Taxation – Page 235 – NewzIntel.com

MIL-OSI: Šiaulių Bankas invitation to Q3 2024 Financial Results webinar

Source: GlobeNewswire (MIL-OSI)

Šiaulių Bankas (SAB1L) invites shareholders, investors, analysts and other stakeholders to join its Investors Webinar for Q3 2024 Financial Results and highlights scheduled on 31 October, 2024 at 8:30 am (EET). The presentation will be held online in English.

The webinar will be hosted by Vytautas Sinius, CEO, Tomas Varenbergas, Head of Investment Management Division and Tautvydas Mėdžius, Strategy Partner, who will discuss the bank’s financial results for the third quarter of 2024, recent developments, and will take questions from participants.

Please send your questions in advance to investors@sb.lt

How to join the webinar?

To join the webinar, please register via following link https://sb.zoomtv.lt. After successful registration You will be provided with the webinar link. The webinar will be recorded and available online for everyone at Šiaulių Bankas website www.sb.lt/en/investors

Additional information:
Tomas Varenbergas
Head of Investment Management Division
tomas.varenbergas@sb.lt

The MIL Network –

January 25, 2025

MIL-OSI: Territorial Bancorp Inc. Announces Third Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

The Company’s tier one leverage and risk-based capital ratios were 11.57% and 29.07%, respectively, and the Company is considered to be “well-capitalized” at September 30, 2024.
Ratio of non-performing assets to total assets of 0.11% at September 30, 2024.

HONOLULU, Oct. 28, 2024 (GLOBE NEWSWIRE) — Territorial Bancorp Inc. (NASDAQ: TBNK) (the Company), headquartered in Honolulu, Hawaii, the holding company parent of Territorial Savings Bank, reported a net loss of $1,318,000, or $0.15 per diluted share, for the three months ended September 30, 2024.

The Board of Directors approved a dividend of $0.01 per share. The dividend is expected to be paid on November 22, 2024, to stockholders of record as of November 8, 2024.

Hope Bancorp, Inc. Merger Agreement

As previously announced in a joint news release issued April 29, 2024, Hope Bancorp, Inc. (NASDAQ: HOPE) (Hope Bancorp) and the Company signed a definitive merger agreement. Under the terms of the merger agreement, Company stockholders will receive a fixed exchange ratio of 0.8048 share of Hope Bancorp common stock in exchange for each share of Company common stock they own, in a 100% stock-for-stock transaction valued at approximately $78.60 million, based on the closing price of Hope Bancorp’s common stock on April 26, 2024. The transaction is intended to qualify as a tax-free reorganization for Territorial stockholders.

Upon completion of the transaction, Hope Bancorp intends to maintain the Territorial franchise in Hawaii and preserve the 100-plus year legacy of the Territorial Savings Bank brand name, culture and commitment to the local communities. The branches will continue to do business under the Territorial Savings Bank brand, as a trade name of Bank of Hope.

The transaction is subject to regulatory approvals, the approval of Territorial stockholders, and the satisfaction of other customary closing conditions.

Interest Income

Net interest income decreased by $2.55 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Total interest income was $18.31 million for the three months ended September 30, 2024, compared to $17.38 million for the three months ended September 30, 2023. The $929,000 increase in total interest income was primarily due to an $850,000 increase in interest earned on other investments and a $343,000 increase in interest earned on loans. The increase in interest income on other investments is primarily due to a $58.03 million increase in the average cash balance with the Federal Reserve Bank of San Francisco (FRB) and a 30 basis point increase in the average interest rate paid on cash balances. The $343,000 increase in interest income on loans resulted from a 15 basis point increase in the average loan yield, partially offset by a $14.74 million decrease in the average loan balance. The increases in interest income on other investments and loans during the quarter were partially offset by a $264,000 decrease in interest on investment securities, which occurred because of a $41.07 million decrease in the average securities balance.

Interest Expense

As a result of prolonged increases in short-term interest rates, total interest expense increased by $3.48 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Interest expense on deposits increased by $3.06 million for the three months ended September 30, 2024, primarily due to an increase in interest expense on certificates of deposit (CD) and savings accounts. Interest expense on CDs rose by $2.01 million for the three months ended September 30, 2024, due to a 66 basis point increase in the average cost of CDs and a $107.30 million increase in the average CD balance. The increase in the average cost of CDs and savings accounts occurred as interest rates were raised in response to the increases in market interest rates over that period. Interest expense on savings accounts rose by $1.06 million for the three months ended September 30, 2024, due to a 65 basis point increase in the average cost of savings accounts which was partially offset by a $82.46 million decrease in the average savings account balance. The increase in the average balance of CDs and the decrease in the average balance of savings accounts occurred as customers transferred balances from lower rate savings accounts to higher rate CDs. Interest expense on FRB borrowings rose by $600,000 for the three months ended September 30, 2024, as the Company obtained a $50.00 million advance from the FRB in the fourth quarter of 2023. FRB advances were obtained in 2023 to enhance the Company’s liquidity and to fund deposit withdrawals.

Noninterest Expense

Noninterest expense increased by $333,000 for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a $398,000 increase in general and administrative expenses. General and administrative expenses included $324,000 of merger-related legal and consulting expenses and the write off of $135,000 of currency destroyed in the Lahaina wildfire. Federal Deposit Insurance Corporation (FDIC) premium expense rose by $146,000 for the quarter because of an increase in the FDIC insurance premium rates. The increase in other general and administrative expenses and FDIC premiums was offset by a $277,000 decrease in salaries and employee benefits during the quarter. The decrease in salaries and employee benefits occurred primarily because of decreases in compensation expense, supplemental executive retirement plan benefits, Employee Stock Ownership Plan (ESOP) expenses, health insurance and payroll taxes. The decrease in compensation expenses, payroll taxes and health insurance expenses is primarily due to a decrease in the number of employees. The decrease in ESOP expenses is primarily due to a decline in the Company’s share price which is used to calculate the accrual. The decrease in these compensation and employee benefit expenses was partially offset by a decrease in deferred salary expense for originating new loans as fewer loans were originated during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Income Taxes

Income tax benefit for the three months ended September 30, 2024 was $611,000 with an effective tax rate of (31.67)% compared to income tax expense of $335,000 with an effective tax rate of 27.57% for the three months ended September 30, 2023. The decrease in income tax expense was primarily due to a $3.14 million decrease in income before income taxes during the quarter.

Balance Sheet

Total assets were $2.20 billion at September 30, 2024 and $2.24 billion at December 31, 2023. Investment securities, including available for sale securities, decreased by $31.63 million to $674.27 million at September 30, 2024 from $705.90 million at December 31, 2023. The decrease in investment securities occurred because of principal repayments on mortgage-backed securities. Loans receivable decreased by $20.86 million to $1.29 billion at September 30, 2024 from $1.31 billion at December 31, 2023. The decrease in loans receivable occurred as loan repayments and sales exceeded new loan originations. Cash and cash equivalents increased by $16.47 million to $143.13 million at September 30, 2024 from $126.66 million at December 31, 2023 due to increases in deposits and principal repayments on mortgage-backed securities and on loans receivable.

Deposits increased by $33.68 million from $1.64 billion at December 31, 2023 to $1.67 billion at September 30, 2024. The increase in deposits is primarily due to deposits from state and local governments. The increase in deposits was used with principal repayments on mortgage-backed securities and loans receivable to pay off $65.00 million of maturing Federal Home Loan Bank (FHLB) advances during the quarter. FHLB advances decreased by $65.00 million to $177.00 million at September 30, 2024 from $242.00 million at December 31, 2023.

Asset Quality

Credit quality continues to be extremely important as the Bank adheres to its strict underwriting standards. The Company had no delinquent mortgage loans 90 days or more past due at September 30, 2024, compared to $227,000 at December 31, 2023. Non-performing assets totaled $2.34 million at September 30, 2024, compared to $2.26 million at December 31, 2023. The ratio of non-performing assets to total assets was 0.11% at September 30, 2024, compared to 0.10% at December 31, 2023. The allowance for credit losses was $5.06 million at September 30, 2024, compared to $5.12 million at December 31, 2023, representing 0.39% of total loans for both periods. The ratio of the allowance for credit losses to non-performing loans was 216.12% at September 30, 2024, compared to 226.59% at December 31, 2023.

About Us

Territorial Bancorp Inc., headquartered in Honolulu, Hawaii, is the stock holding company for Territorial Savings Bank. Territorial Savings Bank is a state-chartered savings bank which was originally chartered in 1921 by the Territory of Hawaii. Territorial Savings Bank conducts business from its headquarters in Honolulu, Hawaii and has 28 branch offices in the state of Hawaii. For additional information, please visit the Company’s website at: https://www.tsbhawaii.bank.

Additional Information and Where to Find it

In connection with the proposed merger, Hope Bancorp, Inc. filed with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 on June 21, 2024, which included a Proxy Statement of Territorial Bancorp Inc. that also constitutes a prospectus of Hope Bancorp, Inc. Territorial Bancorp stockholders are encouraged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information about the proposed merger. Territorial Bancorp stockholders are able to obtain a free copy of the Proxy Statement/Prospectus, as well as other filings containing information about Hope Bancorp and Territorial Bancorp at the SEC’s Internet site (www.sec.gov).

Forward-looking statements

This earnings release contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:

statements of our goals, intentions and expectations;
statements regarding our business plans, prospects, growth and operating strategies;
statements regarding the asset quality of our loan and investment portfolios; and
estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this earnings release.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

factors related to the proposed transaction with Hope Bancorp, including the receipt of regulatory and stockholder approvals, and other customary closing conditions;
general economic conditions, either internationally, nationally or in our market areas, that are worse than expected;
competition among depository and other financial institutions;
inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;
adverse changes in the securities markets;
changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;
changes in monetary or fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;
our ability to enter new markets successfully and capitalize on growth opportunities;
our ability to successfully integrate acquired entities, if any;
changes in consumer demand, spending, borrowing and savings habits;
changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;
changes in our organization, compensation and benefit plans;
the timing and amount of revenues that we may recognize;
the value and marketability of collateral underlying our loan portfolios;
our ability to retain key employees;
cyberattacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data or disable our systems;
technological change that may be more difficult or expensive than expected;
the ability of third-party providers to perform their obligations to us;
the ability of the U.S. Government to manage federal debt limits;
the quality and composition of our investment portfolio;
the effect of any pandemic disease, natural disaster, war, act of terrorism, accident or similar action or event;
changes in market and other conditions that would affect our ability to repurchase our common stock; and
changes in our financial condition or results of operations that reduce capital available to pay dividends.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Contact:
Walter Ida
(808) 946-1400


Territorial Bancorp Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2024			2023				2024			2023
Interest income:
Loans	$	12,229		$	11,886		$	36,540		$	35,037
Investment securities		4,183			4,447			12,753			13,512
Other investments		1,901			1,051			5,104			2,848
Total interest income		18,313			17,384			54,397			51,397

Interest expense:
Deposits		8,469			5,408			22,658			13,261
Advances from the Federal Home Loan Bank		1,714			1,896			5,330			4,782
Advances from the Federal Reserve Bank		600			—			1,789			—
Securities sold under agreements to repurchase		46			46			137			137
Total interest expense		10,829			7,350			29,914			18,180

Net interest income		7,484			10,034			24,483			33,217
Provision (reversal of provision) for credit losses		29			(259	)		22			(147	)

Net interest income after provision (reversal of provision) for credit losses		7,455			10,293			24,461			33,364

Noninterest income:
Service and other fees		273			298			885			1,022
Income on bank-owned life insurance		255			218			750			628
Net gain on sale of loans		19			—			19			10
Other		69			73			215			208
Total noninterest income		616			589			1,869			1,868

Noninterest expense:
Salaries and employee benefits		4,899			5,176			14,606			15,723
Occupancy		1,813			1,819			5,319			5,201
Equipment		1,335			1,263			3,987			3,878
Federal deposit insurance premiums		392			246			1,281			737
Other general and administrative expenses		1,561			1,163			4,851			3,251
Total noninterest expense		10,000			9,667			30,044			28,790

(Loss) Income before income taxes		(1,929	)		1,215			(3,714	)		6,442
Income tax (benefit) expense		(611	)		335			(1,139	)		1,749
Net (loss) income	$	(1,318	)	$	880		$	(2,575	)	$	4,693

Basic (loss) earnings per share	$	(0.15	)	$	0.10		$	(0.30	)	$	0.54
Diluted (loss) earnings per share	$	(0.15	)	$	0.10		$	(0.30	)	$	0.53
Cash dividends declared per common share	$	0.01		$	0.23		$	0.07		$	0.69
Basic weighted-average shares outstanding		8,618,155			8,577,632			8,604,082			8,656,915
Diluted weighted-average shares outstanding		8,618,155			8,610,289			8,604,082			8,705,784


Territorial Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)

	September 30,			December 31,
	2024			2023
ASSETS
Cash and cash equivalents	$	143,128		$	126,659
Investment securities available for sale, at fair value		19,920			20,171
Investment securities held to maturity, at amortized cost (fair value of $552,222 and $568,128 at September 30, 2024 and December 31, 2023, respectively)		654,349			685,728
Loans receivable		1,287,688			1,308,552
Allowance for credit losses		(5,055	)		(5,121	)
Loans receivable, net of allowance for credit losses		1,282,633			1,303,431
Federal Home Loan Bank stock, at cost		9,307			12,192
Federal Reserve Bank stock, at cost		3,187			3,180
Accrued interest receivable		6,056			6,105
Premises and equipment, net		7,257			7,185
Right-of-use asset, net		11,613			12,371
Bank-owned life insurance		49,388			48,638
Income taxes receivable		1,832			344
Deferred income tax assets, net		2,465			2,457
Prepaid expenses and other assets		7,297			8,211
Total assets	$	2,198,432		$	2,236,672

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits	$	1,670,281		$	1,636,604
Advances from the Federal Home Loan Bank		177,000			242,000
Advances from the Federal Reserve Bank		50,000			50,000
Securities sold under agreements to repurchase		10,000			10,000
Accounts payable and accrued expenses		22,176			23,334
Lease liability		17,090			17,297
Advance payments by borrowers for taxes and insurance		3,148			6,351
Total liabilities		1,949,695			1,985,586

Stockholders’ Equity:
Preferred stock, $0.01 par value; authorized 50,000,000 shares, no shares issued or outstanding		—			—
Common stock, $0.01 par value; authorized 100,000,000 shares; issued and outstanding
8,832,210 and 8,826,613 shares at September 30, 2024 and December 31, 2023, respectively		88			88
Additional paid-in capital		48,163			48,022
Unearned ESOP shares		(2,079	)		(2,447	)
Retained earnings		208,504			211,644
Accumulated other comprehensive loss		(5,939	)		(6,221	)
Total stockholders’ equity		248,737			251,086
Total liabilities and stockholders’ equity	$	2,198,432		$	2,236,672


Territorial Bancorp Inc. and Subsidiaries
Selected Financial Data (Unaudited)



		Three Months Ended
		September 30,
			2024			2023

Performance Ratios (annualized):
	Return on average assets		(0.24%	)		0.16%
	Return on average equity		(2.09%	)		1.39%
	Net interest margin on average interest earning assets		1.42%			1.90%
	Efficiency ratio (1)		123.46%			91.00%

		At			At
		September			December
			30, 2024			31, 2023

Selected Balance Sheet Data:
	Book value per share (2)	$	28.16		$	28.45
	Stockholders’ equity to total assets		11.31%			11.23%


Asset Quality
(Dollars in thousands):
	Delinquent loans 90 days past due and not accruing	$	0		$	227
	Non-performing assets (3)	$	2,339		$	2,260
	Allowance for credit losses	$	5,055		$	5,121
	Non-performing assets to total assets		0.11%			0.10%
	Allowance for credit losses to total loans		0.39%			0.39%
	Allowance for credit losses to non-performing assets		216.12%			226.59%


Note:

(1)	Efficiency ratio is equal to noninterest expense divided by the sum of net interest income and noninterest income
(2)	Book value per share is equal to stockholders’ equity divided by number of shares issued and outstanding
(3)	Non-performing assets consist of non-accrual loans and real estate owned. Amounts are net of charge-offs

The MIL Network –

January 25, 2025

MIL-OSI: NEWTON GOLF Company Provides Preliminary Financial Results for Third Quarter of 2024

Source: GlobeNewswire (MIL-OSI)

CAMARILLO, CA, Oct. 28, 2024 (GLOBE NEWSWIRE) — NEWTON GOLF Company (Nasdaq: SPGC) (“NEWTON GOLF” or the “Company”), a technology-forward golf company with a growing portfolio of golf products, including putters, golf shafts, golf grips, and other golf-related accessories, reports preliminary financial results for the third quarter of 2024 (three months ended September 30, 2024) ahead of its quarterly filing.

Financial Highlights for Third Quarter 2024

Revenue of $1,150,000 – $1,250,000 in 3Q24, an increase of 1,163% at the midpoint of the range over $95,000 in 3Q23 and a sequential increase of 48% at the midpoint of the range over $813,000 in 2Q24.
Gross margin of 63-67% in 3Q24 was driven by increased volume in manufacturing and compares to 41% in 3Q23.
Announced a complete rebranding of the Company.
Launched the new Gravity Premium putter line with the introduction of five models.
Expanded the Company’s global presence with the launch of the Newton Motion shafts in Japan in 50 of its largest golf retail locations.
Closed on $732,000 of underwritten public offering of shares of common stock.
Increased the number of professionals using the Newton Motion Shafts on the PGA TOUR Champions to 34, generating greater exposure.
Executed successful digital campaigns.
Introduced the new advanced performance shafts for higher swing speeds.

NEWTON GOLF Company Executive Chairman Greg Campbell commented, “Our third quarter was marked by continued momentum in the sales of our Newton Motion replacement driver shafts and the first full quarter of revenue from our fairway woods replacement shafts. The continued traction we are seeing from professional golfers, highlighted by 34 Champions TOUR players now using the Newton Motion shafts, gives us confidence that our technology-forward approach to design is the proper cornerstone of our product development strategy. Additionally, a recent launch of our putter line that now carries the NEWTON GOLF Gravity brand can potentially add to our growth trajectory.”

This press release contains preliminary estimated financial results for the quarter ended September 30, 2024, and may change as a result of management’s continued review. The preliminary financial information included in this press release reflects the Company’s current estimates based on information available as of the date of this press release and has been prepared by Company management. This preliminary financial and operational information should not be viewed as a substitute for full financial statements and is not necessarily indicative of the results to be achieved for any future periods. This preliminary financial and operational information could be impacted by the effects of financial closing procedures, final adjustments, and other developments.

About NEWTON GOLF: A Sacks Parente Company

NEWTON GOLF: A Sacks Parente Company, is a technology-forward golf company that help golfers elevate their game. With a growing portfolio of golf products, including putters, golf shafts, golf grips, and other golf-related accessories, the Company’s innovative accomplishments include: the First Vernier Acuity putter, patented Ultra-Low Balance Point (ULBP) putter technology, weight-forward Center-of-Gravity (CG) design, and pioneering ultra-light carbon fiber putter shafts.

In consideration of its growth opportunities in golf shaft technologies, the Company expanded its manufacturing business in April of 2022 to develop the advanced Newton brand of premium golf shafts by opening a new shaft manufacturing facility in St. Joseph, MO. It is the Company’s intent to manufacture and assemble substantially all products in the United States, while also expanding into golf apparel and other golf-related product lines to enhance its growth.

The Company’s future expansions may include broadening its offerings through mergers, acquisitions or internal developments of product lines that are complementary to its premium brand. The Company currently sells its products through resellers, the Company’s websites, Club Champion retail stores, and distributors in the United States, Japan, and South Korea.

For more information, please visit the Company’s website at www.newtongolfco.com or on social media at @newtongolfco.com, @newtonshafts, or @gravityputters.

Investor Contact for NEWTON GOLF
CORE IR
516-222-2560
investors@sacksparente.com

The MIL Network –

January 25, 2025

MIL-OSI: Norwood Financial Corp Announces Third Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

Quarterly Highlights:

Net interest margin increased 19 basis points vs. the prior quarter and 7 basis points over the prior year.
Loans grew at an 8% annualized rate during the 3^rd quarter.
Capital continues to improve as the negative mark-to-market effect lessens 42% since last year.

