Taxation – Page 223 – NewzIntel.com

MIL-OSI USA: Risch, Britt Introduce Bill to Finish Southern Border Wall, Eliminate Taxpayer-funded Entitlement Benefits for Illegal Immigrants

US Senate News:

Source: United States Senator for Idaho James E Risch
WASHINGTON – U.S. Senators Jim Risch (R-Idaho) and Katie Britt (R-Ala.) introduced the WALL Act to finish construction of the southern border wall and protect American families.
“Now is the time to finish the southern border wall. The WALL Act helps President Trump complete what he started in his first term and does it all without adding a dime to our national debt,” said Risch. “For the last four years, millions of illegal immigrants flooded across our southern border, exploiting open-border policies and wasting vast sums of taxpayer dollars. Those days are over.”
“President Donald Trump and the Republican majorities in the House and Senate have not just a mandate but an obligation to secure the border and protect American families,” said Britt.“The United States needs a completed border wall—it is just common sense to have a physical barrier in place to ensure only lawful entry into our country. The WALL Act would ensure the completion of America’s border wall without raising taxes on U.S. citizens or increasing the national debt by a single penny. It would accomplish this by eliminating taxpayer-funded entitlement benefits for illegal aliens, which would further deter illegal migration.”
The WALL Act would appropriate $25 billion to finish building a wall on our southern border without raising taxes on U.S. citizens or increasing the national debt. It would be funded by closing loopholes and eliminating taxpayer-funded entitlements and tax benefits for people who are in the U.S. illegally. The bill also imposes monetary fines on people who enter the country illegally or overstay their visas. The Joint Committee on Taxation estimated in 2018 that enacting the provisions in this bill would save $33 billion of taxpayer dollars over ten years.
Risch and Britt are joined by U.S. Senators Ted Cruz (R-Texas), John Barrasso (R-Wyo.), Mike Rounds (R-S.Dak.), and Roger Wicker (R-Miss.) in introducing the legislation.

MIL OSI USA News –

January 28, 2025

MIL-OSI: BlackRock® Canada Announces Final January Cash Distributions for the iShares® Premium Money Market ETF

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 27, 2025 (GLOBE NEWSWIRE) — BlackRock Asset Management Canada Limited (“BlackRock Canada”), an indirect, wholly-owned subsidiary of BlackRock, Inc. (NYSE: BLK), today announced the final January 2025 cash distributions for the iShares Premium Money Market ETF. Unitholders of record on January 28, 2025 will receive cash distributions payable on January 31, 2025.

Details regarding the final “per unit” distribution amounts are as follows:

Fund Name	Fund Ticker	Cash Distribution Per Unit
iShares Premium Money Market ETF	CMR	$0.145

Further information on the iShares ETFs can be found at http://www.blackrock.com/ca.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @BlackRockCA

About iShares ETFs

iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1500+ exchange traded funds (ETFs) and US$4.2 trillion in assets under management as of December 31, 2024, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.

iShares^® ETFs are managed by BlackRock Asset Management Canada Limited.

Commissions, trailing commissions, management fees and expenses all may be associated with investing in iShares ETFs. Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.

Contact for Media:
Reem Jazar
Email: reem.jazar@blackrock.com

The MIL Network –

January 28, 2025

MIL-OSI: Five Star Bancorp Announces Quarterly and Annual Results

Source: GlobeNewswire (MIL-OSI)

RANCHO CORDOVA, Calif., Jan. 27, 2025 (GLOBE NEWSWIRE) — Five Star Bancorp (Nasdaq: FSBC) (“Five Star” or the “Company”), a holding company that operates through its wholly owned banking subsidiary, Five Star Bank (the “Bank”), today reported net income of $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024 and $10.8 million for the three months ended December 31, 2023. Net income for the year ended December 31, 2024 was $45.7 million, as compared to $47.7 million for the year ended December 31, 2023.

Financial and Other Highlights

Performance highlights and other developments for the Company for the periods noted below included the following:

	Three months ended
(in thousands, except per share and share data)	December 31, 2024			September 30, 2024			December 31, 2023
Return on average assets (“ROAA”)		1.31	%		1.18	%		1.26	%
Return on average equity (“ROAE”)		13.48	%		11.31	%		15.45	%
Pre-tax income	$	19,367		$	15,241		$	15,151
Pre-tax, pre-provision income⁽¹⁾	$	20,667		$	17,991		$	15,951
Net income	$	13,317		$	10,941		$	10,799
Basic earnings per common share	$	0.63		$	0.52		$	0.63
Diluted earnings per common share	$	0.63		$	0.52		$	0.63
Weighted average basic common shares outstanding		21,182,143			21,182,143			17,175,445
Weighted average diluted common shares outstanding		21,235,318			21,232,758			17,193,114
Shares outstanding at end of period		21,319,083			21,319,583			17,256,989

	Year ended
(in thousands, except per share and share data)	December 31, 2024			December 31, 2023
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Pre-tax income	$	64,721		$	66,616
Pre-tax, pre-provision income⁽¹⁾	$	71,671		$	70,616
Net income	$	45,671		$	47,734
Basic earnings per common share	$	2.26		$	2.78
Diluted earnings per common share	$	2.26		$	2.78
Weighted average basic common shares outstanding		20,154,385			17,166,592
Weighted average diluted common shares outstanding		20,205,440			17,187,969
Shares outstanding at end of period		21,319,083			17,256,989

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

James E. Beckwith, President and Chief Executive Officer, commented:

“While we focus on the future and maintaining a position of distinction and respect in the markets we serve, we proudly look back at 2024 as another outstanding year of achievement. We experienced consistent, strong financial performance with year-over-year growth in loans and deposits, a consistent shareholder dividend, and stable net interest margin. We also continued our successful execution of our San Francisco market expansion and now have 27 employees in the San Francisco Bay Area who contributed $229.5 million in deposits from June 5, 2023 to December 31, 2024. We have managed expenses and executed on conservative underwriting practices, which are foundational to our success.

Five Star Bank consistently executes on client and community-focused initiatives, and in 2024, we received a Super Premier rating from Findley Reports, an IDC Superior rating, and a Bauer Financial rating of 5 stars (out of five). We were also awarded the prestigious 2023 Raymond James Community Bankers Cup, were among S&P Global Market Intelligence’s 2023 Top 20 Best-Performing Community banks in the nation (with assets between $3 billion and $10 billion), and were ranked fifth on the 2024 Bank Director Magazine (RankingBanking) Best U.S. Banks with assets less than $5 billion. We also received the Greater Sacramento Economic Council’s Sustainability Award recognizing a company that has supported industry growth in the Greater Sacramento region.

In 2024, our senior leadership was recognized by the Sacramento Business Journal with a C-Suite Award, a Women Who Mean Business honor, a 40 Under 40 recognition, and placement on the Power 100 list. Our senior leadership was also recognized on the San Francisco Business Times’ Newsmaker 100 list, as part of the Independent Community Bankers of America’s 40 Under 40: Emerging Community Bank Leaders, among the Association of Latino Professionals for America’s 50 Most Powerful Latinas, and with a National Association of Women Business Owners’ Sacramento Valley Outstanding Women Leaders’ Executive Woman award.

Being recognized as community leaders ensures Five Star Bank remains top of mind in the markets we serve as we continue to build-out our market presence. I am humbled and proud of our team’s accomplishments and look forward to the future.”

Financial highlights included the following:

The San Francisco Bay Area team, which increased from 24 to 27 employees during the three months ended December 31, 2024, generated deposit balances totaling $229.5 million at December 31, 2024, an increase of $40.4 million from September 30, 2024.
Cash and cash equivalents were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 7.38% at September 30, 2024.
Total deposits increased by $158.0 million, or 4.65%, during the three months ended December 31, 2024, due to increases in both non-wholesale and wholesale deposits, which the Company defines as brokered deposits and public time deposits. During the three months ended December 31, 2024, non-wholesale deposits increased by $8.0 million, or 0.27%, and wholesale deposits increased by $150.0 million, or 36.59%.
Consistent, disciplined management of expenses contributed to our efficiency ratio of 41.21% for the three months ended December 31, 2024, as compared to 43.37% for the three months ended September 30, 2024.
For the three months ended December 31, 2024, net interest margin was 3.36%, as compared to 3.37% for the three months ended September 30, 2024 and 3.19% for the three months ended December 31, 2023. For the year ended December 31, 2024, net interest margin was 3.32%, as compared to 3.42% for the year ended December 31, 2023. The effective Federal Funds rate fell to 4.33% as of December 31, 2024 from 4.83% as of September 30, 2024 and 5.33% as of December 31, 2023.
Other comprehensive loss was $2.6 million during the three months ended December 31, 2024. Unrealized losses, net of tax effect, on available-for-sale securities were $12.4 million as of December 31, 2024. Total carrying value of held-to-maturity and available-for-sale securities represented 0.07% and 2.48% of total interest-earning assets, respectively, as of December 31, 2024.
The Company’s common equity Tier 1 capital ratio was 11.02% and 10.93% as of December 31, 2024 and September 30, 2024, respectively. The Bank continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines.
Loan and deposit growth in the three and twelve months ended December 31, 2024 was as follows:

(in thousands)	December 31, 2024		September 30, 2024		$ Change		% Change
Loans held for investment	$	3,532,686	$	3,460,565	$	72,121	2.08	%
Non-interest-bearing deposits		922,629		906,939		15,690	1.73	%
Interest-bearing deposits		2,635,365		2,493,040		142,325	5.71	%

(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Loans held for investment	$	3,532,686	$	3,081,719	$	450,967	14.63	%
Non-interest-bearing deposits		922,629		831,101		91,528	11.01	%
Interest-bearing deposits		2,635,365		2,195,795		439,570	20.02	%

The ratio of nonperforming loans to loans held for investment at period end decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024.
The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of $0.20 per share during the three months ended December 31, 2024. The Company’s Board of Directors subsequently declared another cash dividend of $0.20 per share on January 16, 2025, which the Company expects to pay on February 10, 2025 to shareholders of record as of February 3, 2025.

Summary Results

Three months ended December 31, 2024, as compared to three months ended September 30, 2024

The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024. Net interest income increased by $3.1 million, primarily due to an increase in interest income driven by a larger average balance of interest-earning assets, partially offset by an increase in interest expense due to a larger average balance of deposits, as compared to September 30, 2024. The provision for credit losses decreased by $1.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Non-interest income increased by $0.3 million, primarily due to income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a loss from equity investments in venture-backed funds during the three months ended September 30, 2024. Non-interest expense increased by $0.7 million, primarily due to: (i) increased salaries and employee benefits mainly resulting from increased loan production driving higher commissions expense period-over-period; and (ii) increased advertising and promotional expenses due to a larger number of events sponsored and attended period-over-period.

Three months ended December 31, 2024, as compared to three months ended December 31, 2023

The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.8 million for the three months ended December 31, 2023. Net interest income increased by $6.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $0.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended December 31, 2023. Non-interest income decreased by $0.3 million, primarily due to lower swap referral and rate lock fees during the three months ended December 31, 2024 compared to the same quarter of the prior year. Non-interest expense increased by $1.8 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area as the leading driver.

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

The Company’s net income was $45.7 million for the year ended December 31, 2024, as compared to $47.7 million for the year ended December 31, 2023. Net interest income increased by $8.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $3.0 million, or 73.75%, as loan originations in the year ended December 31, 2024 were almost double those for the year ended December 31, 2023. Non-interest income decreased by $1.1 million, primarily due to lower income received on equity investments in venture-backed funds during the year ended December 31, 2024 than during the year ended December 31, 2023. Non-interest expense increased by $6.7 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area as the leading driver.

The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:

	Three months ended
(in thousands, except per share data)	December 31, 2024			September 30, 2024			$ Change			% Change
Selected operating data:
Net interest income	$	33,489		$	30,386		$	3,103		10.21	%
Provision for credit losses		1,300			2,750			(1,450	)	(52.73)	%
Non-interest income		1,666			1,381			285		20.64	%
Non-interest expense		14,488			13,776			712		5.17	%
Pre-tax income		19,367			15,241			4,126		27.07	%
Provision for income taxes		6,050			4,300			1,750		40.70	%
Net income	$	13,317		$	10,941		$	2,376		21.72	%
Earnings per common share:
Basic	$	0.63		$	0.52		$	0.11		21.15	%
Diluted	$	0.63		$	0.52		$	0.11		21.15	%
Performance and other financial ratios:
ROAA		1.31	%		1.18	%
ROAE		13.48	%		11.31	%
Net interest margin		3.36	%		3.37	%
Cost of funds		2.65	%		2.72	%
Efficiency ratio		41.21	%		43.37	%

	Three months ended
(in thousands, except per share data)	December 31, 2024			December 31, 2023			$ Change			% Change
Selected operating data:
Net interest income	$	33,489		$	26,678		$	6,811		25.53	%
Provision for credit losses		1,300			800			500		62.50	%
Non-interest income		1,666			1,936			(270	)	(13.95)	%
Non-interest expense		14,488			12,663			1,825		14.41	%
Pre-tax income		19,367			15,151			4,216		27.83	%
Provision for income taxes		6,050			4,352			1,698		39.02	%
Net income	$	13,317		$	10,799		$	2,518		23.32	%
Earnings per common share:
Basic	$	0.63		$	0.63		$	—		—	%
Diluted	$	0.63		$	0.63		$	—		—	%
Performance and other financial ratios:
ROAA		1.31	%		1.26	%
ROAE		13.48	%		15.45	%
Net interest margin		3.36	%		3.19	%
Cost of funds		2.65	%		2.50	%
Efficiency ratio		41.21	%		44.25	%

	Year ended
(in thousands, except per share data)	December 31, 2024			December 31, 2023			$ Change			% Change
Selected operating data:
Net interest income	$	119,711		$	110,880		$	8,831		7.96	%
Provision for credit losses		6,950			4,000			2,950		73.75	%
Non-interest income		6,453			7,511			(1,058	)	(14.09)	%
Non-interest expense		54,493			47,775			6,718		14.06	%
Pre-tax income		64,721			66,616			(1,895	)	(2.84)	%
Provision for income taxes		19,050			18,882			168		0.89	%
Net income	$	45,671		$	47,734		$	(2,063	)	(4.32)	%
Earnings per common share:
Basic	$	2.26		$	2.78		$	(0.52	)	(18.71)	%
Diluted	$	2.26		$	2.78		$	(0.52	)	(18.71)	%
Performance and other financial ratios:
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Net interest margin		3.32	%		3.42	%
Cost of funds		2.64	%		2.10	%
Efficiency ratio		43.19	%		40.35	%

Balance Sheet Summary

(in thousands)	December 31, 2024		December 31, 2023		$ Change			% Change
Selected financial condition data:
Total assets	$	4,053,278	$	3,593,125	$	460,153		12.81	%
Cash and cash equivalents		352,343		321,576		30,767		9.57	%
Total loans held for investment		3,532,686		3,081,719		450,967		14.63	%
Total investments		100,914		111,160		(10,246	)	(9.22)	%
Total liabilities		3,656,654		3,307,351		349,303		10.56	%
Total deposits		3,557,994		3,026,896		531,098		17.55	%
Subordinated notes, net		73,895		73,749		146		0.20	%
Total shareholders’ equity		396,624		285,774		110,850		38.79	%

Insured and collateralized deposits were approximately $2.4 billion, representing 66.92% of total deposits as of December 31, 2024. Net uninsured and uncollateralized deposits were approximately $1.2 billion as of December 31, 2024.
Commercial and consumer deposit accounts constituted 77.00% of total deposits. Deposit relationships of greater than $5 million represented 61.13% of total deposits and had an average age of approximately 9.28 years as of December 31, 2024.
Cash and cash equivalents as of December 31, 2024 were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 10.62% as of December 31, 2023.
Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth below) was approximately $1.9 billion as of December 31, 2024.

	December 31, 2024
(in thousands)	Line of Credit		Letters of Credit Issued		Borrowings		Available
Federal Home Loan Bank of San Francisco (“FHLB”) advances	$	1,212,209	$	701,500	$	—	$	510,709
Federal Reserve Discount Window		862,136		—		—		862,136
Correspondent bank lines of credit		175,000		—		—		175,000
Cash and cash equivalents		—		—		—		352,343
Total	$	2,249,345	$	701,500	$	—	$	1,900,188

The increase in total assets from December 31, 2023 to December 31, 2024 was primarily due to a $451.0 million increase in total loans held for investment and a $30.8 million increase in cash and cash equivalents, partially offset by a $10.2 million decrease in investments. The $451.0 million increase in total loans held for investment between December 31, 2023 and December 31, 2024 was the result of $1.1 billion in loan originations, partially offset by $263.0 million and $423.0 million in loan payoffs and paydowns, respectively. The $451.0 million increase in total loans held for investment included $281.4 million in purchased loans within the consumer concentration of the loan portfolio. The $30.8 million increase in cash and cash equivalents primarily resulted from net cash inflows related to financing and operating activities of $425.7 million and $52.3 million, respectively, partially offset by net cash outflows related to investing activities of $447.3 million.

The increase in total liabilities from December 31, 2023 to December 31, 2024 was primarily attributable to an increase in deposits of $531.1 million, partially offset by a decrease in other borrowings of $170.0 million. The $531.1 million increase in deposits was largely due to increases in money market, time, and non-interest-bearing demand deposits of $242.9 million, $203.6 million, and $91.5 million, respectively, partially offset by decreases in interest-bearing demand and savings deposits of $5.1 million and $1.8 million, respectively.

The increase in total shareholders’ equity from December 31, 2023 to December 31, 2024 was primarily a result of $80.9 million of additional common stock issued during the year and net income recognized of $45.7 million, partially offset by $16.2 million in cash dividends paid during the period.

Net Interest Income and Net Interest Margin

The following is a summary of the components of net interest income for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024			September 30, 2024			$ Change		% Change
Interest and fee income	$	57,745		$	52,667		$	5,078	9.64	%
Interest expense		24,256			22,281			1,975	8.86	%
Net interest income	$	33,489		$	30,386		$	3,103	10.21	%
Net interest margin		3.36	%		3.37	%

	Three months ended
(in thousands)	December 31, 2024			December 31, 2023			$ Change		% Change
Interest and fee income	$	57,745		$	46,180		$	11,565	25.04	%
Interest expense		24,256			19,502			4,754	24.38	%
Net interest income	$	33,489		$	26,678		$	6,811	25.53	%
Net interest margin		3.36	%		3.19	%

	Year ended
(in thousands)	December 31, 2024			December 31, 2023			$ Change		% Change
Interest and fee income	$	206,951		$	174,382		$	32,569	18.68	%
Interest expense		87,240			63,502			23,738	37.38	%
Net interest income	$	119,711		$	110,880		$	8,831	7.96	%
Net interest margin		3.32	%		3.42	%

The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:

	Three months ended
	December 31, 2024						September 30, 2024						December 31, 2023
(in thousands)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets
Interest-earning deposits in banks	$	363,828	$	4,335	4.74	%	$	126,266	$	1,657	5.22	%	$	157,775	$	2,100	5.28	%
Investment securities		103,930		607	2.33	%		106,256		620	2.32	%		106,483		651	2.43	%
Loans held for investment and sale		3,498,109		52,803	6.01	%		3,354,050		50,390	5.98	%		3,055,042		43,429	5.64	%
Total interest-earning assets		3,965,867		57,745	5.79	%		3,586,572		52,667	5.84	%		3,319,300		46,180	5.52	%
Interest receivable and other assets, net		91,736						91,965						80,360
Total assets	$	4,057,603					$	3,678,537					$	3,399,660

Liabilities and shareholders’ equity
Interest-bearing transaction accounts	$	298,518	$	1,249	1.66	%	$	302,188	$	1,237	1.63	%	$	291,967	$	1,091	1.48	%
Savings accounts		127,298		887	2.77	%		124,851		979	3.12	%		130,915		891	2.70	%
Money market accounts		1,596,116		13,520	3.37	%		1,578,244		14,688	3.70	%		1,347,111		10,824	3.19	%
Time accounts		617,596		7,438	4.79	%		326,640		4,172	5.08	%		417,434		5,322	5.06	%
Subordinated notes and other borrowings		73,872		1,162	6.25	%		76,988		1,205	6.23	%		88,401		1,374	6.16	%
Total interest-bearing liabilities		2,713,400		24,256	3.56	%		2,408,911		22,281	3.68	%		2,275,828		19,502	3.40	%
Demand accounts		921,881						852,872						821,651
Interest payable and other liabilities		29,234						32,062						24,886
Shareholders’ equity		393,088						384,692						277,295
Total liabilities & shareholders’ equity	$	4,057,603					$	3,678,537					$	3,399,660

Net interest spread					2.23	%					2.16	%					2.12	%
Net interest income/margin			$	33,489	3.36	%			$	30,386	3.37	%			$	26,678	3.19	%

Net interest income during the three months ended December 31, 2024 increased $3.1 million, or 10.21%, to $33.5 million compared to $30.4 million during the three months ended September 30, 2024. Net interest margin totaled 3.36% for the three months ended December 31, 2024, a decrease of one basis point compared to the prior quarter. The increase in net interest income is primarily attributable to an additional $5.1 million in interest income due to a $379.3 million, or 10.58%, increase in the average balance of interest-earning assets during the three months ended December 31, 2024 compared to the prior quarter. The increase in interest income was partially offset by a $2.0 million increase in deposit interest expense due to a $376.6 million, or 11.83%, increase in the average balance of deposits during the three months ended December 31, 2024 compared to the prior quarter.

As compared to the three months ended December 31, 2023, net interest income increased $6.8 million, or 25.53%, to $33.5 million compared to $26.7 million. Net interest margin totaled 3.36% for the three months ended December 31, 2024, an increase of 17 basis points compared to the same quarter of the prior year. The increase in net interest income is primarily attributable to an additional $9.4 million in loan interest income due to a $443.1 million, or 14.50%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans during the three months ended December 31, 2024 compared to the same quarter of the prior year. The increase in interest income was partially offset by a $5.0 million increase in deposit interest expense due to a $552.3 million, or 18.36%, increase in the average balance of deposits and a 19 basis point increase in the average cost of deposits during the three months ended December 31, 2024 compared to the same quarter of the prior year.

The following table shows the components of net interest income and net interest margin for the annual periods indicated:

	Year ended
	December 31, 2024						December 31, 2023
(in thousands)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets
Interest-earning deposits in banks	$	218,156	$	11,080	5.08	%	$	184,103	$	9,069	4.93	%
Investment securities		106,289		2,530	2.38	%		113,515		2,600	2.29	%
Loans held for investment and sale		3,283,874		193,341	5.89	%		2,947,603		162,713	5.52	%
Total interest-earning assets		3,608,319		206,951	5.74	%		3,245,221		174,382	5.37	%
Interest receivable and other assets, net		90,061						75,741
Total assets	$	3,698,380					$	3,320,962

Liabilities and shareholders’ equity
Interest-bearing transaction accounts	$	298,137	$	4,716	1.58	%	$	312,944	$	3,321	1.06	%
Savings accounts		124,208		3,584	2.89	%		140,060		3,073	2.19	%
Money market accounts		1,533,405		53,750	3.51	%		1,263,539		33,932	2.69	%
Time accounts		412,007		20,348	4.94	%		372,557		17,535	4.71	%
Subordinated notes and other borrowings		77,335		4,842	6.26	%		93,279		5,641	6.05	%
Total interest-bearing liabilities		2,445,092		87,240	3.57	%		2,182,379		63,502	2.91	%
Demand accounts		858,789						844,057
Interest payable and other liabilities		35,331						27,127
Shareholders’ equity		359,168						267,399
Total liabilities & shareholders’ equity	$	3,698,380					$	3,320,962

Net interest spread					2.17	%					2.46	%
Net interest income/margin			$	119,711	3.32	%			$	110,880	3.42	%

Net interest income during the year ended December 31, 2024 increased $8.8 million, or 7.96%, to $119.7 million compared to $110.9 million during the year ended December 31, 2023. Net interest margin totaled 3.32% for the year ended December 31, 2024, a decrease of 10 basis points compared to the prior year. The increase in net interest income is primarily attributable to an additional $30.6 million in loan interest income due to a $336.3 million, or 11.41%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans as compared to the prior year. The increase in interest income was partially offset by an additional $24.5 million in deposit interest expense due to a $293.4 million, or 10.00%, increase in the average balance of deposits and a 58 basis point increase in the average cost of deposits compared to the prior year.

Loans by Type

The following table provides loan balances, excluding deferred loan fees, by type as of December 31, 2024:

(in thousands)
Real estate:
Commercial	$	2,857,173
Commercial land and development		3,849
Commercial construction		111,318
Residential construction		4,561
Residential		32,774
Farmland		47,241
Commercial:
Secured		170,548
Unsecured		27,558
Consumer and other		279,584
Net deferred loan fees		(1,920	)
Total loans held for investment	$	3,532,686

Interest-bearing Deposits

The following table provides interest-bearing deposit balances by type as of December 31, 2024:

(in thousands)
Interest-bearing demand accounts	$	315,217
Money market accounts		1,525,293
Savings accounts		124,702
Time accounts		670,153
Total interest-bearing deposits	$	2,635,365

Asset Quality

Allowance for Credit Losses

At December 31, 2024, the Company’s allowance for credit losses was $37.8 million, as compared to $34.4 million at December 31, 2023. The $3.4 million increase in the allowance is due to a $7.5 million provision for credit losses recorded during the twelve months ended December 31, 2024, partially offset by net charge-offs of $4.1 million, mainly attributable to commercial and industrial loans, during the same period.

The Company’s ratio of nonperforming loans to loans held for investment decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024. Loans designated as watch increased from $39.6 million to $123.4 million between December 31, 2023 and December 31, 2024. Loans designated as substandard increased from $2.0 million to $2.6 million between December 31, 2023 and December 31, 2024. There were no loans with doubtful risk grades at December 31, 2024 or December 31, 2023.

A summary of the allowance for credit losses by loan class is as follows:

	December 31, 2024				December 31, 2023
(in thousands)	Amount		% of Total		Amount		% of Total
Real estate:
Commercial	$	25,864	68.44	%	$	29,015	84.27	%
Commercial land and development		78	0.21	%		178	0.52	%
Commercial construction		2,268	6.00	%		718	2.08	%
Residential construction		64	0.17	%		89	0.26	%
Residential		270	0.71	%		151	0.44	%
Farmland		607	1.61	%		399	1.16	%
		29,151	77.14	%		30,550	88.73	%
Commercial:
Secured		5,866	15.52	%		3,314	9.62	%
Unsecured		278	0.74	%		189	0.55	%
		6,144	16.26	%		3,503	10.17	%
Consumer and other		2,496	6.60	%		378	1.10	%
Total allowance for credit losses	$	37,791	100.00	%	$	34,431	100.00	%

The ratio of allowance for credit losses to loans held for investment was 1.07% at December 31, 2024, as compared to 1.12% at December 31, 2023.

Non-interest Income

The following table presents the key components of non-interest income for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		$ Change			% Change
Service charges on deposit accounts	$	179	$	165	$	14		8.48	%
Gain on sale of loans		150		306		(156	)	(50.98)	%
Loan-related fees		400		406		(6	)	(1.48)	%
FHLB stock dividends		332		327		5		1.53	%
Earnings on bank-owned life insurance		182		162		20		12.35	%
Other income		423		15		408		2,720.00	%
Total non-interest income	$	1,666	$	1,381	$	285		20.64	%

Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $4.4 million of loans sold with an effective yield of 7.03% during the three months ended September 30, 2024.

Other income. The increase resulted primarily from $0.3 million of income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a $0.1 million loss from equity investments in venture-backed funds during the three months ended September 30, 2024.

The following table presents the key components of non-interest income for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		December 31, 2023			$ Change			% Change
Service charges on deposit accounts	$	179	$	165		$	14		8.48	%
Net gain (loss) on sale of securities		—		(167	)		167		(100.00)	%
Gain on sale of loans		150		317			(167	)	(52.68)	%
Loan-related fees		400		667			(267	)	(40.03)	%
FHLB stock dividends		332		314			18		5.73	%
Earnings on bank-owned life insurance		182		155			27		17.42	%
Other income		423		485			(62	)	(12.78)	%
Total non-interest income	$	1,666	$	1,936		$	(270	)	(13.95)	%

Net gain (loss) on sale of securities. The decrease in the net loss on sale of securities related to the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the three months ended December 31, 2023, with no sales occurring during the three months ended December 31, 2024.

Gain on sale of loans. The decrease resulted from an overall decline in the volume of loans sold during the three months ended December 31, 2024, as compared to the three months ended December 31, 2023. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $5.9 million of loans sold with an effective yield of 5.41% during the three months ended December 31, 2023.

Loan-related fees. The decrease resulted from the recognition of $0.2 million lower rate lock fees and $0.1 million lower swap referral fees during the three months ended December 31, 2024 than the three months ended December 31, 2023.

Non-interest income for the periods indicated:

	Year ended
(in thousands)	December 31, 2024		December 31, 2023			$ Change			% Change
Service charges on deposit accounts	$	721	$	575		$	146		25.39	%
Net gain (loss) on sale of securities		—		(167	)		167		(100.00)	%
Gain on sale of loans		1,274		1,952			(678	)	(34.73)	%
Loan-related fees		1,605		1,719			(114	)	(6.63)	%
FHLB stock dividends		1,320		970			350		36.08	%
Earnings on bank-owned life insurance		644		510			134		26.27	%
Other income		889		1,952			(1,063	)	(54.46)	%
Total non-interest income	$	6,453	$	7,511		$	(1,058	)	(14.09)	%

Service charges on deposit accounts. The increase resulted primarily from a $0.2 million increase in wire transfer fees recognized, partially offset by a small decrease in other fees recognized during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Net gain (loss) on sale of securities. The decrease in the net loss on sale of securities resulted from the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the year ended December 31, 2023, with no sales occurring during the year ended December 31, 2024.

Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold during the year ended December 31, 2024 compared to the year ended December 31, 2023. During the year ended December 31, 2024, approximately $18.3 million of loans were sold with an effective yield of 6.96%, as compared to approximately $36.5 million of loans sold with an effective yield of 5.35% during the year ended December 31, 2023.

Loan-related fees. The decrease was primarily a result of a $0.2 million net decrease in income earned from the credit card program, partially offset by a small increase in loan fee income earned on various loan types and services.

FHLB stock dividends. The increase primarily relates to a 50 basis point increase in the annualized dividend rate earned year-over-year, while the average shares outstanding remained consistent.

Earnings on bank-owned life insurance. The increase was primarily due to additional policies purchased between December 31, 2024 and December 31, 2023.

Other income. The decrease resulted primarily from $0.5 million in income received on equity investments in venture-backed funds during the year ended December 31, 2024, as compared to $1.7 million in income received on equity investments in venture-back funds during the year ended December 31, 2023.

Non-interest Expense

The following table presents the key components of non-interest expense for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		$ Change			% Change
Salaries and employee benefits	$	8,360	$	7,969	$	391		4.91	%
Occupancy and equipment		649		626		23		3.67	%
Data processing and software		1,369		1,327		42		3.17	%
Federal Deposit Insurance Corporation (“FDIC”) insurance		440		405		35		8.64	%
Professional services		774		830		(56	)	(6.75)	%
Advertising and promotional		752		584		168		28.77	%
Loan-related expenses		321		292		29		9.93	%
Other operating expenses		1,823		1,743		80		4.59	%
Total non-interest expense	$	14,488	$	13,776	$	712		5.17	%

Salaries and employee benefits. The increase was primarily a result of: (i) a $0.1 million increase in salaries, benefits, and bonus expense; and (ii) a $0.5 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.2 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

Advertising and promotional. The increase was primarily due to the timing of events sponsored and attended during the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

The following table presents the key components of non-interest expense for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Salaries and employee benefits	$	8,360	$	7,182	$	1,178	16.40	%
Occupancy and equipment		649		583		66	11.32	%
Data processing and software		1,369		1,110		259	23.33	%
FDIC insurance		440		370		70	18.92	%
Professional services		774		658		116	17.63	%
Advertising and promotional		752		717		35	4.88	%
Loan-related expenses		321		268		53	19.78	%
Other operating expenses		1,823		1,775		48	2.70	%
Total non-interest expense	$	14,488	$	12,663	$	1,825	14.41	%

Salaries and employee benefits. The increase was primarily a result of: (i) a $1.0 million increase in salaries, benefits, and bonus expense, of which approximately $0.8 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $0.7 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.5 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.

Professional services. The increase was primarily due to increased audit and examination fees for services provided for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

The following table presents the key components of non-interest expense for the periods indicated:

	Year ended
(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Salaries and employee benefits	$	31,709	$	27,097	$	4,612	17.02	%
Occupancy and equipment		2,547		2,218		329	14.83	%
Data processing and software		5,088		4,015		1,073	26.72	%
FDIC insurance		1,635		1,557		78	5.01	%
Professional services		3,078		2,575		503	19.53	%
Advertising and promotional		2,411		2,403		8	0.33	%
Loan-related expenses		1,207		1,192		15	1.26	%
Other operating expenses		6,818		6,718		100	1.49	%
Total non-interest expense	$	54,493	$	47,775	$	6,718	14.06	%

Salaries and employee benefits. The increase was the result of: (i) a $3.5 million increase in salaries, benefits, and bonus, of which approximately $3.3 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $1.4 million increase in commissions paid, primarily to employees in the San Francisco Bay Area. The increase was partially offset by a $0.3 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

Occupancy and equipment. The increase related to rent expense for the San Francisco branch office and a new office lease to support back office staff during the year ended December 31, 2024, which did not exist for the full year ended December 31, 2023.

Data processing and software. The increase related to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.

Professional services. The increase was due to an increase in audit, IT support, and other consulting fees for services provided for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Other operating expenses. The increase is primarily related to a $0.2 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network, partially offset by a $0.1 million decrease in conference and training expenses.

Provision for Income Taxes

Three months ended December 31, 2024, as compared to the three months ended September 30, 2024

Provision for income taxes for the quarter ended December 31, 2024 increased by $1.8 million, or 40.70%, to $6.1 million, as compared to $4.3 million for the quarter ended September 30, 2024, which was primarily due to: (i) the increase in taxable income recognized during the three months ended December 31, 2024; and (ii) a $0.6 million provision to return true-up recorded during the three months ended December 31, 2024 related primarily to the timing of recognition of low income housing tax credits, which did not occur during the three months ended September 30, 2024. The effective tax rate was 31.24% and 28.21% for the three months ended December 31, 2024 and September 30, 2024, respectively.

Three months ended December 31, 2024, as compared to the three months ended December 31, 2023

Provision for income taxes increased by $1.7 million, or 39.02%, to $6.1 million for the three months ended December 31, 2024, as compared to $4.4 million for the three months ended December 31, 2023. This increase is due to: (i) the increase in taxable income for the three months ended December 31, 2024 compared to the three months ended December 31, 2023; and (ii) a $0.6 million provision to return true-up recorded during the three months ended December 31, 2024 related primarily to the timing of recognition of low income housing tax credits, which did not occur during the three months ended December 31, 2023. The effective tax rate was 31.24% and 28.72% for the three months ended December 31, 2024 and December 31, 2023, respectively.

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

Provision for income taxes increased by $0.2 million, or 0.89%, to $19.1 million for the year ended December 31, 2024, as compared to $18.9 million for the year ended December 31, 2023. This increase is due to a $0.6 million provision to return true-up recorded during the year ended December 31, 2024, partially offset by a decline in taxable income year-over-year. The effective tax rate was 29.43% and 28.34% for the years ended December 31, 2024 and December 31, 2023, respectively.

Webcast Details

Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, January 28, 2025, at 1:00 pm ET (10:00 am PT), to discuss its fourth quarter and annual financial results. To view the live webcast, visit the “News & Events” section of the Company’s website under “Events” at https://investors.fivestarbank.com/news-events/events. The webcast will be archived on the Company’s website for a period of 90 days.

About Five Star Bancorp

Five Star is a bank holding company headquartered in Rancho Cordova, California. Five Star operates through its wholly owned banking subsidiary, Five Star Bank. The Bank has eight branches in Northern California.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2024, June 30, 2024, and September 30, 2024, in each case under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time.

