Taxation – Page 236 – NewzIntel.com

MIL-OSI USA: Shaheen, Hassan Join Ribbon Cutting for Affordable Housing Development Made Possible by the American Rescue Plan

US Senate News:

Source: United States Senator for New Hampshire Maggie Hassan
(Concord, NH) – Today, U.S. Senators Jeanne Shaheen (D-NH) and Maggie Hassan (D-NH) delivered remarks to community members and local advocates at the ribbon cutting ceremony for CATCH Neighborhood Housing’s Davis Ridge development, which will offer 48 units of affordable housing in Concord. The project was funded in part by Invest NH, which is supported by funding Senators Shaheen and Hassan helped secure in the American Rescue Plan. Photos from today’s event can be found here.
“Far too many Granite Staters are struggling with affordable housing and anything we can do to build more housing units to help lower costs for the workforce is worth doing, which is why developments like Davis Ridge are critical to addressing this challenge,” said Senator Shaheen. “I’m proud to have helped secure the federal funds needed to support this project, and I’ll continue fighting in Congress to ensure New Hampshire has the resources we need to tackle the housing crisis and bring costs down for Granite Staters.”
“The housing crisis affects every corner of our state, as families struggle to afford their rent and businesses are unable to grow because workers can’t find housing that they can afford,” said Senator Hassan. “Developments like the Davis Ridge Apartments demonstrate the role that federal funding can play in addressing the housing shortage in New Hampshire. I will keep working to expand federal funding to build more housing here in NH, help more Granite State individuals and families afford their rent, and strengthen our economy.”
The Davis Ridge development was built with the support of Invest NH, a $100 million program to accelerate affordable workforce housing construction funded through American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) secured by Shaheen and Hassan. The project is also supported by federal funding from the Low-Income Housing Tax Credit (LIHTC), which Shaheen and Hassan are working to expand.
Shaheen is a leader in the Senate on efforts to tackle the housing affordability crisis, including by helping to ensure Granite Staters have the resources they need to thrive. In May, Shaheen and Hassan celebrated more than $30 million in federal grants for New Hampshire to build more affordable housing across the Granite State.
As a senior member of the U.S. Senate Appropriations Committee and Chair of the Commerce, Justice, Science Appropriations Subcommittee, Shaheen worked to include key provisions from her Strategy and Investment in Rural Housing Preservation Act in the FY24 Agriculture and Related Agencies Appropriations Act which was signed into law in March. Shaheen’s standalone legislation would ensure that hundreds of thousands of low-income tenants in rural areas are able to maintain access to safe and affordable housing. Another Shaheen-led bipartisan bill to increase access to rural housing was signed into law the same day. Together, the two bills will bolster existing rural housing options, make new construction easier and protect renters across the Granite State.
Shaheen also helped introduced the Fighting Homelessness Through Services and Housing Act to help local governments reduce homelessness as well as a bicameral bill that would protect the rights of residents of manufactured housing communities. Shaheen secured over $22 million in Congressionally Directed Spending in the FY24 government funding bills to address New Hampshire’s housing, transportation and urban development needs.

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: Senator Stabenow, Congressman Kildee Visit Hemlock Semiconductor to Celebrate Major Federal Manufacturing Investment

US Senate News:

Source: United States Senator for Michigan Debbie Stabenow

Stabenow and Kildee Secured Up to $325 Million in Federal Funding for Hemlock to Expand Production of Semiconductor-Grade Polysilicon Investment Will Create Over 1,000 Jobs

Friday, October 25, 2024

HEMLOCK – U.S. Senator Debbie Stabenow (D-MI) and Congressman Dan Kildee (MI-08) visited Hemlock Semiconductor to celebrate a major federal investment from the CHIPS and Science Act. Secured by Stabenow and Kildee, Hemlock will receive up to $325 million in funding to build a new, state-of-the-art manufacturing facility on its campus in Hemlock, Michigan. This historic funding will allow Hemlock to expand its production of hyper-pure polysilicon needed for semiconductor chips and create over 1,000 good paying jobs in Michigan.

“It is so exciting to see Hemlock Semiconductor and Saginaw County leading the way to make sure that American manufacturing no longer depends on semiconductor chips made halfway around the world. As one of only five companies in the world capable of producing the highest quality polysilicon for chips, this investment keeps Hemlock on the leading edge of innovations in microchips technology,” said Senator Stabenow. “I was very pleased to partner with Representative Kildee to make sure the CHIPS and Science Act focused on funding and tax incentives to make things in America which made this investment possible.”

“Because of the work of President Biden, Vice President Harris and Democrats in Congress, we are securing our supply chains and bringing manufacturing back to Michigan,” said Congressman Dan Kildee. “I fought hard alongside Senator Stabenow to bring this federal investment to mid-Michigan to create hundreds of good-paying local jobs and ensure that we make things in Michigan, not overseas. Hemlock is a key part of America’s resurgence in semiconductor and polysilicon manufacturing that will help our economy grow and compete for years to come.”

HSC Chairman and CEO AB Ghosh highlighted the transformative impact of the proposed funding, stating, “The proposed $325 million CHIPS award is a monumental achievement, not just for HSC, but for Michigan and our country. It allows HSC to plan for a once-in-a-generation investment that will secure our position as a top supplier to the leading-edge semiconductor market and therefore strengthen national security. Our customers want high quality and sustainably made polysilicon, and this grant underscores HSC’s commitment to meeting those needs while strengthening American interests.”

Senator Stabenow and Congressman Kildee have led the effort in Congress to advance the next generation of American manufacturing and strengthen our domestic supply chain. This includes the 48D Advanced Manufacturing Investment Tax Credit authored by Stabenow and Kildee. This will provide a 25% tax credit and allow for a wide range of qualified investments necessary to create equipment for and manufacture semiconductors.

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: Kelly Introduces Bipartisan Farmer Assistance and Revenue Mitigation Act of 2024 (FARM Act)

Source: United States House of Representatives – Representative Trent Kelly (R-Miss)

Washington, D.C. – Congressman Trent Kelly (MS-01) is proud to announce the introduction of the bipartisan Farmer Assistance and Revenue Mitigation Act of 2024 (FARM Act), vital legislation designed to provide much-needed support to America’s farmers.

The FARM Act provides assistance to farmers when their revenue falls below the cost of production due to circumstances beyond their control. Congressman Kelly emphasizes that this bill will help keep farms in operation during this challenging time.

“Farmers have been hit with circumstances outside of their control, such as natural disasters, inflation pressures, and drought, which have crippled their ability to obtain financing from credit and banking institutions. The FARM Act will bridge the gap, providing relief so that our farmers can continue to do their best—feed the nation,” said Congressman Kelly.

With support from major agricultural organizations, including the American Farm Bureau Federation, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, National Cotton Council, National Sorghum Producers, National Sunflower Association, U.S. Canola Association, U.S. Peanut Federation, USA Dry Pea & Lentil Council, USA Rice, and Western Peanut Growers Association, the FARM Act offers assistance for farmers growing a wide range of crops, including barley, corn, cotton, soybeans, wheat, and many others.

This legislation is a lifeline for farmers struggling to meet rising costs and navigate a difficult market. As Congress debates longer-term solutions in the 2025 Farm Bill, the FARM Act delivers immediate help to the farming community.

Original co-sponsors include: Sanford Bishop (GA), Julia Letlow (LA), Rick Allen (GA), Michael Guest (MS), Mike Rogers (AL), Barry Moore (AL), Austin Scott (GA), Don Bacon (NE), Rick Crawford (AR), Jerry Carl (AL), John Rose (TN), Vicente Gonzalez (TX), Greg Murphy (NC), Jake Ellzey (TX), Troy Nehls (TX), Dale Strong (AL), Brad Finstad (MN), David Rouzer (NC), Robert Aderholt (AL), Chuck Fleischmann (TN), Michelle Fischbach (MN), Mike Ezell (MS), Troy Balderson (OH), Tony Gonzales (TX), Henry Cuellar (TX), Michael McCaul (TX), Monica De La Cruz (TX), Clay Higgins (LA), Mike Collins (GA), Pat Fallon (TX), Pete Sessions (TX), Ronny Jackson (TX), David Kustoff (TN), Randy Feenstra (IA), John Carter (TX), Frank Lucas (OK), August Pfluger (TX), Gary Palmer (AL), Juan Ciscomani (AZ), Buddy Carter (GA), Brian Babin (TX), Jim Baird (IN), Randy Weber (TX), Lance Gooden (TX), Marjorie Taylor Greene (GA), Marc Veasey (TX), Nathaniel Moran (TX), and Michael Rulli (OH).
Contact: For more information or to co-sponsor the FARM Act, please contact Semaj Redd at semaj.redd@mail.house.gov.

###

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: Pappas Introduces Multi-State Worker Tax Fairness Act

Source: United States House of Representatives – Congressman Chris Pappas (D-NH)

This week, Representatives Chris Pappas (NH-01), Jim Himes (CT-04), and Josh Gottheimer (NJ-05) introduced the Multi-State Worker Tax Fairness Act. This bill establishes a uniform standard for taxing income based on physical presence in a state. In doing so, the bill prohibits a state from taxing a nonresident’s income earned when the individual was not physically in that state.

“Every dollar hard-working Granite Staters can keep in their pocket matters, and workers must be protected from unfair, out-of-state taxes,” said Congressman Chris Pappas. “The Multi-State Worker Tax Fairness Act would protect individuals who telework for a company in a state different from the one they reside in from over-taxation. I will continue to fight for tax fairness for all.”

“Despite a pandemic-driven surge in telework, conflicting state tax rules still burden employees and discourage working from home,” said Congressman Jim Himes. “There is no good reason why residents of Connecticut who work from home offices in Connecticut should be paying taxes to any other state. It is time to modernize our laws to support an evolving workforce and protect Americans from unfair over-taxation.”

“The Multi-State Worker Tax Fairness Act is essential for cutting taxes and ensuring people in New Jersey keep more of their hard-earned dollars where they belong — in their own pockets,” said Congressman Josh Gottheimer. “By clarifying that they should only pay taxes to the state where they live and work, we’re not just protecting their financial well-being — we’re ensuring they aren’t double taxed by a state they don’t even set foot in.”

You can view the full text of the bill here.

MIL OSI USA News –

January 25, 2025

MIL-OSI Asia-Pac: CBIC Destroys 49 Lakh Foreign Cigarettes, 73 Kgs of Drugs, and Gutka/Paan masala and e-cigarettes under “SpecialCampaign4.0”

Source: Government of India

CBIC Destroys 49 Lakh Foreign Cigarettes, 73 Kgs of Drugs, and Gutka/Paan masala and e-cigarettes under “SpecialCampaign4.0”

Rs 460 Crores Worth of Drugs, Foreign Cigarettes, and Contraband destroyed in fight against illegal importation of Contraband goods

Posted On: 25 OCT 2024 7:35PM by PIB Delhi

As part of #SpecialCampaign4.0 of the Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance and in continuation of fight against illegal importation of contraband goods, Delhi Customs (Preventive) Commissionerate and Customs (Airport and General) Commissionerate jointly destroyed a total of around 49 Lakhs cigarettes of foreign origin, around 73 Kgs of NDPS drugs (Heroin, Cocaine, Ganja, Charas, etc), Gutkha/ Pan Masala and eCigarettes.

Value of destroyed Drugs, Cigarettes etc. is Rs 460 Crores approx. These goods were seized by the Customs department for violation of Customs Act, NDPS Act and the Cigarette and other Tobacco Products Act.

The destruction process was carried out on 25th October, 2024 in a safe and non-hazardous manner at a waste management facility at Delhi in presence of Smt Harbinder Kaur Prasad, Commissioner of Delhi Customs Preventive Commissionerate and Sh Vishal Pal Singh, Commissioner of Customs (Airport and General) Commissionerate.

*****

NB/AD

(Release ID: 2068229) Visitor Counter : 63

MIL OSI Asia Pacific News –

January 25, 2025

MIL-OSI: Fidus Investment Corporation Schedules Third Quarter 2024 Earnings Release and Conference Call

Source: GlobeNewswire (MIL-OSI)

EVANSTON, Ill., Oct. 25, 2024 (GLOBE NEWSWIRE) — Fidus Investment Corporation (NASDAQ: FDUS) (“Fidus” or the “Company”) today announced that it will report its third quarter 2024 financial results on Thursday, October 31, 2024 after the close of the financial markets.

Management will host a conference call to discuss the operating and financial results at 9:00am ET on Friday, November 1, 2024. To participate in the conference call, please dial (844) 808-7136 approximately 10 minutes prior to the call. International callers should dial (412) 317-0534. Please ask to be joined into the Fidus Investment Corporation call.

A live webcast of the conference call will be available at https://investor.fdus.com/news-events/events-presentations. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.

A webcast replay of the conference call will be available two hours after the call on the investor relations section of the Company’s website.

ABOUT FIDUS INVESTMENT CORPORATION

Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies, which management generally defines as U.S. based companies with revenues between $10 million and $150 million. The Company’s investment objective is to provide attractive risk-adjusted returns by generating both current income from debt investments and capital appreciation from equity related investments. Fidus seeks to partner with business owners, management teams and financial sponsors by providing customized financing for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives.

Fidus is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. In addition, for tax purposes, Fidus has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Fidus was formed in February 2011 to continue and expand the business of Fidus Mezzanine Capital, L.P., which commenced operations in May 2007 and is licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC).

FORWARD-LOOKING STATEMENTS

This press release may contain certain forward-looking statements which are based upon current expectations and are inherently uncertain, including, but not limited to, statements about the future performance and financial condition of the Company, the prospects of our existing and prospective portfolio companies, the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives, and the timing, form and amount of any distributions or supplemental dividends in the future. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, and that the Company may or may not have considered, such as changes in the financial and lending markets and the impact of interest rate volatility, including the decommissioning of LIBOR and rising interest rates; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future as a result of a number of factors related to changes in the markets in which the Company invests, changes in the financial, capital, and lending markets, and other factors described from time to time in the Company’s filings with the Securities and Exchange Commission. Such statements speak only as of the time when made, and are based on information available to the Company as of the date hereof and are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to update any such statement now or in the future, except as required by applicable law.

Company Contact:	Investor Relations Contact:
Shelby E. Sherard	LHA Investor Relations
Chief Financial Officer	Jody Burfening
Fidus Investment Corporation	(212) 838-3777
(847) 859-3938	JBurfening@lhai.com
SSherard@fidusinv.com

The MIL Network –

January 25, 2025

MIL-OSI Security: New Jersey Man Charged For Multi-Year, Multi-Million Dollar Fraud

Source: Office of United States Attorneys

Damian Williams, the United States Attorney for the Southern District of New York; James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); and Francis J. Russo, the Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), announced today the arrest of ARSEN LUSHER, who orchestrated a scheme to defraud more than 20 investors of more than $5 million between 2017 and 2021. LUSHER was arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Gary Stein.

U.S. Attorney Damian Williams said: “For years, the defendant allegedly solicited investors’ funds by representing that he had a hugely profitable trucking business. That wasn’t true, and the defendant instead allegedly used the funds to run a classic Ponzi scheme, enriching himself along the way. When luck ran out, the victims sustained millions of dollars in losses. Today’s arrest serves as a stark reminder that the illusion of success built on fraud and deceit will inevitably fail.”

FBI Assistant Director James E. Dennehy said: “For four years, Arsen Lusher allegedly defrauded numerous victims of more than $5 million by cycling their investments to conceal the business’s inability to produce its promised returns, and altered official tax documents to reflect inflated balances in furtherance of this ploy. The alleged empty assurances allowed the defendant to wrongfully haul in funding from investors and selfishly benefit from their losses. The FBI will continue to disrupt and hit the brakes on any investment scheme rooted in deceit.”

IRS-CI Special Agent in Charge Thomas Fattorusso said: “It’s alleged Lusher acted with impunity for years, deceiving over 20 investors out of more than five million dollars. He created a ‘get-rich-quick’ scheme, then sold his victims a dream of high-returns on their investment. Instead of a profit, investors were left with a loss of money and of trust. Today’s arrest ensures that Lusher can now be held accountable for his alleged fraud.”

CBP Director Francis J. Russo said: “U.S. Customs and Border Protection is proud to have played an important role in this investigation that resulted in the takedown of an elaborate conspiracy to defraud the United States.  This case serves as a great example of how collaborative law enforcement efforts can dismantle nefarious enterprises that cause economic harm to their competitors.”