HONESDALE, Pa., Oct. 28, 2024 (GLOBE NEWSWIRE) — Norwood Financial Corp (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced earnings for the three months ended September 30, 2024 of $3.8 million, which was $275 thousand lower than the same three-month period of last year. Net interest income was up by $892 thousand which was offset by increases in operating expense and the provision for credit losses. Earnings per share (fully diluted) were $0.48 in the three months ended September 30, 2024, compared to $0.51 in the same period of last year. The annualized return on average assets for the three months ended September 30, 2024, was 0.68%, while the annualized return on average tangible equity was 9.58%.

Net income for the nine months ended September 30, 2024, was $12.5 million, which is $3.9 million lower than the same nine-month period of 2023, due to a decrease in net interest income, an increase in the provision for credit losses, and an increase in operating expenses, partially offset by an increase in total other income. Earnings per share (fully diluted) for the nine months ended September 30, 2024, were $1.55, compared to $2.03 for the nine months ended September 30, 2023. The annualized return on average assets for the nine months ended September 30, 2024 was 0.75%. The annualized return on average tangible equity for the nine months ended September 30, 2024 was 10.82%.

Total assets as of September 30, 2024 were $2.280 billion, compared to $2.180 billion at September 30, 2023. At September 30, 2024, loans receivable were $1.675 billion, total deposits were $1.855 billion and stockholders’ equity was $195.7 million.

For the three months ended September 30, 2024, net interest income, on a fully-taxable equivalent basis (fte), totaled $16.1 million, an increase of $914 thousand compared to the same period in 2023. A $77.5 million increase in average interest-earning assets, generated an increase in interest income of $4.0 million. Interest expense increased $3.1 million mainly due to higher deposit balances and higher rates on those deposits. Net interest margin (fte) for the three months ended September 30, 2024 was 2.99%, compared to 2.92% in the same period of 2023. The tax-equivalent yield on interest-earning assets increased 58 basis points to 5.31% during the three months ended September 30, 2024, compared to the same prior year period, while the cost of interest-bearing liabilities increased 62 basis points to 3.09%.

Net interest income (fte) for the nine-months ended September 30, 2024 totaled $45.6 million, which was $1.2 million lower than the same period in 2023, due primarily to a $14.8 million increase in the cost of interest-bearing liabilities. The net interest margin (fte) was 2.87% for the nine-months ended September 30, 2024, as compared to 3.10% for the nine-months ended September 30, 2023.

Other income for the three months ended September 30, 2024, totaled $2.3 million, compared to $2.3 million for the same period in 2023. For the nine-months ended September 30, 2024, other income totaled $6.5 million, compared to $6.0 million for the nine-months ended September 30, 2023.

Other expenses totaled $12.0 million for the three months ended September 30, 2024, an increase of $755 thousand, compared to the $11.3 million for the same period of 2023. For the nine-months ended September 30, 2024, other expenses totaled $35.2 million, compared to $32.6 million for the same period in 2023, due primarily to an increase in salaries and benefits, professional fees, data processing costs and FDIC insurance.

Jim Donnelly President and CEO of Norwood Financial Corp and Wayne Bank, stated, “We are pleased to present our result of operations for the third quarter. Although strong loan growth caused an increase in our provision for credit losses we welcome the ongoing opportunity to serve our customers. Net interest margin (fte) for this quarter eclipsed the margin for last year, something that hasn’t happened since the Federal Reserve began raising interest rates. Our capital base remains above “Well-Capitalized” targets and we continue to show less impact from the market value of our bond portfolio. Additionally, our credit quality metrics remained strong during the third quarter, which we believe should benefit future performance. We appreciate the opportunity to serve our Wayne Bank customers and our customers at the Bank of the Finger Lakes and Bank of Cooperstown locations. We continue to look for opportunities available to us as we service our growing base of stockholders and customers.”

Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and fifteen 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”.

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.

Non-GAAP Financial Measures

This release references net interest income on a fully taxable-equivalent basis (fte), which is a non-GAAP (Generally Accepted Accounting Principles) financial measure. Fully taxable-equivalent net interest income was derived from GAAP interest income and net interest income using an assumed tax rate of 21%. We believe the presentation of net interest income on a fully taxable-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.

The following table reconciles net interest income to net interest income on a fully taxable-equivalent basis:


(dollars in thousands)	Three months ended				Nine months ended
(dollars in thousands)	September 30				September 30
		2024		2023			2024		2023
Net Interest Income	$	15,931	$	15,039		$	45,566	$	46,774
Taxable equivalent basis adjustment using 21% marginal tax rate		207		185			601		554
Net interest income on a fully taxable equivalent basis	$	16,138	$	15,224		$	46,167	$	47,328

This release also references average tangible equity, which is also a non-GAAP financial measure. Average tangible equity is calculated by deducting average goodwill and other intangible assets from average stockholders’ equity. The Company believes that disclosure of tangible equity ratios enhances investor understanding of our financial position and improves the comparability of our financial data.

The following table reconciles average equity to average tangible equity:


	Three months ended				Nine months ended
(dollars in thousands)	September 30				September 30
		2024		2023		2024		2023
Average equity	$	189,135	$	175,224	$	183,593	$	174,943
Average goodwill and other intangibles		(29,440)		(29,514)		(29,457)		(29,536)
Average tangible equity	$	159,695	$	145,710	$	154,136	$	145,407

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)
	September 30
		2024	2023
ASSETS
Cash and due from banks	$	47,072		$	41,141
Interest-bearing deposits with banks		35,808			13,005
Cash and cash equivalents		82,880			54,146

Securities available for sale		396,891			380,499
Loans receivable		1,675,139			1,611,069
Less: Allowance for credit losses		18,699			16,086
Net loans receivable		1,656,440			1,594,983
Regulatory stock, at cost		6,329			8,843
Bank premises and equipment, net		18,503			17,254
Bank owned life insurance		46,382			46,197
Foreclosed real estate owned		0			290
Accrued interest receivable		8,062			7,759
Deferred tax assets, net		18,818			25,610
Goodwill		29,266			29,266
Other intangible assets		167			240
Other assets		16,013			14,911
TOTAL ASSETS	$	2,279,751		$	2,179,998


LIABILITIES
Deposits:
Non-interest bearing demand	$	420,967		$	430,242
Interest-bearing		1,434,284			1,316,582
Total deposits		1,855,251			1,746,824
Short-term borrowings		52,453			103,881
Other borrowings		144,959			137,447
Accrued interest payable		12,688			8,605
Other liabilities		18,746			18,539
TOTAL LIABILITIES		2,084,097			2,015,296

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: 8,311,851 shares, 2023: 8,291,401 shares		831			829
Surplus		98,330			97,449
Retained earnings		140,489			137,363
Treasury stock, at cost: 2024: 221,140 shares, 2023: 222,051 shares		(5,969	)		(5,957	)
Accumulated other comprehensive loss		(38,027	)		(64,982	)
TOTAL STOCKHOLDERS’ EQUITY		195,654			164,702
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,279,751		$	2,179,998


NORWOOD FINANCIAL CORP Consolidated Statements of Income (dollars in thousands, except per share data) (unaudited)
		Three Months Ended September 30,				Nine Months Ended September 30,
		2024	2023				2024		2023
INTEREST INCOME
Loans receivable, including fees	$	25,464		$	22,021	$	73,266	$	61,881
Securities		2,526			2,433		7,635		7,418
Other		497			54		2,194		156
Total Interest income		28,487			24,508		83,095		69,455

INTEREST EXPENSE
Deposits		10,553			7,017		31,349		17,119
Short-term borrowings		323			1,126		1,015		2,702
Other borrowings		1,680			1,326		5,165		2,860
Total Interest expense		12,556			9,469		37,529		22,681
NET INTEREST INCOME		15,931			15,039		45,566		46,774
PROVISION FOR CREDIT LOSSES		1,345		$	882	$	1,069	$	(568	)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		14,586			14,157		44,497		47,342

OTHER INCOME
Service charges and fees		1,517			1,527		4,364		4,192
Income from fiduciary activities		256			246		719		688
Net realized (losses) gains on sales of securities		–			–		–		(209	)
Gains on sales of loans, net		103			18		145		27
Gains on sales of foreclosed real estate owned		–			13		32		13
Earnings and proceeds on life insurance policies		261			328		781		770
Other		158			174		467		520
Total other income		2,295			2,306		6,508		6,001

OTHER EXPENSES
Salaries and employee benefits		6,239			6,083		18,328		17,893
Occupancy, furniture and equipment		1,269			1,242		3,758		3,818
Data processing and related operations		1,162			876		3,208		2,465
Taxes, other than income		179			167		452		490
Professional fees		576			524		1,669		1,132
FDIC Insurance assessment		339			254		1,009		699
Foreclosed real estate		9			9		45		112
Amortization of intangibles		16			20		54		66
Other		2,242			2,101		6,683		5,974
Total other expenses		12,031			11,276		35,206		32,649

INCOME BEFORE TAX		4,850			5,187		15,799		20,694
INCOME TAX EXPENSE		1,006			1,068		3,308		4,289
NET INCOME	$	3,844		$	4,119	$	12,491	$	16,405

Basic earnings per share	$	0.48		$	0.51	$	1.55	$	2.03

Diluted earnings per share	$	0.48		$	0.51	$	1.55	$	2.03


NORWOOD FINANCIAL CORP Financial Highlights (Unaudited) (dollars in thousands, except per share data)
For the Three Months Ended September 30		2024			2023
Net interest income	$	15,931		$	15,039
Net income		3,844			4,119

Net interest spread (fully taxable equivalent)		2.23	%		2.26	%
Net interest margin (fully taxable equivalent)		2.99	%		2.92	%
Return on average assets		0.68	%		0.76	%
Return on average equity		8.09	%		9.33	%
Return on average tangible equity		9.58	%		11.22	%
Basic earnings per share	$	0.48		$	0.51
Diluted earnings per share	$	0.48		$	0.51

For the Nine Months Ended September 30		2024			2023
Net interest income	$	45,566		$	46,774
Net income		12,491			16,405

Net interest spread (fully taxable equivalent)		2.12	%		2.56	%
Net interest margin (fully taxable equivalent)		2.87	%		3.10	%
Return on average assets		0.75	%		1.04	%
Return on average equity		9.09	%		12.54	%
Return on average tangible equity		10.82	%		15.08	%
Basic earnings per share	$	1.55		$	2.03
Diluted earnings per share	$	1.55		$	2.03

As of September 30		2024			2023
Total assets	$	2,279,751		$	2,179,998
Total loans receivable		1,675,139			1,611,069
Allowance for credit losses		18,699			16,086
Total deposits		1,855,251			1,746,824
Stockholders’ equity		195,654			164,702
Trust assets under management		209,857			185,913

Book value per share	$	24.92		$	21.15
Tangible book value per share	$	21.28		$	17.49
Equity to total assets		8.58	%		7.56	%
Allowance to total loans receivable		1.12	%		1.00	%
Nonperforming loans to total loans		0.47	%		0.65	%
Nonperforming assets to total assets		0.35	%		0.50	%


NORWOOD FINANCIAL CORP Consolidated Balance Sheets (unaudited) (dollars in thousands)
	September 30 2024		June 30 2024		March 31 2024		December 31 2023		September 30 2023
ASSETS
Cash and due from banks	$	47,072	$	29,903	$	19,519	$	28,533	$	41,141
Interest-bearing deposits with banks		35,808		39,492		92,444		37,587		13,005
Cash and cash equivalents		82,880		69,395		111,963		66,120		54,146

Securities available for sale		396,891		397,578		398,374		406,259		380,499
Loans receivable		1,675,139		1,641,356		1,621,448		1,603,618		1,611,069
Less: Allowance for credit losses		18,699		17,807		18,020		18,968		16,086
Net loans receivable		1,656,440		1,623,549		1,603,428		1,584,650		1,594,983
Regulatory stock, at cost		6,329		6,443		6,545		7,318		8,843
Bank owned life insurance		46,382		46,121		45,869		46,439		46,197
Bank premises and equipment, net		18,503		18,264		18,057		17,838		17,254
Foreclosed real estate owned		0		0		97		97		290
Goodwill and other intangibles		29,433		29,449		29,468		29,487		29,506
Other assets		42,893		44,517		46,622		42,871		48,280
TOTAL ASSETS	$	2,279,751	$	2,235,316	$	2,260,423	$	2,201,079	$	2,179,998

LIABILITIES
Deposits
Non-interest bearing demand	$	420,967	$	391,849	$	383,362	$	399,545	$	430,242
Interest-bearing deposits		1,434,284		1,419,323		1,455,636		1,395,614		1,316,582
Total deposits		1,855,251		1,811,172		1,838,998		1,795,159		1,746,824
Borrowings		197,412		210,422		211,234		198,312		241,328
Other liabilities		31,434		31,534		28,978		26,538		27,144
TOTAL LIABILITIES		2,084,097		2,053,128		2,079,210		2,020,009		2,015,296

STOCKHOLDERS’ EQUITY		195,654		182,188		181,213		181,070		164,702

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,279,751	$	2,235,316	$	2,260,423	$	2,201,079	$	2,179,998


NORWOOD FINANCIAL CORP Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data)

		September 30 2024		June 30 2024				March 31 2024			December 31 2023			September 30 2023
Three months ended		September 30 2024		June 30 2024				March 31 2024			December 31 2023			September 30 2023
INTEREST INCOME
Loans receivable, including fees	$	25,464		$	24,121		$	23,681		$	23,328		$	22,021
Securities		2,526			2,584			2,526			2,504			2,433
Other		497			966			731			253			54
Total interest income		28,487			27,671			26,938			26,085			24,508

INTEREST EXPENSE
Deposits		10,553			10,687			10,110			8,910			7,017
Borrowings		2,003			2,059			2,118			1,882			2,452
Total interest expense		12,556			12,746			12,228			10,792			9,469
NET INTEREST INCOME		15,931			14,925			14,710			15,293			15,039
(RELEASE OF) PROVISION FOR CREDIT LOSSES		1,345			347			(624	)		6,116			882
NET INTEREST INCOME AFTER (RELEASE OF) PROVISION FOR CREDIT LOSSES
		14,586			14,578			15,334			9,177			14,157

OTHER INCOME
Service charges and fees		1,517			1,504			1,343			1,421			1,527
Income from fiduciary activities		256			225			238			210			246
Net realized (losses) gains on sales of securities		–			–			–			–			–
Gains on sales of loans, net		103			36			6			36			18
Gains on sales of foreclosed real estate owned		–			32			–			66			13
Earnings and proceeds on life insurance policies		261			253			268			242			328
Other		158			157			151			148			174
Total other income		2,295			2,207			2,006			2,123			2,306

OTHER EXPENSES
Salaries and employee benefits		6,239			5,954			6,135			5,672			6,083
Occupancy, furniture and equipment, net		1,269			1,229			1,261			1,265			1,242
Foreclosed real estate		9			15			21			17			9
FDIC insurance assessment		339			309			361			287			254
Other		4,175			3,937			3,954			3,608			3,688
Total other expenses		12,031			11,444			11,732			10,849			11,276

INCOME BEFORE TAX		4,850			5,341			5,608			451			5,187
INCOME TAX EXPENSE		1,006			1,128			1,175			96			1,068
NET INCOME	$	3,844		$	4,213		$	4,433		$	355		$	4,119

Basic earnings per share	$	0.48		$	0.52		$	0.55		$	0.04		$	0.51

Diluted earnings per share	$	0.48		$	0.52		$	0.55		$	0.04		$	0.51

Book Value per share	$	24.92		$	23.26		$	23.01		$	22.99		$	21.15
Tangible Book Value per share		21.28			19.62			19.38			19.36			17.49

Return on average assets (annualized)		0.68	%		0.75	%		0.80	%		0.06	%		0.76	%
Return on average equity (annualized)		8.09	%		9.41	%		9.79	%		0.84	%		9.33	%
Return on average tangible equity (annualized)		9.58	%		11.26	%		11.68	%		1.01	%		11.22	%

Net interest spread (fte)		2.23	%		2.05	%		2.07	%		2.24	%		2.28	%
Net interest margin (fte)		2.99	%		2.79	%		2.79	%		2.95	%		2.94	%

Allowance for credit losses to total loans		1.12	%		1.08	%		1.11	%		1.18	%		1.00	%
Net charge-offs to average loans (annualized)		0.08	%		0.13	%		0.08	%		0.79	%		0.59	%
Nonperforming loans to total loans		0.47	%		0.47	%		0.23	%		0.48	%		0.65	%
Nonperforming assets to total assets		0.35	%		0.34	%		0.17	%		0.35	%		0.50	%

NORWOOD FINANCIAL CORP NET INTEREST MARGIN ANALYSIS (dollars in thousands)
	For the Quarter Ended
	September 30, 2024							For the Quarter Ended June 30, 2024								September 30, 2023
	Average Balance (2)			Interest (1)			Average Rate (3)	Average Balance (2)				Interest (1)			Average Rate (3)	Average Balance (2)				Interest (1)			Average Rate (3)
Assets
Interest-earning assets:
Interest-bearing deposits with banks	$	36,221		$	497		5.46	%	$	69,173		$	967		5.62	%	$	3,675		$	54		5.83	%
Securities available for sale:
Taxable		392,168			2,161		2.19			401,014			2,206		2.21			406,962			2,052		2.00
Tax-exempt (1)		67,563			461		2.71			69,126			477		2.78			70,219			483		2.73
Total securities available for sale (1)		459,731			2,622		2.27			470,140			2,683		2.30			477,181			2,535		2.11
Loans receivable (1) (4) (5)		1,651,921			25,575		6.16			1,629,283			24,220		5.98			1,589,474			22,104		5.52
Total interest-earning assets		2,147,873			28,694		5.31			2,168,596			27,870		5.17			2,070,330			24,693		4.73
Non-interest earning assets:
Cash and due from banks		28,193								26,422								27,910
Allowance for credit losses		(17,944	)							(18,023	)							(17,262	)
Other assets		78,344								69,718								65,863
Total non-interest earning assets		88,593								78,117								76,511
Total Assets	$	2,236,466							$	2,246,713							$	2,146,841
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:

Interest-bearing demand and money market	$	461,897		$	2,782		2.40		$	450,918		$	2,397		2.14		$	439,255		$	1,647		1.49
Savings		221,366			13		0.02			233,676			286		0.49			238,493			77		0.13
Time		734,235			7,758		4.20			755,224			8,004		4.26			611,607			5,293		3.43
Total interest-bearing deposits		1,417,498			10,553		2.96			1,439,818			10,687		2.99			1,289,355			7,017		2.16
Short-term borrowings		53,622			323		2.40			61,689			356		2.32			116,470			1,126		3.84
Other borrowings		146,357			1,680		4.57			149,442			1,703		4.58			116,700			1,326		4.51
Total interest-bearing liabilities		1,617,477			12,556		3.09			1,650,949			12,746		3.11			1,522,525			9,469		2.47
Non-interest bearing liabilities:
Demand deposits		400,314								387,962								425,216
Other liabilities		29,540								28,308								23,876
Total non-interest bearing liabilities		429,854								416,270								449,092
Stockholders’ equity		189,135								179,494								175,224
Total Liabilities and Stockholders’ Equity	$	2,236,466							$	2,246,713							$	2,146,841
Net interest income/spread (tax equivalent basis)					16,138		2.23	%					15,124		2.06	%					15,224		2.26	%
Tax-equivalent basis adjustment					(207	)							(199	)							(185	)
Net interest income				$	15,931							$	14,925							$	15,039
Net interest margin (tax equivalent basis)							2.99	%							2.80	%							2.92	%

(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.

The MIL Network –

January 25, 2025

MIL-OSI: PSB Holdings, Inc. Reports Earnings of $0.69 per Share for Q3 2024; Net Interest Margin and Tangible Book Value Increase; Asset Quality Improves

Source: GlobeNewswire (MIL-OSI)

WAUSAU, Wis., Oct. 28, 2024 (GLOBE NEWSWIRE) — PSB Holdings, Inc. (“PSB”) (OTCQX: PSBQ), the holding company for Peoples State Bank (“Peoples”) serving Northcentral and Southeastern Wisconsin reported third quarter earnings ending September 30, 2024 of $0.69 per common share on net income of $2.9 million, compared to $0.56 per common share on net income of $2.3 million during the second quarter ending June 30, 2024, and $0.29 per common share on net income of $1.2 million during the third quarter ending September 30, 2023.

PSB’s third quarter 2024 operating results reflected the following changes from the second quarter of 2024: (1) higher net interest margin increased 6 basis points; (2) slightly lower non-interest income; (3) lower non-interest expense due to the second quarter reflecting elevated severance expenses; and (4) the return of a $2.5 million non-performing loan to performing status and a corresponding release in specific reserves.