The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

Condensed Financial Data (Unaudited)

	Three months ended
(in thousands, except per share and share data)	December 31, 2024			September 30, 2024			December 31, 2023
Revenue and Expense Data
Interest and fee income	$	57,745		$	52,667		$	46,180
Interest expense		24,256			22,281			19,502
Net interest income		33,489			30,386			26,678
Provision for credit losses		1,300			2,750			800
Net interest income after provision		32,189			27,636			25,878
Non-interest income:
Service charges on deposit accounts		179			165			165
Net gain (loss) on sale of securities		—			—			(167	)
Gain on sale of loans		150			306			317
Loan-related fees		400			406			667
FHLB stock dividends		332			327			314
Earnings on bank-owned life insurance		182			162			155
Other income		423			15			485
Total non-interest income		1,666			1,381			1,936
Non-interest expense:
Salaries and employee benefits		8,360			7,969			7,182
Occupancy and equipment		649			626			583
Data processing and software		1,369			1,327			1,110
FDIC insurance		440			405			370
Professional services		774			830			658
Advertising and promotional		752			584			717
Loan-related expenses		321			292			268
Other operating expenses		1,823			1,743			1,775
Total non-interest expense		14,488			13,776			12,663
Income before provision for income taxes		19,367			15,241			15,151
Provision for income taxes		6,050			4,300			4,352
Net income	$	13,317		$	10,941		$	10,799

Comprehensive Income
Net income	$	13,317		$	10,941		$	10,799
Net unrealized holding (loss) gain on securities available-for-sale during the period		(3,747	)		3,549			5,744
Reclassification for net loss on sale of securities included in net income		—			—			167
Less: Income tax (benefit) expense related to other comprehensive (loss) income		(1,108	)		1,049			1,747
Other comprehensive (loss) income		(2,639	)		2,500			4,164
Total comprehensive income	$	10,678		$	13,441		$	14,963

Share and Per Share Data
Earnings per common share:
Basic	$	0.63		$	0.52		$	0.63
Diluted	$	0.63		$	0.52		$	0.63
Book value per share	$	18.60		$	18.29		$	16.56
Tangible book value per share⁽¹⁾	$	18.60		$	18.29		$	16.56
Weighted average basic common shares outstanding		21,182,143			21,182,143			17,175,445
Weighted average diluted common shares outstanding		21,235,318			21,232,758			17,193,114
Shares outstanding at end of period		21,319,083			21,319,583			17,256,989

Credit Quality
Allowance for credit losses to period end nonperforming loans		2,101.78	%		2,041.44	%		1,752.70	%
Nonperforming loans to loans held for investment		0.05	%		0.05	%		0.06	%
Nonperforming assets to total assets		0.05	%		0.05	%		0.05	%
Nonperforming loans plus performing loan modifications to loans held for investment		0.05	%		0.05	%		0.06	%

Selected Financial Ratios
ROAA		1.31	%		1.18	%		1.26	%
ROAE		13.48	%		11.31	%		15.45	%
Net interest margin		3.36	%		3.37	%		3.19	%
Loan to deposit		99.38	%		101.87	%		102.19	%

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

	Year ended
(in thousands, except per share and share data)	December 31, 2024			December 31, 2023
Revenue and Expense Data
Interest and fee income	$	206,951		$	174,382
Interest expense		87,240			63,502
Net interest income		119,711			110,880
Provision for credit losses		6,950			4,000
Net interest income after provision		112,761			106,880
Non-interest income:
Service charges on deposit accounts		721			575
Net gain (loss) on sale of securities		—			(167	)
Gain on sale of loans		1,274			1,952
Loan-related fees		1,605			1,719
FHLB stock dividends		1,320			970
Earnings on bank-owned life insurance		644			510
Other income		889			1,952
Total non-interest income		6,453			7,511
Non-interest expense:
Salaries and employee benefits		31,709			27,097
Occupancy and equipment		2,547			2,218
Data processing and software		5,088			4,015
FDIC insurance		1,635			1,557
Professional services		3,078			2,575
Advertising and promotional		2,411			2,403
Loan-related expenses		1,207			1,192
Other operating expenses		6,818			6,718
Total non-interest expense		54,493			47,775
Income before provision for income taxes		64,721			66,616
Provision for income taxes		19,050			18,882
Net income	$	45,671		$	47,734

Comprehensive Income
Net income	$	45,671		$	47,734
Net unrealized holding (loss) gain on securities available-for-sale during the period		(858	)		2,228
Reclassification for net loss on sale of securities included in net income		—			167
Less: Income tax (benefit) expense related to other comprehensive (loss) income		(254	)		708
Other comprehensive (loss) income		(604	)		1,687
Total comprehensive income	$	45,067		$	49,421

Share and Per Share Data
Earnings per common share:
Basic	$	2.26		$	2.78
Diluted	$	2.26		$	2.78
Book value per share	$	18.60		$	16.56
Tangible book value per share⁽¹⁾	$	18.60		$	16.56
Weighted average basic common shares outstanding		20,154,385			17,166,592
Weighted average diluted common shares outstanding		20,205,440			17,187,969
Shares outstanding at end of period		21,319,083			17,256,989

Credit Quality
Allowance for credit losses to period end nonperforming loans		2,101.78	%		1,752.70	%
Nonperforming loans to loans held for investment		0.05	%		0.06	%
Nonperforming assets to total assets		0.05	%		0.05	%
Nonperforming loans plus performing loan modifications to loans held for investment		0.05	%		0.06	%

Selected Financial Ratios
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Net interest margin		3.32	%		3.42	%
Loan to deposit		99.38	%		102.19	%

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

(in thousands)	December 31, 2024			September 30, 2024			December 31, 2023
Balance Sheet Data
Cash and due from financial institutions	$	33,882		$	44,531		$	26,986
Interest-bearing deposits in banks		318,461			206,321			294,590
Time deposits in banks		4,121			4,118			5,858
Securities – available-for-sale, at fair value		98,194			104,238			108,083
Securities – held-to-maturity, at amortized cost		2,720			2,720			3,077
Loans held for sale		3,247			2,910			11,464
Loans held for investment		3,532,686			3,460,565			3,081,719
Allowance for credit losses		(37,791	)		(37,583	)		(34,431	)
Loans held for investment, net of allowance for credit losses		3,494,895			3,422,982			3,047,288
FHLB stock		15,000			15,000			15,000
Operating leases, right-of-use asset		6,245			6,590			5,284
Premises and equipment, net		1,584			1,657			1,623
Bank-owned life insurance		19,375			19,192			17,180
Interest receivable and other assets		55,554			56,745			56,692
Total assets	$	4,053,278		$	3,887,004		$	3,593,125

Non-interest-bearing deposits	$	922,629		$	906,939		$	831,101
Interest-bearing deposits		2,635,365			2,493,040			2,195,795
Total deposits		3,557,994			3,399,979			3,026,896
Subordinated notes, net		73,895			73,859			73,749
Other borrowings		—			—			170,000
Operating lease liability		6,857			7,101			5,603
Interest payable and other liabilities		17,908			16,135			31,103
Total liabilities		3,656,654			3,497,074			3,307,351

Common stock		302,531			302,251			220,505
Retained earnings		106,464			97,411			77,036
Accumulated other comprehensive loss, net of taxes		(12,371	)		(9,732	)		(11,767	)
Total shareholders’ equity		396,624			389,930			285,774
Total liabilities and shareholders’ equity	$	4,053,278		$	3,887,004		$	3,593,125

Quarterly Average Balance Data
Average loans held for investment and sale	$	3,498,109		$	3,354,050		$	3,055,042
Average interest-earning assets		3,965,867			3,586,572			3,319,300
Average total assets		4,057,603			3,678,537			3,399,660
Average deposits		3,561,409			3,184,795			3,009,078
Average total equity		393,088			384,692			277,295

Capital Ratios
Total shareholders’ equity to total assets		9.79	%		10.03	%		7.95	%
Tangible shareholders’ equity to tangible assets⁽¹⁾		9.79	%		10.03	%		7.95	%
Total capital (to risk-weighted assets)		13.99	%		13.94	%		12.30	%
Tier 1 capital (to risk-weighted assets)		11.02	%		10.93	%		9.07	%
Common equity Tier 1 capital (to risk-weighted assets)		11.02	%		10.93	%		9.07	%
Tier 1 leverage ratio		10.05	%		10.83	%		8.73	%

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

Non-GAAP Reconciliation (Unaudited)

The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons.

Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated.

Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated.

Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income.

The following reconciliation tables provide a more detailed analysis of this non-GAAP financial measure:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		December 31, 2023
Pre-tax, pre-provision income
Pre-tax income	$	19,367	$	15,241	$	15,151
Add: provision for credit losses		1,300		2,750		800
Pre-tax, pre-provision income	$	20,667	$	17,991	$	15,951

	Year ended
(in thousands)	December 31, 2024		December 31, 2023
Pre-tax, pre-provision income
Pre-tax income	$	64,721	$	66,616
Add: provision for credit losses		6,950		4,000
Pre-tax, pre-provision income	$	71,671	$	70,616

Investor Contact:
Heather C. Luck, Chief Financial Officer
Five Star Bancorp
(916) 626-5008
hluck@fivestarbank.com

Media Contact:
Shelley R. Wetton, Chief Marketing Officer
Five Star Bancorp
(916) 284-7827
swetton@fivestarbank.com

The MIL Network –

January 28, 2025

MIL-OSI USA: Department of Revenue plans events in Prineville, Pendleton, The Dalles to help taxpayers e-file their taxes for free

Source: US State of Oregon

alem, OR—Oregonians looking to file their taxes for free could find help as close as their local library.

Volunteers from the Oregon Department of Revenue will be traveling to libraries in 18 different communities across the state in February, March, and April to assist taxpayers in using the free combination of IRS Direct File and Direct File Oregon to complete their returns.

Upcoming stops include:

February 4

Crook County Library

175 NW Meadow Lakes Drive, Prineville, OR 97754

8 a.m. to 8 p.m.

February 5

Pendleton Public Library

502 SW Dorion Ave, Pendleton, OR 97801

8 a.m. to 7 p.m.

February 6

The Dalles Wasco County Library

722 Court Street, The Dalles, OR 97058

10 a.m. to 7 p.m.

Taxpayers can find more information on the department’s Free Direct File assistance at local libraries webpage.

The IRS estimates that 640,000 Oregon taxpayers will be able to e-file both their federal and state returns for free in 2025 using the combination of IRS Direct File and Direct File Oregon.

The department believes that offering free assistance will help maximize the number of Oregonians who choose to use the new free option and make it possible for many who don’t have a filing requirement to file and claim significant federal and state tax credits for low-income families.

For example, the IRS estimates that one in five Oregon taxpayers eligible to claim the federal Earned Income Tax Credit are not doing so. One Oregon organization estimates that the unclaimed credits have totaled nearly $100 million in recent years.

Taxpayers should use the IRS eligibility checker to see if they’ll be able to use IRS Direct File and Direct File Oregon. Eligible taxpayers should set up an IRS online account and an account with Oregon’s Revenue Online before they come to an event. Taxpayers attending an event should bring the following information with them.

Identification documents

Social security card or ITIN for everyone on your tax return
Government picture ID for taxpayer and spouse if filing jointly (such as driver’s license or passport)

Common income and tax documents

Forms W2 (wages from a job)
Forms 1099 (other kinds of income)
Form SSA-1099 (Social Security Benefits)

Optional documents

Canceled check or bank routing and account numbers for direct deposit
Last year’s tax return

Taxpayers can signup for the new “Oregon Tax Tips” direct email newsletter to keep up with information about tax return filing and how to claim helpful tax credits.

MIL OSI USA News –

January 28, 2025

MIL-OSI: Brown & Brown, Inc. announces fourth quarter 2024 results, including total revenues of $1.2 billion, an increase of 15.4%; Organic Revenue growth of 13.8%; diluted net income per share of $0.73; and Diluted Net Income Per Share – Adjusted of $0.86

Source: GlobeNewswire (MIL-OSI)

DAYTONA BEACH, Fla., Jan. 27, 2025 (GLOBE NEWSWIRE) — Brown & Brown, Inc. (NYSE:BRO) (the “Company”) announced its unaudited financial results for the fourth quarter and full year of 2024.

Revenues for the fourth quarter of 2024 under U.S. generally accepted accounting principles (“GAAP”) were $1.2 billion, increasing $158 million, or 15.4%, compared to the fourth quarter of the prior year, with commissions and fees increasing by 15.4% and Organic Revenue increasing by 13.8%. Income before income taxes was $275 million, decreasing 22.8% from the fourth quarter of the prior year with Income Before Income Taxes Margin decreasing to 23.2% from 34.7% as a result of a gain on disposal of certain third-party claims administration and adjusting services businesses sold in the fourth quarter of 2023. EBITDAC – Adjusted was $390 million, increasing 22.6% from the fourth quarter of the prior year with EBITDAC Margin – Adjusted increasing to 32.9% from 31.0%. Net income attributable to the Company was $210 million, decreasing $59 million, or 21.9%, and diluted net income per share decreased to $0.73, or 22.3%, with Diluted Net Income Per Share – Adjusted increasing to $0.86, or 24.6%, each as compared to the fourth quarter of the prior year.

Revenues for the twelve months ended December 31, 2024 under GAAP were $4.8 billion, increasing $548 million, or 12.9%, as compared to 2023, with commissions and fees increasing by 12.1%, and Organic Revenue increasing by 10.4%. Income before income taxes was $1.3 billion, increasing 13.7% with Income Before Income Taxes Margin increasing to 27.1% from 26.9% as compared to 2023. EBITDAC – Adjusted was $1.7 billion, which was an increase of 17.0% and EBITDAC Margin – Adjusted increased to 35.2% from 33.9% as compared to 2023. Net income attributable to the Company was $1.0 billion, increasing $122 million, or 14.0%, with diluted net income per share increasing to $3.46, or 13.4%, and Diluted Net Income Per Share – Adjusted increasing to $3.84, or 18.2%, each as compared to 2023.

J. Powell Brown, president and chief executive officer of the Company, noted, “The fourth quarter was outstanding. We are extremely pleased with our 10.4% Organic Revenue growth for 2024. These results were only possible through the incredible efforts of our 17,000+ teammates.”

Reconciliation of Commissions and Fees
to Organic Revenue
(in millions, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
Commissions and fees	$	1,161		$	1,006		$	4,705		$	4,199
Profit-sharing contingent commissions		(57	)		(42	)		(166	)		(130	)
Core commissions and fees	$	1,104		$	964		$	4,539		$	4,069
Acquisitions		(26	)					(146	)
Dispositions					(20	)					(101	)
Foreign Currency Translation					3						10
Organic Revenue	$	1,078		$	947		$	4,393		$	3,978
Organic Revenue growth	$	131					$	415
Organic Revenue growth %		13.8	%					10.4	%

See information regarding non-GAAP measures presented later in this press release.

Reconciliation of Diluted Net Income Per Share to
Diluted Net Income Per Share – Adjusted
(unaudited)

	Three Months Ended December 31,						Change						Twelve Months Ended December 31,						Change
	2024			2023			$			%			2024			2023			$			%
Diluted net income per share	$	0.73		$	0.94		$	(0.21	)		(22.3	%)	$	3.46		$	3.05		$	0.41			13.4	%
Change in estimated acquisition earn-out payables		0.02			(0.02	)		0.04						—			0.06			(0.06	)
(Gain)/loss on disposal ⁽¹⁾		(0.02	)		(0.35	)		0.33						(0.09	)		(0.37	)		0.28
Acquisition/Integration Costs		—			0.01			(0.01	)					—			0.04			(0.04	)
Amortization		0.13			0.11			0.02						0.47			0.44			0.03
1Q23 Nonrecurring Cost		—			—			—						—			0.03			(0.03	)
Diluted Net Income Per Share – Adjusted	$	0.86		$	0.69		$	0.17			24.6	%	$	3.84		$	3.25		$	0.59			18.2	%

(1) Includes the gain on disposal of $0.35 associated with the sale of certain third-party claims administration and adjusting services businesses sold in the fourth quarter of 2023.

See information regarding non-GAAP measures presented later in this press release.

Reconciliation of Income Before Income Taxes to EBITDAC and
EBITDAC – Adjusted and Income Before Income Taxes Margin⁽¹⁾ to
EBITDAC Margin and EBITDAC Margin – Adjusted
(in millions, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
Total revenues	$	1,184		$	1,026		$	4,805		$	4,257
Income before income taxes	$	275		$	356		$	1,303		$	1,146
Income Before Income Taxes Margin ⁽¹⁾		23.2	%		34.7	%		27.1	%		26.9	%
Amortization		48			43			178			166
Depreciation		11			10			44			40
Interest		46			47			193			190
Change in estimated acquisition earn-out payables		11			(9	)		2			21
EBITDAC	$	391		$	447		$	1,720		$	1,563
EBITDAC Margin		33.0	%		43.6	%		35.8	%		36.7	%
(Gain)/loss on disposal ⁽²⁾		(1	)		(134	)		(31	)		(143	)
Acquisition/Integration Costs		—			5			—			13
1Q23 Nonrecurring Cost					—						11
EBITDAC – Adjusted	$	390		$	318		$	1,689		$	1,444
EBITDAC Margin – Adjusted		32.9	%		31.0	%		35.2	%		33.9	%

(1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues.

(2) Includes the gain on disposal of $134.6 million associated with the sale of certain third-party claims administration and adjusting services businesses sold in the fourth quarter of 2023.

See information regarding non-GAAP measures presented later in this press release.

Brown & Brown, Inc.
Consolidated Statements of Income
(in millions, except per share data; unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
REVENUES
Commissions and fees	$	1,161		$	1,006		$	4,705		$	4,199
Investment income		22			18			93			52
Other income, net		1			2			7			6
Total revenues		1,184			1,026			4,805			4,257
EXPENSES
Employee compensation and benefits		582			554			2,406			2,187
Other operating expenses		212			159			710			650
Gain on disposal		(1	)		(134	)		(31	)		(143	)
Amortization		48			43			178			166
Depreciation		11			10			44			40
Interest		46			47			193			190
Change in estimated acquisition earn-out payables		11			(9	)		2			21
Total expenses		909			670			3,502			3,111
Income before income taxes		275			356			1,303			1,146
Income taxes		63			87			301			275
Net income before non-controlling interests		212			269			1,002			871
Less: Net income attributable to non-controlling interests		2			—			9			—
Net income attributable to the Company	$	210		$	269		$	993		$	871
Net income per share:
Basic	$	0.73		$	0.94		$	3.48		$	3.07
Diluted	$	0.73		$	0.94		$	3.46		$	3.05
Weighted average number of shares outstanding:
Basic		283			280			282			280
Diluted		284			282			284			281

Brown & Brown, Inc.
Consolidated Balance Sheets
(in millions, except per share data, unaudited)

	December 31, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	675		$	700
Fiduciary cash		1,827			1,603
Short-term investments		10			11
Commission, fees, and other receivables		895			790
Fiduciary receivables		1,116			1,125
Reinsurance recoverable		1,527			125
Prepaid reinsurance premiums		520			462
Other current assets		354			314
Total current assets		6,924			5,130
Fixed assets, net		319			270
Operating lease assets		200			199
Goodwill		7,970			7,341
Amortizable intangible assets, net		1,814			1,621
Investments		19			21
Other assets		366			301
Total assets	$	17,612		$	14,883
LIABILITIES AND EQUITY
Current liabilities:
Fiduciary liabilities	$	2,943		$	2,727
Losses and loss adjustment reserve		1,543			131
Unearned premiums		577			462
Accounts payable		373			459
Accrued expenses and other liabilities		653			608
Current portion of long-term debt		225			569
Total current liabilities		6,314			4,956
Long-term debt less unamortized discount and debt issuance costs		3,599			3,227
Operating lease liabilities		189			179
Deferred income taxes, net		711			616
Other liabilities		362			326
Equity:
Common stock, par value $0.10 per share; authorized 560 shares; issued 306 shares and outstanding 286 shares at 2024, issued 304 shares and outstanding 285 shares at 2023, respectively		31			30
Additional paid-in capital		1,118			1,027
Treasury stock, at cost 20 shares at 2024 and 2023		(748	)		(748	)
Accumulated other comprehensive loss		(109	)		(19	)
Non-controlling interests		17			–
Retained earnings		6,128			5,289
Total equity		6,437			5,579
Total liabilities and equity	$	17,612		$	14,883

Brown & Brown, Inc.
Consolidated Statements of Cash Flows
(in millions, unaudited)

	Twelve Months Ended December 31,
	2024			2023
Cash flows from operating activities:
Net income before non-controlling interests	$	1,002		$	871
Adjustments to reconcile net income before non-controlling interests to net cash provided by operating activities:
Amortization		178			166
Depreciation		44			40
Non-cash stock-based compensation		101			89
Change in estimated acquisition earn-out payables		2			22
Deferred income taxes		13			12
Net gain on sales/disposals of investments, businesses, fixed assets and customer accounts		(29	)		(140	)
Payments on acquisition earn-outs in excess of original estimated payables		(37	)		(29	)
Other		5			5
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Commissions, fees and other receivables (increase)/decrease		(94	)		(106	)
Reinsurance recoverable (increase)/decrease		(1,402	)		706
Prepaid reinsurance premiums (increase)/decrease		(58	)		(68	)
Other assets (increase)/decrease		(98	)		(118	)
Losses and loss adjustment reserve increase/(decrease)		1,411			(710	)
Unearned premiums increase/(decrease)		115			50
Accounts payable increase/(decrease)		(47	)		260
Accrued expenses and other liabilities increase/(decrease)		35			43
Other liabilities increase/(decrease)		33			(83	)
Net cash provided by operating activities		1,174			1,010
Cash flows from investing activities:
Additions to fixed assets		(82	)		(69	)
Payments for businesses acquired, net of cash acquired		(890	)		(631	)
Proceeds from sales of businesses, fixed assets and customer accounts		70			107
Purchases of investments		(7	)		(7	)
Proceeds from sales of investments		11			13
Net cash used in investing activities		(898	)		(587	)
Cash flows from financing activities:
Fiduciary receivables and liabilities, net		191			189
Payments on acquisition earn-outs		(117	)		(90	)
Proceeds from long-term debt		599			—
Payments on long-term debt		(719	)		(251	)
Deferred debt issuance costs		(5	)		—
Borrowings on revolving credit facility		500			420
Payments on revolving credit facility		(350	)		(320	)
Issuances of common stock for employee stock benefit plans		44			40
Repurchase shares to fund tax withholdings for non-cash stock-based compensation		(55	)		(40	)
Cash dividends paid		(154	)		(135	)
Other financing activities		2			—
Net cash used in financing activities		(64	)		(187	)
Effect of foreign exchange rate changes in cash and cash equivalents inclusive of fiduciary cash		(13	)		34
Net increase in cash and cash equivalents inclusive of fiduciary cash		199			270
Cash and cash equivalents inclusive of fiduciary cash at beginning of period		2,303			2,033
Cash and cash equivalents inclusive of fiduciary cash at end of period	$	2,502		$	2,303

Conference call, webcast and slide presentation

A conference call to discuss the results of the fourth quarter and full year of 2024 will be held on Tuesday, January 28, 2025, at 8:00 AM (EST). The Company may refer to a slide presentation during its conference call. You can access the webcast and the slides from the “Investor Relations” section of the Company’s website at bbinsurance.com.

About Brown & Brown

Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm, delivering risk management solutions to individuals and businesses since 1939. With over 17,000 teammates and 500+ locations worldwide, we are committed to providing innovative strategies to help protect what our customers value most. For more information or to find an office near you, please visit bbinsurance.com.

Forward-looking statements

This press release may contain certain statements relating to future results which are “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, which are intended to be covered by the safe harbors created by those laws. You can identify these statements by forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or similar words. We have based these statements on our current expectations about potential future events. Although we believe the expectations expressed in the forward-looking statements included in this press release are based upon reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by us or on our behalf. Many of these factors have previously been identified in filings or statements made by us or on our behalf. Important factors which could cause our actual results to differ, possibly materially from the forward-looking statements in this press release include but are not limited to the following items: the Company’s determination as it finalizes its financial results for the fourth quarter and full year 2024 that its financial results differ from the current preliminary unaudited numbers set forth herein; the inability to hire, retain and develop qualified employees, as well as the loss of any of our executive officers or other key employees; a cybersecurity attack or any other interruption in information technology and/or data security that may impact our operations or the operations of third parties that support us; acquisition-related risks that could negatively affect the success of our growth strategy, including the possibility that we may not be able to successfully identify suitable acquisition candidates, complete acquisitions, successfully integrate acquired businesses into our operations and expand into new markets; risks related to our international operations, which may result in additional risks or require more management time and expense than our domestic operations to achieve or maintain profitability; the requirement for additional resources and time to adequately respond to dynamics resulting from rapid technological change; the loss of or significant change to any of our insurance company relationships, which could result in loss of capacity to write business, additional expense, loss of market share or material decrease in our commissions; the effect of natural disasters on our profit-sharing contingent commissions, insurer capacity or claims expenses within our capitalized captive insurance facilities; adverse economic conditions, political conditions, outbreaks of war, disasters, or regulatory changes in states or countries where we have a concentration of our business; the inability to maintain our culture or a significant change in management, management philosophy or our business strategy; fluctuations in our commission revenue as a result of factors outside of our control; the effects of sustained inflation or higher interest rates; claims expense resulting from the limited underwriting risk associated with our participation in capitalized captive insurance facilities; risks associated with our automobile and recreational vehicle dealer services (“F&I”) businesses; changes in, or the termination of, certain programs administered by the U.S. federal government from which we derive revenues; the limitations of our system of disclosure and internal controls and procedures in preventing errors or fraud, or in informing management of all material information in a timely manner; the significant control certain shareholders have over the Company; changes in data privacy and protection laws and regulations or any failure to comply with such laws and regulations; improper disclosure of confidential information; our ability to comply with non-U.S. laws, regulations and policies; the potential adverse effect of certain actual or potential claims, regulatory actions or proceedings on our businesses, results of operations, financial condition or liquidity; uncertainty in our business practices and compensation arrangements with insurance carriers due to potential changes in regulations; regulatory changes that could reduce our profitability or growth by increasing compliance costs, technology compliance, restricting the products or services we may sell, the markets we may enter, the methods by which we may sell our products and services, or the prices we may charge for our services and the form of compensation we may accept from our customers, carriers and third-parties; increasing scrutiny and changing laws and expectations from regulators, investors and customers with respect to our environmental, social and governance practices and disclosure; a decrease in demand for liability insurance as a result of tort reform legislation; our failure to comply with any covenants contained in our debt agreements; the possibility that covenants in our debt agreements could prevent us from engaging in certain potentially beneficial activities; changes in the U.S.-based credit markets that might adversely affect our business, results of operations and financial condition; changes in current U.S. or global economic conditions, including an extended slowdown in the markets in which we operate; disintermediation within the insurance industry, including increased competition from insurance companies, technology companies and the financial services industry, as well as the shift away from traditional insurance markets; conditions that result in reduced insurer capacity; quarterly and annual variations in our commissions that result from the timing of policy renewals and the net effect of new and lost business production; intangible asset risk, including the possibility that our goodwill may become impaired in the future; future pandemics, epidemics or outbreaks of infectious diseases, and the resulting governmental and societal responses; other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission (“SEC”) filings; and other factors that the Company may not have currently identified or quantified. Assumptions as to any of the foregoing, and all statements, are not based upon historical fact, but rather reflect our current expectations concerning future results and events. Forward-looking statements that we make or that are made by others on our behalf are based upon a knowledge of our business and the environment in which we operate, but because of the factors listed above, among others, actual results may differ from those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements we make herein. We cannot assure you that the results or developments anticipated by us will be realized, or even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements. All forward-looking statements made herein are made only as of the date of this press release, and the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.

Non-GAAP supplemental financial information
This press release contains references to “non-GAAP financial measures” as defined in SEC Regulation G, consisting of Organic Revenue, EBITDAC, EBITDAC Margin, EBITDAC – Adjusted, EBITDAC Margin – Adjusted and Diluted Net Income Per Share – Adjusted. We present these measures because we believe such information is of interest to the investment community and because we believe it provides additional meaningful methods to evaluate the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period. This non-GAAP financial information should be considered in addition to, not in lieu of, the Company’s consolidated income statements and balance sheets as of the relevant date. Consistent with Regulation G, a description of such information is provided below and a reconciliation of such items to GAAP information can be found within this press release as well as in our periodic filings with the SEC.

We view Organic Revenue and Organic Revenue growth as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our three segments, because it allows us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year and that are expected to continue in the future. In addition, we believe Diluted Net Income Per Share – Adjusted provides a meaningful representation of our operating performance and improves the comparability of our results between periods by excluding the impact of the change in estimated acquisition earn-out payables, the impact of amortization of intangible assets and certain other non-recurring or infrequently occurring items. We also view EBITDAC, EBITDAC – Adjusted, EBITDAC Margin and EBITDAC Margin – Adjusted as important indicators when assessing and evaluating our performance, as they present more comparable measurements of our operating margins in a meaningful and consistent manner. As disclosed in our most recent proxy statement, we use Organic Revenue growth, Diluted Net Income Per Share – Adjusted and EBITDAC Margin – Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees.

Beginning January 1, 2024, we no longer exclude Foreign Currency Translation from the calculation of EBITDAC – Adjusted, EBITDAC Margin – Adjusted and Diluted Net Income Per Share – Adjusted. Prior periods are presented accordingly on the same basis so that the calculations of EBITDAC – Adjusted, EBITDAC Margin – Adjusted and Diluted Net Income Per Share – Adjusted are comparable for both periods. We no longer exclude Foreign Currency Translation from the calculation of these earnings measures because fluctuations in Foreign Currency Translation affect both our revenues and expenses, largely offsetting each other. Therefore, excluding Foreign Currency Translation from these earnings measures provides no meaningful incremental value in evaluating our financial performance.

Beginning January 1, 2024, amortization of intangible assets is excluded from the calculation of Diluted Net Income Per Share – Adjusted. Prior periods are presented accordingly on the same basis so that the calculation of Diluted Net Income Per Share – Adjusted is comparable for both periods. We exclude the impact of amortization of intangible assets from the calculation of Diluted Net Income Per Share – Adjusted because amortization of intangible assets is a non-cash expense that is not indicative of the performance of our business and provides no meaningful incremental value in evaluating our financial performance.

Non-GAAP Revenue Measures

Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first 12 months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period); and (iii) Foreign Currency Translation (as defined below). The term “core commissions and fees” excludes profit-sharing contingent commissions and therefore represents the revenues earned directly from specific insurance policies sold and specific fee-based services rendered. Organic Revenue can be expressed as a dollar amount or a percentage rate when describing Organic Revenue growth.

Non-GAAP Earnings Measures

EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables.
EBITDAC Margin is defined as EBITDAC divided by total revenues.
EBITDAC – Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal, (ii) for 2023, Acquisition/Integration Costs (as defined below) and (iii) for 2023, the 1Q23 Nonrecurring Cost (as defined below).
EBITDAC Margin – Adjusted is defined as EBITDAC – Adjusted divided by total revenues.
Diluted Net Income Per Share – Adjusted is defined as diluted net income per share, excluding the after-tax impact of (i) the change in estimated acquisition earn-out payables, (ii) (gain)/loss on disposal, (iii) for 2023, Acquisition/Integration Costs (as defined below), (iv) for 2023, the 1Q23 Nonrecurring Cost (as defined below) and (v) amortization.

Definitions Related to Certain Components of Non-GAAP Measures

“Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings, legal/accounting services, due diligence and the costs of integrating our information technology systems) arising out of our acquisitions of GRP (Jersey) Holdco Limited and its business, Orchid Underwriters Agency and CrossCover Insurance Services, and BdB Limited companies, which are not considered to be normal, recurring or part of the ongoing operations.
“Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of US dollars for the same period in the prior year.
“1Q23 Nonrecurring Cost” means approximately $11.0 million expensed and substantially paid in the first quarter of 2023 to resolve a business matter, which is not considered to be normal, recurring or part of the ongoing operations.
“(Gain)/loss on disposal,” a caption on our consolidated statements of income which reflects net proceeds received as compared to net book value related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.

Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments and, therefore comparability may be limited. This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company’s condensed consolidated financial statements.

For more information:

R. Andrew Watts
Chief Financial Officer
(386) 239-5770

The MIL Network –

January 28, 2025

MIL-OSI Security: St. Lucie County company and woman sentenced for conspiring to harbor aliens by means of employment

Source: Office of United States Attorneys

MIAMI – On Jan. 24, Martinez Builders Supply, d/b/a East Coast Trust (ECT) and Kelly Yanira Del Valle, 43, of Fort Pierce, Florida, were sentenced after pleading guilty to conspiring to harbor aliens by means of employment in August and October 2024. Del Valle also pleaded guilty for filing false tax returns and aiding the filing of false tax returns.

ECT was sentenced to two years of probation, to include the implementation of a corporate compliance program, ordered to forfeit $450,000 to the United States and ordered to pay a $100,000 fine. Del Valle was sentenced to 13 months in prison, to be followed by three years of supervised release, ordered to forfeit $100,000 to the United States and to pay $100,146 in restitution to the IRS.

From June 2018 through August 2021, Del Valle, who was employed by ECT at the time, along with several of ECT’s officers and employees, conspired to harbor migrants by means of employment. In June 2018, Homeland Security Investigations (HSI) law enforcement agents conducted an audit of ECT. The audit revealed that dozens of ECT’s employees were migrants, who were not authorized to work in the United States. To conceal, harbor, and shield the undocumented migrants from HSI, Del Valle and several of ECT’s officers and employees, transferred the undocumented migrants from ECT’s payroll to the payroll of two shell companies. The undocumented migrants continued to work at ECT while purportedly being employed and paid by the shell companies. ECT paid Del Valle a fee for each undocumented migrant that she transferred from ECT’s to the shell companies’ payroll.

Between June 2018 and July 2021, ECT, through its agents and employees, transferred money to bank accounts operated by Del Valle in the name of the shell companies for the express purpose of paying the undocumented migrants who worked at ECT.

On Aug. 6, 2021, HSI law enforcement agents discovered 28 undocumented migrants working at ECT’s headquarters in St. Lucie County.

Acting U.S. Attorney Michael S. Davis for the Southern District of Florida, Acting Special Agent in Charge José R. Figueroa Homeland Security Investigations (HSI) Miami and Special Agent in Charge Emmanuel Gomez of the IRS Criminal Investigation (IRS-CI), Miami Field Office, made the announcement.

The HSI Fort Pierce Field Office and IRS CI Miami Filed Office investigated the case with assistance from the U.S. Immigration and Customs Enforcement (ICE), Enforcement and Removal Operations (ERO), U.S. Border Patrol Miami Sector, U.S. Secret Service (USSS), Miami Field Office, St. Lucie County Sheriff’s Office, and Fort Pierce Police Department (FPPD). Assistant U.S. Attorney Michael D. Porter prosecuted the case.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 24-cr-14019 and 24-cr-14035.

###

MIL Security OSI –

January 28, 2025

MIL-OSI Security: Waterbury Drug Trafficker Sentenced to More Than 18 Years in Federal Prison

Source: Office of United States Attorneys

Marc H. Silverman, Acting United States Attorney for the District of Connecticut, announced that GAWAYNE FISHER, also known as “Fruit” and “Tank,” 49, of Waterbury, was sentenced today by U.S. District Judge Victor A. Bolden in New Haven to 217 months of imprisonment, followed by five years of supervised release, for heading a large-scale drug trafficking ring while on federal supervised release.

According to court documents and statements made in court, in August 2009, Fisher was sentenced in New Haven federal court to 10 years of imprisonment and eight years of supervised release for cocaine trafficking offenses. He was released from prison in February 2015.

In 2022, the DEA New Haven Task Force, the DEA Tactical Diversion Squad, the Waterbury Police Department, and other law enforcement agencies determined that Fisher was trafficking narcotics while on federal supervised release. The investigation, which included court-authorized wiretaps on multiple phones, physical surveillance, and controlled purchases of narcotics, revealed that Fisher and others were selling large quantities of heroin, fentanyl, and cocaine, as well as counterfeit oxycodone and alprazolam (Xanax) pills.

