63,597     5.3  
    Storage   32,229     2.8       32,443     2.8       33,033     2.8  
    Mobile home park   22,701     2.0       22,443     2.0       21,701     1.8  
    Warehouse   23,363     2.0       18,743     1.6       19,218     1.6  
    Nursing Home   9,713     0.8       11,407     1.0       11,610     1.0  
    Other non-residential   29,865     2.5       30,719     2.7       31,750     2.6  
    Total non-residential   374,398     32.3       363,089     31.8       377,859     31.6  
                           
    Construction/land:                      
    One-to-four family residential   49,674     4.3       42,846     3.8       47,149     4.0  
    Multifamily   7,884     0.7       7,227     0.6       4,004     0.3  
    Land development   9,582     0.8       10,148     0.8       9,771     0.8  
    Total construction/land   67,140     5.8       60,221     5.2       60,924     5.1  
                           
    One-to-four family residential:                      
    Permanent owner occupied   284,650     24.7       279,744     24.5       284,471     23.9  
    Permanent non-owner occupied   217,420     18.8       221,127     19.4       228,752     19.2  
    Total one-to-four family residential   502,070     43.5       500,871     43.9       513,223     43.1  
                           
    Business                      
    Aircraft   –     0.0       –     0.0       1,945     0.1  
    Small Business Administration (“SBA”)   1,729     0.2       1,745     0.2       1,794     0.3  
    Paycheck Protection Plan (“PPP”)   159     0.0       238     0.0       473     0.0  
    Other business   10,247     0.9       12,416     1.1       24,869     2.1  
    Total business   12,135     1.1       14,399     1.3       29,081     2.5  
                           
    Consumer                      
    Classic, collectible and other auto   59,580     5.2       58,085     5.1       58,618     5.0  
    Other consumer   13,626     1.2       12,935     1.1       13,377     1.1  
    Total consumer   73,206     6.4       71,020     6.2       71,995     6.1  
    Total loans   1,155,252     100.0 %     1,142,411     100.0 %     1,191,231     100.0 %
    Less:                      
    ACL   15,066           16,265           15,306      
    Loans receivable, net $ 1,140,186         $ 1,126,146         $ 1,175,925      
                           
    Concentrations of credit: (1)                      
    Construction loans as % of total capital   40.5 %         36.8 %         38.3 %      
    Total non-owner occupied commercial
    real estate as % of total capital    		   300.8 %         296.2 %         316.8 %    

    (1) Concentrations of credit percentages are for First Financial Northwest Bank only using classifications in accordance with FDIC regulatory guidelines.

    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Key Financial Measures
    (Unaudited)
      At or For the Quarter Ended
      Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
        2024       2024       2024       2024       2023  
      (Dollars in thousands, except per share data)
    Performance Ratios: (1)                  
    Return on assets   0.33 %     (0.17 )%     0.43 %     (0.29 )%     0.31 %
    Return on equity   2.96       (1.50 )     3.88       (2.67 )     2.97  
    Dividend payout ratio   0.00       0.00       76.47       (108.33 )     100.00  
    Equity-to-assets ratio   11.34       11.04       11.10       10.91       10.74  
    Tangible equity ratio (2)   11.26       10.97       11.02       10.83       10.66  
    Net interest margin   2.50       2.46       2.66       2.55       2.54  
    Average interest-earning assets to average interest-bearing liabilities   116.51       116.46       117.01       116.40       115.84  
    Efficiency ratio   98.20       92.96       82.35       116.97       85.17  
    Noninterest expense as a percent of average total assets   2.49       2.32       2.21       3.05       2.18  
    Book value per common share $ 17.50     $ 17.39     $ 17.51     $ 17.46     $ 17.61  
    Tangible book value per share (2)   17.37       17.26       17.37       17.32       17.47  
                       
    Capital Ratios: (3)                  
    Tier 1 leverage ratio   11.16 %     10.86 %     10.91 %     10.41 %     10.18 %
    Common equity tier 1 capital ratio   15.40       15.43       15.39       14.98       14.90  
    Tier 1 capital ratio   15.40       15.43       15.39       14.98       14.90  
    Total capital ratio   16.65       16.68       16.64       16.24       16.15  
                       
    Asset Quality Ratios: (4)                  
    Nonaccrual loans as a percent of total loans   0.07 %     0.07 %     0.41 %     0.02 %     0.02 %
    Nonaccrual loans as a percent of total assets   0.06       0.06       0.32       0.01       0.01  
    ACL as a percent of total loans   1.30       1.42       1.29       1.30       1.28  
    Net charge-offs to average loans receivable, net   (0.00 )     0.00       0.00       0.00       0.00  
                       
    Allowance for Credit Losses:                  
    ACL – loans                  
    Beginning balance $ 16,265     $ 14,796     $ 14,996     $ 15,306     $ 15,306  
    (Recapture of provision) provision for credit losses   (1,200 )     1,500       (200 )     (300 )     –  
    Charge-offs   –       (31 )     –       (10 )     –  
    Recoveries   1       –       –       –       –  
    Ending balance $ 15,066     $ 16,265     $ 14,796     $ 14,996     $ 15,306  
                       
    Allowance for unfunded commitments                  
    Beginning balance $ 639     $ 564     $ 564     $ 439     $ 439  
    (Recapture of provision) provision for credit losses   (50 )     75       –       125       –  
    Ending balance $ 589     $ 639     $ 564     $ 564     $ 439  
                       
    (Recapture of provision) provision for credit losses                  
    ACL – loans $ (1,200 )   $ 1,500     $ (200 )   $ (300 )   $ –  
    Allowance for unfunded commitments   (50 )     75       –       125       –  
    Total $ (1,250 )   $ 1,575     $ (200 )   $ (175 )   $ –  

    (1) Performance ratios are calculated on an annualized basis.
    (2) Non-GAAP financial measures. Refer to Non-GAAP Financial Measures at the end of this press release for a reconciliation to the nearest GAAP equivalents.
    (3) Capital ratios are for First Financial Northwest Bank only.
    (4) Loans are reported net of undisbursed funds.

    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Key Financial Measures
    (Unaudited)
      At or For the Quarter Ended
      Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
        2024       2024       2024       2024       2023  
      (Dollars in thousands)
    Yields and Costs: (1)                  
    Yield on loans   5.82 %     5.86 %     5.93 %     5.88 %     5.83 %
    Yield on investments   4.29       4.30       4.38       4.11       4.11  
    Yield on interest-earning deposits   4.73       5.27       5.25       5.28       5.32  
    Yield on FHLB stock   12.87       7.73       8.63       7.79       7.29  
    Yield on interest-earning assets   5.63 %     5.66 %     5.73 %     5.62 %     5.56 %
                       
    Cost of interest-bearing deposits   3.77 %     3.80 %     3.71 %     3.69 %     3.62 %
    Cost of borrowings   2.35       3.19       2.64       2.65       2.40  
    Cost of interest-bearing liabilities   3.64 %     3.72 %     3.59 %     3.58 %     3.50 %
                       
    Cost of total deposits (2)   3.46 %     3.47 %     3.38 %     3.38 %     3.31 %
    Cost of funds (2)   3.37       3.44       3.30       3.31       3.23  
                       
    Average Balances:                  
    Loans $ 1,129,019     $ 1,131,473     $ 1,139,017     $ 1,160,156     $ 1,167,339  
    Investments   156,975       161,232       173,102       202,106       206,837  
    Interest-earning deposits   51,518       65,149       36,959       37,032       65,680  
    FHLB stock   5,471       7,719       6,714       6,554       6,584  
    Total interest-earning assets $ 1,342,983     $ 1,365,573     $ 1,355,792     $ 1,405,848     $ 1,446,440  
                       
    Interest-bearing deposits $ 1,051,201     $ 1,021,041     $ 1,029,608     $ 1,082,168     $ 1,127,690  
    Borrowings   101,522       151,478       129,126       125,604       120,978  
    Total interest-bearing liabilities   1,152,723       1,172,519       1,158,734       1,207,772       1,248,668  
    Noninterest-bearing deposits   93,331       96,003       101,196       99,173       102,869  
    Total deposits and borrowings $ 1,246,054     $ 1,268,522     $ 1,259,930     $ 1,306,945     $ 1,351,537  
                       
    Average assets $ 1,429,788     $ 1,453,431     $ 1,446,207     $ 1,495,753     $ 1,538,955  
    Average stockholders’ equity   161,093       161,569       161,057       161,823       159,659  

    (1) Yields and costs are annualized.
    (2) Includes noninterest-bearing deposits.
    (3) Includes total borrowings and deposits (including noninterest-bearing deposits).

    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Key Financial Measures
    (Unaudited)
      At or For the Year Ended December 31,
        2024       2023       2022       2021       2020  
          (Dollars in thousands, except per share data)  
    Performance Ratios:                  
    Return on assets   0.07 %     0.41 %     0.91 %     0.86 %     0.63 %
    Return on equity   0.66       3.93       8.34       7.65       5.50  
    Dividend payout ratio   216.67       75.36       32.65       33.59       45.45  
    Equity-to-assets ratio   11.34       10.74       10.67       11.07       11.26  
    Tangible equity ratio (1)   11.26       10.66       10.58       10.97       11.15  
    Net interest margin   2.54       2.82       3.54       3.35       3.15  
    Average interest-earning assets to average interest-bearing liabilities   116.59       116.69       119.18       118.59       115.62  
    Efficiency ratio   97.69       82.34       69.04       68.32       72.39  
    Noninterest expense as a percent of average total assets   2.52       2.33       2.44       2.35       2.39  
    Book value per common share $ 17.50     $ 17.61     $ 17.57     $ 17.30     $ 16.05  
    Tangible book value per share (1)   17.37       17.47       17.41       17.13       15.88  
                       
    Capital Ratios: (2)                  
    Tier 1 leverage ratio   11.16 %     10.18 %     10.31 %     10.34 %     10.29 %
    Common equity tier 1 capital ratio   15.40       14.90       14.37       14.23       14.32  
    Tier 1 capital ratio   15.40       14.90       14.37       14.23       14.32  
    Total capital ratio   16.65       16.15       15.62       15.48       15.57  
                       
    Asset Quality Ratios: (3)                  
    Nonaccrual loans as a percent of total loans   0.07 %     0.02 %     0.02 %     0.00 %     0.19 %
    Nonaccrual loans as a percent of total assets   0.06       0.01       0.01       0.00       0.18  
    ACL as a percent of total loans   1.30       1.28       1.29       1.40       1.36  
    Net charge-offs (recoveries) to average loans receivable, net   0.00       0.00       0.00       (0.02 )     (0.00 )
                       
    ACL – loans                  
    Beginning balance $ 15,306     $ 15,227     $ 15,657     $ 15,174     $ 13,218  
    Beginning balance adjustment from adoption of Topic 326   –       500       –       –       –  
    (Recapture of provision) provision for credit losses   (200 )     (400 )     (400 )     300       1,900  
    Charge-offs   (41 )     (22 )     (37 )     –       (2 )
    Recoveries   1       1       7       183       58  
    Ending balance $ 15,066     $ 15,306     $ 15,227     $ 15,657     $ 15,174  
                       
    Allowance for unfunded commitments                  
    Beginning balance $ 439     $ 247     $ 281     $ 351     $ 428  
    Provision (recapture of provision) for credit losses   150       192       (34 )     (70 )     (77 )
    Ending balance $ 589     $ 439     $ 247     $ 281     $ 351  
                       
    (Recapture of provision) provision for credit losses                  
    ACL – loans $ (200 )   $ (400 )   $ (400 )   $ 300     $ 1,900  
    Allowance for unfunded commitments   150       192       (34 )     (70 )     (77 )
    Total $ (50 )   $ (208 )   $ (434 )   $ 230     $ 1,823  

    (1) Non-GAAP financial measures. Refer to Non-GAAP Financial Measures at the end of this press release for a reconciliation to the nearest GAAP equivalents.
    (2) Capital ratios are for First Financial Northwest Bank only.
    (3) Loans are reported net of undisbursed funds.

    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
     Key Financial Measures
    (Unaudited)
      At or For the Year Ended December 31,
        2024       2023       2022       2021       2020  
      (Dollars in thousands)
    Yields and Costs:                  
    Yield on loans   5.87 %     5.71 %     4.69 %     4.57 %     4.69 %
    Yield on investments   4.26       3.97       2.77       1.83       2.39  
    Yield on interest-earning deposits   5.12       5.06       1.28       0.12       0.21  
    Yield on FHLB stock   9.03       7.07       5.08       5.29       4.85  
    Yield on interest-earning assets   5.66 %     5.44 %     4.33 %     4.01 %     4.36 %
                       
    Cost of deposits   3.74 %     3.12 %     0.87 %     0.71 %     1.42 %
    Cost of borrowings   2.75       2.52       1.70       1.39       1.31  
    Cost of interest-bearing liabilities   3.63 %     3.05 %     0.95 %     0.78 %     1.41 %
                       
    Cost of interest-bearing deposits   3.42 %     2.83 %     0.77 %     0.64 %     1.32 %
    Cost of funds   3.35       2.80       0.86       0.71       1.32  
                       
    Average Balances:                  
    Loans $ 1,139,864     $ 1,172,569     $ 1,128,835     $ 1,098,772     $ 1,120,889  
    Investments   173,276       213,261       203,165       176,110       133,584  
    Interest-earning deposits   47,723       44,684       30,176       60,482       25,108  
    FHLB stock   6,614       6,857       6,256       6,271       6,600  
    Total interest-earning assets $ 1,367,477     $ 1,437,371     $ 1,368,432     $ 1,341,635     $ 1,286,181  
                       
    Interest-bearing deposits $ 1,045,950     $ 1,104,510     $ 1,034,351     $ 1,015,852     $ 987,069  
    Borrowings   126,931       127,263       113,890       115,466       125,392  
    Total interest-bearing liabilities   1,172,881       1,231,773       1,148,241       1,131,318       1,112,461  
    Noninterest-bearing deposits   97,411       109,795       125,166       112,484       75,388  
    Total deposits and borrowings $ 1,270,292     $ 1,341,568     $ 1,273,407     $ 1,243,802     $ 1,187,849  
                       
    Average assets $ 1,456,215     $ 1,529,511     $ 1,455,739     $ 1,421,476     $ 1,361,604  
    Average stockholders’ equity   161,385       160,428       158,685       160,041       155,587  

    Non-GAAP Financial Measures

    In addition to financial results presented in accordance with generally accepted accounting principles (“GAAP”) utilized in the United States, this earnings release contains non-GAAP financial measures that include tangible equity, tangible assets, tangible book value per share, and the tangible equity-to-assets ratio. The Company believes that these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of goodwill and core deposit intangible, net and provides an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. Non-GAAP financial measures have limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation and are not a substitute for other measures in this earnings release that are presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

    The following tables provide a reconciliation between the GAAP and non-GAAP measures:

      Quarter Ended
        Dec 31,
    2024    		       Sep 30,
    2024    		       Jun 30,
    2024    		       Mar 31,
    2024    		       Dec 31,
    2023    		  
      (Dollars in thousands, except per share data)
    Tangible equity to tangible assets and tangible book value per share:  
    Total stockholders’ equity (GAAP) $ 161,555     $ 160,213     $ 160,693     $ 160,183     $ 161,660  
    Less:                  
    Goodwill   889       889       889       889       889  
    Core deposit intangible, net   295       326       357       388       419  
    Tangible equity (Non-GAAP) $ 160,371     $ 158,998     $ 159,447     $ 158,906     $ 160,352  
                       
    Total assets (GAAP) $ 1,424,889     $ 1,451,086     $ 1,447,753     $ 1,468,350     $ 1,505,082  
    Less:                  
    Goodwill   889       889       889       889       889  
    Core deposit intangible, net   295       326       357       388       419  
    Tangible assets (Non-GAAP) $ 1,423,705     $ 1,449,871     $ 1,446,507     $ 1,467,073     $ 1,503,774  
                       
    Common shares outstanding at period end   9,230,010       9,213,969       9,179,825       9,174,425       9,179,510  
                       
    Equity-to-assets ratio (GAAP)   11.34 %     11.04 %     11.10 %     10.91 %     10.74 %
    Tangible equity-to-tangible assets ratio (Non-GAAP)   11.26       10.97       11.02       10.83       10.66  
    Book value per common share (GAAP) $ 17.50     $ 17.39     $ 17.51     $ 17.46     $ 17.61  
    Tangible book value per share (Non-GAAP)   17.37       17.26       17.37       17.32       17.47  
                                           
    Non-GAAP Financial Measures (continued)
     
      Year Ended December 31,
        2024       2023       2022       2021       2020  
      (Dollars in thousands, except per share data)
    Tangible equity to tangible assets and tangible book value per share:
    Total stockholders’ equity (GAAP) $ 161,555     $ 161,660     $ 160,360     $ 157,879     $ 156,302  
    Less:                  
    Goodwill   889       889       889       889       889  
    Core deposit intangible   295       419       548       684       824  
    Tangible equity (Non-GAAP) $ 160,371     $ 160,352     $ 158,923     $ 156,306     $ 154,589  
                       
    Total assets (GAAP)   1,424,889       1,505,082       1,502,916       1,426,329       1,387,669  
    Less:                  
    Goodwill   889       889       889       889       889  
        295       419       548       684       824  
    Tangible assets (Non-GAAP) $ 1,423,705     $ 1,503,774     $ 1,501,479     $ 1,424,756     $ 1,385,956  
                       
    Common shares outstanding at period end   9,230,010       9,179,510       9,127,595       9,125,759       9,736,875  
                       
    Equity-to-assets ratio (GAAP)   11.34 %     10.74 %     10.67 %     11.07 %     11.26 %
    Tangible equity ratio (Non-GAAP)   11.26       10.66       10.58       10.97       11.15  
    Book value per common share (GAAP) $ 17.50     $ 17.61     $ 17.57     $ 17.30     $ 16.05  
    Tangible book value per share (Non-GAAP)   17.37       17.47       17.41       17.13       15.88  

    For more information, contact:
    Joseph W. Kiley III, President and Chief Executive Officer
    Rich Jacobson, Executive Vice President and Chief Financial Officer
    (425) 255-4400

    The MIL Network –

  • MIL-OSI: Auburn National Bancorporation, Inc. Reports Fourth Quarter and Full Year Results

    Source: GlobeNewswire (MIL-OSI)

    Fourth Quarter 2024 Highlights:

    • Net interest margin (tax-equivalent) improved 44 basis points to 3.09%, compared to 4Q 2023
    • Net interest income (tax-equivalent) increased 14% compared to 4Q 2023
    • Average loans increased 3% compared to 4Q 2023
    • Nonperforming assets were $0.5 million or 0.05% of total assets at December 31, 2024

    AUBURN, Ala., Jan. 28, 2025 (GLOBE NEWSWIRE) — Auburn National Bancorporation (Nasdaq: AUBN) reported net income of $1.6 million, or $0.45 per share, for the fourth quarter of 2024, compared to $1.7 million, or $0.50 per share, for the third quarter of 2024, and a net loss of $(4.0) million, or $(1.14) per share, for the fourth quarter of 2023. The net loss for the fourth quarter of 2023 reflected the sale of $117.6 million of available-for-sale securities for an after-tax loss of $(4.7) million, or $(1.35) per share related to the Company’s balance sheet repositioning strategy. Excluding this non-routine item, net earnings for the fourth quarter of 2023 would have been $0.7 million, or $0.21 per share.

    For the full year 2024, the Company reported net earnings of $6.4 million, or $1.83 per share, compared to $1.4 million, or $0.40 per share, for 2023. Excluding the loss on sale of securities related to the balance sheet repositioning strategy during 2023, described above, net earnings for the full year 2023 would have been $6.1 million, or $1.75 per share.

    “Our fourth quarter and full year results reflect solid revenue growth, strong asset quality, and controlled expenses,” said David A. Hedges, President and CEO. “Except for the first quarter of 2024, following the balance sheet repositioning, our quarterly cost of deposits decreased for the first time since the third quarter of 2022. We remain optimistic that our net interest margin will continue to improve in 2025 as recent cuts in the federal funds rate should reduce our cost of deposits and still allow our earning asset yields to improve as loans and securities re-price. While the interest rate environment remains challenging for the banking industry, our capital and liquidity are strong and we are well positioned to meet the needs of our customers,” said Mr. Hedges.

    Net interest income (tax-equivalent) was $7.0 million for the fourth quarter of 2024, compared to $6.8 million in the third quarter of 2024, and $6.2 million for the fourth quarter of 2023. The increase in net interest income was primarily due to improved net interest margin.

    Net interest margin (tax-equivalent) was 3.09% in the fourth quarter of 2024, compared to 3.05% in the third quarter of 2024, and 2.65% in the fourth quarter of 2023. The increase in net interest margin compared to the fourth quarter of 2023 was primarily due to loan growth and the balance sheet repositioning strategy mentioned above, which resulted in a more favorable asset mix and higher yields on interest-earning assets in 2024. Average loans for the fourth quarter of 2024 were $567.6 million, a 3% increase from the fourth quarter of 2023.

    Nonperforming assets were $0.5 million, or 0.05% of total assets, at December 31, 2024, compared to $0.8 million, or 0.08% of total assets at September 30, 2024, and $0.9 million, or 0.09% of total assets, at December 31, 2023.

    The Company recorded a negative provision for credit losses of $(48) thousand in the fourth quarter of 2024, compared to a negative provision for credit losses of $(127) thousand in the third quarter of 2024, and a provision for credit losses of $326 thousand in the fourth quarter of 2023.

    At December 31, 2024 and September 30, 2024, the Company’s allowance for credit losses was $6.9 million, or 1.22% of total loans, compared to $6.9 million, or 1.23% of total loans at December 31, 2023. Although the balance of the allowance for credit losses was largely unchanged, the decrease in the allowance for credit losses as a percentage of total loans was primarily due to improved economic forecasts.

    Noninterest income was $0.8 million for both the fourth and third quarters of 2024, compared to a loss of $5.4 million in the fourth quarter of 2023. Excluding the pre-tax securities loss of $6.3 million related to the balance sheet repositioning strategy in 2023, noninterest income would have been $0.9 million for the fourth quarter of 2023.

    Noninterest expense was $5.5 million in both the fourth and third quarters of 2024, compared to $5.8 million for the fourth quarter of 2023. The decrease in noninterest expense compared to the fourth quarter of 2023 was primarily related to decreases in salaries and benefits expense, net occupancy and equipment expense, and professional fees expense.

    The provision for income tax expense was $0.8 million for the fourth quarter of 2024, compared to income tax expense of $0.5 million for the third quarter of 2024, and an income tax benefit of $(1.5) million for the fourth quarter of 2023.

    The effective tax rate for the fourth quarter of 2024 was 34.73%, compared to 23.46% for the third quarter of 2024, and an effective tax rate of (27.53)% for the fourth quarter of 2023. The increase in the effective tax rate compared to the fourth quarter of 2023 was primarily due to an increase in pre-tax earnings in 2024 resulting from our balance sheet repositioning and the pre-tax loss incurred in the fourth quarter of 2023 from selling securities in such balance sheet repositioning. Also, the provision for income tax expense and the effective tax rates for the fourth and third quarters of 2024 included discrete tax items associated with provision to return adjustments in conjunction with the final 2023 tax return filing and the resolution of state examination activities, which resulted in additional tax expense. Excluding these discrete items, the effective tax rate for the fourth and third quarters of 2024, would have been 21.55% and 18.96%, respectively. The Company’s effective income tax rate otherwise is principally affected by tax-exempt earnings from the Company’s investments in municipal securities, bank-owned life insurance, and New Markets Tax Credits.