According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]

Between 2017 and 2021, LUSHER engaged in a scheme to defraud more than 20 victims of more than $5 million. LUSHER and a small group of trusted lieutenants acting at LUSHER’s direction solicited investments from the victims, usually by representing that LUSHER had a profitable trucking business that enjoyed delivery and installation contracts with multiple large retailers. LUSHER and his lieutenants typically represented that the victims’ investments would fund the purchase of trucks, each truck costing around $45,000. Through written and signed investment agreements, LUSHER and his lieutenants normally guaranteed the victims that their investments would generate high rates of return over a fixed period—typically between 30 and 40 percent over one or two years. In that way, LUSHER succeeded in raising more than $40 million.

In fact, though, LUSHER did not have a large trucking business. Instead, LUSHER had a small trucking business that performed a small amount of work—less than $300,000—for just one large retailer. The amount that LUSHER earned from his legitimate trucking business could not have compensated the victims and produced the promised returns.

Indeed, LUSHER did not use the victims’ funds to purchase trucks or to grow his trucking business. Instead, for years, LUSHER engaged in a Ponzi scheme: LUSHER paid earlier victims with later victims’ funds. LUSHER also used the victims’ funds to enrich himself, such as by gambling or shopping for high-end goods. In that way, LUSHER was able to sustain his scheme for a number of years. But in early 2021, the scheme collapsed, leaving numerous victims with losses totaling more than $5 million.

LUSHER used fake documents to carry out his scheme. For example, in December 2020, LUSHER caused to be sent to a particular victim an apparent U.S. Income Tax Return for an S Corporation for one of the companies that LUSHER controlled and used to perpetrate his scheme. That alleged tax return was falsified: the accountant listed as having prepared the return did not, in fact, prepare it. And in February 2021, LUSHER altered account balances on an email sent by a bank employee to make it appear that LUSHER’s companies had healthy account balances when, in fact, they did not. Specifically, while the bank employee wrote that LUSHER’s companies had account balances of $8,767.26 and $320.76, LUSHER altered the bank employee’s email before forwarding it to state that his companies had account balances of $1,228,767.26 and $987,320.76 (italics and bold added). In other words, LUSHER altered the bank employee’s email such that the account balances for his companies were approximately 140 times and 3,078 times greater than they actually were. LUSHER then caused that falsified email to be sent to a particular victim.

If you believe you or your family has been a victim of LUSHER’s fraud, please contact XtremeHDtips@fbi.gov.

* * *

LUSHER, 49, of Millstone, New Jersey, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

The statutory maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI, the IRS, the CBP, and the New York City Police Department.

This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Joseph H. Rosenberg is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth in this press release, constitute only allegations, and every fact described should be treated as an allegation.

MIL Security OSI –

January 25, 2025

MIL-OSI Australia: Appointment – full-time Second Commissioner of Taxation – Australian Taxation Office

Source: Australian Treasurer

The Albanese Government will appoint Mr David Allen as a full-time Second Commissioner of Taxation to the Australian Taxation Office (ATO) for a seven-year period beginning on 1 November 2024.

Mr Allen has extensive experience in the public sector. Mr Allen is currently acting as the Second Commissioner and has been in this role since May 2024. He was previously acting as the ATO’s Chief Service Delivery Officer since May 2023.

Mr Allen joined the ATO in 2010 as the Assistant Commissioner of Large Business Risk and was the ATO’s delegate to the Organisation for Economic Co‑operation and Development (OECD), based in Paris.

Prior to joining the ATO, Mr Allen held senior roles in different tiers of the public service including the Commonwealth, United Kingdom, NSW and local governments.

This appointment will continue to ensure a high level of skills and experience are available to the ATO.

MIL OSI News –

January 25, 2025

MIL-OSI: Digitalist Group Plc’s Business Review, 1 January – 30 September 2024

Source: GlobeNewswire (MIL-OSI)

Digitalist Group Plc Stock Exchange Release 25.10.2024 at 9:00

Digitalist Group Plc’s Business Review, 1 January – 30 September 2024

SUMMARY

July–September 2024 (comparable figures for 2023 in parentheses):

Turnover: EUR 3.6 million (EUR 3.6 million), decrease: -0.8%.
EBITDA: EUR -0.2 million (EUR 0.4 million*), -5.0% of turnover (12.1%).
EBIT: EUR -0.3 million (EUR 0.2 million*), -8.7% of turnover (6.6%).
Net income: EUR -1.5 million (EUR -0.5 million*), -40.8% of turnover (-13.2%).
Earnings per share: EUR -0.00 (EUR -0.00).
Earnings per share (diluted): EUR -0.00 (EUR -0.00).

*) EBIT, EBITDA and net income of the comparison period were impacted by a booked gain of EUR 0.6 million from the FutureLab Share transaction.

January–September 2024 (comparable figures for 2023 in parentheses):

Turnover: EUR 11.5 million (EUR 12.5 million), decrease: -8.4%.
EBITDA: EUR -1.3 million (EUR -0.5 million*), -11.5% of turnover (-3.9%).
EBIT: EUR -1.7 million (EUR -1.1 million*), -14.4% of turnover (-8.8%).
Net income: EUR -4.0 million (EUR -2.5 million*), -35.0% of turnover (-19.7%).
Earnings per share: EUR -0.01 (EUR -0.00).
Earnings per share (diluted): EUR -0.00 (EUR -0.00).
Number of employees at the end of the review period: 126 (138), decrease of -9%.

*) EBIT, EBITDA and net income of the period were impacted by a booked gain of EUR 0.6 million from the FutureLab Share transaction.

CEO’s review

The third quarter of 2024 has been one step towards a profitable business for Digitalist Group. While no major events impacted this quarter, we are seeing slowly improving market conditions in Sweden. However, the weak Finnish economy continues to affect our business operations in the region.

Our revenues for the quarter remained consistent with the same period last year, totaling EUR 3.6 million. EBITDA for the third quarter of 2024 was EUR -0.2 million, compared to EUR 0.4 million in the same period last year, which included a EUR 0.6 million gain from the FutureLab Share transaction. This underscores the need for ongoing efforts in operational efficiency and cost management.

A significant highlight of the quarter was the launch of our first AI offering, Digitalist Private AI Hub, in September. This platform enables companies to leverage the strengths of generative AI without compromising on data security and GDPR compliance. We believe this innovative solution positions us well to meet the growing demand for secure AI applications in the enterprise as well as in the public sector. The new offering has already brought us clients like Sandå and Pinmeto. Other new clients acquired during the third quarter are DNA, City of Tampere and Pricer.

Looking ahead, I remain cautiously optimistic. The improving market conditions in Sweden provide a foundation for growth, and we are committed to addressing the challenges in Finland through ongoing initiatives and continued focus on efficiency.

I extend my sincere gratitude to all our employees for their dedication and hard work. Together, we are advancing towards a stronger future for Digitalist Group.

/CEO Magnus Leijonborg

FUTURE PROSPECTS

In 2024, turnover and EBITDA are expected to decrease in comparison with 2023.

EVENTS AFTER THE THIRD QUARTER

Digitalist Group Plc decreases its earlier guidance regarding future prospects 17.10.2024

Digitalist Group Plc (”Company”) decreases its earlier guidance regarding future prospects. The new guidance is:

In 2024, turnover and EBITDA are expected to decrease in comparison with 2023.

The previous guidance of the company was:

In 2024, it is expected that turnover will maintain its current level and EBITDA will improve in comparison with 2023.

Although the third quarter shows an improvement compared to the first quarters of the year, and we are cautiously optimistic regarding the fourth quarter, we do not expect to reach last year’s reported EBITDA, which included other operating income of EUR 1.0 million. Operationally, not including the impact of other operating income, we expect that the current financial year will still be stronger than the previous year.

The stock exchange releases are on the company’s website at https://digitalist.global/investors/releases

Despite the implemented efficiency measures and financial arrangements, the cash flow for the next 12 months is likely to be negative, according to the forecast. However, at the time of publishing the business review, the company estimates that its working capital is sufficient for the needs of the next 12 months, taking into account the financing support provided by the main owner if needed.

DIGITALIST GROUP OYJ
Board of Directors

Additional information:
Digitalist Group Plc
CEO Magnus Leijonborg, tel. +46 76 315 8422, magnus.leijonborg@digitalistgroup.com
Chairman of the Board Esa Matikainen, tel. +358 40 506 0080, esa.matikainen@digitalistgroup.com

Distribution:
Nasdaq Helsinki Ltd
Major media
https://digitalist.global

Attachment

ENG Digitalist Group Business Review Q3 2024

The MIL Network –

January 25, 2025

MIL-OSI Asia-Pac: Task Force on Promoting the Development of Asset and Wealth Management holds first meeting (with photo)

Source: Hong Kong Government special administrative region

The Task Force on Promoting the Development of Asset and Wealth Management, chaired by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, was established and convened its first meeting today (October 25).

Hong Kong is an international asset and wealth management (WAM) centre. To drive market development, the Financial Secretary has announced in the 2024-25 Budget the establishment of the Task Force to discuss with the industry measures for further developing the WAM industry. The Task Force comprises nine non-official members from the WAM industry, government officials, and representatives of financial regulators and relevant bodies.

The Chief Executive’s 2024 Policy Address has set out the need to further enhance Hong Kong’s status as an international WAM centre. In this respect, the Government will consult the industry on the proposal to add qualifying transactions eligible for tax concessions for funds, single-family offices, etc. At its first meeting, the Task Force had a focused discussion on the proposed enhancements.

Mr Hui said, “As an international WAM centre, Hong Kong has long been a hub for global capital and family offices. As of end-2023, assets under management in Hong Kong reached over HK$31 trillion, and net fund inflows of close to HK$390 billion were registered, representing a year-on-year increase of over 3.4 times. Funding sourced from non-Hong Kong investors has consistently accounted for a high percentage, reflecting the confidence of international investors in Hong Kong’s WAM industry. Also, market research estimates that Hong Kong is home to about 2 700 single-family offices, with over half of them set up by ultra-high-net-worth-individuals with a wealth of US$50 million or above.

“In view of the development trends in global finance, Hong Kong will continue to consolidate and enhance its competitive advantages and pursue continuous reforms. The Task Force brings together industry leaders and professionals, and I believe their valuable advice will help propel the long-term development of the WAM industry.”

The membership of the Task Force is as follows, with the term of non-official members taking effect from October 25, 2024, for two years:

Chairman
———–
Secretary for Financial Services and the Treasury

Non-official members
————————
Mr Kent Chen
Mr Jiang Jingjing
Ms Lian Shaodong
Ms Luanne Lim
Ms Amy Lo
Ms Elisa Ng
Mr Murray Steel
Mr Peter Stein
Mr Sun Yu

Official members
——————-
Permanent Secretary for Financial Services and the Treasury (Financial Services)
Commissioner of Inland Revenue
Deputy Chief Executive, Hong Kong Monetary Authority
Executive Director (Investment Products), Securities and Futures Commission
Executive Director (Policy), Mandatory Provident Fund Schemes Authority
Head of Equities Product Development, Hong Kong Exchanges and Clearing Limited
Executive Director, Financial Services Development Council

MIL OSI Asia Pacific News –

January 25, 2025

MIL-OSI United Kingdom: What Derby City Council would like to see in the Government’s Autumn budget statement

Source: City of Derby

Following weeks of speculation, the Government will outline their actual spending plans for the first time next week in the Autumn budget statement. Councils across the country, including Derby City Council, will be watching with interest to see what, if any, action will be taken to address the severe financial challenges faced by local government sector.

In Derby, the Council’s current budget is its most challenging yet, with the Council reporting a predicted £9.6 million overspend on its revenue budget – which funds most of its services outside housing, education, and capital projects – at the end of the first quarter of 2024/25.

Demand and costs have continued to rise at a much higher rate than forecast, mainly for services affecting the city’s most vulnerable citizens such as social care and homelessness. This is not unique to Derby and is affecting councils across the country. The Council has been lobbying the Government for changes to the way it is funded, together with local government colleagues nationally.

Derby City Council’s Quarter 2 financial update will be presented to Cabinet in November, but over the medium term the Council faces the challenge of closing a significant budget gap which was estimated to be £13.9 million for 2025/26 before any of the new pressures on services emerged this year. The Council’s Medium Term Financial Strategy, which is also being considered by Council Cabinet in November, will provide further details on this position.

As a result, the Council is already in the process of planning a balanced budget for 2025/26, which is a legal requirement, ready to present it to Councillors in December before it goes out to consultation. Although the Council won’t know for certain how much money it will receive from the Government until around the same time, it is hoped the Autumn statement on 30 October will provide some additional financial support.

In simple terms, the Government currently funds Councils through one-year grant settlements, supplemented by additional grants which can only be used for specific purposes. Shortfalls therefore have to be met from Council Tax and Business Rates, and as Government funding has significantly declined the Council has become more reliant on these local taxes.

While the new Government has indicated that it will move towards multi-year settlements that make it easier to plan for the mid-term, it is not known when this will happen.

Councillor Kathy Kozlowski, Cabinet Member for Governance and Finance, said:

We have to be realistic. We are not expecting the Government to announce multi-year grant funding settlements next week. However there are some small changes they could announce which we’ve lobbied for, and would be ‘quick wins’ for local government. They would certainly make a difference to us in Derby.

A shortage of affordable accommodation means that homeless families are having to stay in temporary accommodation for longer. The amount of Housing Benefit we can claim back from the Government for this is capped, and if this cap was lifted we would be £4 million better off. A review of the right to buy legislation would allow Councils to maintain their levels of social housing.

Costs in the social care market are spiralling, and introducing caps on fees that Councils pay for care would help ease the pressure on social care.

A commitment to the much-awaited funding reforms for local government would also see a redistribution of funding to those areas that need it the most. Continuation of a lot of temporary funding, including funding that supports social care services and support to struggling families through the Household Support Fund, would mean that we could continue to support our most vulnerable residents.

We would welcome any additional funding that the new Government can provide, however we are aware that there is no easy solution to the financial challenges that lie ahead, especially when we have no control over rising costs and demand. Any new burdens on local government need to be adequately funded.

Let me be clear, we will have to make some very difficult decisions over the next few months if we are to fulfil our legal obligation of setting a balanced budget. Many councils have already had to make a Section 114 declaration or ask for additional Government support. This is not a route we want to take, as it would limit what we could do for Derby, but we accept that we may have to do less but in a safe and managed way.

It is usually councils that are left to pick up the pieces when people find themselves in crisis. Yet demand continues to rise and we don’t have the funds to meet it. However we are acutely aware that we are not the only public service lobbying for more help.

MIL OSI United Kingdom –

January 25, 2025

MIL-OSI Asia-Pac: Mid-term progress of Ministry of Information and Broadcasting under Special Campaign 4.0 for institutionalizing Swachhata and reducing pendency in government

Source: Government of India

Mid-term progress of Ministry of Information and Broadcasting under Special Campaign 4.0 for institutionalizing Swachhata and reducing pendency in government

Commitment to Good Governance: Ministry enhances workplace efficiency and environmental responsibility through Special Campaign 4.0

407 outdoor campaigns conducted, 8,000 Kg of scrap disposed of and ₹21.65 lakhs in revenue generated under the campaign

Posted On: 25 OCT 2024 2:18PM by PIB Delhi

Implementation of Special Campaign 4.0 is in full swing in Ministry of Information & Broadcasting along with its subordinate/ attached offices across the nation. Significant progress has been achieved so far in enhancing cleanliness, reducing pending matters, and boosting overall efficiency.

Pendency reduction and swachhata awareness

In the preparatory phase of the Campaign, this Ministry of Information & Broadcasting identified various targets for reducing pendency such as VIP references, public grievances, weeding out of physical as well as electronic files, conducting outdoor campaigns to raise awareness about Swachhata.

During the implementation phase Ministry along with its subordinate/ attached offices has undertaken comprehensive cleanliness drive across the country. Dedicated efforts have been made to achieve these targets.

Ministry’s cleanup drive achieves milestones

Till date, the Ministry has conducted 407 outdoor campaigns, around 8000 Kg scraps have been disposed of, reviewed more than 22000 physical files and 10800 have been weeded out. A total of 303 e-files have been reviewed and 68 were closed. Revenue of Rs 21,65,031 has been generated out of the disposal of scraps. A total of 97 Public grievances, 6 PG Appeals, 27 VIP References also have been disposed of. 8104 saplings have been planted under “Ek Ped Maa Ke Naam” Campaign so far.