“Over the past year, we have increased shareholders’ tangible book value per share 18.7% and paid $0.62 in dividends to our shareholders, up 12.7% from the 12 month period ended September 30, 2023. With the rapid rise in short term interest rates over the past couple of years coming to an apparent end, we expect our net interest margin to be stable and operating expenses to continue to be well managed and efficient. Additionally, as funds become available from investment and loan repayments and maturities, we expect the funds to be reinvested into higher yielding assets which should lessen the volatility in fair market value adjustments reflected in our tangible book value,” stated Scott Cattanach, President and CEO.

September 30, 2024, Highlights:

Net interest income increased to $9.9 million for the quarter ended September 30, 2024, from $9.4 million for the quarter ended June 30, 2024, as increases in asset and loan yields outpaced the increases in funding costs.
Noninterest income decreased slightly to $1.8 million for the quarter ended September 30, 2024, compared to $1.9 million the prior quarter.
Noninterest expenses decreased during the quarter ended September 30, 2024, reflecting lower salary and benefit expenses. Included in salary and benefit expenses for the prior quarter were non-recurring expenses totaling approximately $404,000.
Tangible book value per common share increased $1.86 per share to $26.41 at September 30, 2024, compared to $24.55 one quarter earlier, and increased $4.16 per share, or 18.7%, compared to $22.25 at September 30, 2023. Additionally, PSB paid dividends totaling $0.62 per share over the past year. During the third quarter ended September 30, 2024, tangible book value per share was positively influenced by higher net income, intangible asset amortization, an increase in fair market value of investment securities and consistent stock repurchase activity.
Loans decreased $16.9 million in the third quarter ended September 30, 2024, to $1.06 billion largely due to not replacing certain out of market maturing loans. Allowance for credit losses increased to 1.18% of gross loans.
Non-performing assets declined to 0.71% of total assets at September 30, 2024 from 0.84% at June 30, 2024 as a $2.5 million loan returned to performing status.
Total deposits decreased $13.2 million during the quarter ended September 30, 2024 to $1.14 billion, with a large portion of the decrease attributable to a large overnight deposit held at June 30, 2024 which was withdrawn in early July.
Return on average tangible common equity was 10.96% for the quarter ended September 30, 2024, compared to 9.34% the prior quarter and 5.17% in the year ago quarter.

Balance Sheet and Asset Quality Review

Total assets decreased $9.7 million to $1.48 billion at September 30, 2024. Investment securities available for sale increased $9.7 million to $174.9 million at September 30, 2024, from $165.2 million one quarter earlier. Total collateralized liquidity available to meet cash demands was approximately $321 million at September 30, 2024, with an additional $343 million that could be raised in a short time frame from the brokered CDs market.

Total loans receivable decreased $16.9 million to $1.06 billion at September 30, 2024, due primarily to lower commercial and construction lending. Commercial non-real estate loans decreased $9.1 million to $139.0 million at September 30, 2024, from $148.2 million one quarter earlier. Gross construction lending decreased $9.6 million to $61.0 million at September 30, 2024, from $70.5 million at June 30, 2024, while loans in process declined $3.6 million during the quarter ended September 30, 2024. Commercial real estate loans decreased $2.6 million to $541.6 million at September 30, 2024, from $544.2 million the prior quarter. Meanwhile, residential real estate loans increased slightly from the prior quarter to $341.3 million from $340.9 million. The loan portfolio remains well diversified with commercial real estate and construction loans totaling 55.4% of gross loans followed by residential real estate loans at 31.4% of gross loans, commercial non-real estate loans at 12.8% and consumer loans at 0.4%.

The allowance for credit losses increased slightly to 1.18% of gross loans at September 30, 2024, from 1.16% the prior quarter. Annualized net charge-offs to average loans were zero for the last five quarters. Non-performing assets totaled 0.71% of total assets at September 30, 2024, compared to 0.84% at June 30, 2024. During the quarter ended September 30, 2024, a loan totaling $2.5 million was returned to performing status, while a loan on a recreation facility totaling $3.3 million was added to nonaccrual status. Additionally, one loan relationship to an equipment dealership on nonaccrual status totaling $5.1 million at June 30, 2024 was paid down to $2.8 million at September 30, 2024 on sale of the equipment inventory. For the seventh consecutive quarter, the Bank did not own any foreclosed real estate.

Total deposits decreased $13.2 million to $1.14 billion at September 30, 2024, from $1.15 billion at June 30, 2024. The decrease in deposits reflects a $13.1 million decrease in interest-bearing demand and savings deposits, a $19.7 million decrease in money market deposits partially offset by a $14.6 million increase in non-interest bearing deposits and a $5.4 million increase in retail and local time deposits. The decrease in money market deposits reflected a large deposit of $49 million on June 30, 2024 that was drawn down in early July 2024.

At September 30, 2024, non-interest bearing demand deposits increased to 23.3% of total deposits from 21.6% the prior quarter, while interest-bearing demand and savings deposits decreased to 28.4% of deposits, compared to 29.3% at June 30, 2024. Uninsured and uncollateralized deposits decreased to 21.6% of total deposits at September 30, 2024, from 24.0% of total deposits at June 30, 2024.

FHLB advances decreased to $181.3 million at September 30, 2024, compared to $184.9 million at June 30, 2024.

Tangible stockholder equity as a percent of total tangible assets increased to 7.85% at September 30, 2024, compared to 7.32% at June 30, 2024, and 6.98% at September 30, 2023.

Tangible net book value per common share increased $4.16, to $26.41, at September 30, 2024, compared to $22.25 one year earlier, an increase of 18.7% after dividends of $0.62 were paid to shareholders. Relative to the prior quarter, tangible net book value per common share increased due to continued earnings, a fair market value increase in the investment portfolio which reduced unrealized losses reflected in accumulated other comprehensive income and amortization of intangible assets. The accumulated other comprehensive loss on the investment portfolio was $15.8 million at September 30, 2024, compared to $20.5 million one quarter earlier.

Operations Review

Net interest income increased to $9.9 million (on a net margin of 2.90%) for the third quarter of 2024, from $9.4 million (on a net margin of 2.84%) for the second quarter of 2024, and $9.6 million (on a net margin of 2.88%) for the third quarter of 2023. Earning asset yields increased by 8 basis points to 5.29% during the third quarter of 2024 from 5.21% during the second quarter of 2024, while interest bearing deposit and borrowing costs increased 7 basis points to 3.13% compared to 3.06% during the second quarter of 2024.

The increase in earning asset yields was primarily due to higher yields on loan originations and renewals. Loan yields increased during the third quarter of 2024 to 5.78% from 5.67% for the second quarter of 2024, up 11 basis points. Taxable security yields were 3.01% for the quarter ended September 30, 2024, compared to 3.02% for the quarter ended June 30, 2024, while tax-exempt security yields were 3.31% for the quarter ended September 30, 2024 compared to 3.33% the prior quarter.

The cost of all deposits was 2.11% for the quarter ended September 30, 2024, compared to 2.11% the prior quarter, while the overall cost of funds increased 7 basis points from 3.06% to 3.13% during the same time period. Deposit costs for money market deposits decreased during the quarter ended September 30, 2024, to 2.69% from 2.72% the prior quarter. The cost of time deposits and FHLB advances continued to increase and were primarily responsible for the rise in the Bank’s cost of funds in the current quarter. The cost of time deposits increased to 4.04% for the third quarter ended September 30, 2024, from 3.97% the prior quarter. FHLB advance costs rose to 4.44% during the third quarter ended September 30, 2024, from 4.28% the prior quarter.

Total noninterest income decreased slightly for the third quarter of 2024 to $1.84 million, from $1.91 million for the second quarter of 2024. Mortgage banking income remained at $433,000 in the September 30, 2024 quarter while various decreases in nominal revenue sources accounted for the slight decline in non-interest income during the third quarter ended September 30, 2024. At September 30, 2024, the Bank serviced $371 million in secondary market residential mortgage loans for others which provide fee income.

Noninterest expenses decreased to $8.2 million for the third quarter of 2024, compared to $8.4 million for the second quarter of 2024. The second quarter ended June 30, 2024, reflected higher salary and benefit expenses related to non-recurring costs. Relative to one year earlier, salary and benefit cost increased 5.7% to $4.8 million for the quarter ended September 30, 2024, compared to $4.5 million for the third quarter ended September 30, 2023.

Taxes increased $183,000 during the third quarter to $593,000, from $410,000 one quarter earlier. The increase generally reflects higher pre-tax income. The effective tax rate for the quarter ended September 30, 2024, was 16.6% compared to 14.4% for the second quarter ended June 30, 2024, and 63.8% for the third quarter ended September 30, 2023, when higher tax expenses were incurred to recognize the loss of certain deferred tax assets following a change in Wisconsin tax law that eliminated state taxes on certain qualified assets.

About PSB Holdings, Inc.

PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank headquartered in Wausau, Wisconsin, serving northcentral and southeastern Wisconsin from twelve full-service banking locations in Marathon, Oneida, Vilas, Portage, Milwaukee and Waukesha counties and a loan production office in Dane County. Peoples also provides investment and insurance products, along with retirement planning services, through Peoples Wealth Management, a division of Peoples. PSB Holdings, Inc. is traded under the stock symbol PSBQ on the OTCQX Market. More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations, estimates and projections about PSB’s business based, in part, on assumptions made by management and include, without limitation, statements with respect to the potential growth of PSB, its future profits, expected stock repurchase levels, future dividend rates, future interest rates, and the adequacy of its capital position. Forward-looking statements can be affected by known and unknown risks, uncertainties, and other factors, including, but not limited to, strength of the economy, the effects of government policies, including interest rate policies, risks associated with the execution of PSB’s vision and growth strategy, including with respect to current and future M&A activity, and risks associated with global economic instability. The forward-looking statements in this press release speak only as of the date on which they are made and PSB does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

PSB Holdings, Inc.
Consolidated Balance Sheets
September 30, June 30, and March 31, 2024, September 30, 2023, unaudited, December 31, 2023 derived from audited financial statements

	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(dollars in thousands, except per share data)		2024			2024			2024			2023			2023

Assets

Cash and due from banks	$	23,554		$	16,475		$	13,340		$	20,887		$	12,881
Interest-bearing deposits		5,126			251			105			1,431			668
Federal funds sold		58,434			69,249			2,439			5,462			7,764

Cash and cash equivalents		87,114			85,975			15,884			27,780			21,313
Securities available for sale (at fair value)		174,911			165,177			165,566			164,024			160,883
Securities held to maturity (fair values of $82,389, $79,993, $81,234, $82,514 and
$75,236 respectively)		86,847			86,825			87,104			87,081			86,908
Equity securities		1,752			1,661			1,474			1,474			2,273
Loans held for sale		–			2,268			865			230			971
Loans receivable, net (allowance for credit losses of $12,598, $12,597, $12,494,
$12,302 and $12,267 respectively)		1,057,974			1,074,844			1,081,394			1,078,475			1,098,019
Accrued interest receivable		4,837			5,046			5,467			5,136			4,716
Foreclosed assets		–			–			–			–			–
Premises and equipment, net		14,065			14,048			13,427			13,098			13,242
Mortgage servicing rights, net		1,727			1,688			1,657			1,664			1,684
Federal Home Loan Bank stock (at cost)		8,825			8,825			7,006			6,373			6,373
Cash surrender value of bank-owned life insurance		24,565			24,401			24,242			24,085			23,931
Core deposit intangible		212			229			249			273			297
Goodwill		2,541			2,541			2,541			2,541			2,541
Other assets		10,598			12,111			11,682			11,866			14,094

TOTAL ASSETS	$	1,475,968		$	1,485,639		$	1,418,558		$	1,424,100		$	1,437,245

Liabilities

Non-interest-bearing deposits	$	265,078		$	250,435		$	247,608		$	266,829		$	288,765
Interest-bearing deposits		874,035			901,886			865,744			874,973			883,474

Total deposits		1,139,113			1,152,321			1,113,352			1,141,802			1,172,239

Federal Home Loan Bank advances		181,250			184,900			158,250			134,000			128,000
Other borrowings		6,128			5,775			8,096			8,058			5,660
Senior subordinated notes		4,779			4,778			4,776			4,774			4,772
Junior subordinated debentures		12,998			12,972			12,947			12,921			12,896
Allowance for credit losses on unfunded commitments		477			477			477			577			512
Accrued expenses and other liabilities		12,850			13,069			10,247			12,681			10,258

Total liabilities		1,357,595			1,374,292			1,308,145			1,314,813			1,334,337

Stockholders’ equity

Preferred stock – no par value:
Authorized – 30,000 shares; no shares issued or outstanding
Outstanding – 7,200 shares, respectively		7,200			7,200			7,200			7,200			7,200
Common stock – no par value with a stated value of $1.00 per share:
Authorized – 18,000,000 shares; Issued – 5,490,798 shares
Outstanding – 4,105,594, 4,128,382, 4,147,649, 4,164,735 and
4,174,197 shares, respectively		1,830			1,830			1,830			1,830			1,830
Additional paid-in capital		8,567			8,527			8,466			8,460			8,421
Retained earnings		138,142			135,276			134,271			132,666			131,624
Accumulated other comprehensive income (loss), net of tax		(15,814	)		(20,503	)		(20,775	)		(20,689	)		(26,190	)
Treasury stock, at cost – 1,385,204, 1,362,416, 1,343,149, 1,326,063 and
1,316,601 shares, respectively		(21,552	)		(20,983	)		(20,579	)		(20,180	)		(19,977	)

Total stockholders’ equity		118,373			111,347			110,413			109,287			102,908

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,475,968		$	1,485,639		$	1,418,558		$	1,424,100		$	1,437,245

PSB Holdings, Inc.
Consolidated Statements of Income
	Quarter Ended												Nine Months Ended
(dollars in thousands,	Sep. 30,		Jun. 30,		Mar. 31,			Dec. 31,			Sep. 30,		September
except per share data – unaudited)	2024		2024		2024			2023			2023		2024			2023

Interest and dividend income:
Loans, including fees	$	15,634	$	15,433	$	15,109		$	14,888		$	14,263	$	46,176		$	38,745
Securities:
Taxable		1,345		1,295		1,197			1,147			1,114		3,837			3,772
Tax-exempt		522		521		526			532			533		1,569			1,605
Other interest and dividends		699		265		343			320			238		1,307			531

Total interest and dividend income		18,200		17,514		17,175			16,887			16,148		52,889			44,653

Interest expense:
Deposits		5,905		5,838		6,082			5,526			4,817		17,825			11,467
FHLB advances		2,038		1,860		1,450			1,349			1,321		5,348			3,068
Other borrowings		57		58		60			54			51		175			161
Senior subordinated notes		59		58		59			59			59		176			179
Junior subordinated debentures		252		255		251			254			255		758			731

Total interest expense		8,311		8,069		7,902			7,242			6,503		24,282			15,606

Net interest income		9,889		9,445		9,273			9,645			9,645		28,607			29,047
Provision for credit losses		–		100		95			100			150		195			350

Net interest income after provision for credit losses		9,889		9,345		9,178			9,545			9,495		28,412			28,697

Noninterest income:
Service fees		367		350		336			360			349		1,053			1,088
Mortgage banking income		433		433		308			247			345		1,174			981
Investment and insurance sales commissions		230		222		121			100			158		573			810
Net loss on sale of securities		–		–		(495	)		(297	)		–		(495	)		(279	)
Increase in cash surrender value of life insurance		165		159		157			154			155		481			461
Life insurance death benefit		–		–		–			–			–		–			533
Other noninterest income		648		742		617			540			675		2,007			2,022

Total noninterest income		1,843		1,906		1,044			1,104			1,682		4,793			5,616

Noninterest expense:
Salaries and employee benefits		4,771		5,167		5,123			4,244			4,514		15,061			14,404
Occupancy and facilities		757		733		721			675			689		2,211			2,086
Loss (gain) on foreclosed assets		1		–		–			1			–		1			(46	)
Data processing and other office operations		1,104		1,047		1,022			1,001			953		3,173			2,784
Advertising and promotion		164		171		129			244			161		464			489
Core deposit intangible amortization		17		20		24			24			24		61			85
Other noninterest expenses		1,337		1,257		1,306			1,169			1,113		3,900			3,388

Total noninterest expense		8,151		8,395		8,325			7,358			7,454		24,871			23,190

Income before provision for income taxes		3,581		2,856		1,897			3,291			3,723		8,334			11,123
Provision for income taxes		593		410		169			878			2,374		1,172			3,967

Net income	$	2,988	$	2,446	$	1,728		$	2,413		$	1,349	$	7,162		$	7,156
Preferred stock dividends declared	$	122	$	122	$	122		$	122		$	122	$	366		$	366

Net income available to common shareholders	$	2,866	$	2,324	$	1,606		$	2,291		$	1,227	$	6,796		$	6,790
Basic earnings per common share	$	0.69	$	0.56	$	0.39		$	0.55		$	0.29	$	1.64		$	1.61
Diluted earnings per common share	$	0.69	$	0.56	$	0.39		$	0.55		$	0.29	$	1.64		$	1.61

PSB Holdings, Inc.
Quarterly Financial Summary
(dollars in thousands, except per share data)		Quarter ended
		Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
Earnings and dividends:			2024			2024			2024			2023			2023

	Interest income	$	18,200		$	17,514		$	17,175		$	16,887		$	16,148
	Interest expense	$	8,311		$	8,069		$	7,902		$	7,242		$	6,503
	Net interest income	$	9,889		$	9,445		$	9,273		$	9,645		$	9,645
	Provision for credit losses	$	–		$	100		$	95		$	100		$	150
	Other noninterest income	$	1,843		$	1,906		$	1,044		$	1,104		$	1,682
	Other noninterest expense	$	8,151		$	8,395		$	8,325		$	7,358		$	7,454
	Net income available to common shareholders	$	2,866		$	2,324		$	1,606		$	2,291		$	1,227

	Basic earnings per common share (3)	$	0.69		$	0.56		$	0.39		$	0.55		$	0.29
	Diluted earnings per common share (3)	$	0.69		$	0.56		$	0.39		$	0.55		$	0.29
	Dividends declared per common share (3)	$	–		$	0.32		$	–		$	0.30		$	–
	Tangible net book value per common share (4)	$	26.41		$	24.55		$	24.21		$	23.84		$	22.25

	Semi-annual dividend payout ratio	n/a				33.60	%	n/a				38.14	%	n/a
	Average common shares outstanding		4,132,218			4,139,456			4,154,702			4,168,924			4,186,940


Balance sheet – average balances:
	Loans receivable, net of allowances for credit loss	$	1,066,795		$	1,088,013		$	1,081,936		$	1,081,851		$	1,076,158
	Assets	$	1,445,613		$	1,433,749		$	1,429,437		$	1,424,240		$	1,425,522
	Deposits	$	1,110,854		$	1,111,240		$	1,138,010		$	1,148,399		$	1,149,624
	Stockholders’ equity	$	114,458		$	110,726		$	109,473		$	105,060		$	105,745


Performance ratios:
	Return on average assets (1)		0.82	%		0.69	%		0.49	%		0.67	%		0.38	%
	Return on average common stockholders’ equity (1)		10.63	%		9.03	%		6.32	%		9.29	%		4.94	%
	Return on average tangible common
	stockholders’ equity (1)(4)		10.96	%		9.34	%		6.57	%		9.64	%		5.17	%
	Net loan charge-offs to average loans (1)		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
	Nonperforming loans to gross loans		0.97	%		1.15	%		1.08	%		0.54	%		0.55	%
	Nonperforming assets to total assets		0.71	%		0.84	%		0.83	%		0.42	%		0.42	%
	Allowance for credit losses to gross loans		1.18	%		1.16	%		1.14	%		1.13	%		1.10	%
	Nonperforming assets to tangible equity
	plus the allowance for credit losses (4)		8.71	%		11.09	%		10.59	%		5.38	%		5.87	%
	Net interest rate margin (1)(2)		2.90	%		2.84	%		2.80	%		2.88	%		2.88	%
	Net interest rate spread (1)(2)		2.16	%		2.15	%		2.12	%		2.20	%		2.27	%
	Service fee revenue as a percent of
	average demand deposits (1)		0.56	%		0.56	%		0.54	%		0.52	%		0.50	%
	Noninterest income as a percent
	of gross revenue		9.20	%		9.81	%		5.73	%		6.14	%		9.43	%
	Efficiency ratio (2)		68.43	%		72.52	%		78.93	%		67.04	%		64.58	%
	Noninterest expenses to average assets (1)		2.24	%		2.35	%		2.34	%		2.05	%		2.07	%
	Average stockholders’ equity less accumulated
	other comprehensive income (loss) to
	average assets		9.06	%		9.03	%		8.98	%		8.88	%		9.00	%
	Tangible equity to tangible assets (4)		7.85	%		7.32	%		7.60	%		7.49	%		6.98	%

Stock price information:

	High	$	25.00		$	21.40		$	22.50		$	22.30		$	22.50
	Low	$	20.30		$	19.75		$	20.05		$	20.10		$	20.35
	Last trade value at quarter-end	$	25.00		$	20.40		$	21.25		$	22.11		$	21.15

(1) Annualized
(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.
(3) Due to rounding, cumulative quarterly per share performance may not equal annual per share totals.
(4) Tangible stockholders’ equity excludes goodwill and core deposit intangibles.