    Total assets were $977.3 million at December 31, 2024, compared to $990.1 million at September 30, 2024 and $975.3 million at December 31, 2023. Loans, net of unearned income were $564.0 million at December 31, 2024, compared to $565.7 million at September 30, 2024 and $557.3 million at December 31, 2023. Growth in construction and land development loans since December 31, 2023 was partially offset by paydowns in commercial and industrial loans. Total deposits were $895.8 million at December 31, 2024, compared to $901.7 million at September 30, 2024 and $896.2 million at December 31, 2023. At December 31, 2024, the Company had $74.1 million of reciprocal deposits sold off-balance sheet, compared to $37.8 million at September 30, 2024, and $59.0 million at December 31, 2023. The Company had no brokered deposits, FHLB advances or other wholesale borrowings outstanding at December 31, 2024, September 30, 2024, or December 31, 2023.

    At December 31, 2024, the Company’s consolidated stockholders’ equity (book value) was $78.3 million, or $22.41 per share, compared to $84.3 million, or $24.14 per share, and $76.5 million, or $21.90 per share, at December 31, 2023. The decrease from September 30, 2024 was primarily driven by other comprehensive losses of $6.7 million due to higher market interest rates that led to an increase in unrealized losses on securities available-for-sale, net of tax, and cash dividends paid of $1.0 million, partially offset by net earnings of $1.6 million during the fourth quarter of 2024. The increase from December 31, 2023 was primarily driven by net earnings of $6.4 million, which was partially offset by cash dividends paid of $3.8 million, other comprehensive losses of $0.6 million related to unrealized gains/losses on securities available-for-sale, net of tax, and a $0.3 million one-time charge for the cumulative effect to adopt a new accounting standard on January 1, 2024. Unrealized losses on securities do not affect the Bank’s capital for regulatory capital purposes.

    The Company’s tangible common equity (“TCE”) ratio or total equity to total assets ratio was 8.01% at December 31, 2024, compared to 8.52% at September 30, 2024, and 7.84% at December 31, 2023. All of the Company’s marketable securities are classified as available-for-sale. Therefore, any changes in the fair value of the Company’s securities portfolio are reflected in total equity, net of tax, under generally accepted accounting principles.

    The Company paid cash dividends of $0.27 per share in the fourth quarter of 2024. At December 31, 2024, the Bank’s regulatory capital ratios were well above the minimum amounts required to be “well capitalized” under current regulatory standards.

    About Auburn National Bancorporation, Inc.

    Auburn National Bancorporation, Inc. (the “Company”) is the parent company of AuburnBank (the “Bank”), with total assets of approximately $977 million. The Bank is an Alabama state-chartered bank that is a member of the Federal Reserve System, which has operated continuously since 1907. Both the Company and the Bank are headquartered in Auburn, Alabama. The Bank conducts its business in East Alabama, including Lee County and surrounding areas. The Bank operates seven full-service branches in Auburn, Opelika, Valley, and Notasulga, Alabama. The Bank also operates a loan production office in Phenix City, Alabama. Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.

    Cautionary Notice Regarding Forward-Looking Statements

    This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results, costs and revenues, the continuing effects of the COVID-19 pandemic and related government, Federal Reserve monetary and regulatory actions, including the remaining effects of pandemic-related economic stimulus and economic conditions generally and in our markets, loan demand, mortgage lending activity, changes in the mix of our earning assets (including those generating tax exempt income or tax credits) and our mix and cost of deposits and wholesale liabilities, net interest income and margin, yields on earning assets, the market values and performance of securities held, effects of inflation, including Federal Reserve monetary policies which were tightened in response to inflation beginning in 2022 through increases in the target federal funds rate and reductions in the Federal Reserve’s Treasury and mortgage-backed securities (MBS) holdings, and more recent monetary loosening through increased reinvestment of maturing Treasury securities and reinvestment in agency debt and MBS in Treasury securities beginning in June 2024 and beginning September 17, 2024, three reductions in the target federal funds rate totaling 100 basis points to a current target of 4.25-4.50%, changes in the shape of the yield curve, interest rates (generally and those applicable to our assets and liabilities) and changes in our asset values, especially investment securities, as a result of monetary policies and interest rate changes, noninterest income, loan performance, loan deferrals and modifications, nonperforming assets, other real estate owned, provision for credit losses, including the continuing effects of the application of the new CECL accounting standard adopted on January 1, 2023 and our CECL models, including possible adjustments to the fair values of securities available for sale in lieu of other-than-temporary impairments, charge-offs, collateral values, credit quality, asset sales, insurance claims, and market trends, as well as statements with respect to our objectives, expectations and intentions and other statements that are not historical facts. Actual results may differ from those set forth in the forward-looking statements.

    Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, achievements, or financial condition of the Company or the Bank to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements.

    All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2023 and otherwise in our other SEC reports and filings.

    Explanation of Certain Unaudited Non-GAAP Financial Measures

    This press release contains financial information determined by methods other than U.S. generally accepted accounting principles (“GAAP”). The attached financial highlights include certain designated net interest income amounts presented on a tax-equivalent basis, a non-GAAP financial measure, and the presentation and calculation of the efficiency ratio, a non-GAAP measure. Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes the presentation of net interest income on a tax-equivalent basis provides comparability of net interest income from both taxable and tax-exempt sources and facilitates comparability within the industry. Similarly, the efficiency ratio is a common measure that facilitates comparability with other financial institutions. Although the Company believes these non-GAAP financial measures enhance investors’ understanding of its business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. Along with the attached financial highlights, the Company provides reconciliations between the GAAP financial measures and these non-GAAP financial measures.

    For additional information, contact:
    David A. Hedges
    President and CEO
    (334) 821-9200

    Financial Highlights (unaudited)                                      
            Quarter ended     Year ended December 31,  
    (Dollars in thousands, except per share amounts)   December 31, 2024       September 30, 2024       December 31, 2023       2024         2023    
    Results of Operations                                      
    Net interest income (a) $ 6,988       $ 6,811       $ 6,154       $ 27,204       $ 26,745    
    Less: tax-equivalent adjustment   19         21         95         79         417    
      Net interest income (GAAP)   6,969         6,790         6,059         27,125         26,328    
    Noninterest income   845         846         (5,429 )       3,474         (2,981 )  
      Total revenue   7,814         7,636         630         30,599         23,347    
    Provision for credit losses   (48 )       (127 )       326         36         135    
    Noninterest expense   5,472         5,500         5,803         22,166         22,594    
    Income tax expense (benefit)   830         531         (1,514 )       2,000         (777 )  
    Net earnings (loss) $ 1,560       $ 1,732       $ (3,985 )     $ 6,397       $ 1,395    
                                                 
    Per share data:                                      
    Basic and diluted net earnings (loss): $ 0.45       $ 0.50       $ (1.14 )     $ 1.83       $ 0.40    
    Cash dividends declared $ 0.27       $ 0.27       $ 0.27       $ 1.08       $ 1.08    
    Weighted average shares outstanding:   3,493,699         3,493,699         3,493,614         3,493,690         3,498,030    
    Shares outstanding, at period end   3,493,699         3,493,699         3,493,614         3,493,699         3,493,614    
    Book value $ 22.41       $ 24.14       $ 21.90       $ 22.41       $ 21.90    
    Common stock price:                                      
      High $ 24.57       $ 24.35       $ 21.99       $ 24.57       $ 24.50    
      Low   20.06         17.50         19.72         16.63         18.80    
      Period-end $ 23.49       $ 22.90       $ 21.28       $ 23.49       $ 21.28    
        To earnings ratio (c)   12.77   x     91.60   x     53.20   x     12.84   x     53.20   x
        To book value   105   %     95   %     97   %     105   %     97   %
    Performance ratios:                                      
    Return on average equity (annualized):   7.49   %     9.10   %     (26.40 ) %     8.21   %     2.05   %
    Return on average assets (annualized):   0.63   %     0.71   %     (1.56 ) %     0.65   %     0.14   %
    Dividend payout ratio   60.00   %     54.00   %     (23.68 ) %     59.02   %     270.00   %
    Other financial data:                                      
    Net interest margin (a)   3.09   %     3.05   %     2.65   %     3.06   %     2.89   %
    Effective income tax rate   34.73   %     23.46   %     (27.53 ) %     23.82   %     (125.73 ) %
    Efficiency ratio (b)   69.86   %     71.83   %     800.41   %     72.25   %     95.08   %
    Asset Quality:                                      
    Nonperforming assets:                                      
      Nonperforming (nonaccrual) loans $ 503       $ 775       $ 911       $ 503       $ 911    
        Total nonperforming assets $ 503       $ 775       $ 911       $ 503       $ 911    
                                                 
    Net (recoveries) charge-offs $ (16 )     $ 60       $ 173       $ (14 )     $ 46    
    Allowance for credit losses as a % of:                                      
      Loans   1.22   %     1.22   %     1.23   %     1.22   %     1.23   %
      Nonperforming loans   1,366   %     887   %     753   %     1,366   %     753   %
    Nonperforming assets as a % of:                                      
      Loans and other real estate owned   0.09   %     0.14   %     0.16   %     0.09   %     0.16   %
      Total assets   0.05   %     0.08   %     0.09   %     0.05   %     0.09   %
    Nonperforming loans as a % of total loans   0.09   %     0.14   %     0.16   %     0.09   %     0.16   %
    Net (recoveries) charge-offs                                      
    as a % of average loans   (0.01 ) %     0.04   %     0.13   %     —   %     0.01   %
                                                 
    Selected average balances:                                      
    Securities $ 255,168       $ 251,723       $ 354,065       $ 258,155       $ 387,488    
    Loans, net of unearned income   567,634         571,651         550,938         568,378         523,838    
    Total assets   991,275         982,656         1,020,476         982,268         1,021,808    
    Total deposits   904,605         904,860         953,674         902,429         946,791    
    Total stockholders’ equity   83,325         76,113         60,372         77,921         68,066    
    Selected period end balances:                                      
    Securities $ 243,012       $ 258,285       $ 270,910       $ 243,012       $ 270,910    
    Loans, net of unearned income   564,017         565,699         557,294         564,017         557,294    
    Allowance for credit losses   6,871         6,876         6,863         6,871         6,863    
    Total assets   977,324         990,143         975,255         977,324         975,255    
    Total deposits   895,824         901,724         896,243         895,824         896,243    
    Total stockholders’ equity   78,292         84,336         76,507         78,292         76,507    
                                                 
    (a) Tax equivalent. See “Explanation of Certain Unaudited Non-GAAP Financial Measures” and “Reconciliation of  
      GAAP to non-GAAP Measures (unaudited).”  
    (b) Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and tax-equivalent  
      net interest income. See “Reconciliation of GAAP to non-GAAP Measures (unaudited)” below.  
    (c) Calculated by dividing period end share price by earnings per share for the previous four quarters.  
    Reconciliation of GAAP to non-GAAP Measures (unaudited):  
                               
          Quarter ended December 31,     Years ended December 31,  
    (Dollars in thousands, except per share amounts)   2023     2022     2023     2022  
    Net interest income, as reported (GAAP) $ 6,059   $ 7,471   $ 26,328   $ 27,166  
    Tax-equivalent adjustment   95     117     417     456  
    Net interest income (tax-equivalent) $ 6,154   $ 7,588   $ 26,745   $ 27,622  
                               

    The MIL Network –

  • MIL-OSI: Capital City Bank Group, Inc. Reports Fourth Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    TALLAHASSEE, Fla., Jan. 28, 2025 (GLOBE NEWSWIRE) — Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $13.1 million, or $0.77 per diluted share, for the fourth quarter of 2024 compared to $13.1 million, or $0.77 per diluted share, for the third quarter of 2024, and $11.7 million, or $0.70 per diluted share, for the fourth quarter of 2023.

    For the full year of 2024, net income attributable to common shareowners totaled $52.9 million, or $3.12 per diluted share, compared to net income of $52.3 million, or $3.07 per diluted share, for the same period of 2023.

    QUARTER HIGHLIGHTS (4thQuarter 2024 versus 3rdQuarter 2024)

    Income Statement

    • Tax-equivalent net interest income totaled $41.2 million compared to $40.3 million for the prior quarter
      • Net interest margin increased 5 basis points to 4.17% (total deposit costs down 6 basis points partially offset by a 1 basis point decrease in earning asset yield).
    • Stable credit quality metrics and credit loss provision – net loan charge-offs were 25 basis points (annualized) of average loans – allowance coverage ratio was 1.10% at December 31, 2024
    • Noninterest income decreased $0.8 million, or 3.9%, driven by lower mortgage banking revenues
    • Noninterest expense decreased $1.1 million, or 2.7%, primarily due to lower other expense which included a gain from the sale of a banking office

    Balance Sheet

    • Loan balances decreased $16.1 million, or 0.6% (average), and $31.5 million, or 1.2% (end of period)
    • Deposit balances increased $28.4 million, or 0.8% (average), and increased $92.9 million, or 2.6% (end of period), reflective of the seasonal increase in public fund balances
    • Tangible book value per share increased $1.05, or 4.6%, due in part to a favorable year-end re-measurement adjustment for the pension plan ($0.60 per diluted share)

    FULL YEAR 2024 HIGHLIGHTS

    Income Statement

    • Tax-equivalent net interest income totaled $159.2 million for 2024 compared to $159.4 million for 2023 driven by higher yields across our earning assets, partially offset by higher deposit cost which was well controlled at 89 basis points for the year – net interest margin was 4.08% for 2024 compared to 4.05% for 2023
    • Credit quality metrics remained strong throughout the year – allowance coverage ratio remained stable at 1.10% – net loan charge-offs were 21 basis points of average loans for 2024 versus 18 basis points for 2023
    • Noninterest income increased $4.4 million, or 6.1%, driven by higher mortgage banking revenues and wealth management fees
    • Noninterest expense increased $8.3 million, or 5.3%, primarily due to higher compensation expense reflective of higher incentive compensation, merit raises, and higher health insurance costs

    Balance Sheet

    • Loan balances increased $50.1 million, or 1.9% (average), and decreased $82.4 million, or 3.0% (end of period)
    • Deposit balances decreased $72.2 million, or 2.0% (average), and decreased $29.8 million, or 0.8% (end of period)
    • Tangible book value per share increased $3.20, or 15.6%, driven by strong earnings and favorable investment security and pension plan accumulated other comprehensive loss adjustments

    “In 2024, we delivered record earnings and advanced our commitment to creating shareholder value, which is demonstrated by a 15.6% increase in tangible book value per share, a 15.8% increase in the dividend, and the repurchase of 83,000 shares,” said William G. Smith, Jr., President, Chairman and CEO of Capital City Bank Group. “Our associates also earned us recognition for the 12th consecutive year as one of the best banks to work for—an achievement that underscores the strength of our organization and the core values we embrace. We remain focused on soundness, profitability, growth, and making strategic investments that add long-term value. Our fortress balance sheet, diversified revenues, and growth markets together position us well for 2025 and beyond.”

    Discussion of Operating Results

    Net Interest Income/Net Interest Margin

    Tax-equivalent net interest income for the fourth quarter of 2024 totaled $41.2 million, compared to $40.3 million for the third quarter of 2024, and $39.3 million for the fourth quarter of 2023. For 2024, tax-equivalent net interest income totaled $159.2 million compared to $159.4 million for 2023. Compared to the third quarter of 2024, the increase reflected higher investment securities interest due to new investment purchases at higher yields, in addition to lower deposit interest expense, partially offset by lower loan interest due to lower balances. Compared to 2023, the slight decrease reflected an increase in deposit interest expense and a decrease in investment securities interest that was offset by increases in loan interest and overnight funds interest.

    Our net interest margin for the fourth quarter of 2024 was 4.17%, an increase of five basis points over the third quarter of 2024 and an increase of 10 basis points over the fourth quarter of 2023. For the month of December 2024, our net interest margin was 4.18%. For 2024, our net interest margin was 4.08%, an increase of three basis points over 2023. Compared to the third quarter of 2024, the increase reflected higher yield in the investment portfolio driven by new purchases during the quarter, in addition to lower deposit interest expense. The increase over 2023 reflected a combination of earning assets re-pricing at higher interest rates and higher average loan balances, partially offset by a higher cost of deposits. For the fourth quarter of 2024, our cost of funds was 88 basis points, a decrease of five basis points from the third quarter of 2024 and an increase of 15 basis points over the fourth quarter of 2023. Our total cost of deposits (including noninterest bearing accounts) was 86 basis points, 92 basis points, and 66 basis points, respectively, for the same periods.

    Provision for Credit Losses

    We recorded a provision expense for credit losses of $0.7 million for the fourth quarter of 2024 compared to $1.2 million for the third quarter of 2024 and $2.0 million for the fourth quarter of 2023. Compared to the third quarter of 2024, the provision expense reflected a $0.8 million decrease in the provision for loans held for investment (“HFI”) and a $0.3 million decrease in the provision benefit for unfunded loan commitments. The decrease in the provision for loans HFI was primarily due to lower loan balances and slightly lower loss rates.

    For 2024, we recorded a provision expense for credit losses of $4.0 million compared to $9.7 million for 2023. The decrease reflected a $4.5 million decrease in the provision for loans HFI and a $1.2 million decrease in the provision for unfunded loan commitments. The decrease in the provision for loans HFI was primarily due to lower new loan volume and loan balances in 2024 and favorable loan grade migration. The decrease in the provision for unfunded loan commitments reflected a lower level of loan commitments. We discuss the allowance for credit losses further below.

    Noninterest Income and Noninterest Expense

    Noninterest income for the fourth quarter of 2024 totaled $18.8 million compared to $19.5 million for the third quarter of 2024 and $17.2 million for the fourth quarter of 2023. Compared to the third quarter of 2024, the $0.7 million decrease from the third quarter of 2024 reflected a $0.8 million decrease in mortgage banking revenues attributable to lower production volume and a $0.3 million decrease in deposit fees that was partially offset by a $0.4 million increase in wealth management fees, primarily from retail brokerage. The $1.6 million increase over the fourth quarter of 2023 was driven by higher mortgage banking revenues of $0.8 million driven by a higher gain on sale margin and wealth management fees of $0.9 million, primarily from retail brokerage and to a lesser extent trust.

    For 2024, noninterest income totaled $76.0 million compared to $71.6 million for 2023, primarily attributable to a $3.9 million increase in mortgage banking revenues and a $2.8 million increase in wealth management fees, partially offset by a $2.2 million decrease in other income. The increase in mortgage banking revenues was due to a higher gain on sale margin. The increase in wealth management fees was primarily driven by higher retail brokerage fees and to a lesser extent trust fees, primarily attributable to both new account growth and higher account values driven by higher market returns. The decrease in other income was primarily attributable to a $1.4 million gain from the sale of mortgage servicing rights in 2023, and to a lesser extent a decrease in vendor bonus income and miscellaneous income.

    Noninterest expense for the fourth quarter of 2024 totaled $41.8 million compared to $42.9 million for the third quarter of 2024 and $40.0 million for the fourth quarter of 2023. The $1.1 million decrease from the third quarter of 2024 was primarily attributable to lower other expense of $1.2 million and occupancy expense of $0.2 million that was partially offset by a $0.3 million increase in compensation expense. The decrease in other expense was primarily attributable to a $1.0 million decrease in other real estate expense driven by the sale of a banking office and lower miscellaneous expense of $0.5 million which reflected a non-routine VISA Class B swap payment in the third quarter of 2024. The decrease in occupancy expense reflected lower property tax and software license expense. The increase in compensation was driven by higher incentive plan compensation. Compared to the fourth quarter of 2023, the $1.8 million increase was driven by a $2.3 million increase in compensation expense that was partially offset by a $0.2 million decrease in occupancy expense and a $0.3 million decrease in other expense. The unfavorable variance in compensation expense reflected a $1.4 million increase in salary expense and a $0.9 million increase in other benefit expense with the salary expense driven by higher incentive compensation and merit adjustments and the associate benefit expense reflective of higher health insurance cost.

    For 2024, noninterest expense totaled $165.3 million compared to $157.0 million for 2023, primarily attributable to increases in compensation expense of $6.9 million, occupancy expense of $0.3 million, and other expense of $1.1 million. The increase in compensation reflected a $5.4 million increase in salary expense and a $1.6 million increase in other associate benefit expense. The increase in salary expense was primarily due to a lower level of realized loan cost (credit offset to salary expense) of $3.1 million (lower new loan volume), higher base salary expense of $2.2 million (primarily annual merit raises), and a $1.2 million increase in cash incentive compensation that was partially offset by lower commission expense of $1.4 million (lower residential mortgage volume). The unfavorable variance in other associate benefit expense was due to a $0.9 million increase in associate insurance cost and a $0.6 million increase in stock compensation expense. The increase in occupancy expense was attributable to increases in software license and maintenance agreement expenses. The increase in other expense was driven by a $1.1 million increase in other real estate expense and a $1.4 million increase in processing expense that was partially offset by a $1.4 million decrease in miscellaneous expense. The increase in other real estate expense reflected a lower level of gains from the sale of banking offices in 2024. The increase in processing expense reflected both inflationary increases on contract renewals and the outsourcing of our core processing system. The decrease in miscellaneous expense was attributable to lower pension plan expense for the non-service related component of the plan.

    Income Taxes

    We realized income tax expense of $4.2 million (effective rate of 24.3%) for the fourth quarter of 2024 compared to $3.0 million (effective rate of 19.1%) for the third quarter of 2024 and $2.9 million (effective rate of 20.3%) for the fourth quarter of 2023. Compared to the third quarter of 2024, the increase in our effective tax rate was attributable to a lower than projected level of pre-tax income from Capital City Home Loans (“CCHL”) in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment. Further, we realized a higher than projected Internal Revenue Code (“IRC”) Section 162(m) limitation related to current and future compensation. For 2024, we realized income tax expense of $13.9 million (effective rate of 21.2%) compared to $13.0 million (effective rate of 20.4%) for 2023 with the increase in the effective tax rate primarily attributable to a higher IRC Section 162(m) limitation and lower tax-exempt interest income. Absent discrete items or new tax credit investments, we expect our annual effective tax rate to approximate 24% for 2025.

    Discussion of Financial Condition

    Earning Assets

    Average earning assets totaled $3.922 billion for the fourth quarter of 2024, an increase of $38.5 million, or 1.0 %, over the third quarter of 2024, and an increase of $97.9 million, or 2.6%, over the fourth quarter of 2023. The increase over both prior periods was primarily driven by higher deposit balances (see below – Deposits). Compared to the third quarter of 2024, the change in earning asset mix was primarily attributable to a $41.4 million increase in short term investments (overnight funds sold), a $6.7 million increase in investment securities, and $6.5 million increase in loans held for sale, partially offset by a $16.1 million decrease in loans HFI. Compared to the fourth quarter of 2023, the change in earning asset mix reflected a $198.4 million increase in short term investments (overnight funds sold) that was partially offset by a $48.0 million decrease in investment securities, a $33.8 million decrease in loans HFI, and a $18.7 million decrease in loans held for sale.