Fisher and three of his associates were arrested on April 13, 2023. On that date, a search of a West Main Street apartment in Waterbury that Fisher used as a stash location revealed approximately 16 kilograms of cocaine, three kilograms of fentanyl, 125,000 individual glassine bags containing fentanyl, and $7,574 in cash. A search of Fisher’s residence on Beverly Avenue in Waterbury, and his vehicle, revealed approximately $175,110 in cash. In addition, a search of a residence on Yale Street in Waterbury that Fisher’s co-conspirator used as a stash location revealed drug-processing equipment, approximately three kilograms of loose fentanyl, and approximately 75,000 individual bags containing fentanyl.

Fisher has been detained since his arrest. On January 11, 2024, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 400 grams or more of fentanyl and five kilograms or more of cocaine, and one count of money laundering.

Judge Bolden sentenced Fisher to 180 months of imprisonment for the narcotics trafficking and money laundering offenses, and a consecutive 37 months of imprisonment for violating the conditions of his supervised release.

This investigation was conducted by the DEA New Haven Task Force, the DEA Tactical Diversion Squad, and the Waterbury Police Department, with the assistance of the Federal Bureau of Investigation, U.S. Marshals Service, Connecticut State Police, Internal Revenue Service – Criminal Investigation Division, and the New Haven, Naugatuck, Ansonia, West Haven, Meriden, East Haven, Branford, Shelton, and Bristol Police Departments.

This case is being prosecuted by Assistant U.S. Attorney Natasha M. Freismuth through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts, and dismantles drug traffickers, money launderers, gangs, and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state, and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

MIL Security OSI –

January 28, 2025

MIL-OSI Security: Two Lancaster Men Sentenced On Money Laundering Offenses

Source: Office of United States Attorneys

HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Christopher Lopez, age 41, and Michael Torres, age 43, both of Lancaster, Pennsylvania, were sentenced on January 23, 2025, by United States District Court Judge Jennifer P. Wilson on money laundering charges. Lopez received a sentence of one year and one day in prison and Torres was sentenced to six months in prison. Both defendants were ordered to serve one year on supervised release following completion of their prison terms.

According to Acting United States Attorney John C. Gurganus, Lopez owned C&D Motorsports, a car dealership located in Lancaster, where Torres was employed as a salesperson. Agents with the Internal Revenue Service, Criminal Investigation (IRS-CI) began investigating C&D Motorsports and Lopez in 2019 after receiving reports that C&D Motorsports catered to known drug traffickers who were known to have purchased vehicles from the dealership, and that the dealership had not been filing currency transaction reports for cash sales in excess of $10,000, as required by federal law.

IRS-CI conducted an undercover operation during which agents purported to be a drug trafficker and his girlfriend. The undercover agents met with Torres and Lopez at C&D Motorsports on October 16, 2019, and discussed purchasing a vehicle using cash from drug trafficking and ensuring that the vehicle would be put in the girlfriend’s name and that the drug trafficker’s name would be omitted from paperwork filed in connection with the sale. On December 11, 2019, the undercover agents returned to C&D Motorsports to meet with both Torres and Lopez to complete a cash purchase of a vehicle, which Lopez and Torres caused to be titled in a third party’s name. A federal grand jury returned an indictment in February 2022, charging Lopez and Torres with conspiring to commit money laundering involving proceeds represented to have been from drug trafficking.

Following a four-day trial in February 2024, a jury found both Lopez and Torres guilty of conspiring together to accept more than $33,000 in cash proceeds that were represented to be from the sale of cocaine, and to conceal the nature, source, ownership, and control of those proceeds by having the vehicle titled in a third party’s name.

“IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money,” stated Amy MacNeely, Acting Special Agent in Charge, IRS-Criminal Investigation, Philadelphia Field Office.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

The case was investigated by the IRS Criminal Investigation and the Drug Enforcement Administration. Assistant U.S. Attorneys Christian Haugsby and Joseph Terz prosecuted the case.

# # #

MIL Security OSI –

January 28, 2025

MIL-OSI: Capital Bancorp, Inc. Announces 4Q and Full Year 2024 Results; Successful Close of the IFH Acquisition; Robust Organic Loan and Deposit Growth; Diversified Business Model Drives Strong Performance

Source: GlobeNewswire (MIL-OSI)

Fourth Quarter 2024 Results

Net Income of $7.5 million, or $0.45 per share, and return on average assets of 0.96%
- Net Income of $15.5 million, or $0.92 per share, and return on average assets of 1.97% as adjusted to exclude the impact of merger-related expenses, initial Integrated Financial Holdings, Inc. (“IFH”) Allowance for Credit Losses (“ACL”) provision, and a non-recurring legacy IFH equity and debt investment write-down (non-GAAP)⁽¹⁾
Tangible Book Value Per Share⁽¹⁾ of $18.77, decreased 6.8%, or $1.36 as compared to $20.13 (3Q 2024), resulting from the acquisition of IFH and related purchase accounting impacts
Return on average equity of 8.50%, and return on average tangible common equity⁽¹⁾ of 9.47%
- Core return on average equity⁽¹⁾ of 17.68%, and core return on average tangible common equity⁽¹⁾ of 19.19%
Net Interest Income increased $6.0 million, or 15.6% (not annualized), from 3Q 2024
Net Interest Margin (“NIM”) decreased to 5.87% as compared to 6.41% (3Q 2024)
- Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)⁽¹⁾ decreased to 4.05% as compared to 4.08% (3Q 2024)
- Net purchase accounting accretion of $0.7 million for 4Q 2024 accounted for 9 basis points of the reported 5.87% NIM and 10 basis points of the reported 4.05% core NIM, respectively
Fee Revenue (noninterest income) totaled $11.9 million, or 21.2% of total revenue for 4Q 2024
- Core Fee Revenue of $14.5 million, or 24.7% of total core revenue, increased $7.9 million from 3Q 2024, excluding a non-recurring equity and debt investment write-down of $2.6 million (non-GAAP)⁽¹⁾, primarily due to the acquisition of IFH
Gross Loan Growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q 2024
- Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024
Total Deposit Growth in the quarter of $575.7 million includes $459.0 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q 2024
- Noninterest bearing deposits increased $92.8 million, or 51.4% annualized from 3Q 2024
The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024 including 1.44% for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million impact from the acquisition of the IFH portfolio.
Cash Dividend of $0.10 per share declared by the Board of Directors

ROCKVILLE, Md., Jan. 27, 2025 (GLOBE NEWSWIRE) — Capital Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the “Bank”), today reported net income of $7.5 million, or $0.45 per diluted share, for the fourth quarter 2024, compared to net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, and $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023. On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Net income for the fourth quarter 2024 would have been $15.5 million, or $0.92 per diluted share if adjusted to exclude the impact of merger-related expenses, the initial IFH ACL provision, and a non-recurring equity and debt investment write down (non-GAAP)⁽¹⁾, compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on February 26, 2025 to shareholders of record on February 10, 2025.

“We are pleased to have successfully closed our acquisition of Integrated Financial Holdings, and we are now focused on merger integration and executing on the opportunities from our complementary lines of business,” said Ed Barry, CEO of the Company and the Bank. “We continue to benefit from our diversified business model which is driving growth across our platforms.”

“The really strong performance of the commercial bank during the quarter was highlighted by record loan growth, solid deposit growth, and stable core net interest margin. I am particularly pleased by the growth of our commercial and industrial loans,” said Steven J. Schwartz, Chairman of the Company. “This outstanding organic growth is expected to continue to be a major contributing factor in our overall earnings growth in 2025 and beyond. The acquisition of IFH, while creating a lot of noise in the financial results of the 4th quarter, provides us with a new line of business – loan servicing, processing, and packaging – and a significant expansion of our government-guaranteed lending platform.”

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

Acquisition of Integrated Financial Holdings, Inc.
On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Pursuant to the terms of the Merger Agreement, each share of IFH’s common stock, par value $1.00 per share (“IFH Common Stock”) was converted into the right to receive (a) 1.115 shares of common stock of the Company, par value $0.01 per share (“Capital Common Stock”); and (b) $5.36 in cash per share of IFH Common Stock held immediately prior to the Effective Time, in addition to cash in lieu of fractional shares. In addition, each stock option granted by IFH to purchase shares of IFH Common Stock, whether vested or unvested, outstanding immediately prior to the Effective Time, was assumed by the Company and converted into an equivalent option to purchase Capital Common Stock, with the same terms and conditions as applied to the IFH stock option.

Total assets, including purchase accounting adjustments, of $559.4 million acquired in connection with the IFH acquisition included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

During 2024, the Company incurred pre-tax merger-related expenses of $3.9 million, including expenses totaling $2.6 million for the fourth quarter 2024, generally consistent with modeled expectations.

The fourth quarter earnings were also impacted by pre-tax provision credit losses on acquired loans of $4.2 million (“Initial IFH ACL Provision”) along with a non-recurring $2.6 million write-down of a legacy IFH equity and debt investment in a start-up. The net remaining value of the equity and debt investment is $0.2 million at December 31, 2024.

The following table provides a reconciliation of the Company’s net income under GAAP to non-GAAP results excluding merger-related expenses, Initial IFH ACL Provision, and the non-recurring equity and debt write-down.

	Fourth Quarter 2024								Third Quarter 2024
(in thousands, except per share data)	Income Before Income Taxes		Income Tax Expense		Net Income		Diluted Earnings per Share		Income Before Income Taxes		Income Tax Expense(Benefit)			Net Income		Diluted Earnings per Share
GAAP Earnings	$	10,776	$	3,243	$	7,533	$	0.45	$	11,499	$	2,827		$	8,672	$	0.62
Add: Merger-Related Expenses		2,615		464		2,151				520		(37	)		557
Add: Non-recurring Equity and Debt Investment Write-Down		2,620		—		2,620				—		—			—
Add: Initial IFH ACL Provision		4,194		1,025		3,169				—		—			—
Non-GAAP Earnings	$	20,205	$	4,732	$	15,473	$	0.92	$	12,019	$	2,790		$	9,229	$	0.66

	Year Ended December 31, 2024
(in thousands, except per share data)	Income Before Income Taxes		Income Tax Expense		Net Income		Diluted Earnings per Share
GAAP Earnings	$	41,832	$	10,860	$	30,972	$	2.11
Add: Merger-Related Expenses		3,930		622		3,308
Add: Non-recurring Equity and Debt Investment Write-Down		2,620		—		2,620
Add: Initial IFH ACL Provision		4,194		1,025		3,169
Non-GAAP Earnings	$	52,576	$	12,507	$	40,069	$	2.73

^{Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.}

Fourth Quarter 2024 Highlights

Earnings Summary

Net income of $7.5 million, or $0.45 per diluted share, decreased $1.1 million compared to $8.7 million, or $0.62 per diluted share, for the third quarter 2024. Net income of $15.5 million, or $0.92 per diluted share, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision and a $2.6 million non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾ for the fourth quarter 2024 compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

Net interest income of $44.3 million increased $6.0 million, or 15.6%, compared to the third quarter 2024.
- Interest income of $61.7 million increased $9.1 million, or 17.3%, over the third quarter 2024, primarily from $7.9 million in portfolio loan interest income, as growth in average balances increased $539.3 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.3 million, as average balances increased $49.1 million to $140.2 million. Interest income included $0.7 million from net purchase accounting amortization.
- Interest expense of $17.4 million increased $3.1 million, or 21.9% over the third quarter 2024 due to increases in time deposits and borrowed funds of $2.7 million and $0.6 million, respectively, offset by a decrease in customer money market deposits of $0.3 million. Average balances increased $367.8 million, $53.5 million and $65.3 million, respectively. Interest expense included $1.4 million from net purchase accounting accretion.
The provision for credit losses was $7.8 million, an increase of $4.1 million from the third quarter 2024, which included the Initial IFH ACL Provision of $4.2 million, $2.4 million from organic commercial portfolio loan growth and $1.2 million from OpenSky provision in the quarter. Net charge-offs totaled $2.4 million, a $0.2 million decrease over the third quarter 2024, including $2.1 million from credit card related loans. At December 31, 2024, the allowance for credit losses to total loans ratio was 1.85%, up 34 basis points from the ratio at September 30, 2024 due to the initial purchase credit deteriorated (“PCD”) credit mark and initial non-PCD ACL provision. Excluding IFH, legacy Capital Bank ACL coverage ratio was 1.44%, a decrease of 7 basis points from the third quarter 2024.

Earnings Summary (Continued)

Noninterest income of $11.9 million increased $5.3 million as compared to the third quarter 2024 primarily due to contributions from the IFH acquisition. Government loan servicing revenue (Windsor) totaled $4.0 million, government lending revenue totaled $2.3 million and loan servicing rights totaled $1.0 million, offset by a non-recurring equity and debt write-down of $2.6 million related to an IFH investment. Other income increased $1.0 million including $0.9 million related to an investment in an SBIC, while credit card fees declined $0.3 million.
Noninterest expense of $37.5 million increased $7.8 million as compared to the third quarter 2024, primarily from the IFH acquisition. Noninterest expense of $34.9 million, excluding merger-related expenses of $2.6 million, increased $5.7 million as compared to the third quarter 2024. Highlights include:
- The fourth quarter 2024 includes $0.3 million of intangible amortization resulting from the transaction.
- Salaries and employee benefits expenses of $16.5 million increased $3.2 million, primarily related to the acquisition of IFH.
- Occupancy and equipment expenses of $3.0 million increased $1.2 million, primarily related to increased contract expense from the IFH acquisition of $0.5 million and software depreciation of $0.4 million.
- Estimated total cost synergies resulting from the acquisition totaled $1.5 million in the fourth quarter 2024, generally consistent with modeled expectations.
Income tax expense of $3.2 million, or 30.1% of pre-tax income for the fourth quarter 2024, increased $0.4 million from $2.8 million, or 24.6% of pre-tax income for the third quarter 2024. The elevated tax rate in the quarter resulted from non-deductibility of an equity and debt write-down along with some merger-related expenses. Excluding merger-related expenses and the non-recurring equity and debt write-down, the effective income tax rate for the fourth quarter 2024 would have been 22.6%.

Balance Sheet

Total assets of $3.2 billion at December 31, 2024 increased $646.1 million, or 25.2% (not annualized), from September 30, 2024. Total assets, including $559.4 million acquired with the IFH acquisition, net of purchase accounting, included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

Cash and cash equivalents of $205.3 million at December 31, 2024 increased $48.6 million from September 30, 2024.
Total portfolio loans of $2.6 billion at December 31, 2024 increased $522.6 million, or 24.8% (not annualized) from September 30, 2024. Total average loans increased $539.3 million quarter over quarter.
- Owner-occupied commercial real estate loans increased $88.6 million, or 25.2% (not annualized) from September 30, 2024.
- The average portfolio loans-to-deposit ratio of 99.27% for the three months ended December 31, 2024 remained stable.
Total deposits of $2.8 billion at December 31, 2024 increased $575.7 million, or 26.3% (not annualized), from September 30, 2024. The increase includes $190.6 million of customer time deposits, $92.8 million of noninterest-bearing deposits primarily related to growth in title company deposit balances, $130.2 million of growth in customer money market deposits and $180.0 million of growth in brokered time deposits, partially offset by a decrease in interest-bearing demand accounts of $27.6 million.
- Insured and protected deposits were approximately $1.6 billion as of December 31, 2024, representing 57.1% of the Company’s deposit portfolio.
- Low and no interest bearing deposits of $1.1 billion, 38.5% of deposits, increased $74.9 million, or 7.6% (not annualized) from September 30, 2024. Average noninterest-bearing deposits of $729.9 million increased $49.2 million, or 7.2% (not annualized), and represented 27.9% of total average deposits at December 31, 2024.
The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $223.6 million, or 7.0% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 57% of the overall investment portfolio at December 31, 2024. The accumulated other comprehensive income (loss) on the investment securities portfolio increased $2.9 million during the quarter to ($11.5 million) as of December 31, 2024, which represents 3.2% of total stockholders’ equity. The Company does not have a held-to-maturity investment securities portfolio.
Liquidity – The Company maintains stable and reliable sources of available borrowings, generally consistent with prior quarter. Sources of available borrowings at December 31, 2024 totaled $803.0 million, including available collateralized lines of credit of $595.7 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $131.4 million.
Capital Positions – As of December 31, 2024, the Company reported a common equity tier 1 capital ratio of 13.74%, compared to 14.78% at September 30, 2024. At December 31, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.

Financial Metrics

Net Interest Margin – Net interest margin decreased 54 basis points to 5.87% for the three months ended December 31, 2024, compared to prior quarter. Core net interest margin, as adjusted to exclude the impact of OpenSky^™ credit card loans (non-GAAP)⁽¹⁾, decreased 3 basis points to 4.05% as compared to prior quarter. Net purchase accounting accretion for the fourth quarter 2024 was 9 basis points and 10 basis points for NIM and core NIM, respectively.

The average yield on interest earning assets of 8.17% decreased 62 basis points compared to the prior quarter, including 40 basis points from inclusion of IFH commercial assets. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky^™ credit card loans (non-GAAP)⁽¹⁾, of 6.98% for the fourth quarter 2024, decreased 17 basis points, primarily as a consequence of reduced market interest rates.
The total cost of deposits decreased 14 basis points to 2.50% for the fourth quarter 2024 as compared to the prior quarter. The total cost of interest-bearing deposits decreased 46 basis points to 3.46% for the fourth quarter 2024 as compared to the prior quarter.

Efficiency Ratios – The efficiency ratio was 66.7% for the three months ended December 31, 2024, compared to 66.1% for the three months ended September 30, 2024. The efficiency ratio was 59.3%, as adjusted to exclude the impact of merger-related expenses and a non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾, for the three months ended December 31, 2024 compared to 64.9% for the three months ended September 30, 2024.

Credit Metrics and Asset Quality – The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024, an increase of 34 basis points from September 20, 2024, which includes a 1.44% ACL coverage ratio for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million reserve on the $373.5 million IFH loan portfolio. Underlying credit performance and metrics were relatively stable and consistent with prior quarter when excluding the impact of the combination with IFH.

Nonperforming assets increased 34 basis points to 0.94% of total assets at December 31, 2024 as compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased $14.8 million to $30.2 million compared to September 30, 2024. At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

Performance Ratios – Annualized return on average assets (“ROAA”) and annualized return on average equity (“ROAE”), and ROATCE were 0.96%, 8.50%, and 9.47% respectively, for the three months ended December 31, 2024, compared to 1.42%, 12.59%, and 12.59% respectively, for the three months ended September 30, 2024.

Annualized ROAA, annualized ROAE, and annualized ROATCE were 1.97%, 17.46%, and 19.19% respectively, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision, and a non-recurring equity and debt investment write-down (non-GAAP)⁽¹⁾, for the three months ended December 31, 2024, compared to 1.51%, 13.40%, and 13.40% respectively, for the three months ended September 30, 2024.

Tangible Book Value – Book value per common share of $21.31 at December 31, 2024 increased $1.19 when compared to September 30, 2024. Tangible book value per common share⁽¹⁾ decreased $1.36, or 6.8%, to $18.77 at December 31, 2024 when compared to September 30, 2024. Tangible book value was impacted by the purchase accounting adjustments made in consequence of the IFH acquisition. The Company did not have goodwill or other intangible assets prior to the fourth quarter 2024. Therefore, tangible book value per share⁽¹⁾ was equal to book value per share for periods prior to the fourth quarter 2024.

Commercial Bank

Continued Portfolio Loan Growth – Gross portfolio loans, excluding OpenSky^™ credit card loans, increased $522.9 million, to $2.5 billion, at December 31, 2024 compared to September 30, 2024.

The $522.9 million gross portfolio loan growth includes commercial real estate loans of $156.4 million, residential real estate loans of $64.9 million and commercial and industrial loans of $282.7 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.

Net Interest Income – Interest income of $45.2 million increased $9.4 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $17.1 million increased $3.1 million, driven by an increase in average balances in the fourth quarter 2024.

Credit Metrics – Nonperforming assets, comprised solely of nonaccrual loans, increased 34 basis point to 0.94% of total assets at December 31, 2024 compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased to $30.2 million compared to $15.5 million at September 30, 2024 due primarily to the acquisition of IFH.

Classified and Criticized Loans – At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

OpenSky^™

Revenues – Total revenue of $19.2 million decreased $0.5 million from the prior quarter. Interest income of $15.5 million decreased $0.2 million from the prior quarter. Average OpenSky^™ credit card loan balances, net of reserves and deferred fees of $121.0 million for the fourth quarter 2024, increased $1.5 million, or 1.3% (not annualized), compared to prior quarter. Noninterest income of $3.7 million decreased $0.4 million as compared to the prior quarter, primarily related to lower annual fee income.

Noninterest Expense – Total noninterest expense of $12.6 million decreased $0.7 million, primarily related to a reduction in quarterly advertising expense.

Loan and Deposit Balances – Loan balances, net of reserves, of $127.8 million at December 31, 2024 increased by $0.7 million, or 0.5%, compared to $127.1 million at September 30, 2024. Corresponding deposit balances of $166.4 million at December 31, 2024 decreased $4.4 million, or 2.6%, compared to $170.8 million at September 30, 2024. Gross unsecured loan balances of $42.4 million at December 31, 2024 increased $2.7 million, or 6.8%, compared to $39.7 million at September 30, 2024. During the fourth quarter 2024, the number of credit card accounts increased by 3,614 to 552,566 from September 30, 2024.

OpenSky^™Credit – Portfolio credit metrics continue to be generally consistent with modeled expectations during the fourth quarter 2024. The provision for credit losses of $1.2 million decreased $1.1 million when compared to the prior quarter.

Capital Bank Home Loans

Originations of loans held for sale totaled $90.0 million during the fourth quarter, with $77.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.9 million, representing a 2.45% of gain on sale as a percentage of total loans sold.

Windsor Advantage

Windsor Advantage is a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. Windsor Advantage generates fee income for the Company in connection with its servicing, processing and packaging of such loans for its financial institution clients.

Fee Income – Gross government loan servicing revenue totaled $4.6 million, including $0.5 million of Capital Bank related servicing fees, during the fourth quarter 2024. Windsor’s total servicing portfolio was $2.5 billion at December 31, 2024.

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited

	Quarter Ended									4Q24 vs 3Q24					4Q24 vs 4Q23
(in thousands, except per share data)	December 31, 2024			September 30, 2024			December 31, 2023			$ Change			% Change		$ Change			% Change
Earnings Summary
Interest income	$	61,707		$	52,610		$	46,969		$	9,097		17.3	%	$	14,738		31.4	%
Interest expense		17,380			14,256			12,080			3,124		21.9	%		5,300		43.9	%
Net interest income		44,327			38,354			34,889			5,973		15.6	%		9,438		27.1	%
Provision for credit losses		7,828			3,748			2,808			4,080		108.9	%		5,020		178.8	%
Provision for (release of) credit losses on unfunded commitments		122			17			(106	)		105		617.6	%		228		(215.1	)%
Noninterest income		11,913			6,635			5,936			5,278		79.5	%		5,977		100.7	%
Noninterest expense		37,514			29,725			26,907			7,789		26.2	%		10,607		39.4	%
Income before income taxes		10,776			11,499			11,216			(723	)	(6.3	)%		(440	)	(3.9	)%
Income tax expense		3,243			2,827			2,186			416		14.7	%		1,057		48.4	%
Net income	$	7,533		$	8,672		$	9,030		$	(1,139	)	(13.1	)%	$	(1,497	)	(16.6	)%

Pre-tax pre-provision net revenue (“PPNR”) ⁽¹⁾	$	18,726		$	15,264		$	13,918		$	3,462		22.7	%	$	4,808		34.5	%
PPNR, as adjusted⁽¹⁾	$	23,961		$	15,784		$	13,918		$	8,177		51.8	%	$	10,043		72.2	%

Common Share Data
Earnings per share – Basic	$	0.45		$	0.62		$	0.65		$	(0.17	)	(27.4	)%	$	(0.20	)	(30.8	)%
Earnings per share – Diluted	$	0.45		$	0.62		$	0.65		$	(0.17	)	(27.4	)%	$	(0.20	)	(30.8	)%
Earnings per share – Diluted, as adjusted⁽¹⁾	$	0.92		$	0.66		$	0.65		$	0.26		39.4	%	$	0.27		41.5	%
Weighted average common shares – Basic		16,595			13,914			13,897
Weighted average common shares – Diluted		16,729			13,951			13,989

Return Ratios
Return on average assets (annualized)		0.96	%		1.42	%		1.63	%
Return on average assets, as adjusted (annualized)⁽¹⁾		1.97	%		1.51	%		1.63	%
Return on average equity (annualized)		8.50	%		12.59	%		14.44	%
Return on average equity, as adjusted (annualized)⁽¹⁾		17.46	%		13.40	%		14.44	%
Return on average tangible common equity (annualized)⁽¹⁾		9.47	%		12.59	%		14.44	%
Core return on average equity, as adjusted (annualized)⁽¹⁾		17.68	%		13.40	%		14.44	%
Core return on average tangible common equity, as adjusted (annualized)⁽¹⁾		19.19	%		13.40	%		14.44	%

______________
⁽¹⁾ Refer to Appendix for reconciliation of non-GAAP measures.

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)

	Year Ended
	December 31,
(in thousands, except per share data)		2024			2023		$ Change			% Change
Earnings Summary
Interest income	$	213,301		$	183,206		$	30,095		16.4	%
Interest expense		58,555			41,680			16,875		40.5	%
Net interest income		154,746			141,526			13,220		9.3	%
Provision for credit losses		17,720			9,610			8,110		84.4	%
Provision for (release of) credit losses on unfunded commitments		385			(101	)		486		(481.2	)%
Noninterest income		31,410			24,975			6,435		25.8	%
Noninterest expense		126,219			110,767			15,452		14.0	%
Income before income taxes		41,832			46,225			(4,393	)	(9.5	)%
Income tax expense		10,860			10,354			506		4.9	%
Net income	$	30,972		$	35,871		$	(4,899	)	(13.7	)%

Pre-tax pre-provision net revenue (“PPNR”) ⁽¹⁾	$	59,937		$	55,734		$	4,203		7.5	%
PPNR, as adjusted⁽¹⁾	$	66,487		$	55,734		$	10,753		19.3	%

Common Share Data
Earnings per share – Basic	$	2.12		$	2.56		$	(0.44	)	(17.2	)%
Earnings per share – Diluted	$	2.11		$	2.55		$	(0.44	)	(17.3	)%
Earnings per share – Diluted, as adjusted⁽¹⁾	$	2.73		$	2.55
Weighted average common shares – Basic		14,584			14,003
Weighted average common shares – Diluted		14,660			14,081

Return Ratios
Return on average assets (annualized)		1.21	%		1.64	%
Return on average assets, as adjusted (annualized)⁽¹⁾		1.57	%		1.64	%
Return on average equity (annualized)		10.78	%		14.91	%
Return on average equity, as adjusted (annualized)⁽¹⁾		13.94	%		14.91	%

______________
⁽¹⁾ Refer to Appendix for reconciliation of non-GAAP measures.

COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)

	Quarter Ended							Quarter Ended
	December 31,							September 30,		June 30,		March 31,
(in thousands, except per share data)		2024		2023	% Change				2024		2024		2024
Balance Sheet Highlights
Assets	$	3,206,911	$	2,226,176		44.1	%	$	2,560,788	$	2,438,583	$	2,324,238
Investment securities available-for-sale		223,630		208,329		7.3	%		208,700		207,917		202,254
Mortgage loans held for sale		21,270		7,481		184.3	%		19,554		19,219		10,303
Portfolio loans receivable ⁽²⁾		2,630,163		1,903,288		38.2	%		2,107,522		2,021,588		1,964,525
Allowance for credit losses		48,652		28,610		70.1	%		31,925		30,832		29,350
Deposits		2,761,939		1,895,996		45.7	%		2,186,224		2,100,428		2,005,695
FHLB borrowings		22,000		22,000		—	%		52,000		32,000		22,000
Other borrowed funds		12,062		27,062		(55.4	)%		12,062		12,062		12,062
Total stockholders’ equity		355,139		254,860		39.3	%		280,111		267,854		259,465
Tangible common equity ⁽¹⁾		312,685		254,860		22.7	%		280,111		267,854		259,465

Common shares outstanding		16,662		13,923		19.7	%		13,918		13,910		13,890
Book value per share	$	21.31	$	18.31		16.4	%	$	20.13	$	19.26	$	18.68
Tangible book value per share ⁽¹⁾	$	18.77	$	18.31		2.5	%	$	20.13	$	19.26	$	18.68
Dividends per share	$	0.10	$	0.08		25.0	%	$	0.10	$	0.08	$	0.08

______________
⁽¹⁾ Refer to Appendix for reconciliation of non-GAAP measures.
⁽²⁾ Loans are reflected net of deferred fees and costs.

Consolidated Statements of Income (Unaudited)
	Three Months Ended												Year Ended
(in thousands)	December 31, 2024			September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023			December 31, 2024			December 31, 2023
Interest income
Loans, including fees	$	58,602		$	50,047	$	48,275	$	45,991	$	45,109		$	202,915		$	174,760
Investment securities available-for-sale		1,539			1,343		1,308		1,251		1,083			5,441			4,815
Federal funds sold and other		1,566			1,220		1,032		1,127		777			4,945			3,631
Total interest income		61,707			52,610		50,615		48,369		46,969			213,301			183,206

Interest expense
Deposits		16,385			13,902		13,050		12,833		11,759			56,170			39,625
Borrowed funds		995			354		508		528		321			2,385			2,055
Total interest expense		17,380			14,256		13,558		13,361		12,080			58,555			41,680

Net interest income		44,327			38,354		37,057		35,008		34,889			154,746			141,526
Provision for credit losses		7,828			3,748		3,417		2,727		2,808			17,720			9,610
Provision for (release of) credit losses on unfunded commitments		122			17		104		142		(106	)		385			(101	)
Net interest income after provision for credit losses		36,377			34,589		33,536		32,139		32,187			136,641			132,017
Noninterest income
Service charges on deposits		241			235		200		207		240			883			964
Credit card fees		3,733			4,055		4,330		3,881		3,970			15,999			17,273
Mortgage banking revenue		1,821			1,882		1,990		1,453		1,166			7,146			4,896
Government lending revenue		2,301			—		—		—		—			2,301			—
Government loan servicing revenue		3,993			—		—		—		—			3,993			—
Loan servicing rights (government guaranteed)		1,013			—		—		—		—			1,013			—
Non-recurring equity and debt investment write-down		(2,620	)		—		—		—		—			(2,620	)		—
Other income		1,431			463		370		431		560			2,695			1,842
Total noninterest income		11,913			6,635		6,890		5,972		5,936			31,410			24,975
Noninterest expenses
Salaries and employee benefits		16,513			13,345		13,272		12,907		11,638			56,037			48,754
Occupancy and equipment		2,976			1,791		1,864		1,613		1,573			8,244			5,673
Professional fees		2,150			1,980		1,769		1,947		1,930			7,846			9,270
Data processing		7,210			6,930		6,788		6,761		6,128			27,689			25,686
Advertising		1,032			1,223		2,072		2,032		1,433			6,359			6,161
Loan processing		969			615		476		371		198			2,431			1,633
Foreclosed real estate expenses, net		—			1		—		1		—			2			7
Merger-related expenses		2,615			520		83		712		—			3,930			—
Operational losses		993			1,008		782		931		1,490			3,714			4,613
Other operating		3,056			2,312		2,387		2,212		2,517			9,967			8,970
Total noninterest expenses		37,514			29,725		29,493		29,487		26,907			126,219			110,767
Income before income taxes		10,776			11,499		10,933		8,624		11,216			41,832			46,225
Income tax expense		3,243			2,827		2,728		2,062		2,186			10,860			10,354
Net income	$	7,533		$	8,672	$	8,205	$	6,562	$	9,030		$	30,972		$	35,871

Consolidated Balance Sheets
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(audited)
(in thousands, except share data)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Assets
Cash and due from banks	$	25,433		$	23,462		$	19,294		$	12,361		$	14,513
Interest-bearing deposits at other financial institutions		179,841			133,180			117,160			72,787			39,044
Federal funds sold		58			58			57			56			407
Total cash and cash equivalents		205,332			156,700			136,511			85,204			53,964
Investment securities available-for-sale		223,630			208,700			207,917			202,254			208,329
Restricted investments		4,479			5,895			4,930			4,441			4,353
Loans held for sale		21,270			19,554			19,219			10,303			7,481
Portfolio loans receivable, net of deferred fees and costs		2,630,163			2,107,522			2,021,588			1,964,525			1,903,288
Less allowance for credit losses		(48,652	)		(31,925	)		(30,832	)		(29,350	)		(28,610	)
Total portfolio loans held for investment, net		2,581,511			2,075,597			1,990,756			1,935,175			1,874,678
Premises and equipment, net		15,525			5,959			5,551			4,500			5,069
Accrued interest receivable		16,664			12,468			12,162			12,258			11,494
Goodwill		21,126			—			—			—			—
Intangible assets		14,072			—			—			—			—
Loan servicing assets		5,511			—			—			—			—
Deferred tax asset		16,670			10,748			12,150			12,311			12,252
Bank owned life insurance		43,956			38,779			38,414			38,062			37,711
Other assets		37,165			26,388			10,973			19,730			10,845
Total assets	$	3,206,911		$	2,560,788		$	2,438,583		$	2,324,238		$	2,226,176

Liabilities
Deposits
Noninterest-bearing	$	810,928		$	718,120		$	684,574		$	665,812		$	617,373
Interest-bearing		1,951,011			1,468,104			1,415,854			1,339,883			1,278,623
Total deposits		2,761,939			2,186,224			2,100,428			2,005,695			1,895,996
Federal Home Loan Bank advances		22,000			52,000			32,000			22,000			22,000
Other borrowed funds		12,062			12,062			12,062			12,062			27,062
Accrued interest payable		9,393			8,503			6,573			6,009			5,583
Other liabilities		46,378			21,888			19,666			19,007			20,675
Total liabilities		2,851,772			2,280,677			2,170,729			2,064,773			1,971,316

Stockholders’ equity
Common stock		167			139			139			139			139
Additional paid-in capital		128,598			55,585			55,005			54,229			54,473
Retained earnings		237,843			232,995			225,824			218,731			213,345
Accumulated other comprehensive loss		(11,469	)		(8,608	)		(13,114	)		(13,634	)		(13,097	)
Total stockholders’ equity		355,139			280,111			267,854			259,465			254,860
Total liabilities and stockholders’ equity	$	3,206,911		$	2,560,788		$	2,438,583		$	2,324,238		$	2,226,176

The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

	Three Months Ended December 31, 2024							Three Months Ended September 30, 2024							Three Months Ended December 31, 2023
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate⁽¹⁾			Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate⁽¹⁾			Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate⁽¹⁾
	(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits	$	140,206	$	1,446		4.10	%	$	91,089	$	1,137		4.97	%	$	65,336	$	680		4.13	%
Federal funds sold		58		—		—			57		1		6.98			1,574		21		5.29
Investment securities available-for-sale		236,951		1,539		2.58			221,303		1,343		2.41			223,132		1,083		1.93
Restricted investments		7,292		120		6.55			4,911		82		6.64			4,518		76		6.67
Loans held for sale		25,614		193		3.00			9,967		161		6.43			4,601		83		7.16
Portfolio loans receivable⁽²⁾⁽³⁾		2,592,960		58,409		8.96			2,053,619		49,886		9.66			1,863,298		45,026		9.59
Total interest earning assets		3,003,081		61,707		8.17			2,380,946		52,610		8.79			2,162,459		46,969		8.62
Noninterest earning assets		117,026							56,924							40,020
Total assets	$	3,120,107						$	2,437,870						$	2,202,479

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	257,446		424		0.66		$	228,365		321		0.56		$	195,539		90		0.18
Savings		13,497		20		0.59			4,135		5		0.48			5,184		2		0.15
Money market accounts		763,526		7,131		3.72			698,239		7,442		4.24			680,697		7,139		4.16
Time deposits		847,618		8,810		4.13			479,824		6,134		5.09			380,731		4,528		4.72
Borrowed funds		97,116		995		4.08			43,655		354		3.23			41,823		321		3.05
Total interest-bearing liabilities		1,979,203		17,380		3.49			1,454,218		14,256		3.90			1,303,974		12,080		3.68
Noninterest-bearing liabilities:
Noninterest-bearing liabilities		58,460							28,834							27,529
Noninterest-bearing deposits		729,907							680,731							622,941
Stockholders’ equity		352,537							274,087							248,035
Total liabilities and stockholders’ equity	$	3,120,107						$	2,437,870						$	2,202,479

Net interest spread						4.68	%						4.89	%						4.94	%
Net interest income			$	44,327						$	38,354						$	34,889
Net interest margin⁽⁴⁾						5.87	%						6.41	%						6.40	%

_______________
⁽¹⁾Annualized.
⁽²⁾Includes nonaccrual loans.
⁽³⁾For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.98%, 7.15% and 6.89%, respectively.
⁽⁴⁾For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, credit card loans accounted for 182, 233 and 248 basis points of the reported net interest margin, respectively.