PSB Holdings, Inc.
Consolidated Statements of Comprehensive Income

			Quarter Ended
			Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
(dollars in thousands – unaudited)				2024			2024			2024			2023			2023

Net income			$	2,988		$	2,446		$	1,728		$	2,413		$	1,349

Other comprehensive income, net of tax:

	Unrealized gain (loss) on securities available
		for sale		4,738			184			(615	)		5,278			(3,085	)

	Reclassification adjustment for security
		loss included in net income		–			–			391			280			–

	Accretion of unrealized loss included in net
		income on securities available for sale
		deferred tax adjustment for Wisconsin
		Act 19		–			–			(35	)		–			–

	Amortization of unrealized loss included in net
		income on securities available for sale
		transferred to securities held to maturity		90			89			91			91			91

	Unrealized gain (loss) on interest rate swap			(101	)		39			123			(109	)		79

	Reclassification adjustment of interest rate
		swap settlements included in earnings		(38	)		(40	)		(41	)		(39	)		(35	)


Other comprehensive income (loss)				4,689			272			(86	)		5,501			(2,950	)

Comprehensive income (loss)			$	7,677		$	2,718		$	1,642		$	7,914		$	(1,601	)

PSB Holdings, Inc.
Nonperforming Assets as of:
	Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(dollars in thousands)		2024			2024			2024			2023			2023

Nonaccrual loans (excluding restructured loans)	$	10,116		$	12,184		$	11,498		$	5,596		$	5,807
Nonaccrual restructured loans		25			28			30			34			42
Restructured loans not on nonaccrual		292			299			304			310			256
Accruing loans past due 90 days or more		–			–			–			–			–

Total nonperforming loans		10,433			12,511			11,832			5,940			6,105
Other real estate owned		–			–			–			–			–

Total nonperforming assets	$	10,433		$	12,511		$	11,832		$	5,940		$	6,105

Nonperforming loans as a % of gross loans receivable		0.97	%		1.15	%		1.08	%		0.54	%		0.55	%
Total nonperforming assets as a % of total assets		0.71	%		0.84	%		0.83	%		0.42	%		0.42	%
Allowance for credit losses as a % of nonperforming loans		120.75	%		100.69	%		105.59	%		207.10	%		200.93	%

PSB Holdings, Inc.
Nonperforming Assets >= $500,000 net book value before specific reserves
At September 30, 2024
(dollars in thousands)
		Gross			Specific
Collateral Description	Asset Type	Principal			Reserves

Real estate – Recreation Facility	Nonaccrual	$	3,291		$	–
Real estate – Independent Auto Repair	Nonaccrual		562			–
Real estate – Equipment Dealership	Nonaccrual		2,808			660


Total listed nonperforming assets		$	6,661		$	660
Total bank wide nonperforming assets		$	10,433		$	1,220
Listed assets as a % of total nonperforming assets			64	%		54	%

PSB Holding, Inc.
Loan Composition by Collateral Type
Quarter-ended (dollars in thousands)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023

Commercial:
Commercial and industrial	$	115,234		$	125,508		$	118,821		$	117,207		$	138,299
Agriculture		11,203			11,480			12,081			12,304			12,464
Municipal		12,596			11,190			28,842			31,530			27,186

Total Commercial		139,033			148,178			159,744			161,041			177,949

Commercial Real Estate:
Commercial real estate		541,577			544,171			546,257			536,209			539,488
Construction and development		60,952			70,540			63,375			81,701			86,456

Total Commercial Real Estate		602,529			614,711			609,632			617,910			625,944

Residential real estate:
Residential		269,954			270,944			274,300			274,453			274,632
Construction and development		34,655			36,129			34,158			33,960			33,141
HELOC		36,734			33,838			31,357			29,766			29,044

Total Residential Real Estate		341,343			340,911			339,815			338,179			336,817

Consumer installment		4,770			4,423			4,867			4,357			4,350

Subtotals – Gross loans		1,087,675			1,108,223			1,114,058			1,121,487			1,145,060
Loans in process of disbursement		(17,836	)		(21,484	)		(20,839	)		(31,359	)		(35,404	)

Subtotals – Disbursed loans		1,069,839			1,086,739			1,093,219			1,090,128			1,109,656
Net deferred loan costs		733			702			669			649			630
Allowance for credit losses		(12,598	)		(12,597	)		(12,494	)		(12,302	)		(12,267	)

Total loans receivable	$	1,057,974		$	1,074,844		$	1,081,394		$	1,078,475		$	1,098,019

PSB Holding, Inc.
Selected Commercial Real Estate Loans by Purpose
	Sept 30,				June 30,				Mar 31,				Dec 31,				Sept 30,
(dollars in thousands)		2024				2024				2024				2023				2023

	Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)		Total Exposure		% of Portfolio (1)
Multi Family	$	140,307	14.7	%	$	146,873	15.2	%	$	142,001	14.4	%	$	132,386	13.2	%	$	133,466	13.3	%
Industrial and Warehousing		86,818	9.1			86,025	8.9			85,409	8.6			83,817	8.3			88,906	8.9
Retail		33,020	3.5			34,846	3.6			33,177	3.4			35,419	3.5			35,281	3.5
Hotels		31,611	3.3			34,613	3.6			35,105	3.6			36,100	3.6			31,819	3.2
Office		6,378	0.7			6,518	0.7			6,655	0.7			6,701	0.7			6,746	0.7

(1) Percentage of commercial and commercial real estate portfolio and commitments.

PSB Holdings, Inc.
Deposit Composition

Insured and Collateralized Deposits	September 30,				June 30,				March 31,				December 31,				September 30,
(dollars in thousands)		2024				2024				2024				2023				2023
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	210,534	18.6	%	$	202,343	17.5	%	$	199,076	17.8	%	$	197,571	17.3	%	$	209,133	17.9	%
Interest-bearing demand and savings		305,631	26.8	%		304,392	26.5	%		318,673	28.7	%		317,984	27.8	%		307,620	26.3	%
Money market deposits		138,376	12.2	%		137,637	12.0	%		143,167	12.9	%		142,887	12.5	%		135,910	11.4	%
Retail and local time deposits <= $250		155,988	13.7	%		149,298	13.0	%		148,404	13.3	%		149,145	13.1	%		144,738	12.4	%

Total core deposits		810,529	71.3	%		793,670	69.0	%		809,320	72.7	%		807,587	70.7	%		797,401	68.0	%
Retail and local time deposits > $250		23,500	2.1	%		22,500	2.0	%		24,508	2.3	%		23,000	2.0	%		22,750	1.9	%
Broker & national time deposits <= $250		1,241	0.1	%		1,490	0.1	%		2,229	0.2	%		3,470	0.3	%		3,222	0.3	%
Broker & national time deposits > $250		56,164	4.9	%		56,328	4.9	%		61,752	5.5	%		70,020	6.1	%		88,614	7.6	%

Totals	$	891,434	78.4	%	$	873,988	76.0	%	$	897,809	80.7	%	$	904,077	79.1	%	$	911,987	77.8	%

PSB Holdings, Inc.
Deposit Composition

Uninsured Deposits	September 30,				June 30,				March 31,				December 31,				September 30,
(dollars in thousands)		2024				2024				2024				2023				2023
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	54,544	4.7	%	$	48,092	4.1	%	$	48,532	4.4	%	$	69,258	6.1	%	$	79,632	6.8	%
Interest-bearing demand and savings		18,317	1.6	%		32,674	2.8	%		20,535	1.8	%		20,316	1.8	%		22,847	1.9	%
Money market deposits		157,489	13.8	%		177,954	15.4	%		124,766	11.2	%		124,518	10.9	%		133,653	11.4	%
Retail and local time deposits <= $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%

Total core deposits		230,350	20.1	%		258,720	22.3	%		193,833	17.4	%		214,092	18.8	%		236,132	20.1	%
Retail and local time deposits > $250		17,329	1.5	%		19,613	1.7	%		21,710	1.9	%		23,633	2.1	%		24,120	2.1	%
Broker & national time deposits <= $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%
Broker & national time deposits > $250		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%		–	0.0	%

Totals	$	247,679	21.6	%	$	278,333	24.0	%	$	215,543	19.3	%	$	237,725	20.9	%	$	260,252	22.2	%

PSB Holdings, Inc.
Deposit Composition

Total Deposits	September 30,				June 30,				March 31,				December 31,				September 30,
(dollars in thousands)		2024				2024				2024				2023				2023
	$		%		$		%		$		%		$		%		$		%

Non-interest bearing demand	$	265,078	23.3	%	$	250,435	21.6	%	$	247,608	22.2	%	$	266,829	23.4	%	$	288,765	24.7	%
Interest-bearing demand and savings		323,948	28.4	%		337,066	29.3	%		339,208	30.5	%		338,300	29.6	%		330,467	28.2	%
Money market deposits		295,865	26.0	%		315,591	27.4	%		267,933	24.1	%		267,405	23.4	%		269,563	22.8	%
Retail and local time deposits <= $250		155,988	13.7	%		149,298	13.0	%		148,404	13.3	%		149,145	13.1	%		144,738	12.4	%

Total core deposits		1,040,879	91.4	%		1,052,390	91.3	%		1,003,153	90.1	%		1,021,679	89.5	%		1,033,533	88.1	%
Retail and local time deposits > $250		40,829	3.6	%		42,113	3.7	%		46,218	4.2	%		46,633	4.1	%		46,870	4.0	%
Broker & national time deposits <= $250		1,241	0.1	%		1,490	0.1	%		2,229	0.2	%		3,470	0.3	%		3,222	0.3	%
Broker & national time deposits > $250		56,164	4.9	%		56,328	4.9	%		61,752	5.5	%		70,020	6.1	%		88,614	7.6	%

Totals	$	1,139,113	100.0	%	$	1,152,321	100.0	%	$	1,113,352	100.0	%	$	1,141,802	100.0	%	$	1,172,239	100.0	%

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)

	Quarter ended September 30, 2024							Quarter ended June 30, 2024							Quarter ended September 30, 2023
	Average					Yield /		Average					Yield /		Average					Yield /
	Balance			Interest		Rate		Balance			Interest		Rate		Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	1,079,393		$	15,674	5.78	%	$	1,100,518		$	15,520	5.67	%	$	1,088,137		$	14,337	5.23	%
Taxable securities		177,520			1,345	3.01	%		172,563			1,295	3.02	%		173,287			1,114	2.55	%
Tax-exempt securities (2)		79,472			661	3.31	%		79,564			659	3.33	%		81,327			675	3.29	%
FHLB stock		8,825			176	7.93	%		7,931			182	9.23	%		6,368			127	7.91	%
Other		36,680			523	5.67	%		8,241			83	4.05	%		8,195			111	5.37	%

Total (2)		1,381,890			18,379	5.29	%		1,368,817			17,739	5.21	%		1,357,314			16,364	4.78	%

Non-interest-earning assets:
Cash and due from banks		17,162							17,345							19,299
Premises and equipment,
net		14,216							13,930							13,266
Cash surrender value ins		24,458							24,297							23,840
Other assets		20,485							21,865							23,782
Allowance for credit
losses		(12,598	)						(12,505	)						(11,979	)

Total	$	1,445,613						$	1,433,749						$	1,425,522

Liabilities & stockholders’ equity
Interest-bearing liabilities:
Savings and demand
deposits	$	323,841		$	1,515	1.86	%	$	331,740		$	1,467	1.78	%	$	335,214		$	1,198	1.42	%
Money market deposits		277,884			1,876	2.69	%		271,336			1,835	2.72	%		255,823			1,489	2.31	%
Time deposits		247,296			2,514	4.04	%		257,006			2,536	3.97	%		279,971			2,130	3.02	%
FHLB borrowings		182,414			2,038	4.44	%		174,596			1,860	4.28	%		134,386			1,321	3.90	%
Other borrowings		6,702			57	3.38	%		6,870			58	3.40	%		5,681			51	3.56	%
Senior sub. notes		4,779			59	4.91	%		4,777			58	4.88	%		4,772			59	4.91	%
Junior sub. debentures		12,985			252	7.72	%		12,960			255	7.91	%		12,883			255	7.85	%

Total		1,055,901			8,311	3.13	%		1,059,285			8,069	3.06	%		1,028,730			6,503	2.51	%

Non-interest-bearing liabilities:
Demand deposits		261,833							251,158							278,616
Other liabilities		13,421							12,580							12,431
Stockholders’ equity		114,458							110,726							105,745

Total	$	1,445,613						$	1,433,749						$	1,425,522

Net interest income				$	10,068						$	9,670						$	9,861
Rate spread						2.16	%						2.15	%						2.27	%
Net yield on interest-earning assets						2.90	%						2.84	%						2.88	%

(1) Nonaccrual loans are included in the daily average loan balances outstanding.
(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.

PSB Holdings, Inc.
Average Balances ($000) and Interest Rates
(dollars in thousands)
	Nine months ended September 30, 2024							Nine months ended September 30, 2023
	Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate
Assets
Interest-earning assets:
Loans (1)(2)	$	1,091,366		$	46,393	5.68	%	$	1,025,955		$	38,851	5.06	%
Taxable securities		173,971			3,837	2.95	%		189,583			3,772	2.66	%
Tax-exempt securities (2)		79,822			1,986	3.32	%		81,670			2,032	3.33	%
FHLB stock		7,755			523	9.01	%		4,943			228	6.17	%
Other		18,804			784	5.57	%		8,154			303	4.97	%

Total (2)		1,371,718			53,523	5.21	%		1,310,305			45,186	4.61	%

Non-interest-earning assets:
Cash and due from banks		17,291							17,403
Premises and equipment,
net		13,778							13,311
Cash surrender value ins		24,301							24,446
Other assets		21,146							23,364
Allowance for credit
losses		(12,496	)						(12,004	)

Total	$	1,435,738						$	1,376,825

Liabilities & stockholders’ equity
Interest-bearing liabilities:
Savings and demand
deposits	$	335,317		$	4,654	1.85	%	$	350,928		$	3,286	1.25	%
Money market deposits		274,405			5,608	2.73	%		241,594			3,508	1.94	%
Time deposits		256,287			7,563	3.94	%		257,639			4,673	2.43	%
FHLB borrowings		166,703			5,348	4.29	%		110,460			3,068	3.71	%
Other borrowings		7,373			175	3.17	%		7,082			161	3.04	%
Senior sub. notes		4,778			176	4.92	%		4,965			179	4.82	%
Junior sub. debentures		12,972			758	7.81	%		12,857			731	7.60	%

Total		1,057,835			24,282	3.07	%		985,525			15,606	2.12	%

Non-interest-bearing liabilities:
Demand deposits		254,134							273,699
Other liabilities		12,720							12,165
Stockholders’ equity		111,049							105,436

Total	$	1,435,738						$	1,376,825

Net interest income				$	29,241						$	29,580
Rate spread						2.14	%						2.49	%
Net yield on interest-earning assets						2.85	%						3.02	%

(1) Nonaccrual loans are included in the daily average loan balances outstanding.
(2) The yield on federally tax-exempt loans and securities is computed on a tax-equivalent basis using a federal tax rate of 21%.

The MIL Network –

January 25, 2025

MIL-OSI: cBrain lowers expected yearly revenue growth to 10-15%, but maintains EBT margin of 24-28%

Source: GlobeNewswire (MIL-OSI)

Company Announcement no. 10/2024

cBrain lowers expected yearly revenue growth to 10-15%, but maintains EBT margin of 24-28%

Copenhagen, November 28, 2024

cBrain (NASDAQ: CBRAIN) is executing its international growth plan with a financial goal of reaching total revenue of 350 million DKK in 2025. This goal is anchored in two primary revenue streams, referred to as “Base” and “Stepping stones”.

The “Base” stream aims to achieve annual revenue growth of 10-15% by strengthening and expanding existing operations and customer relationships. In parallel, the “Stepping Stones” initiative aims to lift annual revenue growth to 30%, by increasing contract values and winning larger international contracts.

cBrain continues to execute its growth strategy, building a robust pipeline of major opportunities. This is facilitated by a growing number of international pilot projects that set the stage for significant “Stepping Stones” achievements.

In early 2024, cBrain anticipated some of these opportunities, particularly in Germany and the U.S., to yield significant revenue in the second half of the year. cBrain remains highly active in these pursuits and has added further opportunities during the year.

However, not unusually with larger government procurement, delays in decision making mean that cBrain estimates less than a 50% likelihood of substantial revenue from larger international projects materializing in Q4. Consequently, cBrain adjusts its 2024 revenue growth forecast to 10-15%, down from the initial estimate of 20-25%.

In alignment with business planning, cBrain has earmarked financial investments to support “Stepping Stones” projects in Germany and the U.S. Since these projects have not yet materialized, these reserved funds have not been deployed. This provides a positive impact on earnings. cBrain, therefore, maintains its EBT (Earnings Before Tax) guidance at 24-30%.

—

Larger international projects are often structured so that F2 standard software licenses form the majority of the contract value. Due to financial standards for software revenue recognition, larger international orders may, as a result, introduce greater variability in revenue patterns over time.

As cBrain is currently pursuing global opportunities across the USA, Europe, Africa, the UAE, and India, some of these opportunities may still materialize during the fourth quarter, with a positive affect on this year’s revenue.

Best regards

Per Tejs Knudsen, CEO

Inquiries regarding this Company Announcement may be directed to

Ejvind Jørgensen, CFO & Head of Investor Relations, cBrain A/S, ir@cbrain.com, +45 2594 4973

Attachment

Company Announcement no. 2024-10 (forecast of delayed international project)

The MIL Network –

January 25, 2025

MIL-OSI: Correction: cBrain lowers expected yearly revenue growth to 10-15%, but maintains EBT margin of 24-30%

Source: GlobeNewswire (MIL-OSI)

Company Announcement no. 10/2024

cBrain lowers expected yearly revenue growth to 10-15%, but maintains EBT margin of 24-30%

Copenhagen, November 28, 2024

cBrain (NASDAQ: CBRAIN) is executing its international growth plan with a financial goal of reaching total revenue of 350 million DKK in 2025. This goal is anchored in two primary revenue streams, referred to as “Base” and “Stepping stones”.

The “Base” stream aims to achieve annual revenue growth of 10-15% by strengthening and expanding existing operations and customer relationships. In parallel, the “Stepping Stones” initiative aims to lift annual revenue growth to 30%, by increasing contract values and winning larger international contracts.

cBrain continues to execute its growth strategy, building a robust pipeline of major opportunities. This is facilitated by a growing number of international pilot projects that set the stage for significant “Stepping Stones” achievements.

In early 2024, cBrain anticipated some of these opportunities, particularly in Germany and the U.S., to yield significant revenue in the second half of the year. cBrain remains highly active in these pursuits and has added further opportunities during the year.

However, not unusually with larger government procurement, delays in decision making mean that cBrain estimates less than a 50% likelihood of substantial revenue from larger international projects materializing in Q4. Consequently, cBrain adjusts its 2024 revenue growth forecast to 10-15%, down from the initial estimate of 20-25%.

In alignment with business planning, cBrain has earmarked financial investments to support “Stepping Stones” projects in Germany and the U.S. Since these projects have not yet materialized, these reserved funds have not been deployed. This provides a positive impact on earnings. cBrain, therefore, maintains its EBT (Earnings Before Tax) guidance at 24-30%.

—

Larger international projects are often structured so that F2 standard software licenses form the majority of the contract value. Due to financial standards for software revenue recognition, larger international orders may, as a result, introduce greater variability in revenue patterns over time.