    Average loans HFI for the fourth quarter of 2024 decreased $16.1 million, or 0.6%, from the third quarter of 2024 and decreased $33.8 million, or 1.3%, from the fourth quarter of 2023. Compared to the third quarter of 2024, the decline was primarily attributable to decreases in consumer loans (primarily indirect auto) of $18.3 million and commercial mortgage real estate loans of $24.1 million, partially offset by increases in construction real estate loans of $13.1 million, and residential real estate loans of $11.6 million. Compared to the fourth quarter of 2023, the decrease was driven by decreases in consumer loans (primarily indirect auto) of $72.8 million, commercial loans of $30.2 million, and commercial mortgage real estate loans of $25.3 million, partially offset by increases in residential real estate loans of $70.8 million, construction real estate loans of $16.6 million, and home equity loans of $10.2 million.

    Loans HFI at December 31, 2024 decreased $31.5 million, or 1.2%, from September 30, 2024 and decreased $82.4 million, or 3.0%, from December 31, 2023. Compared to September 30, 2024, the decrease was driven by decreases in commercial mortgage real estate loans of $40.9 million, consumer loans (primarily indirect auto) of $13.8 million, and commercial loans of $5.4 million, partially offset by increases in home equity loans of $9.1 million, other loans of $13.5 million, and residential real estate loans of $5.0 million. Compared to December 31, 2023, the decrease was primarily attributable to decreases in consumer loans (primarily indirect auto) of $71.5 million, commercial mortgage real estate loans of $46.4 million, and commercial loans of $36.0 million, partially offset by increases in residential real estate loans of $27.2 million, construction real estate loans of $23.9 million, and home equity loans of $9.1 million.

    Allowance for Credit Losses

    At December 31, 2024, the allowance for credit losses for loans HFI totaled $29.3 million compared to $29.8 million at September 30, 2024 and $29.9 million at December 31, 2023. Activity within the allowance is provided on Page 9. The decreases in the allowance from September 30, 2024 and December 31, 2023 were primarily attributable to lower loan balances and favorable loan migration. Net loan charge-offs were 25 basis points of average loans for the fourth quarter of 2024 versus 19 basis points for the third quarter of 2024. For 2024, net loan charge-offs were 21 basis points of average loans compared to 18 basis points in 2023. At December 31, 2024, the allowance represented 1.10% of loans HFI compared to 1.11% at September 30, 2024, and 1.10% at December 31, 2023.

    Credit Quality

    Nonperforming assets (nonaccrual loans and other real estate) totaled $6.7 million at December 31, 2024 compared to $7.2 million at September 30, 2024 and $6.2 million at December 31, 2023. At December 31, 2024, nonperforming assets as a percent of total assets equaled 0.15%, compared to 0.17% at September 30, 2024 and 0.15% at December 31, 2023. Nonaccrual loans totaled $6.3 million at December 31, 2024, a $0.3 million decrease from September 30, 2024 and a $0.1 million increase over December 31, 2023. Further, classified loans totaled $19.9 million at December 31, 2024, a $5.6 million decrease from September 30, 2024 and a $2.3 million decrease from December 31, 2023.

    Deposits

    Average total deposits were $3.600 billion for the fourth quarter of 2024, an increase of $28.4 million, or 0.8%, over the third quarter of 2024 and an increase of $51.9 million, or 1.5%, over the fourth quarter of 2023. Compared to the third quarter of 2024, the increase was primarily attributable to higher NOW account balances which reflected the seasonal inflow of public funds from municipal clients as they receive their tax receipts beginning in late November. The increase over the fourth quarter of 2023 reflected higher NOW, MMA, and certificates of deposit (“CD”) balances that were partially offset by decreases in noninterest bearing and savings balances. During 2024, we realized a re-mix in deposits as rate sensitive clients sought higher yield deposit products. Average core deposit balances (total deposits less public funds) increased $20.3 million over the third quarter of 2024 and $28.4 million over the fourth quarter of 2023.

    At December 31, 2024, total deposits were $3.672 billion, an increase of $92.9 million, or 2.6%, over September 30, 2024 and a decrease of $29.8 million, or 0.8%, from December 31, 2023. Compared to the third quarter of 2024, the increase was primarily due to a $110.7 million increase in NOW account balances which reflected the aforementioned seasonal inflow of public funds balances. The decrease from the fourth quarter of 2023 was driven by lower noninterest bearing, NOW, and savings account balances that were partially offset by higher MMA and CD balances which reflected the aforementioned re-mix in balances during 2024. Core deposit balances (total deposits less public funds) decreased $50.3 million from the third quarter of 2024 and increased $21.9 million over the fourth quarter of 2023.

    Liquidity

    The Bank maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $298.3 million in the fourth quarter of 2024 compared to $256.9 million in the third quarter of 2024 and $99.8 million in the fourth quarter of 2023. Compared to both prior periods, the increases reflected growth in average core and public fund deposit balances.

    At December 31, 2024, we had the ability to generate approximately $1.535 billion (excludes overnight funds position of $321 million) in additional liquidity through various sources including various federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and brokered deposits.

    We also view our investment portfolio as a liquidity source and have the option to pledge securities in our portfolio as collateral for borrowings or deposits, and/or to sell selected securities. Our portfolio consists of debt issued by the U.S. Treasury, U.S. governmental agencies, municipal governments, and corporate entities. At December 31, 2024, the weighted-average maturity and duration of our portfolio were 2.54 years and 2.19 years, respectively, and the available-for-sale portfolio had a net unrealized after-tax loss of $19.2 million.

    Capital

    Shareowners’ equity was $495.3 million at December 31, 2024 compared to $476.5 million at September 30, 2024 and $440.6 million at December 31, 2023. For the fourth quarter of 2024, shareowners’ equity was positively impacted by net income attributable to common shareowners of $13.1 million, a net $7.6 million decrease in the accumulated other comprehensive loss, the issuance of stock of $0.9 million, stock compensation accretion of $0.7 million, and a $0.4 million reclassification from temporary equity (concurrent with the agreement to assign the minority membership interest (49%) in Capital City Home Loans, LLC, temporary equity was reclassified to other liabilities and included a $0.4 million net credit to retained earnings to account for the difference between the fair value and the book value of the minority interest). The net favorable change in accumulated other comprehensive loss reflected a $10.1 million decrease in the pension plan loss from the year-end re-measurement of the plan and a $0.7 million increase in the fair value of the interest rate swap related to subordinated debt, that was partially offset by a $3.2 million increase in the investment securities loss. Shareowners’ equity was reduced by common stock dividends of $3.9 million ($0.23 per share).

    For the full year 2024, shareowners’ equity was positively impacted by net income attributable to common shareowners of $52.9 million, a net $15.7 million decrease in the accumulated other comprehensive loss, the issuance of stock of $3.1 million, and stock compensation accretion of $1.9 million. The net favorable change in accumulated other comprehensive loss reflected a $10.1 million decrease in the pension plan loss from the year-end re-measurement of the plan and a $5.6 million decrease in the investment securities loss. Shareowners’ equity was reduced by common stock dividends of $14.9 million ($0.88 per share), the repurchase of stock of $2.3 million (82,540 shares), net adjustments totaling $1.4 million related to transactions under our stock compensation plans, and a $0.3 million reclassification from temporary equity.

    At December 31, 2024, our total risk-based capital ratio was 18.77% compared to 17.97% at September 30, 2024 and 16.57% at December 31, 2023. Our common equity tier 1 capital ratio was 15.64%, 14.88%, and 13.52%, respectively, on these dates. Our leverage ratio was 11.05%, 10.89%, and 10.30%, respectively, on these dates. At December 31, 2024, all our regulatory capital ratios exceeded the thresholds to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio was 9.55% at December 31, 2024 compared to 9.28% and 8.26% at September 30, 2024 and December 31, 2023, respectively. If our unrealized held-to-maturity securities losses of $16.0 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 9.17%.

    About Capital City Bank Group, Inc.

    Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $4.3 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 63 banking offices and 104 ATMs/ITMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

    FORWARD-LOOKING STATEMENTS

    Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “vision,” “goal,” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our actual results to differ: our ability to successfully manage credit risk, interest rate risk, liquidity risk, and other risks inherent to our industry; the effects of changes in the level of checking or savings account deposits and the competition for deposits on our funding costs, net interest margin and ability to replace maturing deposits and advances; legislative or regulatory changes; adverse developments in the financial services industry generally; inflation, interest rate, market and monetary fluctuations; uncertainty in the pricing of residential mortgage loans that we sell, as well as competition for the mortgage servicing rights related to these loans; interest rate risk and price risk resulting from retaining mortgage servicing rights and the effects of higher interest rates on our loan origination volumes; changes in monetary and fiscal policies of the U.S. Government; the cost and effects of cybersecurity incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers; the effects of fraud related to debit card products; the accuracy of our financial statement estimates and assumptions; changes in accounting principles, policies, practices or guidelines; the frequency and magnitude of foreclosure of our loans; the effects of our lack of a diversified loan portfolio; the strength of the local economies in which we operate; our ability to declare and pay dividends; structural changes in the markets for origination, sale and servicing of residential mortgages; our ability to retain key personnel; the effects of natural disasters (including hurricanes), widespread health emergencies (including pandemics), military conflict, terrorism, civil unrest or other geopolitical events; our ability to comply with the extensive laws and regulations to which we are subject; the impact of the restatement of our previously issued consolidated statements of cash flows and any deficiencies in the processes undertaken to effect such restatements; any inability to implement and maintain effective internal control over financial reporting and/or disclosure control or inability to remediate our existing material weaknesses in our internal controls deemed ineffective; the willingness of clients to accept third-party products and services rather than our products and services; technological changes; the outcomes of litigation or regulatory proceedings; negative publicity and the impact on our reputation; changes in consumer spending and saving habits; growth and profitability of our noninterest income; the limited trading activity of our common stock; the concentration of ownership of our common stock; anti-takeover provisions under federal and state law as well as our Articles of Incorporation and our Bylaws; other risks described from time to time in our filings with the Securities and Exchange Commission; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ, except as may be required by law.

    USE OF NON-GAAP FINANCIAL MEASURES
    Unaudited

    We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill and other intangibles resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.

    The GAAP to non-GAAP reconciliations are provided below.

    (Dollars in Thousands, except per share data) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023
    Shareowners’ Equity (GAAP)   $ 495,317   $ 476,499   $ 460,999   $ 448,314   $ 440,625  
    Less: Goodwill and Other Intangibles (GAAP)     92,773     92,813     92,853     92,893     92,933  
    Tangible Shareowners’ Equity (non-GAAP) A   402,544     383,686     368,146     355,421     347,692  
    Total Assets (GAAP)     4,307,142     4,225,316     4,225,695     4,259,922     4,304,477  
    Less: Goodwill and Other Intangibles (GAAP)     92,773     92,813     92,853     92,893     92,933  
    Tangible Assets (non-GAAP) B $ 4,214,369   $ 4,132,503   $ 4,132,842   $ 4,167,029   $ 4,211,544  
    Tangible Common Equity Ratio (non-GAAP) A/B   9.55 %   9.28 %   8.91 %   8.53 %   8.26 %
    Actual Diluted Shares Outstanding (GAAP) C   17,018,122     16,980,686     16,970,228     16,947,204     17,000,758  
    Tangible Book Value per Diluted Share (non-GAAP) A/C $ 23.65   $ 22.60   $ 21.69   $ 20.97   $ 20.45  
    CAPITAL CITY BANK GROUP, INC.                      
    EARNINGS HIGHLIGHTS                      
    Unaudited                      
                           
        Three Months Ended   Twelve Months Ended  
    (Dollars in thousands, except per share data)   Dec 31, 2024   Sep 30, 2024   Dec 31, 2023   Dec 31, 2024   Dec 31, 2023  
    EARNINGS                      
    Net Income Attributable to Common Shareowners $ 13,090 $ 13,118 $ 11,720   52,915 $ 52,258  
    Diluted Net Income Per Share $ 0.77 $ 0.77 $ 0.70   3.12 $ 3.07  
    PERFORMANCE                      
    Return on Average Assets (annualized)   1.22 % 1.24 % 1.12 % 1.25 % 1.22 %
    Return on Average Equity (annualized)   10.60   10.87   10.69   11.18   12.40  
    Net Interest Margin   4.17   4.12   4.07   4.08   4.05  
    Noninterest Income as % of Operating Revenue   31.34   32.67   30.46   32.34   31.05  
    Efficiency Ratio   69.74 % 71.81 % 70.82 % 70.30 % 67.99 %
    CAPITAL ADEQUACY                      
    Tier 1 Capital   17.58 % 16.77 % 15.37 % 17.58 % 15.37 %
    Total Capital   18.77   17.97   16.57   18.77   16.57  
    Leverage   11.05   10.89   10.30   11.05   10.30  
    Common Equity Tier 1   15.64   14.88   13.52   15.64   13.52  
    Tangible Common Equity (1)   9.55   9.28   8.26   9.55   8.26  
    Equity to Assets   11.50 % 11.28 % 10.24 % 11.50 % 10.24 %
    ASSET QUALITY                      
    Allowance as % of Non-Performing Loans   464.14 % 452.64 % 479.70 % 464.14 % 479.70 %
    Allowance as a % of Loans HFI   1.10   1.11   1.10   1.10   1.10  
    Net Charge-Offs as % of Average Loans HFI   0.25   0.19   0.23   0.21   0.18  
    Nonperforming Assets as % of Loans HFI and OREO   0.25   0.27   0.23   0.25   0.23  
    Nonperforming Assets as % of Total Assets   0.15 % 0.17 % 0.15 % 0.15 % 0.15 %
    STOCK PERFORMANCE                      
    High $ 40.86 $ 36.67 $ 32.56   40.86 $ 36.86  
    Low   33.00   26.72   26.12   25.45   26.12  
    Close $ 36.65 $ 35.29 $ 29.43   36.65 $ 29.43  
    Average Daily Trading Volume   27,484   37,151   33,297   31,390   33,775  
                           
    (1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 7.        
                           
    CAPITAL CITY BANK GROUP, INC.                    
    CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
    Unaudited                    
                         
      2024
    		 2023
    (Dollars in thousands) Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter
    ASSETS                    
    Cash and Due From Banks $ 70,543   $ 83,431   $ 75,304   $ 73,642   $ 83,118  
    Funds Sold and Interest Bearing Deposits   321,311     261,779     272,675     231,047     228,949  
    Total Cash and Cash Equivalents   391,854     345,210     347,979     304,689     312,067  
                         
    Investment Securities Available for Sale   403,345     336,187     310,941     327,338     337,902  
    Investment Securities Held to Maturity   567,155     561,480     582,984     603,386     625,022  
    Other Equity Securities   2,399     6,976     2,537     3,445     3,450  
    Total Investment Securities   972,899     904,643     896,462     934,169     966,374  
                         
    Loans Held for Sale   28,672     31,251     24,022     24,705     28,211  
                         
    Loans Held for Investment (“HFI”):                    
    Commercial, Financial, & Agricultural   189,208     194,625     204,990     218,298     225,190  
    Real Estate – Construction   219,994     218,899     200,754     202,692     196,091  
    Real Estate – Commercial   779,095     819,955     823,122     823,690     825,456  
    Real Estate – Residential   1,028,498     1,023,485     1,012,541     1,012,791     1,001,257  
    Real Estate – Home Equity   220,064     210,988     211,126     214,617     210,920  
    Consumer   199,479     213,305     234,212     254,168     270,994  
    Other Loans   14,006     461     2,286     3,789     2,962  
    Overdrafts   1,206     1,378     1,192     1,127     1,048  
    Total Loans Held for Investment   2,651,550     2,683,096     2,690,223     2,731,172     2,733,918  
    Allowance for Credit Losses   (29,251 )   (29,836 )   (29,219 )   (29,329 )   (29,941 )
    Loans Held for Investment, Net   2,622,299     2,653,260     2,661,004     2,701,843     2,703,977  
                         
    Premises and Equipment, Net   81,952     81,876     81,414     81,452     81,266  
    Goodwill and Other Intangibles   92,773     92,813     92,853     92,893     92,933  
    Other Real Estate Owned   367     650     650     1     1  
    Other Assets   116,326     115,613     121,311     120,170     119,648  
    Total Other Assets   291,418     290,952     296,228     294,516     293,848  
    Total Assets $ 4,307,142   $ 4,225,316   $ 4,225,695   $ 4,259,922   $ 4,304,477  
    LIABILITIES                    
    Deposits:                    
    Noninterest Bearing Deposits $ 1,306,254   $ 1,330,715   $ 1,343,606   $ 1,361,939   $ 1,377,934  
    NOW Accounts   1,285,281     1,174,585     1,177,180     1,212,452     1,327,420  
    Money Market Accounts   404,396     401,272     413,594     398,308     319,319  
    Savings Accounts   506,766     507,604     514,560     530,782     547,634  
    Certificates of Deposit   169,280     164,901     159,624     151,320     129,515  
    Total Deposits   3,671,977     3,579,077     3,608,564     3,654,801     3,701,822  
                         
    Repurchase Agreements   26,240     29,339     22,463     23,477     26,957  
    Other Short-Term Borrowings   2,064     7,929     3,307     8,409     8,384  
    Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
    Other Long-Term Borrowings   794     794     1,009     265     315  
    Other Liabilities   57,863     71,974     69,987     65,181     66,080  
    Total Liabilities   3,811,825     3,742,000     3,758,217     3,805,020     3,856,445  
                         
    Temporary Equity   –     6,817     6,479     6,588     7,407  
    SHAREOWNERS’ EQUITY                    
    Common Stock   170     169     169     169     170  
    Additional Paid-In Capital   37,684     36,070     35,547     34,861     36,326  
    Retained Earnings   463,949     454,342     445,959     435,364     426,275  
    Accumulated Other Comprehensive Loss, Net of Tax   (6,486 )   (14,082 )   (20,676 )   (22,080 )   (22,146 )
    Total Shareowners’ Equity   495,317     476,499     460,999     448,314     440,625  
    Total Liabilities, Temporary Equity and Shareowners’ Equity $ 4,307,142   $ 4,225,316   $ 4,225,695   $ 4,259,922   $ 4,304,477  
    OTHER BALANCE SHEET DATA                    
    Earning Assets $ 3,974,431   $ 3,880,769   $ 3,883,382   $ 3,921,093   $ 3,957,452  
    Interest Bearing Liabilities   2,447,708     2,339,311     2,344,624     2,377,900     2,412,431  
    Book Value Per Diluted Share $ 29.11   $ 28.06   $ 27.17   $ 26.45   $ 25.92  
    Tangible Book Value Per Diluted Share(1)   23.65     22.60     21.69     20.97     20.45  
    Actual Basic Shares Outstanding   16,975     16,944     16,942     16,929     16,950  
    Actual Diluted Shares Outstanding   17,018     16,981     16,970     16,947     17,001  
    (1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 7.
                                 
    CAPITAL CITY BANK GROUP, INC.                            
    CONSOLIDATED STATEMENT OF OPERATIONS                      
    Unaudited                            
                                 
        2024   2023   Twelve Months Ended December 31,
    (Dollars in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   2024   2023
    INTEREST INCOME                            
    Loans, including Fees $ 41,453   $ 41,659 $ 41,138 $ 40,683 $ 40,407 $ 164,933 $ 152,250
    Investment Securities   4,694     4,155   4,004   4,244   4,392   17,097   18,692
    Federal Funds Sold and Interest Bearing Deposits   3,596     3,514   3,624   1,893   1,385   12,627   10,126
    Total Interest Income   49,743     49,328   48,766   46,820   46,184   194,657   181,068
    INTEREST EXPENSE                            
    Deposits   7,766     8,223   8,579   7,594   5,872   32,162   17,582
    Repurchase Agreements   199     221   217   201   199   838   513
    Other Short-Term Borrowings   83     52   68   39   310   242   1,538
    Subordinated Notes Payable   581     610   630   628   627   2,449   2,427
    Other Long-Term Borrowings   11     11   3   3   5   28   20
    Total Interest Expense   8,640     9,117   9,497   8,465   7,013   35,719   22,080
    Net Interest Income   41,103     40,211   39,269   38,355   39,171   158,938   158,988
    Provision for Credit Losses   701     1,206   1,204   920   2,025   4,031   9,714
    Net Interest Income after Provision for Credit Losses   40,402     39,005   38,065   37,435   37,146   154,907   149,274
    NONINTEREST INCOME                            
    Deposit Fees   5,207     5,512   5,377   5,250   5,304   21,346   21,325
    Bank Card Fees   3,697     3,624   3,766   3,620   3,713   14,707   14,918
    Wealth Management Fees   5,222     4,770   4,439   4,682   4,276   19,113   16,337
    Mortgage Banking Revenues   3,118     3,966   4,381   2,878   2,327   14,343   10,400
    Other   1,516     1,641   1,643   1,667   1,537   6,467   8,630
    Total Noninterest Income   18,760     19,513   19,606   18,097   17,157   75,976   71,610
    NONINTEREST EXPENSE                            
    Compensation   26,108     25,800   24,406   24,407   23,822   100,721   93,787
    Occupancy, Net   6,893     7,098   6,997   6,994   7,098   27,982   27,660
    Other   8,781     10,023   9,038   8,770   9,038   36,612   35,576
    Total Noninterest Expense   41,782     42,921   40,441   40,171   39,958   165,315   157,023
    OPERATING PROFIT   17,380     15,597   17,230   15,361   14,345   65,568   63,861
    Income Tax Expense   4,219     2,980   3,189   3,536   2,909   13,924   13,040
    Net Income   13,161     12,617   14,041   11,825   11,436   51,644   50,821
    Pre-Tax Loss (Income) Attributable to Noncontrolling Interest   (71 )   501   109   732   284   1,271   1,437
    NET INCOME ATTRIBUTABLE TO
    COMMON SHAREOWNERS    		 $ 13,090   $ 13,118 $ 14,150 $ 12,557 $ 11,720 $ 52,915 $ 52,258
    PER COMMON SHARE                            
    Basic Net Income $ 0.77   $ 0.77 $ 0.84 $ 0.74 $ 0.69 $ 3.12 $ 3.08
    Diluted Net Income   0.77     0.77   0.83   0.74   0.70   3.12   3.07
    Cash Dividend $ 0.23   $ 0.23 $ 0.21 $ 0.21 $ 0.20 $ 0.88 $ 0.76
    AVERAGE SHARES                            
    Basic   16,946     16,943   16,931   16,951   16,947   16,943   16,987
    Diluted   16,990     16,979   16,960   16,969   16,997   16,969   17,023
    CAPITAL CITY BANK GROUP, INC.                            
    ALLOWANCE FOR CREDIT LOSSES (“ACL”)                        
    AND CREDIT QUALITY                            
    Unaudited                            
                                 