Ministry enhances workplace efficiency and environmental responsibility

Ministry of Information & Broadcasting will continue to focus on achieving the targets of Special Campaign 4.0, enhancing workplace productivity, and commitment to a cleaner workplace and a more efficient workforce. Officers from Ministry have been deputed to different field offices to oversee the various actions under Special Campaign and plantation under “Ek Ped Maa Ke Naam.”

The following picture glimpse highlights the remarkable developments of the Special Campaign 4.0 initiated by the Ministry of Information & Broadcasting.

Picture: Reviewing/Weeding out of Physical Files At Record Room, Shastri Bhawan After Reviewing more than 15000 files in the record room, 5571 physical files identified and have been weeded out.

********

Dharmendra Tewari/Kshitij Singha

(Release ID: 2068052) Visitor Counter : 56

MIL OSI Asia Pacific News –

January 25, 2025

MIL-OSI Asia-Pac: PRESS RELEASE – VISIT OF THE UNITED NATIONS SECRETARY-GENERAL, H.E ANTONIO GUTERRES, 21-23 AUGUST 2024

Source: Government of Western Samoa

MIL-OSI USA: RELEASE: DCCA DISCIPLINARY ACTIONS (Through September 2024)

Source: US State of Hawaii

RELEASE: DCCA DISCIPLINARY ACTIONS (Through September 2024)

Posted on Oct 24, 2024 in Latest Department News, Newsroom

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

KA ʻOIHANA PILI KĀLEPA

Office of Administrative Hearings

JOSH GREEN, M.D.

GOVERNOR | KIAʻĀINA

NADINE Y. ANDO

DIRECTOR

KA LUNA | HOʻOKELE

FOR IMMEDIATE RELEASE

October 24, 2024

DCCA DISCIPLINARY ACTIONS

(Through September 2024)

HONOLULU – The state Department of Commerce and Consumer Affairs (DCCA) and its respective state Boards and Commissions released a summary of disciplinary actions through the month of September 2024, taken on individuals and entities with professional and vocational licenses in Hawai‘i. These disciplinary actions include dispositions based upon either the results of contested case hearings or settlement agreements submitted by the parties. Respondents enter into settlement agreements as a compromise to claims and to conserve on the expenses of proceeding with an administrative hearing.

The DCCA and the Boards and Commissions are responsible for ensuring those with professional and vocational licenses are performing up to the standards prescribed by state law.

BOARD OF NURSING

Respondent: Kimberly A. Simmons (Maui)

Case Number: RNS 2022-890-L

Sanction: $1,000 fine

Effective Date: 9-5-24

RICO alleges that in July 2022, RICO received a complaint concerning Respondent’s conduct, and that Respondent received notice of RICO’s investigation in 2022 and failed to notify the Board of the ongoing RICO investigation in her 2023 renewal application, in potential violation of HRS §§ 436B-19(9), 457-12(a)(6) and 457-12(a)(11). (Board approved Settlement Agreement.)

BOARD OF PSYCHOLOGY

Respondent: Kathryn L. Lapierre

Case Number: PHA 2024-0001-L

Sanction: $1,500 fine

Effective Date: 8-30-24

RICO alleges that Respondent was served with a complaint by the state of Wisconsin Department of Safety and Professional Services, Division of Legal Services and Compliance on September 25, 2019, Respondent indicated “No” to the question “Are there any disciplinary actions pending against you in this state or any other jurisdiction” on her July 22, 2020 renewal application, the state of Wisconsin disciplined Respondent on September 16, 2020, and Respondent failed to timely notify the Board of the disciplinary action, in potential violation of HRS §§ 465-13(a)(19), 436B-19(5), 436B-19(13), 436B-19(15) and 436B-19(17). (Board approved Settlement Agreement.)

BOARD OF PHYSICAL THERAPY

Respondent: Laura J. Romig

Case Number: PTS 2023-3-L

Sanction: 6-month license suspension, complete 30 CC units

Effective Date: 9-10-24

The Board adopted the Hearings Officer’s recommended decision and found and concluded that Respondent violated HRS §§ 461J-10.1(a), 461J-10.15(a), 461J-10.15(b), 461J-10.15(c) and 461J-12(a)(7). (Board’s Final Order after contested case hearing.)

Respondent: Joy T. D. Yanai

Case Number: PTS 2023-6-L

Sanction: $500

Effective Date: 9-10-24

The Board adopted the Hearings Officer’s recommended decision and found and concluded that Respondent violated HRS § 436B-19(11). (Board’s Final Order after contested case hearing.)

BOARD OF MASSAGE THERAPY

Respondents: Thananya Owens and Healthland, LLC dba Siam Thai Massage and Spa

Case Number: MAS 2024-55-L

Sanction: $1,000 fine

Effective Date: 9-17-24

RICO alleges that on May 24, 2024, RICO investigators conducted an unannounced site inspection and Respondents admitted that an unlicensed massage therapist was currently engaging in massage therapist activity for compensation, and that RICO investigators observed Respondents did not conspicuously display their current massage therapists’ and establishment’s licenses, in potential violation of HRS §§ 452-24(a)(1), 452-24(a)(4), 452-24(a)(6), and HAR §§ 16-84-15(c) and 16-84-15(f). (Board approved Settlement Agreement.)

Respondents: Mareena Trinnaman and Saitara Thai Massage, LLC

Case Number: MAS 2024-15-L

Sanction: $2,000 fine

Effective Date: 9-17-24

RICO alleges that on February 22, 2024, RICO investigators conducted a site inspection and observed that several unlicensed massage therapists were engaging in massage therapy activities, in potential violation of HRS §§ 452-24(a)(1) and 452-24(a)(6), and HAR § 16-84-11(b). (Board approved Settlement Agreement.)

BOARD OF CHIROPRACTIC

Respondent: Dustin R. Craft

Case Number: CHI 2020-0020-L

Sanction: License revocation

Effective Date: 9-11-24

On March 11, 2024, the Board approved a Settlement Agreement between Respondent and RICO. The Board finds Respondent failed to comply with the terms of the Settlement Agreement. (Board’s Final Order for Noncompliance with Settlement Agreement.)

BEHAVIOR ANALYST PROGRAM

Respondent: Kevin Abella (Hawaiʻi)

Case Number: BEH 2024-3-L

Sanction: $500 fine

Effective Date: 9-26-24

RICO alleges that the Disciplinary Appeal Committee of the Behavior Analyst Certification Board (BACB) disciplined Respondent on January 22, 2024, finding Respondent violated subsections 1.02, 1.15, 4.01, 4.04, and 4.05, in potential violation of HRS § 465D-11(a)(7). (Director approved Settlement Agreement.)

ATHLETIC TRAINERS PROGRAM

Respondent: Sadie Sewell

Case Number: APT 2023-1-L

Sanction: $500 fine

Effective Date: 9-24-24

RICO alleges that Respondent was disciplined by the Board of Certification on April 12, 2023, based on Respondent’s failure to comply with a continuing education audit, and that Respondent failed to report the disciplinary action to the program, in potential violation of HRS §§ 436B-19(9), 436B-19(15), and 436H-8(a). (Director approved Settlement Agreement.)

BOARD OF PROFESSIONAL ENGINEERS, ARCHITECTS, SURVEYORS, AND LANDSCAPE ARCHITECTS

Respondent: William W. Wong

Case Number: ENG 2022-10-L

Sanction: License revocation, $6,000 fine

Effective Date: 8-08-24

The Board adopted the Hearings Officer’s recommended decision as modified by stipulation of the parties and found and concluded that Respondent violated HRS §§ 436B-19(8), (11), and (14), and 464-10, and HAR 16-115-10(5). (Board’s Final Order after contested case hearing.)

REAL ESTATE COMMISSION

Respondent: Jon E. McElvaney (Hawaiʻi)

Case Number: REC 2022-273-L

Sanction: License revocation, voluntary lifetime surrender of license

Effective Date: 9-27-24

RICO filed a Petition for Disciplinary Action on May 6, 2024, alleging Respondent violated HRS §§ 436B-19(12) and 436B-19(14). (Commission approved Settlement Agreement After Filing of Petition for Disciplinary Action.)

Respondent: Hawaiiana Management Company, Ltd.

Case Number: REC 2024-184-L

Sanction: $1,500 fine

Effective Date: 9-27-24

RICO alleges that RICO received a complaint alleging a unit owner emailed Respondent a written Request for Condominium Association Records on March 4, 2024, that fulfillment of the request took longer than 30 days without a proper response by Respondent for the delay, and that Respondent did not provide an estimated cost or necessary affidavit until after 30 days from the request, in potential violation of HRS §§ 514B-154.5(c) and 467-1.6(a). (Commission approved Settlement Agreement.)

Copies of the decisions are available online at: http://cca.hawaii.gov/oah/oah_decisions/

BusinessCheck is an online platform designed to serve as a comprehensive resource for researching licensed professionals. This tool empowers users to verify licenses, review complaint histories and discover when a business was established, all in one place. Please visit businesscheck.hawaii.gov to verify a professional’s license status, confirming their qualifications, compliance with regulations and accountability to a governing body.

# # #

Media Contact:

William Nhieu

Communications Officer

Department of Commerce and Consumer Affairs

[email protected]

Office: 808-586-7582

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: NEWS RELEASE: PRIORITIZE CYBER PROTECTION THIS OCTOBER DURING CYBERSECURITY AWARENESS MONTH

Source: US State of Hawaii

NEWS RELEASE: PRIORITIZE CYBER PROTECTION THIS OCTOBER DURING CYBERSECURITY AWARENESS MONTH

Posted on Oct 24, 2024 in Latest Department News, Newsroom

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
KA ʻOIHANA PILI KĀLEPA

JOSH GREEN, M.D.
GOVERNOR | KIAʻĀINA

NADINE Y. ANDO
DIRECTOR
KA LUNA | HOʻOKELE

FOR IMMEDIATE RELEASE

October 24, 2024

PRIORITIZE CYBER PROTECTION THIS OCTOBER DURING CYBERSECURITY AWARENESS MONTH

HONOLULU – Cybersecurity Awareness Month, established nearly two decades ago by the President of the United States and U.S. Congress, serves as a vital reminder for public and private sectors to collaborate in promoting cybersecurity awareness. The state of Hawai‘i Department of Commerce and Consumer Affairs (DCCA) is proud to join this initiative by providing resources and tools to help small businesses secure their financial futures, as well as safeguard the security of Hawai‘i’s consumers.

As reliance on digital communication grows and businesses begin to maintain more detailed pieces of information of their customers, so do the risks associated with storing critical consumer financial and health information electronically. High-profile data breaches have demonstrated that the potential for cybercriminals to disrupt businesses and compromise public safety is alarmingly high. In response, state and federal regulators are intensifying efforts to bolster defenses against these attacks.

These threats can originate from a variety of sources, including nation-states, cybercriminals, even company insiders—both intentional and accidental. Cybercriminals aim to gain political, military, or economic advantages by stealing valuable data, such as credit card numbers, health records, personal identification information, as well as tax returns.

Cyber risks often include identity theft, data breaches, malware, business interruption as a result of a network shutdown, theft of valuable digital assets and business trade secrets, damage to the company’s reputation, lawsuits, and costs associated with damage from cyber-attacks.

To help enhance cybersecurity and protect from intrusion, businesses, individuals, and entities are recommended to:

Conduct a security and risk assessment. Identify what needs protection, evaluate existing safeguards and pinpoint any gaps. Additionally, develop a comprehensive protection plan for your data, operational information and client data.
Update your security software. Install the latest security software, web browser and operating system to defend against viruses and malware. Additionally, set your security software to scan after every update.
Implement firewall protection on all internet networks. Utilize firewalls, a set of related programs that prevent outsiders from accessing data on a private network, to safeguard your network and operating systems. Remote employees should also ensure that their home systems are secured.
Implement cybersecurity procedures and training for employees. Educate staff on cybersecurity best practices, including safe social media usage, recognizing phishing attempts and the dangers of public Wi-Fi. Additionally, limit employee access, as needed, to websites, sensitive data and software installation.
Consider cybersecurity insurance. If your business has a disaster recovery plan, consider integrating cybersecurity as a part of it. Additionally, testing your systems, such as through internal phishing campaigns, can help identify the company’s vulnerabilities.
Back up important business data regularly. Ensure critical business data, including financial and human resources files, is backed up consistently. This may include but is not limited to word processing documents, electronic spreadsheets, databases, and accounts receivable/payable files. Implement measures such as regular password changes and two-factor authentication.

The internet offers unprecedented opportunities to connect with new and larger markets and enhance operational efficiency. Regardless of whether one is adopting cloud computing or simply using email, cybersecurity should always remain at the forefront.

For more resources on internet safety and security, visit https://cca.hawaii.gov/broadband/for-consumers/internet-safety-and-security/.

# # #

Media Contact:

William Nhieu

Communications Officer

Department of Commerce and Consumer Affairs

[email protected]

Office: 808-586-7582

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: NEWS RELEASE: REAL ESTATE COMMISSION TO HOST MEETINGS AND CONSULTATIONS IN HILO

Source: US State of Hawaii

NEWS RELEASE: REAL ESTATE COMMISSION TO HOST MEETINGS AND CONSULTATIONS IN HILO

Posted on Oct 24, 2024 in Latest Department News, Newsroom

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
KA ʻOIHANA PILI KĀLEPA

PROFESSIONAL AND VOCATIONAL LICENSING DIVISION

JOSH GREEN, M.D.
GOVERNOR | KE KIAʻĀINA

NADINE Y. ANDO
DIRECTOR | KA LUNA HOʻOKELE

AHLANI K. QUIOGUE
LICENSING ADMINISTRATOR

FOR IMMEDIATE RELEASE

October 23, 2024

REAL ESTATE COMMISSION TO HOST MEETINGS AND CONSULTATIONS IN HILO

HONOLULU – The Real Estate Commission will convene its monthly meeting at 9:30 a.m. Friday, October 25, 2024 in the State Office Building at 75 Aupuni Street in Hilo. The meeting will be in Conference Room C on the first floor.

Real estate licensees, government officials, members of the condominium community, educators and interested individuals and organizations are encouraged to participate in this meeting. Members of the Real Estate Commission and the commission’s staff will be present. The commission invites comments and recommendations on current and future programs.

Concurrently, a real estate specialist and a condominium specialist will be available for individual meetings after the commission meeting or by appointment.

A real estate specialist will be available to answer questions about licensing laws and rules, licensing applications, broker experience certificate applications, examination administration, continuing education, new legislation, real estate commission procedures, educational programs and other related topics.

A condominium specialist will be available to answer questions about boards, associations, meetings, condominium managing agents, condominium association registration, fidelity bonding, condominium property regime statute, public reports, project registration, new legislation, reserves and other condominium-related topics.

For more information, contact the Real Estate Branch at 808-586-2643 or call toll-free from the island of Hawai‘i at 808-974-4000, ext. 62643.

# # #

The Real Estate Commission is one of 52 boards, commissions and programs administratively attached to the Department of Commerce and Consumer Affairs’ Professional and Vocational Licensing Division. It is responsible for the licensure, education and discipline of real estate agents; registration of prelicense schools, continuing education providers, condominium projects, condominium associations, condominium managing agents and condominium hotel operators; and certification of prelicense and continuing education courses and prelicense instructors.

Media Contact:

William Nhieu

Communications Officer

Department of Commerce and Consumer Affairs

[email protected]

Office: 808-586-7582

MIL OSI USA News –

January 25, 2025

MIL-OSI: Lakeland Financial Reports Third Quarter Net Income of $23.3 Million, Organic Loan Growth of 5% and Organic Deposit Growth of 4%

Source: GlobeNewswire (MIL-OSI)

WARSAW, Ind., Oct. 25, 2024 (GLOBE NEWSWIRE) — Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $23.3 million for the three months ended September 30, 2024, which represents a decrease of $1.9 million, or 8%, compared with net income of $25.3 million for the three months ended September 30, 2023. Diluted earnings per share were $0.91 for the third quarter of 2024 and decreased $0.07, or 7%, compared to $0.98 for the third quarter of 2023. On a linked quarter basis, net income increased $789,000, or 3%, from second quarter 2024 net income of $22.5 million. Diluted earnings per share increased $0.04, or 5%, from $0.87 on a linked quarter basis.