As cBrain is currently pursuing global opportunities across the USA, Europe, Africa, the UAE, and India, some of these opportunities may still materialize during the fourth quarter, with a positive affect on this year’s revenue.

Best regards

Per Tejs Knudsen, CEO

Inquiries regarding this Company Announcement may be directed to

Ejvind Jørgensen, CFO & Head of Investor Relations, cBrain A/S, ir@cbrain.com, +45 2594 4973

Attachment

Company Announcement no. 2024-10 (forecast of delayed international project)

The MIL Network –

January 25, 2025

MIL-OSI: Ormat Commences Commercial Operation of Bottleneck Storage Facility in California, Delivering 80MW/320MWh of Energy Storage Capacity

Source: GlobeNewswire (MIL-OSI)

RENO, Nev., Oct. 28, 2024 (GLOBE NEWSWIRE) — Ormat Technologies Inc. (NYSE: ORA), a leading renewable energy company, announces the successful commencement of commercial operations for its largest energy storage facility, the Bottleneck project. This 80MW/320MWh Battery Energy Storage System (BESS), located in the Central Valley of California, will provide energy, capacity, and ancillary services to San Diego Gas & Electric (SDG&E) under a 15-year Power Purchase Agreement (also known as a Tolling Agreement) signed in 2022.

The Bottleneck project is expected to be eligible for a 40% Investment Tax Credit, which the Company plans to monetize by the end of the year. The project represents Ormat’s continued commitment to strategically growing its Energy Storage segment in the key California energy market.

Doron Blachar, CEO of Ormat Technologies, stated, “We are happy to announce the commencement of operations at Ormat’s Bottleneck Battery Storage Facility. This milestone reflects our dedication to expanding our energy storage portfolio in strategic U.S. markets while improving our profitability. With the addition of Bottleneck, we now operate 270MW/638MWh of storage projects and we have six additional projects currently under construction with a total capacity of 355MW/920MWh, demonstrating our strong development capabilities and commitment to achieving our 950MW-1050MW/2.5GWh-2.9GWh 2028 portfolio capacity target.”

Blachar continued, “The addition of the Bottleneck project, supported by a 15-year PPA, brings long-term contracted revenues with improved margins to our Storage segment. We look forward to continuing to support the state of California with our premium renewable power generation and energy storage solutions as the state continues to advance towards its clean energy goals.”

ABOUT ORMAT TECHNOLOGIES

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,400MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1,500MW with a 1,230MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 270MW energy storage portfolio that is located in the U.S.

ORMAT’S SAFE HARBOR STATEMENT

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under “Risk Factors” as described in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024, and in Ormat’s subsequent quarterly reports on Form 10-Q that are filed from time to time with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Ormat Technologies Contact:
Smadar Lavi
VP Head of IR and ESG Planning & Reporting
775-356-9029 (ext. 65726)
slavi@ormat.com

Investor Relations Agency Contact:
Alec Steinberg or Joseph Caminiti
Alpha IR Group
312-445-2870
ORA@alpha-ir.com

The MIL Network –

January 25, 2025

MIL-OSI: SalesHood Launches Interactive Mutual Action Plans in Digital Sales Rooms to Scale Repeatable B2B Sales Execution

Source: GlobeNewswire (MIL-OSI)

San Francisco, California, Oct. 28, 2024 (GLOBE NEWSWIRE) — SalesHood, a leading revenue enablement platform provider, is excited to announce the launch of Mutual Action Plans (MAPs) in its Digital Sales Rooms. This new offering fosters stronger collaboration between sales teams and their buyers, driving more predictable and successful sales outcomes. Based on Q3 2024 customer feedback, SalesHood’s Digital Sales Rooms have driven win rate increases ranging from 57% to as much as 200%.

The newly released interactive sales tool empowers sales and customer success teams to co-create Mutual Action Plans with their buyers, outlining the key milestones, responsibilities, and timelines required to deliver value to a customer and close a deal.

As per the 2024 Gartner® ’s Market Guide for Digital Sales Rooms, one of the key findings includes: “Improved buyer-seller engagement leads to higher-quality deals, which is what chief sales officers (CSOs) are searching for to drive high-quality purchases that lead to improved long-term revenue results.”

SalesHood’s MAPs are a collaborative resource ensuring that buyers and sellers are aligned, reducing friction and accelerating the sales process. SalesHood’s MAPs feature is seamlessly integrated into its existing platform, making it easy for sales teams to adopt and use.

Elay Cohen, CEO and Co-founder of SalesHood, stated, “We’re thrilled to bring Mutual Action Plans to our customers. This new feature underscores our commitment to empowering sales teams with the tools they need to succeed in today’s competitive market. By enabling stronger collaboration between sales teams and their buyers, we believe that MAPs will be a game-changer for our customers.”

With the introduction of MAPs, SalesHood continues to set the standard for sales enablement and revenue acceleration. This new feature aligns with the company’s mission to help sales organizations close more deals faster and with greater predictability.

New Mutual Action Plans capabilities:

Milestone Tracking: Empower buyers and sellers to co-create, align and track shared timelines, decision-making milestones and compelling events, driving joint accountability throughout the buyer’s journey.

Tasks and Notifications: Assign milestones to decision team members, complete with due dates and ownership. Automatic notifications for overdue tasks create urgency and ensure progress.

AI-Powered Recap Summaries: Leverage generative GenAI to summarize key call points and generate actionable next steps, ensuring clarity and efficient follow-up.

Salesforce Integration: Seamlessly sync buyer engagement data and sales activities with Salesforce for enhanced pipeline management and streamlined CRM updates.

Embedded Collaboration in Digital Sales Rooms: Mutual Action Plans are seamlessly embedded into Digital Sales Rooms, enabling real-time collaboration on timelines, tasks, next steps, and shared resources in a unified digital workspace.

For more information about SalesHood’s Digital Sales Rooms and Mutual Action Plans, please visit https://saleshood.com.

You can also take a self-guided tour https://saleshood.com/digital-sales-rooms/guided-tour.

Gartner Disclaimer:
Gartner, Market Guide for Digital Sales Rooms, Melissa Hilbert , Varun Agarwal , et al., 26 February 2024
GARTNER is registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

About SalesHood

SalesHood is a global leader in revenue enablement on a mission to empower salespeople to sell better. SalesHood’s comprehensive and award winning Revenue Enablement Platform powers repeatable sales execution, guiding sellers on what to do and what to share. SalesHood AI delivers highly personalized training, coaching and selling experiences across the customer journey. Trusted by high-growth, high-performing companies, SalesHood is purpose-built to deliver fast revenue results. Companies like Copado, Ewing-Foley, Frontline Education, Olo, Sage, SmartRecruiters, and Planview use SalesHood to realize increase sales productivity and win-rates. For more information, please visit https://saleshood.com/

Contact
media@saleshood.com

Attachments

The MIL Network –

January 25, 2025

MIL-OSI: Coastal Financial Corporation Announces Third Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

EVERETT, Wash., Oct. 28, 2024 (GLOBE NEWSWIRE) — Coastal Financial Corporation (Nasdaq: CCB) (the “Company”, “Coastal”, “we”, “our”, or “us”), the holding company for Coastal Community Bank (the “Bank”), through which it operates a community-focused bank with an industry leading banking as a service (“BaaS”) segment, today reported unaudited financial results for the quarter ended September 30, 2024, including net income of $13.5 million, or $0.97 per diluted common share, compared to $11.6 million, or $0.84 per diluted common share, for the three months ended June 30, 2024.

Management Discussion of the Quarter

“The third quarter demonstrated strong momentum across both our community bank and CCBX operating segments, despite a still challenging operating environment,” said CEO Eric Sprink. “We saw high quality net loan growth of $92.4 million despite selling $423.7 million in loans. We are implementing strategies to increase fee income and we continue to build out and invest in an infrastructure that is scalable, and that we believe will enable us to be innovative leaders in financial services.”

Key Points for Third Quarter and Our Go-Forward Strategy

Balance Sheet Well Positioned for Lower Rates. Our balance sheet stands in a modestly liability sensitive position as of September 30, 2024, with $1.95 billion of CCBX deposits that contractually reprice lower immediately upon any reduction in the Federal Funds Rate, with $1.09 billion of CCBX loans repricing in 90 days or less following such reduction. The Federal Open Market Committee recently lowered the targeted Federal Funds rate 0.50% on September 19, 2024; a reduction of 0.50% compared to June 30, 2024 and September 30, 2023. The rate decrease came late in the quarter, so the full impact of this and any subsequent rate changes will be reflected in future periods.
Expanding Relationships with CCBX Partners. We continue to focus on expanding product offerings with existing CCBX partners. We believe that launching new products with existing partners positions us to reach a wide and established customer base with modest increase in enterprise risk. Products launched in 2024 with existing partners have gained traction and are growing the balance sheet and increasing income. The pipeline for CCBX is active, although we expect to remain selective in adding new partners to manage risk and capital.
On-going Loan Sales. We sold $423.7 million loans in the quarter ended September 30, 2024 as part of our strategy to balance credit risk, manage partner and lending limits, protect capital levels and move credit card balances to an off balance sheet fee generating model. We are retaining a portion of the fee income for our role in processing transactions on sold credit card balances. This provides an on-going and passive revenue stream with no on balance sheet risk.
Continued Regulatory and Compliance Infrastructure Investments Position Us Well for Next Phase of Growth. We continue to utilize co-sourced personnel as a component of our risk and compliance efforts. This flexible co-sourcing approach allows us to manage the growth of our internal team while also ensuring CCBX has the resources it needs. While we remain 100% indemnified against partner fraud losses, we were encouraged to see fraudulent activity amongst our partners remains low during the current quarter, compared to the same period last year, a positive indicator of our continued investments in our risk infrastructure.
Reorganization and Strengthening of Talent to Accommodate Growth and Plans for the Future. We recently announced the bifurcation of the President of the Bank into two roles, appointing Brian Hamilton as President of CCBX, the Fintech and BaaS segment of the Bank, with Curt Queyrouze serving as President of the community bank and corporate credit.

Third Quarter 2024 Financial Highlights

The tables below outline some of our key operating metrics.

	Three Months Ended
(Dollars in thousands, except share and per share data; unaudited)	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Income Statement Data:
Interest and dividend income	$	105,079		$	97,487		$	90,472		$	88,243		$	88,331
Interest expense		32,892			31,250			29,536			28,586			26,102
Net interest income		72,187			66,237			60,936			59,657			62,229
Provision for credit losses		70,257			62,325			83,158			60,789			27,253
Net interest (expense)/ income after provision for credit losses		1,930			3,912			(22,222	)		(1,132	)		34,976
Noninterest income		80,068			69,918			86,955			64,694			34,579
Noninterest expense		65,616			58,809			56,018			51,703			56,501
Provision for income tax		2,926			3,425			1,915			2,847			2,784
Net income		13,456			11,596			6,800			9,012			10,270

	As of and for the Three Month Period
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Balance Sheet Data:
Cash and cash equivalents	$	484,026		$	487,245		$	515,128		$	483,128		$	474,946
Investment securities		48,620			49,213			50,090			150,364			141,489
Loans held for sale		7,565			—			797			—			—
Loans receivable		3,418,832			3,326,460			3,199,554			3,026,092			2,967,035
Allowance for credit losses		(170,263	)		(147,914	)		(139,258	)		(116,958	)		(101,085	)
Total assets		4,065,821			3,961,546			3,865,258			3,753,366			3,678,265
Interest bearing deposits		3,047,861			2,949,643			2,888,867			2,735,161			2,637,914
Noninterest bearing deposits		579,427			593,789			574,112			625,202			651,786
Core deposits ⁽¹⁾		3,190,869			3,528,339			3,447,864			3,342,004			3,269,082
Total deposits		3,627,288			3,543,432			3,462,979			3,360,363			3,289,700
Total borrowings		47,847			47,810			47,771			47,734			47,695
Total shareholders’ equity		331,930			316,693			303,709			294,978			284,450

Share and Per Share Data ⁽²⁾:
Earnings per share – basic	$	1.00		$	0.86		$	0.51		$	0.68		$	0.77
Earnings per share – diluted	$	0.97		$	0.84		$	0.50		$	0.66		$	0.75
Dividends per share		—			—			—			—			—
Book value per share ⁽³⁾	$	24.51		$	23.54		$	22.65		$	22.17		$	21.38
Tangible book value per share ⁽⁴⁾	$	24.51		$	23.54		$	22.65		$	22.17		$	21.38
Weighted avg outstanding shares – basic		13,447,066			13,412,667			13,340,997			13,286,828			13,285,974
Weighted avg outstanding shares – diluted		13,822,270			13,736,508			13,676,917			13,676,513			13,675,833
Shares outstanding at end of period		13,543,282			13,453,805			13,407,320			13,304,339			13,302,449
Stock options outstanding at end of period		198,370			286,119			309,069			354,969			356,359

See footnotes that follow the tables below

	As of and for the Three Month Period
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Credit Quality Data:
Nonperforming assets ⁽⁵⁾ to total assets		1.34	%		1.34	%		1.42	%		1.43	%		1.18	%
Nonperforming assets ⁽⁵⁾ to loans receivable and OREO		1.60	%		1.60	%		1.71	%		1.78	%		1.47	%
Nonperforming loans ⁽⁵⁾ to total loans receivable		1.60	%		1.60	%		1.71	%		1.78	%		1.47	%
Allowance for credit losses to nonperforming loans		311.5	%		278.1	%		253.8	%		217.2	%		232.2	%
Allowance for credit losses to total loans receivable		4.98	%		4.45	%		4.35	%		3.86	%		3.41	%
Gross charge-offs	$	53,305		$	55,207		$	58,994		$	47,652		$	37,879
Gross recoveries	$	4,069		$	1,973		$	1,776		$	2,781		$	1,045
Net charge-offs to average loans ⁽⁶⁾		5.65	%		6.57	%		7.34	%		5.92	%		4.77	%

Capital Ratios:
Company
Tier 1 leverage capital		8.40	%		8.31	%		8.24	%		8.10	%		8.03	%
Common equity Tier 1 risk-based capital		9.26	%		9.03	%		8.98	%		9.10	%		9.00	%
Tier 1 risk-based capital		9.35	%		9.13	%		9.08	%		9.20	%		9.11	%
Total risk-based capital		11.90	%		11.70	%		11.70	%		11.87	%		11.80	%
Bank
Tier 1 leverage capital		9.29	%		9.24	%		9.19	%		9.06	%		8.99	%
Common equity Tier 1 risk-based capital		10.36	%		10.15	%		10.14	%		10.30	%		10.21	%
Tier 1 risk-based capital		10.36	%		10.15	%		10.14	%		10.30	%		10.21	%
Total risk-based capital		11.65	%		11.44	%		11.43	%		11.58	%		11.48	%

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

Key Performance Ratios

Return on average assets (“ROA”) was 1.34% for the quarter ended September 30, 2024 compared to 1.21% and 1.13% for the quarters ended June 30, 2024 and September 30, 2023, respectively. ROA for the quarter ended September 30, 2024, increased 0.13% and 0.21% compared to June 30, 2024 and September 30, 2023, respectively. Noninterest expenses were higher for the quarter ended September 30, 2024 compared to the quarters ended June 30, 2024 and September 30, 2023 largely due to an increase in BaaS loan expense, which is directly related to the increase in the amount of interest earned on CCBX loans.

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

	Three Months Ended
(unaudited)	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023

Return on average assets ⁽¹⁾	1.34	%	1.21	%	0.73	%	0.97	%	1.13	%
Return on average equity ⁽¹⁾	16.67	%	15.22	%	9.21	%	12.35	%	14.60	%
Yield on earnings assets ⁽¹⁾	10.79	%	10.49	%	10.07	%	9.77	%	10.08	%
Yield on loans receivable ⁽¹⁾	11.43	%	11.23	%	10.85	%	10.71	%	10.84	%
Cost of funds ⁽¹⁾	3.62	%	3.60	%	3.52	%	3.39	%	3.18	%
Cost of deposits ⁽¹⁾	3.59	%	3.58	%	3.49	%	3.36	%	3.14	%
Net interest margin ⁽¹⁾	7.41	%	7.13	%	6.78	%	6.61	%	7.10	%
Noninterest expense to average assets ⁽¹⁾	6.54	%	6.14	%	6.04	%	5.56	%	6.23	%
Noninterest income to average assets ⁽¹⁾	7.98	%	7.30	%	9.38	%	6.95	%	3.81	%
Efficiency ratio	43.10	%	43.19	%	37.88	%	41.58	%	58.36	%
Loans receivable to deposits ⁽²⁾	94.46	%	93.88	%	92.42	%	90.05	%	90.19	%

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

Management Outlook; CEO Eric Sprink

“As we look ahead to the fourth quarter and 2025, we remain laser focused on building out our technology and risk management infrastructure to more efficiently support our next phase of growth within CCBX. While the balance sheet re-mix earlier this year resulted in a short-term reduction to income, we continue to make strategic decisions which are enhancing credit quality, generating passive fee income, strengthening our talent and growing relationships with established and prospective CCBX partners all of which are expected to position Coastal to be more profitable in 2025.”

Coastal Financial Corporation Overview

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

CCBX Performance Update

Our CCBX segment continues to evolve, and we have 22 relationships, at varying stages, as of September 30, 2024. We continue to refine the criteria for CCBX partnerships, are exiting relationships where it makes sense for us to do so and are focusing on larger more established partners, with experienced management teams, existing customer bases and strong financial positions.

We are expanding product offerings with our existing CCBX partners. We believe that launching new products with existing partners positions us to reach a wide and established customer base with a modest increase in regulatory risk given we have already vetted these partners and have operational history. Products launched earlier in the year with existing partners have gained traction and are growing the balance sheet and increasing income. We continue to sell loans as part of our strategy to balance partner and lending limits, and manage the loan portfolio and credit quality. We retain a portion of the fee income for our role in processing transactions on sold credit card balances. This is expected to provide an on-going and passive revenue stream with no on balance sheet risk.

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

	As of
(unaudited)	September 30, 2024	June 30, 2024	September 30, 2023
Active	19	19	18
Friends and family / testing	1	1	1
Implementation / onboarding	1	1	1
Signed letters of intent	1	0	1
Wind down – active but preparing to exit relationship	0	0	1
Total CCBX relationships	22	21	22

CCBX loans increased $106.9 million, or 7.6%, despite selling $423.7 million loans during the three months ended September 30, 2024 to $1.52 billion, while we continued to enhance credit standards on new CCBX loan originations. In accordance with the program agreement for one partner, effective April 1, 2024, the portion of the CCBX portfolio that we are responsible for losses on decreased from 10% to 5%. At September 30, 2024 the portion of this portfolio for which we are responsible represented $19.8 million in loans.

The following table details the CCBX loan portfolio:

CCBX	As of
	September 30, 2024					June 30, 2024					September 30, 2023
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Commercial and industrial loans:
Capital call lines	$	103,924		6.8	%	$	109,133		7.7	%	$	114,174		9.6	%
All other commercial & industrial loans		36,494		2.4			41,731		3.0			58,869		5.0
Real estate loans:
Residential real estate loans		265,402		17.5			287,950		20.4			251,775		21.3
Consumer and other loans:
Credit cards		633,691		41.6			549,241		38.7			440,993		37.3
Other consumer and other loans		482,228		31.7			426,809		30.2			316,987		26.8
Gross CCBX loans receivable		1,521,739		100.0	%		1,414,864		100.0	%		1,182,798		100.0	%
Net deferred origination (fees) costs		(447	)				(438	)				(424	)
Loans receivable	$	1,521,292				$	1,414,426				$	1,182,374
Loan Yield – CCBX ⁽¹⁾⁽²⁾		17.35	%				17.77	%				17.05	%

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

The increase in CCBX loans in the quarter ended September 30, 2024, includes an increase of $139.9 million or 14.3%, in consumer and other loans, partially offset by a $22.5 million, or 7.8%, decrease in residential real estate loans and a decrease of $5.2 million, or 4.8%, in capital call lines as a result of normal balance fluctuations and business activities. We continue to monitor and manage the CCBX loan portfolio, and sold $423.7 million in CCBX loans during the quarter ended September 30, 2024 compared to sales of $155.2 million in the quarter ended June 30, 2024. We continue to reposition ourselves by managing CCBX credit and concentration levels in an effort to optimize our loan portfolio and generate off balance sheet fee income.