	Year Ended December 31,
		2024							2023
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate⁽¹⁾			Average Outstanding Balance		Interest Income/ Expense		Average Yield/ Rate⁽¹⁾
	(in thousands)
Assets
Interest earning assets:
Interest-bearing deposits	$	98,319	$	4,569		4.65	%	$	70,407	$	3,211		4.56	%
Federal funds sold		57		3		5.26			1,597		74		4.63
Investment securities available-for-sale		228,909		5,441		2.38			245,466		4,815		1.96
Restricted investments		5,563		373		6.71			5,016		346		6.90
Loans held for sale		12,121		569		4.69			5,755		382		6.64
Portfolio loans receivable⁽²⁾⁽³⁾		2,142,638		202,346		9.44			1,816,968		174,378		9.60
Total interest earning assets		2,487,607		213,301		8.57			2,145,209		183,206		8.54
Noninterest earning assets		66,442							43,090
Total assets	$	2,554,049						$	2,188,299

Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand accounts	$	221,437	$	1,003		0.45	%	$	201,194	$	298		0.15	%
Savings		6,732		27		0.40			5,768		8		0.14
Money market accounts		704,002		28,741		4.08			642,013		23,510		3.66
Time deposits		561,369		26,399		4.70			360,464		15,809		4.39
Borrowed funds		63,686		2,385		3.74			59,302		2,055		3.47
Total interest-bearing liabilities		1,557,226		58,555		3.76			1,268,741		41,680		3.29
Noninterest-bearing liabilities:
Noninterest-bearing liabilities		34,043							24,026
Noninterest-bearing deposits		675,360							655,013
Stockholders’ equity		287,420							240,519
Total liabilities and stockholders’ equity	$	2,554,049						$	2,188,299

Net interest spread						4.81	%						5.25	%
Net interest income			$	154,746						$	141,526
Net interest margin⁽⁴⁾						6.22	%						6.60	%

⁽¹⁾Annualized.
⁽²⁾Includes nonaccrual loans.
⁽³⁾For the years ended December 31, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.03% and 6.65%, respectively.
⁽⁴⁾For the years ended December 31, 2024 and 2023, collectively, credit card loans accounted for 222 and 264 basis points of the reported net interest margin, respectively.

The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The five segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky^™ (the Company’s credit card division), Windsor Advantage and the Corporate Office.

Effective January 1, 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. These expenses are for shared services also consumed by OpenSky^™, CBHL, and Corporate. The Company performs an allocation process based on several metrics the Company believes more accurately ascribe shared service overhead to each segment. The Company believes this reflects the cost of support for each segment that should be considered in assessing segment performance. Historical information has been recast to reflect financial information consistently with the 2024 presentation.

The following schedule presents financial information for the periods indicated. Total assets are presented as of December 31, 2024, September 30, 2024, and December 31, 2023.

Segments
For the three months ended December 31, 2024
(in thousands)	Commercial Bank			CBHL			OpenSky^™		Windsor Advantage		Corporate⁽²⁾			Eliminations			Consolidated
Interest income	$	45,195		$	192		$	15,454	$	—	$	874		$	(8	)	$	61,707
Interest expense		17,086			131			—		—		171			(8	)		17,380
Net interest income		28,109			61			15,454		—		703			—			44,327
Provision for credit losses		6,651			—			1,177		—		—			—			7,828
Provision for credit losses on unfunded commitments		122			—			—		—		—			—			122
Net interest income after provision		21,336			61			14,277		—		703			—			36,377
Noninterest income (loss)		4,547			1,676			3,743		4,566		(2,619	)		—			11,913
Noninterest expense⁽¹⁾		16,539			2,377			12,595		2,670		3,333			—			37,514
Net income (loss) before taxes	$	9,344		$	(640	)	$	5,425	$	1,896	$	(5,249	)	$	—		$	10,776

Total assets	$	2,994,356		$	21,691		$	125,913	$	7,922	$	376,930		$	(319,901	)	$	3,206,911

For the three months ended September 30, 2024
(in thousands)	Commercial Bank			CBHL			OpenSky^™		Windsor Advantage		Corporate⁽²⁾			Eliminations			Consolidated
Interest income	$	35,805		$	161		$	15,625	$	—	$	1,049		$	(30	)	$	52,610
Interest expense		13,984			108			—		—		194			(30	)		14,256
Net interest income		21,821			53			15,625		—		855			—			38,354
Provision for credit losses		1,453			—			2,294		—		1			—			3,748
Provision for credit losses on unfunded commitments		17			—			—		—		—			—			17
Net interest income after provision		20,351			53			13,331		—		854			—			34,589
Noninterest income		726			1,811			4,096		—		2			—			6,635
Noninterest expense⁽¹⁾		12,422			2,395			13,276		—		1,632			—			29,725
Net income (loss) before taxes	$	8,655		$	(531	)	$	4,151	$	—	$	(776	)	$	—		$	11,499

Total assets	$	2,358,555		$	19,831		$	121,587	$	—	$	300,325		$	(239,510	)	$	2,560,788

For the three months ended December 31, 2023
(in thousands)	Commercial Bank			CBHL			OpenSky^™		Windsor Advantage		Corporate⁽²⁾			Eliminations			Consolidated
Interest income	$	30,957		$	83		$	15,035	$	—	$	964		$	(70	)	$	46,969
Interest expense		11,884			31			—		—		235			(70	)		12,080
Net interest income		19,073			52			15,035		—		729			—			34,889
Provision for (release of) credit losses		691			—			2,125		—		(8	)		—			2,808
Release of credit losses on unfunded commitments		(106	)		—			—		—		—			—			(106	)
Net interest income after provision		18,488			52			12,910		—		737			—			32,187
Noninterest income		773			1,166			3,996		—		1			—			5,936
Noninterest expense⁽¹⁾		12,303			1,617			12,669		—		318			—			26,907
Net income (loss) before taxes	$	6,958		$	(399	)	$	4,237	$	—	$	420		$	—		$	11,216

Total assets	$	2,051,945		$	8,589		$	117,477	$	—	$	277,565		$	(229,400	)	$	2,226,176

________________________
⁽¹⁾ Noninterest expense includes $6.3 million, $6.2 million, and $5.7 million in data processing expense in OpenSky’s^™ segment for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.
⁽²⁾ The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

Segments
For the year ended December 31, 2024
(in thousands)	Commercial Bank			CBHL			OpenSky^™		Windsor Advantage		Corporate⁽²⁾			Eliminations			Consolidated
Interest income	$	147,464		$	568		$	61,785	$	—	$	3,646		$	(162	)	$	213,301
Interest expense		57,536			363			—		—		818			(162	)		58,555
Net interest income		89,928			205			61,785		—		2,828			—			154,746
Provision for credit losses		10,331			—			7,329		—		60			—			17,720
Provision for credit losses on unfunded commitments		385			—			—		—		—			—			385
Net interest income after provision		79,212			205			54,456		—		2,768			—			136,641
Noninterest income (loss)		6,654			6,684			16,122		4,566		(2,616	)		—			31,410
Noninterest expense⁽¹⁾		53,429			9,377			53,245		2,670		7,498			—			126,219
Net income (loss) before taxes	$	32,437		$	(2,488	)	$	17,333	$	1,896	$	(7,346	)	$	—		$	41,832

Total assets	$	2,994,356		$	21,691		$	125,913	$	7,922	$	376,930		$	(319,901	)	$	3,206,911

For the year ended December 31, 2023
(in thousands)	Commercial Bank			CBHL			OpenSky™		Windsor Advantage		Corporate⁽²⁾			Eliminations			Consolidated
Interest income	$	116,408		$	382		$	62,476	$	—	$	4,238		$	(298	)	$	183,206
Interest expense		40,896			135			—		—		947			(298	)		41,680
Net interest income		75,512			247			62,476		—		3,291			—			141,526
Provision for credit losses		1,540			—			7,948		—		122			—			9,610
Release of credit losses on unfunded commitments		(101	)		—			—		—		—			—			(101	)
Net interest income after provision		74,073			247			54,528		—		3,169			—			132,017
Noninterest income		2,737			4,909			17,325		—		4			—			24,975
Noninterest expense⁽¹⁾		48,347			8,155			52,752		—		1,513			—			110,767
Net income (loss) before taxes	$	28,463		$	(2,999	)	$	19,101	$	—	$	1,660		$	—		$	46,225

Total assets	$	2,051,945		$	8,589		$	117,477	$	—	$	277,565		$	(229,400	)	$	2,226,176

⁽¹⁾ Noninterest expense includes $24.9 million and $23.7 million in data processing expense in OpenSky’s^™ segment for the years ended December 31, 2024 and 2023, respectively.
⁽²⁾ The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

HISTORICAL FINANCIAL HIGHLIGHTS – Unaudited
	Quarter Ended
(in thousands, except per share data)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Earnings:
Net income	$	7,533		$	8,672		$	8,205		$	6,562		$	9,030
Earnings per common share, diluted		0.45			0.62			0.59			0.47			0.65
Net interest margin		5.87	%		6.41	%		6.46	%		6.24	%		6.40	%
Net interest margin, excluding credit card loans ⁽¹⁾		4.05	%		4.08	%		4.00	%		3.85	%		3.92	%
Return on average assets⁽²⁾		0.96	%		1.42	%		1.40	%		1.15	%		1.63	%
Return on average equity⁽²⁾		8.50	%		12.59	%		12.53	%		10.19	%		14.44	%
Efficiency ratio		66.70	%		66.07	%		67.11	%		71.95	%		65.91	%

Balance Sheet:
Total portfolio loans receivable, net deferred fees	$	2,630,163		$	2,107,522		$	2,021,588		$	1,964,525		$	1,902,643
Total deposits		2,761,939			2,186,224			2,100,428			2,005,695			1,895,996
Total assets		3,206,911			2,560,788			2,438,583			2,324,238			2,226,176
Total stockholders’ equity		355,139			280,111			267,854			259,465			254,860
Total average portfolio loans receivable, net deferred fees		2,592,960			2,053,619			1,992,630			1,927,372			1,863,298
Total average deposits		2,611,994			2,091,294			2,010,736			1,957,559			1,885,092
Portfolio loans-to-deposit ratio (period-end balances)		95.23	%		96.40	%		96.25	%		97.95	%		100.35	%
Portfolio loans-to-deposit ratio (average balances)		99.27	%		98.20	%		99.10	%		98.46	%		98.84	%

Asset Quality Ratios:
Nonperforming assets to total assets		0.94	%		0.60	%		0.58	%		0.62	%		0.72	%
Nonperforming loans to total loans		1.15	%		0.73	%		0.70	%		0.73	%		0.84	%
Net charge-offs to average portfolio loans ⁽²⁾		0.37	%		0.51	%		0.39	%		0.41	%		0.53	%
Allowance for credit losses to total loans		1.85	%		1.51	%		1.53	%		1.49	%		1.50	%
Allowance for credit losses to non-performing loans		160.88	%		206.50	%		219.40	%		204.37	%		178.34	%

Bank Capital Ratios:
Total risk based capital ratio		12.82	%		13.76	%		14.51	%		14.36	%		14.81	%
Tier 1 risk based capital ratio		11.56	%		12.50	%		13.25	%		13.10	%		13.56	%
Leverage ratio		9.12	%		9.84	%		10.36	%		10.29	%		10.51	%
Common equity Tier 1 capital ratio		11.56	%		12.50	%		13.25	%		13.10	%		13.56	%
Tangible common equity		9.31	%		9.12	%		9.53	%		9.66	%		9.91	%
Holding Company Capital Ratios:
Total risk based capital ratio		15.48	%		16.65	%		16.98	%		16.83	%		17.38	%
Tier 1 risk based capital ratio		13.83	%		14.88	%		15.19	%		15.03	%		15.55	%
Leverage ratio		11.07	%		11.85	%		11.93	%		11.87	%		12.14	%
Common equity Tier 1 capital ratio		13.74	%		14.78	%		15.08	%		14.92	%		15.43	%
Tangible common equity		11.07	%		10.94	%		10.98	%		11.16	%		11.45	%

_______________
⁽¹⁾Refer to Appendix for reconciliation of non-GAAP measures.
⁽²⁾Annualized.

HISTORICAL FINANCIAL HIGHLIGHTS – Unaudited (Continued)
	Quarter Ended
(in thousands, except per share data)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Composition of Loans:
Commercial real estate, non owner-occupied	$	471,329		$	403,487		$	397,080		$	377,224		$	351,116
Commercial real estate, owner-occupied		440,026			351,462			319,370			330,840			307,911
Residential real estate		688,552			623,684			601,312			577,112			573,104
Construction real estate		321,252			301,909			294,489			290,016			290,108
Commercial and industrial		554,550			271,811			255,686			254,577			239,208
Lender finance		28,574			29,546			33,294			13,484			11,085
Business equity lines of credit		3,090			2,663			2,989			14,768			14,117
Credit card, net of reserve⁽³⁾		127,766			127,098			122,217			111,898			123,331
Other consumer loans		2,089			2,045			1,930			738			950
Portfolio loans receivable	$	2,637,228		$	2,113,705		$	2,028,367		$	1,970,657		$	1,910,930
Deferred origination fees, net		(7,065	)		(6,183	)		(6,779	)		(6,132	)		(7,642	)
Portfolio loans receivable, net	$	2,630,163		$	2,107,522		$	2,021,588		$	1,964,525		$	1,903,288

Composition of Deposits:
Noninterest-bearing	$	810,928		$	718,120		$	684,574		$	665,812		$	617,373
Interest-bearing demand		238,881			266,493			266,070			193,963			199,308
Savings		13,488			3,763			4,270			4,525			5,211
Money markets		816,708			686,526			672,455			678,435			663,129
Customer time deposits		548,901			358,300			317,911			302,319			268,619
Brokered time deposits		333,033			153,022			155,148			160,641			142,356
Total deposits	$	2,761,939		$	2,186,224		$	2,100,428		$	2,005,695		$	1,895,996

Capital Bank Home Loan Metrics:
Origination of loans held for sale	$	89,998		$	74,690		$	82,363		$	52,080		$	45,152
Mortgage loans sold		77,399			67,296			66,417			40,377			34,140
Gain on sale of loans		1,897			1,644			1,732			1,238			1,015
Purchase volume as a % of originations		90.42	%		90.98	%		96.48	%		97.83	%		89.99	%
Gain on sale as a % of loans sold⁽⁴⁾		2.45	%		2.44	%		2.61	%		3.07	%		2.97	%
Mortgage commissions	$	620		$	598		$	582		$	490		$	465

OpenSky^™Portfolio Metrics:
Open customer accounts		552,566			548,952			537,734			526,950			525,314
Secured credit card loans, gross	$	87,226		$	89,641		$	90,961		$	85,663		$	95,300
Unsecured credit card loans, gross		42,430			39,730			33,560			28,508			30,817
Noninterest secured credit card deposits		166,355			170,750			173,499			171,771			173,857

_______________
⁽³⁾Credit card loans are presented net of reserve for interest and fees.
⁽⁴⁾Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.

Appendix

Reconciliation of Non-GAAP Measures

The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.

Earnings Metrics, as Adjusted	Quarter Ended
(in thousands, except per share data)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Net Income	$	7,533		$	8,672		$	8,205		$	6,562		$	9,030
Add: Merger-Related Expenses, net of tax		2,151			557			62			538			—
Add: Non-recurring equity and debt investment write-down		2,620			—			—			—			—
Add: IFH ACL Provision, net of tax		3,169			—			—			—			—
Net Income, as Adjusted	$	15,473		$	9,229		$	8,267		$	7,100		$	9,030

Weighted Average Common Shares – Diluted		16,729			13,951			13,895			13,919			13,989
Earnings per Share – Diluted	$	0.45		$	0.62		$	0.59		$	0.47		$	0.65
Earnings per Share – Diluted, as Adjusted	$	0.92		$	0.66		$	0.59		$	0.51		$	0.65

Average Assets	$	3,120,107		$	2,437,870		$	2,353,868		$	2,299,234		$	2,202,479
Return on Average Assets⁽¹⁾		0.96	%		1.42	%		1.40	%		1.15	%		1.63	%
Return on Average Assets, as Adjusted⁽¹⁾		1.97	%		1.51	%		1.41	%		1.24	%		1.63	%

Average Equity	$	352,537		$	274,087		$	263,425		$	258,892		$	248,035
Return on Average Equity⁽¹⁾		8.50	%		12.59	%		12.53	%		10.19	%		14.44	%
Return on Average Equity, as Adjusted⁽¹⁾		17.46	%		13.40	%		12.62	%		11.03	%		14.44	%

Net Interest Income (a)	$	44,327		$	38,354		$	37,057		$	35,008		$	34,889
Noninterest Income		11,913			6,635			6,890			5,972			5,936
Total Revenue	$	56,240		$	44,989		$	43,947		$	40,980		$	40,825
Noninterest Expense	$	37,514		$	29,725		$	29,493		$	29,487		$	26,907
Efficiency Ratio⁽²⁾		66.70	%		66.07	%		67.11	%		71.95	%		65.91	%

Noninterest Income	$	11,913		$	6,635		$	6,890		$	5,972		$	5,936
Add: Non-recurring equity and debt investment write-down		2,620			—			—			—			—
Noninterest Income, as Adjusted (b)	$	14,533		$	6,635		$	6,890		$	5,972		$	5,936
Total Revenue, as Adjusted (a) + (b)	$	58,860		$	44,989		$	43,947		$	40,980		$	40,825

Noninterest Expense	$	37,514		$	29,725		$	29,493		$	29,487		$	26,907
Less: Merger-Related Expenses		2,615			520			83			712			—
Noninterest Expense, as Adjusted	$	34,899		$	29,205		$	29,410		$	28,775		$	26,907
Efficiency Ratio, as Adjusted⁽²⁾		59.29	%		64.92	%		66.92	%		70.22	%		65.91	%

_______________
⁽¹⁾Annualized.
⁽²⁾The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

Earnings Metrics, as Adjusted	Year Ended
(in thousands, except per share data)	December 31, 2024			December 31, 2023

Net Income	$	30,972		$	35,871
Add: Merger-Related Expenses, net of tax		3,308			—
Add: Non-recurring equity and debt investment write-down		2,620			—
Add: IFH ACL Provision, net of tax		3,169			—
Net Income, as Adjusted	$	40,069		$	35,871

Weighted average common shares – Diluted		14,660			14,081
Earnings per share – Diluted	$	2.11		$	2.55
Earnings per share – Diluted, as Adjusted	$	2.73		$	2.55

Average Assets	$	2,554,049		$	2,188,299
Return on Average Assets⁽¹⁾		1.21	%		1.64	%
Return on Average Assets, as Adjusted⁽¹⁾		1.57	%		1.64	%

Average Equity	$	287,420		$	240,519
Return on Average Equity⁽¹⁾		10.78	%		14.91	%
Return on Average Equity, as Adjusted⁽¹⁾		13.94	%		14.91	%

Net Interest Income (a)	$	154,746		$	141,526
Noninterest Income		31,410			24,975
Total Revenue	$	186,156		$	166,501
Noninterest Expense	$	126,219		$	110,767
Efficiency Ratio⁽²⁾		67.80	%		66.53	%

Noninterest Income	$	31,410		$	24,975
Add: Non-recurring equity and debt investment write-down		2,620			—
Noninterest Income, as Adjusted (b)	$	34,030		$	24,975
Total Revenue, as Adjusted (a) + (b)	$	188,776		$	166,501

Noninterest Expense	$	126,219		$	110,767
Less: Merger-Related Expenses		3,930			—
Noninterest Expense, as Adjusted	$	122,289		$	110,767
Efficiency Ratio, as Adjusted⁽²⁾		64.78	%		66.53	%

_______________
⁽¹⁾Annualized.
⁽²⁾The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

Net Interest Margin, as Adjusted	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Net Interest Income	$	44,327		$	38,354		$	37,057		$	35,008		$	34,889
Less: Credit Card Loan Income		15,022			15,137			15,205			14,457			14,677
Net Interest Income, as Adjusted	$	29,305		$	23,217		$	21,852		$	20,551		$	20,212
Average Interest Earning Assets		3,003,081			2,380,946			2,307,070			2,254,663			2,162,459
Less: Average Credit Card Loans		120,993			119,458			111,288			110,483			114,551
Total Average Interest Earning Assets, as Adjusted	$	2,882,088		$	2,261,488		$	2,195,782		$	2,144,180		$	2,047,908
Net Interest Margin, as Adjusted		4.05	%		4.08	%		4.00	%		3.85	%		3.92	%


Net Interest Margin, as Adjusted	Year Ended
(in thousands)	December 31, 2024			December 31, 2023

Net Interest Income	$	154,746		$	141,526
Less: Credit Card Loan Income		59,821			61,096
Net Interest Income, as Adjusted	$	94,925		$	80,430
Average Interest Earning Assets		2,487,607			2,145,209
Less: Average Credit Card Loans		115,581			114,450
Total Average Interest Earning Assets, as Adjusted	$	2,372,026		$	2,030,759
Net Interest Margin, as Adjusted		4.00	%		3.96	%

Portfolio Loans Receivable Yield, as Adjusted	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Portfolio Loans Receivable Interest Income	$	58,409		$	49,886		$	48,143		$	45,908		$	45,026
Less: Credit Card Loan Income		15,022			15,137			15,205			14,457			14,677
Portfolio Loans Receivable Interest Income, as Adjusted	$	43,387		$	34,749		$	32,938		$	31,451		$	30,349
Average Portfolio Loans Receivable		2,592,960			2,053,619			1,992,630			1,927,372			1,863,298
Less: Average Credit Card Loans		120,993			119,458			111,288			110,483			114,551
Total Average Portfolio Loans Receivable, as Adjusted	$	2,471,967		$	1,934,161		$	1,881,342		$	1,816,889		$	1,748,747
Portfolio Loans Receivable Yield, as Adjusted		6.98	%		7.15	%		7.04	%		6.96	%		6.89	%


Portfolio Loans Receivable Yield, as Adjusted	Year Ended
(in thousands)	December 31, 2024			December 31, 2023

Portfolio Loans Receivable Interest Income	$	202,346		$	174,378
Less: Credit Card Loan Income		59,821			61,096
Portfolio Loans Receivable Interest Income, as Adjusted	$	142,525		$	113,282
Average Portfolio Loans Receivable		2,142,638			1,816,968
Less: Average Credit Card Loans		115,581			114,450
Total Average Portfolio Loans Receivable, as Adjusted	$	2,027,057		$	1,702,518
Portfolio Loans Receivable Yield, as Adjusted		7.03	%		6.65	%

Pre-tax, Pre-Provision Net Revenue (“PPNR”)	Quarter Ended
(in thousands)	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023

Net Income	$	7,533	$	8,672	$	8,205	$	6,562	$	9,030
Add: Income Tax Expense		3,243		2,827		2,728		2,062		2,186
Add: Provision for Credit Losses		7,828		3,748		3,417		2,727		2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		122		17		104		142		(106	)
Pre-tax, Pre-Provision Net Revenue (“PPNR”)	$	18,726	$	15,264	$	14,454	$	11,493	$	13,918


Pre-tax, Pre-Provision Net Revenue (“PPNR”)	Year Ended
(in thousands)	December 31, 2024		December 31, 2023

Net Income	$	30,972	$	35,871
Add: Income Tax Expense		10,860		10,354
Add: Provision for Credit Losses		17,720		9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		385		(101	)
Pre-tax, Pre-Provision Net Revenue (“PPNR”)	$	59,937	$	55,734

PPNR, as Adjusted	Quarter Ended
(in thousands)	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023

Net Income	$	7,533	$	8,672	$	8,205	$	6,562	$	9,030
Add: Income Tax Expense		3,243		2,827		2,728		2,062		2,186
Add: Provision for Credit Losses		7,828		3,748		3,417		2,727		2,808
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		122		17		104		142		(106	)
Add: Merger-Related Expenses		2,615		520		83		712		—
Add: Non-recurring equity and debt investment write-down		2,620		—		—		—		—
PPNR, as Adjusted	$	23,961	$	15,784	$	14,537	$	12,205	$	13,918


PPNR, as Adjusted	Year Ended
(in thousands)	December 31, 2024		December 31, 2023

Net Income	$	30,972	$	35,871
Add: Income Tax Expense		10,860		10,354
Add: Provision for Credit Losses		17,720		9,610
Add: Provision for (Release of) Credit Losses on Unfunded Commitments		385		(101	)
Add: Merger-Related Expenses		3,930		—
Add: Non-recurring equity and debt investment write-down		2,620		—
PPNR, as Adjusted	$	66,487	$	55,734

Allowance for Credit Losses to Total Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Allowance for Credit Losses	$	48,652		$	31,925		$	30,832		$	29,350		$	28,610
Total Portfolio Loans		2,630,163			2,107,522			2,021,588			1,964,525			1,903,288
Allowance for Credit Losses to Total Portfolio Loans		1.85	%		1.51	%		1.53	%		1.49	%		1.50	%

Nonperforming Assets to Total Assets	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Total Nonperforming Assets	$	30,241		$	15,460		$	14,053		$	14,361		$	16,042
Total Assets		3,206,911			2,560,788			2,438,583			2,324,238			2,226,176
Nonperforming Assets to Total Assets		0.94	%		0.60	%		0.58	%		0.62	%		0.72	%

Nonperforming Loans to Total Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Total Nonperforming Loans	$	30,241		$	15,460		$	14,053		$	14,361		$	16,042
Total Portfolio Loans		2,630,163			2,107,522			2,021,588			1,964,525			1,903,288
Nonperforming Loans to Total Portfolio Loans		1.15	%		0.73	%		0.70	%		0.73	%		0.84	%

Net Charge-Offs to Average Portfolio Loans	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Total Net Charge-Offs	$	2,427		$	2,655		$	1,935		$	1,987		$	2,477
Total Average Portfolio Loans		2,592,960			2,053,619			1,992,630			1,927,372			1,863,298
Net Charge-Offs to Average Portfolio Loans, Annualized		0.37	%		0.51	%		0.39	%		0.41	%		0.53	%

Net Charge-offs to Average Portfolio Loans	Year Ended
(in thousands)	December 31, 2024			December 31, 2023

Total Net Charge-Offs	$	9,004		$	8,473
Total Average Portfolio Loans		2,142,638			1,816,968
Net Charge-Offs to Average Portfolio Loans, Annualized		0.42	%		0.47	%

Tangible Book Value per Share	Quarter Ended
(in thousands, except share and per share data)	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023

Total Stockholders’ Equity	$	355,139	$	280,111	$	267,854	$	259,465	$	254,860
Less: Preferred Equity		—		—		—		—		—
Less: Intangible Assets		42,454		—		—		—		—
Tangible Common Equity	$	312,685	$	280,111	$	267,854	$	259,465	$	254,860
Period End Shares Outstanding		16,662,405		13,917,891		13,910,467		13,889,563		13,922,532
Tangible Book Value per Share	$	18.77	$	20.13	$	19.26	$	18.68	$	18.31

Return on Average Tangible Common Equity	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Net Income	$	7,533		$	8,672		$	8,205		$	6,562		$	9,030
Add: Intangible Amortization, Net of Tax		198			—			—			—			—
Net Tangible Income	$	7,731		$	8,672		$	8,205		$	6,562		$	9,030
Average Equity		352,537			274,087			263,425			258,892			248,035
Less: Average Intangible Assets		27,653			—			—			—			—
Net Average Tangible Common Equity	$	324,884		$	274,087		$	263,425		$	258,892		$	248,035
Return on Average Equity		8.50	%		12.59	%		12.53	%		10.19	%		14.44	%
Return on Average Tangible Common Equity		9.47	%		12.59	%		12.53	%		10.19	%		14.44	%

Core Return on Average Tangible Common Equity	Quarter Ended
(in thousands)	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023

Net Income, as Adjusted	$	15,473		$	9,229		$	8,267		$	7,100		$	9,030
Add: Intangible Amortization, Net of Tax		198			—			—			—			—
Net Tangible Income, as Adjusted	$	15,671		$	9,229		$	8,267		$	7,100		$	9,030
Core Return on Average Equity, as Adjusted		17.68	%		13.40	%		12.62	%		11.03	%		14.44	%
Core Return on Average Tangible Common Equity, as Adjusted		19.19	%		13.40	%		12.62	%		11.03	%		14.44	%

ABOUT CAPITAL BANCORP, INC.

Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in six locations in the greater Washington, D.C. and Baltimore, Maryland markets, one bank branch in Fort Lauderdale, Florida and one bank branch in Chicago, Illinois. Capital Bancorp had assets of approximately $3.2 billion at December 31, 2024 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company’s website www.CapitalBankMD.com under its investor relations page.

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements. 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,” “optimistic,” “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 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. Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing wars in Ukraine and in the Middle East; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; the expected cost savings, synergies and other financial benefits from the acquisition of IFH or any other acquisition the Company has made or may make might not be realized within the expected time frames or at all; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; and other factors that may affect our future results.

These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update 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 or circumstances, except as required by law.

FINANCIAL CONTACT: Dominic Canuso (301) 468-8848 x1403

MEDIA CONTACT: Ed Barry (240) 283-1912

WEB SITE: www.CapitalBankMD.com

The MIL Network –

January 28, 2025

MIL-OSI: Norwood Financial Corp announces Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

Quarterly Highlights:

Net interest margin increased 5 basis points vs. the prior quarter and 11 basis points over the prior year.
Loans grew at an 9% annualized rate during the fourth quarter.
Completed capital raise that supports our long-term strategy and repositions our investment portfolio to improve our yield on the portfolio.
Capital continues to improve due to recent equity offering and lower AOCI adjustment.

HONESDALE, Pa., Jan. 27, 2025 (GLOBE NEWSWIRE) — Norwood Financial Corp (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced results for the three months and fiscal year ended December 31, 2024.

Jim Donnelly, President and Chief Executive Officer of Norwood Financial Corp and Wayne Bank, stated, “During the fourth quarter, we successfully completed a capital raise that enabled us to reposition our investment portfolio for improved yields on the portfolio in future periods. While we incurred a one-time $20 million loss as a result of this repositioning, we believe the portfolio is better positioned for the current and future interest rate environment. Excluding this loss, we performed well during the fourth quarter, delivering higher net interest income year-over-year for both the fourth quarter and the full year. As a result of these actions, we believe the Company is financially stronger and better protected from changes in interest rates and will enhance our future performance.”

Selected Financial Highlights

(dollars in thousands, except per share data)	Three Months Ended					Twelve Months Ended
	December 31, 2024					December 31, 2024
	2024		2023	Change		2024		2023	Change
Net interest income	16,625		15,293	1,332		62,191		62,067	124
Net interest spread (fte)	2.31%		2.23%	8 bps		2.17%		2.47%	(30 bps	)
Net interest margin (fte)	3.04%		2.93%	11 bps		2.91%		3.06%	(15 bps	)
Net income (loss)	(12,651	)	355	(13,006	)	(160	)	16,759	(16,919	)
Diluted earnings per share	(1.54	)	0.04	(1.41	)	(0.02	)	2.07	(2.09	)
Return on average assets	(2.19%	)	0.06%	(225 bps	)	-0.01%		0.79%	(80 bps	)
Return on tangible equity	(30.77%	)	1.01%	(3,178 bps	)	(0.10%	)	11.66%	(1,167 bps	)
Discussion of financial results for the three months ended December 31, 2024: The Company has a net loss of $12.7 million for the three months ended December 31, 2024. This was $13 million lower than the same period last year due one-time $20 million loss incurred on the sale of securities during December. Net interest income was higher during the fourth quarter of 2024 than 2023 as increases in asset yields outpaced increases in yields on liabilities. Correspondingly, the net interest margin in the fourth quarter was 3.04% in 2024 compared to 2.93% in 2023. Discussion of financial results for the year ended December 31, 2024: The Company posted a had a net loss of $160 thousand, or -$0.02 per diluted share, for the full-fiscal year ended year December 31, 2024 compared to net income of $16.8 million, or $2.07 per diluted share, for the fiscal year ended December in31. 2023. This loss was primarily due to a one-time $20 million loss incurred on the sale of securities during December 2024. The full-year net interest margin was 2.91% in 2024 versus 3.06% in 2023. Deposit costs were higher in 2024, especially in the earlier part of the year, before the Federal Reserve began to cut rates. Total non-interest expenses for 2024 were $48.6 million compared to $43.5 million in 2023. The increase was generally due to higher compensation and data processing costs. Adjusted net income for the year was lower as higher net interest income and total other income was more than offset by an increase in total other expenses. As of December 31, 2024, total assets were $2.317 billion, compared to $2.201 billion at December 31, 2023. Loans receivable were $1.693 billion, total deposits were $1.859 billion, and stockholders’ equity was $213.5 million. Tangible Common Equity was 8.05% as of December 31, 2024, versus 6.98% at the end of 2023.
The following non-GAAP financial measures exclude the one-time $20.0 million net realized loss incurred in the fourth quarter as a result of the repositioning of our investment portfolio. Please see “Non-GAAP Financial Measures” below for a reconciliation of all non-GAAP financial measures.
(dollars in thousands, except per share data)	Three Months Ended					Twelve Months Ended
	December 31, 2024					December 31, 2024
	2024		2023	Change		2024		2023	Change
Adjusted net income	3,119		355	2,764		15,610		16,759	(1,149	)
Adjusted diluted earnings per share	0.38		0.04	0.34		1.93		2.07	(0.14	)
Adjusted return on average assets	0.54%		0.06%	48 bps		0.69%		0.79%	(10 bps	)
Adjusted return on tangible equity	7.59%		1.01%	654 bps		9.97%		11.66%	(169 bps	)

Norwood Financial Corp is the parent company of Wayne Bank, which operates from 16 offices throughout Northeastern Pennsylvania and 14 offices in 4 Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”.

Non-GAAP Financial Measures

This release references adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity, all of which are non-GAAP (Generally Accepted Accounting Principles) financial measures. Adjusted values were derived by reversing the effect of loss on sale of securities in 2024 along with the attendant tax effect. We believe the presentation of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity ensures comparability of these measures as the portfolio restructuring is not something the Company expects to be a recurring event.