Pretax pre-provision earnings, which is a non-GAAP measure, were $30.8 million for the three months ended September 30, 2024, an increase of $666,000, or 2%, compared to $30.1 million for the three months ended September 30, 2023. On a linked quarter basis, pretax pre-provision earnings decreased $4.6 million, or 13%, compared to $35.4 million for the second quarter of 2024.

The company further reported net income of $69.3 million for the nine months ended September 30, 2024, versus $64.1 million for the comparable period of 2023, an increase of $5.1 million, or 8%. Diluted earnings per share also increased 8% to $2.69 for the nine months ended September 30, 2024, versus $2.49 for the comparable period of 2023. Pretax pre-provision earnings were $95.5 million for the nine months ended September 30, 2024, an increase of $15.7 million, or 20%, compared to $79.8 million for the nine months ended September 30, 2023.

“Our long-term track record of serving our clients and communities through organic loan and deposit growth continued during the third quarter of 2024 and we are pleased with our performance for the quarter,” commented David M. Findlay, Chairman and Chief Executive Officer. “We continue to be encouraged by the strength of economic activity in our Indiana markets and are really well positioned to take advantage of the ongoing growth and investment we are seeing throughout our footprint.”

Quarterly Financial Performance

Third Quarter 2024 versus Third Quarter 2023 highlights:

Tangible book value per share grew by $5.47, or 25%, to $27.07
Total risk-based capital ratio of 15.75%, compared to 15.13%
Tangible capital ratio improved to 10.47%, compared to 8.62%
Average loans grew by $214.6 million, or 4%, to $5.06 billion
Core deposit growth of $261.2 million, or 5%
Return on average equity of 13.85%, compared to 16.91%
Return on average assets of 1.39%, compared to 1.54%
Net interest margin of 3.16% versus 3.21%
Noninterest income growth of $1.1 million, or 10%
Revenue improved by 3% to $61.2 million
Noninterest expense increased by $1.3 million, or 4%
Provision expense of $3.1 million, compared to $400,000
Net charge offs of $143,000 versus $353,000
Watch list loans as a percentage of total loans increased to 5.27% from 3.83%

Third Quarter 2024 versus Second Quarter 2024 highlights:

Tangible book value per share grew by $1.73, or 7%
Total risk-based capital ratio improved to 15.75% from 15.53%
Tangible capital ratio of 10.47%, compared to 9.91%
Core deposits increased by $138.3 million, or 2%
Average loans grew by $29.5 million, or 1%, to $5.06 billion
Net interest margin of 3.16% versus 3.17%
Return on average equity of 13.85%, compared to 14.19%
Return on average assets of 1.39%, compared to 1.37%
Noninterest income decreased by $8.5 million, or 42%
Noninterest expense decreased by $2.9 million, or 9%
Provision expense of $3.1 million compared to $8.5 million
Watch list loans as a percentage of total loans improved to 5.27% from 5.31%

Capital Strength

The company’s total capital as a percentage of risk-weighted assets improved to 15.75% at September 30, 2024, compared to 15.13% at September 30, 2023 and 15.53% at June 30, 2024. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as “well capitalized” and reflect a strengthening of the company’s strong capital base.

The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.47% at September 30, 2024, compared to 8.62% at September 30, 2023 and 9.91% at June 30, 2024. Unrealized losses from available-for-sale investment securities improved to $154.5 million at September 30, 2024, compared to $266.4 million at September 30, 2023 and $194.9 million at June 30, 2024. When excluding the impact of accumulated other comprehensive income (loss) on tangible common equity and tangible assets, the company’s ratio of adjusted tangible common equity to adjusted tangible assets, a non-GAAP financial measure, improved to 12.29% at September 30, 2024, compared to 11.74% at September 30, 2023 and 12.18% at June 30, 2024.

Kristin L. Pruitt, President, commented, “Our capital structure is a critical strength of our balance sheet, as it has been for a very long time. This exceptionally strong capital retention supports our plans for continued organic growth as well as total return to shareholders through our common stock dividend.”

As announced on October 8, 2024, the board of directors approved a cash dividend for the third quarter of $0.48 per share, payable on November 5, 2024, to shareholders of record as of October 25, 2024. The third quarter dividend per share represents a 4% increase from the $0.46 dividend per share paid for the third quarter of 2023.

Loan Portfolio

Average total loans of $5.06 billion in the third quarter of 2024, increased $214.6 million, or 4%, from $4.85 billion for the third quarter of 2023, and increased $29.5 million, or 1%, from $5.03 billion for the second quarter of 2024.

Average total loans for the nine months ended September 30, 2024 were $5.02 billion, an increase of $232.1 million, or 5%, from $4.79 billion for the nine months ended September 30, 2023.

“Loan growth has been steady in 2024 and has been funded through healthy deposit growth. We are seeing increased activity with our manufacturing clients as we experienced $91 million, or 6%, of commercial and industrial loan growth as compared to September 30, 2023. In addition, commercial real estate loan balances increased as our relationships with in-market long-term clients expanded with projects moving forward supported by good demand and high-quality developments. As a result, commercial real estate and multi-family loans grew $128 million, or 5% year over year,” noted Findlay. “Our retail and consumer lending teams have also experienced healthy growth of $54 million or 9% in the last year. Our highly diverse loan portfolio growth continues, and it is gratifying to see both commercial and consumer lending positively impacting our balance sheet growth.”

Total loans, net of deferred loan fees, increased by $211.0 million, or 4%, from $4.87 billion as of September 30, 2023 to $5.08 billion as of September 30, 2024. The increase in loans occurred across much of the portfolio with our commercial real estate and multi-family residential loan portfolio growing by $127.4 million, or 5%, our commercial and industrial loan portfolio growing by $90.7 million, or 6%, and our consumer 1-4 family mortgage loans portfolio growing by $36.3 million, or 8%. These increases were offset by a decrease to total agribusiness and agricultural loans of $22.1 million, or 6%, and a decrease to other commercial loans of $31.6 million, or 25%. On a linked quarter basis, total loans net of deferred loan fees increased by $29.6 million, or 1%, from $5.05 billion at June 30, 2024. The linked quarter increase was primarily a result of growth in construction and land development loans of $70.9 million, or 11%, and growth in total consumer loans of $21.7 million, or 4%. Offsetting this growth were declines in total commercial and industrial loans of $33.4 million, or 2%, and in owner occupied loans of $19.6 million, or 2%.

Commercial loan originations for the third quarter included approximately $316.0 million in loan originations, offset by approximately $308.0 million in commercial loan pay downs. Line of credit usage increased to 41% as of September 30, 2024, compared to 39% at September 30, 2023 and was unchanged from 41% as of June 30, 2024. Total available lines of credit contracted by $69.0 million, or 1%, as compared to a year ago, and line usage increased by $96.0 million, or 5%, over that period. The company has limited exposure to commercial office space borrowers, all of which are in the bank’s Indiana markets. Loans totaling $102.6 million for this sector represented 2% of total loans at September 30, 2024, an increase of $1.4 million, or 1%, from June 30, 2024. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 210% of total risk-based capital at September 30, 2024.

Diversified Deposit Base

The bank’s diversified deposit base has grown on a year over year basis and on a linked quarter basis.


DEPOSIT DETAIL (unaudited, in thousands)

	September 30, 2024				June 30, 2024				September 30, 2023
Retail	$	1,709,899	29.3	%	$	1,724,777	29.9	%	$	1,761,235	31.1	%
Commercial		2,304,041	39.5			2,150,127	37.3			2,154,853	38.1
Public funds		1,726,869	29.6			1,727,593	30.0			1,563,557	27.7
Core deposits		5,740,809	98.4			5,602,497	97.2			5,479,645	96.9
Brokered deposits		96,504	1.6			161,040	2.8			177,430	3.1
Total	$	5,837,313	100.0	%	$	5,763,537	100.0	%	$	5,657,075	100.0	%

Total deposits increased $180.2 million, or 3%, from $5.66 billion as of September 30, 2023 to $5.84 billion as of September 30, 2024. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $261.2 million, or 5%. Total core deposits at September 30, 2024 were $5.74 billion and represented 98% of total deposits, as compared to $5.48 billion and 97% of total deposits at September 30, 2023. Brokered deposits were $96.5 million, or 2% of total deposits, at September 30, 2024, compared to $177.4 million, or 3% of total deposits, at September 30, 2023.

The change in composition of core deposits since September 30, 2023 reflects growth in commercial deposits and public funds deposits. As of September 30, 2024, commercial deposits as a percentage of total deposits increased to 39%, from 38%, public fund deposits as a percentage of total deposits increased to 30%, from 28%, and retail deposits as a percentage of total deposits contracted to 29%, from 31%, compared to balances a year ago. Commercial deposits grew annually by $149.2 million, or 7%, to $2.30 billion. Public funds deposits grew annually by $163.3 million, or 10%, to $1.73 billion. Retail deposits contracted annually by $51.3 million, or 3%, to $1.71 billion. Growth in public funds was positively impacted by the addition of a new public funds customer in the Lake City Bank footprint which included the addition of its operating accounts. Net retail outflows since September 30, 2023, reflect the continued utilization of deposits from peak savings levels during 2021.

Findlay noted, “We are pleased with annual core deposit growth of 5% or $261 million in 2024. The deposit mix shift that began in early 2023 has stabilized with growth in noninterest bearing deposits during the third quarter of 2024. Our retail banking team has done a terrific job continuing to drive market share growth in our core Indiana markets and we are pleased with our market share performance in all of our Indiana markets. Core deposit gathering is a strategic focus, continues to improve and today represents 98% of total deposits, up from 97% a year ago.”

On a linked quarter basis, total deposits increased $73.8 million, or 1%, from $5.76 billion at June 30, 2024 to $5.84 billion at September 30, 2024. Core deposits increased by $138.3 million, or 2%, while brokered deposits decreased by $64.5 million, or 40%. Linked quarter growth in core deposits resulted from growth in commercial deposits of $153.9 million, or 7%. Offsetting the increase in commercial deposits was contraction in retail deposits of $14.9 million, or 1%, and contraction in public funds deposits of $724,000, or less than 1%.

Average total deposits were $5.88 billion for the third quarter of 2024, an increase of $307.7 million, or 6%, from $5.57 billion for the third quarter of 2023. Average interest-bearing deposits drove the increase to average total deposits and increased by $481.2 million, or 12%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $422.1 million, or 15%, and growth in average time deposits of $108.4 million, or 11%. Offsetting these increases was a decrease to average savings deposits of $49.4 million, or 15%. Average noninterest-bearing demand deposits decreased by $173.5 million, or 12%.

On a linked quarter basis, average total deposits increased by $60.2 million, or 1%, from $5.82 billion for the second quarter of 2024 to $5.88 billion for the third quarter of 2024. Average interest-bearing deposits drove the increase to total average deposits, which increased by $46.9 million, or 1%. Contributing to the overall growth of interest-bearing deposits was an increase to total average time deposits of $35.5 million, or 3%, and an increase to interest bearing checking accounts of $20.4 million, or 1%. Offsetting these increases was a decrease to average savings deposits of $8.9 million, or 3%. Average noninterest-bearing demand deposits increased by $13.3 million, or 1%.

Checking account trends compared to September 30, 2023, include growth of $181.7 million, or 14%, in aggregate public fund checking account balances and growth of $144.7 million, or 7%, in aggregate commercial checking account balances, and a contraction of $2.5 million, or less than 1%, in aggregate retail checking account balances. The number of accounts has also grown for all three segments, with growth of 14% for public funds accounts, 3% for commercial accounts and 2% for retail accounts.

Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 61% as of September 30, 2024, compared to 54% at both June 30, 2024 and September 30, 2023, reflecting the growth in public fund deposits over the period. Deposits not covered by FDIC deposit insurance or the Indiana Public Deposit Insurance Fund (which insures public funds deposits in Indiana), were 32% of total deposits as of September 30, 2024, compared to 29% at June 30, 2024, and 28% as of September 30, 2023. As of September 30, 2024, 98% of deposit accounts had deposit balances less than $250,000.

Liquidity Overview

The bank has robust liquidity resources. These resources include secured borrowings available from the Federal Home Loan Bank and the Federal Reserve Bank Discount Window. In addition, the bank has unsecured borrowing capacity through long established relationships within the brokered deposits markets, Federal Funds lines from correspondent bank partners, and Insured Cash Sweep (ICS) one-way buy funds available from the Intrafi network. As of September 30, 2024, the company had access to an aggregate of $3.7 billion in liquidity from these sources, compared to $3.3 billion at both September 30, 2023 and June 30, 2024. Utilization from these sources totaled $96.5 million at September 30, 2024, compared to $267.4 million at September 30, 2023 and $161.0 million at June 30, 2024. Core deposits have historically represented, and currently represent, the primary funding resource of the bank at 98% of total deposits and purchased funds.

Investment Portfolio Overview

Total investment securities were $1.15 billion at September 30, 2024, reflecting an increase of $42.8 million, or 4%, as compared to $1.11 billion at September 30, 2023. On a linked quarter basis, investment securities increased $24.0 million, or 2%, due primarily to improvement in the fair market value of available-for-sale securities of $40.4 million and partially offset by portfolio cash flows of $15.1 million. Investment securities represented 17% of total assets on September 30, 2024, September 30, 2023 and June 30, 2024. The ratio of investment securities as a percentage of total assets remains elevated over historical levels of approximately 12% to 14%. The company expects the investment securities portfolio as a percentage of assets to continue to decrease over time as the proceeds from pay downs, sales and maturities are used to fund loan portfolio growth and for general liquidity purposes. Tax equivalent adjusted effective duration for the investment portfolio was 6.3 years at September 30, 2024, compared to 6.7 years and 6.5 years at September 30, 2023 and June 30, 2024, respectively. Tax equivalent adjusted effective duration of the investment portfolio remains elevated as compared to 4.0 years at December 31, 2019 prior to the deployment of excess liquidity to the investment portfolio and the increased rate environment. The company anticipates receiving principal and interest cash flows of approximately $26.4 million throughout the remainder of 2024 and $104.7 million during 2025 from its investment securities portfolio.

Net Interest Margin

Net interest margin was 3.16% for the third quarter of 2024, representing a 5 basis point decrease from 3.21% for the third quarter of 2023. Earning assets yields increased by 23 basis points to 6.04% for the third quarter of 2024 from 5.81% for the third quarter of 2023. The increase in earning asset yields was offset by an increase in the company’s funding costs of 28 basis points as interest expense as a percentage of average earning assets increased to 2.88% for the third quarter of 2024 from 2.60% for the third quarter of 2023. Increased industry competition for deposits has driven funding costs as a percentage of average earning assets to rise more aggressively than earning asset yields since the third quarter of 2023. Notably, the deposit mix shift from noninterest bearing deposits to interest bearing deposits encountered by the company during the recent monetary tightening cycle has stabilized with noninterest bearing deposits representing 22% of total deposits at September 30, 2024, compared to 24% at September 30, 2023 and 21% at June 30, 2024. In 2019, prior to the pandemic and the related stimulus plans, the ratio of noninterest bearing deposits to total deposits stood at 24% as of December 31, 2019.

Linked quarter net interest margin contracted by 1 basis point to 3.16% for the third quarter of 2024, compared to 3.17% for the second quarter of 2024. Average earning asset yields decreased by 3 basis points from 6.07% during the second quarter of 2024 to 6.04% during the third quarter of 2024 and were partially offset by a 2 basis point decrease in interest expense as a percentage of average earning assets from 2.90% to 2.88%.

“Net interest margin has stabilized and has responded well to the first federal fund rate decrease of 50 basis points late in the third quarter. The bank’s net interest margin expanded by 4 basis points on a linked quarter basis, excluding the impact of increased nonperforming loans. In addition, noninterest bearing deposits grew modestly during the quarter as compared to June 30, 2024. While our balance sheet continues to be assets sensitive, we are encouraged by the impact of the Federal Reserve Bank rate action,” commented Lisa M. O’Neill, Executive Vice President and Chief Financial Officer.

The cumulative loan beta, which measures the sensitivity of a bank’s average loan yield to changes in short-term interest rates, was 56% for the recent rate-tightening cycle, compared to 61% during the prior tightening cycle from 2016 through 2019. The cumulative deposit beta, which measures the sensitivity of a bank’s deposit cost to changes in short-term interest rates, was 54% for the recent rate-tightening cycle, compared to 45% during the prior tightening cycle.