        2024
    		   2023   Twelve Months Ended December 31,
    (Dollars in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   2024   2023
    ACL – HELD FOR INVESTMENT LOANS                            
    Balance at Beginning of Period $ 29,836   $ 29,219   $ 29,329   $ 29,941   $ 29,083   $ 29,941   $ 25,068  
    Transfer from Other Liabilities   –     –     –     (50 )   66     (50 )   66  
    Provision for Credit Losses   1,085     1,879     1,129     932     2,354     5,025     9,529  
    Net Charge-Offs (Recoveries)   1,670     1,262     1,239     1,494     1,562     5,665     4,722  
    Balance at End of Period $ 29,251   $ 29,836   $ 29,219   $ 29,329   $ 29,941   $ 29,251   $ 29,941  
    As a % of Loans HFI   1.10 %   1.11 %   1.09 %   1.07 %   1.10 %   1.10 %   1.10 %
    As a % of Nonperforming Loans   464.14 %   452.64 %   529.79 %   431.46 %   479.70 %   464.14 %   479.70 %
    ACL – UNFUNDED COMMITMENTS                            
    Balance at Beginning of Period   2,522   $ 3,139   $ 3,121   $ 3,191   $ 3,502   $ 3,191   $ 2,989  
    Provision for Credit Losses   (367 )   (617 )   18     (70 )   (311 )   (1,036 )   202  
    Balance at End of Period(1)   2,155     2,522     3,139     3,121     3,191     2,155     3,191  
    ACL – DEBT SECURITIES                            
    Provision for Credit Losses $ (17 ) $ (56 ) $ 57   $ 58   $ (18 ) $ 42   $ (17 )
    CHARGE-OFFS                            
    Commercial, Financial and Agricultural $ 499   $ 331   $ 400   $ 282   $ 217   $ 1,512   $ 511  
    Real Estate – Construction   47     –     –     –     –     47     –  
    Real Estate – Commercial   –     3     –     –     –     3     120  
    Real Estate – Residential   44     –     –     17     79     61     79  
    Real Estate – Home Equity   33     23     –     76     –     132     39  
    Consumer   1,307     1,315     1,061     1,550     1,689     5,233     5,754  
    Overdrafts   574     611     571     638     602     2,394     2,789  
    Total Charge-Offs $ 2,504   $ 2,283   $ 2,032   $ 2,563   $ 2,587   $ 9,382   $ 9,292  
    RECOVERIES                            
    Commercial, Financial and Agricultural $ 103   $ 176   $ 59   $ 41   $ 83   $ 379   $ 277  
    Real Estate – Construction   3     –     –     –     –     3     2  
    Real Estate – Commercial   33     5     19     204     16     261     52  
    Real Estate – Residential   28     88     23     37     34     176     253  
    Real Estate – Home Equity   17     59     37     24     17     137     226  
    Consumer   352     405     313     410     433     1,480     1,936  
    Overdrafts   298     288     342     353     442     1,281     1,824  
    Total Recoveries $ 834   $ 1,021   $ 793   $ 1,069   $ 1,025   $ 3,717   $ 4,570  
    NET CHARGE-OFFS (RECOVERIES) $ 1,670   $ 1,262   $ 1,239   $ 1,494   $ 1,562   $ 5,665   $ 4,722  
    Net Charge-Offs as a % of Average Loans HFI(2)   0.25 %   0.19 %   0.18 %   0.22 %   0.23 %   0.21 %   0.18 %
    CREDIT QUALITY                            
    Nonaccruing Loans $ 6,302   $ 6,592   $ 5,515   $ 6,798   $ 6,242          
    Other Real Estate Owned   367     650     650     1     1          
    Total Nonperforming Assets (“NPAs”) $ 6,669   $ 7,242   $ 6,165   $ 6,799   $ 6,243          
                                 
    Past Due Loans 30-89 Days $ 4,311   $ 9,388   $ 5,672   $ 5,392   $ 6,855          
    Classified Loans   19,896     25,501     25,566     22,305     22,203          
                                 
    Nonperforming Loans as a % of Loans HFI   0.24 %   0.25 %   0.21 %   0.25 %   0.23 %        
    NPAs as a % of Loans HFI and Other Real Estate   0.25 %   0.27 %   0.23 %   0.25 %   0.23 %        
    NPAs as a % of Total Assets   0.15 %   0.17 %   0.15 %   0.16 %   0.15 %        
                                 
    (1)Recorded in other liabilities                            
    (2)Annualized                            
    CAPITAL CITY BANK GROUP, INC.                                                                                        
    AVERAGE BALANCE AND INTEREST RATES                                                                                        
    Unaudited                                                                                                    
                                                                                                         
        Fourth Quarter 2024     Third Quarter 2024     Second Quarter 2024     First Quarter 2024     Fourth Quarter 2023       Full Year 2024     Full Year 2023  
    (Dollars in thousands)   Average
    Balance    		   Interest   Average
    Rate    		     Average
    Balance    		   Interest   Average
    Rate    		     Average
    Balance    		   Interest   Average
    Rate    		     Average
    Balance    		   Interest   Average
    Rate    		     Average
    Balance    		   Interest   Average
    Rate    		       Average
    Balance    		   Interest   Average
    Rate    		     Average
    Balance    		   Interest   Average
    Rate    		  
    ASSETS:                                                                                                    
    Loans Held for Sale $ 31,047   $ 976   7.89 % $ 24,570   $ 720   7.49 % $ 26,281   $ 517   5.26 % $ 27,314     563   5.99 % $ 49,790   $ 817   6.50 %   $ 27,306   $ 2,776   6.72 % $ 55,510   $ 3,232   5.82 %
    Loans Held for Investment(1)   2,677,396     40,521   6.07     2,693,533     40,985   6.09     2,726,748     40,683   6.03     2,728,629     40,196   5.95     2,711,243     39,679   5.81       2,706,461     162,385   6.03     2,656,394     149,366   5.62  
                                                                                                         
    Investment Securities                                                                                                    
    Taxable Investment Securities   914,353     4,688   2.04     907,610     4,148   1.82     918,989     3,998   1.74     952,328     4,239   1.78     962,322     4,389   1.81       923,253     17,073   1.85     1,016,550     18,652   1.83  
    Tax-Exempt Investment Securities(1)   849     9   4.31     846     10   4.33     843     9   4.36     856     9   4.34     862     7   4.32       848     37   4.34     2,199     59   2.68  
                                                                                                         
    Total Investment Securities   915,202     4,697   2.04     908,456     4,158   1.82     919,832     4,007   1.74     953,184     4,248   1.78     963,184     4,396   1.82       924,101     17,110   1.85     1,018,749     18,711   1.83  
                                                                                                         
    Federal Funds Sold and Interest Bearing Deposits   298,255     3,596   4.80     256,855     3,514   5.44     262,419     3,624   5.56     140,488     1,893   5.42     99,763     1,385   5.51       239,712     12,627   5.27     203,147     10,126   4.98  
                                                                                                         
    Total Earning Assets   3,921,900   $ 49,790   5.05 %   3,883,414   $ 49,377   5.06 %   3,935,280   $ 48,831   4.99 %   3,849,615   $ 46,900   4.90 %   3,823,980   $ 46,277   4.80 %     3,897,580   $ 194,898   5.00 %   3,933,800   $ 181,435   4.61 %
                                                                                                         
    Cash and Due From Banks   73,992               70,994               74,803               75,763               76,681                 73,881               75,786            
    Allowance for Credit Losses   (30,107 )             (29,905 )             (29,564 )             (30,030 )             (29,998 )               (29,902 )             (28,190 )          
    Other Assets   293,884               291,359               291,669               295,275               296,114                 293,044               297,290            
                                                                                                         
    Total Assets $ 4,259,669             $ 4,215,862             $ 4,272,188             $ 4,190,623             $ 4,166,777               $ 4,234,603             $ 4,278,686            
                                                                                                         
    LIABILITIES:                                                                                                    
    Noninterest Bearing Deposits $ 1,323,556             $ 1,332,305             $ 1,346,546             $ 1,344,188             $ 1,416,825               $ 1,336,601             $ 1,507,657            
    NOW Accounts   1,182,073   $ 3,826   1.29 %   1,145,544   $ 4,087   1.42 %   1,207,643   $ 4,425   1.47 %   1,201,032   $ 4,497   1.51 %   1,138,461   $ 3,696   1.29 %     1,183,962   $ 16,835   1.42 %   1,172,861   $ 12,375   1.06 %
    Money Market Accounts   422,615     2,526   2.38     418,625     2,694   2.56     407,387     2,752   2.72     353,591     1,985   2.26     318,844     1,421   1.77       400,664     9,957   2.49     299,581     3,670   1.22  
    Savings Accounts   504,859     179   0.14     512,098     180   0.14     519,374     176   0.14     539,374     188   0.14     557,579     202   0.14       518,869     723   0.14     592,033     598   0.10  
    Time Deposits   167,321     1,235   2.94     163,462     1,262   3.07     160,078     1,226   3.08     138,328     924   2.69     116,797     553   1.88       157,342     4,647   2.95     97,480     939   0.96  
    Total Interest Bearing Deposits   2,276,868     7,766   1.36     2,239,729     8,223   1.46     2,294,482     8,579   1.50     2,232,325     7,594   1.37     2,131,681     5,872   1.09       2,260,837     32,162   1.42     2,161,955     17,582   0.81  
    Total Deposits   3,600,424     7,766   0.86     3,572,034     8,223   0.92     3,641,028     8,579   0.95     3,576,513     7,594   0.85     3,548,506     5,872   0.66       3,597,438     32,162   0.89     3,669,612     17,582   0.48  
    Repurchase Agreements   28,018     199   2.82     27,126     221   3.24     26,999     217   3.24     25,725     201   3.14     26,831     199   2.94       26,970     838   3.11     19,917     513   2.57  
    Other Short-Term Borrowings   6,510     83   5.06     2,673     52   7.63     6,592     68   4.16     3,758     39   4.16     16,906     310   7.29       4,882     242   4.94     24,146     1,538   6.37  
    Subordinated Notes Payable   52,887     581   4.30     52,887     610   4.52     52,887     630   4.71     52,887     628   4.70     52,887     627   4.64       52,887     2,449   4.56     52,887     2,427   4.53  
    Other Long-Term Borrowings   794     11   5.57     795     11   5.55     258     3   4.31     281     3   4.80     336     5   4.72       534     28   5.31     408     20   4.77  
    Total Interest Bearing Liabilities   2,365,077   $ 8,640   1.45 %   2,323,210   $ 9,117   1.56 %   2,381,218   $ 9,497   1.60 %   2,314,976   $ 8,465   1.47 %   2,228,641   $ 7,013   1.25 %     2,346,110   $ 35,719   1.52 %   2,259,313   $ 22,080   0.98 %
                                                                                                         
    Other Liabilities   73,130               73,767               72,634               68,295               78,772                 71,964               81,842            
                                                                                                         
    Total Liabilities   3,761,763               3,729,282               3,800,398               3,727,459               3,724,238                 3,754,675               3,848,812            
    Temporary Equity   6,763               6,443               6,493               7,150               7,423                 6,712               8,392            
                                                                                                         
    SHAREOWNERS’ EQUITY:   491,143               480,137               465,297               456,014               435,116                 473,216               421,482            
                                                                                                         
    Total Liabilities, Temporary Equity and Shareowners’ Equity $ 4,259,669             $ 4,215,862             $ 4,272,188             $ 4,190,623             $ 4,166,777               $ 4,234,603             $ 4,278,686            
                                                                                                         
    Interest Rate Spread     $ 41,150   3.59 %     $ 40,260   3.49 %     $ 39,334   3.38 %     $ 38,435   3.43 %     $ 39,264   3.55 %       $ 159,179   3.47 %     $ 159,355   3.63 %
                                                                                                         
    Interest Income and Rate Earned(1)       49,790   5.05         49,377   5.06         48,831   4.99         46,900   4.90         46,277   4.80           194,898   5.00         181,435   4.61  
    Interest Expense and Rate Paid(2)       8,640   0.88         9,117   0.93         9,497   0.97         8,465   0.88         7,013   0.73           35,719   0.92         22,080   0.56  
                                                                                                         
    Net Interest Margin     $ 41,150   4.17 %     $ 40,260   4.12 %     $ 39,334   4.02 %     $ 38,435   4.01 %     $ 39,264   4.07 %       $ 159,179   4.08 %     $ 159,355   4.05 %
                                                                                                         
    (1)Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.                                                                  
    (2)Rate calculated based on average earning assets.                                                                                            

    For Information Contact:
    Jep Larkin
    Executive Vice President and Chief Financial Officer
    850.402. 8450

    The MIL Network –

  • MIL-OSI: Sandy Spring Bancorp Announces Fourth Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    OLNEY, Md., Jan. 28, 2025 (GLOBE NEWSWIRE) — Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported a net loss of $39.5 million ($0.87 per diluted common share) for the quarter ended December 31, 2024, compared to net income of $16.2 million ($0.36 per diluted common share) for the third quarter of 2024 and $26.1 million ($0.58 per diluted common share) for the fourth quarter of 2023.   The current quarter’s net loss is a result of a $54.4 million goodwill impairment charge determined during our annual goodwill impairment test based on the terms of the merger agreement with Atlantic Union Bankshares Corporation (“AUB”).   The goodwill impairment is a non-cash charge and has no impact on the Company’s regulatory capital ratios, cash flows, core operating performance or liquidity position.

    The current quarter’s core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the quarter ended September 30, 2024 and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. Core earnings exclude the goodwill impairment charge, merger and acquisition expense, and the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter’s increase in core earnings as compared to the linked quarter was driven by higher net interest income coupled with higher non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense. The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023.

    “We are pleased with our fourth quarter results, most notably our improved net interest margin, growth in core earnings, and reductions in brokered deposits,” said Daniel J. Schrider, Chair, President and CEO of Sandy Spring Bank. “We remain focused on serving our clients and building communities in the Greater Washington region.”

    Fourth Quarter Highlights

    • Total assets at December 31, 2024 decreased by 2% to $14.1 billion compared to $14.4 billion at September 30, 2024. This decline is predominantly driven by a $200.0 million reduction in FHLB advances and a resulting $231.4 million decline in cash and cash equivalents quarter-over-quarter.
    • Total loans remained level at $11.5 billion as of December 31, 2024 compared to September 30, 2024. During the current quarter, AD&C and commercial business loans and lines increased by $71.7 million and $32.2 million, respectively, while the commercial investor real estate segment declined by $88.9 million. Total residential mortgage and consumer loan portfolios increased by $19.6 million during this period.
    • Total deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. Interest-bearing deposits increased $106.1 million, while noninterest-bearing deposits declined $98.1 million. Growth in interest-bearing deposits was mainly experienced within interest checking accounts, which grew $122.9 million during the current quarter, while decline in noninterest-bearing deposit categories was driven by lower balances in commercial checking accounts. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and represented 94% of total deposits as of December 31, 2024.
    • The ratio of non-performing loans to total loans was 1.03% at December 31, 2024 compared to 1.09% at September 30, 2024 and 0.81% at December 31, 2023. The current quarter’s decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status.
    • Net interest income for the fourth quarter of 2024 grew $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. Compared to the previous quarter, interest income increased by $1.0 million, while interest expense decreased by $3.7 million.
    • The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. Compared to the linked quarter, the rate paid on interest-bearing liabilities decreased 23 basis points, driven by a 26 basis point decline in the rate on interest-bearing deposits, while the yield on interest-earning assets declined by six basis points. The decline in the rate paid on interest-bearing deposits was attributable to a 50 basis point reduction in the federal funds rate during the current quarter and the associated actions taken by management to re-price the Company’s funding base.
    • Provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million in the previous quarter and a credit of $2.6 million in the prior year quarter. The current quarter’s provision expense is mainly attributable to a slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of recession. In addition, during the current quarter, the provision for unfunded commitments declined by $0.2 million, a result of higher utilization rates on lines of credit.
    • Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The quarter-over-quarter increase was mainly due to an increase in income from bank-owned life insurance driven by one-time mortality proceeds received during the current quarter in combination with higher swap fees and higher wealth management income, which was partially offset by lower income from mortgage banking activities.
    • Non-interest expense for the fourth quarter of 2024 increased by $61.3 million compared to the third quarter of 2024 and $67.1 million compared to the prior year quarter, due to the goodwill impairment charge of $54.4 million incurred during the current quarter. Excluding the goodwill impairment charge, adjusted non-interest expense was $79.8 million during the current quarter compared to $72.9 million in the linked quarter. This quarterly increase in adjusted non-interest expense was primarily due to a combination of merger and acquisition expense associated with the pending merger with AUB along with higher salaries and compensation benefits, partially offset by lower professional fees and services.
    • We perform an annual goodwill impairment test as of October 1st of each year. During the current year, we utilized the terms incorporated in the merger agreement between the Company and AUB. The implied value of the Company utilized the stock conversion ratio in the merger agreement and used a weighted average approach to consider both AUB’s most recent closing stock price prior to the merger announcement date, as well as the forward sale price for AUB common stock under the forward sale agreement announced simultaneous with the merger agreement. This valuation method resulted in the estimated fair value of the Company being below its book value and required the recording of a goodwill impairment charge of $54.4 million.
    • Return on average assets (“ROA”) for the quarter ended December 31, 2024 was (1.09)% and return on average tangible common equity (“ROTCE”) was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter’s core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88%, respectively, for the previous quarter and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.
    • The GAAP efficiency ratio was 124.61% for the fourth quarter of 2024, compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. An elevated GAAP efficiency ratio for the current quarter was the result of higher non-interest expense due to the $54.4 million goodwill impairment charge. The non-GAAP efficiency ratio was 67.16% for the fourth quarter of 2024 compared to 69.06% for the third quarter of 2024 and 66.16% for the prior year quarter.

    Balance Sheet and Credit Quality

    Total assets were $14.1 billion at December 31, 2024, as compared to $14.4 billion at September 30, 2024. At December 31, 2024, total loans remained stable at $11.5 billion compared to the previous quarter. During this period, the growth in AD&C and commercial business loans and lines of $71.7 million or 6% and $32.2 million or 2%, respectively, was mostly offset by the decline in commercial investor real estate loans of $88.9 million or 2%. Total residential mortgage and consumer loan portfolios increased by $19.6 million or 1%.

    Deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. During this period, noninterest-bearing deposits decreased $98.1 million or 3%, while interest-bearing deposits increased $106.1 million or 1%. The decline in noninterest-bearing deposit categories was driven by decreases in commercial checking accounts. Growth in interest-bearing deposits was seen predominantly in interest checking accounts, which grew $122.9 million or 8% during the current quarter. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and remained at 94% of total deposits as of December 31, 2024 compared to September 30, 2024, reflecting continued strength and stability of the core deposit base. Total uninsured deposits at December 31, 2024 were approximately 37% of total deposits.

    Total borrowings decreased $201.7 million or 23% at December 31, 2024 as compared to the previous quarter, primarily driven by a $200.0 million reduction in FHLB advances, of which $150 million related to scheduled maturities, while $50 million was prepaid generating a $0.5 million gain on debt extinguishment. At December 31, 2024, available unused sources of liquidity, which consist of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank’s discount window, as well as excess cash and unpledged investment securities, totaled $6.3 billion or 147% of uninsured deposits.

    The tangible common equity to tangible assets ratio was 8.84% at December 31, 2024, compared to 8.83% at September 30, 2024.

    At December 31, 2024, the Company had a total risk-based capital ratio of 15.38%, a common equity tier 1 risk-based capital ratio of 11.36%, a tier 1 risk-based capital ratio of 11.36%, and a tier 1 leverage ratio of 9.39%. These risk-based capital ratios compare to a total risk-based capital ratio of 15.53%, a common equity tier 1 risk-based capital ratio of 11.27%, a tier 1 risk-based capital ratio of 11.27%, and a tier 1 leverage ratio of 9.59% at September 30, 2024. All of these ratios remain well in excess of the mandated minimum regulatory requirements.

    Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. At December 31, 2024, non-performing loans totaled $119.4 million, compared to $125.3 million at September 30, 2024 and $91.8 million at December 31, 2023. The ratio of non-performing loans to total loans was 1.03% compared to 1.09% on a linked quarter basis. These levels of non-performing loans compare to 0.81% at December 31, 2023. The current quarter’s decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status based on the borrower’s historical payment performance. Total net charge-offs for the current quarter amounted to $1.7 million compared to $0.7 million for the third quarter of 2024 and net recoveries of $0.1 million for the fourth quarter of 2023.

    At December 31, 2024, the allowance for credit losses was $134.4 million or 1.16% of outstanding loans and 113% of non-performing loans, compared to $131.4 million or 1.14% of outstanding loans and 105% of non-performing loans at the end of the previous quarter and $120.9 million or 1.06% of outstanding loans and 132% of non-performing loans at the end of the fourth quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of economic recession.

    Income Statement Review

    Quarterly Results

    Net loss was $39.5 million ($0.87 per diluted common share) for the three months ended December 31, 2024 compared to net income of $16.2 million ($0.36 per diluted common share) for the three months ended September 30, 2024 and $26.1 million ($0.58 per diluted common share) for the prior year quarter. The current quarter’s net loss is predominantly related to the $54.4 million goodwill impairment charge.   The current quarter’s core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the previous quarter and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. The increase in the current quarter’s core earnings compared to the linked quarter was driven primarily by higher net interest income and non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense.

    Net interest income for the fourth quarter of 2024 increased $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. During the current quarter, interest income increased $1.0 million, while interest expense declined $3.7 million. The higher interest rate environment during the current year was primarily responsible for a $5.4 million year-over-year increase in interest income, which outpaced the $1.0 million year-over-year growth in interest expense.

    The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. The increase in the net interest margin during the current quarter was a result of a 23 basis point decrease in the rate paid on interest-bearing liabilities, driven by a 26 basis point decline in the rate paid on interest-bearing deposits, while the yield earned on interest-earning assets declined by six basis points. As compared to the prior year quarter, the yield on interest-earning assets increased eight basis points, while the rate paid on interest-bearing liabilities declined nine basis points, resulting in net interest margin increase of eight basis points.

    The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million for the third quarter of 2024 and a credit of $2.6 million for the fourth quarter of 2023. The current quarter’s provision is mainly a reflection of a slight deterioration in the projected economic variables along with higher qualitative adjustments, partially offset by lower probability of economic recession. In addition, during the current quarter, the reserve for unfunded commitments declined to $1.3 million from $1.5 million in the previous quarter due to higher utilization rates on lines of credit.

    Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The current quarter’s increase in non-interest income as compared to the previous quarter was mainly driven by the $1.9 million increase in income from bank owned life insurance, generated by one-time mortality proceeds, $0.4 million of swap fee income, and $0.2 million increase in wealth management income, due to the overall favorable market performance, partially offset by $0.4 million decrease in income from mortgage banking activities, due to lower sales volumes.

    Non-interest expense for the fourth quarter of 2024 increased $61.3 million or 84% compared to the third quarter of 2024 and $67.1 million or 100% compared to the fourth quarter of 2023. The increase over the comparative quarters was primarily due to the goodwill impairment charge of $54.4 million in the fourth quarter of 2024. Excluding the goodwill impairment charge, adjusted non-interest expense increased $6.9 million or 9% compared to the linked quarter. This quarter-over-quarter increase is predominantly attributable to $4.2 million in merger and acquisition expenses incurred during the current quarter, a $3.3 million increase in salaries and benefits, due to an increase in employee incentive compensation, and a $0.7 million increase in marketing expense. These increases were partially offset by the $1.8 million reduction in professional fees and services.

    For the fourth quarter of 2024, the GAAP efficiency ratio was 124.61% compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. The non-GAAP efficiency ratio was 67.16% for the current quarter as compared to 69.06% for the third quarter of 2024 and 66.16% for the fourth quarter of 2023.

    ROA for the quarter ended December 31, 2024 was (1.09)% and ROTCE was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter’s core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88% for the third quarter of 2024 and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.

    Explanation of Non-GAAP Financial Measures

    This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

    • Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
    • The non-GAAP efficiency ratio excludes goodwill impairment loss, merger and acquisition expense, amortization of intangible assets, investment securities gains/(losses), pension settlement expense, severance expense, contingent payment expense, and includes tax-equivalent income.
    • Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of goodwill impairment loss, merger and acquisition expense, and after-tax impact of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items.
    • Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

    These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the non-GAAP Reconciliation tables included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

    About Sandy Spring Bancorp, Inc.

    Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.

    Source: Sandy Spring Bancorp, Inc.
    Code: SASR-E

      For additional information or questions, please contact:
        Daniel J. Schrider, Chair, President & Chief Executive Officer, or
        Charles S. Cullum, E.V.P. & Chief Financial Officer
        Sandy Spring Bancorp
        17801 Georgia Avenue
        Olney, Maryland 20832
        1-800-399-5919
        Email: DSchrider@sandyspringbank.com 
          CCullum@sandyspringbank.com 
           
        Website: www.sandyspringbank.com
        Media Contact:
        Jennifer E. Schell, Division Executive, Marketing & Corporate Communications
        301-774-6400 x8331
        jschell@sandyspringbank.com 
           

    Forward-Looking Statements

    Sandy Spring Bancorp’s forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events; the possibility that the Company’s pending merger with AUB does not close when expected or at all because required regulatory or other approvals or conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger); the risk that the benefits from the merger may not be fully realized or may take longer to realize than expected; and the risk of disruption to the Company’s business as a result of the pendency of the merger;. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2023 and its Form 10-Q for the quarter ended September 30, 2024, including in the Risk Factors section of those reports, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov. 

    Sandy Spring Bancorp, Inc. and Subsidiaries
    FINANCIAL HIGHLIGHTS – UNAUDITED

        Three Months Ended
    December 31,    		   %
    Change    		   Year Ended
    December 31,    		   %
    Change
    (Dollars in thousands, except per share data)     2024       2023         2024       2023    
    Results of operations:                        
    Net interest income   $ 86,086     $ 81,696     5 %   $ 327,126     $ 354,550     (8 )%
    Provision/ (credit) for credit losses     4,468       (3,445 )   N/M       14,192       (17,561 )   N/M  
    Non-interest income     21,646       16,560     31       79,315       67,078     18  
    Non-interest expense     134,241       67,142     100       343,288       275,054     25  
    Income/ (loss) before income tax expense     (30,977 )     34,559     N/M       48,961       164,135     (70 )
    Net income/ (loss)     (39,453 )     26,100     N/M       19,935       122,844     (84 )
                               
    Net income/ (loss) attributable to common shareholders   $ (39,457 )   $ 26,066     N/M     $ 19,902     $ 122,621     (84 )
    Pre-tax pre-provision net income/ (loss) (1)   $ (26,509 )   $ 31,114     N/M     $ 63,153     $ 146,574     (57 )
                               
    Return on average assets     (1.09 )%     0.73 %           0.14 %     0.87 %    
    Return on average common equity     (9.70 )%     6.70 %           1.25 %     8.04 %    
    Return on average tangible common equity (1)     5.46 %     9.26 %           6.73 %     11.06 %    
    Net interest margin     2.53 %     2.45 %           2.46 %     2.67 %    
    Efficiency ratio – GAAP basis (2)     124.61 %     68.33 %           84.46 %     65.24 %    
    Efficiency ratio – Non-GAAP basis (2)     67.16 %     66.16 %           67.07 %     60.99 %    
                               
    Per share data:                          
    Basic net income/ (loss) per common share   $ (0.87 )   $ 0.58     N/M     $ 0.44     $ 2.74     (84 )%
    Diluted net income/ (loss) per common share   $ (0.87 )   $ 0.58     N/M     $ 0.44     $ 2.73     (84 )
    Weighted average diluted common shares     45,133,834       45,009,574     —       45,227,487       44,947,263     1  
    Dividends declared per share   $ 0.34     $ 0.34     —     $ 1.36     $ 1.36     —  
    Book value per common share   $ 34.51     $ 35.36     (2 )   $ 34.51     $ 35.36     (2 )
    Tangible book value per common share (1)   $ 26.99     $ 26.64     1     $ 26.99     $ 26.64     1  
    Outstanding common shares     45,140,417       44,913,561     1       45,140,417       44,913,561     1  
                             
    Financial condition at period-end:                        
    Investment securities   $ 1,418,244     $ 1,414,453     — %   $ 1,418,244     $ 1,414,453     — %
    Loans     11,537,966       11,366,989     2       11,537,966       11,366,989     2  
    Assets     14,127,480       14,028,172     1       14,127,480       14,028,172     1  
    Deposits     11,745,665       10,996,538     7       11,745,665       10,996,538     7  
    Stockholders’ equity     1,558,011       1,588,142     (2 )     1,558,011       1,588,142     (2 )
                             
    Capital ratios:                        
    Tier 1 leverage (3)     9.39 %     9.51 %         9.39 %     9.51 %    
    Common equity tier 1 capital to risk-weighted assets (3)     11.36 %     10.90 %         11.36 %     10.90 %    
    Tier 1 capital to risk-weighted assets (3)     11.36 %     10.90 %         11.36 %     10.90 %    
    Total regulatory capital to risk-weighted assets (3)     15.38 %     14.92 %         15.38 %     14.92 %    
    Tangible common equity to tangible assets (4)     8.84 %     8.77 %         8.84 %     8.77 %    
    Average equity to average assets     11.26 %     10.97 %         11.31 %     10.87 %    
                             
    Credit quality ratios:                        
    Allowance for credit losses to loans     1.16 %     1.06 %         1.16 %     1.06 %    
    Non-performing loans to total loans     1.03 %     0.81 %         1.03 %     0.81 %    
    Non-performing assets to total assets     0.87 %     0.65 %         0.87 %     0.65 %    
    Allowance for credit losses to non-performing loans     112.59 %     131.59 %         112.59 %     131.59 %    
    Annualized net charge-offs/ (recoveries) to average loans (5)     0.06 %     — %         0.03 %     0.01 %    

    N/M – not meaningful

    (1) Represents a non-GAAP measure.
    (2) The efficiency ratio – GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio – Non-GAAP basis excludes goodwill impairment loss, merger and acquisition expense, intangible asset amortization, pension settlement expense, severance expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
    (3) Estimated ratio at December 31, 2024.
    (4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders’ equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights.
    (5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.
       

    Sandy Spring Bancorp, Inc. and Subsidiaries
    RECONCILIATION TABLE – UNAUDITED (CONTINUED)
    OPERATING EARNINGS – METRICS

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (Dollars in thousands)     2024       2023       2024       2023  
    Core earnings (non-GAAP):                
    Net income/ (loss) (GAAP)   $ (39,453 )   $ 26,100     $ 19,935     $ 122,844  
    Plus/ (less) non-GAAP adjustments:                
    Merger, acquisition and disposal expense(2)     4,164       —       4,164       —  
    Amortization of intangible assets (net of tax)(1)     1,937       1,047       6,801       3,898  
    Goodwill impairment loss(2)     54,391       —       54,391       —  
    Severance expense (net of tax)(1)     —       —       —       1,445  
    Pension settlement expense (net of tax)(1)     —       —       —       6,088  
    Investment securities gains/ losses     —       —       —       —  
    Contingent payment expense (net of tax)(1)     —       —       —       27  
    Core earnings (Non-GAAP)   $ 21,039     $ 27,147     $ 85,291     $ 134,302  
                     
    Core earnings per diluted common share (non-GAAP):                
    Weighted average common shares outstanding – diluted (GAAP)     45,133,834       45,009,574       45,227,487       44,947,263  
                     
    Earnings/ (loss) per diluted common share (GAAP)   $ (0.87 )   $ 0.58     $ 0.44     $ 2.73  
    Core earnings per diluted common share (non-GAAP)   $ 0.47     $ 0.60     $ 1.89     $ 2.99  
                     
    Core return on average assets (non-GAAP):                
    Average assets (GAAP)   $ 14,362,321     $ 14,090,423     $ 14,129,795     $ 14,055,645  
                     
    Return on average assets (GAAP)     (1.09 )%     0.73 %     0.14 %     0.87 %
    Core return on average assets (non-GAAP)     0.58 %     0.76 %     0.60 %     0.96 %
                     
    Return/ Core return on average tangible common equity (non-GAAP):                
    Net Income/ (loss) (GAAP)   $ (39,453 )   $ 26,100     $ 19,935     $ 122,844  
    Plus: Amortization of intangible assets (net of tax)(1)     1,937       1,047       6,801       3,898  
    Plus: Goodwill impairment loss(2)     54,391       —       54,391       —  
    Net income adjusted (non-GAAP)   $ 16,875     $ 27,147     $ 81,127     $ 126,742  
                     
    Average total stockholders’ equity (GAAP)   $ 1,617,633     $ 1,546,312     $ 1,597,456     $ 1,528,242  
    Average goodwill     (356,341 )     (363,436 )     (361,653 )     (363,436 )
    Average other intangible assets, net     (30,885 )     (20,162 )     (30,178 )     (18,596 )
    Average tangible common equity (non-GAAP)   $ 1,230,407     $ 1,162,714     $ 1,205,625     $ 1,146,210  
                     
    Return on average tangible common equity (non-GAAP)     5.46 %     9.26 %     6.73 %     11.06 %
    Core return on average tangible common equity (non-GAAP)     6.80 %     9.26 %     7.07 %     11.72 %
    (1) Tax adjustments have been determined using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively.
    (2) Adjustment is not tax-effected as it represents a tax nondeductible item.
       

    Sandy Spring Bancorp, Inc. and Subsidiaries
    RECONCILIATION TABLE – UNAUDITED

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (Dollars in thousands)     2024       2023       2024       2023  
    Pre-tax pre-provision net income:                
    Net income/ (loss) (GAAP)   $         (39,453 )   $         26,100     $         19,935     $         122,844  
    Plus/ (less) non-GAAP adjustments:                
    Income tax expense             8,476               8,459               29,026               41,291  
    Provision/ (credit) for credit losses             4,468               (3,445 )             14,192               (17,561 )
    Pre-tax pre-provision net income/ (loss) (non-GAAP)   $ (26,509 )   $ 31,114     $ 63,153     $ 146,574  
                     
    Efficiency ratio (GAAP):                
    Non-interest expense   $ 134,241     $ 67,142     $ 343,288     $ 275,054  
                     
    Net interest income plus non-interest income   $ 107,732     $ 98,256     $ 406,441     $ 421,628  
                     
    Efficiency ratio (GAAP)     124.61 %     68.33 %     84.46 %     65.24 %
                     
    Efficiency ratio (Non-GAAP):                
    Non-interest expense   $ 134,241     $ 67,142     $ 343,288     $ 275,054  
    Less non-GAAP adjustments:                
    Amortization of intangible assets     2,599       1,403       9,126       5,223  
    Merger, acquisition and disposal expense     4,164       —       4,164       —  
    Goodwill impairment loss     54,391       —       54,391       —  
    Severance expense     —       —       —       1,939  
    Pension settlement expense     —       —       —       8,157  
    Contingent payment expense     —       —       —       36  
    Non-interest expense – as adjusted   $ 73,087     $ 65,739     $ 275,607     $ 259,699  
                     
    Net interest income plus non-interest income   $ 107,732     $ 98,256     $ 406,441     $ 421,628  
    Plus non-GAAP adjustment:                
    Tax-equivalent income     1,100       1,113       4,459       4,157  
    Less/ (plus) non-GAAP adjustment:                
    Investment securities gains/ (losses)     —       —       —       —  
    Net interest income plus non-interest income – as adjusted   $ 108,832     $ 99,369     $ 410,900     $ 425,785  
                     
    Efficiency ratio (Non-GAAP)     67.16 %     66.16 %     67.07 %     60.99 %
                     
    Tangible common equity ratio:                
    Total stockholders’ equity   $ 1,558,011     $ 1,588,142     $ 1,558,011     $ 1,588,142  
    Goodwill     (309,045 )     (363,436 )     (309,045 )     (363,436 )
    Other intangible assets, net     (30,748 )     (28,301 )     (30,748 )     (28,301 )
    Tangible common equity   $ 1,218,218     $ 1,196,405     $ 1,218,218     $ 1,196,405  
                     
    Total assets   $ 14,127,480     $ 14,028,172     $ 14,127,480     $ 14,028,172  
    Goodwill     (309,045 )     (363,436 )     (309,045 )     (363,436 )
    Other intangible assets, net     (30,748 )     (28,301 )     (30,748 )     (28,301 )
    Tangible assets   $ 13,787,687     $ 13,636,435     $ 13,787,687     $ 13,636,435  
                     
    Tangible common equity ratio     8.84 %     8.77 %     8.84 %     8.77 %
                     
    Outstanding common shares     45,140,417       44,913,561       45,140,417       44,913,561  
    Tangible book value per common share   $ 26.99     $ 26.64     $ 26.99     $ 26.64  
                                     

    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED STATEMENTS OF CONDITION – UNAUDITED

    (Dollars in thousands)   December 31,
    2024    		   December 31,
    2023
    Assets        
    Cash and due from banks   $ 80,698     $ 82,257  
    Federal funds sold     —       245  
    Interest-bearing deposits with banks     438,265       463,396  
    Cash and cash equivalents     518,963       545,898  
    Residential mortgage loans held for sale (at fair value)     22,757       10,836  
    SBA loans held for sale     715       —  
    Investments held-to-maturity (fair values of $177,854 and $200,411 at December 31, 2024 and December 31, 2023, respectively)     215,747       236,165  
    Investments available-for-sale (at fair value)     1,140,783       1,102,681  
    Other investments, at cost     61,714       75,607  
    Total loans     11,537,966       11,366,989  
    Less: allowance for credit losses – loans     (134,401 )     (120,865 )
    Net loans     11,403,565       11,246,124  
    Premises and equipment, net     55,998       59,490  
    Other real estate owned     3,265       —  
    Accrued interest receivable     45,627       46,583  
    Goodwill     309,045       363,436  
    Other intangible assets, net     30,748       28,301  
    Other assets     318,553       313,051  
    Total assets   $ 14,127,480     $ 14,028,172  
             
    Liabilities        
    Noninterest-bearing deposits   $ 2,804,930     $ 2,914,161  
    Interest-bearing deposits     8,940,735       8,082,377  
    Total deposits     11,745,665       10,996,538  
    Securities sold under retail repurchase agreements     68,911       75,032  
    Federal Reserve Bank borrowings     —       300,000  
    Advances from FHLB     250,000       550,000  
    Subordinated debt     371,400       370,803  
    Total borrowings     690,311       1,295,835  
    Accrued interest payable and other liabilities     133,493       147,657  
    Total liabilities     12,569,469       12,440,030  
             
    Stockholders’ equity        
    Common stock — par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,140,417 and 44,913,561 at December 31, 2024 and December 31, 2023, respectively.     45,140       44,914  
    Additional paid in capital     748,905       742,243  
    Retained earnings     856,613       898,316  
    Accumulated other comprehensive loss     (92,647 )     (97,331 )
    Total stockholders’ equity     1,558,011       1,588,142  
    Total liabilities and stockholders’ equity   $ 14,127,480     $ 14,028,172  
                     

    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

        Three Months Ended
    December 31,    		   Year Ended
    December 31,
    (Dollars in thousands, except per share data)     2024       2023       2024     2023  
    Interest income:                
    Interest and fees on loans   $ 153,262     $ 148,655     $ 609,571   $ 579,960  
    Interest on mortgage loans held for sale     249       199       1,050     896  
    Interest on SBA loans held for sale     21       —       23     —  
    Interest on deposits with banks     7,997       8,456       25,398     22,435  
    Interest and dividend income on investment securities:                
    Taxable     7,821       6,454       29,140     26,992  
    Tax-advantaged     1,697       1,848       7,082     7,224  
    Interest on federal funds sold     —       4       8     17  
    Total interest income     171,047       165,616       672,272     637,524  
    Interest expense:                
    Interest on deposits     76,111       69,813       303,173     225,028  
    Interest on retail repurchase agreements and federal funds purchased     369       4,075       5,259     14,452  
    Interest on advances from FHLB     3,865       6,086       20,259     27,709  
    Interest on subordinated debt     4,616       3,946       16,455     15,785  
    Total interest expense     84,961       83,920       345,146     282,974  
    Net interest income     86,086       81,696       327,126     354,550  
    Provision/ (credit) for credit losses     4,468       (3,445 )     14,192     (17,561 )
    Net interest income after provision/ (credit) for credit losses     81,618       85,141       312,934     372,111  
    Non-interest income:                
    Service charges on deposit accounts     2,998       2,749       11,763     10,447  
    Mortgage banking activities     1,091       792       5,615     5,536  
    Wealth management income     10,920       9,219       42,071     36,633  
    Income from bank owned life insurance     3,213       1,207       7,496     4,210  
    Bank card fees     457       454       1,750     1,769  
    Other income     2,967       2,139       10,620     8,483  
    Total non-interest income     21,646       16,560       79,315     67,078  
    Non-interest expense:                
    Salaries and employee benefits     44,309       35,482       159,858     160,192  
    Occupancy expense of premises     4,727       4,558       19,005     18,778  
    Equipment expenses     4,252       3,987       15,924     15,675  
    Marketing     2,013       1,242       5,363     5,103  
    Outside data services     3,228       3,000       12,642     11,186  
    FDIC insurance     2,761       2,615       11,396     9,461  
    Amortization of intangible assets     2,599       1,403       9,126     5,223  
    Merger, acquisition and disposal expense     4,164       —       4,164     —  
    Professional fees and services     4,805       5,628       21,208     17,982  
    Goodwill impairment loss     54,391       —       54,391     —  
    Other expenses     6,992       9,227       30,211     31,454  
    Total non-interest expense     134,241       67,142       343,288     275,054  
    Income/ (loss) before income tax expense     (30,977 )     34,559       48,961     164,135  
    Income tax expense     8,476       8,459       29,026     41,291  
    Net income/ (loss)   $ (39,453 )   $ 26,100     $ 19,935   $ 122,844  
                     
    Net income per share amounts:                
    Basic net income/ (loss) per common share   $ (0.87 )   $ 0.58     $ 0.44   $ 2.74  
    Diluted net income/ (loss) per common share   $ (0.87 )   $ 0.58     $ 0.44   $ 2.73  
    Dividends declared per share   $ 0.34     $ 0.34     $ 1.36   $ 1.36  
                                   

    Sandy Spring Bancorp, Inc. and Subsidiaries
    HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED

          2024       2023  
    (Dollars in thousands, except per share data)   Q4   Q3   Q2   Q1   Q4   Q3   Q2   Q1
    Profitability for the quarter:                                
    Tax-equivalent interest income   $ 172,147     $ 171,219     $ 166,252     $ 167,113     $ 166,729     $ 163,479     $ 159,156     $ 152,317  
    Interest expense             84,961       88,686       84,828       86,671       83,920       77,330       67,679       54,045  
    Tax-equivalent net interest income     87,186       82,533       81,424       80,442       82,809       86,149       91,477       98,272  
    Tax-equivalent adjustment     1,100       1,121       1,139       1,099       1,113       1,068       1,006       970  
    Provision/ (credit) for credit losses     4,468       6,316       1,020       2,388       (3,445 )     2,365       5,055       (21,536 )
    Non-interest income     21,646       19,715       19,587       18,367       16,560       17,391       17,176       15,951  
    Non-interest expense     134,241       72,937       68,104       68,006       67,142       72,471       69,136       66,305  
    Income/ (loss) before income tax expense     (30,977 )     21,874       30,748       27,316       34,559       27,636       33,456       68,484  
    Income tax expense     8,476       5,665       7,941       6,944       8,459       6,890       8,711       17,231  
    Net income/ (loss)   $ (39,453 )   $ 16,209     $ 22,807     $ 20,372     $ 26,100     $ 20,746     $ 24,745     $ 51,253  
    GAAP financial performance:                                
    Return on average assets   (1.09)%     0.46 %     0.66 %     0.58 %     0.73 %     0.58 %     0.70 %     1.49 %
    Return on average common equity   (9.70)%     4.01 %     5.81 %     5.17 %     6.70 %     5.35 %     6.46 %     13.93 %
    Return on average tangible common equity     5.46 %     5.88 %     8.27 %     7.39 %     9.26 %     7.42 %     8.93 %     19.10 %
    Net interest margin     2.53 %     2.44 %     2.46 %     2.41 %     2.45 %     2.55 %     2.73 %     2.99 %
    Efficiency ratio – GAAP basis     124.61 %     72.12 %     68.19 %     69.60 %     68.33 %     70.72 %     64.22 %     58.55 %
    Non-GAAP financial performance:                                
    Pre-tax pre-provision net income/ (loss)   $ (26,509 )   $ 28,190     $ 31,768     $ 29,704     $ 31,114     $ 30,001     $ 38,511     $ 46,948  
    Core after-tax earnings   $ 21,039     $ 17,936     $ 24,400     $ 21,916     $ 27,147     $ 27,766     $ 27,136     $ 52,253  
    Core return on average assets     0.58 %     0.50 %     0.70 %     0.63 %     0.76 %     0.78 %     0.77 %     1.52 %
    Core return on average common equity     5.17 %     4.44 %     6.21 %     5.56 %     6.97 %     7.16 %     7.09 %     14.20 %
    Core return on average tangible common equity     6.80 %     5.88 %     8.27 %     7.39 %     9.26 %     9.51 %     9.43 %     19.11 %
    Core earnings per diluted common share   $ 0.47     $ 0.40     $ 0.54     $ 0.49     $ 0.60     $ 0.62     $ 0.60     $ 1.16  
    Efficiency ratio – Non-GAAP basis     67.16 %     69.06 %     65.31 %     66.73 %     66.16 %     60.91 %     60.68 %     56.87 %
    Per share data:                        
    Net income/ (loss) attributable to common shareholders   $ (39,457 )   $ 16,205     $ 22,800     $ 20,346     $ 26,066     $ 20,719     $ 24,712     $ 51,084  
    Basic net income/ (loss) per common share   $ (0.87 )   $ 0.36     $ 0.51     $ 0.45     $ 0.58     $ 0.46     $ 0.55     $ 1.14  
    Diluted net income/ (loss) per common share   $ (0.87 )   $ 0.36     $ 0.51     $ 0.45     $ 0.58     $ 0.46     $ 0.55     $ 1.14  
    Weighted average diluted common shares     45,133,834       45,242,920       45,145,214       45,086,471       45,009,574       44,960,455       44,888,759       44,872,582  
    Dividends declared per share   $ 0.34     $ 0.34     $ 0.34     $ 0.34     $ 0.34     $ 0.34     $ 0.34     $ 0.34  
    Non-interest income:                                
    Service charges on deposit accounts     2,998       3,009       2,939       2,817       2,749       2,704       2,606       2,388  
    Mortgage banking activities     1,091       1,529       1,621       1,374       792       1,682       1,817       1,245  
    Wealth management income     10,920       10,738       10,455       9,958       9,219       9,391       9,031       8,992  
    Income from bank owned life insurance     3,213       1,307       1,816       1,160       1,207       845       1,251       907  
    Bank card fees     457       435       445       413       454       450       447       418  
    Other income     2,967       2,697       2,311       2,645       2,139       2,319       2,024       2,001  
    Total non-interest income   $ 21,646     $ 19,715     $ 19,587     $ 18,367     $ 16,560     $ 17,391     $ 17,176     $ 15,951  
    Non-interest expense:                                
    Salaries and employee benefits   $ 44,309     $ 41,030     $ 37,821     $ 36,698     $ 35,482     $ 44,853     $ 40,931     $ 38,926  
    Occupancy expense of premises     4,727       4,657       4,805       4,816       4,558       4,609       4,764       4,847  
    Equipment expenses     4,252       3,841       3,868       3,963       3,987       3,811       3,760       4,117  
    Marketing     2,013       1,320       1,288       742       1,242       729       1,589       1,543  
    Outside data services     3,228       3,025       3,286       3,103       3,000       2,819       2,853       2,514  
    FDIC insurance     2,761       2,773       2,951       2,911       2,615       2,333       2,375       2,138  
    Amortization of intangible assets     2,599       2,323       2,135       2,069       1,403       1,245       1,269       1,306  
    Merger, acquisition and disposal expense     4,164       —       —       —       —       —       —       —  
    Professional fees and services     4,805       6,577       4,946       4,880       5,628       4,509       4,161       3,684  
    Goodwill impairment loss     54,391       —       —       —       —       —       —       —  
    Other expenses     6,992       7,391       7,004       8,824       9,227       7,563       7,434       7,230  
    Total non-interest expense   $ 134,241     $ 72,937     $ 68,104     $ 68,006     $ 67,142     $ 72,471     $ 69,136     $ 66,305  
                                                                     