Our credit card program through CCBX continues to grow in dollars and number of active cards as shown in the graph below:

The following table details the CCBX deposit portfolio:

CCBX	As of
	September 30, 2024					June 30, 2024					September 30, 2023
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Demand, noninterest bearing	$	60,655		2.9	%	$	62,234		3.0	%	$	67,782		3.9	%
Interest bearing demand and money market		1,991,858		94.6			1,989,105		96.7			1,679,921		95.9
Savings		5,204		0.3			5,150		0.3			4,529		0.2
Total core deposits		2,057,717		97.8			2,056,489		100.0			1,752,232		100.0
Other deposits		47,046		2.2			—		0.0			—		—
Total CCBX deposits	$	2,104,763		100.0	%	$	2,056,489		100.0	%	$	1,752,232		100.0	%
Cost of deposits ⁽¹⁾		4.82	%				4.92	%				4.80	%

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

CCBX deposits increased $48.3 million, or 2.3%, in the three months ended September 30, 2024 to $2.10 billion. This excludes the $214.5 million in CCBX deposits that were transferred off balance sheet for increased Federal Deposit Insurance Corporation (“FDIC”) insurance coverage purposes, compared to $117.7 million for the quarter ended June 30, 2024. Amounts in excess of FDIC insurance coverage are transferred, using a third party facilitator/vendor sweep product, to participating financial institutions.

Community Bank Performance Update

In the quarter ended September 30, 2024, the community bank saw net loans decrease $14.5 million, or 0.8%, to $1.90 billion.

The following table details the Community Bank loan portfolio:

Community Bank	As of
	September 30, 2024					June 30, 2024					September 30, 2023
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Commercial and industrial loans	$	152,161		8.0	%	$	144,436		7.5	%	$	158,232		8.8	%
Real estate loans:
Construction, land and land development loans		163,051		8.6			173,064		9.0			167,686		9.4
Residential real estate loans		212,467		11.2			229,639		12.0			225,372		12.6
Commercial real estate loans		1,362,452		71.5			1,357,979		70.8			1,237,849		69.1
Consumer and other loans:
Other consumer and other loans		14,173		0.7			14,220		0.7			2,483		0.1
Gross Community Bank loans receivable		1,904,304		100.0	%		1,919,338		100.0	%		1,791,622		100.0	%
Net deferred origination fees		(6,764	)				(7,304	)				(6,961	)
Loans receivable	$	1,897,540				$	1,912,034				$	1,784,661
Loan Yield⁽¹⁾		6.64	%				6.52	%				6.20	%

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

Community bank loans had a $10.0 million decrease in construction, land and land development loans, partially offset by an increase of $7.7 million in commercial and industrial loans and an increase in commercial real estate loans of $4.5 million during the quarter ended September 30, 2024; consumer and other loans were flat.

The following table details the community bank deposit portfolio:

Community Bank	As of
	September 30, 2024					June 30, 2024					September 30, 2023
(dollars in thousands; unaudited)	Balance			% to Total		Balance			% to Total		Balance			% to Total
Demand, noninterest bearing	$	518,772		34.1	%	$	531,555		35.6	%	$	584,004		37.9	%
Interest bearing demand and money market		552,108		36.3			876,668		59.0			852,747		55.5
Savings		62,272		4.1			63,627		4.3			80,099		5.2
Total core deposits		1,133,152		74.5			1,471,850		98.9			1,516,850		98.6
Other deposits		373,681		24.5			1		0.0			1		0.0
Time deposits less than $100,000		6,305		0.4			6,741		0.5			8,635		0.6
Time deposits $100,000 and over		9,387		0.6			8,351		0.6			11,982		0.8
Total Community Bank deposits	$	1,522,525		100.0	%	$	1,486,943		100.0	%	$	1,537,468		100.0	%
Cost of deposits⁽¹⁾		1.92	%				1.77	%				1.31	%

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

Community bank deposits increased $35.6 million, or 2.4%, during the three months ended September 30, 2024 to $1.52 billion. This is the second consecutive quarter of growth after allowing higher rate balances to run-off earlier in the year. The community bank segment includes noninterest bearing deposits of $518.8 million, or 34.1%, of total community bank deposits, resulting in a cost of deposits of 1.92%, which compared to 1.77% for the quarter ended June 30, 2024.

Net Interest Income and Margin Discussion

Net interest income was $72.2 million for the quarter ended September 30, 2024, an increase of $5.9 million, or 9.0%, from $66.2 million for the quarter ended June 30, 2024, and an increase of $10.0 million, or 16.0%, from $62.2 million for the quarter ended September 30, 2023. The increase in net interest income compared to June 30, 2024, was a result of increased interest income due to an increase in average loans receivable partially offset by an increase in cost of funds. The increase in net interest income compared to September 30, 2023 was largely related to increased yield on loans resulting from higher interest rates and growth in higher yielding loans partially offset by an increase in cost of funds relating to higher interest rates and growth in interest bearing deposits.

Net interest margin was 7.41% for the three months ended September 30, 2024, compared to 7.13% for the three months ended June 30, 2024, with the increase primarily due to higher loan yields. Net interest margin was 7.10% for the three months ended September 30, 2023. The increase in net interest margin for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was largely due to an increase in loan yield partially offset by higher interest rates on interest bearing deposits. Interest and fees on loans receivable increased $8.6 million, or 9.5%, to $99.6 million for the three months ended September 30, 2024, compared to $90.9 million for the three months ended June 30, 2024, and increased $15.9 million, or 19.1%, compared to $83.7 million for the three months ended September 30, 2023, due to an increase in outstanding balances and higher interest rates.

Average investment securities decreased $795,000 to $49.0 million compared to the three months ended June 30, 2024 and decreased $69.0 million compared to the three months ended September 30, 2023 as a result of maturing securities.

Cost of funds was 3.62% for the quarter ended September 30, 2024, an increase of 2 basis points from the quarter ended June 30, 2024 and an increase of 44 basis points from the quarter ended September 30, 2023. Cost of deposits for the quarter ended September 30, 2024 was 3.59%, compared to 3.58% for the quarter ended June 30, 2024, and 3.14% for the quarter ended September 30, 2023. The increased cost of funds and deposits compared to June 30, 2024 and September 30, 2023 was due to the continued high interest rate environment. The late September reduction in the Fed funds rate is expected to help to lower our cost of deposits in future periods.

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

	For the Three Months Ended
	September 30, 2024				June 30, 2024				September 30, 2023
	Yield on Loans ⁽²⁾		Cost of Deposits ⁽²⁾		Yield on Loans ⁽²⁾		Cost of Deposits ⁽²⁾		Yield on Loans ⁽²⁾		Cost of Deposits ⁽²⁾
Community Bank	6.64	%	1.92	%	6.52	%	1.77	%	6.20	%	1.31	%
CCBX ⁽¹⁾	17.35	%	4.82	%	17.77	%	4.92	%	17.05	%	4.80	%
Consolidated	11.43	%	3.59	%	11.23	%	3.58	%	10.84	%	3.14	%

⁽¹⁾CCBX yield on loans does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income which can be compared to interest income on the Company’s community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
⁽²⁾Annualized calculations for periods shown.

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

	For the Three Months Ended
	September 30, 2024				June 30, 2024				September 30, 2023
(dollars in thousands, unaudited)	Income / Expense		Income / expense divided by average CCBX loans ⁽²⁾		Income / Expense		Income / expense divided by average CCBX loans⁽²⁾		Income / Expense		Income / expense divided by average CCBX loans ⁽²⁾
BaaS loan interest income	$	67,692	17.35	%	$	60,203	17.77	%	$	56,279	17.05	%
Less: BaaS loan expense		32,612	8.36	%		29,076	8.58	%		23,003	6.97	%
Net BaaS loan income ⁽¹⁾	$	35,080	8.99	%	$	31,127	9.19	%	$	33,276	10.08	%
Average BaaS Loans⁽³⁾	$	1,552,443			$	1,362,343			$	1,309,380

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

Noninterest Income Discussion

Noninterest income was $80.1 million for the three months ended September 30, 2024, an increase of $10.2 million from $69.9 million for the three months ended June 30, 2024, and an increase of $45.5 million from $34.6 million for the three months ended September 30, 2023. The increase in noninterest income over the quarter ended June 30, 2024 was primarily due to an increase of $9.9 million in total BaaS income. The $9.9 million increase in total BaaS income included a $9.3 million increase in BaaS credit enhancements related to the provision for credit losses, a $300,000 increase in BaaS fraud enhancements, and an increase of $340,000 in BaaS program income. The increase in BaaS program income is largely due to higher servicing and other BaaS fees, transaction fees and interchange fees and our primary BaaS source for recurring fee income (see “Appendix B” for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements). Additionally, other income increased $229,000 largely due to increased incoming ACH activity.

The $45.5 million increase in noninterest income over the quarter ended September 30, 2023 was primarily due to a $43.4 million increase in BaaS credit and fraud enhancements, and an increase of $2.0 million in BaaS program income.

Noninterest Expense Discussion
Total noninterest expense increased $6.8 million to $65.6 million for the three months ended September 30, 2024, compared to $58.8 million for the three months ended June 30, 2024, and increased $9.1 million from $56.5 million for the three months ended September 30, 2023. The increase in noninterest expense for the quarter ended September 30, 2024, as compared to the quarter ended June 30, 2024, was primarily due to a $3.8 million increase in BaaS expense (including a $300,000 increase in BaaS fraud expense and a $3.5 million increase in BaaS loan expense). BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner’s customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners, partially offset by a $1.5 million increase in excise taxes (due to the recording of $1.2 million business and occupation tax credit from the State of Washington which resulted in the recognition of a net credit of $706,000 for the quarter ended June 30, 2024, compared to expense of $762,000 for the quarter ended September 30, 2024). We also recorded an increase of $587,000 in data processing and software licenses as a result of our continued investment in our infrastructure and the automation of our processes so that they are scalable and an increase of $499,000 in point of sale expenses as a result of increased partner transaction activity.

The increase in noninterest expenses for the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023 was largely due to an increase of $8.8 million in BaaS partner expense (including a $9.6 million increase in BaaS loan expense partially offset by a decrease of $766,000 in BaaS fraud expense), a $1.1 million increase in data processing and software licenses due to enhancements in technology, and a $526,000 increase in occupancy expense, largely due to higher software depreciation/amortization expense, partially offset by a $986,000 decrease in salary and employee benefits largely as a result of some one-time costs that were expensed in the quarter ended September 30, 2023 for which there was no similar expense in the current quarter, and an $850,000 decrease in legal and professional expenses as a result of risk management and projects being completed.

Provision for Income Taxes

The provision for income taxes was $2.9 million for the three months ended September 30, 2024, $3.4 million for the three months ended June 30, 2024 and $2.8 million for the third quarter of 2023. The income tax provision was lower for the three months ended September 30, 2024 compared to the quarter ended June 30, 2024 as a result of the deductibility of certain equity awards which reduced tax expense despite net income being higher and higher than the quarter ended September 30, 2023, primarily due to higher net income compared to that quarter.

The Company is subject to various state taxes that are assessed as CCBX activities and employees expand into other states, which has increased the overall tax rate used in calculating the provision for income taxes in the current and future periods. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 2.62% for calculating the provision for state income taxes.

Financial Condition Overview

Total assets increased $104.3 million, or 2.6%, to $4.07 billion at September 30, 2024 compared to $3.96 billion at June 30, 2024. The increase is primarily due to stronger loan growth partially offset by lower cash balances. Total loans receivable increased $92.4 million to $3.42 billion at September 30, 2024, from $3.33 billion at June 30, 2024.

As of September 30, 2024, the Company had the capacity to borrow up to a total of $656.3 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, and an additional $50.0 million from a correspondent bank no borrowings outstanding on these lines as of September 30, 2024.

The Company had a cash balance of $5.9 million as of September 30, 2024, which is retained for general operating purposes, including debt repayment, and for funding $530,000 in commitments to bank technology funds.

Uninsured deposits were $542.2 million as of September 30, 2024, compared to $532.9 million as of June 30, 2024.

Total shareholders’ equity increased $15.2 million since June 30, 2024. The increase in shareholders’ equity was primarily due to $13.5 million in net earnings, combined with an increase of $1.8 million in common stock outstanding as a result of equity awards exercised during the three months ended September 30, 2024.

The Company and the Bank remained well capitalized at September 30, 2024, as summarized in the following table.

(unaudited)	Coastal Community Bank		Coastal Financial Corporation		Minimum Well Capitalized Ratios under Prompt Corrective Action ⁽¹⁾
Tier 1 Leverage Capital (to average assets)	9.29	%	8.40	%	5.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	10.36	%	9.26	%	6.50	%
Tier 1 Capital (to risk-weighted assets)	10.36	%	9.35	%	8.00	%
Total Capital (to risk-weighted assets)	11.65	%	11.90	%	10.00	%

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

Asset Quality

The total allowance for credit losses was $170.3 million and 4.98% of loans receivable at September 30, 2024 compared to $147.9 million and 4.45% at June 30, 2024 and $101.1 million and 3.41% at September 30, 2023. The allowance for credit loss allocated to the CCBX portfolio was $150.1 million and 9.87% of CCBX loans receivable at September 30, 2024, with $20.1 million of allowance for credit loss allocated to the community bank or 1.06% of total community bank loans receivable.

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

	As of September 30, 2024									As of June 30, 2024									As of September 30, 2023
(dollars in thousands; unaudited)	Community Bank			CCBX			Total			Community Bank			CCBX			Total			Community Bank			CCBX			Total
Loans receivable	$	1,897,540		$	1,521,292		$	3,418,832		$	1,912,034		$	1,414,426		$	3,326,460		$	1,784,661		$	1,182,374		$	2,967,035
Allowance for credit losses		(20,132	)		(150,131	)		(170,263	)		(21,045	)		(126,869	)		(147,914	)		(21,316	)		(79,769	)		(101,085	)
Allowance for credit losses to total loans receivable		1.06	%		9.87	%		4.98	%		1.10	%		8.97	%		4.45	%		1.19	%		6.75	%		3.41	%

Net charge-offs totaled $49.2 million for the quarter ended September 30, 2024, compared to $53.2 million for the quarter ended June 30, 2024 and $36.8 million for the quarter ended September 30, 2023. Net charge-offs as a percent of average loans decreased to 5.65% for the quarter ended September 30, 2024 compared to 6.57% for the quarter ended June 30, 2024, which we believe is a result of the steps we took manage our credit quality. CCBX partner agreements provide for a credit enhancement that covers the net-charge-offs on CCBX loans and negative deposit accounts by indemnifying or reimbursing incurred losses, except in accordance with the program agreement for one partner where the Company was responsible for credit losses on approximately 5% of a $400.8 million loan portfolio. At September 30, 2024, our portion of this portfolio represented $19.8 million in loans. Net charge-offs for this $19.8 million in loans were $1.1 million for the three months ended September 30, 2024, compared to $1.3 million for the three months ended June 30, 2024 and $579,000 for the three months ended September 30, 2023.

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

	Three Months Ended
	September 30, 2024									June 30, 2024									September 30, 2023
(dollars in thousands; unaudited)	Community Bank			CCBX			Total			Community Bank			CCBX			Total			Community Bank			CCBX			Total
Gross charge-offs	$	398		$	52,907		$	53,305		$	2		$	55,205		$	55,207		$	3		$	37,876		$	37,879
Gross recoveries		(3	)		(4,066	)		(4,069	)		(4	)		(1,969	)		(1,973	)		(3	)		(1,042	)		(1,045	)
Net charge-offs	$	395		$	48,841		$	49,236		$	(2	)	$	53,236		$	53,234		$	—		$	36,834		$	36,834
Net charge-offs to average loans ⁽¹⁾		0.08	%		12.52	%		5.65	%		0.00	%		15.72	%		6.57	%		0.00	%		11.16	%		4.77	%

⁽¹⁾ Annualized calculations shown for periods presented.

During the quarter ended September 30, 2024, a $72.1 million provision for credit losses – loans was recorded for CCBX partner loans based on management’s analysis, compared to the $62.2 million provision for credit losses – loans that was recorded for CCBX for the quarter ended June 30, 2024. CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. Agreements with our CCBX partners provide for a credit enhancement which protects the Bank by indemnifying or reimbursing incurred losses.

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

The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of $519,000 and was needed for the quarter ended September 30, 2024 compared to a provision recapture of $341,000 and provision of $664,000 for the quarters ended June 30, 2024 and September 30, 2023, respectively. The recapture in the current period was largely due to a change in remaining average lives of community bank loans.

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

	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Community bank	$	(519	)	$	(341	)	$	664
CCBX		72,104			62,231			26,493
Total provision expense	$	71,585		$	61,890		$	27,157

At September 30, 2024, our nonperforming assets were $54.7 million, or 1.34%, of total assets, compared to $53.2 million, or 1.34%, of total assets, at June 30, 2024, and $43.5 million, or 1.18%, of total assets, at September 30, 2023. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of September 30, 2024, $52.0 million of the $53.6 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above.

Nonperforming assets increased $1.5 million during the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024. This change is largely due to an increase in CCBX nonaccrual loans partially offset by a decrease in community bank nonaccrual loans. CCBX nonaccrual loans increased $8.0 million as a result of a new collection practice that places certain loans on nonaccrual status to improve collectability, $5.3 million of these loans are less than 90 days past due as of September 30, 2024. CCBX loans that are past due 90 days or more and still accruing was $45.6 million for the quarter ended September 30, 2024 compared to $45.2 million for the quarter ended June 30, 2024. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners we anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners will continue to accrue interest until 120 and 180 days past due, respectively and are reported as substandard, 90 days or more days past due and still accruing. There were no repossessed assets or other real estate owned at September 30, 2024. Our nonperforming loans to loans receivable ratio was 1.60% at September 30, 2024, compared to 1.60% at June 30, 2024, and 1.47% at September 30, 2023.

For the quarter ended September 30, 2024, there were $395,000 community bank net charge-offs and $1.1 million nonperforming community bank loans. For the quarter ended September 30, 2024 $48.8 million in net charge-offs were recorded on CCBX loans. These CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses.

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

Consolidated	As of
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Nonaccrual loans:
Commercial and industrial loans	$	198		$	—		$	2
Real estate loans:
Construction, land and land development		—			—			—
Residential real estate		44			213			176
Commercial real estate		831			7,731			7,145
Consumer and other loans:
Credit cards		7,987			—			—
Total nonaccrual loans		9,060			7,944			7,323
Accruing loans past due 90 days or more:
Commercial & industrial loans		1,593			1,278			1,387
Real estate loans:
Residential real estate loans		3,025			2,722			1,462
Consumer and other loans:
Credit cards		34,562			36,465			24,807
Other consumer and other loans		6,412			4,779			8,561
Total accruing loans past due 90 days or more		45,592			45,244			36,217
Total nonperforming loans		54,652			53,188			43,540
Real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	54,652		$	53,188		$	43,540
Total nonaccrual loans to loans receivable		0.27	%		0.24	%		0.25	%
Total nonperforming loans to loans receivable		1.60	%		1.60	%		1.47	%
Total nonperforming assets to total assets		1.34	%		1.34	%		1.18	%

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

CCBX	As of
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Nonaccrual loans:
Consumer and other loans:
Credit cards	$	7,987		$	—		$	—
Total nonaccrual loans		7,987			—			—
Accruing loans past due 90 days or more:
Commercial & industrial loans		1,593			1,278			1,387
Real estate loans:
Residential real estate loans		3,025			2,722			1,462
Consumer and other loans:
Credit cards		34,562			36,465			24,807
Other consumer and other loans		6,412			4,779			8,561
Total accruing loans past due 90 days or more		45,592			45,244			36,217
Total nonperforming loans		53,579			45,244			36,217
Other real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	53,579		$	45,244		$	36,217
Total CCBX nonperforming assets to total consolidated assets		1.32	%		1.14	%		0.98	%

Community Bank	As of
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Nonaccrual loans:
Commercial and industrial loans	$	198		$	—		$	2
Real estate:
Construction, land and land development		—			—			—
Residential real estate		44			213			176
Commercial real estate		831			7,731			7,145
Total nonaccrual loans		1,073			7,944			7,323
Accruing loans past due 90 days or more:
Total accruing loans past due 90 days or more		—			—			—
Total nonperforming loans		1,073			7,944			7,323
Other real estate owned		—			—			—
Repossessed assets		—			—			—
Total nonperforming assets	$	1,073		$	7,944		$	7,323
Total community bank nonperforming assets to total consolidated assets		0.03	%		0.20	%		0.20	%

About Coastal Financial

Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC. The $4.07 billion Bank provides service through 14 branches in Snohomish, Island, and King Counties, the Internet and its mobile banking application. The Bank provides banking as a service to broker-dealers, digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank’s CCBX segment. To learn more about the Company visit www.coastalbank.com.