Adjusted Return on Average Assets
(Dollars in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2024			2023			2024			2023
Net (loss) income	$	(12,651	)	$	355		$	(160	)	$	16,759
Average assets		2,299,732			2,166,821			2,250,171			2,128,570
Return on average assets (annualized)		-2.19	%		0.06	%		-0.01	%		0.79	%
Net (loss) income		(12,651	)		355			(160	)		16,759
Net realized losses on sale of securities		19,962			0			19,962			0
Tax effect at 21%		(4,192	)		0			(4,192	)		0
Adjusted Net Income (Non-GAAP)		3,119			355			15,610			16,759
Average assets		2,299,732			2,166,821			2,250,171			2,128,570
Adjusted return on average assets (annualized)
(Non-GAAP)		0.54	%		0.06	%		0.69	%		0.79	%


Adjusted Return on Average Tangible Shareholders’ Equity
(Dollars in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2024			2023			2024			2023
Net (loss) income	$	(12,651	)	$	355		$	(160	)	$	16,759
Average shareholders’ equity		192,981			168,317			185,952			173,273
Average intangible assets		29,424			29,495			29,449			29,526
Average tangible shareholders’ equity		163,557			138,822			156,503			143,747
Return on average tangible shareholders’ equity (annualized)		-30.77	%		1.01	%		-0.10	%		11.66	%
Net (loss) income		(12,651	)		355			(160	)		16,759
Net realized losses on sale of securities		19,962			0			19,962			0
Tax effect at 21%		(4,192	)		0			(4,192	)		0
Adjusted Net Income (Non-GAAP)		3,119			355			15,610			16,759
Average tangible shareholders’ equity		163,557			138,822			156,503			143,747
Adjusted return on average shareholders’ equity (annualized)
(Non-GAAP)		7.59	%		1.01	%		9.97	%		11.66	%


Adjusted Earnings Per Share
(Dollars in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2024			2023			2024			2023
GAAP-Based Earnings Per Share, Basic	$	(1.54	)	$	0.04		$	(0.02	)	$	2.08
GAAP-Based Earnings Per Share, Diluted	$	(1.54	)	$	0.04		$	(0.02	)	$	2.07
Net (Loss) Income		(12,651	)		355			(160	)		16,759
Net realized losses on sale of securities		19,962			0			19,962			0
Tax effect at 21%		(4,192	)		0			(4,192	)		0
Adjusted Net Income (Non-GAAP)		3,119			355			15,610			16,759
Adjusted Earnings per Share, Basic (Non-GAAP)	$	0.38		$	0.04		$	1.93		$	2.08
Adjusted Earnings per Share, Diluted (Non-GAAP)	$	0.38		$	0.04		$	1.93		$	2.07

The following table reconciles average equity to average tangible equity:

Tangible Book Value
(Dollars in thousands)

	December 31,
		2024		2023
Total shareholders’ equity		213,508		181,070
Adjustments:
Goodwill		(29,266	)	(29,266	)
Other intangible assets		(152	)	(221	)
Tangible common equity (Non-GAAP)		184,090		151,583
Common shares outstanding		9,272,906		8,110,157
Book value per common share		23.02		22.33
Tangible book value per common share (Non-GAAP)		19.85		18.69

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, “bode”, “future performance” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include, among other things, changes in federal and state laws, changes in interest rates, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:	John M. McCaffery
	Executive Vice President &
	Chief Financial Officer
	NORWOOD FINANCIAL CORP
	272-304-3003
	www.waynebank.com


NORWOOD FINANCIAL CORP
Consolidated Balance Sheets
(dollars in thousands, except share and per share data)
(unaudited)
		December 31
		2024			2023
ASSETS
Cash and due from banks	$	27,562		$	28,533
Interest-bearing deposits with banks		44,777			37,587
Cash and cash equivalents		72,339			66,120

Securities available for sale		397,846			406,259
Loans receivable		1,713,638			1,603,618
Less: Allowance for credit losses		19,843			18,968
Net loans receivable		1,693,795			1,584,650
Regulatory stock, at cost		13,366			7,318
Bank premises and equipment, net		19,657			17,838
Bank owned life insurance		46,657			46,439
Foreclosed real estate owned		–			97
Accrued interest receivable		8,466			8,123
Deferred tax assets, net		17,696			21,353
Goodwill		29,266			29,266
Other intangible assets		152			221
Other assets		18,222			13,395
TOTAL ASSETS	$	2,317,462		$	2,201,079

LIABILITIES
Deposits:
Non-interest bearing demand	$	381,479		$	399,545
Interest-bearing		1,477,684			1,395,614
Total deposits		1,859,163			1,795,159
Short-term borrowings		113,069			74,076
Other borrowings		101,793			124,236
Accrued interest payable		12,615			10,510
Other liabilities		17,314			16,028
TOTAL LIABILITIES		2,103,954			2,020,009

STOCKHOLDERS’ EQUITY
Preferred Stock, no par value per share, authorized 5,000,000 shares		–			–
Common Stock, $.10 par value per share,
authorized: 20,000,000 shares,
issued: 2024: 9,487,067 shares, 2023: 8,310,847 shares		949			831
Surplus		98,513			97,700
Retained earnings		152,964			135,284
Treasury stock, at cost: 2024: 214,161 shares, 2023: 200,690 shares		(5,797	)		(5,397	)
Accumulated other comprehensive loss		(33,121	)		(47,348	)
TOTAL STOCKHOLDERS’ EQUITY		213,508			181,070

TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY	$	2,317,462		$	2,201,079

NORWOOD FINANCIAL CORP
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
	Three Months Ended December 31,							Twelve Months Ended December 31,
			2024				2023			2024				2023
INTEREST INCOME
Loans receivable, including fees	$		26,122		$		23,328	$		99,388		$		85,209
Securities			2,789				2,504			10,424				9,922
Other			574				253			2,768				409
Total Interest income			29,485				26,085			112,580				95,540

INTEREST EXPENSE
Deposits			10,984				8,910			42,334				26,029
Short-term borrowings			348				346			1,363				3,048
Other borrowings			1,528				1,536			6,692				4,396
Total Interest expense			12,860				10,792			50,389				33,473
NET INTEREST INCOME			16,625				15,293			62,191				62,067
PROVISION FOR CREDIT LOSSES		$	1,604			$	6,116		$	2,673			$	5,548
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			15,021				9,177			59,518				56,519


OTHER INCOME
Service charges and fees			1,595				1,421			5,959				5,613
Income from fiduciary activities			224				210			943				898
Net realized (losses) gains on sales of securities			(19,962	)			–			(19,962	)			(209	)
Gains on sales of loans, net			50				36			195				63
Gains on sales of foreclosed real estate owned			–				66			32				80
Earnings and proceeds on life insurance policies			275				242			1,056				1,012
Other			159				148			626				667
Total other income			(17,659	)			2,123			(11,151	)			8,124

OTHER EXPENSES
Salaries and employee benefits			6,690				5,672			25,018				23,565
Occupancy, furniture and equipment			1,291				1,265			5,049				5,083
Data processing and related operations			1,312				877			4,520				3,342
Taxes, other than income			163				77			615				566
Professional fees			504				544			2,173				1,676
FDIC Insurance assessment			335				287			1,344				985
Foreclosed real estate			9				17			54				129
Amortization of intangibles			15				19			69				85
Other			3,100				2,091			9,783				8,066
Total other expenses			13,419				10,849			48,625				43,497

INCOME BEFORE TAX (BENEFIT) EXPENSE			(16,057	)			451			(258	)			21,146
INCOME TAX (BENEFIT) EXPENSE			(3,406	)			96			(98	)			4,387
NET (LOSS) INCOME	$		(12,651	)	$		355	$		(160	)	$		16,759

Basic (loss) earnings per share	$		(1.54	)	$		0.04	$		(0.02	)	$		2.08

Diluted (loss) earnings per share	$		(1.54	)	$		0.04	$		(0.02	)	$		2.07

NORWOOD FINANCIAL CORP
NET INTEREST MARGIN ANALYSIS
(dollars in thousands)

	For the Quarter Ended
	December 31, 2024								September 30, 2024								December 31, 2023
	Average						Average		Average						Average		Average						Average
	Balance			Interest			Rate		Balance			Interest			Rate		Balance			Interest			Rate
	(2)			(1)			(3)		(2)			(1)			(3)		(2)			(1)			(3)
Assets
Interest-earning assets:
Interest-bearing deposits with banks	$	46,629		$	574		4.90	%	$	36,221		$	497		5.46	%	$	18,282		$	253		5.49	%
Securities available for sale:
Taxable		404,777			2,434		2.39			392,168			2,161		2.19			403,044			2,126		2.09
Tax-exempt (1)		65,628			449		2.72			67,563			461		2.71			70,049			479		2.71
Total securities available for sale (1)		470,405			2,883		2.44			459,731			2,622		2.27			473,093			2,605		2.18
Loans receivable (1) (4) (5)		1,690,650			26,246		6.18			1,651,921			25,575		6.16			1,605,496			23,422		5.79
Total interest-earning assets		2,207,684			29,703		5.35			2,147,873			28,694		5.31			2,096,871			26,280		4.97
Non-interest earning assets:
Cash and due from banks		27,283								28,193								27,791
Allowance for credit losses		(18,741	)							(17,944	)							(16,728	)
Other assets		83,506								78,344								58,231
Total non-interest earning assets		92,048								88,593								69,294
Total Assets	$	2,299,732							$	2,236,466							$	2,166,165
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and money market	$	528,330		$	3,017		2.27		$	461,897		$	2,782		2.40		$	463,792		$	2,059		1.76
Savings		209,362			162		0.31			221,366			13		0.02			226,809			119		0.21
Time		764,819			7,805		4.06			734,235			7,758		4.20			679,587			6,732		3.93
Total interest-bearing deposits		1,502,511			10,984		2.91			1,417,498			10,553		2.96			1,370,188			8,910		2.58
Short-term borrowings		46,267			348		2.99			53,622			323		2.40			59,836			346		2.29
Other borrowings		133,620			1,528		4.55			146,357			1,680		4.57			131,071			1,536		4.65
Total interest-bearing liabilities		1,682,398			12,860		3.04			1,617,477			12,556		3.09			1,561,095			10,792		2.74
Non-interest bearing liabilities:
Demand deposits		394,001								400,314								411,434
Other liabilities		30,352								29,540								25,316
Total non-interest bearing liabilities		424,353								429,854								436,750
Stockholders’ equity		192,981								189,135								168,320
Total Liabilities and Stockholders’ Equity	$	2,299,732							$	2,236,466							$	2,166,165
Net interest income/spread (tax equivalent basis)					16,843		2.31	%					16,138		2.23	%					15,488		2.23	%
Tax-equivalent basis adjustment					(218	)							(207	)							(195	)
Net interest income				$	16,625							$	15,931							$	15,293
Net interest margin (tax equivalent basis)							3.04	%							2.99	%							2.93	%

(1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.
(2) Average balances have been calculated based on daily balances.
(3) Annualized
(4) Loan balances include non-accrual loans and are net of unearned income.
(5) Loan yields include the effect of amortization of deferred fees, net of costs.


	Year to Date
	December 31, 2024								September 30, 2024								December 31, 2023
	Average						Average		Average						Average		Average						Average
	Balance			Interest			Rate		Balance			Interest			Rate		Balance			Interest			Rate
	(2)			(1)			(3)		(2)			(1)			(3)		(2)			(1)			(3)
Assets
Interest-earning assets:
Interest-bearing deposits with banks	$	51,433		$	2,768		5.38	%	$	53,046		$	2,194		5.52	%	$	7,537		$	409		5.43	%
Securities available for sale:
Taxable		400,050			8,948		2.24			398,462			6,514		2.18			411,633			8,390		2.04
Tax-exempt (1)		68,041			1,868		2.75			68,852			1,419		2.75			70,598			1,940		2.75
Total securities available for sale (1)		468,091			10,816		2.31			467,314			7,933		2.27			482,231			10,330		2.14
Loans receivable (1) (4) (5)		1,646,128			99,815		6.06			1,631,179			73,569		6.02			1,565,665			85,550		5.46
Total interest-earning assets		2,165,652			113,399		5.24			2,151,539			83,696		5.20			2,055,433			96,289		4.68
Non-interest earning assets:
Cash and due from banks		26,629								26,409								26,633
Allowance for credit losses		(18,450	)							(18,353	)							(18,122	)
Other assets		76,340								73,935								64,626
Total non-interest earning assets		84,519								81,991								73,137
Total Assets	$	2,250,171							$	2,233,530							$	2,128,570
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing demand and money market	$	476,106		$	10,506		2.21		$	460,579		$	7,489		2.17		$	466,329		$	5,824		1.25
Savings		220,190			711		0.32			223,825			549		0.33			248,629			378		0.15
Time		744,895			31,117		4.18			738,205			23,311		4.22			610,726			19,827		3.25
Total interest-bearing deposits		1,441,191			42,334		2.94			1,422,609			31,349		2.94			1,325,684			26,029		1.96
Short-term borrowings		54,867			1,363		2.48			57,754			1,015		2.35			93,455			3,048		3.26
Other borrowings		146,195			6,692		4.58			150,418			5,165		4.59			94,931			4,396		4.63
Total interest-bearing liabilities		1,642,253			50,389		3.07			1,630,781			37,529		3.07			1,514,070			33,473		2.21
Non-interest bearing liabilities:
Demand deposits		393,616								391,479								418,631
Other liabilities		28,350								27,677								22,595
Total non-interest bearing liabilities		421,966								419,156								441,226
Stockholders’ equity		185,952								183,593								173,274
Total Liabilities and Stockholders’ Equity	$	2,250,171							$	2,233,530							$	2,128,570
Net interest income/spread (tax equivalent basis)					63,010		2.17	%					46,167		2.12	%					62,816		2.47	%
Tax-equivalent basis adjustment					(819	)							(601	)							(749	)
Net interest income				$	62,191							$	45,566							$	62,067
Net interest margin (tax equivalent basis)							2.91	%							2.87	%							3.06	%

(1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.
(2) Average balances have been calculated based on daily balances.
(3) Annualized
(4) Loan balances include non-accrual loans and are net of unearned income.
(5) Loan yields include the effect of amortization of deferred fees, net of costs.

NORWOOD FINANCIAL CORP
Financial Highlights (Unaudited)
(dollars in thousands, except per share data)

For the Three Months Ended December 31		2024			2023

Net interest income	$	16,625		$	15,293
Net (loss) income		(12,651	)		355

Net interest spread (fully taxable equivalent)		2.31%			2.23%
Net interest margin (fully taxable equivalent)		3.04%			2.93%
Return on average assets		-2.19%			0.06%
Return on average equity		-26.08%			0.84%
Return on average tangible equity		-30.77%			1.01%
Basic (loss) earnings per share	$	(1.54	)	$	0.04
Diluted (loss) earnings per share	$	(1.54	)	$	0.04

For the Twelve Months Ended December 31		2024			2023

Net interest income	$	62,191		$	62,067
Net (loss) income		(160	)		16,759

Net interest spread (fully taxable equivalent)		2.17%			2.47%
Net interest margin (fully taxable equivalent)		2.91%			3.06%
Return on average assets		-0.01%			0.79%
Return on average equity		-0.09%			9.67%
Return on average tangible equity		-0.10%			11.66%
Basic (loss) earnings per share	$	(0.02	)	$	2.08
Diluted (loss) earnings per share	$	(0.02	)	$	2.07

As of December 31		2024			2023

Total assets	$	2,317,462		$	2,201,079
Total loans receivable		1,713,638			1,603,618
Allowance for credit losses		19,843			18,968
Total deposits		1,859,163			1,795,159
Stockholders’ equity		213,508			181,070
Trust assets under management		205,097			192,374

Book value per share	$	23.02		$	22.33
Tangible book value per share	$	19.85		$	18.69
Equity to total assets		9.21%			8.23%
Allowance to total loans receivable		1.16%			1.18%
Nonperforming loans to total loans		0.46%			0.48%
Nonperforming assets to total assets		0.34%			0.35%

NORWOOD FINANCIAL CORP
Consolidated Balance Sheets (unaudited)
(dollars in thousands)
		December 31			September 30		June 30		March 31			December 31
		2024			2024		2024		2024			2023
ASSETS
Cash and due from banks	$	27,562		$	47,072	$	29,903	$	19,519		$	28,533
Interest-bearing deposits with banks		44,777			35,808		39,492		92,444			37,587
Cash and cash equivalents		72,339			82,880		69,395		111,963			66,120

Securities available for sale		397,846			396,891		397,578		398,374			406,259
Loans receivable		1,713,638			1,675,139		1,641,356		1,621,448			1,603,618
Less: Allowance for credit losses		19,843			18,699		17,807		18,020			18,968
Net loans receivable		1,693,795			1,656,440		1,623,549		1,603,428			1,584,650
Regulatory stock, at cost		13,366			6,329		6,443		6,545			7,318
Bank owned life insurance		46,657			46,382		46,121		45,869			46,439
Bank premises and equipment, net		19,657			18,503		18,264		18,057			17,838
Foreclosed real estate owned		0			0		0		97			97
Goodwill and other intangibles		29,418			29,433		29,449		29,468			29,487
Other assets		44,384			42,893		44,517		46,622			42,871
TOTAL ASSETS	$	2,317,462		$	2,279,751	$	2,235,316	$	2,260,423		$	2,201,079

LIABILITIES
Deposits:
Non-interest bearing demand	$	381,479		$	420,967	$	391,849	$	383,362		$	399,545
Interest-bearing deposits		1,477,684			1,434,284		1,419,323		1,455,636			1,395,614
Total deposits		1,859,163			1,855,251		1,811,172		1,838,998			1,795,159
Borrowings		214,862			197,412		210,422		211,234			198,312
Other liabilities		29,929			31,434		31,534		28,978			26,538
TOTAL LIABILITIES		2,103,954			2,084,097		2,053,128		2,079,210			2,020,009

STOCKHOLDERS’ EQUITY		213,508			195,654		182,188		181,213			181,070

TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY	$	2,317,462		$	2,279,751	$	2,235,316	$	2,260,423		$	2,201,079



NORWOOD FINANCIAL CORP
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
		December 31			September 30		June 30		March 31			December 31
Three months ended		2024			2024		2024		2024			2023
INTEREST INCOME
Loans receivable, including fees	$	26,122		$	25,464	$	24,121	$	23,681		$	23,328
Securities		2,789			2,526		2,584		2,526			2,504
Other		574			497		966		731			253
Total interest income		29,485			28,487		27,671		26,938			26,085

INTEREST EXPENSE
Deposits		10,984			10,553		10,687		10,110			8,910
Borrowings		1,876			2,003		2,059		2,118			1,882
Total interest expense		12,860			12,556		12,746		12,228			10,792
NET INTEREST INCOME		16,625			15,931		14,925		14,710			15,293
PROVISION FOR (RELEASE OF) CREDIT LOSSES		1,604			1,345		347		(624	)		6,116
NET INTEREST INCOME AFTER (RELEASE OF) PROVISION
FOR CREDIT LOSSES		15,021			14,586		14,578		15,334			9,177

OTHER INCOME
Service charges and fees		1,595			1,517		1,504		1,343			1,421
Income from fiduciary activities		224			256		225		238			210
Net realized (losses) gains on sales of securities		(19,962	)		–		–		–			–
Gains on sales of loans, net		50			103		36		6			36
Gains on sales of foreclosed real estate owned		–			–		32		–			66
Earnings and proceeds on life insurance policies		275			261		253		268			242
Other		159			158		157		151			148
Total other income		(17,659	)		2,295		2,207		2,006			2,123

OTHER EXPENSES
Salaries and employee benefits		6,690			6,239		5,954		6,135			5,672
Occupancy, furniture and equipment, net		1,291			1,269		1,229		1,261			1,265
Foreclosed real estate		9			9		15		21			17
FDIC insurance assessment		335			339		309		361			287
Other		5,094			4,175		3,937		3,954			3,608
Total other expenses		13,419			12,031		11,444		11,732			10,849

INCOME BEFORE TAX (BENEFIT) EXPENSE		(16,057	)		4,850		5,341		5,608			451
INCOME TAX (BENEFIT) EXPENSE		(3,406	)		1,006		1,128		1,175			96
NET (LOSS) INCOME	$	(12,651	)	$	3,844	$	4,213	$	4,433		$	355

Basic (loss) earnings per share	$	(1.54	)	$	0.48	$	0.52	$	0.55		$	0.04

Diluted (loss) earnings per share	$	(1.54	)	$	0.48	$	0.52	$	0.55		$	0.04

Book Value per share	$	23.02		$	24.92	$	23.26	$	23.01		$	22.99
Tangible Book Value per share		19.85			21.28		19.62		19.38			19.36

Return on average assets (annualized)		-2.19	%		0.68%		0.75%		0.80%			0.06%
Return on average equity (annualized)		-26.08	%		8.09%		9.41%		9.79%			0.84%
Return on average tangible equity (annualized)		-30.77	%		9.58%		11.26%		11.68%			1.01%

Net interest spread (fte)		2.31%			2.23%		2.06%		2.06%			2.23%
Net interest margin (fte)		3.04%			2.99%		2.80%		2.79%			2.93%

Allowance for credit losses to total loans		1.16%			1.12%		1.08%		1.11%			1.18%
Net charge-offs to average loans (annualized)		0.12%			0.08%		0.13%		0.08%			0.79%
Nonperforming loans to total loans		0.46%			0.47%		0.47%		0.23%			0.48%
Nonperforming assets to total assets		0.34%			0.35%		0.34%		0.17%			0.35%

The MIL Network –

January 28, 2025

MIL-OSI: Park National Corporation reports 2024 results

Source: GlobeNewswire (MIL-OSI)

NEWARK, Ohio, Jan. 27, 2025 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2024. Park’s board of directors declared a quarterly cash dividend of $1.07 per common share, payable on March 10, 2025, to common shareholders of record as of February 14, 2025.

“Our consistent and measured growth stems from our team’s absolute focus on meeting customer needs to produce meaningful results,” said Park Chairman and Chief Executive Officer David Trautman. “Helping customers flourish remains our primary goal.”

Park’s net income for the fourth quarter of 2024 was $38.6 million, a 57.7 percent increase from $24.5 million for the fourth quarter of 2023. Fourth quarter 2024 net income per diluted common share was $2.37, compared to $1.51 for the fourth quarter of 2023. Park’s net income for the full year of 2024 was $151.4 million, a 19.5 percent increase from $126.7 million for the full year of 2023. Net income per diluted common share for the full year of 2024 was $9.32 compared to $7.80 for the full year of 2023.

Park’s total loans increased 4.6 percent during 2024. Park’s total deposits increased 1.3 percent during 2024, with an increase of 2.7 percent including off balance sheet deposits. The combination of solid loan growth and steady deposits contributed to Park’s success in 2024.

“As we enter the new year, we look forward to the opportunity to deepen relationships with our customers, communities and all stakeholders,” said Park President Matthew Miller. “Our bankers are dedicated to helping all those we serve achieve their financial goals and thrive in 2025.”

Headquartered in Newark, Ohio, Park National Corporation has $9.8 billion in total assets (as of December 31, 2024). Park’s banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

Complete financial tables are listed below.

Category: Earnings

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties, including those described in Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our filings with the SEC. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

Risks and uncertainties that could cause actual results to differ materially include, without limitation: (1) Park’s ability to execute our business plan successfully and within the expected timeframe; (2) adverse changes in future economic and financial market conditions; (3) adverse changes in real estate values and liquidity in our primary market areas; (4) the financial health of our commercial borrowers; (5) adverse changes in federal, state and local governmental law and policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation, government shutdown, infrastructure spending and social programs; (6) changes in consumer spending, borrowing and saving habits; (7) our litigation and regulatory compliance exposure; (8) increased credit risk and higher credit losses resulting from loan concentrations; (9) competitive pressures among financial services organizations; (10) changes in accounting policies and practices as may be adopted by regulatory agencies; (11) Park’s assumptions and estimates used in applying critical accounting policies and modeling which may prove unreliable, inaccurate or not predictive of actual results; (12) Park’s ability to anticipate and respond to technological changes and Park’s reliance on, and the potential failure of, a number of third-party vendors to perform as expected; (13) failures in or breaches of Park’s operational or security systems or infrastructure, or those of our third-party vendors and other service providers; (14) negative impacts on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia; (15) effects of a fall in stock market prices on Park’s asset and wealth management businesses; (16) continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; (17) the impact on Park’s business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; (18) the impact of widespread natural and other disasters, pandemics, dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; (19) the potential further deterioration of the U.S. economy due to financial, political, or other shocks; (20) the effect of healthcare laws in the U.S. and potential changes for such laws that may increase our healthcare and other costs and negatively impact our operations and financial results; (21) the impact of larger or similar-sized financial institutions encountering problems that may adversely affect the banking industry; and (22) other risk factors relating to the financial services industry.

Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.


PARK NATIONAL CORPORATION
Financial Highlights
As of or for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023

		2024			2024			2023		Percent change vs.
*(in thousands, except common share and per common share data and ratios)*	4th QTR			3rd QTR			4th QTR			3Q ’24			4Q ’23
INCOME STATEMENT:
Net interest income	$	103,445		$	101,114		$	95,074		2.3		%	8.8		%
Provision for credit losses		3,935			5,315			1,809		(26.0	)	%	117.5		%
Other income		31,064			36,530			15,519		(15.0	)	%	100.2		%
Other expense		83,241			85,681			79,043		(2.8	)	%	5.3		%
Income before income taxes	$	47,333		$	46,648		$	29,741		1.5		%	59.2		%
Income taxes		8,703			8,431			5,241		3.2		%	66.1		%
Net income	$	38,630		$	38,217		$	24,500		1.1		%	57.7		%

MARKET DATA:
Earnings per common share – basic (a)	$	2.39		$	2.37		$	1.52		0.8		%	57.2		%
Earnings per common share – diluted (a)		2.37			2.35			1.51		0.9		%	57.0		%
Quarterly cash dividend declared per common share		1.06			1.06			1.05		—		%	1.0		%
Special cash dividend declared per common share		0.50			—			—		N.M.			N.M.
Book value per common share at period end		76.98			76.74			71.06		0.3		%	8.3		%
Market price per common share at period end		171.43			167.98			132.86		2.1		%	29.0		%
Market capitalization at period end		2,770,134			2,713,152			2,141,235		2.1		%	29.4		%

Weighted average common shares – basic (b)		16,156,827			16,151,640			16,113,215		—		%	0.3		%
Weighted average common shares – diluted (b)		16,283,701			16,264,393			16,216,562		0.1		%	0.4		%
Common shares outstanding at period end		16,158,982			16,151,640			16,116,479		—		%	0.3		%

PERFORMANCE RATIOS: (annualized)
Return on average assets (a)(b)		1.54	%		1.53	%		0.98	%	0.7		%	57.1		%
Return on average shareholders’ equity (a)(b)		12.32	%		12.56	%		8.81	%	(1.9	)	%	39.8		%
Yield on loans		6.21	%		6.24	%		5.84	%	(0.5	)	%	6.3		%
Yield on investment securities		3.46	%		3.74	%		3.88	%	(7.5	)	%	(10.8	)	%
Yield on money market instruments		4.75	%		5.38	%		5.30	%	(11.7	)	%	(10.4	)	%
Yield on interest earning assets		5.82	%		5.88	%		5.48	%	(1.0	)	%	6.2		%
Cost of interest bearing deposits		1.90	%		2.06	%		1.84	%	(7.8	)	%	3.3		%
Cost of borrowings		3.86	%		3.97	%		4.42	%	(2.8	)	%	(12.7	)	%
Cost of paying interest bearing liabilities		1.99	%		2.15	%		2.01	%	(7.4	)	%	(1.0	)	%
Net interest margin (g)		4.51	%		4.45	%		4.17	%	1.3		%	8.2		%
Efficiency ratio (g)		61.60	%		61.98	%		70.93	%	(0.6	)	%	(13.2	)	%

OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Tangible book value per common share (d)	$	66.89		$	66.62		$	60.87		0.4		%	9.9		%
Average interest earning assets		9,176,540			9,100,594			9,120,407		0.8		%	0.6		%
Pre-tax, pre-provision net income (j)		51,268			51,963			31,550		(1.3	)	%	62.5		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Highlights (continued)
As of or for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023

										Percent change vs.
*(in thousands, except ratios)*	December 31, 2024			September 30, 2024			December 31, 2023			3Q ’24			4Q ’23
BALANCE SHEET:
Investment securities	$	1,100,861		$	1,233,297		$	1,429,144		(10.7	)	%	(23.0	)	%
Loans		7,817,128			7,730,984			7,476,221		1.1		%	4.6		%
Allowance for credit losses		87,966			87,237			83,745		0.8		%	5.0		%
Goodwill and other intangible assets		163,032			163,320			164,247		(0.2	)	%	(0.7	)	%
Other real estate owned (OREO)		938			1,119			983		(16.2	)	%	(4.6	)	%
Total assets		9,805,350			9,903,049			9,836,453		(1.0	)	%	(0.3	)	%
Total deposits		8,143,526			8,214,671			8,042,566		(0.9	)	%	1.3		%
Borrowings		280,083			306,964			517,329		(8.8	)	%	(45.9	)	%
Total shareholders’ equity		1,243,848			1,239,413			1,145,293		0.4		%	8.6		%
Tangible equity (d)		1,080,816			1,076,093			981,046		0.4		%	10.2		%
Total nonperforming loans		69,932			71,541			61,118		(2.2	)	%	14.4		%
Total nonperforming assets		70,870			72,660			62,101		(2.5	)	%	14.1		%

ASSET QUALITY RATIOS:
Loans as a % of period end total assets		79.72	%		78.07	%		76.01	%	2.1		%	4.9		%
Total nonperforming loans as a % of period end loans		0.89	%		0.93	%		0.82	%	(4.3	)	%	8.5		%
Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets		0.91	%		0.94	%		0.83	%	(3.2	)	%	9.6		%
Allowance for credit losses as a % of period end loans		1.13	%		1.13	%		1.12	%	—		%	0.9		%
Net loan charge-offs	$	3,206		$	4,653		$	2,666		(31.1	)	%	20.3		%
Annualized net loan charge-offs as a % of average loans (b)		0.16	%		0.24	%		0.14	%	(33.3	)	%	14.3		%

CAPITAL & LIQUIDITY:
Total shareholders’ equity / Period end total assets		12.69	%		12.52	%		11.64	%	1.4		%	9.0		%
Tangible equity (d) / Tangible assets (f)		11.21	%		11.05	%		10.14	%	1.4		%	10.6		%
Average shareholders’ equity / Average assets (b)		12.47	%		12.20	%		11.16	%	2.2		%	11.7		%
Average shareholders’ equity / Average loans (b)		16.08	%		15.76	%		14.94	%	2.0		%	7.6		%
Average loans / Average deposits (b)		93.00	%		92.69	%		89.48	%	0.3		%	3.9		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Highlights
Year months ended December 31, 2024 and December 31, 2023

*(in thousands, except common share and per common share data and ratios)*		2024			2023		Percent change vs ’23
INCOME STATEMENT:
Net interest income	$	398,019		$	373,113		6.7		%
Provision for credit losses		14,543			2,904		400.8		%
Other income		122,588			92,634		32.3		%
Other expense		321,339			309,239		3.9		%
Income before income taxes	$	184,725		$	153,604		20.3		%
Income taxes		33,305			26,870		23.9		%
Net income	$	151,420		$	126,734		19.5		%

MARKET DATA:
Earnings per common share – basic (a)	$	9.38		$	7.84		19.6		%
Earnings per common share – diluted (a)		9.32			7.80		19.5		%
Quarterly cash dividend declared per common share		4.24			4.20		1.0		%
Special cash dividend declared per common share		0.50			—		N.M.