    Sandy Spring Bancorp, Inc. and Subsidiaries
    HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED

          2024       2023  
    (Dollars in thousands, except per share data)   Q4   Q3   Q2   Q1   Q4   Q3   Q2   Q1
    Balance sheets at quarter end:                            
    Commercial investor real estate loans   $ 4,779,593     $ 4,868,467     $ 4,933,329     $ 4,997,879     $ 5,104,425     $ 5,137,694     $ 5,131,210     $ 5,167,456  
    Commercial owner-occupied real estate loans     1,748,772       1,737,327       1,747,708       1,741,113       1,755,235       1,760,384       1,770,135       1,769,928  
    Commercial AD&C loans     1,327,292       1,255,609       1,184,296       1,090,259       988,967       938,673       1,045,742       1,046,665  
    Commercial business loans     1,653,135       1,620,926       1,601,510       1,509,592       1,504,880       1,454,709       1,423,614       1,437,478  
    Residential mortgage loans     1,537,589       1,529,786       1,521,890       1,511,624       1,474,521       1,432,051       1,385,743       1,328,524  
    Residential construction loans     49,028       53,639       78,027       97,685       121,419       160,345       190,690       223,456  
    Consumer loans     442,557       426,167       417,161       416,132       417,542       416,436       422,505       421,734  
    Total loans     11,537,966       11,491,921       11,483,921       11,364,284       11,366,989       11,300,292       11,369,639       11,395,241  
    Allowance for credit losses – loans     (134,401 )     (131,428 )     (125,863 )     (123,096 )     (120,865 )     (123,360 )     (120,287 )     (117,613 )
    Residential mortgage loans held for sale     22,757       21,489       18,961       16,627       10,836       19,235       21,476       16,262  
    SBA loans held for sale     715       425       —       —       —       —       —       —  
    Investment securities     1,418,244       1,440,488       1,401,511       1,405,490       1,414,453       1,392,078       1,463,554       1,528,336  
    Total assets     14,127,480       14,383,073       14,008,343       13,888,133       14,028,172       14,135,085       13,994,545       14,129,007  
    Noninterest-bearing demand deposits     2,804,930       2,903,063       2,931,405       2,817,928       2,914,161       3,013,905       3,079,896       3,228,678  
    Total deposits     11,745,665       11,737,694       11,340,228       11,227,200       10,996,538       11,151,012       10,958,922       11,075,991  
    Customer repurchase agreements     68,911       70,767       75,038       71,529       75,032       66,581       74,510       47,627  
    Total stockholders’ equity     1,558,011       1,628,837       1,599,004       1,589,364       1,588,142       1,537,914       1,539,032       1,536,865  
    Quarterly average balance sheets:                            
    Commercial investor real estate loans   $ 4,825,594     $ 4,874,003     $ 4,964,406     $ 5,057,334     $ 5,125,028     $ 5,125,459     $ 5,146,632     $ 5,136,204  
    Commercial owner-occupied real estate loans     1,739,686       1,741,663       1,734,106       1,746,042       1,755,048       1,769,717       1,773,039       1,769,680  
    Commercial AD&C loans     1,300,966       1,253,035       1,133,506       1,030,763       960,646       995,682       1,057,205       1,082,791  
    Commercial business loans     1,606,641       1,579,001       1,551,798       1,508,336       1,433,035       1,442,518       1,441,489       1,444,588  
    Residential mortgage loans     1,535,924       1,526,445       1,518,748       1,491,277       1,451,614       1,406,929       1,353,809       1,307,761  
    Residential construction loans     47,788       64,684       86,638       110,456       142,325       174,204       211,590       223,313  
    Consumer loans     433,185       421,003       417,206       417,539       419,299       421,189       423,306       424,122  
    Total loans     11,489,784       11,459,834       11,406,408       11,361,747       11,286,995       11,335,698       11,407,070       11,388,459  
    Residential mortgage loans held for sale     13,768       19,889       14,497       8,142       10,132       13,714       17,480       8,324  
    SBA loans held for sale     591       65       —       —       —       —       —      
    Investment securities     1,542,401       1,531,378       1,538,624       1,536,127       1,544,173       1,589,342       1,639,324       1,679,593  
    Interest-earning assets     13,713,618       13,474,697       13,292,995       13,411,810       13,462,583       13,444,117       13,423,589       13,316,165  
    Total assets     14,362,321       14,136,037       13,956,261       14,061,935       14,090,423       14,086,342       14,094,653       13,949,276  
    Noninterest-bearing demand deposits     2,813,545       2,783,906       2,790,620       2,730,295       2,958,254       3,041,101       3,137,971       3,480,433  
    Total deposits     11,807,983       11,483,524       11,245,476       11,086,145       11,089,587       11,076,724       10,928,038       11,049,991  
    Customer repurchase agreements     65,253       63,436       62,161       72,836       66,622       67,298       58,382       60,626  
    Total interest-bearing liabilities     9,792,134       9,600,905       9,441,015       9,583,074       9,418,666       9,332,617       9,257,652       8,806,720  
    Total stockholders’ equity     1,617,633       1,607,377       1,579,582       1,584,902       1,546,312       1,538,553       1,535,465       1,491,929  
    Financial measures:                                
    Average equity to average assets     11.26 %     11.37 %     11.32 %     11.27 %     10.97 %     10.92 %     10.89 %     10.70 %
    Average investment securities to average earning assets     11.25 %     11.36 %     11.57 %     11.45 %     11.47 %     11.82 %     12.21 %     12.61 %
    Average loans to average earning assets     83.78 %     85.05 %     85.81 %     84.71 %     83.84 %     84.32 %     84.98 %     85.52 %
    Loans to assets     81.67 %     79.90 %     81.98 %     81.83 %     81.03 %     79.94 %     81.24 %     80.65 %
    Loans to deposits     98.23 %     97.91 %     101.27 %     101.22 %     103.37 %     101.34 %     103.75 %     102.88 %
    Assets under management   $ 6,577,150     $ 6,567,752     $ 6,215,697     $ 6,165,509     $ 5,999,520     $ 5,536,499     $ 5,742,888     $ 5,477,560  
    Capital measures:                                
    Tier 1 leverage(1)     9.39 %     9.59 %     9.70 %     9.56 %     9.51 %     9.50 %     9.42 %     9.44 %
    Common equity tier 1 capital to risk-weighted assets(1)     11.36 %     11.27 %     11.28 %     10.96 %     10.90 %     10.83 %     10.65 %     10.53 %
    Tier 1 capital to risk-weighted assets(1)     11.36 %     11.27 %     11.28 %     10.96 %     10.90 %     10.83 %     10.65 %     10.53 %
    Total regulatory capital to risk-weighted assets(1)     15.38 %     15.53 %     15.49 %     15.05 %     14.92 %     14.85 %     14.60 %     14.43 %
    Book value per common share   $ 34.51     $ 36.10     $ 35.45     $ 35.37     $ 35.36     $ 34.26     $ 34.31     $ 34.37  
    Outstanding common shares     45,140,417       45,125,078       45,109,671       44,940,147       44,913,561       44,895,158       44,862,369       44,712,497  
    (1) Estimated ratio at December 31, 2024.
       

    Sandy Spring Bancorp, Inc. and Subsidiaries
    LOAN PORTFOLIO QUALITY DETAIL – UNAUDITED

          2024     2023
    (Dollars in thousands)   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,
    Non-performing assets:                                
    Loans 90 days past due:                                
    Commercial real estate:                                
    Commercial investor real estate   $ —   $ —   $ —   $ —   $ —   $ —   $ —   $ 215
    Commercial owner-occupied real estate     —     —     —     —     —     —     —     —
    Commercial AD&C     —     —     —     —     —     —     —     —
    Commercial business     —     —     —     20     20     415     29     3,002
    Residential real estate:                                
    Residential mortgage     232     399     338     340     342     —     692     352
    Residential construction     —     —     —     —     —     —     —     —
    Consumer     —     —     —     —     —     —     —     —
    Total loans 90 days past due     232     399     338     360     362     415     721     3,569
    Non-accrual loans:                                
    Commercial real estate:                                
    Commercial investor real estate     58,071     57,578     55,498     55,579     58,658     20,108     20,381     15,451
    Commercial owner-occupied real estate     7,008     9,639     9,403     4,394     4,640     4,744     4,846     4,949
    Commercial AD&C     31,314     31,816     2,127     556     1,259     1,422     569     —
    Commercial business     7,590     9,044     8,455     7,164     10,051     9,671     9,393     9,443
    Residential real estate:                                
    Residential mortgage     10,939     11,996     12,228     11,835     12,332     10,766     10,153     8,935
    Residential construction     521     539     539     542     443     449     —     —
    Consumer     3,697     4,258     4,400     4,011     4,102     4,187     3,396     4,900
    Total non-accrual loans     119,140     124,870     92,650     84,081     91,485     51,347     48,738     43,678
    Total non-performing loans     119,372     125,269     92,988     84,441     91,847     51,762     49,459     47,247
    Other real estate owned (OREO)     3,265     3,265     2,700     2,700     —     261     611     645
    Total non-performing assets   $ 122,637   $ 128,534   $ 95,688   $ 87,141   $ 91,847   $ 52,023   $ 50,070   $ 47,892
                                                     
        For the Quarter Ended,
    (Dollars in thousands)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		 z September 30,
    2023    		   June 30,
    2023    		   March 31,
    2023
    Analysis of non-accrual loan activity:                                
    Balance at beginning of period   $ 124,870     $ 92,650     $ 84,081     $ 91,485     $ 51,347     $ 48,738     $ 43,678     $ 34,782  
    Non-accrual balances transferred to OREO     —       (565 )     —       (2,700 )     —       —       —       —  
    Non-accrual balances charged-off     (1,698 )     (787 )     —       (1,550 )     —       (183 )     (2,049 )     (126 )
    Net payments or draws     (5,065 )     (3,095 )     (1,427 )     (4,017 )     (7,619 )     (1,545 )     (1,654 )     (10,212 )
    Loans placed on non-accrual     2,847       36,667       10,038       1,490       47,920       4,967       9,276       19,714  
    Non-accrual loans brought current     (1,814 )     —       (42 )     (627 )     (163 )     (630 )     (513 )     (480 )
    Balance at end of period   $ 119,140     $ 124,870     $ 92,650     $ 84,081     $ 91,485     $ 51,347     $ 48,738     $ 43,678  
                                     
    Analysis of allowance for credit losses – loans:                                
    Balance at beginning of period   $ 131,428     $ 125,863     $ 123,096     $ 120,865     $ 123,360     $ 120,287     $ 117,613     $ 136,242  
    Provision/ (credit) for credit losses – loans     4,653       6,310       2,961       3,331       (2,574 )     3,171       4,454       (18,945 )
    Less loans charged-off, net of recoveries:                                
    Commercial real estate:                                
    Commercial investor real estate     (3 )     397       (3 )     (2 )     (3 )     (3 )     (14 )     (5 )
    Commercial owner-occupied real estate     (30 )     (27 )     (27 )     (27 )     (27 )     (25 )     (27 )     (26 )
    Commercial AD&C     (23 )     111       (23 )     (283 )     —       —       —       —  
    Commercial business     1,656       250       (28 )     1,550       (105 )     15       363       (127 )
    Residential real estate:                                
    Residential mortgage     (7 )     (35 )     39       (6 )     (6 )     (4 )     35       21  
    Residential construction     —       —       —       —       —       —       —       —  
    Consumer     87       49       236       (132 )     62       115       1,423       (179 )
    Net charge-offs/ (recoveries)     1,680       745       194       1,100       (79 )     98       1,780       (316 )
    Balance at the end of period   $ 134,401     $ 131,428     $ 125,863     $ 123,096     $ 120,865     $ 123,360     $ 120,287     $ 117,613  
                                     
    Asset quality ratios:                                
    Non-performing loans to total loans     1.03 %     1.09 %     0.81 %     0.74 %     0.81 %     0.46 %     0.44 %     0.41 %
    Non-performing assets to total assets     0.87 %     0.89 %     0.68 %     0.63 %     0.65 %     0.37 %     0.36 %     0.34 %
    Allowance for credit losses to total loans     1.16 %     1.14 %     1.10 %     1.08 %     1.06 %     1.09 %     1.06 %     1.03 %
    Allowance for credit losses to non-performing loans     112.59 %     104.92 %     135.35 %     145.78 %     131.59 %     238.32 %     243.21 %     248.93 %
    Annualized net charge-offs/ (recoveries) to average loans     0.06 %     0.03 %     0.01 %     0.04 %     — %     — %     0.06 %       (0.01 )%
                                                                     

    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES – UNAUDITED

        Three Months Ended December 31,
          2024       2023  
    (Dollars in thousands and tax-equivalent)   Average
    Balances    		   Interest (1)   Annualized
    Average
    Yield/Rate    		   Average
    Balances    		   Interest (1)   Annualized
    Average
    Yield/Rate
    Assets                        
    Commercial investor real estate loans   $ 4,825,594     $ 57,898   4.77 %   $ 5,125,028     $ 60,909   4.72 %
    Commercial owner-occupied real estate loans     1,739,686       21,497   4.92       1,755,048       21,011   4.75  
    Commercial AD&C loans     1,300,966       24,303   7.43       960,646       20,510   8.47  
    Commercial business loans     1,606,641       26,374   6.53       1,433,035       23,822   6.60  
    Total commercial loans     9,472,887       130,072   5.46       9,273,757       126,252   5.40  
    Residential mortgage loans     1,535,924       14,676   3.82       1,451,614       12,984   3.58  
    Residential construction loans     47,788       672   5.59       142,325       1,515   4.22  
    Consumer loans     433,185       8,496   7.80       419,299       8,543   8.08  
    Total residential and consumer loans     2,016,897       23,844   4.72       2,013,238       23,042   4.56  
    Total loans (2)     11,489,784       153,916   5.33       11,286,995       149,294   5.25  
    Residential mortgage loans held for sale     13,768       249   7.24       10,132       199   7.86  
    SBA loans held for sale     591       21   14.50       —       —   —  
    Taxable securities     1,214,327       7,821   2.58       1,193,408       6,454   2.16  
    Tax-advantaged securities     328,074       2,143   2.61       350,765       2,322   2.64  
    Total investment securities (3)     1,542,401       9,964   2.58       1,544,173       8,776   2.27  
    Interest-bearing deposits with banks     667,074       7,997   4.77       621,007       8,456   5.40  
    Federal funds sold     —       —   —       276       4   5.43  
    Total interest-earning assets     13,713,618       172,147   5.00       13,462,583       166,729   4.92  
                             
    Less: allowance for credit losses – loans     (131,565 )             (121,851 )        
    Cash and due from banks     77,280               89,143          
    Premises and equipment, net     56,925               69,162          
    Other assets     646,063               591,386          
    Total assets   $ 14,362,321             $ 14,090,423          
                             
    Liabilities and Stockholders’ Equity                        
    Interest-bearing demand deposits   $ 1,519,835     $ 6,510   1.70 %   $ 1,474,748     $ 5,612   1.51 %
    Regular savings deposits     1,763,353       13,768   3.11       1,153,610       9,715   3.34  
    Money market savings deposits     3,116,359       26,657   3.40       2,697,930       24,456   3.60  
    Time deposits     2,594,891       29,176   4.47       2,805,045       30,030   4.25  
    Total interest-bearing deposits     8,994,438       76,111   3.37       8,131,333       69,813   3.41  
    Repurchase agreements     65,253       327   2.00       66,622       354   2.11  
    Federal funds purchased and Federal Reserve Bank borrowings     3,525       42   4.69       300,000       3,721   4.92  
    Advances from FHLB     357,609       3,865   4.30       550,000       6,086   4.39  
    Subordinated debt     371,309       4,616   4.97       370,711       3,946   4.26  
    Total borrowings     797,696       8,850   4.41       1,287,333       14,107   4.35  
    Total interest-bearing liabilities     9,792,134       84,961   3.45       9,418,666       83,920   3.54  
                             
    Noninterest-bearing demand deposits     2,813,545               2,958,254          
    Other liabilities     139,009               167,191          
    Stockholders’ equity     1,617,633               1,546,312          
    Total liabilities and stockholders’ equity   $ 14,362,321             $ 14,090,423          
                             
    Tax-equivalent net interest income and spread       $ 87,186   1.55 %       $ 82,809   1.38 %
    Less: tax-equivalent adjustment         1,100             1,113    
    Net interest income       $ 86,086           $ 81,696    
                             
    Interest income/earning assets           5.00 %           4.92 %
    Interest expense/earning assets           2.47             2.47  
    Net interest margin           2.53 %           2.45 %
    (1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million and $1.1 million in 2024 and 2023, respectively.
    (2) Non-accrual loans are included in the average balances.
    (3) Available-for-sale investments are presented at amortized cost.
       

    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES – UNAUDITED

        Year Ended December 31,
          2024       2023  
    (Dollars in thousands and tax-equivalent)   Average
    Balances    		   Interest (1)   Annualized
    Average
    Yield/Rate    		   Average
    Balances    		   Interest (1)   Annualized
    Average
    Yield/Rate
    Assets                        
    Commercial investor real estate loans   $ 4,929,894     $ 234,402   4.75 %   $ 5,133,279     $ 237,976   4.64 %
    Commercial owner-occupied real estate loans     1,740,376       84,587   4.86       1,766,839       82,049   4.64  
    Commercial AD&C loans     1,180,100       93,082   7.89       1,023,669       81,515   7.96  
    Commercial business loans     1,561,616       105,400   6.75       1,440,382       92,080   6.39  
    Total commercial loans     9,411,986       517,471   5.50       9,364,169       493,620   5.27  
    Residential mortgage loans     1,518,170       56,644   3.73       1,380,496       48,909   3.54  
    Residential construction loans     77,276       3,880   5.02       187,599       6,817   3.63  
    Consumer loans     422,260       34,189   8.10       421,963       32,946   7.81  
    Total residential and consumer loans     2,017,706       94,713   4.69       1,990,058       88,672   4.46  
    Total loans (2)     11,429,692       612,184   5.36       11,354,227       582,292   5.13  
    Residential mortgage loans held for sale     14,089       1,050   7.45       12,421       896   7.21  
    SBA loans held for sale     165       23   14.17       —       —   —  
    Taxable securities     1,200,218       29,140   2.43       1,254,739       26,992   2.15  
    Tax-advantaged securities     336,913       8,928   2.65       357,933       9,049   2.53  
    Total investment securities (3)     1,537,131       38,068   2.48       1,612,672       36,041   2.23  
    Interest-bearing deposits with banks     492,649       25,398   5.16       432,392       22,435   5.19  
    Federal funds sold     216       8   3.79       393       17   4.26  
    Total interest-earning assets     13,473,942       676,731   5.02       13,412,105       641,681   4.78  
                             
    Less: allowance for credit losses – loans     (125,131 )             (124,624 )        
    Cash and due from banks     81,761               93,494          
    Premises and equipment, net     58,571               69,886          
    Other assets     640,652               604,784          
    Total assets   $ 14,129,795             $ 14,055,645          
                             
    Liabilities and Stockholders’ Equity                        
    Interest-bearing demand deposits   $ 1,480,668     $ 25,368   1.71 %   $ 1,429,219     $ 16,077   1.12 %
    Regular savings deposits     1,643,305       56,365   3.43       784,575       17,546   2.24  
    Money market savings deposits     2,914,712       105,847   3.63       2,974,580       93,432   3.14  
    Time deposits     2,588,713       115,593   4.47       2,695,232       97,973   3.64  
    Total interest-bearing deposits     8,627,398       303,173   3.51       7,883,606       225,028   2.85  
    Repurchase agreements     65,913       1,370   2.08       63,259       915   1.45  
    Federal funds purchased and Federal Reserve Bank borrowings     75,227       3,889   5.17       273,508       13,537   4.95  
    Advances from FHLB     465,164       20,259   4.36       615,082       27,709   4.50  
    Subordinated debt     371,085       16,455   4.43       370,487       15,785   4.26  
    Total borrowings     977,389       41,973   4.29       1,322,336       57,946   4.38  
    Total interest-bearing liabilities     9,604,787       345,146   3.59       9,205,942       282,974   3.07  
                             
    Noninterest-bearing demand deposits     2,779,696               3,152,699          
    Other liabilities     147,856               168,762          
    Stockholders’ equity     1,597,456               1,528,242          
    Total liabilities and stockholders’ equity   $ 14,129,795             $ 14,055,645          
                             
    Tax-equivalent net interest income and spread       $ 331,585   1.43 %       $ 358,707   1.71 %
    Less: tax-equivalent adjustment         4,459             4,157    
    Net interest income       $ 327,126           $ 354,550    
                             
    Interest income/earning assets           5.02 %           4.78 %
    Interest expense/earning assets           2.56             2.11  
    Net interest margin           2.46 %           2.67 %
    (1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.5 million and $4.2 million in 2024 and 2023, respectively.
    (2) Non-accrual loans are included in the average balances.
    (3) Available-for-sale investments are presented at amortized cost.

    The MIL Network –

  • MIL-OSI: RecycLiCo Battery Materials Engages Carmot Strategic Group and Penney Capital for Grants and Cooperative Funding Consultation

    Source: GlobeNewswire (MIL-OSI)

    SURREY, British Columbia, Jan. 28, 2025 (GLOBE NEWSWIRE) — RecycLiCo Battery Materials Inc. (“RecycLiCo” or the “Company”), (TSX.V: AMY | OTCQB: AMYZF| FSE: ID4), a pioneer in the field of lithium-ion battery recycling technology, is pleased to announce that it has engaged Penney Capital and Carmot Strategic Group, Inc. to assist in the company’s efforts to identify, and qualify for, government funding opportunities that could be used to further RecycLiCo’s critical mineral recovery activities in the U.S. and Canada, including research to enhance and find new applications for its current intellectual property and know-how and the continued exploitation of its upcycling technology.

    Carmot Strategic and Penney Capital advisory companies have won multiple federal grants to develop domestic sources of Critical Minerals, from mining and processing to advanced materials manufacturing, as well as developing innovative financial instruments to integrate these materials into U.S. supply chains.

    “We are very pleased to have Carmot Strategic and Penney Capital working with us,” said Richard Sadowsky, RecycLiCo’s Interim Chief Executive Officer. “Critical mineral recovery and reuse are becoming increasingly important, especially in terms of national security. The RecycLiCo Board has mandated that we explore new ways to exploit our recovery expertise and, at the same time, continue to offer high-quality upcycling of battery materials. We hope, with Carmot and Penney’s assistance, to establish relationships with government agencies that will support increases in the pace of both R&D and deployment.”