CCB-ER

Contact

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

Forward-Looking Statements

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

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


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

ASSETS
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Cash and due from banks	$	45,327		$	59,995		$	32,790		$	31,345		$	29,984
Interest earning deposits with other banks		438,699			427,250			482,338			451,783			444,962
Investment securities, available for sale, at fair value		38			39			41			99,504			98,939
Investment securities, held to maturity, at amortized cost		48,582			49,174			50,049			50,860			42,550
Other investments		10,757			10,664			10,583			10,227			11,898
Loans held for sale		7,565			—			797			—			—
Loans receivable		3,418,832			3,326,460			3,199,554			3,026,092			2,967,035
Allowance for credit losses		(170,263	)		(147,914	)		(139,258	)		(116,958	)		(101,085	)
Total loans receivable, net		3,248,569			3,178,546			3,060,296			2,909,134			2,865,950
CCBX credit enhancement asset		167,251			143,485			137,276			107,921			91,867
CCBX receivable		16,060			11,520			10,369			9,088			10,623
Premises and equipment, net		25,833			24,526			22,995			22,090			20,543
Lease right-of-use assets		5,427			5,635			5,756			5,932			6,126
Accrued interest receivable		23,664			23,617			24,681			26,819			23,428
Bank-owned life insurance, net		13,255			13,132			12,991			12,870			12,970
Deferred tax asset, net		3,083			2,221			2,221			3,806			4,404
Other assets		11,711			11,742			12,075			11,987			14,021
Total assets	$	4,065,821		$	3,961,546		$	3,865,258		$	3,753,366		$	3,678,265

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits	$	3,627,288		$	3,543,432		$	3,462,979		$	3,360,363		$	3,289,700
Subordinated debt, net		44,256			44,219			44,181			44,144			44,106
Junior subordinated debentures, net		3,591			3,591			3,590			3,590			3,589
Deferred compensation		369			405			442			479			513
Accrued interest payable		1,070			999			1,061			892			1,056
Lease liabilities		5,609			5,821			5,946			6,124			6,321
CCBX payable		39,188			34,536			33,095			33,651			38,229
Other liabilities		12,520			11,850			10,255			9,145			10,301
Total liabilities		3,733,891			3,644,853			3,561,549			3,458,388			3,393,815
SHAREHOLDERS’ EQUITY
Common Stock		134,769			132,989			131,601			130,136			129,244
Retained earnings		197,162			183,706			172,110			165,311			156,299
Accumulated other comprehensive loss, net of tax		(1	)		(2	)		(2	)		(469	)		(1,093	)
Total shareholders’ equity		331,930			316,693			303,709			294,978			284,450
Total liabilities and shareholders’ equity	$	4,065,821		$	3,961,546		$	3,865,258		$	3,753,366		$	3,678,265


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

	Three Months Ended
	September 30, 2024		June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	99,590	$	90,944		$	84,621		$	81,159		$	83,652
Interest on interest earning deposits with other banks		4,781		5,683			4,780			5,687			3,884
Interest on investment securities		675		686			1,034			1,225			766
Dividends on other investments		33		174			37			172			29
Total interest income		105,079		97,487			90,472			88,243			88,331
INTEREST EXPENSE
Interest on deposits		32,083		30,578			28,867			27,916			25,451
Interest on borrowed funds		809		672			669			670			651
Total interest expense		32,892		31,250			29,536			28,586			26,102
Net interest income		72,187		66,237			60,936			59,657			62,229
PROVISION FOR CREDIT LOSSES		70,257		62,325			83,158			60,789			27,253
Net interest income/(expense) after provision for credit losses		1,930		3,912			(22,222	)		(1,132	)		34,976
NONINTEREST INCOME
Deposit service charges and fees		952		946			908			957			998
Loan referral fees		—		—			168			—			1
Gain on sales of loans, net		—		—			—			—			107
Unrealized gain (loss) on equity securities, net		2		9			15			80			5
Other income		486		257			308			60			291
Noninterest income, excluding BaaS program income and BaaS indemnification income		1,440		1,212			1,399			1,097			1,402
Servicing and other BaaS fees		1,044		1,525			1,131			1,015			997
Transaction fees		1,696		1,309			1,122			1,006			1,036
Interchange fees		1,853		1,625			1,539			1,272			1,216
Reimbursement of expenses		1,843		1,637			1,033			1,076			1,152
BaaS program income		6,436		6,096			4,825			4,369			4,401
BaaS credit enhancements		70,108		60,826			79,808			58,449			25,926
BaaS fraud enhancements		2,084		1,784			923			779			2,850
BaaS indemnification income		72,192		62,610			80,731			59,228			28,776
Total noninterest income		80,068		69,918			86,955			64,694			34,579
NONINTEREST EXPENSE
Salaries and employee benefits		17,101		17,005			17,984			16,490			18,087
Occupancy		1,750		1,686			1,518			1,340			1,224
Data processing and software licenses		3,511		2,924			2,892			2,417			2,366
Legal and professional expenses		3,597		3,631			3,672			2,649			4,447
Point of sale expense		1,351		852			869			899			1,068
Excise taxes		762		(706	)		320			449			541
Federal Deposit Insurance Corporation (“FDIC”) assessments		740		690			683			665			694
Director and staff expenses		559		470			400			478			529
Marketing		67		14			53			138			169
Other expense		1,482		1,383			1,867			1,089			1,523
Noninterest expense, excluding BaaS loan and BaaS fraud expense		30,920		27,949			30,258			26,614			30,648
BaaS loan expense		32,612		29,076			24,837			24,310			23,003
BaaS fraud expense		2,084		1,784			923			779			2,850
BaaS loan and fraud expense		34,696		30,860			25,760			25,089			25,853
Total noninterest expense		65,616		58,809			56,018			51,703			56,501
Income before provision for income taxes		16,382		15,021			8,715			11,859			13,054
PROVISION FOR INCOME TAXES		2,926		3,425			1,915			2,847			2,784
NET INCOME	$	13,456	$	11,596		$	6,800		$	9,012		$	10,270
Basic earnings per common share	$	1.00	$	0.86		$	0.51		$	0.68		$	0.77
Diluted earnings per common share	$	0.97	$	0.84		$	0.50		$	0.66		$	0.75
Weighted average number of common shares outstanding:
Basic		13,447,066		13,412,667			13,340,997			13,286,828			13,285,974
Diluted		13,822,270		13,736,508			13,676,917			13,676,513			13,675,833


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

	For the Three Months Ended
	September 30, 2024							June 30, 2024							September 30, 2023
	Average Balance			Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance			Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance			Interest & Dividends		Yield / Cost ⁽¹⁾
Assets
Interest earning assets:
Interest earning deposits with other banks	$	350,915		$	4,781	5.42	%	$	418,165		$	5,683	5.47	%	$	285,596		$	3,884	5.40	%
Investment securities, available for sale ⁽²⁾		40			—	—			43			—	3.13			100,283			543	2.15
Investment securities, held to maturity ⁽²⁾		48,945			675	5.49			49,737			686	5.55			17,703			223	5.00
Other investments		11,140			33	1.18			10,592			174	6.61			11,943			29	0.96
Loans receivable ⁽³⁾		3,464,871			99,590	11.43			3,258,042			90,944	11.23			3,062,214			83,652	10.84
Total interest earning assets		3,875,911			105,079	10.79			3,736,579			97,487	10.49			3,477,739			88,331	10.08
Noninterest earning assets:
Allowance for credit losses		(151,292	)						(138,472	)						(100,329	)
Other noninterest earning assets		268,903							255,205							220,750
Total assets	$	3,993,522						$	3,853,312						$	3,598,160

Liabilities and Shareholders’ Equity
Interest bearing liabilities:
Interest bearing deposits	$	2,966,527		$	32,083	4.30	%	$	2,854,575		$	30,578	4.31	%	$	2,515,093		$	25,451	4.01	%
FHLB advances and other borrowings		9,717			140	5.73			1,648			3	0.73			—			—	—
Subordinated debt		44,234			598	5.38			44,197			598	5.44			44,084			580	5.22
Junior subordinated debentures		3,591			71	7.87			3,590			71	7.95			3,589			71	7.85
Total interest bearing liabilities		3,024,069			32,892	4.33			2,904,010			31,250	4.33			2,562,766			26,102	4.04
Noninterest bearing deposits		588,178							584,661							698,532
Other liabilities		60,101							58,267							57,865
Total shareholders’ equity		321,174							306,374							278,997
Total liabilities and shareholders’ equity	$	3,993,522						$	3,853,312						$	3,598,160
Net interest income				$	72,187						$	66,237						$	62,229
Interest rate spread						6.46	%						6.17	%						6.04	%
Net interest margin ⁽⁴⁾						7.41	%						7.13	%						7.10	%

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


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

	For the Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
(dollars in thousands, unaudited)	Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾
Community Bank
Assets
Interest earning assets:
Loans receivable ⁽²⁾	$	1,912,428	$	31,898	6.64	%	$	1,895,699	$	30,741	6.52	%	$	1,752,834	$	27,373	6.20	%
Total interest earning assets		1,912,428		31,898	6.64			1,895,699		30,741	6.52			1,752,834		27,373	6.20
Liabilities
Interest bearing liabilities:
Interest bearing deposits		982,280		7,264	2.94	%		938,033		6,459	2.77	%		920,707		5,067	2.18	%
Intrabank liability		406,641		5,540	5.42			429,452		5,836	5.47			223,221		3,036	5.40
Total interest bearing liabilities		1,388,921		12,804	3.67			1,367,485		12,295	3.62			1,143,928		8,103	2.81
Noninterest bearing deposits		523,507						528,214						608,906
Net interest income			$	19,094					$	18,446					$	19,270
Net interest margin⁽³⁾					3.97	%					3.91	%					4.36	%

CCBX
Assets
Interest earning assets:
Loans receivable ⁽²⁾⁽⁴⁾	$	1,552,443	$	67,692	17.35	%	$	1,362,343	$	60,203	17.77	%	$	1,309,380	$	56,279	17.05	%
Intrabank asset		496,475		6,764	5.42			610,646		8,299	5.47			374,632		5,095	5.40
Total interest earning assets		2,048,918		74,456	14.46			1,972,989		68,502	13.96			1,684,012		61,374	14.46
Liabilities
Interest bearing liabilities:
Interest bearing deposits		1,984,247		24,819	4.98	%		1,916,542		24,119	5.06	%		1,594,386		20,384	5.07	%
Total interest bearing liabilities		1,984,247		24,819	4.98			1,916,542		24,119	5.06			1,594,386		20,384	5.07
Noninterest bearing deposits		64,671						56,447						89,626
Net interest income			$	49,637					$	44,383					$	40,990
Net interest margin⁽³⁾					9.64	%					9.05	%					9.66	%
Net interest margin, net of Baas loan expense ⁽⁵⁾					3.31	%					3.12	%					4.24	%

	For the Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
(dollars in thousands, unaudited)	Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾		Average Balance		Interest & Dividends		Yield / Cost ⁽¹⁾
Treasury & Administration
Assets
Interest earning assets:
Interest earning deposits with other banks	$	350,915	$	4,781	5.42	%	$	418,165	$	5,683	5.47	%	$	285,596	$	3,884	5.40	%
Investment securities, available for sale ⁽⁶⁾		40		—	—			43		—	3.13			100,283		543	2.15
Investment securities, held to maturity ⁽⁶⁾		48,945		675	5.49			49,737		686	5.55			17,703		223	5.00
Other investments		11,140		33	1.18			10,592		174	6.61			11,943		29	0.96
Total interest earning assets		411,040		5,489	5.31	%		478,537		6,543	5.50	%		415,525		4,679	4.47	%
Liabilities
Interest bearing liabilities:
FHLB advances and borrowings	$	9,717	$	140	5.73	%		1,648		3	0.73	%		—		—	—	%
Subordinated debt		44,234		598	5.38	%		44,197		598	5.44	%		44,084		580	5.22	%
Junior subordinated debentures		3,591		71	7.87			3,590		71	7.95			3,589		71	7.85
Intrabank liability, net ⁽⁷⁾		89,834		1,224	5.42			181,194		2,463	5.47			151,411		2,059	5.40
Total interest bearing liabilities		147,376		2,033	5.49			230,629		3,135	5.47			199,084		2,710	5.40
Net interest income			$	3,456					$	3,408					$	1,969
Net interest margin⁽³⁾					3.34	%					2.86	%					1.88	%

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

Non-GAAP Financial Measures

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

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

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

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

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

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

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

	As of and for the Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Net BaaS loan income divided by average CCBX loans:
CCBX loan yield (GAAP)⁽¹⁾		17.35	%		17.77	%		17.05	%
Total average CCBX loans receivable	$	1,552,443		$	1,362,343		$	1,309,380
Interest and earned fee income on CCBX loans (GAAP)		67,692			60,203			56,279
BaaS loan expense		(32,612	)		(29,076	)		(23,003	)
Net BaaS loan income	$	35,080		$	31,127		$	33,276
Net BaaS loan income divided by average CCBX loans ⁽¹⁾		8.99	%		9.19	%		10.08	%
Net interest margin, net of BaaS loan expense:
CCBX interest margin ⁽¹⁾		9.64	%		9.05	%		9.66	%
CCBX earning assets		2,048,918			1,972,989			1,684,012
Net interest income		49,637			44,383			40,990
Less: BaaS loan expense		(32,612	)		(29,076	)		(23,003	)
Net interest income, net of BaaS loan expense	$	17,025		$	15,307		$	17,987
CCBX net interest margin, net of BaaS loan expense ⁽¹⁾		3.31	%		3.12	%		4.24	%

⁽¹⁾ Annualized calculations for periods presented.

APPENDIX A –
As of September 30, 2024

Industry Concentration

We have a diversified loan portfolio, representing a wide variety of industries. Our major categories of loans are commercial real estate, consumer and other loans, residential real estate, commercial and industrial, and construction, land and land development loans. Together they represent $3.43 billion in outstanding loan balances. When combined with $2.29 billion in unused commitments the total of these categories is $5.72 billion.

Commercial real estate loans represent the largest segment of our loans, comprising 39.8% of our total balance of outstanding loans as of September 30, 2024. Unused commitments to extend credit represents an additional $41.5 million, and the combined total in commercial real estate loans represents $1.40 billion, or 24.6% of our total outstanding loans and loan commitments.

The following table summarizes our loan commitment by industry for our commercial real estate portfolio as of September 30, 2024:

(dollars in thousands; unaudited)	Outstanding Balance		Available Loan Commitments		Total Outstanding Balance & Available Commitment		% of Total Loans (Outstanding Balance & Available Commitment)		Average Loan Balance		Number of Loans
Apartments	$	382,498	$	5,685	$	388,183	6.8	%	$	3,714	103
Hotel/Motel		155,441		189		155,630	2.7			6,758	23
Convenience Store		142,366		614		142,980	2.5			2,296	62
Office		123,423		8,204		131,627	2.3			1,371	90
Warehouse		102,818		2,000		104,818	1.8			1,743	59
Retail		107,934		620		108,554	1.9			1,018	106
Mixed use		93,490		5,273		98,763	1.7			1,154	81
Mini Storage		79,395		14,330		93,725	1.7			3,452	23
Strip Mall		44,089		—		44,089	0.8			6,298	7
Manufacturing		34,599		1,200		35,799	0.6			1,193	29
Groups < 0.70% of total		96,393		3,392		99,785	1.8			1,205	80
Total	$	1,362,446	$	41,507	$	1,403,953	24.6	%	$	2,055	663

Consumer loans comprise 33.0% of our total balance of outstanding loans as of September 30, 2024. Unused commitments to extend credit represents an additional $1.07 billion, and the combined total in consumer and other loans represents $2.20 billion, or 38.4% of our total outstanding loans and loan commitments. As illustrated in the table below, our CCBX partners bring in a large number of mostly smaller dollar loans, resulting in an average consumer loan balance of just $900. CCBX consumer loans are underwritten to CCBX credit standards and underwriting of these loans is regularly tested, including quarterly testing for partners with portfolio balances greater than $10.0 million.

The following table summarizes our loan commitment by industry for our consumer and other loan portfolio as of September 30, 2024:

(dollars in thousands; unaudited)	Outstanding Balance		Available Loan Commitments		Total Outstanding Balance & Available Commitment ⁽¹⁾		% of Total Loans (Outstanding Balance & Available Commitment)		Average Loan Balance		Number of Loans
CCBX consumer loans
Credit cards	$	633,691	$	1,055,684	$	1,689,375	29.5	%	$	1.7	369,404
Installment loans		471,813		7,112		478,925	8.4			0.9	513,897
Lines of credit		1,362		—		1,362	0.0			2.4	558
Other loans		9,053		—		9,053	0.2			—	365,834
Community bank consumer loans
Installment loans		1,291		1		1,292	0.0			51.6	25
Lines of credit		194		365		559	0.0			6.1	32
Other loans		12,688		3,000		15,688	0.3			32.5	390
Total	$	1,130,092	$	1,066,162	$	2,196,254	38.4	%	$	0.9	1,250,140

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

Residential real estate loans comprise 13.9% of our total balance of outstanding loans as of September 30, 2024. Unused commitments to extend credit represents an additional $522.8 million, and the combined total in residential real estate loans represents $1.00 billion, or 17.5% of our total outstanding loans and loan commitments.

The following table summarizes our loan commitment by industry for our residential real estate loan portfolio as of September 30, 2024:

(dollars in thousands; unaudited)	Outstanding Balance		Available Loan Commitments		Total Outstanding Balance & Available Commitment ⁽¹⁾		% of Total Loans (Outstanding Balance & Available Commitment)		Average Loan Balance		Number of Loans
CCBX residential real estate loans
Home equity line of credit	$	265,402	$	472,385	$	737,787	12.9	%	$	25	10,742
Community bank residential real estate loans
Closed end, secured by first liens		176,066		2,961		179,027	3.1			555	317
Home equity line of credit		25,427		46,515		71,942	1.3			106	239
Closed end, second liens		10,974		925		11,899	0.2			366	30
Total	$	477,869	$	522,786	$	1,000,655	17.5	%	$	42	11,328

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

Commercial and industrial loans comprise 8.5% of our total balance of outstanding loans as of September 30, 2024. Unused commitments to extend credit represents an additional $598.4 million, and the combined total in commercial and industrial loans represents $891.0 million, or 15.6% of our total outstanding loans and loan commitments. Included in commercial and industrial loans is $103.9 million in outstanding capital call lines, with an additional $504.6 million in available loan commitments which is limited to a $350.0 million portfolio maximum. Capital call lines are provided to venture capital firms through one of our CCBX BaaS clients. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards and the underwriting is reviewed by the Bank on every capital call line.

The following table summarizes our loan commitment by industry for our commercial and industrial loan portfolio as of September 30, 2024:

(dollars in thousands; unaudited)	Outstanding Balance		Available Loan Commitments		Total Outstanding Balance & Available Commitment ⁽¹⁾		% of Total Loans (Outstanding Balance & Available Commitment)		Average Loan Balance		Number of Loans
Consolidated C&I loans
Capital Call Lines	$	103,924	$	504,561	$	608,485	10.6	%	$	764	136
Construction/Contractor Services		27,463		34,658		62,121	1.1			136	202
Financial Institutions		48,648		—		48,648	0.9			4,054	12
Retail		33,003		5,725		38,728	0.7			15	2,247
Manufacturing		6,124		5,460		11,584	0.2			149	41
Medical / Dental / Other Care		6,864		2,731		9,595	0.2			528	13
Groups < 0.20% of total		66,553		45,299		111,852	2.0			58	1,143
Total	$	292,579	$	598,434	$	891,013	15.6	%	$	77	3,794

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

Construction, land and land development loans comprise 4.8% of our total balance of outstanding loans as of September 30, 2024. Unused commitments to extend credit represents an additional $63.5 million, and the combined total in construction, land and land development loans represents $226.6 million, or 4.0% of our total outstanding loans and loan commitments.