Weighted average common shares – basic (b)		16,143,708			16,163,500		(0.1	)	%
Weighted average common shares – diluted (b)		16,244,797			16,250,019		—		%

PERFORMANCE RATIOS:
Return on average assets (a)(b)		1.53	%		1.27	%	20.5		%
Return on average shareholders’ equity (a)(b)		12.65	%		11.55	%	9.5		%
Yield on loans		6.14	%		5.55	%	10.6		%
Yield on investment securities		3.74	%		3.73	%	0.3		%
Yield on money market instruments		5.16	%		5.00	%	3.2		%
Yield on interest earning assets		5.78	%		5.18	%	11.6		%
Cost of interest bearing deposits		1.97	%		1.52	%	29.6		%
Cost of borrowings		4.05	%		3.79	%	6.9		%
Cost of paying interest bearing liabilities		2.08	%		1.67	%	24.6		%
Net interest margin (g)		4.41	%		4.11	%	7.3		%
Efficiency ratio (g)		61.44	%		65.87	%	(6.7	)	%

ASSET QUALITY RATIOS:
Net loan charge-offs	$	10,322		$	4,921		109.8		%
Net loan charge-offs as a % of average loans (b)		0.14	%		0.07	%	100.0		%

CAPITAL & LIQUIDITY
Average shareholders’ equity / Average Assets (b)		12.09	%		11.02	%	9.7		%
Average shareholders’ equity / Average loans (b)		15.69	%		15.19	%	3.3		%
Average loans / Average deposits (b)		92.34	%		86.39	%	6.9		%

OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:
Average interest earning assets		9,085,850			9,171,721		(0.9	)	%
Pre-tax, pre-provision net income (j)		199,268			156,508		27.3		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Consolidated Statements of Income

	Three Months Ended				Twelve Month Ended
	December 31				December 31
*(in thousands, except share and per share data)*		2024		2023		2024		2023

Interest income:
Interest and fees on loans	$	120,870	$	108,495	$	467,602	$	399,795
Interest on debt securities:
Taxable		8,641		13,055		41,718		52,786
Tax-exempt		1,351		2,248		5,524		10,966
Other interest income		2,751		1,408		8,121		8,123
Total interest income		133,613		125,206		522,965		471,670

Interest expense:
Interest on deposits:
Demand and savings deposits		19,802		19,467		82,789		71,776
Time deposits		7,658		6,267		29,594		12,677
Interest on borrowings		2,708		4,398		12,563		14,104
Total interest expense		30,168		30,132		124,946		98,557

Net interest income		103,445		95,074		398,019		373,113

Provision for credit losses		3,935		1,809		14,543		2,904

Net interest income after provision for credit losses		99,510		93,265		383,476		370,209

Other income		31,064		15,519		122,588		92,634

Other expense		83,241		79,043		321,339		309,239

Income before income taxes		47,333		29,741		184,725		153,604

Income taxes		8,703		5,241		33,305		26,870

Net income	$	38,630	$	24,500	$	151,420	$	126,734

Per common share:
Net income – basic	$	2.39	$	1.52	$	9.38	$	7.84
Net income – diluted	$	2.37	$	1.51	$	9.32	$	7.80

Weighted average common shares – basic		16,156,827		16,113,215		16,143,708		16,163,500
Weighted average common shares – diluted		16,283,701		16,216,562		16,244,797		16,250,019

Cash dividends declared:
Quarterly dividend	$	1.06	$	1.05	$	4.24	$	4.20
Special dividend	$	0.50	$	—	$	0.50	$	—


PARK NATIONAL CORPORATION
Consolidated Balance Sheets

*(in thousands, except share data)*	December 31, 2024			December 31, 2023

Assets

Cash and due from banks	$	122,363		$	160,477
Money market instruments		38,203			57,791
Investment securities		1,100,861			1,429,144
Loans		7,817,128			7,476,221
Allowance for credit losses		(87,966	)		(83,745	)
Loans, net		7,729,162			7,392,476
Bank premises and equipment, net		69,522			74,211
Goodwill and other intangible assets		163,032			164,247
Other real estate owned		938			983
Other assets		581,269			557,124
Total assets	$	9,805,350		$	9,836,453

Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,612,708		$	2,628,234
Interest bearing		5,530,818			5,414,332
Total deposits		8,143,526			8,042,566
Borrowings		280,083			517,329
Other liabilities		137,893			131,265
Total liabilities	$	8,561,502		$	8,691,160


Shareholders’ Equity:
Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2024 and December 31, 2023)	$	—		$	—
Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at December 31, 2024 and December 31, 2023)		463,706			463,280
Total shareholders’ equity	$	1,243,848		$	1,145,293
Total liabilities and shareholders’ equity	$	9,805,350		$	9,836,453


PARK NATIONAL CORPORATION
Consolidated Average Balance Sheets

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
*(in thousands)*		2024			2023			2024			2023

Assets

Cash and due from banks	$	122,949		$	134,593		$	129,070		$	147,414
Money market instruments		230,591			105,425			157,292			162,544
Investment securities		1,167,467			1,544,942			1,265,680			1,716,037
Loans		7,757,229			7,387,512			7,627,419			7,222,479
Allowance for credit losses		(87,608	)		(85,493	)		(85,930	)		(87,002	)
Loans, net		7,669,621			7,302,019			7,541,489			7,135,477
Bank premises and equipment, net		70,615			76,718			72,689			79,443
Goodwill and other intangible assets		163,221			164,466			163,669			164,960
Other real estate owned		1,079			1,342			1,192			1,654
Other assets		582,785			560,683			570,183			550,025
Total assets	$	10,008,328		$	9,890,188		$	9,901,264		$	9,957,554


Liabilities and Shareholders’ Equity

Deposits:
Noninterest bearing	$	2,593,128		$	2,694,148		$	2,564,009		$	2,814,259
Interest bearing		5,747,671			5,561,845			5,696,185			5,546,015
Total deposits		8,340,799			8,255,993			8,260,194			8,360,274
Borrowings		279,149			394,423			309,996			371,955
Other liabilities		140,700			136,046			133,954			128,182
Total liabilities	$	8,760,648		$	8,786,462		$	8,704,144		$	8,860,411

Shareholders’ Equity:
Preferred shares	$	—		$	—		$	—		$	—
Common shares		462,146			461,864			461,433			460,973
Accumulated other comprehensive loss, net of taxes		(41,229	)		(108,219	)		(60,619	)		(98,154	)
Retained earnings		978,267			906,091			949,160			884,711
Treasury shares		(151,504	)		(156,010	)		(152,854	)		(150,387	)
Total shareholders’ equity	$	1,247,680		$	1,103,726		$	1,197,120		$	1,097,143
Total liabilities and shareholders’ equity	$	10,008,328		$	9,890,188		$	9,901,264		$	9,957,554


PARK NATIONAL CORPORATION
Consolidated Statements of Income – Linked Quarters

	2024		2024		2024		2024		2023
*(in thousands, except per share data)*	4th QTR		3rd QTR		2nd QTR		1st QTR		4th QTR

Interest income:
Interest and fees on loans	$	120,870	$	120,203	$	115,318	$	111,211	$	108,495
Interest on debt securities:
Taxable		8,641		10,228		10,950		11,899		13,055
Tax-exempt		1,351		1,381		1,382		1,410		2,248
Other interest income		2,751		1,996		1,254		2,120		1,408
Total interest income		133,613		133,808		128,904		126,640		125,206

Interest expense:
Interest on deposits:
Demand and savings deposits		19,802		22,762		20,370		19,855		19,467
Time deposits		7,658		7,073		7,525		7,338		6,267
Interest on borrowings		2,708		2,859		3,172		3,824		4,398
Total interest expense		30,168		32,694		31,067		31,017		30,132

Net interest income		103,445		101,114		97,837		95,623		95,074

Provision for credit losses		3,935		5,315		3,113		2,180		1,809

Net interest income after provision for credit losses		99,510		95,799		94,724		93,443		93,265

Other income		31,064		36,530		28,794		26,200		15,519

Other expense		83,241		85,681		75,189		77,228		79,043

Income before income taxes		47,333		46,648		48,329		42,415		29,741

Income taxes		8,703		8,431		8,960		7,211		5,241

Net income	$	38,630	$	38,217	$	39,369	$	35,204	$	24,500

Per common share:
Net income – basic	$	2.39	$	2.37	$	2.44	$	2.18	$	1.52
Net income – diluted	$	2.37	$	2.35	$	2.42	$	2.17	$	1.51


PARK NATIONAL CORPORATION
Detail of other income and other expense – Linked Quarters

	2024			2024		2024		2024			2023
(in thousands)	4th QTR			3rd QTR		2nd QTR		1st QTR			4th QTR

Other income:
Income from fiduciary activities	$	11,122		$	10,615	$	10,728	$	10,024		$	8,943
Service charges on deposit accounts		2,319			2,362		2,214		2,106			2,054
Other service income		3,277			3,036		2,906		2,524			2,349
Debit card fee income		6,511			6,539		6,580		6,243			6,583
Bank owned life insurance income		1,519			2,057		1,565		2,629			1,373
ATM fees		415			471		458		496			517
Pension settlement gain		365			5,783		—		—			—
Loss on sale of debt securities, net		(128	)		—		—		(398	)		(7,875	)
Gain (loss) on equity securities, net		1,852			1,557		358		(687	)		353
Other components of net periodic benefit income		2,651			2,204		2,204		2,204			1,893
Miscellaneous		1,161			1,906		1,781		1,059			(671	)
Total other income	$	31,064		$	36,530	$	28,794	$	26,200		$	15,519

Other expense:
Salaries	$	37,254		$	38,370	$	35,954	$	35,733		$	36,192
Employee benefits		10,129			10,162		9,873		11,560			10,088
Occupancy expense		2,929			3,731		2,975		3,181			3,344
Furniture and equipment expense		2,375			2,571		2,454		2,583			2,824
Data processing fees		10,450			11,764		9,542		8,808			9,605
Professional fees and services		10,465			7,842		6,022		6,817			7,015
Marketing		1,949			1,464		1,164		1,741			1,716
Insurance		1,600			1,640		1,777		1,718			1,708
Communication		1,104			955		1,002		1,036			993
State tax expense		1,145			1,116		1,129		1,110			1,158
Amortization of intangible assets		288			287		320		320			334
Foundation contributions		—			2,000		—		—			1,000
Miscellaneous		3,553			3,779		2,977		2,621			3,066
Total other expense	$	83,241		$	85,681	$	75,189	$	77,228		$	79,043


PARK NATIONAL CORPORATION
Asset Quality Information

	Year ended December 31,
*(in thousands, except ratios)*		2024			2023			2022			2021				2020

Allowance for credit losses:
Allowance for credit losses, beginning of period	$	83,745		$	85,379		$	83,197		$	85,675			$	56,679
Cumulative change in accounting principle; adoption of ASU 2022-02 in 2023 and ASU 2016-13 in 2021		—			383			—			6,090				—
Charge-offs		18,334			10,863			9,133			5,093				10,304
Recoveries		8,012			5,942			6,758			8,441				27,246
Net charge-offs (recoveries)		10,322			4,921			2,375			(3,348	)			(16,942	)
Provision for (recovery of) credit losses		14,543			2,904			4,557			(11,916	)			12,054
Allowance for credit losses, end of period	$	87,966		$	83,745		$	85,379		$	83,197			$	85,675

General reserve trends:
Allowance for credit losses, end of period	$	87,966		$	83,745		$	85,379		$	83,197			$	85,675
Allowance on accruing purchased credit deteriorated (“PCD”) loans (purchased credit impaired (“PCI”) loans for years 2020 and prior)		—			—			—			—				167
Allowance on purchased loans excluded from collectively evaluated loans (for years 2020 and prior)		N.A.			N.A.			N.A.			N.A.				678
Specific reserves on individually evaluated loans		1,299			4,983			3,566			1,616				5,434
General reserves on collectively evaluated loans	$	86,667		$	78,762		$	81,813		$	81,581			$	79,396

Total loans	$	7,817,128		$	7,476,221		$	7,141,891		$	6,871,122			$	7,177,785
Accruing PCD loans (PCI loans for years 2020 and prior)		2,174			2,835			4,653			7,149				11,153
Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)		N.A.			N.A.			N.A.			N.A.				360,056
Individually evaluated loans (k)		53,149			45,215			78,341			74,502				108,407
Collectively evaluated loans	$	7,761,805		$	7,428,171		$	7,058,897		$	6,789,471			$	6,698,169

Asset Quality Ratios:
Net charge-offs (recoveries) as a % of average loans		0.14	%		0.07	%		0.03	%		(0.05	)	%		(0.24	)	%
Allowance for credit losses as a % of period end loans		1.13	%		1.12	%		1.20	%		1.21		%		1.19		%
General reserve as a % of collectively evaluated loans		1.12	%		1.06	%		1.16	%		1.20		%		1.19		%

Nonperforming assets:
Nonaccrual loans	$	68,178		$	60,259		$	79,696		$	72,722			$	117,368
Accruing troubled debt restructurings (for years 2022 and prior) (k)		N.A.			N.A.			20,134			28,323				20,788
Loans past due 90 days or more		1,754			859			1,281			1,607				1,458
Total nonperforming loans	$	69,932		$	61,118		$	101,111		$	102,652			$	139,614
Other real estate owned		938			983			1,354			775				1,431
Other nonperforming assets		—			—			—			2,750				3,164
Total nonperforming assets	$	70,870		$	62,101		$	102,465		$	106,177			$	144,209
Percentage of nonaccrual loans to period end loans		0.87	%		0.81	%		1.12	%		1.06		%		1.64		%
Percentage of nonperforming loans to period end loans		0.89	%		0.82	%		1.42	%		1.49		%		1.95		%
Percentage of nonperforming assets to period end loans		0.91	%		0.83	%		1.43	%		1.55		%		2.01		%
Percentage of nonperforming assets to period end total assets		0.72	%		0.63	%		1.04	%		1.11		%		1.55		%

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Asset Quality Information (continued)

	Year ended December 31,
(in thousands, except ratios)	2024		2023		2022		2021		2020

New nonaccrual loan information:
Nonaccrual loans, beginning of period	$	60,259	$	79,696	$	72,722	$	117,368	$	90,080
New nonaccrual loans		65,535		48,280		64,918		38,478		103,386
Resolved nonaccrual loans		57,616		67,717		57,944		83,124		76,098
Nonaccrual loans, end of period	$	68,178	$	60,259	$	79,696	$	72,722	$	117,368

Individually evaluated commercial loan portfolio information (period end): (k)
Unpaid principal balance	$	58,158	$	47,564	$	80,116	$	75,126	$	109,062
Prior charge-offs		5,009		2,349		1,775		624		655
Remaining principal balance		53,149		45,215		78,341		74,502		108,407
Specific reserves		1,299		4,983		3,566		1,616		5,434
Book value, after specific reserves	$	51,850	$	40,232	$	74,775	$	72,886	$	102,973

Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Reconciliations
NON-GAAP RECONCILIATIONS
	THREE MONTHS ENDED												TWELVE MONTHS ENDED
*(in thousands, except share and per share data)*	December 31, 2024				September 30, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net interest income	$	103,445			$	101,114			$	95,074			$	398,019			$	373,113
less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions		250				281				124				1,154				633
less interest income on former Vision Bank relationships		38				9				35				54				631
Net interest income – adjusted	$	103,157			$	100,824			$	94,915			$	396,811			$	371,849

Provision for credit losses	$	3,935			$	5,315			$	1,809			$	14,543			$	2,904
less recoveries on former Vision Bank relationships		—				(234	)			—				(1,304	)			(788	)
Provision for credit losses – adjusted	$	3,935			$	5,549			$	1,809			$	15,847			$	3,692

Other income	$	31,064			$	36,530			$	15,519			$	122,588			$	92,634
less loss on sale of debt securities, net		(128	)			—				(7,875	)			(526	)			(7,875	)
less pension settlement gain		365				5,783				—				6,148				—
less impact of strategic initiatives		117				—				(1,038	)			775				(1,038	)
less Vision related OREO valuation adjustments, net		—				1				(370	)			115				(370	)
less other service income related to former Vision Bank relationships		299				—				40				312				175
Other income – adjusted	$	30,411			$	30,746			$	24,762			$	115,764			$	101,742

Other expense	$	83,241			$	85,681			$	79,043			$	321,339			$	309,239
less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions		288				287				334				1,215				1,323
less Foundation contribution		—				2,000				1,000				2,000				1,000
less special incentive		—				1,700				—				1,700				—
less building demolition costs		44				349				—				458				—
less direct expenses related to collection of payments on former Vision Bank loan relationships		215				—				—				215				100
Other expense – adjusted	$	82,694			$	81,345			$	77,709			$	315,751			$	306,816

Tax effect of adjustments to net income identified above (i)	$	(83	)		$	(414	)		$	2,188			$	(787	)		$	1,991

Net income – reported	$	38,630			$	38,217			$	24,500			$	151,420			$	126,734
Net income – adjusted (h)	$	38,319			$	36,659			$	32,730			$	148,459			$	134,222

Diluted earnings per common share	$	2.37			$	2.35			$	1.51			$	9.32			$	7.80
Diluted earnings per common share, adjusted (h)	$	2.35			$	2.25			$	2.02			$	9.14			$	8.26

Annualized return on average assets (a)(b)		1.54		%		1.53		%		0.98		%		1.53		%		1.27		%
Annualized return on average assets, adjusted (a)(b)(h)		1.52		%		1.47		%		1.31		%		1.50		%		1.35		%

Annualized return on average tangible assets (a)(b)(e)		1.56		%		1.56		%		1.00		%		1.56		%		1.29		%
Annualized return on average tangible assets, adjusted (a)(b)(e)(h)		1.55		%		1.49		%		1.34		%		1.52		%		1.37		%

Annualized return on average shareholders’ equity (a)(b)		12.32		%		12.56		%		8.81		%		12.65		%		11.55		%
Annualized return on average shareholders’ equity, adjusted (a)(b)(h)		12.22		%		12.05		%		11.76		%		12.40		%		12.23		%

Annualized return on average tangible equity (a)(b)(c)		14.17		%		14.52		%		10.35		%		14.65		%		13.60		%
Annualized return on average tangible equity, adjusted (a)(b)(c)(h)		14.06		%		13.93		%		13.83		%		14.37		%		14.40		%

Efficiency ratio (g)		61.60		%		61.98		%		70.93		%		61.44		%		65.87		%
Efficiency ratio, adjusted (g)(h)		61.63		%		61.55		%		64.48		%		61.31		%		64.28		%

Annualized net interest margin (g)		4.51		%		4.45		%		4.17		%		4.41		%		4.11		%
Annualized net interest margin, adjusted (g)(h)		4.50		%		4.43		%		4.17		%		4.39		%		4.09		%
Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.


PARK NATIONAL CORPORATION
Financial Reconciliations (continued)

(a) Reported measure uses net income
(b) Averages are for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023 and the twelve months ended December 31, 2024 and December 31, 2023, as appropriate
(c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangible assets during the applicable period.

RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE EQUITY:
	THREE MONTHS ENDED						TWELVE MONTHS ENDED
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
AVERAGE SHAREHOLDERS’ EQUITY	$	1,247,680	$	1,210,565	$	1,103,726	$	1,197,120	$	1,097,143
Less: Average goodwill and other intangible assets		163,221		163,509		164,466		163,669		164,960
AVERAGE TANGIBLE EQUITY	$	1,084,459	$	1,047,056	$	939,260	$	1,033,451	$	932,183

(d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders’ equity less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL SHAREHOLDERS’ EQUITY TO TANGIBLE EQUITY:
	December 31, 2024		September 30, 2024		December 31, 2023
TOTAL SHAREHOLDERS’ EQUITY	$	1,243,848	$	1,239,413	$	1,145,293
Less: Goodwill and other intangible assets		163,032		163,320		164,247
TANGIBLE EQUITY	$	1,080,816	$	1,076,093	$	981,046

(e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.

RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS
	THREE MONTHS ENDED						TWELVE MONTHS ENDED
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
AVERAGE ASSETS	$	10,008,328	$	9,920,633	$	9,890,188	$	9,901,264	$	9,957,554
Less: Average goodwill and other intangible assets		163,221		163,509		164,466		163,669		164,960
AVERAGE TANGIBLE ASSETS	$	9,845,107	$	9,757,124	$	9,725,722	$	9,737,595	$	9,792,594

(f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.

RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
	December 31, 2024		September 30, 2024		December 31, 2023
TOTAL ASSETS	$	9,805,350	$	9,903,049	$	9,836,453
Less: Goodwill and other intangible assets		163,032		163,320		164,247
TANGIBLE ASSETS	$	9,642,318	$	9,739,729	$	9,672,206

(g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.

RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
	THREE MONTHS ENDED						TWELVE MONTHS ENDED
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Interest income	$	133,613	$	133,808	$	125,206	$	522,965	$	471,670
Fully taxable equivalent adjustment		617		594		838		2,432		3,726
Fully taxable equivalent interest income	$	134,230	$	134,402	$	126,044	$	525,397	$	475,396
Interest expense		30,168		32,694		30,132		124,946		98,557
Fully taxable equivalent net interest income	$	104,062	$	101,708	$	95,912	$	400,451	$	376,839

(h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for credit losses, other income, other expense and tax effect of adjustments to net income.
(i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
(j) Pre-tax, pre-provision (“PTPP”) net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for credit losses.


RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
	THREE MONTHS ENDED						TWELVE MONTHS ENDED
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Net income	$	38,630	$	38,217	$	24,500	$	151,420	$	126,734
Plus: Income taxes		8,703		8,431		5,241		33,305		26,870
Plus: Provision for credit losses		3,935		5,315		1,809		14,543		2,904
Pre-tax, pre-provision net income	$	51,268	$	51,963	$	31,550	$	199,268	$	156,508

(k) Effective January 1, 2023, Park adopted Accounting Standards Update (“ASU”) 2022-02. Among other things, this ASU eliminated the concept of troubled debt restructurings (“TDRs”). As a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans (“NPLs”) and total nonperforming assets (“NPAs”) each decreased by $20.1 million effective January 1, 2023. Additionally, as a result of the adoption of this ASU, individually evaluated loans decreased by $11.5 million effective January 1, 2023.

The MIL Network –

January 28, 2025

MIL-OSI: NBT Bancorp Inc. Announces Full Year Net Income and Declares Cash Dividend

Source: GlobeNewswire (MIL-OSI)

NORWICH, N.Y., Jan. 27, 2025 (GLOBE NEWSWIRE) — NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and twelve months ended December 31, 2024.

Net income for the three months ended December 31, 2024 was $36.0 million, or $0.76 per diluted common share, compared to $30.4 million, or $0.64 per diluted common share, for the three months ended December 31, 2023, and $38.1 million, or $0.80 per diluted common share, for the third quarter of 2024. Operating diluted earnings per share⁽¹⁾, a non-GAAP measure was $0.77 for the fourth quarter of 2024, compared to $0.72 for the fourth quarter of 2023 and $0.80 for the third quarter of 2024.

Net income for the year ended December 31, 2024 was $140.6 million, or $2.97 per diluted common share, compared to $118.8 million, or $2.65 per diluted common share, in the prior year.

The Company completed the acquisition of Salisbury Bancorp, Inc. (“Salisbury”) on August 11, 2023, adding 13 banking offices, $1.18 billion in loans and $1.31 billion in deposits. The comparisons to the full year of 2023 are significantly impacted by the Salisbury acquisition.

CEO Comments

“Three consecutive quarters of growth in net interest income and margin along with continued strong results from our diverse mix of fee businesses drove NBT’s operating performance in the fourth quarter of 2024,” said NBT President and Chief Executive Officer Scott A. Kingsley. “In addition, we were pleased to receive regulatory approval during the fourth quarter to complete our planned merger with Evans Bancorp, Inc. Evans shareholders also demonstrated strong support for the partnership with the vote to approve the transaction in December. We continue to expect the merger to close in the second quarter of 2025 in conjunction with the core system conversion, and team members from NBT and Evans are working closely to plan a smooth transition for the customers and communities we will serve together in the Buffalo and Rochester markets.”

Fourth Quarter 2024 Financial Highlights

Net Income	Net income was $36.0 million and diluted earnings per share was $0.76
Net Interest Income / NIM	Net interest income on a fully taxable equivalent (“FTE”) basis was $106.7 million, up $4.4 million from the prior quarter⁽¹⁾ Net interest margin (“NIM”) on an FTE basis was 3.34%⁽¹⁾, up 7 basis points (“bps”) from the prior quarter Included in FTE net interest income was $2.6 million of acquisition-related net accretion, which was consistent with the third quarter of 2024 Earning asset yields of 4.96% were down 5 bps from the prior quarter Total cost of funds of 1.71% was down 14 bps from the prior quarter
Noninterest Income	Noninterest income was $42.2 million, an increase of 11.1% from the fourth quarter of 2023, excluding net securities gains (losses)
Loans and Credit Quality	Period end total loans of $9.97 billion as of December 31, 2024, up $319.2 million, or 3.3%, from December 31, 2023 Net charge-offs to average loans was 0.23% annualized Nonperforming loans to total loans was 0.52% Allowance for loan losses to total loans was 1.16%
Deposits	Deposits were $11.55 billion as of December 31, 2024, up $577.8 million, or 5.3%, from December 31, 2023 Total cost of deposits was 1.60% for the fourth quarter of 2024, down 12 bps from the third quarter of 2024
Capital	Stockholders’ equity was $1.53 billion as of December 31, 2024 Tangible book value per share⁽²⁾ was $23.88 at December 31, 2024 Tangible equity to assets of 8.42%⁽¹⁾ CET1 ratio of 11.93%; Leverage ratio of 10.24%

Loans

Period end total loans were $9.97 billion at December 31, 2024, $9.91 billion at September 30, 2024 and $9.65 billion at December 31, 2023.
Period end total loans increased $319.2 million from December 31, 2023. Total commercial loans increased $322.0 million to $5.30 billion while total consumer loans decreased $2.8 million to $4.67 billion. Excluding the other consumer and residential solar portfolios, which are in a planned run-off status, period end loans increased $478.6 million, or 5.6%.
Commercial line of credit utilization rate was 21% at December 31, 2024, compared to 22% at September 30, 2024 and 20% at December 31, 2023.

Deposits

Total deposits at December 31, 2024 were $11.55 billion, compared to $11.59 billion at September 30, 2024 and $10.97 billion at December 31, 2023. The $577.8 million increase in deposits from December 31, 2023 was primarily due to higher consumer and commercial deposit balances.
The loan to deposit ratio was 86.3% at December 31, 2024, compared to 88.0% at December 31, 2023.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2024 was $106.1 million, an increase of $4.4 million, or 4.4%, from the third quarter of 2024 and an increase of $6.9 million, or 7.0%, from the fourth quarter of 2023. The increase in net interest income from the third quarter of 2024 resulted primarily from a decrease in the cost of deposits, an increase in average short-term interest-bearing accounts and the interest earned on those balances combined with a more favorable funding mix.
The NIM on an FTE basis for the fourth quarter of 2024 was 3.34%, an increase of 7 bps from the third quarter of 2024. This increase was driven by an improved funding mix with lower average balances of short-term borrowings, an increase in the average balance of noninterest-bearing demand deposit accounts and a decrease in the cost of interest-bearing deposits. The NIM on an FTE basis increased 19 bps from the fourth quarter of 2023 due to higher earning asset yields and lower average balances of short-term borrowings, partially offset by the increase in the cost of interest-bearing deposits.
Earning asset yields for the three months ended December 31, 2024 decreased 5 bps from the prior quarter to 4.96% and increased 17 bps from the same quarter in the prior year. Loan yields for the three months ended December 31, 2024 decreased 9 bps from the prior quarter to 5.65% primarily due to the repricing of $2.1 billion in variable rate loans partly offset by loans originating at higher rates than portfolio yields during the quarter. Earnings asset yields increased 17 bps from the same quarter in the prior year. Average earning assets increased $257.5 million, or 2.1%, from the third quarter of 2024 due to organic loan growth and an increase in short-term interest-bearing accounts. Average earning assets grew $140.6 million, or 1.1%, from the fourth quarter of 2023 due to organic loan growth partially offset by lower average balances of short-term interest-bearing accounts and securities.
Total cost of deposits, including noninterest bearing deposits, was 1.60% for the fourth quarter of 2024, a decrease of 12 bps from the prior quarter and an increase of 9 bps from the same period in the prior year.
Total cost of funds for the three months ended December 31, 2024 was 1.71%, a decrease of 14 bps from the prior quarter and a decrease of 1 bp from the fourth quarter of 2023.

Asset Quality and Allowance for Loan Losses

Net charge-offs to total average loans for the fourth quarter of 2024 was 23 bps compared to 16 bps in the prior quarter. The increase in net charge-offs from the prior quarter was driven by two commercial real estate relationships, of which $1.7 million was previously specifically reserved for in the second quarter of 2024. Net charge-offs for the portfolios in a planned run-off status represented the majority of total net charge-offs for the full year.
Nonperforming assets to total assets was 0.38% at December 31, 2024, compared to 0.27% at September 30, 2024 and 0.28% at December 31, 2023. The increase in nonperforming assets was attributable to a commercial real estate relationship that was placed into a nonaccrual status in the fourth quarter of 2024. The relationship is being actively managed and was written-down to estimated fair value in the fourth quarter of 2024, and as such, no specific reserve has been established.
Provision expense for the three months ended December 31, 2024 was $2.2 million, compared to $2.9 million for the third quarter of 2024. The decrease in provision expense from the prior quarter was primarily due to the run-off of the other consumer and residential solar portfolios partially offset by a higher level of net charge-offs.
The allowance for loan losses was $116.0 million, or 1.16% of total loans, at December 31, 2024, compared to $119.5 million, or 1.21% of total loans, at September 30, 2024 and $114.4 million, or 1.19% of total loans, at December 31, 2023.
The reserve for unfunded loan commitments was $4.4 million at December 31, 2024, compared to $4.6 million at September 30, 2024 and $5.1 million at December 31, 2023.

Noninterest Income

Total noninterest income, excluding securities gains (losses), was $42.2 million for the three months ended December 31, 2024, down $3.1 million, or 6.8%, from the seasonally high third quarter of 2024, and up $4.2 million, or 11.1%, from the fourth quarter of 2023.
Retirement plan administration fees were down $1.7 million from the prior quarter and increased $1.7 million from the fourth quarter of 2023. The decrease from the prior quarter, as expected, was due to higher seasonal activity-based fees in the third quarter. The increase from the fourth quarter of 2023 was driven by organic growth and higher market levels.
Wealth management fees were consistent with the prior quarter and increased $1.7 million from the fourth quarter of 2023. The increase from the fourth quarter of 2023 was driven by market performance and growth in new customer accounts.
Insurance revenues decreased $1.0 million from the third quarter, which typically has comparatively higher levels of policy renewals than the fourth quarter.

Noninterest Expense

Total noninterest expense was $100.8 million for the fourth quarter of 2024, compared to $95.7 million for the third quarter of 2024 and $92.8 million for the fourth quarter of 2023. Total noninterest expense increased 4.8% compared to the previous quarter and increased 13.7% from the fourth quarter of 2023, excluding $1.0 million of acquisition expenses in the fourth quarter of 2024, $0.5 million in the third quarter of 2024 and $0.3 million in the fourth quarter of 2023, respectively, and the $4.8 million impairment of a minority interest equity investment in the fourth quarter of 2023.
Salaries and benefits increased 3.5% from the prior quarter driven by higher medical costs and an increase in other benefits including higher levels of incentive compensation. The increase from the fourth quarter of 2023 was driven by merit pay increases, higher levels of incentive compensation and higher medical and other benefit costs.
Occupancy costs were consistent with the prior quarter and increased from the fourth quarter of 2023 driven by additional expenses including seasonal maintenance, rent and equipment expense.
Other expense increased $2.5 million from the prior quarter and $0.4 million from the fourth quarter of 2023. The increase from the previous quarter was driven by increases in office supplies and postage, advertising and other expenses.

Income Taxes

The full year effective tax rate was 21.6% for 2024 down from 22.6% for the full year of 2023.

Capital

Tangible common equity to tangible assets⁽¹⁾ was 8.42% at December 31, 2024. Tangible book value per share⁽²⁾ was $23.88 at December 31, 2024, $23.83 at September 30, 2024 and $21.72 at December 31, 2023.
Stockholders’ equity increased $100.5 million from December 31, 2023 driven by net income generation of $140.6 million and an $18.8 million decrease in accumulated other comprehensive loss reflecting the change in the fair value of securities available for sale, partially offset by dividends declared of $62.3 million.
As of December 31, 2024, CET1 capital ratio of 11.93%, leverage ratio of 10.24% and total risk-based capital ratio of 15.03%.

Dividend

The Board of Directors approved a first-quarter cash dividend of $0.34 per share at a meeting held earlier today. The dividend represents a $0.02 per share, or 6.3%, increase over the dividend paid in the first quarter of 2024. The dividend will be paid on March 17, 2025 to stockholders of record as of March 3, 2025.

Stock Repurchase

The Company purchased 7,600 shares of its common stock during 2024 at an average price of $33.02 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of December 31, 2024, there were 1,992,400 shares available for repurchase under this plan.

Evans Bancorp, Inc. Merger

In December 2024, NBT announced that it had received the regulatory approval and waiver from the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York necessary to complete its acquisition of Evans Bancorp, Inc. (“Evans”). Also in December 2024, the shareholders of Evans voted to approve the merger. Evans reported over 75% of the issued and outstanding shares of Evans were represented at a special shareholder meeting and over 96% of the votes cast were voted to approve the merger. NBT and Evans anticipate closing the transaction in second quarter of 2025 in conjunction with the core system conversion, pending customary closing conditions. Evans had assets of $2.28 billion, deposits of $1.90 billion and net loans of $1.76 billion as of September 30, 2024.

Conference Call and Webcast

The Company will host a conference call at 10:00 a.m. (Eastern) Tuesday, January 28, 2025, to review the fourth quarter 2024 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at www.nbtbancorp.com/bn/presentations-events.html#events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $13.79 billion at December 31, 2024. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 155 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtbank.com/Insurance.

Forward-Looking Statements

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers, and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT and Evans may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all or to successfully integrate Evans operations and those of NBT; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; and (21) the Company’s success at managing the risks involved in the foregoing items.

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors, including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected.

Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Profitability (reported)
Diluted earnings per share	$	0.76		$	0.80		$	0.69		$	0.71		$	0.64
Weighted average diluted common shares outstanding		47,505,760			47,473,417			47,382,814			47,370,145			47,356,899
Return on average assets⁽³⁾		1.04	%		1.12	%		0.98	%		1.02	%		0.89	%
Return on average equity⁽³⁾		9.44	%		10.21	%		9.12	%		9.52	%		8.79	%
Return on average tangible common equity⁽¹⁾⁽³⁾		13.36	%		14.54	%		13.23	%		13.87	%		13.08	%
Net interest margin⁽¹⁾⁽³⁾		3.34	%		3.27	%		3.18	%		3.14	%		3.15	%

	12 Months Ended December 31,
		2024			2023
Profitability (reported)
Diluted earnings per share	$	2.97		$	2.65
Weighted average diluted common shares outstanding		47,433,174			44,770,171
Return on average assets		1.04	%		0.95	%
Return on average equity		9.57	%		9.34	%
Return on average tangible common equity⁽¹⁾		13.75	%		13.02	%
Net interest margin⁽¹⁾		3.23	%		3.29	%

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Profitability (operating)
Diluted earnings per share⁽¹⁾	$	0.77		$	0.80		$	0.69		$	0.68		$	0.72
Return on average assets⁽¹⁾⁽³⁾		1.06	%		1.12	%		0.98	%		0.97	%		0.99	%
Return on average equity⁽¹⁾⁽³⁾		9.60	%		10.23	%		9.14	%		9.04	%		9.79	%
Return on average tangible common equity⁽¹⁾⁽³⁾		13.57	%		14.56	%		13.26	%		13.20	%		14.49	%

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Balance sheet data
Short-term interest-bearing accounts	$	78,973		$	231,671		$	35,207		$	156,632		$	31,378
Securities available for sale		1,574,664			1,509,338			1,439,445			1,418,471			1,430,858
Securities held to maturity		842,921			854,941			878,909			890,863			905,267
Net loans		9,853,910			9,787,541			9,733,847			9,572,777			9,536,313
Total assets		13,786,666			13,839,552			13,501,909			13,439,199			13,309,040
Total deposits		11,546,761			11,588,278			11,271,459			11,195,289			10,968,994
Total borrowings		414,983			456,666			476,082			518,190			637,387
Total liabilities		12,260,525			12,317,572			12,039,954			11,997,784			11,883,349
Stockholders’ equity		1,526,141			1,521,980			1,461,955			1,441,415			1,425,691

Capital
Equity to assets		11.07	%		11.00	%		10.83	%		10.73	%		10.71	%
Tangible equity ratio⁽¹⁾		8.42	%		8.36	%		8.11	%		7.98	%		7.93	%
Book value per share	$	32.34		$	32.26		$	31.00		$	30.57		$	30.26
Tangible book value per share⁽²⁾	$	23.88		$	23.83		$	22.54		$	22.07		$	21.72
Leverage ratio		10.24	%		10.29	%		10.16	%		10.09	%		9.71	%
Common equity tier 1 capital ratio		11.93	%		11.86	%		11.70	%		11.68	%		11.57	%
Tier 1 capital ratio		12.83	%		12.77	%		12.61	%		12.61	%		12.50	%
Total risk-based capital ratio		15.03	%		15.02	%		14.88	%		14.87	%		14.75	%
Common stock price (end of period)	$	47.76		$	44.23		$	38.60		$	36.68		$	41.91

NBT Bancorp Inc. and Subsidiaries
Asset Quality and Consolidated Loan Balances
(unaudited, dollars in thousands)

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Asset quality
Nonaccrual loans	$	45,819		$	33,338		$	34,755		$	35,189		$	34,213
90 days past due and still accruing		5,798			3,981			3,333			2,600			3,661
Total nonperforming loans		51,617			37,319			38,088			37,789			37,874
Other real estate owned		182			127			74			–			–
Total nonperforming assets		51,799			37,446			38,162			37,789			37,874
Allowance for loan losses		116,000			119,500			120,500			115,300			114,400

Asset quality ratios
Allowance for loan losses to total loans		1.16	%		1.21	%		1.22	%		1.19	%		1.19	%
Total nonperforming loans to total loans		0.52	%		0.38	%		0.39	%		0.39	%		0.39	%
Total nonperforming assets to total assets		0.38	%		0.27	%		0.28	%		0.28	%		0.28	%
Allowance for loan losses to total nonperforming loans		224.73	%		320.21	%		316.37	%		305.12	%		302.05	%
Past due loans to total loans⁽⁴⁾		0.34	%		0.36	%		0.30	%		0.33	%		0.32	%
Net charge-offs to average loans⁽³⁾		0.23	%		0.16	%		0.15	%		0.19	%		0.22	%

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Loan net charge-offs by line of business
Commercial	$	2,542		$	807		$	(8	)	$	772		$	1,107
Residential real estate and home equity		(25	)		(64	)		(76	)		(32	)		11
Indirect auto		675			725			747			665			399
Residential solar		1,589			1,599			1,610			1,211			1,081
Other consumer		928			853			1,426			2,063			2,729
Total loan net charge-offs	$	5,709		$	3,920		$	3,699		$	4,679		$	5,327

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Allowance for loan losses as a percentage of loans by segment
Commercial & industrial		0.73	%		0.73	%		0.76	%		0.79	%		0.84	%
Commercial real estate		0.95	%		1.01	%		1.00	%		0.97	%		0.99	%
Residential real estate		1.00	%		1.00	%		0.98	%		0.89	%		0.84	%
Auto		0.81	%		0.83	%		0.85	%		0.81	%		0.83	%
Residential solar		3.70	%		3.70	%		3.76	%		3.58	%		3.28	%
Other consumer		2.65	%		3.51	%		4.09	%		4.24	%		4.70	%
Total		1.16	%		1.21	%		1.22	%		1.19	%		1.19	%

		2024												2023
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Loans by line of business
Commercial & industrial	$	1,426,482		$	1,458,926		$	1,397,935		$	1,353,446		$	1,354,248
Commercial real estate		3,876,698			3,792,498			3,784,214			3,646,739			3,626,910
Residential real estate		2,142,249			2,143,766			2,134,875			2,133,289			2,125,804
Home equity		334,268			328,687			326,556			328,673			337,214
Indirect auto		1,273,253			1,235,175			1,225,786			1,190,734			1,130,132
Residential solar		820,079			839,659			861,883			896,147			917,755
Other consumer		96,881			108,330			123,098			139,049			158,650
Total loans	$	9,969,910		$	9,907,041		$	9,854,347		$	9,688,077		$	9,650,713

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, in thousands)