Net interest income was $49.3 million for the third quarter of 2024, representing an increase of $880,000, or 2%, as compared to $48.4 million for the third quarter of 2023. On a linked quarter basis, net interest income increased $977,000, or 2%, from $48.3 million for the second quarter of 2024. Net interest income decreased by $3.5 million, or 2%, from $148.4 million for the nine months ended September 30, 2023, to $145.0 million for the nine months ended September 30, 2024.

Asset Quality

The company recorded a provision for credit losses of $3.1 million in the third quarter of 2024, an increase of $2.7 million, as compared to $400,000 in the third quarter of 2023. On a linked quarter basis, the provision expense decreased by $5.4 million, from $8.5 million for the second quarter of 2024. The elevated provision expense during the second quarter of 2024 was primarily attributable to an increase in the specific reserve allocation from the downgrade of a $43.3 million credit to an industrial company in Northern Indiana in conjunction with the relationship’s placement on nonperforming status. Additional specific reserves of $4.7 million were allocated to this credit during the third quarter of 2024.

The ratio of allowance for credit losses to total loans was 1.65% at September 30, 2024, up from 1.48% at September 30, 2023, and 1.60% at June 30, 2024. Net charge offs in the third quarter of 2024 were $143,000, compared to $353,000 in the third quarter of 2023 and $949,000 during the linked second quarter of 2024. Annualized net charge offs to average loans were 0.01% for the third quarter of 2024, compared to 0.03% for the third quarter of 2023 and 0.08% for the linked second quarter of 2024.

Nonperforming assets increased $41.3 million, or 247%, to $58.1 million as of September 30, 2024, versus $16.7 million as of September 30, 2023. On a linked quarter basis, nonperforming assets increased $427,000, or 1%, compared to $57.6 million as of June 30, 2024. The ratio of nonperforming assets to total assets at September 30, 2024 increased to 0.87% from 0.26% at September 30, 2023 and declined from 0.88% at June 30, 2024. The increase in nonperforming assets was primarily driven by the industrial borrower relationship referenced above.

Total individually analyzed and watch list loans increased by $81.2 million, or 44%, to $267.6 million as of September 30, 2024, versus $186.4 million as of September 30, 2023. On a linked quarter basis, total individually analyzed and watch list loans decreased by $687,000, or less than 1%, from $268.3 million at June 30, 2024. Watch list loans as a percentage of total loans increased by 144 basis points to 5.27% at September 30, 2024, compared to 3.83% at September 30, 2023, and decreased by 4 basis points from 5.31% at June 30, 2024. The increase in individually analyzed and watch list loans between September 30, 2024 and September 30, 2023 was primarily driven by downgrades to four commercial relationships individually greater than $10.0 million, net of paydowns, payoffs and upgrades to other relationships.

“Overall, we continue to observe stable economic conditions in our Lake City Bank footprint. The commencement of the Federal Reserve Bank easing cycle will provide some interest relief to variable rate borrowers, in particular for commercial real estate clients. We believe that loan demand could accelerate for our commercial and industrial sector if the Federal Reserve Bank takes additional easing actions,” stated Findlay.

Noninterest Income

The company’s noninterest income increased $1.1 million, or 10%, to $11.9 million for the third quarter of 2024, compared to $10.8 million for the third quarter of 2023. Wealth advisory fees increased $420,000, or 18%, driven by growth in customers and favorable market performance. Other income increased $429,000, or 72%, primarily from an improvement to income from the company’s limited partnership investments. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $11.9 million for the third quarter of 2024, an increase of $1.1 million, or 10%, compared to $10.8 million for the third quarter of 2023.

Noninterest income for the third quarter of 2024 decreased by $8.5 million, or 42%, on a linked quarter basis from $20.4 million during the second quarter of 2024. Second quarter noninterest income benefited from the net gain recognized on the exchange and partial redemption of the company’s Visa shares of $9.0 million. The company’s remaining Visa Class C shares were redeemed during the third quarter of 2024 for a net loss of $15,000. Offsetting this linked quarter decrease was an increase to other income of $333,000, or 48%, and an increase to bank owned life insurance income of $178,000, or 20%. Adjusted core noninterest income increased by $504,000, or 4%, compared to $11.4 million for the linked second quarter of 2024.

Noninterest income increased by $12.3 million, or 38%, to $45.0 million for the nine months ended September 30, 2024, compared to $32.7 million for the prior year nine-month period. The increase in noninterest income was driven primarily by the net gain on Visa shares of $9.0 million. Additionally, other income increased $2.0 million, or 105%, wealth advisory fees increased $1.0 million, or 15%, bank owned life insurance income increased $601,000, or 25%, and mortgage banking income increased $252,000. Other income increased primarily due to improved performance from limited partnership investment income and the receipt of a $1.0 million insurance recovery related to the 2023 wire fraud loss. Improved market performance of the company’s variable bank owned life insurance policies, which are tied to the performance of the equity markets, drove the increase to bank owned life insurance income. Mortgage banking income increased from pipeline expansion and a related positive impact to mortgage rate lock income. Offsetting these increases was a decrease to interest rate swap fee income of $794,000, or 100%, due to no new swap fee activity during the period. Adjusted core noninterest income for the nine months ended September 30, 2024 was $35.0 million, an increase of $2.3 million, or 7%, compared to $32.7 million for the nine months ended September 30, 2023.

“While not robust, we are pleased to report that revenue growth for the nine months ended September 30, 2024, was $8.9 million, or 5% as compared to the same period in 2023. Noninterest income, and in particular, wealth advisory fees are positively impacting the improvement in revenue,” stated Findlay. “It is rewarding to see this important part of the business growing and positively impacting revenue growth at the bank.”

Noninterest Expense

Noninterest expense increased $1.3 million, or 4%, to $30.4 million for the third quarter of 2024, compared to $29.1 million during the third quarter of 2023. Driving the third quarter 2024 increase to noninterest expense were increases to salaries and benefits expense of $499,000, or 3%, data processing fees and supplies expense of $389,000, or 12%, and corporate and business development expense of $168,000, or 14%, as compared to the third quarter of 2023. Adjusted core noninterest expense, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $30.4 million for the third quarter of 2024, an increase of $1.3 million, or 4%, compared to $29.1 million for the third quarter of 2023.

On a linked quarter basis, noninterest expense decreased by $2.9 million, or 9%, from $33.3 million during the second quarter of 2024. Other expense decreased by $3.6 million, or 58%, primarily due to the recognition of a $4.5 million legal accrual in the second quarter 2024. Offsetting the decrease to noninterest expense was an increase in salaries and employee benefits of $318,000, or 2%. Adjusted core noninterest expense increased by $1.6 million, or 6%, compared to $28.8 million for the linked second quarter of 2024.

Noninterest expense decreased by $6.8 million, or 7%, for the nine months ended September 30, 2024 to $94.4 million compared to $101.3 million for the nine months ended September 30, 2023. The $18.1 million wire fraud loss recorded during the second quarter of 2023 was the primary driver of the decrease between these periods. Offsetting this decrease were increases to salaries and employee benefits expense of $6.1 million, or 14%, other expense of $3.2 million, or 41%, data processing fees of $1.1 million, or 11%, and professional fees of $391,000, or 6%. The increase to salaries and benefits expense resulted primarily from increases to salaries and wages of $2.3 million, performance-based incentive compensation of $2.2 million, health insurance expense of $695,000 and variable deferred compensation related to the company’s variable bank owned life insurance of $536,000. The increase for data processing fees resulted from continued investment in customer-facing and operational technology solutions. Professional fees increased due to higher costs to implement technology solutions. Adjusted core noninterest expense was $89.9 million for the nine months ended September 30, 2024, an increase of $4.8 million, or 6%, from $85.1 million recorded during the comparable period of 2023.

The company’s efficiency ratio was 49.7% for the third quarter of 2024, compared to 49.1% for the third quarter of 2023 and 48.5% for the linked second quarter of 2024. The company’s adjusted core efficiency ratio, a non-GAAP measure that excludes the impact of certain non-routine operating events, was 49.7% for the third quarter of 2024, compared to 48.2% for the linked second quarter of 2024 and 49.1% for the third quarter of 2023.

The company’s efficiency ratio was 49.7% for the nine months ended September 30, 2024, compared to 55.9% for the comparable period in 2023. The company’s adjusted core efficiency ratio was 50.0% for the nine months ended September 30, 2024, compared to 47.0% for the comparable period in 2023.

Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under “LKFN.” Lake City Bank, a $6.6 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 54 branch offices and a robust digital banking platform. Lake City Bank’s community banking model prioritizes building in-market long-term customer relationships while delivering technology-forward solutions for retail and commercial clients.

This document contains, and future oral and written statements of the company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “continue,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. The company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Numerous factors could cause the company’s actual results to differ from those reflected in forward-looking statements, including the effects of economic, business and market conditions and changes, particularly in our Indiana market area, including prevailing interest rates and the rate of inflation; governmental monetary and fiscal policies; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities; and changes in borrowers’ credit risks and payment behaviors, as well as those identified in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q.


LAKELAND FINANCIAL CORPORATION THIRD QUARTER 2024 FINANCIAL HIGHLIGHTS

	Three Months Ended									Nine Months Ended
(Unaudited – Dollars in thousands, except per share data)	September 30,			June 30,			September 30,			September 30,			September 30,
END OF PERIOD BALANCES	2024			2024			2023			2024			2023
Assets	$	6,645,371		$	6,568,807		$	6,426,844		$	6,645,371		$	6,426,844
Investments		1,147,806			1,123,803			1,105,026			1,147,806			1,105,026
Loans		5,081,990			5,052,341			4,870,965			5,081,990			4,870,965
Allowance for Credit Losses		83,627			80,711			72,105			83,627			72,105
Deposits		5,837,313			5,763,537			5,657,075			5,837,313			5,657,075
Brokered Deposits		96,504			161,040			177,430			96,504			177,430
Core Deposits (1)		5,740,809			5,602,497			5,479,645			5,740,809			5,479,645
Total Equity		699,181			654,590			557,184			699,181			557,184
Goodwill Net of Deferred Tax Assets		3,803			3,803			3,803			3,803			3,803
Tangible Common Equity (2)		695,378			650,787			553,381			695,378			553,381
Adjusted Tangible Common Equity (2)		832,813			820,534			780,756			832,813			780,756
AVERAGE BALANCES
Total Assets	$	6,656,464		$	6,642,954		$	6,498,984		$	6,618,102		$	6,448,316
Earning Assets		6,329,287			6,295,281			6,145,894			6,280,677			6,103,538
Investments		1,128,705			1,118,776			1,171,426			1,135,304			1,210,540
Loans		5,064,348			5,034,851			4,849,758			5,023,556			4,791,431
Total Deposits		5,880,177			5,819,962			5,572,466			5,777,234			5,537,379
Interest Bearing Deposits		4,635,993			4,589,059			4,154,825			4,527,524			4,028,087
Interest Bearing Liabilities		4,649,745			4,666,136			4,382,380			4,616,129			4,246,648
Total Equity		670,160			638,999			592,510			651,457			594,063
INCOME STATEMENT DATA
Net Interest Income	$	49,273		$	48,296		$	48,393		$	144,985		$	148,436
Net Interest Income-Fully Tax Equivalent		50,383			49,493			49,712			148,558			152,436
Provision for Credit Losses		3,059			8,480			400			13,059			5,550
Noninterest Income		11,917			20,439			10,835			44,968			32,650
Noninterest Expense		30,393			33,333			29,097			94,431			101,265
Net Income		23,338			22,549			25,252			69,288			64,141
Pretax Pre-Provision Earnings (2)		30,797			35,402			30,131			95,522			79,821
PER SHARE DATA
Basic Net Income Per Common Share	$	0.91		$	0.88		$	0.99		$	2.70		$	2.51
Diluted Net Income Per Common Share		0.91			0.87			0.98			2.69			2.49
Cash Dividends Declared Per Common Share		0.48			0.48			0.46			1.44			1.38
Dividend Payout		52.75	%		55.17	%		46.94	%		53.53	%		36.95	%
Book Value Per Common Share (equity per share issued)	$	27.22		$	25.49		$	21.75		$	27.22		$	21.75
Tangible Book Value Per Common Share (2)		27.07			25.34			21.60			27.07			21.60
Market Value – High	$	72.25		$	66.62		$	57.00		$	73.22		$	77.07
Market Value – Low		57.45			57.59			44.46			57.45			43.05


	Three Months Ended									Nine Months Ended
(Unaudited – Dollars in thousands, except per share data)	September 30,			June 30,			September 30,			September 30,			September 30,
PER SHARE DATA (continued)	2024			2024			2023			2024			2023
Basic Weighted Average Common Shares Outstanding		25,684,407			25,678,231			25,613,456			25,673,275			25,601,493
Diluted Weighted Average Common Shares Outstanding		25,767,739			25,742,871			25,693,535			25,754,357			25,709,841
KEY RATIOS
Return on Average Assets		1.39	%		1.37	%		1.54	%		1.40	%		1.33	%
Return on Average Total Equity		13.85			14.19			16.91			14.21			14.44
Average Equity to Average Assets		10.07			9.62			9.12			9.84			9.21
Net Interest Margin		3.16			3.17			3.21			3.16			3.33
Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income)		49.67			48.49			49.13			49.71			55.92
Loans to Deposits		87.06			87.66			86.10			87.06			86.10
Investment Securities to Total Assets		17.27			17.11			17.19			17.27			17.19
Tier 1 Leverage (3)		12.18			11.98			11.64			12.18			11.64
Tier 1 Risk-Based Capital (3)		14.50			14.28			13.88			14.50			13.88
Common Equity Tier 1 (CET1) (3)		14.50			14.28			13.88			14.50			13.88
Total Capital (3)		15.75			15.53			15.13			15.75			15.13
Tangible Capital (2)		10.47			9.91			8.62			10.47			8.62
Adjusted Tangible Capital (2)		12.29			12.18			11.74			12.29			11.74
ASSET QUALITY
Loans Past Due 30 – 89 Days	$	829		$	1,615		$	1,782		$	829		$	1,782
Loans Past Due 90 Days or More		95			26			19			95			19
Nonaccrual Loans		57,551			57,124			16,290			57,551			16,290
Nonperforming Loans		57,646			57,150			16,309			57,646			16,309
Other Real Estate Owned		384			384			384			384			384
Other Nonperforming Assets		21			90			45			21			45
Total Nonperforming Assets		58,051			57,624			16,738			58,051			16,738
Individually Analyzed Loans		77,654			78,533			16,739			77,654			16,739
Non-Individually Analyzed Watch List Loans		189,918			189,726			169,621			189,918			169,621
Total Individually Analyzed and Watch List Loans		267,572			268,259			186,360			267,572			186,360
Gross Charge Offs		231			1,076			480			1,811			6,766
Recoveries		88			127			127			407			715
Net Charge Offs/(Recoveries)		143			949			353			1,404			6,051
Net Charge Offs/(Recoveries) to Average Loans		0.01	%		0.08	%		0.03	%		0.04	%		0.17	%
Credit Loss Reserve to Loans		1.65			1.60			1.48			1.65			1.48
Credit Loss Reserve to Nonperforming Loans		145.07			141.23			442.11			145.07			442.11
Nonperforming Loans to Loans		1.13			1.13			0.33			1.13			0.33
Nonperforming Assets to Assets		0.87			0.88			0.26			0.87			0.26
Total Individually Analyzed and Watch List Loans to Total Loans		5.27	%		5.31	%		3.83	%		5.27	%		3.83	%


	Three Months Ended									Nine Months Ended
(Unaudited – Dollars in thousands, except per share data)	September 30,			June 30,			September 30,			September 30,			September 30,
PER SHARE DATA (continued)	2024			2024			2023			2024			2023
OTHER DATA
Full Time Equivalent Employees		639			653			614			639			614
Offices		54			53			53			54			53

___________________
(1)  Core deposits equals deposits less brokered deposits.
(2)  Non-GAAP financial measure – see “Reconciliation of Non-GAAP Financial Measures”.
(3)  Capital ratios for September 30, 2024 are preliminary until the Call Report is filed.


CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
	September 30, 2024			December 31, 2023
	(Unaudited)
ASSETS
Cash and due from banks	$	86,785		$	70,451
Short-term investments		73,405			81,373
Total cash and cash equivalents		160,190			151,824

Securities available-for-sale, at fair value		1,016,649			1,051,728
Securities held-to-maturity, at amortized cost (fair value of $118,861 and $119,215, respectively)		131,157			129,918
Real estate mortgage loans held-for-sale		3,148			1,158

Loans, net of allowance for credit losses of $83,627 and $71,972		4,998,363			4,844,562

Land, premises and equipment, net		59,987			57,899
Bank owned life insurance		112,075			109,114
Federal Reserve and Federal Home Loan Bank stock		21,420			21,420
Accrued interest receivable		28,471			30,011
Goodwill		4,970			4,970
Other assets		108,941			121,425
Total assets	$	6,645,371		$	6,524,029


LIABILITIES
Noninterest bearing deposits	$	1,284,527		$	1,353,477
Interest bearing deposits		4,552,786			4,367,048
Total deposits		5,837,313			5,720,525

Federal Funds purchased		30,000			0
Federal Home Loan Bank advances		0			50,000
Total borrowings		30,000			50,000

Accrued interest payable		14,784			20,893
Other liabilities		64,093			82,818
Total liabilities		5,946,190			5,874,236

STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value
25,974,017 shares issued and 25,506,084 outstanding as of September 30, 2024
25,903,686 shares issued and 25,430,566 outstanding as of December 31, 2023		128,346			127,692
Retained earnings		724,550			692,760
Accumulated other comprehensive income (loss)		(138,136	)		(155,195	)
Treasury stock, at cost (467,933 shares and 473,120 shares as of September 30, 2024 and December 31, 2023, respectively)		(15,668	)		(15,553	)
Total stockholders’ equity		699,092			649,704
Noncontrolling interest		89			89
Total equity		699,181			649,793
Total liabilities and equity	$	6,645,371		$	6,524,029


CONSOLIDATED STATEMENTS OF INCOME (unaudited – in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023
NET INTEREST INCOME
Interest and fees on loans
Taxable	$	86,118		$	78,910		$	252,386		$	223,499
Tax exempt		298			1,008			1,830			2,869
Interest and dividends on securities
Taxable		2,908			3,077			9,051			9,966
Tax exempt		3,921			4,023			11,800			12,387
Other interest income		1,773			1,605			4,721			3,604
Total interest income		95,018			88,623			279,788			252,325

Interest on deposits		45,556			37,108			131,083			95,637
Interest on short-term borrowings		189			3,122			3,720			8,252
Total interest expense		45,745			40,230			134,803			103,889

NET INTEREST INCOME		49,273			48,393			144,985			148,436

Provision for credit losses		3,059			400			13,059			5,550

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		46,214			47,993			131,926			142,886

NONINTEREST INCOME
Wealth advisory fees		2,718			2,298			7,770			6,769
Investment brokerage fees		438			408			1,438			1,370
Service charges on deposit accounts		2,835			2,735			8,332			8,091
Loan and service fees		2,955			2,934			8,855			8,782
Merchant and interchange fee income		898			938			2,653			2,744
Bank owned life insurance income		1,068			1,009			2,994			2,393
Interest rate swap fee income		0			0			0			794
Mortgage banking income (loss)		(7	)		(50	)		68			(184	)
Net securities gains (losses)		0			(35	)		(46	)		(16	)
Net gain (loss) on Visa shares		(15	)		0			8,996			0
Other income		1,027			598			3,908			1,907
Total noninterest income		11,917			10,835			44,968			32,650

NONINTEREST EXPENSE
Salaries and employee benefits		16,476			15,977			49,467			43,414
Net occupancy expense		1,721			1,621			5,159			4,874
Equipment costs		1,452			1,325			4,207			4,189
Data processing fees and supplies		3,768			3,379			11,419			10,305
Corporate and business development		1,369			1,201			4,015			3,930
FDIC insurance and other regulatory fees		966			871			2,571			2,469
Professional fees		2,089			2,114			6,675			6,284
Wire fraud loss		0			0			0			18,058
Other expense		2,552			2,609			10,918			7,742
Total noninterest expense		30,393			29,097			94,431			101,265

INCOME BEFORE INCOME TAX EXPENSE		27,738			29,731			82,463			74,271
Income tax expense		4,400			4,479			13,175			10,130
NET INCOME	$	23,338		$	25,252		$	69,288		$	64,141

BASIC WEIGHTED AVERAGE COMMON SHARES		25,684,407			25,613,456			25,673,275			25,601,493

BASIC EARNINGS PER COMMON SHARE	$	0.91		$	0.99		$	2.70		$	2.51

DILUTED WEIGHTED AVERAGE COMMON SHARES		25,767,739			25,693,535			25,754,357			25,709,841

DILUTED EARNINGS PER COMMON SHARE	$	0.91		$	0.98		$	2.69		$	2.49


LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands)

	September 30, 2024					June 30, 2024					September 30, 2023
Commercial and industrial loans:
Working capital lines of credit loans	$	678,079		13.3	%	$	697,754		13.8	%	$	589,345		12.1	%
Non-working capital loans		814,804		16.0			828,523		16.4			812,875		16.7
Total commercial and industrial loans		1,492,883		29.3			1,526,277		30.2			1,402,220		28.8

Commercial real estate and multi-family residential loans:
Construction and land development loans		729,293		14.3			658,345		13.0			633,920		13.0
Owner occupied loans		810,453		15.9			830,018		16.4			811,175		16.6
Nonowner occupied loans		766,821		15.1			762,365		15.1			740,783		15.2
Multifamily loans		243,283		4.8			252,652		5.0			236,581		4.8
Total commercial real estate and multi-family residential loans		2,549,850		50.1			2,503,380		49.5			2,422,459		49.6

Agri-business and agricultural loans:
Loans secured by farmland		157,413		3.1			161,410		3.2			183,241		3.8
Loans for agricultural production		200,971		4.0			199,654		4.0			197,287		4.0
Total agri-business and agricultural loans		358,384		7.1			361,064		7.2			380,528		7.8

Other commercial loans		94,309		1.9			96,703		1.9			125,939		2.6
Total commercial loans		4,495,426		88.4			4,487,424		88.8			4,331,146		88.8

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		261,462		5.1			259,094		5.1			247,114		5.1
Open end and junior lien loans		210,275		4.1			197,861		3.9			189,611		3.9
Residential construction and land development loans		14,200		0.3			12,952		0.3			12,888		0.3
Total consumer 1-4 family mortgage loans		485,937		9.5			469,907		9.3			449,613		9.3

Other consumer loans		103,547		2.1			97,895		1.9			93,737		1.9
Total consumer loans		589,484		11.6			567,802		11.2			543,350		11.2
Subtotal		5,084,910		100.0	%		5,055,226		100.0	%		4,874,496		100.0	%
Less: Allowance for credit losses		(83,627	)				(80,711	)				(72,105	)
Net deferred loan fees		(2,920	)				(2,885	)				(3,531	)
Loans, net	$	4,998,363				$	4,971,630				$	4,798,860


LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands)

	September 30, 2024		June 30, 2024		September 30, 2023
Noninterest bearing demand deposits	$	1,284,527	$	1,212,989	$	1,377,650
Savings and transaction accounts:
Savings deposits		276,468		283,809		315,651
Interest bearing demand deposits		3,273,405		3,274,179		2,891,683
Time deposits:
Deposits of $100,000 or more		787,095		776,314		756,107
Other time deposits		215,818		216,246		315,984
Total deposits	$	5,837,313	$	5,763,537	$	5,657,075
FHLB advances and other borrowings		30,000		55,000		90,000
Total funding sources	$	5,867,313	$	5,818,537	$	5,747,075


LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED)

	Three Months Ended September 30, 2024							Three Months Ended June 30, 2024							Three Months Ended September 30, 2023
(fully tax equivalent basis, dollars in thousands)	Average Balance			Interest Income		Yield (1)/ Rate		Average Balance			Interest Income		Yield (1)/ Rate		Average Balance			Interest Income		Yield (1)/ Rate
Earning Assets
Loans:
Taxable (2)(3)	$	5,037,855		$	86,118	6.80	%	$	4,993,270		$	84,226	6.78	%	$	4,791,156		$	78,910	6.53	%
Tax exempt (1)		26,493			366	5.50			41,581			783	7.57			58,602			1,258	8.52
Investments: (1)
Securities		1,128,705			7,871	2.77			1,118,776			8,082	2.91			1,171,426			8,169	2.77
Short-term investments		2,841			35	4.90			2,836			35	4.96			2,533			29	4.54
Interest bearing deposits		133,393			1,738	5.18			138,818			1,807	5.24			122,177			1,576	5.12
Total earning assets	$	6,329,287		$	96,128	6.04	%	$	6,295,281		$	94,933	6.07	%	$	6,145,894		$	89,942	5.81	%
Less: Allowance for credit losses		(81,353	)						(74,166	)						(71,997	)
Nonearning Assets
Cash and due from banks		63,744							64,518							68,669
Premises and equipment		59,493							58,702							58,782
Other nonearning assets		285,293							298,619							297,636
Total assets	$	6,656,464						$	6,642,954						$	6,498,984

Interest Bearing Liabilities
Savings deposits	$	280,180		$	45	0.06	%	$	289,107		$	48	0.07	%	$	329,557		$	57	0.07	%
Interest bearing checking accounts		3,295,911			33,822	4.08			3,275,502			33,323	4.09			2,873,795			27,891	3.85
Time deposits:
In denominations under $100,000		215,020			1,914	3.54			217,146			1,871	3.47			211,039			1,507	2.83
In denominations over $100,000		844,882			9,775	4.60			807,304			9,121	4.54			740,434			7,654	4.10
Miscellaneous short-term borrowings		13,752			189	5.48			77,077			1,077	5.62			227,555			3,121	5.44
Total interest bearing liabilities	$	4,649,745		$	45,745	3.91	%	$	4,666,136		$	45,440	3.92	%	$	4,382,380		$	40,230	3.64	%
Noninterest Bearing Liabilities
Demand deposits		1,244,184							1,230,903							1,417,641
Other liabilities		92,375							106,916							106,453
Stockholders’ Equity		670,160							638,999							592,510
Total liabilities and stockholders’ equity	$	6,656,464						$	6,642,954						$	6,498,984
Interest Margin Recap
Interest income/average earning assets					96,128	6.04	%					94,933	6.07	%					89,942	5.81	%
Interest expense/average earning assets					45,745	2.88						45,440	2.90						40,230	2.60
Net interest income and margin				$	50,383	3.16	%				$	49,493	3.17	%				$	49,712	3.21	%

(1)  Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983, included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $1.11 million, $1.20 million and $1.32 million in the three-month periods ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(2)  Loan fees, which are immaterial in relation to total taxable loan interest income for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, are included as taxable loan interest income.
(3)  Nonaccrual loans are included in the average balance of taxable loans.

Reconciliation of Non-GAAP Financial Measures

Tangible common equity, adjusted tangible common equity, tangible assets, adjusted tangible assets, tangible book value per common share, tangible common equity to tangible assets, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings are non-GAAP financial measures calculated based on GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio in accumulated other comprehensive income (loss) (“AOCI”). Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company’s value meaningful to understanding of the company’s financial information and performance.

A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).

	Three Months Ended									Nine Months Ended
	Sep. 30, 2024			Jun. 30, 2024			Sep. 30, 2023			Sep. 30, 2024			Sep. 30, 2023
Total Equity	$	699,181		$	654,590		$	557,184		$	699,181		$	557,184
Less: Goodwill		(4,970	)		(4,970	)		(4,970	)		(4,970	)		(4,970	)
Plus: DTA Related to Goodwill		1,167			1,167			1,167			1,167			1,167
Tangible Common Equity		695,378			650,787			553,381			695,378			553,381
Market Value Adjustment in AOCI		137,435			169,747			227,375			137,435			227,375
Adjusted Tangible Common Equity		832,813			820,534			780,756			832,813			780,756

Assets	$	6,645,371		$	6,568,807		$	6,426,844		$	6,645,371		$	6,426,844
Less: Goodwill		(4,970	)		(4,970	)		(4,970	)		(4,970	)		(4,970	)
Plus: DTA Related to Goodwill		1,167			1,167			1,167			1,167			1,167
Tangible Assets		6,641,568			6,565,004			6,423,041			6,641,568			6,423,041
Market Value Adjustment in AOCI		137,435			169,747			227,375			137,435			227,375
Adjusted Tangible Assets		6,779,003			6,734,751			6,650,416			6,779,003			6,650,416

Ending Common Shares Issued		25,684,916			25,679,066			25,614,163			25,684,916			25,614,163

Tangible Book Value Per Common Share	$	27.07		$	25.34		$	21.60		$	27.07		$	21.60

Tangible Common Equity/Tangible Assets		10.47	%		9.91	%		8.62	%		10.47	%		8.62	%
Adjusted Tangible Common Equity/Adjusted Tangible Assets		12.29	%		12.18	%		11.74	%		12.29	%		11.74	%

Net Interest Income	$	49,273		$	48,296		$	48,393		$	144,985		$	148,436
Plus: Noninterest Income		11,917			20,439			10,835			44,968			32,650
Minus: Noninterest Expense		(30,393	)		(33,333	)		(29,097	)		(94,431	)		(101,265	)

Pretax Pre-Provision Earnings	$	30,797		$	35,402		$	30,131		$	95,522		$	79,821

Adjusted core noninterest income, adjusted core noninterest expense, adjusted earnings before income taxes, core operational profitability, core operational diluted earnings per common share and adjusted core efficiency ratio are non-GAAP financial measures calculated based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of the net gain on Visa shares, legal accrual, and wire fraud loss and associated insurance and loss recoveries and adjustments to salaries and employee benefits expense for the periods presented below. Management considers these measures of financial performance to be meaningful to understanding the company’s core business performance for these periods.

A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).

	Three Months Ended									Nine Months Ended
	Sep. 30, 2024			Jun. 30, 2024			Sep. 30, 2023			Sep. 30, 2024			Sep. 30, 2023
Noninterest Income	$	11,917		$	20,439		$	10,835		$	44,968		$	32,650
Less: Net (Gain) Loss on Visa Shares		15			(9,011	)		0			(8,996	)		0
Less: Insurance Recoveries		0			0			0			(1,000	)		0
Adjusted Core Noninterest Income	$	11,932		$	11,428		$	10,835		$	34,972		$	32,650

Noninterest Expense	$	30,393		$	33,333		$	29,097		$	94,431		$	101,265
Less: Legal Accrual		0			(4,537	)		0			(4,537	)		0
Less: Wire Fraud Loss		0			0			0			0			(18,058	)
Plus: Salaries and Employee Benefits (1)		0			0			0			0			1,850
Adjusted Core Noninterest Expense	$	30,393		$	28,796		$	29,097		$	89,894		$	85,057

Earnings Before Income Taxes	$	27,738		$	26,922		$	29,731		$	82,463		$	74,271
Adjusted Core Impact:
Noninterest Income		15			(9,011	)		0			(9,996	)		0
Noninterest Expense		0			4,537			0			4,537			16,208
Total Adjusted Core Impact		15			(4,474	)		0			(5,459	)		16,208
Adjusted Earnings Before Income Taxes		27,753			22,448			29,731			77,004			90,479
Tax Effect		(4,404	)		(3,261	)		(4,479	)		(11,817	)		(14,123	)
Core Operational Profitability (2)	$	23,349		$	19,187		$	25,252		$	65,187		$	76,356

Diluted Earnings Per Common Share	$	0.91		$	0.87		$	0.98		$	2.69		$	2.49
Impact of Adjusted Core Items		0.00			(0.13	)		0.00			(0.16	)		0.48
Core Operational Diluted Earnings Per Common Share	$	0.91		$	0.74		$	0.98		$	2.53		$	2.97

Adjusted Core Efficiency Ratio		49.66	%		48.22	%		49.13	%		49.95	%		46.97	%

(1) In 2023, long-term, incentive-based compensation accruals were reduced as a result of the wire fraud loss and associated insurance and loss recoveries.
(2) Core operational profitability was $11,000 higher and $3.4 million lower than reported net income for the three months ended September 30, 2024 and June 30, 2024, respectively. Core operational profitability was $4.1 million lower and $12.2 million higher than reported net income for the nine months ended September 30, 2024 and 2023, respectively.

Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com

The MIL Network –

January 25, 2025

MIL-OSI: First Hawaiian, Inc. Reports Third Quarter 2024 Financial Results and Declares Dividend

Source: GlobeNewswire (MIL-OSI)

HONOLULU, Oct. 25, 2024 (GLOBE NEWSWIRE) — First Hawaiian, Inc. (NASDAQ:FHB), (“First Hawaiian” or the “Company”) today reported financial results for its quarter ended September 30, 2024.

“I’m happy to report that we had a very good third quarter,” said Bob Harrison, Chairman, President, and CEO. “Net interest income and noninterest income increased over the prior quarter, expenses were well controlled and credit quality remained excellent. I’m also pleased to report that during the third quarter, Moody’s reviewed and reaffirmed all of First Hawaiian Bank’s long-term credit and deposit ratings.”

On October 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend will be payable on November 29, 2024, to stockholders of record at the close of business on November 18, 2024.

Third Quarter 2024 Highlights:

Net income of $61.5 million, or $0.48 per diluted share
Total loans and leases decreased $118.5 million versus the prior quarter
Total deposits decreased $91.1 million versus the prior quarter
Net interest margin increased 3 basis points to 2.95%
Recorded a $7.4 million provision for credit losses
Board of Directors declared a quarterly dividend of $0.26 per share

Balance Sheet

Total assets were $23.8 billion as of September 30, 2024, a decrease of $211.5 million, or 0.9%, from $24.0 billion as of June 30, 2024.

Gross loans and leases were $14.2 billion as of September 30, 2024, a decrease of $118.5 million, or 0.8%, from $14.4 billion as of June 30, 2024.

Total deposits were $20.2 billion as of September 30, 2024, a decrease of $91.1 million, or 0.4%, from $20.3 billion as of June 30, 2024.

Net Interest Income

Net interest income for the third quarter of 2024 was $156.7 million, an increase of $3.9 million, or 2.5%, compared to $152.9 million for the prior quarter.

The net interest margin was 2.95% in the third quarter of 2024, an increase of 3 basis points compared to 2.92% in the prior quarter.

Provision Expense

During the quarter ended September 30, 2024, we recorded a $7.4 million provision for credit losses. In the quarter ended June 30, 2024, we recorded a $1.8 million provision for credit losses.

Noninterest Income

Noninterest income was $53.3 million in the third quarter of 2024, an increase of $1.5 million compared to noninterest income of $51.8 million in the prior quarter.

Noninterest Expense

Noninterest expense was $126.1 million in the third quarter of 2024, an increase of $4.1 million compared to noninterest expense of $122.1 million in the prior quarter.

The efficiency ratio was 59.8% and 59.2% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Taxes

The effective tax rate was 19.6% and 23.3% for the quarters ended September 30, 2024 and June 30, 2024, respectively.

Asset Quality

The allowance for credit losses was $163.7 million, or 1.15% of total loans and leases, as of September 30, 2024, compared to $160.5 million, or 1.12% of total loans and leases, as of June 30, 2024. The reserve for unfunded commitments was $33.7 million as of September 30, 2024 compared to $33.4 million as of June 30, 2024. Net charge-offs were $3.9 million, or 0.11% of average loans and leases on an annualized basis, for the quarter ended September 30, 2024, compared to net charge-offs of $2.5 million, or 0.07% of average loans and leases on an annualized basis, for the quarter ended June 30, 2024. Total non-performing assets were $17.8 million, or 0.13% of total loans and leases and other real estate owned, as of September 30, 2024, compared to $18.0 million, or 0.13% of total loans and leases and other real estate owned, as of June 30, 2024.

Capital

Total stockholders’ equity increased $97.7 million in the third quarter, and stood at $2.6 billion on September 30, 2024 and June 30, 2024.

The tier 1 leverage, common equity tier 1 and total capital ratios were 9.14%, 13.03% and 14.25%, respectively, on September 30, 2024, compared with 9.03%, 12.73% and 13.92%, respectively, on June 30, 2024.

The Company did not repurchase any shares in the third quarter.

First Hawaiian, Inc.

First Hawaiian, Inc. (NASDAQ:FHB) is a bank holding company headquartered in Honolulu, Hawaii. Its principal subsidiary, First Hawaiian Bank, founded in 1858 under the name Bishop & Company, is Hawaii’s oldest and largest financial institution with branch locations throughout Hawaii, Guam and Saipan. The company offers a comprehensive suite of banking services to consumer and commercial customers including deposit products, loans, wealth management, insurance, trust, retirement planning, credit card and merchant processing services. Customers may also access their accounts through ATMs, online and mobile banking channels. For more information about First Hawaiian, Inc., visit the Company’s website, www.fhb.com.

Conference Call Information

First Hawaiian will host a conference call to discuss the Company’s results today at 1:00 p.m. Eastern Time, 7:00 a.m. Hawaii Time.

To access the call by phone, participants will need to click on the following registration link: https://register.vevent.com/register/BIec8273f35cc340bcb13d27eae17d127b, register for the conference call, and then you will receive the dial-in number and a personalized PIN code. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

A live webcast of the conference call, including a slide presentation, will be available at the following link: www.fhb.com/earnings. The archive of the webcast will be available at the same location.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized” and “outlook”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there can be no assurance that actual results will not prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the domestic and global economic environment and capital market conditions and other risk factors. For a discussion of some of these risks and important factors that could affect our future results and financial condition, see our U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024.

Use of Non-GAAP Financial Measures
Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We believe that these measurements are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results or financial condition as reported under GAAP. Investors should consider our performance and capital adequacy as reported under GAAP and all other relevant information when assessing our performance and capital adequacy.

Table 14 at the end of this document provides a reconciliation of these non-GAAP financial measures with their most directly comparable GAAP measures.


Financial Highlights	Table 1
	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(dollars in thousands, except per share data)	2024			2024			2023			2024			2023
Operating Results:
Net interest income	$	156,707		$	152,851		$	157,148		$	463,985		$	484,334
Provision for credit losses		7,400			1,800			7,500			15,500			21,300
Noninterest income		53,288			51,768			46,097			156,427			142,468
Noninterest expense		126,147			122,086			119,383			377,046			358,831
Net income		61,492			61,921			58,221			177,633			187,481
Basic earnings per share		0.48			0.48			0.46			1.39			1.47
Diluted earnings per share		0.48			0.48			0.46			1.38			1.47
Dividends declared per share		0.26			0.26			0.26			0.78			0.78
Dividend payout ratio		54.17	%		54.17	%		56.52	%		56.52	%		53.06	%
Performance Ratios⁽¹⁾:
Net interest margin		2.95	%		2.92	%		2.86	%		2.93	%		2.96	%
Efficiency ratio		59.77	%		59.22	%		58.31	%		60.38	%		56.86	%
Return on average total assets		1.02	%		1.04	%		0.93	%		0.99	%		1.01	%
Return on average tangible assets (non-GAAP)⁽²⁾		1.06	%		1.08	%		0.97	%		1.03	%		1.06	%
Return on average total stockholders’ equity		9.45	%		9.91	%		9.76	%		9.37	%		10.72	%
Return on average tangible stockholders’ equity (non-GAAP)⁽²⁾		15.35	%		16.42	%		16.84	%		15.43	%		18.68	%
Average Balances:
Average loans and leases	$	14,304,806		$	14,358,049		$	14,349,402		$	14,325,065		$	14,238,309
Average earning assets		21,328,882			21,247,707			22,060,480			21,352,739			22,040,704
Average assets		24,046,696			23,958,913			24,727,893			24,064,208			24,699,826
Average deposits		20,367,805			20,308,028			21,212,102			20,415,746			21,245,055
Average stockholders’ equity		2,588,806			2,512,471			2,367,422			2,532,911			2,337,292
Market Value Per Share:
Closing		23.15			20.76			18.05			23.15			18.05
High		26.18			22.68			22.59			26.18			28.28
Low		20.28			19.48			17.41			19.48			15.08


	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share data)	2024			2024			2023			2023
Balance Sheet Data:
Loans and leases	$	14,241,370		$	14,359,899		$	14,353,497		$	14,332,335
Total assets		23,780,285			23,991,791			24,926,474			24,912,524
Total deposits		20,227,702			20,318,832			21,332,657			21,511,489
Short-term borrowings		250,000			500,000			500,000			500,000
Total stockholders’ equity		2,648,034			2,550,312			2,486,066			2,351,009

Per Share of Common Stock:
Book value	$	20.71		$	19.94		$	19.48		$	18.42
Tangible book value (non-GAAP)⁽²⁾		12.92			12.16			11.68			10.62

Asset Quality Ratios:
Non-accrual loans and leases / total loans and leases		0.13	%		0.13	%		0.13	%		0.10	%
Allowance for credit losses for loans and leases / total loans and leases		1.15	%		1.12	%		1.09	%		1.08	%

Capital Ratios:
Common Equity Tier 1 Capital Ratio		13.03	%		12.73	%		12.39	%		12.21	%
Tier 1 Capital Ratio		13.03	%		12.73	%		12.39	%		12.21	%
Total Capital Ratio		14.25	%		13.92	%		13.57	%		13.38	%
Tier 1 Leverage Ratio		9.14	%		9.03	%		8.64	%		8.45	%
Total stockholders’ equity to total assets		11.14	%		10.63	%		9.97	%		9.44	%
Tangible stockholders’ equity to tangible assets (non-GAAP)⁽²⁾		7.25	%		6.76	%		6.23	%		5.67	%

Non-Financial Data:
Number of branches		48			48			50			50
Number of ATMs		273			272			275			294
Number of Full-Time Equivalent Employees		2,022			2,032			2,089			2,087

⁽¹⁾Except for the efficiency ratio, amounts are annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

⁽²⁾Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of net income to average tangible assets, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total assets. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our average total stockholders’ equity. We compute our tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. Tangible stockholders’ equity is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill from our total stockholders’ equity. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets, each of which we calculate by subtracting (and thereby effectively excluding) the value of our goodwill. For a reconciliation to the most directly comparable GAAP financial measure, see Table 14, GAAP to Non-GAAP Reconciliation.


Consolidated Statements of Income	Table 2
	For the Three Months Ended						For the Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(dollars in thousands, except per share amounts)	2024		2024		2023		2024		2023
Interest income
Loans and lease financing	$	205,682	$	202,068	$	194,098	$	607,594	$	551,777
Available-for-sale investment securities		12,850		14,143		18,426		41,539		55,208
Held-to-maturity investment securities		16,937		17,575		18,271		52,305		55,510
Other		14,527		11,148		9,004		38,444		20,054
Total interest income		249,996		244,934		239,799		739,882		682,549
Interest expense
Deposits		87,500		85,609		74,651		257,252		176,006
Short-term and long-term borrowings		5,397		5,953		6,838		17,303		20,057
Other		392		521		1,162		1,342		2,152
Total interest expense		93,289		92,083		82,651		275,897		198,215
Net interest income		156,707		152,851		157,148		463,985		484,334
Provision for credit losses		7,400		1,800		7,500		15,500		21,300
Net interest income after provision for credit losses		149,307		151,051		149,648		448,485		463,034
Noninterest income
Service charges on deposit accounts		7,783		7,793		7,524		23,122		22,001
Credit and debit card fees		17,533		15,861		15,748		49,567		47,507
Other service charges and fees		11,790		11,036		9,546		32,730		27,764
Trust and investment services income		9,077		9,426		9,742		28,857		28,804
Bank-owned life insurance		4,502		3,360		1,872		12,148		10,263
Other		2,603		4,292		1,665		10,003		6,129
Total noninterest income		53,288		51,768		46,097		156,427		142,468
Noninterest expense
Salaries and employee benefits		59,563		57,737		55,937		176,562		169,873
Contracted services and professional fees		14,634		16,067		16,393		46,440		50,204
Occupancy		6,945		7,377		6,711		21,263		22,047
Equipment		13,078		13,196		11,826		39,687		32,562
Regulatory assessment and fees		3,412		3,814		4,149		15,346		11,661
Advertising and marketing		1,813		1,765		2,289		6,190		6,174
Card rewards program		8,678		8,719		8,358		25,905		24,124
Other		18,024		13,411		13,720		45,653		42,186
Total noninterest expense		126,147		122,086		119,383		377,046		358,831
Income before provision for income taxes		76,448		80,733		76,362		227,866		246,671
Provision for income taxes		14,956		18,812		18,141		50,233		59,190
Net income	$	61,492	$	61,921	$	58,221	$	177,633	$	187,481
Basic earnings per share	$	0.48	$	0.48	$	0.46	$	1.39	$	1.47
Diluted earnings per share	$	0.48	$	0.48	$	0.46	$	1.38	$	1.47
Basic weighted-average outstanding shares		127,886,167		127,867,853		127,609,860		127,820,737		127,552,255
Diluted weighted-average outstanding shares		128,504,035		128,262,594		127,936,440		128,362,433		127,897,829


Consolidated Balance Sheets	Table 3
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except share amount)	2024			2024			2023			2023
Assets
Cash and due from banks	$	252,209		$	290,501		$	185,015		$	246,028
Interest-bearing deposits in other banks		820,603			824,258			1,554,882			967,400
Investment securities:
Available-for-sale, at fair value (amortized cost: $2,290,781 as of September 30, 2024, $2,379,004 as of June 30, 2024, $2,558,675 as of December 31, 2023 and $3,172,031 as of September 30, 2023)		2,055,959			2,067,956			2,255,336			2,722,704
Held-to-maturity, at amortized cost (fair value: $3,475,143 as of September 30, 2024, $3,401,006 as of June 30, 2024, $3,574,856 as of December 31, 2023 and $3,433,029 as of September 30, 2023)		3,853,697			3,917,175			4,041,449			4,104,114
Loans held for sale		—			2,820			190			—
Loans and leases		14,241,370			14,359,899			14,353,497			14,332,335
Less: allowance for credit losses		163,700			160,517			156,533			154,795
Net loans and leases		14,077,670			14,199,382			14,196,964			14,177,540

Premises and equipment, net		287,036			283,762			281,461			277,805
Accrued interest receivable		81,875			82,512			84,417			84,327
Bank-owned life insurance		490,135			486,261			479,907			477,698
Goodwill		995,492			995,492			995,492			995,492
Mortgage servicing rights		5,236			5,395			5,699			5,855
Other assets		860,373			836,277			845,662			853,561
Total assets	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524
Liabilities and Stockholders’ Equity
Deposits:
Interest-bearing	$	13,427,674		$	13,461,365		$	13,749,095		$	13,612,493
Noninterest-bearing		6,800,028			6,857,467			7,583,562			7,898,996
Total deposits		20,227,702			20,318,832			21,332,657			21,511,489
Short-term borrowings		250,000			500,000			500,000			500,000
Retirement benefits payable		100,448			101,304			103,285			99,685
Other liabilities		554,101			521,343			504,466			450,341
Total liabilities		21,132,251			21,441,479			22,440,408			22,561,515

Stockholders’ equity
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 141,735,601 / 127,886,167 shares as of September 30, 2024, issued/outstanding: 141,728,446 / 127,879,012 shares as of June 30, 2024, issued/outstanding: 141,340,539 / 127,618,761 shares as of December 31, 2023 and issued/outstanding: 141,330,663 / 127,609,934 shares as of September 30, 2023)		1,417			1,417			1,413			1,413
Additional paid-in capital		2,558,158			2,554,795			2,548,250			2,545,659
Retained earnings		915,062			887,176			837,859			823,895
Accumulated other comprehensive loss, net		(452,658	)		(519,132	)		(530,210	)		(648,731	)
Treasury stock (13,849,434 shares as of September 30, 2024, 13,849,434 shares as of June 30, 2024, 13,721,778 shares as of December 31, 2023 and 13,720,729 shares as of September 30, 2023)		(373,945	)		(373,944	)		(371,246	)		(371,227	)
Total stockholders’ equity		2,648,034			2,550,312			2,486,066			2,351,009
Total liabilities and stockholders’ equity	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524