    About RecycLiCo

    RecycLiCo Battery Materials Inc. is a battery materials company specializing in sustainable lithium-ion battery upcycling and materials production. RecycLiCo has developed advanced technologies that efficiently recover battery-grade materials from lithium-ion batteries, addressing the global demand for environmentally friendly solutions in energy storage. With minimal processing steps and up to 99% extraction of lithium, cobalt, nickel, and manganese. RecycLiCo’s hydrometallurgical process turns lithium-ion battery waste into battery-grade cathode precursor, lithium hydroxide, and lithium carbonate for direct integration into the re- manufacturing of new lithium-ion batteries.

    About Penney Capital

    Founded in 2017 by President & CEO Clark Penney, Penney Capital excels at navigating, connecting, and expanding new development opportunities and large-investment infrastructure projects.

    Prior to founding Penney Capital, Clark Penney began his career working on energy and defense committees with the U.S. Senate in Washington D.C. and with the president pro tempore. Later, he branched into the finance industry for over 10 years: co-founding Cypress Wealth Management, a private wealth management firm now with over $1 billion in assets under management and offices in Alaska and California, where he remains a partner.

    Today, Penney Capital’s resume includes leading economic development with The State of Alaska, new development projects worth over $2 billion, and other areas of expertise including resource development, financial technology firms, cryptocurrency, campaigns, wireless technology, and manufacturing.

    About Carmot Strategic Group

    Established in 2008 by Daniel McGroarty, Carmot Strategic Group, Inc. is an issues management firm focused on Critical Mineral development, based in the Washington, D.C. area.

    A recognized subject matter expert on Critical Minerals, Daniel McGroarty serves on the advisory boards of several companies developing U.S.-based Critical Mineral projects. He has testified on Critical Mineral issues before both U.S. Senate and House committees on energy and natural resources and served a term as Independent Advisory Board Member of the Critical Materials Institute, the Department of Energy’s Energy Innovation Hub. Prior to establishing his consulting practice, he served in senior positions in the U.S. Government, as special assistant at the White House and Presidential appointee at the Department of Defense.

    For more information, please contact:
    Teresa Piorun
    Senior Corporate Secretary
    Telephone: 778-574-4444
    Email: InvestorServices@RecycLiCo.com

    Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain “forward-looking statements”, which are statements about the future based on current expectations or beliefs. For this purpose, statements of historical fact may be deemed to be forward-looking statements. Forward–looking statements by their nature involve risks and uncertainties, and there can be no assurance that such statements will prove to be accurate or true. Investors should not place undue reliance on forward-looking statements. The Company does not undertake any obligation to update forward-looking statements except as required by law.

    The MIL Network –

  • MIL-OSI USA: DCCA NEWS RELEASE: SAFETY AROUND ELECTRIC UTILITY POLES AND POWER LINES

    Source: US State of Hawaii

    DCCA NEWS RELEASE: SAFETY AROUND ELECTRIC UTILITY POLES AND POWER LINES

    Posted on Jan 27, 2025 in Latest Department News, Newsroom

     

    STATE OF HAWAIʻI

    KA MOKU ʻĀINA O HAWAIʻI

     

    DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

    KA ʻOIHANA PILI KĀLEPA

    DIVISION OF CONSUMER ADVOCACY

     

    JOSH GREEN, M.D.

    GOVERNOR

    KE KIAʻĀINA

     

    NADINE Y. ANDO

    DIRECTOR

    KA LUNA HOʻOKELE

    MICHAEL ANGELO

    EXECUTIVE DIRECTOR

    SAFETY AROUND ELECTRIC UTILITY POLES AND POWER LINES

    Public Urged to Report Safety Hazards Around Electric Utility Poles and Power Lines

     

    FOR IMMEDIATE RELEASE

    January 27, 2025

    HONOLULU — The state of Hawai‘i Department of Commerce and Consumer Affairs, Division of Consumer Advocacy (DCA), urges residents take appropriate action in case of emergencies involving downed power lines or sparking near electric utility poles. Residents are also encouraged to report non-emergency concerns, such as vegetation overgrowth near power lines, which can pose safety hazards.

    Residents should call 911 immediately if they observe downed power lines or sparking near a utility pole. The electric utility will then be notified by 911 dispatchers and a troubleshooter will be dispatched.

    For non-emergency concerns, such as vegetation overgrowth on power lines or damage, residents should contact their local electric utility directly.

    Emergency Concerns:

    • Downed Power Lines or Sparking Near a Utility Pole: If you witness downed power lines or sparking, call 911 immediately. Never touch a downed power line or attempt to move it, and always assume it is energized. Once 911 is called, dispatchers will notify the electric utility, and a troubleshooter will be sent. For after-hours emergencies, always contact 911 first, then report it to your electric utility’s trouble line.

    Emergency Contact Information:

    • Hawaiian Electric
      • O‘ahu: 1-855-304-1212
      • Maui: 808-871-7777
      • Moloka‘i, Lānaʻi: 1-877-871-8461
      • Hawai‘i Island: 808-969-6666
    • KIUC
      • Kaua‘i: 808-246-4300

    Non-Emergency Safety Concerns:

    • Vegetation Concerns or Equipment Issues Near/On Electric Utility Poles or Power Lines: If you see overgrown vegetation near power lines or have safety concerns related to electric utility equipment on utility poles (power lines, transformers, etc.), please report them to the relevant electric utility company. This document can assist with identifying electric utility equipment.
    • Contacting Electric Utility Providers: Once the electric utility company has been notified, a troubleshooter will assess the risk and, if necessary, remove the potential hazard. Response times vary based on the amount of volume being managed at that time.

    Non-Emergency Contact Information:

    • Hawaiian Electric
      • For vegetation concerns or questions regarding tree trimming and inspection, please contact:
    • KIUC
      • Members are encouraged to take photos and email a report to [email protected] with as much information on the location of the problem as possible. You can also send a message through Facebook Messenger with photos and location information. Reports can be made by phone to 808-246-4300, but specific information on the location and a description of the problem will be necessary.

    Safety Reminders:

    • Never touch a downed power line or attempt to move it.
    • Always assume a downed line is energized.
    • Never plant vegetation below or close to power lines.
    • Keep vegetation trimmed away from your home to prevent contact with power lines.
    • If you see sparking or smoke near a utility pole, call 911 and report it immediately to your local electric utility company.

     

    The Division of Consumer Advocacy is a state agency that plays a vital role in safeguarding the interests of consumers of regulated public utility services. Representing a broad spectrum of customers across various utility and transportation sectors, DCA advocates before the Hawai‘i Public Utilities Commission. DCA comprises a diverse team of professionals committed to ensuring the safe, reliable, and equitable delivery of utility services at affordable rates, while aligning with the state’s policy objectives.

    ###

    Media Contact:

    Communications Office

    Department of Commerce and Consumer Affairs

    Phone: 808-586-2760

    Email: [email protected]

    MIL OSI USA News –

  • MIL-OSI NGOs: DRC: warring parties must prioritise civilian protection and humanitarian access amid ‘devastating violence’ in Goma

    Source: Amnesty International –

    The Democratic Republic of Congo (DRC)’s regional and international partners must put pressure on all parties to the conflict in the east of the country — including the Rwandan-backed M23 fighters, the Rwandan and Congolese armies, and their allies — to prioritise the protection of civilians in the aftermath of the recent fighting in Goma, Amnesty International said today.

    Responding to the escalation of violence in the region, Tigere Chagutah, Amnesty International’s Regional Director for East and Southern Africa, said: 

    “Thousands of Congolese civilians are once again fleeing for their lives, in desperate need of safety and humanitarian aid.

    “Civilians face a grave risk of human rights violations amid this latest escalation. Over the past year, both sides have ramped up their use of explosive weapons in densely populated areas, with devastating consequences for civilians.

    “The M23, backed by Rwanda, must comply with international humanitarian law. They must ensure the safety of civilians, including human rights defenders and journalists, and those critical of Rwanda and the M23.

    “Amnesty International calls on all parties to the conflict to prioritise the protection of civilians amid this devastating violence.  With thousands in and around Goma seeking shelter, food, water, sanitation and healthcare, the parties to the conflict must allow the passage of safe and unrestricted humanitarian access to all those in need.”

    Devastating violence

    On Monday (27 January), the M23 declared that it had seized control of Goma, the DRC’s third-largest city and home to nearly two million people. This development occurred despite the UN Secretary General’s call for Rwanda to withdraw its troops from the DRC and cease its support for the M23 fighters. Reports from the city described ongoing gunfire and explosions, alongside unverified reports on social media and by journalists of looting, indiscriminate shooting, and shelling in the city. The DRC government has not officially acknowledged losing control of Goma.

    Humanitarian organisations, including Medecins Sans Frontieres, report that over 400,000 people were displaced in January due to the ongoing conflict in the region. Many sought refuge in and around Goma, a city that was already sheltering over 600,000 internally displaced persons (IDPs).

    Reports from Rwandan media indicated that Rwanda has received several civilians seeking refuge, while others fled Goma to Bukavu, provincial capital of South Kivu, via Lake Kivu. Following the capture of Goma, the M23 ordered the suspension of all activities on the lake, which could hinder the movement of people fleeing the fighting in Goma. Certain areas of the city are without access to water and electricity, as the conflict has damaged critical infrastructure.

    Military operation

    On 18 January, the M23, backed by Rwandan forces, launched a military operation to expand its territory, violating a ceasefire agreement between Rwanda and the DRC established through the Luanda Peace Process. On 21 January, the M23 claimed to have captured several cities, including the strategically important supply city of Minova in South Kivu province, located about 20 kilometres from Goma across Lake Kivu.

    On 24 January, heavy fighting was reported near Sake, more than 20 kilometres north-west of Goma, where the Armed Forces of the DRC (FARDC), supported by the Southern African Mission in the Democratic Republic of Congo (SAMIRDRC), UN forces (MONUSCO), and a coalition of militia groups, were seeking to halt the M23’s advance toward Goma. The same day, a spokesperson for the M23, as well as Rwandan media, said the military governor of North Kivu, General Peter Cirimwami, was shot while visiting troops on the frontlines near Sake. His death was later confirmed by Congolese officials.

    According to a statement issued on 25 January by the South African National Defence Force, nine South African soldiers deployed under SAMIRDRC and UN forces were killed in the fighting. Malawi authorities also reported the deaths of three of their soldiers serving in the SAMIRDRC.

     

    The UN Security Council met on 26 January to assess the situation in North-Kivu. The next day, M23 rebels said they had taken control of Goma. In its statement, the Security Council condemned M23’s advances in North-Kivu and called on the armed group to stop its offensive as it gave rise to a major humanitarian crisis and called for the protection of civilians. The Security Council also called for the withdrawal of the external forces from DRC and re-affirmed the sovereignty of the DRC. The Security Council’s decisions should be respected and implemented by all parties.

    MIL OSI NGO –

  • MIL-OSI Asia-Pac: To reimagine, reinvent, and reposition ISI as a globally recognized institution: Indian Statistical Institute poised to embrace the transformative vision as it approaches its centenary in 2031

    Source: Government of India (2)

    Posted On: 28 JAN 2025 1:19PM by PIB Delhi

    The Indian Statistical Institute, established in 1931 by the visionary statistician Prof. Prasanta Chandra Mahalanobis, has played a pivotal role in statistical research, education, training and its application. Having been declared as an institution of national importance through the Indian Statistical Institute Act of 1959, the Institute has been a leader in advancing statistical methods and their application across various disciplines. The ISI Council is the governing body of the Institute. In terms of the provision of the ISI Act and ISI Regulations, a newly constituted Council has been set up for the term 2024-26. During the 1stMeeting of the Council held on 26 October 2024, the members of the Council elected Dr. Koppillil Radhakrishnan, as the Chairman of the ISI, Council. Dr. Radhakrishnan is a Padma Bhushan awardee and an Indian Space Scientist, who headed the Indian Space Research Organisation (ISRO) as Chairman of the Space Commission and Secretary of the Department of Space, Government of India.

    As per the provisions of the ISI Act, 1959, the Central Government (MoSPI) constitutes Committees at regularintervals for reviewing the performance of the ISI and for making recommendations about its future course. Under this provision, the 4thReview Committee of the Indian Statistical Institutewas constituted in 2020. The Committee submitted its comprehensive report to the Government of India, charting a transformative roadmap for this esteemed Institution of National Importance. Headed by the distinguished scientist and former Director-General of the Council of Scientific and Industrial Research (CSIR), Dr. R.A. Mashelkar, the Committee, through interactions with multiple stakeholders, conducted an extensive review of ISI’s functioning, achievements and challenges, and arrived at the report culminating in a series of actionable recommendations aimed at rejuvenating the Institute’s role in advancing statistical sciences and its applications in India and globally.

    Based on the theme ‘Reimagine, Reinvent and Reposition’, the Committee proposed 61 recommendations addressing governance, academic programs, research priorities, infrastructure, and financial sustainability of the Institute. The Committeehad extensive Stakeholder Consultations in the online mode due to the raging pandemic, engagingvirtually with faculty, students, alumni, and administrative staff to gather insights into ISI’s functioning, challenges, and aspirations.They also consulted industry experts, government representatives, and other academic institutions to understand and assess the external expectations from ISI. The Committee held virtual meetings to deliberate on findings and draft recommendations and undertook an evidence-basedevaluation of ISI’s performance over the past decade, including its research output, academic programs, infrastructure, and outreach efforts andbenchmarked ISI against leading global institutions to identify gaps and opportunities.

    The Committee proposed a comprehensive set of recommendations to reimagine, reinvent, and reposition ISI as a globally recognized institution. It emphasized the need for governance reforms and strengthening accountability through performance-based evaluations and establishing clear work norms for faculty and staff. The committee recommended expanding academic programs to include cutting-edge fields like data science and machine learning, increasing student intake and faculty numbers to scale the institute’s impact, and promoting interdisciplinary and large-scale research projects with national and international relevance. It called for modernizing administrative processes and research methodologies using advanced digital tools and building world-class computing and laboratory infrastructure to support innovative research.

    The recommendations also included establishing robust partnerships with industry and government to address real-world challenges and generate revenue, establishing more enabling structures like the technology innovation hub, enhancing visibility through targeted outreach and brand-building initiatives, and encouraging resource generation through research grants, industry collaborations, and alumni contributions. The committee stressed the importance of increasing autonomy in managing internal revenue and recruitment processes. Infrastructure development was also a priority, with a focus on upgrading physical facilities, including campuses, laboratories, and student housing, and establishing new centers focused on emerging disciplines and regional outreach.

    The Committee’s recommendations are aimed at reimagining, reinventing, and repositioning ISI as a globally recognized institution and included recommendations in the area of Governance Reforms, Academic and Research Enhancements, Digital Transformation, Industry and Government Engagement, Financial Sustainability and Infrastructure Development.

    ISI has commenced implementation of these recommendations, demonstrating their commitment towards strengthening the Institute’s excellence in addressing the nation’s socio-economic development needs. During the2ndMeeting of the Council held on 23 January 2025, the Council of the Institute under the Chairmanship of Dr. Koppillil Radhakrishnan reviewed the status of implementation of the recommendations of the 4thReview Committee.The Institute’sCouncil is committed to implement the Committee’s recommendations in a phased manner with focus on:

    1. Short-Term Initiatives: Immediate steps to address critical issues, such as faculty recruitment, infrastructure upgradation, and governance reforms.
    2. Medium-Term Goals: Enhancing academic and research programs, scaling outreach efforts, and improving financial sustainability.
    3. Long-Term Vision: Transforming ISI into a global leader by its centenary year in 2031, with a focus on impactful research, innovative education, and strong industry connections.

    ISI has commenced work on improving its structure, strengthening research and ensuring robust academic and administrative frameworks. Significant restructuring has been undertaken to align the Institute’s various Divisions with contemporary requirements. The Centre for AI and ML (CAIML) has aligned its initiatives with the National AI Policy, emphasizing strategic relevance. Efforts are also underway to operationalize the Interdisciplinary Centre for Applied Statistics and Biostatistics. The Research Centre for Economics and Data Analysis has been invigorated with dedicated leadership assignments, ensuring forward momentum. Faculty recruitment and promotions have been prioritized, with streamlined processes nearing finalization. Formalization of teaching benchmarks highlight ISI’s to academic excellence.

    While certain actions remain under discussion, the groundwork has been laid for transformative changes. ISI has also adopted advanced digital teaching methods, introducing online and hybrid courses as part of a broader academic enhancement strategy. These initiatives are complemented by expedited decision-making processes within the Academic Council, fostering agility in program development and revision. Infrastructure and governance improvements remain a focal point, with e-governance initiatives progressing in alignment with MoSPI. Revenue generation efforts, including consultancy rules and facility usage charges, have been implemented to strengthen financial sustainability.

    While many recommendations have been fully implemented, others are actively in progress. These actions, signal a forward-looking approach and underline the Government’s dedication to strengthen ISI as a global leader in statistical science and related disciplines.The Government recognizes ISI’s rich legacy of excellence and its critical role in supporting India’s economic and social development and is committed to providing the necessary support to realize the 4th Review Committee’s vision and roadmap.

    The Government of India’s support for implementing these recommendations reflects its commitment to empower the ISI as a cornerstone of the nation’s knowledge ecosystem. As the Institute approaches its centenary in 2031, the Institute is poised to embrace this transformative vision and emerge as a beacon of excellence on the global stage.

    *****

    SB/DP

    (Release ID: 2096926) Visitor Counter : 21

    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: PRESS RELEASE – Ministry of Customs & Revenue commemorates and celebrates International Customs Day

    Source: Government of Western Samoa

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    The Ministry of Customs & Revenue commenced its week long commemoration of the International Customs Day with a thanksgiving service on Monday, 27th January 2025.

    The International Customs Day (ICD) is an annual event that was initiated by the World Customs Organization in the year 1983, to recognize the important role that Customs play in ensuring border security. This day is celebrated on the 26th day of January every year, the same date of the inauguaration of the Customs Cooperation Council, now known as the World Customs Organization, in the year 1952. A theme is assigned for every year, and this year is on “Customs delivering on its commitment to Efficiency, Security and Prosperity”. The theme highlights on the current Vision and Mission of the Ministry.

    The keynote address was delivered by the Deputy Prime Minister, who is also the Minister for Customs & Revenue, Hon. Tuala Tevaga Iosefo Ponifasio. The Deputy Prime Minister echoed the concerns of the public, members of parliament and those who have shared these concerns, on the growing problems on illicit drugs and weapons, undervaluation of Customs invoices, under-declaration of income and non compliance with requirements of the Tax Invoice Monitoring System (TIMS), among many other issues.

    Furthermore, he reminded the Ministry on the equipment and systems now available for operations that will remove doubt by the public on Customs delivering on its mandate around security. Emphasis was placed by him on the need to utilize the container x-ray scanner to its full capacity. He further re-emphasized on the relevancy of the theme to the work of the Ministry and his challenge put to the CEO, Management and staff of Customs, is to really focus their work, resources and efforts on ensuring “border security”, a critical national concern that needs to be taken seriously.

    The international day for Customs will be celebrated this week with various activities reflecting the theme for this year. The week long program started with an official opening prayer service held at the Customs office this morning. One of the featured program of the opening ceremony is the launch of the Ministry revamped website. The new website has been thoughtfully redesigned on collective efforts with a clear focus on user-friendliness, accessibility, and efficiency.

    There are two new features introduced in the new website. One is the most ground-breaking features of the revamped website is the introduction of the MCR’s AI Technology, CRISA, which stands for Customs and Revenue Information and Support Assistant. Powered by advanced artificial intelligence (AI) and machine learning technologies, CRISA is designed to transform the way you interact with the Ministry. The second feature is that of the duty estimator tool, to assist importers in knowing an estimated cost of duties and taxes on their imports before they arrive in country. Hon. Tuala Tevaga I. Ponifasio acknowledged this work by the Ministry’s IT team. He further stated that this has been one of his deliverable for the Ministry and although it has taken about three years for the Ministry to build, it is a great milestone indeed.

    Thirteen Customs officials, including the Chief Executive Officer of the Ministry, were awarded with Certificates of Merit from the WCO for their service rendered to the International Customs community. The thirteen awardees were selected based on the longevity and quality of their services to the government and people of Samoa as well as the international Customs forum for more that twenty (20) years. The awards were given by Hon. Tuala Tevaga Iosefo Ponifasio with a warm congratulatory remark to each awardee.

    The week long program features a range of activities and includes an awareness session on the Container X-ray Machine and the refresher session on the Ministry’s Identity Framework. The operability of the Container X-ray machine is expected to be at full capacity from this week onwards. A media campaign is also set for this week commencing with interview from the Chief Executive Officer on ICD celebration and its significance to the work of the Ministry, communication relative to the new website and operations of the Xray machine, staff capacity building and wellness programs throughout the week.

    The Ministry takes this opportunity to Wish all Staff of MCR, partners and stakeholders of the Ministry, fellow Customs administrations in the Pacific and around the World a “Happy International Customs Day”

    (End)

    SOURCE – Ministry of Customs and Revenue

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    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: Financial results for nine months ended December 31, 2024

    Source: Hong Kong Government special administrative region

    Financial results for nine months ended December 31, 2024
    Financial results for nine months ended December 31, 2024
    *********************************************************

         The Government announced today (January 28) its financial results for the nine months ended December 31, 2024.           Expenditure and revenue from April to December 2024 amounted to HK$524.2 billion and HK$349.7 billion respectively, resulting in a deficit of HK$70.5 billion after taking into account HK$114.6 billion received from issuance of Government Bonds and repayment of HK$10.6 billion principal on Government Bonds.     　     A Government spokesperson said that the deficit for the period was mainly due to the fact that some major types of revenue including salaries and profits taxes are mostly received towards the end of a financial year. The revised estimates for the current financial year will be published along with the 2025-26 Budget.     　     The fiscal reserves stood at HK$664.1 billion as at December 31, 2024.     　     Detailed figures are shown in Tables 1 and 2. TABLE 1. CONSOLIDATED ACCOUNT (Note 1) 

     
    Month endedDecember 31, 2024HK$ million
    Nine months endedDecember 31, 2024HK$ million

    Revenue
    101,403.9
    349,677.1

    Expenditure
    (52,635.2)
    (524,217.4)

     
     
     

    Surplus / (Deficit) before issuance and repayment of Government Bonds
    48,768.7
    (174,540.3)

     
     
     

    Proceeds received from issuance of Government Bonds
    23,934.7
    114,588.2

     
     
     

    Repayment of Government Bonds*
    (38.0)
    (10,555.5)

     
     
     

    Surplus / (Deficit) after issuance and repayment of Government Bonds
    72,665.4
    (70,507.6)

     
     
     

    Financing
     
     

          Domestic
     
     

              Banking Sector (Note 2)
    (72,152.2)
    67,227.5

              Non-Banking Sector
    (513.2)
    3,280.1

          External
    –
    –

     
     
     

    Total
    (72,665.4)
    70,507.6

    * Being repayment of principal on Government Bonds and does not include the associated interest and other expenses.