	December 31,		December 31,
	2024		2023
Assets
Cash and due from banks	$	205,083	$	173,811
Short-term interest-bearing accounts		78,973		31,378
Equity securities, at fair value		42,372		37,591
Securities available for sale, at fair value		1,574,664		1,430,858
Securities held to maturity (fair value $749,945 and $814,524, respectively)		842,921		905,267
Federal Reserve and Federal Home Loan Bank stock		33,957		45,861
Loans held for sale		9,744		3,371
Loans		9,969,910		9,650,713
Less allowance for loan losses		116,000		114,400
Net loans	$	9,853,910	$	9,536,313
Premises and equipment, net		80,840		80,675
Goodwill		362,663		361,851
Intangible assets, net		36,360		40,443
Bank owned life insurance		272,657		265,732
Other assets		392,522		395,889
Total assets	$	13,786,666	$	13,309,040

Liabilities and stockholders’ equity
Demand (noninterest bearing)	$	3,446,068	$	3,413,829
Savings, NOW and money market		6,658,188		6,230,456
Time		1,442,505		1,324,709
Total deposits	$	11,546,761	$	10,968,994
Short-term borrowings		162,942		386,651
Long-term debt		29,644		29,796
Subordinated debt, net		121,201		119,744
Junior subordinated debt		101,196		101,196
Other liabilities		298,781		276,968
Total liabilities	$	12,260,525	$	11,883,349

Total stockholders’ equity	$	1,526,141	$	1,425,691

Total liabilities and stockholders’ equity	$	13,786,666	$	13,309,040

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, in thousands except per share data)

	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
	2024			2023		2024			2023
Interest, fee and dividend income
Interest and fees on loans	$	141,103		$	132,738	$	552,846		$	462,669
Securities available for sale		8,773			7,208		31,274			29,812
Securities held to maturity		4,931			5,374		20,466			20,681
Other		2,930			5,594		7,084			9,627
Total interest, fee and dividend income	$	157,737		$	150,914	$	611,670		$	522,789
Interest expense
Deposits	$	46,815		$	42,753	$	186,948		$	104,641
Short-term borrowings		918			4,951		8,669			25,608
Long-term debt		293			294		1,166			925
Subordinated debt		1,816			1,795		7,232			6,076
Junior subordinated debt		1,790			1,948		7,533			7,320
Total interest expense	$	51,632		$	51,741	$	211,548		$	144,570
Net interest income	$	106,105		$	99,173	$	400,122		$	378,219
Provision for loan losses	$	2,209		$	5,126	$	19,607		$	16,524
Provision for loan losses – acquisition day 1 non-PCD		–			–		–			8,750
Total provision for loan losses	$	2,209		$	5,126	$	19,607		$	25,274
Net interest income after provision for loan losses	$	103,896		$	94,047	$	380,515		$	352,945
Noninterest income
Service charges on deposit accounts	$	4,411		$	4,165	$	17,087		$	15,425
Card services income		5,652			5,360		22,331			20,829
Retirement plan administration fees		12,924			11,226		56,587			47,221
Wealth management		10,842			9,152		41,641			34,763
Insurance services		3,883			3,659		17,032			15,667
Bank owned life insurance income		2,271			1,776		8,325			6,750
Net securities gains (losses)		222			507		2,789			(9,315	)
Other		2,221			2,643		11,032			10,838
Total noninterest income	$	42,426		$	38,488	$	176,824		$	142,178
Noninterest expense
Salaries and employee benefits	$	61,749		$	50,013	$	232,487		$	194,250
Technology and data services		10,220			10,174		39,139			38,163
Occupancy		7,786			7,175		31,309			28,408
Professional fees and outside services		4,843			5,115		19,132			17,601
Amortization of intangible assets		2,080			2,131		8,443			4,734
Reserve for unfunded loan commitments		(125	)		300		(705	)		30
Impairment of a minority interest equity investment		–			4,750		–			4,750
Acquisition expenses		988			254		1,531			9,978
Other		13,234			12,839		46,545			43,750
Total noninterest expense	$	100,775		$	92,751	$	377,881		$	341,664
Income before income tax expense	$	45,547		$	39,784	$	179,458		$	153,459
Income tax expense		9,542			9,338		38,817			34,677
Net income	$	36,005		$	30,446	$	140,641		$	118,782
Earnings Per Share
Basic	$	0.76		$	0.65	$	2.98		$	2.67
Diluted	$	0.76		$	0.64	$	2.97		$	2.65

NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, in thousands except per share data)

		2024										2023
	4th Q			3rd Q		2nd Q			1st Q			4th Q
Interest, fee and dividend income
Interest and fees on loans	$	141,103		$	141,991	$	136,606		$	133,146		$	132,738
Securities available for sale		8,773			7,815		7,562			7,124			7,208
Securities held to maturity		4,931			5,042		5,190			5,303			5,374
Other		2,930			1,382		1,408			1,364			5,594
Total interest, fee and dividend income	$	157,737		$	156,230	$	150,766		$	146,937		$	150,914
Interest expense
Deposits	$	46,815		$	49,106	$	46,688		$	44,339		$	42,753
Short-term borrowings		918			1,431		2,899			3,421			4,951
Long-term debt		293			292		291			290			294
Subordinated debt		1,816			1,810		1,806			1,800			1,795
Junior subordinated debt		1,790			1,922		1,908			1,913			1,948
Total interest expense	$	51,632		$	54,561	$	53,592		$	51,763		$	51,741
Net interest income	$	106,105		$	101,669	$	97,174		$	95,174		$	99,173
Provision for loan losses	$	2,209		$	2,920	$	8,899		$	5,579		$	5,126
Provision for loan losses – acquisition day 1 non-PCD		–			–		–			–			–
Total provision for loan losses	$	2,209		$	2,920	$	8,899		$	5,579		$	5,126
Net interest income after provision for loan losses	$	103,896		$	98,749	$	88,275		$	89,595		$	94,047
Noninterest income
Service charges on deposit accounts	$	4,411		$	4,340	$	4,219		$	4,117		$	4,165
Card services income		5,652			5,897		5,587			5,195			5,360
Retirement plan administration fees		12,924			14,578		14,798			14,287			11,226
Wealth management		10,842			10,929		10,173			9,697			9,152
Insurance services		3,883			4,913		3,848			4,388			3,659
Bank owned life insurance income		2,271			1,868		1,834			2,352			1,776
Net securities gains (losses)		222			476		(92	)		2,183			507
Other		2,221			2,773		2,865			3,173			2,643
Total noninterest income	$	42,426		$	45,774	$	43,232		$	45,392		$	38,488
Noninterest expense
Salaries and employee benefits	$	61,749		$	59,641	$	55,393		$	55,704		$	50,013
Technology and data services		10,220			9,920		9,249			9,750			10,174
Occupancy		7,786			7,754		7,671			8,098			7,175
Professional fees and outside services		4,843			4,871		4,565			4,853			5,115
Amortization of intangible assets		2,080			2,062		2,133			2,168			2,131
Reserve for unfunded loan commitments		(125	)		250		(380	)		(450	)		300
Impairment of a minority interest equity investment		–			–		–			–			4,750
Acquisition expenses		988			543		–			–			254
Other		13,234			10,704		10,957			11,650			12,839
Total noninterest expense	$	100,775		$	95,745	$	89,588		$	91,773		$	92,751
Income before income tax expense	$	45,547		$	48,778	$	41,919		$	43,214		$	39,784
Income tax expense		9,542			10,681		9,203			9,391			9,338
Net income	$	36,005		$	38,097	$	32,716		$	33,823		$	30,446
Earnings Per Share
Basic	$	0.76		$	0.81	$	0.69		$	0.72		$	0.65
Diluted	$	0.76		$	0.80	$	0.69		$	0.71		$	0.64

NBT Bancorp Inc. and Subsidiaries
Average Quarterly Balance Sheets
(unaudited, dollars in thousands)

	Average Balance		Yield / Rates	Average Balance		Yield / Rates	Average Balance		Yield / Rates	Average Balance		Yield / Rates	Average Balance		Yield / Rates
	Q4 – 2024			Q3 – 2024			Q2 – 2024			Q1 – 2024			Q4 – 2023
Assets
Short-term interest-bearing accounts	$	184,988	5.27%	$	62,210	4.87%	$	48,861	5.48%	$	47,972	4.48%	$	319,907	5.59%
Securities taxable⁽¹⁾		2,317,034	2.10%		2,266,930	1.99%		2,280,767	1.97%		2,278,029	1.91%		2,310,409	1.88%
Securities tax-exempt⁽¹⁾⁽⁵⁾		211,493	3.46%		217,251	3.47%		226,032	3.56%		230,468	3.58%		232,575	3.51%
FRB and FHLB stock		33,261	5.75%		35,395	6.97%		40,283	7.41%		42,296	7.89%		47,994	8.98%
Loans⁽¹⁾⁽⁶⁾		9,957,879	5.65%		9,865,412	5.74%		9,772,014	5.63%		9,674,892	5.54%		9,653,191	5.47%
Total interest-earning assets	$	12,704,655	4.96%	$	12,447,198	5.01%	$	12,367,957	4.92%	$	12,273,657	4.84%	$	12,564,076	4.79%
Other assets		1,093,419			1,072,277			1,064,487			1,055,386			1,052,024
Total assets	$	13,798,074		$	13,519,475		$	13,432,444		$	13,329,043		$	13,616,100
Liabilities and stockholders’ equity
Money market deposit accounts	$	3,504,937	3.27%	$	3,342,845	3.68%	$	3,254,252	3.65%	$	3,129,160	3.56%	$	3,045,531	3.43%
NOW deposit accounts		1,664,960	0.91%		1,600,547	0.87%		1,603,695	0.78%		1,600,288	0.75%		1,645,401	0.80%
Savings deposits		1,561,703	0.05%		1,566,316	0.05%		1,586,753	0.05%		1,607,659	0.04%		1,666,915	0.04%
Time deposits		1,446,798	3.85%		1,442,424	4.00%		1,391,062	4.00%		1,352,559	4.00%		1,343,548	3.81%
Total interest-bearing deposits	$	8,178,398	2.28%	$	7,952,132	2.46%	$	7,835,762	2.40%	$	7,689,666	2.32%	$	7,701,395	2.20%
Federal funds purchased		–	–		2,609	5.34%		29,945	5.56%		19,769	5.53%		217	5.48%
Repurchase agreements		116,408	3.13%		98,035	2.80%		86,405	1.55%		82,419	1.55%		82,387	1.59%
Short-term borrowings		174	4.57%		48,875	5.74%		155,159	5.58%		213,390	5.34%		345,250	5.31%
Long-term debt		29,657	3.93%		29,696	3.91%		29,734	3.94%		29,772	3.92%		29,809	3.91%
Subordinated debt, net		120,967	5.97%		120,594	5.97%		120,239	6.04%		119,873	6.04%		119,531	5.96%
Junior subordinated debt		101,196	7.04%		101,196	7.56%		101,196	7.58%		101,196	7.60%		101,196	7.64%
Total interest-bearing liabilities	$	8,546,800	2.40%	$	8,353,137	2.60%	$	8,358,440	2.58%	$	8,256,085	2.52%	$	8,379,785	2.45%
Demand deposits		3,438,194			3,389,894			3,323,906			3,356,607			3,535,815
Other liabilities		295,292			292,446			306,747			286,749			326,857
Stockholders’ equity		1,517,788			1,483,998			1,443,351			1,429,602			1,373,643
Total liabilities and stockholders’ equity	$	13,798,074		$	13,519,475		$	13,432,444		$	13,329,043		$	13,616,100
Interest rate spread			2.56%			2.41%			2.34%			2.32%			2.34%
Net interest margin (FTE)⁽¹⁾			3.34%			3.27%			3.18%			3.14%			3.15%

NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)

	Average				Yield/	Average				Yield/
	Balance		Interest		Rates	Balance		Interest		Rates
Twelve Months Ended December 31,		2024					2023
Assets
Short-term interest-bearing accounts	$	86,213	$	4,412	5.12%	$	126,765	$	6,259	4.94%
Securities taxable⁽¹⁾		2,285,725		45,588	1.99%		2,377,596		45,176	1.90%
Securities tax-exempt⁽¹⁾⁽⁵⁾		221,273		7,788	3.52%		214,053		6,730	3.14%
FRB and FHLB stock		37,789		2,672	7.07%		48,641		3,368	6.92%
Loans⁽¹⁾⁽⁶⁾		9,818,064		553,784	5.64%		8,803,228		463,290	5.26%
Total interest-earning assets	$	12,449,064	$	614,244	4.93%	$	11,570,283	$	524,823	4.54%
Other assets		1,071,455					923,850
Total assets	$	13,520,519				$	12,494,133
Liabilities and stockholders’ equity
Money market deposit accounts	$	3,308,433	$	116,982	3.54%	$	2,418,450	$	62,475	2.58%
NOW deposit accounts		1,617,456		13,442	0.83%		1,555,414		8,298	0.53%
Savings deposits		1,580,517		734	0.05%		1,715,749		650	0.04%
Time deposits		1,408,410		55,790	3.96%		1,006,867		33,218	3.30%
Total interest-bearing deposits	$	7,914,816	$	186,948	2.36%	$	6,696,480	$	104,641	1.56%
Federal funds purchased		13,016		721	5.54%		24,575		1,269	5.16%
Repurchase agreements		95,879		2,255	2.35%		70,251		747	1.06%
Short-term borrowings		103,963		5,693	5.48%		450,377		23,592	5.24%
Long-term debt		29,715		1,166	3.92%		24,247		925	3.81%
Subordinated debt, net		120,420		7,232	6.01%		105,756		6,076	5.75%
Junior subordinated debt		101,196		7,533	7.44%		101,196		7,320	7.23%
Total interest-bearing liabilities	$	8,379,005	$	211,548	2.52%	$	7,472,882	$	144,570	1.93%
Demand deposits		3,377,352					3,463,608
Other liabilities		295,301					285,310
Stockholders’ equity		1,468,861					1,272,333
Total liabilities and stockholders’ equity	$	13,520,519				$	12,494,133
Net interest income (FTE)⁽¹⁾			$	402,696				$	380,253
Interest rate spread					2.41%					2.61%
Net interest margin (FTE)⁽¹⁾					3.23%					3.29%
Taxable equivalent adjustment			$	2,574				$	2,034
Net interest income			$	400,122				$	378,219

⁽¹⁾	The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:

	Non-GAAP measures
	(unaudited, dollars in thousands except per share data)

			2024												2023
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Operating net income
	Net income	$	36,005		$	38,097		$	32,716		$	33,823		$	30,446
	Acquisition expenses		988			543			–			–			254
	Impairment of a minority interest equity investment		–			–			–			–			4,750
	Securities (gains) losses		(222	)		(476	)		92			(2,183	)		(507	)
	Adjustments to net income	$	766		$	67		$	92		$	(2,183	)	$	4,497
	Adjustments to net income (net of tax)	$	604		$	52		$	72		$	(1,703	)	$	3,435
	Operating net income	$	36,609		$	38,149		$	32,788		$	32,120		$	33,881
	Operating diluted earnings per share	$	0.77		$	0.80		$	0.69		$	0.68		$	0.72

			2024												2023
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	FTE adjustment
	Net interest income	$	106,105		$	101,669		$	97,174		$	95,174		$	99,173
	Add: FTE adjustment		619			639			658			658			669
	Net interest income (FTE)	$	106,724		$	102,308		$	97,832		$	95,832		$	99,842
	Average earning assets	$	12,704,655		$	12,447,198		$	12,367,957		$	12,273,657		$	12,564,076
	Net interest margin (FTE)⁽³⁾		3.34	%		3.27	%		3.18	%		3.14	%		3.15	%

		12 Months Ended December 31,
			2024			2023
	FTE adjustment
	Net interest income	$	400,122		$	378,219
	Add: FTE adjustment		2,574			2,034
	Net interest income (FTE)	$	402,696		$	380,253
	Average earning assets	$	12,449,064		$	11,570,283
	Net interest margin (FTE)		3.23	%		3.29	%

	Interest income for tax-exempt securities and loans have been adjusted to an FTE basis using the statutory Federal income tax rate of 21%.

⁽¹⁾	The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:

	Non-GAAP measures (continued)
	(unaudited, dollars in thousands)

			2024												2023
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Tangible equity to tangible assets
	Total equity	$	1,526,141		$	1,521,980		$	1,461,955		$	1,441,415		$	1,425,691
	Intangible assets		399,023			397,853			398,686			400,819			402,294
	Total assets	$	13,786,666		$	13,839,552		$	13,501,909		$	13,439,199		$	13,309,040
	Tangible equity to tangible assets		8.42	%		8.36	%		8.11	%		7.98	%		7.93	%

			2024												2023
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Return on average tangible common equity
	Net income	$	36,005		$	38,097		$	32,716		$	33,823		$	30,446
	Amortization of intangible assets (net of tax)		1,560			1,547			1,600			1,626			1,599
	Net income, excluding intangibles amortization	$	37,565		$	39,644		$	34,316		$	35,449		$	32,045

	Average stockholders’ equity	$	1,517,788		$	1,483,998		$	1,443,351		$	1,429,602		$	1,373,643
	Less: average goodwill and other intangibles		399,139			399,113			399,968			401,756			401,978
	Average tangible common equity	$	1,118,649		$	1,084,885		$	1,043,383		$	1,027,846		$	971,665
	Return on average tangible common equity⁽³⁾		13.36	%		14.54	%		13.23	%		13.87	%		13.08	%

		12 Months Ended December 31,
			2024			2023
	Return on average tangible common equity
	Net income	$	140,641		$	118,782
	Amortization of intangible assets (net of tax)		6,332			3,551
	Net income, excluding intangibles amortization	$	146,973		$	122,333

	Average stockholders’ equity	$	1,468,861		$	1,272,333
	Less: average goodwill and other intangibles		399,989			332,667
	Average tangible common equity	$	1,068,872		$	939,666
	Return on average tangible common equity		13.75	%		13.02	%

⁽²⁾	Non-GAAP measure – Stockholders’ equity less goodwill and intangible assets divided by common shares outstanding.
⁽³⁾	Annualized.
⁽⁴⁾	Total past due loans, defined as loans 30 days or more past due and in an accrual status.
⁽⁵⁾	Securities are shown at average amortized cost.
⁽⁶⁾	For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.

Contact:	Scott A. Kingsley, President and CEO
	Annette L. Burns, Executive Vice President and CFO
	NBT Bancorp Inc.
	52 South Broad Street
	Norwich, NY 13815
	607-337-6589

This press release was published by a CLEAR® Verified individual.

The MIL Network –

January 28, 2025

MIL-OSI: Preferred Bank Reports Fourth Quarter and Annual Results

Source: GlobeNewswire (MIL-OSI)

LOS ANGELES, Jan. 27, 2025 (GLOBE NEWSWIRE) — Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended December 31, 2024. Preferred Bank (“the Bank”) reported net income of $30.2 million or $2.25 per diluted share for the fourth quarter of 2024. This represents a decrease in net income of $3.2 million from the prior quarter and a decrease of $5.6 from the same quarter last year. The decrease compared to both periods was mainly due to a one-time $8.1 million increase in occupancy expense this quarter due to the previously disclosed error in the calculation of ASC 842, Accounting for Leases. As previously disclosed, this calculation error goes back to the adoption of ASC 842 in 2019 and the $8.1 million item represents the cumulative erroneous calculation through the years from 2019 to present.

Net interest income was $69.2 million, up by $325,000 compared to last quarter’s $68.8 million and down slightly from the $69.4 million recorded one year ago. Noninterest expense was $28.2 million, an increase of $6.2 million from the previous quarter and an increase of $10.4 million over the same quarter last year. These increases were due to the aforementioned non-recurring occupancy expense item. The provision for credit losses was $2.0 million this quarter compared to $3.2 million last quarter and compared to $3.5 million this quarter last year. Despite the non-recurring expense item, Preferred Bank continues to deliver top-of-peer group profitability metrics and long term shareholder returns.

Highlights for the Quarter:

Return on average assets was 1.74%
Return on beginning equity of 16.03%
Net interest margin (NIM) held strong at 4.06%
Total loans increased by $71 million or 1.3%
Efficiency ratio was 38.8%

Highlights for the Year:

Return on average assets was 1.91%
Return on beginning equity of 18.80%
The NIM was 4.08%
Total loans increased by $369 million or 7.0%
Efficiency ratio was 31.47%

Li Yu, Chairman and CEO, commented, “We completed the year 2024 with net income of $130.7 million or $9.64 per diluted share. Return on assets was 1.91% for the year and return on beginning equity was 18.8%, which should be well above peer group and the industry average.

”Fourth quarter net income of $30.2 million or $2.25 per diluted share was negatively impacted by a correction to our lease expense of $8.1 million. This correction was previously announced and is non-recurring in nature. The after-tax effect of this item was approximately $0.42.

“Under a high interest rate and high inflation environment, Preferred Bank’s loan growth and deposit growth were less than our historical performance. 2024 loan growth of 7.0% and deposit growth of 3.6% were still in- line with industry averages.

“At December 31, 2024, our credit metrics improved from September 30, 2024. Non-performing loans decreased by $10.0 million or 52% and criticized loans decreased by $76.7 million or 32.6%. The Bank’s allowance for credit losses to total loans was 1.27% as of December 31, 2024.

“The recent wildfires in the Los Angeles area have wrought unprecedented damage to our community. We at Preferred Bank will be dedicated to making the utmost effort to help rebuild the homes and businesses lost in this tragedy. At this time, the Bank has confirmed the existence of one property that secures a commercial loan which was affected by the fires but we can confirm the property had the appropriate insurance. We are most grateful that none of our residential home mortgage borrowers have been affected and that none of our employees have been directly impacted.

“In December, our Board of Directors announced an increase in the quarterly dividend from $0.70 per quarter to $0.75 per quarter, the first of which is payable in January of 2025. For the year, we also repurchased 464,314 shares of our common stock for total consideration of $34.3 million. At December 31, 2024, the Bank’s tier 1 leverage ratio improved to 11.33% from 10.85% as of December 31, 2023. Tangible book value per common share increased from $50.54 at the end of 2023 to $57.86 as of December 31, 2024, a 13.1% increase.

“We look forward to continue our consistently strong financial performance into 2025.”

Results of Operations – Quarter

Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $69.2 million for the fourth quarter of 2024. This was a $325,000 increase from the $68.8 million recorded in the prior quarter and a $223,000 decrease from the same quarter last year. Compared to the prior quarter, interest income was down by $3.6 million but interest expense also decreased by $3.9 million. In comparison to the same quarter last year, interest income increased by $894,000 but interest expense increased by $1.1 million. The Bank’s net interest margin came in at 4.06% for the quarter, this is down slightly from the 4.10% recorded last quarter and was down by 18 basis points from the 4.24% margin achieved in the fourth quarter of the prior year. Management believes that efforts to reduce the Bank’s asset sensitivity have been largely effective as the margin has held up much better than originally anticipated when the first rate cut occurred in September of 2024.

Noninterest Income. For the fourth quarter of 2024, noninterest income was $3.6 million compared with $2.1 million for the same quarter last year and compared to $3.5 million for the third quarter of 2024. The increase over the prior quarter was primarily due to other income and fees which increased by $131,000. In comparing to the same quarter last year, letter of credit (LC) fee income was up by $491,000 and last year the Bank recorded a loss on sale of investment securities of $929,000. Finally, other income was up by $303,000 over last year.

Noninterest Expense. Total noninterest expense was $28.2 million for the fourth quarter of 2024 compared to $22.1 million for the third quarter of 2024 and compared to the $17.9 million recorded in the same period last year. The primary reason for the increase over the prior year and over the prior quarter was the $8.1 million occupancy expense adjustment related to accounting pronouncement ASC 842 mentioned earlier. In comparing to the prior quarter; personnel expense was down by $246,000, business development expense was up by $99,000 and OREO expense was lower by $1.8 million due to a $1.6 million valuation allowance recorded last quarter. In comparing to same quarter last year; personnel expense was up by $1.2 million due to additional personnel, professional services was up by $251,000 and other expense was up by $360,000. For the quarter ended December 31, 2024, the Bank’s efficiency ratio was 38.8%, higher than the 30.6% posted last quarter and higher than the 25.0% posted this quarter last year.

Income Taxes. The Bank recorded a provision for income taxes of $12.3 million for the fourth quarter of 2024. This represents an effective tax rate (“ETR”) of 29.0% which is identical to the ETR for last quarter and up from the 28.5% ETR recorded in the same period last year. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

Balance Sheet Summary

Total gross loans at December 31, 2024 were $5.64 billion, an increase of $369 million from the total of $5.27 billion as of December 31, 2023. Total deposits were $5.92 billion, an increase of $207.5 million from the $5.71 billion as of December 31, 2023. Total assets were $6.92 billion, an increase of $264.2 million over the total of $6.66 billion as of December 31, 2023.

Results of Operations – Year

The Bank’s net income for the year ended December 31, 2024 was $130.7 million or $9.64 per diluted share. This is down from $150.0 million or $10.52 per diluted share for 2023. The decrease was due to net interest income which was down by $16.7 million as well as noninterest expense which increased by $13.4 million. This was partially offset by noninterest income which increased in 2024 by $6.5 million over 2023. Despite this decline, the Bank’s earnings metrics still remain top-of-class as ROA was 1.91%, ROBE was 18.8% and the Bank’s efficiency ratio was 31.5%. Also, during 2024 the Bank repurchased 464,314 shares at an average price of $73.76 which contributed approximately $0.17 per diluted share for 2024.

Asset Quality

Non-accrual loans and loans 90 days past due and still accruing totaled $9.4 million as of December 31, 2024, a decrease of $10.0 million from $19.4 million on September 30, 2024 and a decrease of $19.3 million from the $28.7 million in nonperforming loans as of December 31, 2023. Total net charge-offs for the quarter were $6.6 million and all were previously fully reserved.

Total criticized loans decreased to $158.1 million from $234.8 million last quarter. The Bank expects to upgrade a number of the remaining credits in this cohort once more collateral is in place.

Allowance for Credit Losses

The provision for credit losses for the fourth quarter of 2024 was $2.0 million compared to $3.2 million last quarter and compared to $3.5 million in the same quarter last year. The Bank’s allowance coverage ratio declined to 1.27% of loans as compared to 1.36% in the prior quarter.

Capitalization

As of December 31, 2024, the Bank’s leverage ratio was 11.33%, the common equity tier 1 capital ratio was 11.80% and the total capital ratio stood at 15.11%. As of December 31, 2023, the Bank’s leverage ratio was 10.85%, the common equity tier 1 ratio was 11.57% and the total capital ratio was 15.18%.

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank’s fourth quarter 2024 financial results will be held tomorrow, January 28, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (international) and referencing “Preferred Bank.” There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank’s website at www.preferredbank.com.

Preferred Bank’s Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank’s financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank’s website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through February 11, 2025; the passcode is 6335378.

About Preferred Bank

Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), one branch in Flushing, New York and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government’s monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank’s results to differ materially from those described in the forward-looking statements can be found in the Bank’s 2023 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank’s website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank’s website at www.preferredbank.com.

Financial Tables to Follow


PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)

	For the Quarter Ended
	December 31,		September 30,		December 31,
	2024		2024		2023
Interest income:
Loans, including fees	$	111,596	$	114,112	$	107,709
Investment securities		14,013		15,032		16,973
Fed funds sold		249		280		282
Total interest income		125,858		129,424		124,964

Interest expense:
Interest-bearing demand		18,245		23,211		21,716
Savings		85		84		72
Time certificates		37,030		35,956		32,455
Subordinated debt		1,325		1,325		1,325
Total interest expense		56,685		60,576		55,568
Net interest income		69,173		68,848		69,396
Provision for credit losses		2,000		3,200		3,500
Net interest income after provision for credit losses		67,173		65,648		65,896

Noninterest income:
Fees & service charges on deposit accounts		761		747		857
Letters of credit fee income		1,977		1,959		1,486
BOLI income		102		108		105
Net loss on called and sale of investment securities		–		–		(929	)
Net gain on sale of loans		112		91		205
Other income		685		554		382
Total noninterest income		3,637		3,459		2,106

Noninterest expense:
Salary and employee benefits		13,279		13,525		12,058
Net occupancy expense		10,110		1,883		1,536
Business development and promotion expense		340		241		239
Professional services		1,606		1,816		1,355
Office supplies and equipment expense		396		435		391
OREO valuation allowance and related expense		155		1,915		294
Other		2,360		2,274		2,000
Total noninterest expense		28,246		22,089		17,873
Income before provision for income taxes		42,564		47,018		50,129
Income tax expense		12,343		13,635		14,290
Net income	$	30,221	$	33,383	$	35,839

Income per share available to common shareholders
Basic	$	2.29	$	2.50	$	2.63
Diluted	$	2.25	$	2.46	$	2.60

Weighted-average common shares outstanding
Basic		13,190,696		13,327,848		13,617,225
Diluted		13,442,294		13,544,273		13,804,315

Cash dividends per common share	$	0.75	$	0.70	$	0.70

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)

	For the Twelve Months Ended
	December 31,		December 31,			Change
	2024		2023			%
Interest income:
Loans, including fees	$	445,139	$	412,505			7.9	%
Investment securities		62,854		64,427			-2.4	%
Fed funds sold		1,103		1,056			4.5	%
Total interest income		509,096		477,988			6.5	%

Interest expense:
Interest-bearing demand		87,951		75,417			16.6	%
Savings		323		225			43.5	%
Time certificates		142,894		103,853			37.6	%
FHLB borrowings		0		3,819			-100.0	%
Subordinated debt		5,300		5,300			0.0	%
Total interest expense		236,468		188,614			25.4	%
Net interest income		272,628		289,374			-5.8	%
Provision for credit losses		12,100		10,000			21.0	%
Net interest income after provision for credit losses		260,528		279,374			-6.7	%

Noninterest income:
Fees & service charges on deposit accounts		3,172		3,333			-4.8	%
Letters of credit fee income		7,188		5,798			24.0	%
BOLI income		420		412			2.1	%
Net loss on called and sale of investment securities		–		(5,046	)		-100.0	%
Net gain on sale of loans		659		752			-12.4	%
Other income		2,126		1,864			14.0	%
Total noninterest income		13,565		7,113			90.7	%

Noninterest expense:
Salary and employee benefits		53,648		51,314			4.5	%
Net occupancy expense		15,420		6,049			154.9	%
Business development and promotion expense		1,250		737			69.6	%
Professional services		6,711		5,270			27.3	%
Office supplies and equipment expense		1,781		1,588			12.2	%
OREO valuation allowance and related expense		2,234		3,344			-33.2	%
Other		9,016		8,332			8.2	%
Total noninterest expense		90,060		76,634			17.5	%
Income before provision for income taxes		184,033		209,853			-12.3	%
Income tax expense		53,371		59,813			-10.8	%
Net income	$	130,662	$	150,040			-12.9	%

Income per share available to common shareholders
Basic	$	9.79	$	10.64			-8.0	%
Diluted	$	9.64	$	10.52			-8.4	%

Weighted-average common shares outstanding
Basic		13,347,004		14,095,745			-5.3	%
Diluted		13,554,266		14,261,644			-5.0	%

Dividends per share	$	2.85	$	2.35			21.3	%

PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)

	December 31,			December 31,
	2024			2023
	(Unaudited)			(Audited)
Assets
Cash and due from banks	$	765,515		$	890,852
Fed funds sold		20,000			20,000
Cash and cash equivalents		785,515			910,852

Securities held-to-maturity, at amortized cost		20,021			21,171
Securities available-for-sale, at fair value		348,706			313,842

Loans held for sale, at lower of cost or fair value		2,214			360

Loans		5,640,615			5,273,498
Less allowance for credit losses		(71,477	)		(78,355	)
Less amortized deferred loan fees, net		(9,234	)		(11,079	)
Loans, net		5,559,904			5,184,064

Other real estate owned and repossessed assets		14,991			16,716
Customers’ liability on acceptances		–			315
Bank furniture and fixtures, net		8,462			9,694
Bank-owned life insurance		10,433			10,632
Accrued interest receivable		33,561			33,892
Investment in affordable housing partnerships		58,346			65,276
Federal Home Loan Bank stock, at cost		15,000			15,000
Deferred tax assets		47,316			48,991
Income tax receivable		2,281			2,391
Operating lease right-of-use assets		13,182			22,050
Other assets		3,497			4,030
Total assets	$	6,923,429		$	6,659,276

Liabilities and Shareholders’ Equity
Deposits:
Noninterest bearing demand deposits	$	704,859		$	786,995
Interest bearing deposits:		2,026,965			2,075,156
Savings		30,150			29,167
Time certificates of $250,000 or more		1,477,931			1,317,862
Other time certificates		1,676,943			1,500,162
Total deposits		5,916,848			5,709,342

Acceptances outstanding		–			315
Subordinated debt issuance, net		148,469			148,232
Commitments to fund investment in affordable housing partnerships		21,623			30,824
Operating lease liabilities		16,990			19,766
Accrued interest payable		16,517			16,124
Other liabilities		39,830			39,568
Total liabilities		6,160,277			5,964,171

Shareholders’ equity		763,152			695,105
Total liabilities and shareholders’ equity		6,923,429			6,659,276

Book value per common share	$	57.86		$	50.54
Number of common shares outstanding		13,188,776			13,753,246

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

	For the Quarter Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2024			2024			2024			2024			2023
Unaudited historical quarterly operations data:
Interest income	$	125,858		$	129,424		$	127,294		$	126,520		$	124,964
Interest expense		56,685			60,576			61,187			58,020			55,568
Interest income before provision for credit losses		69,173			68,848			66,107			68,500			69,396
Provision for credit losses		2,000			3,200			2,500			4,400			3,500
Noninterest income		3,637			3,459			3,404			3,065			2,106
Noninterest expense		28,246			22,089			19,697			20,028			17,873
Income tax expense		12,343			13,635			13,722			13,671			14,290
Net income	$	30,221		$	33,383		$	33,592		$	33,466		$	35,839

Earnings per share
Basic	$	2.29		$	2.50		$	2.51		$	2.48		$	2.63
Diluted	$	2.25		$	2.46		$	2.48		$	2.44		$	2.60

Ratios for the period:
Return on average assets		1.74	%		1.95	%		1.97	%		2.00	%		2.15	%
Return on beginning equity		16.03	%		18.37	%		19.44	%		19.36	%		21.21	%
Net interest margin (Fully-taxable equivalent)		4.06	%		4.10	%		3.96	%		4.19	%		4.24	%
Noninterest expense to average assets		1.62	%		1.29	%		1.15	%		1.20	%		1.07	%
Efficiency ratio		38.79	%		30.55	%		28.34	%		27.99	%		25.00	%
Net charge-offs to average loans (annualized)		0.47	%		-0.00	%		0.68	%		0.26	%		-0.00	%

Ratios as of period end:
Tangible common equity ratio		11.02	%		10.92	%		10.55	%		10.35	%		10.43	%
Tier 1 leverage capital ratio		11.33	%		11.28	%		10.89	%		10.80	%		10.85	%
Common equity tier 1 risk-based capital ratio		11.80	%		11.66	%		11.52	%		11.50	%		11.57	%
Tier 1 risk-based capital ratio		11.80	%		11.66	%		11.52	%		11.50	%		11.57	%
Total risk-based capital ratio		15.11	%		15.06	%		14.93	%		15.08	%		15.18	%
Allowances for credit losses to loans at end of period		1.27	%		1.36	%		1.34	%		1.49	%		1.49	%
Allowance for credit losses to non-performing loans		7.64	x		3.92	x		1.79	x		4.33	x		2.73	x

Average balances:
Total securities	$	350,732		$	356,590		$	353,357		$	348,961		$	349,863
Total loans		5,542,558			5,458,613			5,320,360			5,263,562			5,126,918
Total earning assets		6,788,487			6,684,766			6,728,498			6,585,853			6,499,469
Total assets		6,920,325			6,817,979			6,863,829			6,718,018			6,627,349
Total time certificate of deposits		3,144,523			2,874,985			2,884,259			2,852,860			2,767,385
Total interest bearing deposits		5,220,655			5,124,245			5,203,034			5,004,834			4,906,947
Total deposits		5,905,127			5,828,227			5,901,976			5,761,488			5,689,713
Total interest bearing liabilities		5,369,092			5,272,617			5,351,347			5,153,089			5,055,143
Total equity		760,345			747,222			715,190			704,996			683,141