The following table details our loan commitment for our construction, land and land development portfolio as of September 30, 2024:

(dollars in thousands; unaudited)	Outstanding Balance		Available Loan Commitments		Total Outstanding Balance & Available Commitment		% of Total Loans (Outstanding Balance & Available Commitment)		Average Loan Balance		Number of Loans
Commercial construction	$	97,798	$	41,521	$	139,319	2.5	%	$	7,523	13
Residential construction		35,822		16,846		52,668	0.9			1,990	18
Developed land loans		14,863		723		15,586	0.3			743	20
Undeveloped land loans		8,606		4,086		12,692	0.2			574	15
Land development		5,968		345		6,313	0.1			597	10
Total	$	163,057	$	63,521	$	226,578	4.0	%	$	2,145	76

Exposure and risk in our construction, land and land development portfolio is in line with our average historically, compared to June 30, 2024 when the balance was elevated as indicated in the following table:

	Outstanding Balance as of
(dollars in thousands; unaudited)	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
Commercial construction	$	97,798	$	110,372	$	102,099	$	81,489	$	91,396
Residential construction		35,822		34,652		28,751		34,213		33,971
Undeveloped land loans		8,606		8,372		8,190		7,890		8,310
Developed land loans		14,863		13,954		14,307		20,515		21,369
Land development		5,968		5,714		7,515		12,993		12,640
Total	$	163,057	$	173,064	$	160,862	$	157,100	$	167,686

Commitments to extend credit total $2.29 billion at September 30, 2024, however we do not anticipate our customers using the $2.29 billion that is showing as available.

The following table presents outstanding commitments to extend credit as of September 30, 2024:

Consolidated
(dollars in thousands; unaudited)	As of September 30, 2024
Commitments to extend credit:
Commercial and industrial loans	$	93,873
Commercial and industrial loans – capital call lines		504,561
Construction – commercial real estate loans		46,007
Construction – residential real estate loans		17,514
Residential real estate loans		522,786
Commercial real estate loans		41,507
Credit cards		1,055,684
Consumer and other loans		10,478
Total commitments to extend credit	$	2,292,410

We have individual CCBX partner portfolio limits with our each of our partners to manage loan concentration risk, liquidity risk, and counter-party partner risk. For example, as of September 30, 2024, capital call lines outstanding balance totaled $103.9 million, and while commitments totaled $504.6 million, the commitments are limited to a maximum of $350.0 million by agreement with the partner. If a CCBX partner goes over their individual limit, it would be a breach of their contract and the Bank may impose penalties and would not be required to fund the loan.

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

CCBX
(dollars in thousands; unaudited)	Balance			Percent of CCBX loans receivable		Available Commitments ⁽¹⁾		Maximum Portfolio Size		Cash Reserve/ Pledge Account Amount ⁽²⁾
Commercial and industrial loans:
Capital call lines	$	103,924		6.8	%	$	504,561	$	350,000	$	—
All other commercial & industrial loans		36,494		2.4			16,922		285,153		675
Real estate loans:
Home equity lines of credit ⁽³⁾		265,402		17.5			472,385		375,000		35,597
Consumer and other loans:
Credit cards – cash secured		180					—				—
Credit cards – unsecured		633,511					1,055,684				37,065
Credit cards – total		633,691		41.6			1,055,684		807,263		37,065
Installment loans – cash secured		129,138					7,112				—
Installment loans – unsecured		342,675					—				2,222
Installment loans – total		471,813		31.0			7,112		1,630,027		2,222
Other consumer and other loans		10,415		0.7			—		7,557		383
Gross CCBX loans receivable		1,521,739		100.0	%		2,056,664		3,455,000	$	75,942
Net deferred origination fees		(447	)
Loans receivable	$	1,521,292

⁽¹⁾ Remaining commitment available, net of outstanding balance.
⁽²⁾ Balances are as of October 4, 2024.
⁽³⁾ These home equity lines of credit are secured by residential real estate and are accessed by using a credit card, but are classified as 1-4 family residential properties per regulatory guidelines.

APPENDIX B –
As of September 30, 2024

CCBX – BaaS Reporting Information

During the quarter ended September 30, 2024, $70.1 million was recorded in BaaS credit enhancements related to the provision for credit losses – loans and reserve for unfunded commitments for CCBX partner loans and negative deposit accounts. Agreements with our CCBX partners provide for a credit enhancement provided by the partner which protects the Bank by indemnifying or reimbursing incurred losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans, unfunded commitments and negative deposit accounts. When the provision for credit losses – loans and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements) in recognition of the CCBX partner legal commitment to indemnify or reimburse losses. The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the CCBX partner or taken from the partner’s cash reserve account. Agreements with our CCBX partners also provide protection to the Bank from fraud by indemnifying or reimbursing incurred fraud losses. BaaS fraud includes noncredit fraud losses on loans and deposits originated through partners. Fraud losses are recorded when incurred as losses in noninterest expense, and the enhancement received from the CCBX partner is recorded in noninterest income, resulting in a net impact of zero to the income statement. Many CCBX partners also pledge a cash reserve account at the Bank which the Bank can collect from when losses occur that is then replenished by the partner on a regular interval. Although agreements with our CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses by indemnifying or reimbursing incurred credit and fraud losses, if our partner is unable to fulfill their contracted obligation then the bank would be exposed to additional loan and deposit losses if the cash flows on the loans were not sufficient to fund the reimbursement of loan losses, as a result of this counterparty risk. If a CCBX partner does not replenish their cash reserve account the Bank may consider an alternative plan for funding the cash reserve. This may involve the possibility of adjusting the funding amounts or timelines to better align with the partner’s specific situation. If a mutually agreeable funding plan is not agreed to, the Bank could declare the agreement in default, take over servicing and cease paying the partner for servicing the loan and providing credit enhancements. The Bank would evaluate any remaining credit enhancement asset from the CCBX partner in the event the partner failed to determine if a write-off is appropriate. If a write-off occurs, the Bank would retain the full yield and any fee income on the loan portfolio going forward, and our BaaS loan expense would decrease once default occurred and payments to the CCBX partner were stopped.

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

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

Loan income and related loan expense	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024			June 30, 2024			September 30, 2023
Yield on loans ⁽¹⁾		17.35	%		17.77	%		17.05	%
BaaS loan interest income	$	67,692		$	60,203		$	56,279
Less: BaaS loan expense		32,612			29,076			23,003
Net BaaS loan income ⁽²⁾	$	35,080		$	31,127		$	33,276
Net BaaS loan income divided by average BaaS loans ⁽¹⁾⁽²⁾		8.99	%		9.19	%		10.08	%

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

An increase in average CCBX loans receivable resulted in increased interest income on CCBX loans during the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024. The increase in average CCBX loans receivable was primarily due to growth in the CCBX loan portfolio as part of our strategy to optimize the CCBX loan portfolio and strengthen our balance sheet through originating higher quality new loans and enhanced credit standards. Increased interest rates and growth in CCBX loans and deposits has resulted in increases in interest income and expense for the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023.

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

Interest income	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024		June 30, 2024		September 30, 2023
Loan interest income	$	67,692	$	60,203	$	56,279
Total BaaS interest income	$	67,692	$	60,203	$	56,279

Interest expense	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024		June 30, 2024		September 30, 2023
BaaS interest expense	$	24,819	$	24,119	$	20,384
Total BaaS interest expense	$	24,819	$	24,119	$	20,384

BaaS income	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024		June 30, 2024		September 30, 2023
BaaS program income:
Servicing and other BaaS fees	$	1,044	$	1,525	$	997
Transaction fees		1,696		1,309		1,036
Interchange fees		1,853		1,625		1,216
Reimbursement of expenses		1,843		1,637		1,152
BaaS program income		6,436		6,096		4,401
BaaS indemnification income:
BaaS credit enhancements		70,108		60,826		25,926
BaaS fraud enhancements		2,084		1,784		2,850
BaaS indemnification income		72,192		62,610		28,776
Total noninterest BaaS income	$	78,628	$	68,706	$	33,177

Servicing and other BaaS fees decreased $481,000 in the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024 while transaction fees and interchange fees increased $387,000 and $228,000, respectively. We expect servicing and other BaaS fees to decrease and transaction and interchange fees to increase as partner activity grows and contracted minimum fees are replaced with recurring fees and then exceed those minimum fees.

BaaS loan and fraud expense:	Three Months Ended
(dollars in thousands; unaudited)	September 30, 2024		June 30, 2024		September 30, 2023
BaaS loan expense	$	32,612	$	29,076	$	23,003
BaaS fraud expense		2,084		1,784		2,850
Total BaaS loan and fraud expense	$	34,696	$	30,860	$	25,853

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/2d50cba0-18d9-4c78-8e96-0418250a8658

The MIL Network –

January 25, 2025

MIL-OSI United Kingdom: PM speech in Birmingham: 28 October 2024

Source: United Kingdom – Executive Government & Departments

Prime Minister Keir Starmer makes a speech in Birmingham.

Location:: Birmingham
Delivered on:: 28 October 2024 (Transcript of the speech, exactly as it was delivered)

It’s always great to be here in Birmingham. A city that is at the heart, not just of our country but also – our plans for growth – as we announced two weeks ago £500m worth of new investment in battery storage will create the jobs of the future right here. And that’s a snapshot of the Britain we are building this week and beyond.

Our economy – stabilised.

The foundations – fixed.

Hope in the future – restored.

Another step taken on the long, difficult, but resolute path that we will walk.

Towards a Britain returned to the service of working people.

I said on the steps of Downing Street – the day after the election that this would be a government for the working people of this country.

That, when the cameras stopped rolling. When that black door closed. We would carry their hopes and aspirations with us.

That the basic, completely reasonable desire to want a better future for your family. That would become the driving purpose of this Government.

Now, I will never stand here and tell you to feel better, if you don’t. And I will never ask you to feel grateful for what you should expect as a given.

Trust in my project to return Britain to the service of working people can only be earned through actions not words: Change must be felt.

But every decision we have made. Every decision that we will make in the future will be made with working people in our minds’ eye. People who have been working harder and harder for years, just to stand still.

People doing the right thing maybe still finding a little bit of money to put away. Paying their way – even in the cost-of-living crisis but who feel this country no longer gives them or their children a fair chance.

People stuck on an NHS waiting list whose town centre is blighted by anti-social behaviour who can’t afford to buy a place they call home or can’t afford the home they have, because of the mortgage bombshell.

And people who feel ignored as their lives, no matter how hard they work slide into greater insecurity. Scared of the postman coming down the path – will it be another bill I can’t afford?

People like that video, we just watched. [Political content removed]

I know some people want to have a debate about this and I know there will always be the exception that proves the rule. Welcome to the wonders of a diverse country!

But I also know that the working people of this country know exactly who they are and that – they are the golden thread that runs through our agenda. Every single one of our national missions is about delivering for them.

And we are getting on with the job. That’s why we reformed planning rules to get Britain building again – restore the dream of home ownership.

It’s why we ended junior doctor strikes to lift the pressure on our NHS. Start cutting waiting lists.

It’s why we stopped the riots with tough sentences for violent thugs.

Launched a Border Security Command to smash the people-smugglers.

Switched on Great British Energy to get Putin’s boot off our throat. Make our country more secure. Create good jobs – right across the country.

And it’s also why we’ve started the work of changing our economy. Stabilising it. Fixing its foundations.

But also – changing how it works for them. An employment bill that will finally make work pay. That will contribute to growth and raise living standards for working people. A direct response to the cost-of-living crisis, we were elected to tackle for them. Because let me tell you, it is working people who pay the price when their Government fails to deliver economic stability. They’ve had enough of slow growth, stagnant living standards and crumbling public services.

They know that austerity is no solution. And they’ve seen the chaos when politicians let borrowing get out of control.

We choose a different path. Honest, responsible, long-term decisions in the interests of working people.

Because it’s stability that means we can invest. And reform that will maximise that investment. £63 billion worth of investment secured from business two weeks ago – a record-breaking show of confidence in our plan for growth.

That’s investment that will create tens of thousands of jobs. Good jobs – in every corner of the country.

I know some people will recoil when we say we have to take the tough decisions needed to fix the foundations.

This doesn’t happen by accident it’s because business can see we are fixing the foundations. Everyone who finds damp in their house – know they have a decision. Paint over it or strip it out, pull off the plaster, deal with it once and for all.

So, I will defend our tough decisions all day long.

It’s the right thing for our country. The only way you get the investment we need. Stability. Investment. Reform.

That is how we fix the NHS, rebuild Britain, and protect the payslips of working people, delivering on our mandate of change.

That’s what the Budget this week will be about. It’s what every week of this Government will be about.

A Budget for working people, from a government for working people. Because returning Britain to their service, that’s our fundamental cause – and it never changes.

It will also be the first budget delivered by a woman – ever. That is a moment of pride. That is a moment of pride. When Rachel Reeves stands up – she will be making history – young women and girls will watching across the country. They will look up – and they will notice.

It will also be a Budget which will show to the British people that we won’t be distracted from our task.

We will stick to our long-term plan. Run towards the tough decisions, rip-off the short-term sticking plasters, so we can lead our country finally but decisively out of this ‘pay-more, get less’ doom-loop [political content removed].

Of course there will still be tough decisions. Rebuilding Britain and delivering growth, that will take the skills and effort of all of us.

That is why this Budget will also Get Britain Working. It will pave the way for reforms that tackle the root causes of economic inactivity, make sure – that those who can work, do work.

[Political content removed] we will always help those who cannot support themselves, but the UK is the only G7 country where economic inactivity is still higher than it was before Covid.

That is not just bad for our economy, it’s also bad for all those who are locked out of opportunity. So the Chancellor will announce £240 million in funding to provide local services that can help people back into work, and the dignity it brings.

A Britain that works for working people. With all those who can, playing their part.

We will also be ruthless in clamping down on government waste, just as we will be ruthless on clamping down on tax avoidance, so the British people that every penny counts.

Every single person in this country had to do that during the cost-of-living crisis and government must be no different.

And frankly, when we’re asking broader shoulders to carry a higher burden on tax, that determination to be more productive and efficient in government, that’s the very least their contribution deserves.

Look – nobody wants higher taxes, just like nobody wants public spending cuts. But we have to be realistic about where we are as a country. This is not 1997, when the economy was decent but public services were on their knees. And it’s not 2010, where public services were strong, but the public finances were weak. We have to deal with both sides of that coin.

These are unprecedented circumstances, but the budget the Chancellor will deliver on Wednesday, will prevent devastating austerity in our public services and prevent a disastrous path for our public finances.

[Political content removed]

And yes – things are worse than we could possibly have expected during the election – the Budget will set that out very clearly.

I mean – just look at the state of our prisons last week.

[Political content removed]

On Rwanda, asylum hotels, propping up failing train companies [Political content removed] . An economy riddled with weakness on productivity and investment. A state that needs urgent modernisation to face down the challenge of a volatile world.

A country where people don’t just lack faith in politicians to fix any of this but also wonder – whether Britain can. Whether we still have the resources to move forward or whether decline is now an incurable disease.

[Political content removed]

I expect to be judged on my ability to deal with this. I expect to be judged on my ability to deal with it. Politics is always a choice. So we won’t hide from our decisions on Wednesday or for that matter, any day.

Besides, as I said two weeks ago at our International Investment Summit we have huge assets in this country. Leading positions in the industries of the future:

Clean energy, artificial intelligence, life sciences, the creative industries, a technology sector that is the envy of Europe. A heritage steeped in science, trade and innovation. And values. Values deep in the bones of this nation and which say, to the world – this country is open for business. This country respects diversity and difference under the same flag.

We are still the country, known all around the world for our pragmatism and our creativity, the ingenuity and industry of our people and so if we do grasp the nettle on our economy, if we do fix those foundations, stick to those values and deliver the change working people need we won’t just get through this – better days are ahead.

Seriously – this is an economic plan that will change long-term British growth for the better. We are tackling the biggest challenges in our economy.

Higher investment – we’re dealing with it.

Planning – we’re reforming it.

The labour market – we’re getting people back to work, but also making sure work pays.

On competition – we’re stripping out the needless regulation that holds back private investment and all of this built on that foundation of economic stability. This is what fixing the foundations means.

What delivering change means. Everyone in this country will benefit from this. Everyone can wake up on Thursday and see that a new future is being built. A better future. But I tell you now – what we can’t do. Is waste any more time.

Politics is a choice and it’s time to choose a clear path.

It’s time to embrace the harsh light of fiscal reality. So we can come together behind a credible, long-term plan.

It’s time we ran towards the tough decisions because ignoring them set us on the path of decline.

It’s time we ignored the populist chorus of easy answers because we saw what happens if you reject the constraints of economic stability and we’re never going back to that.

That is our choice. Stability – to prevent chaos.

Borrowing that will drive long-term growth.

Tax rises – to prevent austerity and rebuild public services.

We choose – to protect working people.

We choose – to get the NHS back on its feet.

We choose – to fix the foundations reject decline and rebuild our country with investment.

And while I’m sure you understand I can’t get into individual measures before Wednesday. I will say this.

If people want to criticise the path we choose – that’s their prerogative. But let them then spell out a different direction.

If they think the state has grown too big let them tell working people which public services they would cut.

If they think tax rises are unfair let them tell working people which taxes they’d raise instead.

If they don’t see our long-term investment in infrastructure as necessary let them explain to working people how they would grow the economy for them.

[Political content removed]

Because I have said it before and I will say it again the time is long overdue for politicians in this country, to level with you, honestly about the trade-offs this country faces.

To stop insulting your intelligence with the chicanery of easy answers. Working people know that hard choices are necessary.

[Political content removed]

They lived through the cost-of-living crisis so they know that the things they want from us:

Protecting their living standards.

Rebuilding our nation.

Fixing our public services.

They know – that this can only be achieved alongside economic stability. There are no short-cuts.

No, what they want to see on Wednesday is a country on a different path. Making different choices. They don’t want to pay the price anymore, in times of crisis because our economic foundations are weak and they don’t want to see the proceeds of growth which could serve their family, their community, their public services – instead – always serving those at the top.

They want change and that is what they will get.

Because that is the mandate we were elected to deliver and the only path consistent with our driving purpose to return Britain to the service of working people.

That purpose also runs through the priorities we set out in our manifesto.

The national missions which capture the hope working people have for the future of our country. Look – there is a paradox in politics at the moment.

All around the world, traditional values. Democratic values. Values that have underpinned the way countries like ours have operated for years. The pragmatism that is part of our identity, it’s under attack.

Why?

Because people – working people most of all have lost faith it can still deliver for their family. And yet, at the same time, what people want from politics that hasn’t changed.

People want a stable economy, they want their country to be safe, their borders secure. Economic security, national security, border security. Those are still the foundations everything rests upon.

And then beyond that they want exactly what those national missions promise.

A growing economy.

Safer streets.

Clean British energy in their home.

Opportunities for their children.

And an NHS that is there when they need it.

I know populism preys on the fears people have that these things no longer belong to them. But I have never felt the right response is to ignore those concerns rather than showing that they can still be delivered.

So I am never going to pick just one of these missions – and say that’s everything because every single one of them matters to working people. And for the same reason – I will never turn away from them either.

In fact, because I know actions speak louder than words because I expect to be judged by the British people.

In the coming weeks, on every mission, we will publish clear ambitions for this Parliament and we will also track our progress against them, so that every single person in this country can see exactly how we measure up to things that matter to them.

[Political content removed]

They want to see us build 1.5m homes, make sure a record number of children start school ready to learn, raise living standards so that there is more cash in their pocket, restore confidence crime will be punished. Guaranteed neighbourhood policing in every community.

Make our energy system more secure by harnessing clean British energy, accelerating towards net-zero.

And on our NHS, they want us to cut waiting times dramatically and meet the 18-week target – that is still the best benchmark for an NHS that is back on its feet facing the future, once more – a beacon of pride to the world.

These are my priorities for change and I won’t change course.

The budget will light the way and we will use the power of government.

Stability, investment and reform, partnership across the whole of society, galvanised by clear objectives.

To deliver on the priorities of the British people.

The foundations – fixed.

Public services – renewed.

A country rebuilt by investment.

Released from decline.

Returned once more.

To the service of working people.

Now that is the course we set this week.

That is the driving purpose of this government.

That is the change we will deliver.

Thank you very much.

Published 28 October 2024

MIL OSI United Kingdom –

January 25, 2025

MIL-OSI United Kingdom: Speech: PM speech in Birmingham: 28 October 2024

Source: United Kingdom – Prime Minister’s Office 10 Downing Street

Prime Minister Keir Starmer makes a speech in Birmingham.

Location:: Birmingham
Delivered on:: 28 October 2024 (Transcript of the speech, exactly as it was delivered)