     Government Debts as at December 31, 2024 (Note 3)    HK$293,210 millionDebts Guaranteed by Government as at December 31, 2024 (Note 4)    HK$132,387 million TABLE 2. FISCAL RESERVES 

     
    Month endedDecember 31, 2024HK$ million
    Nine months endedDecember 31, 2024HK$ million

    Fiscal Reserves at start of period
    591,412.4
    734,585.4

    Consolidated Surplus / (Deficit) afterissuance and repayment of Government Bonds
    72,665.4
    (70,507.6)

     
     
     

    Fiscal Reserves at end of period(Note 5)
    664,077.8
    664,077.8

     Notes:     1. This Account consolidates the General Revenue Account and the following eight Funds: Capital Works Reserve Fund, Capital Investment Fund, Civil Service Pension Reserve Fund, Disaster Relief Fund, Innovation and Technology Fund, Land Fund, Loan Fund and Lotteries Fund. It excludes the Bond Fund, the balance of which is not part of the fiscal reserves. The Bond Fund balance as at December 31, 2024, was HK$229,943 million. 2. Includes transactions with the Exchange Fund and resident banks. 3. The Government Debts, with proceeds credited to the Capital Works Reserve Fund, comprise: (i) the Green Bonds (equivalent to HK$203,686 million as at December 31, 2024) issued under the Government Sustainable Bond Programme. They were denominated in US dollars (US$9,950 million with maturity from January 2026 to January 2053), euros (5,330 million euros with maturity from January 2025 to November 2041), Renminbi (RMB39,000 million with maturity from January 2025 to July 2054) and Hong Kong dollars (HK$42,000 million with maturity from May 2025 to October 2026); (ii) the Infrastructure Bonds (equivalent to HK$34,597 million as at December 31, 2024) issued under the Infrastructure Bond Programme. They were denominated in Renminbi (RMB6,000 million with maturity from December 2025 to November 2034) and Hong Kong dollars (HK$28,230 million with maturity from November 2025 to December 2039); and (iii) the Silver Bonds with nominal value of HK$54,927 million (with maturity in October 2027 and may be redeemed before maturity upon request from bond holders) issued under the Infrastructure Bond Programme.       They do not include the outstanding bonds with nominal value of HK$178,169 million and alternative bonds with nominal value of US$1,000 million (equivalent to HK$7,764 million as at December 31, 2024) issued under the Government Bond Programme with proceeds credited to the Bond Fund. Of these bonds under the Government Bond Programme (including Silver Bonds with nominal value of HK$96,669 million, which may be redeemed before maturity upon request from bond holders), bonds with nominal value of HK$53,357 million will mature within the period from January 2025 to December 2025 and the rest within the period from January 2026 to May 2042. 4. Includes guarantees provided under the SME Loan Guarantee Scheme launched in 2001, the Special Loan Guarantee Scheme launched in 2008, the SME Financing Guarantee Scheme launched in 2012, and the Loan Guarantee Scheme for Cross-boundary Passenger Transport Trade, the Loan Guarantee Scheme for Battery Electric Taxis and the Loan Guarantee Scheme for Travel Sector launched in 2023. 5. Includes HK$249,751 million, being the balance of the Land Fund held in the name of “Future Fund”, for long-term investments up to December 31, 2030. The Future Fund also includes HK$4,800 million, being one-third of the actual surplus in 2015-16 as top-up.

     
    Ends/Tuesday, January 28, 2025Issued at HKT 16:30

    NNNN

    MIL OSI Asia Pacific News –

  • MIL-OSI: Netcompany – Interim report for the 12 months ended 31 December 2024 and Annual Report 2024

    Source: GlobeNewswire (MIL-OSI)

    Company announcement
    No. 06/2025

                                                     28 January 2025

    Continued growth and margin improvement in a challenging market
    Summary full year 2024

    • For the full year, Netcompany grew revenue by 7.6% (constant 7.4%) to DKK 6,540.6m, in line with guidance.
    • Adjusted EBITDA was DKK 1,097.9m in 2024 compared to DKK 901.2m in 2023. Adjusted EBITDA margin was 16.8% for 2024 (constant 16.9%) compared to 14.8% in 2023.
    • Average workforce increased to 8,007 FTEs.
    • Free cash flow in 2024 was DKK 821.1m compared to DKK 552.1m in 2023.
    • Cash conversion ratio increased to 147.1% in 2024 from 135.1% in 2023.
    • Debt leverage was 1.2x.
    • For 2025, Netcompany expects revenue growth in constant currencies of between 5% and 10% and adjusted EBITDA margin measured in constant currencies is expected to be between 16% and 19%.

    Performance highlights Q4

    • Revenue increased by 6% to DKK 1,678.2m in reported currencies and by 5.7% in constant currencies.
    • Adjusted EBITDA increased 12.8% to DKK 275.3m in Q4. Adjusted EBITDA margin was 16.4% (constant 16.5%) compared to 15.4% in Q4 2023.
    • Average workforce increased by 484 FTEs to 8,249 FTEs.
    • Free cash flow was DKK 532.4m.  
    • Cash conversion ratio (tax normalised) was 407.8%.

    “We realised revenue growth of 7.6% (constant 7.4%) and adjusted EBITDA margin of 16.8% (constant 16.9%) in 2024, which was another year of high macro and geopolitically uncertainty.

    I am pleased to see the impacts of our significant investment into our operation materialising in continued growth and an improvement of more than 53% in our earnings compared to last year. This, combined with the significant work spent on business development in the last quarter of the year comforts me in Netcompany’s ability to deliver continued growth and margin expansion going forward.

    During the year we have welcomed more than 1,700 new employees to our Group and at the end of 2024 we were more than 8,250 impressive individuals whom, together with our customers, will pave the way forward for continued success – for all parties.

    Despite the continued uncertainty on both macro and geopolitical matters we expect to grow between 5% and 10%, and deliver an adjusted EBITDA margin of between 16% and 19% in 2025. At the same time, we reiterate our mid-term adjusted EBITDA margin target of 20%, but defer the timing for realising DKK 8.5bn in revenue to 2027. We remain committed to a total redistribution of cash of at least DKK 2bn to our shareholders by 2026, however, due to ongoing strategic considerations we are not initiating a new share buyback programme at this particular point in time.

    These are truly exiting times, and I look forward to continue to grow Netcompany successfully with all our stakeholders in 2025.”

    André Rogaczewski,
    Netcompany CEO and Co-founder

    Financial overview
    For full details on financial performance, see enclosed Company announcement Q4 2024 and Annual Report 2024 (incl. iXBRL)

    Conference details
    In connection with the publication of the results for Q4 2024, Netcompany will host a conference call on 28 January 2025 at 11.00 CET.

    The conference call will be held in English and can be followed live via the company’s website; www.netcompany.com

    Dial-in details for investors and analysts
    DK: +45 7876 8490
    UK: +44 203 769 6819
    US: +1 646 787 0157
    PIN: 598046

    Webcast Player URL: https://netcompany-as.eventcdn.net/events/annual-report-2024

    Additional information
    For additional information, please contact:

    Netcompany Group A/S
    Thomas Johansen, CFO, +45 51 19 32 24
    Frederikke Linde, Head of IR, +45 60 62 60 87

    Attachments

    The MIL Network –

  • MIL-OSI USA: Sen. Scott Statement on Confirmation of Scott Bessent

    US Senate News:

    Source: United States Senator for South Carolina Tim Scott
    WASHINGTON — Today, U.S. Senator Tim Scott (R-S.C.), member of the Senate Finance Committee, issued the statement below following the confirmation of Scott Bessent to serve as U.S. Secretary of the Treasury:
    “Scott Bessent’s confirmation is great news for the pockets of American taxpayers. He understands the cataclysmic repercussions the middle class will face if provisions of the 2017 Tax Cuts and Jobs Act expire. With his great success as an entrepreneur, he will help ensure all Americans have the necessary tools to reach financial freedom. I am excited to work with the President and Secretary Bessent to unleash economic opportunity for all Americans!”

    MIL OSI USA News –

  • MIL-OSI USA: Historic Week as the Golden Age Begins

    US Senate News:

    Source: United States Senator for Wisconsin Ron Johnson

    Inauguration Day was a good day for America. Watching Donald Trump take the oath of office becoming the 47th President of the United States was an honor. It is time to not only make America great again, but make it even better after four years of disastrous Democratic policies.  
    President Trump is coming into office with more experience and a wariness of the deep state. Our job in the Senate is to make sure we confirm his cabinet so we can get to work and President Trump can fulfill his promises to the American people. We also need to expose the weaponization of government that happened during the last administration. 
    WATCH: Sen. Johnson on BBC News Special Inauguration Coverage 
    WATCH: Sen. Johnson on Newsmax 

    Attending the swearing-in ceremony of President Trump at the Capitol Rotunda: Sen. Mike Lee, Sen. Ron Johnson, Sen. Rand Paul, and Sen.Ted Cruz. 
    New Position as Chairman of PSI

    I am honored to serve as chairman of the powerful Permanent Subcommittee on Investigations. This subcommittee’s investigatory record spans decades and its reputation for conducting thorough oversight and exposing wrongdoing is unparalleled. It is my privilege to build on that legacy.
    I look forward to working with Ranking Member Richard Blumenthal and other members of the subcommittee to uncover the truth on issues that are important to the American people. My hope is that the subcommittee’s work will be largely non-partisan. There should be nothing partisan about revealing the truth.
    Absurd Spending Needs to Change

    Current spending is completely unsustainable, unjustified, and absurd. We have to return to pre-pandemic spending levels. It’s time for a paradigm shift in the way we use our budgets.
    The people that voted for President Trump do not expect the federal government is going to continue spending at President Biden and the Democrats’ spending levels.
    On January 16, I spoke on the Senate floor to discuss the importance of returning to a reasonable pre-pandemic spending level and the massive deficit spending that is devaluing the U.S. dollar.
    WATCH: Senate floor speech on government spending
    READ: Badger Institute —  Emergency ended; so should federal spending spree
    WATCH: Politico First 100 Days Speaker Series on Tax Reform
    Cabinet Confirmation Hearings

    Since the start of the 119th Congress, we have been holding confirmation hearings for President Trump’s cabinet nominees. 
    Here are some highlights from the hearings I have participated in:
    Kristi Noem: For too long the Department of Homeland Security has been completely misused. Their mission creep under the Biden administration has caused the agency to leave America vulnerable. I look forward to working with Kristi Noem as DHS Secretary to secure the homeland again.
    Scott Bessent: The pick for Treasury Secretary and I agree that the U.S. does not have a revenue problem, we have a spending problem. I look forward to voting for Scott Bessent’s confirmation and working with him to reset spending levels to a reasonable pre-pandemic level.
    Sean Duffy: I was proud to introduce Wisconsin’s own Sean Duffyin his confirmation hearing. Sean will be a strong and dedicated leader of the Department of Transportation, prioritizing safety and investing in infrastructure projects that connect our communities. We are fortunate that he is willing to serve the public again, and I recommend him as Secretary without reservation.
    News from the 119th Congress

    The Laken Riley Act passed Congress and will be the first bill signed into law by President Trump. I voted to pass the bill which will give local law enforcement and ICE more tools to combat illegal immigrants who commit crime in the United States.  
    I joined a letter to President Trump encouraging him to reinstate and broaden the life-affirming pro-life policies in the early days of his new administration and end the weaponization of the U.S. government against pro-life Americans and unborn children.
    As part of the MAHA Caucus, we were pleased to see the FDA ban Red No. 3 from foods, dietary supplements, and ingested medicines. We look forward to addressing the root causes of chronic diseases and creating a healthier, stronger nation with President Trump and HHS nominee Robert F. Kennedy, Jr. 

    MIL OSI USA News –

  • MIL-OSI Australia: Public Country-by-Country reporting

    Source: Australian Department of Revenue

    What is Public CBC reporting?

    Public CBC reporting is a reporting regime which requires certain large multinational enterprises to publish selected tax information. The information must be reported either on a CBC basis or on an aggregated basis. The regime applies for reporting periods commencing from 1 July 2024.

    The entities within the regime publish their Public CBC report by providing it to the ATO and then the ATO uploading it on data.gov.au. Public CBC reporting improves how information is shared with the public to help compare entity tax disclosures, to better assess whether an entity’s economic presence in a jurisdiction aligns with the amount of tax they pay in that jurisdiction.

    Public CBC reporting requires disclosures about:

    • the revenues, profits and income taxes of the global group
    • the activities of the global group
    • an entity’s international related party dealings.

    Who is required to report?

    An entity must report for a reporting period if all of the following apply to it:

    • is a Public CBC reporting parent for the preceding period
    • is an entity of the type specified
    • satisfies the requirements for that reporting period.

    An entity is of the type specified if it is any one of the following:

    • constitutional corporation
    • trust, provided each of the trustees is a constitutional corporation
    • partnership, provided each of the partners is a constitutional corporation.

    Entities meet the requirements for a reporting period if all of the following apply:

    • they were a Public CBC reporting parent for a period that includes the whole or a part of the preceding reporting period
    • they were a member of a Public CBC reporting group at any time during the reporting period
    • at any point during the reporting period, they, or a member of their Public CBC reporting group, were an Australian resident or a foreign resident operating an Australian permanent establishment
    • $10 million or more of their aggregated turnover for the reporting period was Australian-sourced
    • they were not an exempt entity or included in a class of exempt entities.

    Public CBC reporting registration

    All Public CBC reporting parents are encouraged to register with the ATO as this simplifies:

    • the giving of the Public CBC report to the ATO
    • requesting an extension of time to provide the Public CBC report
    • requesting an exemption from reporting obligations.

    The registration form and instructions are under development and will be made available in 2025.

    Public CBC reporting obligations

    The Public CBC reporting parent entity must give the Public CBC report electronically to the ATO within 12 months after the end of the relevant reporting period.

    An update to correct any material errors must be given to the ATO within 28 days of the Public CBC reporting parent identifying or otherwise becoming aware of that error.

    Penalties apply for non-compliance.

    The Public CBC reporting form and instructions are in development, they will be made available in 2025.

    What does jurisdictional reporting mean?

    For Australia and specified jurisdictions determined by the Minister, particular information must be published on a CBC basis.

    For all other jurisdictions the CBC reporting group operates in, the Public CBC reporting parent has a choice to publish that same information on either a CBC basis or an aggregated basis.

    Specified jurisdictions list

    The Minister’s determination of jurisdictions for the purpose of Public CBC reporting is provided by legislative instrument. The Taxation Administration (Country by Country Reporting Jurisdictions) Determination 2024Opens in a new window outlines the specified jurisdictions.

    Jurisdictions that have a comprehensive international tax agreement with Australia:

    • Singapore
    • Switzerland

    Other jurisdictions:

    • Andorra
    • Anguilla
    • Antigua and Barbuda
    • Aruba
    • Barbados
    • Bahamas
    • Bahrain
    • Belize
    • Bermuda
    • British Virgin Islands
    • Cayman Islands
    • Cook Islands
    • Curacao
    • Dominica
    • Gibraltar
    • Grenada
    • Guernsey
    • Hong Kong
    • Isle of Man
    • Jersey
    • Liberia
    • Mauritius
    • Monaco
    • Montserrat
    • Nauru
    • Niue
    • Panama
    • Republic of the Marshall Islands
    • Saint Kitts and Nevis
    • Saint Lucia
    • Saint Maarten (Dutch Part)
    • Saint Vincent & the Grenadines
    • Samoa
    • San Marino
    • Seychelles
    • Turks and Caicos Islands
    • US Virgin Islands
    • Vanuatu

    Public CBC information to be reported

    The Public CBC reporting parent is required to publish: 

    • its own legal name
    • the names of each entity in the CBC reporting group
    • a description of the CBC reporting group’s approach to tax
    • information about Australia and specified jurisdictions, on a CBC basis
    • information about its other jurisdictions, either on a CBC or aggregated basis.

    Information required to be reported

    If the Public CBC reporting parent chooses to report on a CBC basis for all jurisdictions that the group operates in, it does not need to publish any information on an aggregated basis. However, if the Public CBC reporting parent only publishes information on a CBC basis for Australia and the specified jurisdictions, it must publish information for all other jurisdictions on an aggregated basis.

    Australia and specified jurisdictions

    The information required to be reported for Australia and specified jurisdictions is:

    • the name of the jurisdiction
    • a description of main business activities
    • the number of employees (on a full-time equivalent basis) at the end of the reporting period
    • revenue from unrelated parties
    • revenue from related parties that are not tax residents of the jurisdiction
    • profit or loss before income tax
    • book value at the end of the reporting period of tangible assets, other than cash and cash equivalents
    • income tax paid (on a cash basis)
    • income tax accrued (current year)
    • the reasons for the difference between income tax accrued (current year) and the amount of income tax due if the income tax rate applicable to the jurisdiction were applied to profit and loss before income tax
    • the currency used in calculating and presenting the above information.

    Other jurisdictions (aggregated information)

    The information required to be reported on an aggregated basis, for all other jurisdictions the group operates in, is, the aggregation of the following for all of those jurisdictions:

    • a description of main business activities in those jurisdictions
    • the number of employees (on a full-time equivalent basis) at the end of the reporting period
    • revenue from unrelated parties
    • revenue from related parties that are not tax residents of the jurisdiction in which that revenue is being derived
    • profit or loss before income tax
    • book value at the end of the reporting period of tangible assets, other than cash and cash equivalents
    • income tax paid (on a cash basis)
    • income tax accrued (current year)
    • the currency used in calculating and presenting the above information.

    The information required to be reported, has been adopted from the Global Reporting Initiative (GRI) 207: Tax 2019 reporting standard. The GRI 207 may be used as a source of guidance in interpretating the publishing requirements. Regard may also be had to the BEPS Action 13 Guidance and the OECD Transfer Pricing Guidelines where they provide greater detail on the interpretation of terms.

    Correction of errors

    If a Public CBC reporting parent becomes aware of a material error contained in any of the information that has been published, the CBC reporting parent must correct the error by giving corrected information to the Commissioner in the approved form. This is required no later than 28 days after the entity becomes aware of the material error.

    Penalties apply for non-compliance.

    Publishing the information

    The Public CBC reporting parent is required to publish the information on an Australian government website by giving the information in the approved form to the Commissioner.

    The Public CBC reporting form and instructions are under development and will be made available in 2025.

    The Commissioner’s role

    The Commissioner will facilitate publication of the reported information as soon as practicable, on the Australian government website data.gov.au.

    If a material error is corrected by the Public CBC reporting parent, the Commissioner will publish the corrected information on data.gov.au as soon as practicable. 

    The first publication is expected to be released in late 2026.

    Extension of time to provide the Public CBC report

    The Public CBC report is due within 12 months after the end of the relevant reporting period. For example, for the reporting period ending 30 June 2025, the Public CBC report is due by 30 June 2026.

    A Public CBC reporting parent may apply to the Commissioner for an extension of time to provide the Public CBC report. A Public CBC reporting parent does not have to register to request an extension of time, but consideration and processing of the request may be delayed if it is not registered.

    Guidance on extension of time requests will be made available in 2025.

    Exemptions

    The primary purpose of the Public CBC regime is to enhance tax transparency. However, a Public CBC reporting parent may seek an exemption from reporting obligations, from the Commissioner. The Commissioner may exempt an entity (a ‘full exemption’) or specify that an entity is exempt from publishing information of a particular kind (a ‘partial exemption’) for a single reporting period.

    A Public CBC reporting parent does not have to register to request an exemption, but consideration and processing of the request may be delayed if it is not registered.

    Guidance on exemptions will be made available in 2025. For more information, see Public country-by-country reporting transparency measure and exemption discretions.

    MIL OSI News –

  • MIL-OSI: Madison Pacific Properties Inc. announces Federal Court of Appeal judgement on tax reassessments appeal

    Source: GlobeNewswire (MIL-OSI)

    VANCOUVER, British Columbia, Jan. 27, 2025 (GLOBE NEWSWIRE) — Madison Pacific Properties Inc. (the Parent Company) (TSX: MPC and MPC.C), a Vancouver-based real estate company announces judgement issued by the Federal Court of Appeal (“FCA”) on its tax reassessments appeal.

    As previously reported in the Parent Company’s Consolidated Financial Statements and MD&A, the Parent Company and certain subsidiaries had received from the Canada Revenue Agency (“CRA”) and Alberta Tax and Revenue Administration (“ATRA”) tax notices of reassessment for various taxation years. The reassessments denied the application and usage of certain non-capital losses, capital losses, deductions and investment tax credits arising from prior years. The Parent Company and its subsidiaries had filed notices of objection and notices of appeal to the reassessments with the CRA and ATRA.

    The appeal with the Tax Court of Canada (“TCC”) for the Parent Company was heard in 2020, 2022 and in 2023 (the “Appeal”). The TCC released its judgement on the Appeal in December 2023 in favour of the CRA’s position, confirming the CRA’s reassessments. The decision denied the Parent Company’s ability to use certain carryforward losses for certain taxation years within its 2009 to 2017 taxation years. Additional taxes payable for the reassessed years plus estimated interest and awarded legal costs totals approximately $6.6 million and as at August 31, 2024, the Parent Company had paid $6.1 million to the CRA for the taxes and estimated interest on the reassessments.

    In January 2024, the Parent Company filed a notice of appeal to the FCA to appeal the decision issued by the TCC on the Appeal (the “TCC Appeal”). On January 22, 2025, the TCC Appeal was heard by the FCA and on January 23, 2025 the FCA released its judgement dismissing the TCC Appeal. The Parent Company and its counsel are currently assessing whether to appeal the decision issued by the FCA. The Parent Company has also filed interest relief applications with the CRA to apply to waive arrears interest paid on the reassessments.

    For a review of the risks and uncertainties to which the Parent Company is subject, see its most recently filed annual and interim MD&A.

    For more information please contact:
           
    Contact: Mr. John DeLucchi   Ms. Bernice Yip
      President & CEO   Chief Financial Officer
    Telephone: (604) 732-6540   (604) 732-6540
           
    Address: 389 West 6th Avenue    
      Vancouver, B.C. V5Y 1L1    

    The MIL Network –

  • MIL-OSI New Zealand: Tax Issues – Overwhelming support for Capital Gains Tax welcomed – TJA

    Source: Tax Justice Aotearoa (TJA)

    28 January 2025 – A new survey showing strong support for a capital gains tax among workers has been welcomed by Tax Justice Aotearoa (TJA).

    TJA chair Glenn Barclay said the latest Council of Trade Unions (CTU) Te Kauae Kaimahi Mood of the Workforce survey showed almost 90 per cent of respondents were in favour of a capital gains tax.

    “We welcome this result, which shows almost universal support for a capital gains tax among workers,” Mr Barclay said.

    The CTU survey asked  “Should a greater share of public services such as health and education be paid for by taxing non-income profit via a capital gains tax?” – with 87.7% answering in favour.

    “It supports what we know from public surveys held last year – and shows support is growing, with our own survey in 2023 finding 62 per cent of respondents thought all income should be taxed the same way, regardless of how it is earned.

    “A capital gains tax is now widely accepted as the tax we need to have, because we are so far out of step with the rest of the developed world when it comes to taxing capital gains.

    “Aotearoa is an outlier internationally, in that we do not tax capital gains in a comprehensive way – and this latest survey shows it’s no longer a political taboo.

    “However, a capital gains tax is not the silver bullet for our unfair and unjust tax system.

    “There are other options – such as wealth tax and excess profits taxes – that Aotearoa needs to consider in order to adequately fund public services, including health and education – and to help address inequality and challenges arising from climate change.”

    MIL OSI New Zealand News –