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

	For the Twelve Months Ended
	December 31,			December 31,
	2024			2023

Interest income	$	509,096		$	477,988
Interest expense		236,468			188,614
Interest income before provision for credit losses		272,628			289,374
Provision for credit losses		12,100			10,000
Noninterest income		13,565			7,113
Noninterest expense		90,060			76,634
Income tax expense		53,371			59,813
Net income	$	130,662		$	150,040

Earnings per share
Basic	$	9.79		$	10.64
Diluted	$	9.64		$	10.52

Ratios for the period:
Return on average assets		1.91	%		2.28	%
Return on beginning equity		18.80	%		23.80	%
Net interest margin (Fully-taxable equivalent)		4.08	%		4.49	%
Noninterest expense to average assets		1.32	%		1.17	%
Efficiency ratio		31.47	%		25.85	%
Net charge-off to average loans		0.35	%		0.00	%

Average balances:
Total securities	$	352,416		$	389,584
Total loans		5,396,844			5,068,486
Total earning assets		6,697,118			5,067,870
Total assets		6,830,252			6,452,661
Total time certificate of deposits		2,939,543			6,577,690
Total interest bearing deposits		5,849,300			2,570,706
Total deposits		5,849,300			4,678,893
Total interest bearing liabilities		5,849,300			5,577,155
Total equity		732,058			4,902,616

PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)

				As of
				December 31,			September 30,			June 30,			March 31,			December 31,
				2024			2024			2024			2024			2023
Unaudited quarterly statement of financial position data:
Assets:
	Cash and cash equivalents			$	785,515		$	804,994		$	917,677		$	936,600		$	910,852
	Securities held-to-maturity, at amortized cost				20,021			20,311			20,605			20,904			21,171
	Securities available-for-sale, at fair value				348,706			337,363			331,909			333,411			313,842
	Loans:
		Real estate – Mortgage:
			Real estate—Residential	$	790,069		$	753,453		$	732,251		$	724,101		$	688,058
			Real estate—Commercial		2,840,771			2,882,506			2,833,430			2,777,608			2,760,761
			Total Real Estate – Mortgage		3,630,840			3,635,959			3,565,681			3,501,709			3,448,819
		Real estate – Construction:
			R/E Construction — Residential		296,580			274,214			238,062			236,596			246,201
			R/E Construction — Commercial		287,185			290,308			247,582			213,727			179,775
			Total real estate construction loans		583,765			564,522			485,644			450,323			425,976
		Commercial and industrial			1,418,930			1,365,550			1,371,694			1,369,529			1,394,871
		SBA			6,833			5,424			5,463			3,914			3,469
		Consumer and others			247			124			118			379			363
			Gross loans		5,640,615			5,571,579			5,428,600			5,325,854			5,273,498
	Allowance for credit losses on loans				(71,477	)		(76,051	)		(72,848	)		(79,311	)		(78,355	)
	Net deferred loan fees				(9,234	)		(10,414	)		(10,502	)		(10,460	)		(11,079	)
		Net loans, excluding loans held for sale		$	5,559,904		$	5,485,114		$	5,345,250		$	5,236,083		$	5,184,064
	Loans held for sale			$	2,214		$	225		$	955		$	605		$	360
		Net loans		$	5,562,118		$	5,485,339		$	5,346,205		$	5,236,688		$	5,184,424

	Other real estate owned and repossessed assets			$	14,991		$	15,082		$	16,716		$	16,716		$	16,716
	Investment in affordable housing partnerships				58,346			58,009			60,432			62,854			65,276
	Federal Home Loan Bank stock, at cost				15,000			15,000			15,000			15,000			15,000
	Other assets				118,732			136,246			138,036			134,040			131,995
		Total assets		$	6,923,429		$	6,872,344		$	6,846,580		$	6,756,213		$	6,659,276

Liabilities:
	Deposits:
		Demand		$	704,859		$	682,859		$	675,767		$	709,767		$	786,995
		Interest bearing demand			2,026,965			1,994,288			2,326,214			2,159,948			2,075,156
		Savings			30,150			29,793			28,251			29,261			29,167
		Time certificates of $250,000 or more			1,477,931			1,478,500			1,406,149			1,349,927			1,317,862
		Other time certificates			1,676,943			1,682,324			1,442,381			1,552,805			1,500,162
		Total deposits		$	5,916,848		$	5,867,764		$	5,878,762		$	5,801,708		$	5,709,342

	Acceptances outstanding			$	–		$	–		$	–		$	–		$	315
	Subordinated debt issuance, net				148,469			148,410			148,351			148,292			148,232
	Commitments to fund investment in affordable housing partnerships				21,623			23,617			27,946			29,647			30,824
	Other liabilities				73,337			82,436			68,394			77,008			75,458
		Total liabilities		$	6,160,277		$	6,122,227		$	6,123,453		$	6,056,655		$	5,964,171

Equity:
	Net common stock, no par value			$	105,501		$	109,928		$	113,509		$	115,915		$	134,534
	Retained earnings				685,108			664,808			640,675			616,417			592,325
	Accumulated other comprehensive income				(27,457	)		(24,619	)		(31,057	)		(32,774	)		(31,754	)
		Total shareholders’ equity		$	763,152		$	750,117		$	723,127		$	699,558		$	695,105
		Total liabilities and shareholders’ equity		$	6,923,429		$	6,872,344		$	6,846,580		$	6,756,213		$	6,659,276

PREFERRED BANK
Quarter-to-Date Average Balances, Yield and Rates
(unaudited)


	Three months ended December 31,								Three months ended September 30,								Three months ended December 31,
	2024								2024								2023
				Interest		Average						Interest		Average						Interest		Average
	Average			Income or		Yield/			Average			Income or		Yield/			Average			Income or		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate			Balance			Expense		Rate
ASSETS	(Dollars in thousands)
Interest earning assets:
Loans ^(1,2)	$	5,543,215		$	111,596		8.01	%	$	5,459,842		$	114,112		8.31	%	$	5,127,935		$	107,709		8.33	%
Investment securities ⁽³⁾		350,732			3,566		4.04	%		356,590			3,610		4.03	%		349,863			3,335		3.78	%
Federal funds sold		20,172			249		4.91	%		20,164			280		5.52	%		20,028			282		5.58	%
Other earning assets		874,368			10,546		4.80	%		848,170			11,521		5.40	%		1,001,643			13,739		5.44	%
Total interest earning assets		6,788,487			125,957		7.38	%		6,684,766			129,523		7.71	%		6,499,469			125,065		7.63	%
Deferred loan fees, net		(9,808	)							(10,248	)							(10,421	)
Allowance for credit losses on loans		(75,474	)							(72,899	)							(74,965	)
Noninterest earning assets:
Cash and due from banks		10,626								10,826								12,376
Bank furniture and fixtures		8,866								9,419								9,243
Right of use assets		28,570								22,496								20,338
Other assets		169,058								173,619								171,309
Total assets	$	6,920,325							$	6,817,979							$	6,627,349

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Interest bearing demand and savings	$	2,076,132		$	18,330		3.51	%	$	2,249,260		$	23,295		4.12	%	$	2,139,562		$	21,788		4.04	%
TCD $250K or more		1,481,219			17,514		4.70	%		1,412,073			17,866		5.03	%		1,294,531			15,600		4.78	%
Other time certificates		1,663,304			19,516		4.67	%		1,462,912			18,090		4.92	%		1,472,854			16,855		4.54	%
Total interest bearing deposits		5,220,655			55,360		4.22	%		5,124,245			59,251		4.60	%		4,906,947			54,243		4.39	%
Short-term borrowings		3			0		3.31	%		–			–		0.00	%		2			0		6.08	%
Subordinated debt, net		148,434			1,325		3.55	%		148,372			1,325		3.55	%		148,194			1,325		3.55	%
Total interest bearing liabilities		5,369,092			56,685		4.20	%		5,272,617			60,576		4.57	%		5,055,143			55,568		4.36	%
Noninterest bearing liabilities:
Demand deposits		684,472								703,982								782,766
Lease liability		25,486								18,882								18,179
Other liabilities		80,930								75,276								88,120
Total liabilities		6,159,980								6,070,757								5,944,208
Shareholders’ equity		760,345								747,222								683,141
Total liabilities and shareholders’ equity	$	6,920,325							$	6,817,979							$	6,627,349
Net interest income				$	69,272							$	68,947							$	69,497
Net interest spread							3.18	%							3.14	%							3.27	%
Net interest margin							4.06	%							4.10	%							4.24	%

Cost of Deposits:
Noninterest bearing demand deposits	$	684,472							$	703,982							$	782,766
Interest bearing deposits		5,220,655			55,360		4.22	%		5,124,245			59,251		4.60	%		4,906,947			54,243		4.39	%
Total Deposits	$	5,905,127		$	55,360		3.73	%	$	5,828,227		$	59,251		4.04	%	$	5,689,713		$	54,243		3.78	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $1.2 million, $991,000, and $1.0 million for the quarter ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, are included in the yield computations
⁽³⁾	Yields on securities have been adjusted to a tax-equivalent basis

PREFERRED BANK
Year-to-Date Average Balances, Yield and Rates
(unaudited)

	Twleve Months ended December 31,
	2024								2023
				Interest		Average						Interest		Average
	Average			Income or		Yield/			Average			Income or		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
ASSETS	(Dollars in thousands)
Interest earning assets:
Loans ^(1,2)	$	5,398,916		$	445,139		8.24	%	$	5,068,486		$	412,505		8.14	%
Investment securities ⁽³⁾		352,416			14,257		4.05	%		389,584			14,461		3.71	%
Federal funds sold		20,397			1,103		5.41	%		20,090			1,056		5.26	%
Other earning assets		925,389			48,994		5.29	%		974,501			50,372		5.17	%
Total interest earning assets		6,697,118			509,493		7.61	%		6,452,661			478,394		7.41	%
Deferred loan fees, net		(10,301	)							(10,212	)
Allowance for credit losses on loans		(76,448	)							(70,992	)
Noninterest earning assets:
Cash and due from banks		10,624								11,978
Bank furniture and fixtures		9,537								9,010
Right of use assets		23,997								21,417
Other assets		175,725								163,828
Total assets	$	6,830,252							$	6,577,690

LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Interest bearing demand/ savings	$	2,198,837		$	88,274		4.01	%	$	2,108,187		$	75,642		3.59	%
TCD $250K or more		1,403,663			69,176		4.93	%		1,267,859			53,200		4.20	%
Other time certificates		1,535,880			73,718		4.80	%		1,302,847			50,653		3.89	%
Total interest bearing deposits		5,138,380			231,168		4.50	%		4,678,893			179,495		3.84	%
Short-term borrowings		1			0		2.50	%		1			0		3.06	%
Advance from Federal Home Loan Bank		–			0		0.00	%		75,616			3,819		5.05	%
Subordinated debt, net		148,344			5,300		3.57	%		148,106			5,300		3.58	%
Total interest bearing liabilities		5,286,725			236,468		4.47	%		4,902,616			188,614		3.85	%
Noninterest bearing liabilities:
Demand deposits		710,920								898,262
Lease liability		20,931								19,902
Other liabilities		79,618								84,449
Total liabilities		6,098,194								5,905,229
Shareholders’ equity		732,058								672,461
Total liabilities and shareholders’ equity	$	6,830,252							$	6,577,690
Net interest income				$	273,025							$	289,780
Net interest spread							3.13	%							3.57	%
Net interest margin							4.08	%							4.49	%

Cost of Deposits:
Noninterest bearing demand deposits	$	710,920							$	898,262
Interest bearing deposits		5,138,380			231,168		4.50	%		4,678,893			179,495		3.84	%
Total Deposits	$	5,849,300		$	231,168		3.95	%	$	5,577,155		$	179,495		3.22	%

⁽¹⁾	Includes non-accrual loans and loans held for sale
⁽²⁾	Net loan fee income of $4.6 million and $4.2 million for the year ended December 31, 2024 and 2023, respectively, are included in the yield computations
⁽³⁾	Yields on securities have been adjusted to a tax-equivalent basis

Preferred Bank
Loan and Credit Quality Information

Allowance For Credit Losses History
	Year ended
	December 31, 2024			December 31, 2023
	(Dollars in 000’s)
Allowance For Credit Losses
Balance at Beginning of Period	$	78,355		$	68,472
Charge-Offs
Commercial & Industrial		19,028			124
Total Charge-Offs		19,028			124

Recoveries
Commercial & Industrial		50			7
Total Recoveries		50			7

Net Charge-Offs		18,978			117
Provision for Credit Losses:		12,100			10,000
Balance at End of Period	$	71,477		$	78,355

Average Loans Held for Investment	$	5,396,844		$	5,067,870
Loans Held for Investment at End of Period	$	5,640,615		$	5,273,498
Net Charge-Offs to Average Loans		0.35	%		0.00	%
Allowances for Credit Losses to Loans at End of Period		1.27	%		1.49	%

AT THE COMPANY:	AT FINANCIAL PROFILES:
Edward J. Czajka	Jeffrey Haas
Executive Vice President	General Information
Chief Financial Officer	(310) 622-8240
(213) 891-1188	PFBC@finprofiles.com

The MIL Network –

January 28, 2025

MIL-OSI USA: 01.23.2025 Cruz, Daines, Leader Thune, GOP Colleagues Introduce Bill to Give Small Businesses Permanent Tax Break

US Senate News:

Source: United States Senator for Texas Ted Cruz
WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas), Steve Daines (R-Mont.), Majority Leader John Thune (R-S.D.), and 37 additional Republican Senators introduced the “Main Street Tax Certainty Act.” This bill would make the 20-percent pass-through business tax deduction permanent.
Upon introduction, Sen. Cruz said, “Small businesses are the backbone of our economy, providing jobs and opportunities for millions of families across Texas and America. With Biden’s catastrophic inflation continuing to burden hardworking Americans, the last thing they need is a massive tax hike. Making the 20-percent pass-through deduction permanent is essential to ensuring our small businesses can prosper, expand, and keep our nation strong. I’m proud to support the ‘Main Street Tax Certainty Act’ and will continue fighting to protect small businesses.”
Sen. Daines said, “As the son of a contractor, I’ve seen firsthand the hard work it takes to keep a small business flourishing- especially as Americans are still grappling with the effects of Joe Biden’s inflation. It’s absolutely crucial that we pass this legislation to prevent a 20 percent tax increase for hardworking Montanans and I’ll keep fighting for ways to support Montana small businesses, which provide the majority of jobs in our state.”
Sen. Thune said, “Small businesses are the economic engine that drive growth and jobs in South Dakota and across our country. This legislation is critical to permanently extending a key provision from the Tax Cuts and Jobs Act and ensuring our small businesses and farms and ranches are not hit with a crippling tax hike at the end of 2025.”
The legislation was also co-sponsored by Sens. John Barrasso (R-Wyo.), Shelley Moore Capito (R-W.V.), James Lankford (R-Okla.), Joni Ernst (R-Iowa), Tom Cotton (R-Ark.), Tim Scott (R-S.C.), Chuck Grassley (R-Iowa), Kevin Cramer (R-N.D.), Jerry Moran (R-Kan.), Marsha Blackburn (R-Tenn.), Mike Rounds (R-S.D.), Pete Ricketts (R-Neb.), Katie Britt (R-Ala.), Jim Risch (R-Idaho), Eric Schmitt (R-Mo.), Roger Wicker (R-Miss.), Cynthia Lummis (R-Wyo.), Cindy Hyde-Smith (R-Miss.), Tommy Tuberville (R-Ala.), John Hoeven (R-N.D.), Thom Tillis (R-N.C.), Roger Marshall (R-Kan.), Jim Justice (R-W.V.), Tim Sheehy (R-Mont.), Deb Fischer (R-Neb.), Bill Cassidy (R-La.), Ted Budd (R-N.C.), Rick Scott (R-Fla.), Bill Hagerty (R-Tenn.), Todd Young (R-Ind.), John Kennedy (R-La.) and Jim Banks (R-Ind.), John Curtis (R-Utah), Dan Sullivan (R-Alaska), Lindsey Graham (R-S.C.), Bernie Moreno (R-Ohio), John Boozman (R-Ark.).
Read the bill text here.
BACKGROUND
The 20-percent small business deduction, section 199A, was created as a part of President Trump’s 2017 tax cuts to level the playing field between small businesses and corporations. Without Congressional action, it will expire at the end of 2025, causing 9 out of 10 small businesses to incur a significant tax hike. This legislation is endorsed by the National Association of Manufacturers, National Federation of Independent Business, and over 230 trade associations.

MIL OSI USA News –

January 28, 2025

MIL-OSI Asia-Pac: Over 23,000 Track Kilometers Upgraded for 130 kmph Speed

Source: Government of India

Over 23,000 Track Kilometers Upgraded for 130 kmph Speed

Indian Railways Achieves Significant Milestone

Posted On: 27 JAN 2025 6:37PM by PIB Delhi

Indian Railways has achieved a significant milestone by upgrading over 23,000 track kilometers (TKM) of the Indian Railways network to support train speeds of up to 130 kilometres per hour (kmph). This remarkable progress underscores the government’s commitment to modernizing railway infrastructure, improving connectivity, and reducing travel times for millions of passengers nationwide. With nearly one-fifth of India’s railway network now equipped for higher speeds, these advancements have been made possible through robust safety measures such as modern signalling systems and strategic fencing, marking a new era of efficiency and reliability in train travel.

The modernization of track infrastructure involves comprehensive upgrades, including the strengthening of tracks to ensure stability and durability for high-speed operations, the implementation of advanced signalling systems for precise communication and safe train operations, and the installation of safety measures such as fencing at vulnerable locations to enhance security and mitigate risks. These efforts align with Indian Railways’ goal of fostering a safer and more efficient railway network, catering to the needs of both passenger and freight demands.

The upgrades prominently feature sections of the Golden Quadrilateral and Golden Diagonal networks, vital corridors linking the nation’s major cities. These routes, which handle a significant portion of India’s passenger and freight traffic, are now better equipped to accommodate higher speeds, ensuring faster transit and improved logistics.

Additionally, around 54,337 TKM of tracks have been upgraded to support speeds up to 110 kmph. This systematic enhancement ensures seamless connectivity across various regions and bolsters the overall operational efficiency of Indian Railways.

Indian Railways’ flagship semi-high-speed train, the Vande Bharat Express, exemplifies the success of these infrastructure improvements. Capable of achieving speeds up to 160 kmph, the Vande Bharat Express symbolizes a new era in Indian train travel, offering passengers a faster, more comfortable, and premium travel experience. To accommodate such speeds safely, Indian Railways has prioritized safety fencing along high-speed track sections. These measures not only ensure the smooth operation of trains but also minimize the risk of accidents. Compared to the previous year, specialised train services during periods of peak demand increased significantly by 54%, reaching to 57,169 services.

ASPECT	DETAILS
Increased Revenue	A 4% rise in earnings between April and December of the current fiscal year, 2024-25 with ₹1.26 lakh crore revenue from freight operations. The passenger segment earnings increased by 6%, reaching Rs 55,988 crores.
Higher Capital Expenditure	2% higher capital expenditure in 2024-25 where the capital investments increased to ₹1.92 lakh crore during the current fiscal year, 2024-25 showcasing the government’s commitment to infrastructure development.
Enhanced Freight Efficiency	For the January-24 to November-24 period, the revenue earning freight loading on Indian Railways has been 1473.05 metric tonnes, recording a growth of 3.86% over the corresponding period of last year.

The ongoing modernization drive of Indian Railways extends far beyond track upgrades. With a focus on adopting cutting-edge technologies, strengthening infrastructure, and enhancing passenger amenities, Indian Railways is setting the stage for a transformative travel experience. These initiatives are aimed at improving the reliability and efficiency of train services, fostering economic growth by enabling the faster movement of goods and passengers, and ensuring an inclusive and accessible railway system that caters to the diverse needs of the population.

With the successful completion of these upgrades, Indian Railways is establishing new benchmarks in speed, safety, and service. These efforts not only enhance the travel experience for millions of passengers but also reaffirm the role of Indian Railways as the lifeline of the nation.

As the modernization journey progresses, Indian Railways continues to symbolize progress and innovation, driving India toward a brighter and more interconnected future. The advancements reflect the organization’s commitment to building a railway network that supports the nation’s growth and meets the aspirations of its people.

References

Click here to see PDF.

*****

Santosh Kumar/ Sarla Meena/ Gouri S/ Vatsla Srivastava

(Release ID: 2096768) Visitor Counter : 55

MIL OSI Asia Pacific News –

January 28, 2025

MIL-OSI Asia-Pac: Office of PSA, IISc and MEA organise Technology Dialogue 2025 to Explore New Frontiers in Technology Diplomacy on 24th and 25th January 2025

Source: Government of India

Posted On: 27 JAN 2025 6:21PM by PIB Delhi

Office of the Principal Scientific Adviser (PSA) to the Government of India, Indian Institute of Science (IISc) and the Ministry of External Affairs (MEA) jointly organised an international technology policy summit titled “Technology Dialogue 2025: Exploring New Frontiers in Technology Diplomacy” on 24 and 25 January 2025 in IISc, Bengaluru as a continuation to Dialogue 2023 held in November 2023.

Recognising the importance of technology in driving India’s global partnerships, the summit focused on India’s international technology engagement framework, and the need for leveraging strategic partnerships on critical and emerging technologies such as quantum, AI, semiconductors, space tech, and bioeconomy.

The summit was inaugurated with a keynote address on International Technology Engagement Framework (ITEF) by the Hon’ble Minister of State (Independent Charge) for Science and Technology, Dr. Jitendra Singh, who highlighted various national initiatives and missions aimed at advancing India’s technological aspirations while emphasizing the importance of global partnerships and collaborations. Hon’ble Minister Dr Singh also emphasised the need for a structured framework and approach in elevating India’s International Technology Engagements. The inauguration ceremony was joined by Prof. Ajay Kumar Sood (Principal Scientific Adviser to the Government of India), H.E. Pavan Kapoor (Deputy National Security Adviser, Government of India), Shri S. Raghuram (Joint Secretary of Policy Planning & Research, Ministry of External Affairs), Prof. G. Rangarajan (Director of IISc), and Dr. Kiran Mazumdar-Shaw (Chairperson and Managing Director of Biocon), and was chaired by Prof. G.K. Ananthasuresh (Dean of the Division of Mechanical Sciences, IISc). PSA Prof. Ajay Kumar Sood delivered a special address on conceptualisation and building blocks of ITEF. Dr. Kiran Mazumdar-Shaw delivered a special address on industrial perspective that should shape India’s ITEF.

The summit featured a keynote address on leveraging strategic partnerships on critical and emerging technologies for India by H.E. Pavan Kapoor (Deputy National Security Adviser, Government of India). This was followed by a featured panel on expanding the contours of international engagements for technology partnerships featuring H.E. Chandru Iyer (His Majesty’s Deputy Trade Commissioner for Investment for Souh Asia, Deputy High Commissioner of the United Kingdom to Karnataka and Kerala), H.E. Carly Partridge (Minister Counsellor, Australian High Commission), H.E. Alfonso Tagliaferri (Consulate General of Italy in Bengaluru), Dr Soren Tranberg Hansen (Consulate General of Denmark) and Dr Rama Swami Bansal (Chief Scientist & Head, International S&T Affairs Directorate, Council for Scientific and Industrial Research (CSIR).

The second day began with a keynote address on Technology and Development Partnerships of India by Shri Periasamy Kumaran, Special Secretary (ER & DPA), Ministry of External Affairs where he highlighted the ongoing bilateral efforts of Government of India with multiple countries in emerging and critical technologies.

Thematic panel on ‘Fostering Collaboration for Quantum Revolution’ was organised on to deliberate on advancements in quantum technologies and policy imperatives globally. The panel began with a lead presentation by Prof. Ajay Kumar Sood highlighting features of India’s National Quantum Mission (NQM). The panel also featured Prof Andrew White (ARC Australian Laureate Fellow), Dr Amith Singhee (Director, IBM Research India) and Prof Urbasi Sinha (Professor at Raman Research Institute), moderated by Mr Luke Preskey (Chief Revenue Officer, Resonance).

The summit also featured a dialogue between Dr S Somanath (Former Secretary, Department of Space and former Chairman of ISRO), and Dr Koichi Wakata (Astronaut and CTO, Asia-Pacific at Axiom Space) on the theme, ‘Unlocking Potentials of Space Tech’ discussing space exploration boom, the entry of private entities, industry partners and foreign investment, as well the encouraging growth of space startups.

The panel on ‘Accelerating Artificial Intelligence (AI) Innovation’ featured Shri S Krishnan (Secretary, Ministry of Electronics and Information Technology), H.E. Arthur Barichard (Deputy Ambassador for Digital Affairs, Ministry for Europe and Foreign Affairs, Republic of France), Ms Laxmi Shenoy (Managing Director, Accenture), Shri Biswajit Das (Head – Data Analytics and AI, Amazon Web Services), and Dr Leah Junck (Global Center on AI Governance, South Africa), moderated by Prof Chiranjib Bhattacharyya (Chair, Department of Computer Science and Automation, IISc). The panel deliberated on building a trustworthy AI ecosystem, focusing on AI governance, the future of work, and AI for public interest.

The panel on ‘Advancing India’s Bio-Economy’ featured Dr Alka Sharma (Adviser, Department of Biotechnology), Shri Krishna Mohan Puvvada (Senior Vice President, MEIA Novonesis), Mr Peter Bains (Group CEO of Biocon Group), Prof Usha Vijayraghavan (Dean, Biological Science Division, IISc) and Dr Bhuvnesh Shrivastava (Director- Healthcare, US-India Strategic Partnership Forum (USISPF), moderated by Prof Gayatri Saberwal (Dean, Institute of Bioinformatics and Applied Biotechnology). The panel discussed the importance of international collaboration for India to achieve its bio-economy ambitions.

The valedictory session featured a keynote address on driving sectoral transformation through independent and synergistic technology advancements by Dr Parvinder Maini, Scientific Secretary, Office of the Principal Scientific Adviser to the Government of India. The session also featured a fireside chat on positioning India in the global semiconductor value chain between Shri Utpal Shah (Senior Vice President – Strategy and Business Development, Tata Electronics) and Prof Andrew White, chaired by Prof Navakanta Bhat (Dean, Division of Interdisciplinary Sciences, IISc).

The Technology Dialogue 2025 also featured the India-France AI Policy Roundtable: Roadmap for the AI Action Summit 2025. The roundtable was co-chaired by Shri Abhishek Singh, Additional Secretary, Ministry of Electronics and Information Technology (MeitY), Government of India, and Chief Executive Officer of the IndiaAI Mission, representing India, and H.E. Mr. Marc Lamy, Consul General of France in Bengaluru, representing France. The discussion focused on key policy positions related to global AI development and governance, while also exploring opportunities for collaboration and synergy between India and France. The roundtable focused on the following key objectives:

● Unified Global AI Governance

● Understanding AI Technologies and Implications

● Addressing Digital Divide and Market Concentration

● Common and Open AI Infrastructure

● Cultural and Linguistic Diversity in AI

● Sustaining AI Innovation and Addressing Resource Needs

The India-France AI Policy Roundtable, during Technology Dialogue 2025, served as a platform for discussions leading up to the 2025 AI Action Summit to be co-chaired by Hon’ble Prime Minister Shri Narendra Modi.

The two day summit exploring technology policy and diplomacy efforts with key partner countries witnessed the participation from various foreign missions in India, global thought leaders on critical and emerging technologies, industry and academia thought leadership in various technologies, industries bodies, start-ups and scholars of public policy.

More details at: https://technologydialogue.in/

*****

Mattu J.P. Singh/Siddhant Tiwari

(Release ID: 2096762) Visitor Counter : 59

MIL OSI Asia Pacific News –

January 28, 2025

MIL-OSI United Kingdom: Councillors scrutinise Common Good Funds and welcome update on Bouchardon Bust.

Source: Scotland – Highland Council

The 2023/24 Annual Accounts and Final Monitoring reports for Cromarty, Fortrose and Rosemarkie, Invergordon and Tain Common Good Funds have been approved by Members of the Black Isle and Easter Ross Area Committee.

Committee Chair Cllr Lyndsey Johnston said: “The Highland Council administers 13 Common Good Funds across the region of which we have four in our Area. It’s important that Members have regular updates and opportunities to scrutinise the funds which can be used for projects that benefits our communities. The importance of this scrutiny is not only reflected by the outstanding value of the Bouchardon Bust but is also significant across all Common Good Funds that these assets are managed effectively for future generations.”

Revenue surpluses for each of the Common Good Funds 2023/24 reports were noted by Members with the following being added to reserves:

Cromarty Common Good Fund £4,202

Fortrose and Rosemarkie Common Good Fund £27,779

Invergordon Common Good Fund £1,090

Tain Common Good Fund £19,962.

Members also approved proposed budgets for the same 4 Common Good Funds for 2025/26 with the Forecast Year End Reserves for each as follows:

Cromarty Common Good Fund £55,098

Fortrose and Rosemarkie Common Good Fund £248,806

Invergordon Common Good Fund £88,940

Tain Common Good Fund £261,619.

In addition, Councillors agreed to delegate to the Council’s Community Support and Engagement Team the power to approve expenditure of up to £10,000 in relation to Fortrose and Rosemarkie Common Good within the annually set budget and following consultation with relevant Ward Members. This delegated power will be reviewed annually as part of the budget setting process.

Members welcomed an update in an Invergordon Common Fund report on the progress of the disposition and sale of the Bouchardon Bust. They were informed that the ongoing process will continue to take around 8 months or longer and that Members would continue to be updated in future reports to committee.

Each of the Common Good Fund reports and budgets can be viewed on the Black Isle and Easter Ross Area Committee agenda for 27 January on the council’s website.

27 Jan 2025

MIL OSI United Kingdom –

January 28, 2025

MIL-OSI USA: Owners of Florida Labor-Staffing Companies Sentenced for Tax and Immigration Fraud and Money Laundering

Source: US State Government of Utah

Two Ukrainian nationals who were extradited from the Kingdom of Thailand to the United States in September 2024 were sentenced today on charges related to labor-staffing companies they operated in Florida. Oleg Oliynyk and Oleksandr Yurchyk were each sentenced to 15 years in prison for conspiracy to defraud the United States and conspiracy to commit money laundering.

According to court documents, Oliynyk, Yurchyk and others owned and operated a series of labor-staffing companies in South Florida — including Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC — from at least April 2008 and August 2021. Through these staffing companies, Oliynyk, Yurchyk and co-defendants Oleksandr Morgunov, Mykhaylo Chugay and Volodymyr Ogorodnychuk facilitated the employment of non-resident aliens in the hospitality industry who were not authorized to work in the United States and helped evade the assessment and collection of more than $25 million of federal income and employment taxes.

In addition to the term of imprisonment, U.S. District Court Judge Jose E. Martinez ordered Oliynyk and Yurchyk to each serve three years of supervised release, pay $10,863,233.05 in restitution to the United States and to forfeit $11 million.

Oliynyk and Yurchyk are the latest defendants sentenced as part of Operation RoomKey, a joint criminal investigation initiative led by the Tax Division, the U.S. Attorney’s Office for the Southern District of Florida, Homeland Security Investigations (HSI) and IRS Criminal Investigation (IRS-CI).

Co-defendant Chugay, was convicted at trial in June 2022, and was sentenced in August 2022 to more than 24 years in prison. Co-defendants Morgunov and Ogorodnychuk each pleaded guilty and were sentenced to 96 months in prison and 48 months in prison, respectively.

In March 2022, Mikus Berzins, former City of Key West Police Officer Igor Kasyanenko, Roman Riabov and Andrejs Kozlovs each pleaded guilty to their crimes in the operation of the labor staffing company, Phoenix ADB Services Inc. (Phoenix ADB), which, according to court records, facilitated the employment of aliens without work authorization.

In May 2022, the court sentenced Igor Kasyanenko and Riabov to 22 months and 18 months in prison, respectively, for their roles in the tax and immigration conspiracy. The court also sentenced Berzins and Kozlovs to 28 months and 12 months in prison, respectively, for knowingly hiring ten or more aliens who were not authorized to work in the United States. Later, in September 2023, Nataliya Vasylivna Kasyanenko, a former housekeeping manager at a large Key West hotel, was sentenced for participating in the tax and immigration conspiracy related to the operation of Phoenix ADB.

Batyr Myatiev, the owner and operator of two labor staffing companies, AmeriHos LLC and Golden Sands Management LLC, pleaded guilty in March 2023 and was sentenced in June 2023 to 32 months in prison. According to court records, Myatiev’s labor staffing companies caused a tax loss to the United States of more than $3.5 million and facilitated the employment of aliens without work authorization.

In July 2023, Eka Samadashvili and Davit Pavliashvili were sentenced for their respective roles in the operation of several labor staffing companies, including PSEB Services JD Inc., Paradise Hospitality Solutions LLC, Paradise Hospitality Group LLC, Paradise Hospitality Inc. and HBSM Corp. According to court records, these labor staffing companies caused a tax loss to the United States of more than $8.4 million and facilitated the employment of non-resident aliens in hotels, bars and restaurants in Key West and elsewhere who were not authorized to work in the United States.

Finally, in March 2024, Petr Sutka was sentenced to four years in prison for his role in operating a series of labor staffing companies — including PSEB Specialty Service Inc., Perfect Service Excellent Benefits Services Inc., Starline Hospitality Inc., Norbert Janitorial Service Inc., E.S.F. Services Inc. and Expert Services F.S. Inc. — which, according to court records, caused a tax loss to the United States of more than $3.5 million and facilitated the employment of aliens without work authorization. In April 2024, Sutka’s co-defendants, Zdenek Strnad and Vasil Khatiashvili, were each sentenced to more than three years, respectively, for their roles in the tax and immigration conspiracy.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney Michael S. Davis for the Southern District of Florida made the announcement.

HSI and IRS-CI are investigating the case.

Senior Litigation Counsel Sean Beaty and Trial Attorneys Jessica A. Kraft, Matthew C. Hicks and Wilson Rae Stamm of the Tax Division and Senior Litigation Counsel Chris Clark for the U.S. Attorney’s Office for the Southern District of Florida are prosecuting the case.

MIL OSI USA News –

January 28, 2025

MIL-OSI USA: New Jersey Return Preparer Charged with Preparing False Tax Returns and Obstructing the IRS

Source: US State Government of Utah

An indictment was unsealed last week charging a New Jersey return preparer with preparing and filing 55 false income tax returns on behalf of clients and obstructing the IRS.

According to the indictment, from at least 2018 through 2023, Christopher Demba, of Hillsborough, owned and operated Demba & Associates CPA LLC, a return preparation business. Demba allegedly prepared returns for clients that claimed false deductions, credit carryforwards or fraudulently recategorized income to claim expenses that would otherwise be disallowed. The indictment further alleges that Demba obstructed the IRS by providing false working papers to IRS personnel in an attempt to justify some of the claims made on returns he prepared for clients.

If convicted, Demba faces a maximum penalty of three years in prison for each count as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorneys Mark McDonald and Alexis Hughes of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

MIL OSI USA News –

January 28, 2025

MIL-OSI Security: New Jersey Return Preparer Charged with Preparing False Tax Returns and Obstructing the IRS

Source: United States Attorneys General 4

An indictment was unsealed last week charging a New Jersey return preparer with preparing and filing 55 false income tax returns on behalf of clients and obstructing the IRS.

According to the indictment, from at least 2018 through 2023, Christopher Demba, of Hillsborough, owned and operated Demba & Associates CPA LLC, a return preparation business. Demba allegedly prepared returns for clients that claimed false deductions, credit carryforwards or fraudulently recategorized income to claim expenses that would otherwise be disallowed. The indictment further alleges that Demba obstructed the IRS by providing false working papers to IRS personnel in an attempt to justify some of the claims made on returns he prepared for clients.

If convicted, Demba faces a maximum penalty of three years in prison for each count as well as a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorneys Mark McDonald and Alexis Hughes of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

MIL Security OSI –

January 28, 2025

MIL-OSI Security: Owners of Florida Labor-Staffing Companies Sentenced for Tax and Immigration Fraud and Money Laundering

Source: United States Attorneys General 13