Average Balances and Interest Rates																	Table 4
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
	Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)	Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	1,020.4	$	13.9	5.40	%	$	773.4	$	10.5	5.45	%	$	608.6	$	8.2	5.36	%
Available-for-Sale Investment Securities
Taxable		2,062.6		12.8	2.48			2,100.7		14.1	2.69			2,834.6		18.4	2.59
Non-Taxable		1.5		—	5.06			1.5		—	5.76			2.3		—	5.48
Held-to-Maturity Investment Securities
Taxable		3,288.2		13.8	1.67			3,358.2		14.4	1.71			3,544.1		15.0	1.70
Non-Taxable		602.3		3.7	2.46			602.9		4.0	2.64			604.3		4.1	2.66
Total Investment Securities		5,954.6		30.3	2.03			6,063.3		32.5	2.15			6,985.3		37.5	2.14
Loans Held for Sale		2.2		—	5.64			1.0		—	6.58			0.4		—	6.63
Loans and Leases⁽¹⁾
Commercial and industrial		2,165.3		38.0	6.98			2,201.6		38.1	6.96			2,123.5		35.7	6.66
Commercial real estate		4,278.3		71.6	6.67			4,305.6		71.5	6.68			4,381.8		71.4	6.47
Construction		1,040.7		20.3	7.74			984.8		18.5	7.57			873.7		15.5	7.05
Residential:
Residential mortgage		4,204.5		40.4	3.84			4,229.4		40.1	3.80			4,316.3		40.1	3.72
Home equity line		1,158.5		13.2	4.52			1,164.2		12.6	4.35			1,154.0		10.1	3.45
Consumer		1,035.3		18.7	7.19			1,054.1		17.7	6.74			1,172.8		18.3	6.19
Lease financing		422.2		4.0	3.72			418.3		4.3	4.09			327.3		3.7	4.48
Total Loans and Leases		14,304.8		206.2	5.74			14,358.0		202.8	5.67			14,349.4		194.8	5.39
Other Earning Assets		46.9		0.7	5.83			52.0		0.7	5.25			116.8		0.8	2.64
Total Earning Assets⁽²⁾		21,328.9		251.1	4.69			21,247.7		246.5	4.66			22,060.5		241.3	4.35
Cash and Due from Banks		242.3						240.4						276.0
Other Assets		2,475.5						2,470.8						2,391.4
Total Assets	$	24,046.7					$	23,958.9					$	24,727.9

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	5,963.1	$	23.6	1.57	%	$	6,000.4	$	23.4	1.57	%	$	5,982.5	$	19.2	1.27	%
Money Market		4,179.5		31.9	3.04			4,076.7		30.6	3.02			3,907.2		24.7	2.51
Time		3,327.3		32.0	3.83			3,284.3		31.6	3.87			3,362.7		30.8	3.63
Total Interest-Bearing Deposits		13,469.9		87.5	2.58			13,361.4		85.6	2.58			13,252.4		74.7	2.23
Other Short-Term Borrowings		451.1		5.4	4.76			500.0		6.0	4.79			113.1		1.5	5.17
Long-Term Borrowings		—		—	—			—		—	—			440.2		5.3	4.83
Other Interest-Bearing Liabilities		22.4		0.4	6.97			38.2		0.5	5.48			89.1		1.2	5.17
Total Interest-Bearing Liabilities		13,943.4		93.3	2.66			13,899.6		92.1	2.66			13,894.8		82.7	2.36
Net Interest Income			$	157.8					$	154.4					$	158.6
Interest Rate Spread⁽³⁾					2.03	%					2.00	%					1.99	%
Net Interest Margin⁽⁴⁾					2.95	%					2.92	%					2.86	%
Noninterest-Bearing Demand Deposits		6,897.9						6,946.6						7,959.7
Other Liabilities		616.6						600.2						506.0
Stockholders’ Equity		2,588.8						2,512.5						2,367.4
Total Liabilities and Stockholders’ Equity	$	24,046.7					$	23,958.9					$	24,727.9

⁽¹⁾Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

⁽²⁾Interest income includes taxable-equivalent basis adjustments of $1.1 million, $1.5 million and $1.5 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

⁽³⁾Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

⁽⁴⁾Net interest margin is net interest income annualized for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, on a fully taxable-equivalent basis, divided by average total earning assets.


Average Balances and Interest Rates											Table 5
	Nine Months Ended						Nine Months Ended
	September 30, 2024						September 30, 2023
	Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)	Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	884.6	$	35.9	5.43	%	$	493.6	$	18.8	5.10	%
Available-for-Sale Investment Securities
Taxable		2,124.4		41.5	2.61			2,964.0		54.8	2.47
Non-Taxable		1.6		0.1	5.49			13.0		0.5	5.57
Held-to-Maturity Investment Securities
Taxable		3,354.0		42.7	1.70			3,615.0		46.0	1.70
Non-Taxable		602.9		11.7	2.58			608.9		11.9	2.62
Total Investment Securities		6,082.9		96.0	2.10			7,200.9		113.2	2.10
Loans Held for Sale		1.3		0.1	6.11			0.3		—	6.11
Loans and Leases⁽¹⁾
Commercial and industrial		2,177.2		113.3	6.95			2,193.8		104.3	6.35
Commercial real estate		4,302.4		213.4	6.62			4,224.7		194.6	6.16
Construction		983.6		56.2	7.63			874.0		45.4	6.95
Residential:
Residential mortgage		4,232.6		122.5	3.86			4,312.4		117.6	3.64
Home equity line		1,164.9		37.8	4.34			1,116.4		27.9	3.35
Consumer		1,057.6		54.4	6.87			1,194.1		53.2	5.95
Lease financing		406.8		11.9	3.90			322.9		10.5	4.34
Total Loans and Leases		14,325.1		609.5	5.68			14,238.3		553.5	5.19
Other Earning Assets		58.8		2.5	5.69			107.6		1.3	1.53
Total Earning Assets⁽²⁾		21,352.7		744.0	4.65			22,040.7		686.8	4.16
Cash and Due from Banks		242.4						273.3
Other Assets		2,469.1						2,385.8
Total Assets	$	24,064.2					$	24,699.8

Interest-Bearing Liabilities
Interest-Bearing Deposits
Savings	$	6,007.6	$	70.5	1.57	%	$	6,144.1	$	49.1	1.07	%
Money Market		4,067.5		91.3	3.00			3,857.0		58.6	2.03
Time		3,312.3		95.5	3.85			2,921.8		68.3	3.12
Total Interest-Bearing Deposits		13,387.4		257.3	2.57			12,922.9		176.0	1.82
Federal Funds Purchased		—		—	—			23.0		0.8	4.45
Other Short-Term Borrowings		483.6		17.3	4.78			176.5		6.8	5.15
Long-Term Borrowings		—		—	—			349.8		12.5	4.78
Other Interest-Bearing Liabilities		31.1		1.3	5.75			62.1		2.1	4.63
Total Interest-Bearing Liabilities		13,902.1		275.9	2.65			13,534.3		198.2	1.96
Net Interest Income			$	468.1					$	488.6
Interest Rate Spread⁽³⁾					2.00	%					2.20	%
Net Interest Margin⁽⁴⁾					2.93	%					2.96	%
Noninterest-Bearing Demand Deposits		7,028.4						8,322.2
Other Liabilities		600.8						506.0
Stockholders’ Equity		2,532.9						2,337.3
Total Liabilities and Stockholders’ Equity	$	24,064.2					$	24,699.8

⁽¹⁾Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

⁽²⁾Interest income includes taxable-equivalent basis adjustments of $4.1 million and $4.2 million for the nine months ended September 30, 2024 and 2023, respectively.

⁽³⁾Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

⁽⁴⁾Net interest margin is net interest income annualized for the nine months ended September 30, 2024 and 2023, on a fully taxable-equivalent basis, divided by average total earning assets.

Analysis of Change in Net Interest Income

Table 6

Three Months Ended September 30, 2024

Compared to June 30, 2024

(dollars in millions)

Volume

Rate

Total ⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

$

3.5

$

(0.1

)

$

3.4

Available-for-Sale Investment Securities

Taxable

(0.2

)

(1.1

)

(1.3

)

Held-to-Maturity Investment Securities

Taxable

(0.3

)

(0.3

)

(0.6

)

Non-Taxable

—

(0.3

)

(0.3

)

Total Investment Securities

(0.5

)

(1.7

)

(2.2

)

Loans and Leases

Commercial and industrial

(0.3

)

0.2

(0.1

)

Commercial real estate

—

0.1

Construction

1.3

0.5

1.8

Residential:

Residential mortgage

(0.2

)

0.5

0.3

Home equity line

—

0.6

Consumer

(0.3

)

1.3

1.0

Lease financing

—

(0.3

)

(0.3

)

Total Loans and Leases

0.5

2.9

3.4

Other Earning Assets

(0.1

)

0.1

—

Total Change in Interest Income

3.4

1.2

4.6

Change in Interest Expense:

Interest-Bearing Deposits

Savings

—

0.2

Money Market

1.0

0.3

1.3

Time

0.6

(0.2

)

0.4

Total Interest-Bearing Deposits

1.6

0.3

1.9

Other Short-Term Borrowings

(0.5

)

(0.1

)

(0.6

)

Other Interest-Bearing Liabilities

(0.2

)

0.1

(0.1

)

Total Change in Interest Expense

0.9

0.3

1.2

Change in Net Interest Income

$

2.5

$

0.9

$

3.4

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

Analysis of Change in Net Interest Income

Table 7

Three Months Ended September 30, 2024

Compared to September 30, 2023

(dollars in millions)

Volume

Rate

Total ⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

$

5.6

$

0.1

$

5.7

Available-for-Sale Investment Securities

Taxable

(4.8

)

(0.8

)

(5.6

)

Held-to-Maturity Investment Securities

Taxable

(1.0

)

(0.2

)

(1.2

)

Non-Taxable

—

(0.4

)

(0.4

)

Total Investment Securities

(5.8

)

(1.4

)

(7.2

)

Loans and Leases

Commercial and industrial

0.7

1.6

2.3

Commercial real estate

(1.8

)

2.0

0.2

Construction

3.2

1.6

4.8

Residential:

Residential mortgage

(1.0

)

1.3

0.3

Home equity line

—

3.1

Consumer

(2.3

)

2.7

0.4

Lease financing

0.9

(0.6

)

0.3

Total Loans and Leases

(0.3

)

11.7

11.4

Other Earning Assets

(0.7

)

0.6

(0.1

)

Total Change in Interest Income

(1.2

)

11.0

9.8

Change in Interest Expense:

Interest-Bearing Deposits

Savings

(0.1

)

4.5

4.4

Money Market

1.8

5.4

7.2

Time

(0.3

)

1.5

1.2

Total Interest-Bearing Deposits

1.4

11.4

12.8

Other Short-Term Borrowings

4.0

(0.1

)

3.9

Long-Term Borrowings

(2.6

)

(2.7

)

(5.3

)

Other Interest-Bearing Liabilities

(1.1

)

0.3

(0.8

)

Total Change in Interest Expense

1.7

8.9

10.6

Change in Net Interest Income

$

(2.9

)

$

2.1

$

(0.8

)

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

Analysis of Change in Net Interest Income

Table 8

Nine Months Ended September 30, 2024

Compared to September 30, 2023

(dollars in millions)

Volume

Rate

Total ⁽¹⁾

Change in Interest Income:

Interest-Bearing Deposits in Other Banks

$

15.8

$

1.3

$

17.1

Available-for-Sale Investment Securities

Taxable

(16.3

)

3.0

(13.3

)

Non-Taxable

(0.4

)

—

(0.4

)

Held-to-Maturity Investment Securities

Taxable

(3.3

)

—

(3.3

)

Non-Taxable

(0.1

)

(0.1

)

(0.2

)

Total Investment Securities

(20.1

)

2.9

(17.2

)

Loans Held for Sale

0.1

—

0.1

Loans and Leases

Commercial and industrial

(0.8

)

9.8

9.0

Commercial real estate

3.7

15.1

18.8

Construction

6.1

4.7

10.8

Residential:

Residential mortgage

(2.2

)

7.1

4.9

Home equity line

1.3

8.6

9.9

Consumer

(6.5

)

7.7

1.2

Lease financing

2.5

(1.1

)

1.4

Total Loans and Leases

4.1

51.9

56.0

Other Earning Assets

(0.8

)

2.0

1.2

Total Change in Interest Income

(0.9

)

58.1

57.2

Change in Interest Expense:

Interest-Bearing Deposits

Savings

(1.1

)

22.5

21.4

Money Market

3.4

29.3

32.7

Time

9.9

17.3

27.2

Total Interest-Bearing Deposits

12.2

69.1

81.3

Federal Funds Purchased

(0.4

)

(0.4

)

(0.8

)

Other Short-Term Borrowings

11.0

(0.5

)

10.5

Long-Term Borrowings

(6.3

)

(6.2

)

(12.5

)

Other Interest-Bearing Liabilities

(1.2

)

0.4

(0.8

)

Total Change in Interest Expense

15.3

62.4

77.7

Change in Net Interest Income

$

(16.2

)

$

(4.3

)

$

(20.5

)

⁽¹⁾The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.


Loans and Leases								Table 9
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2024		2024		2023		2023
Commercial and industrial	$	2,110,077	$	2,208,690	$	2,165,349	$	2,101,442
Commercial real estate		4,265,289		4,305,017		4,340,243		4,387,751
Construction		1,056,249		1,017,649		900,292		885,112
Residential:
Residential mortgage		4,187,060		4,216,416		4,283,315		4,303,924
Home equity line		1,159,823		1,159,833		1,174,588		1,167,388
Total residential		5,346,883		5,376,249		5,457,903		5,471,312
Consumer		1,030,044		1,027,104		1,109,901		1,154,203
Lease financing		432,828		425,190		379,809		332,515
Total loans and leases	$	14,241,370	$	14,359,899	$	14,353,497	$	14,332,335


Deposits								Table 10
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2024		2024		2023		2023
Demand	$	6,800,028	$	6,857,467	$	7,583,562	$	7,898,996
Savings		5,896,029		6,055,051		6,445,084		6,028,308
Money Market		4,129,381		4,111,609		3,847,853		3,923,054
Time		3,402,264		3,294,705		3,456,158		3,661,131
Total Deposits	$	20,227,702	$	20,318,832	$	21,332,657	$	21,511,489


Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More								Table 11
	September 30,		June 30,		December 31,		September 30,
(dollars in thousands)	2024		2024		2023		2023
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial Loans:
Commercial and industrial	$	934	$	1,084	$	970	$	988
Commercial real estate		152		3,085		2,953		—
Construction		—		447		—		—
Total Commercial Loans		1,086		4,616		3,923		988
Residential Loans:
Residential mortgage		9,103		7,273		7,620		7,435
Home equity line		7,645		6,124		7,052		6,200
Total Residential Loans		16,748		13,397		14,672		13,635
Total Non-Accrual Loans and Leases		17,834		18,013		18,595		14,623
Total Non-Performing Assets	$	17,834	$	18,013	$	18,595	$	14,623

Accruing Loans and Leases Past Due 90 Days or More
Commercial Loans:
Commercial and industrial	$	529	$	110	$	494	$	289
Commercial real estate		568		—		300		170
Total Commercial Loans		1,097		110		794		459
Residential mortgage		931		1,820		—		1,430
Consumer		2,515		1,835		2,702		1,681
Total Accruing Loans and Leases Past Due 90 Days or More	$	4,543	$	3,765	$	3,496	$	3,570

Total Loans and Leases	$	14,241,370	$	14,359,899	$	14,353,497	$	14,332,335


Allowance for Credit Losses and Reserve for Unfunded Commitments																		Table 12
	For the Three Months Ended												For the Nine Months Ended
	September 30,				June 30,				September 30,				September 30,				September 30,
(dollars in thousands)	2024				2024				2023				2024				2023
Balance at Beginning of Period	$	193,930			$	194,649			$	184,780			$	192,138			$	177,735
Loans and Leases Charged-Off
Commercial Loans:
Commercial and industrial		(1,178	)			(677	)			(784	)			(2,764	)			(2,572	)
Commercial real estate		(400	)			—				—				(400	)			—
Total Commercial Loans		(1,578	)			(677	)			(784	)			(3,164	)			(2,572	)
Residential Loans:
Residential mortgage		—				—				—				—				(122	)
Home equity line		—				—				—				—				(272	)
Total Residential Loans		—				—				—				—				(394	)
Consumer		(4,192	)			(4,182	)			(3,665	)			(13,228	)			(12,963	)
Total Loans and Leases Charged-Off		(5,770	)			(4,859	)			(4,449	)			(16,392	)			(15,929	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial and industrial		160				250				2,637				621				3,175
Residential Loans:
Residential mortgage		31				28				53				89				110
Home equity line		86				112				303				242				539
Total Residential Loans		117				140				356				331				649
Consumer		1,560				1,950				1,746				5,199				5,640
Total Recoveries on Loans and Leases Previously Charged-Off		1,837				2,340				4,739				6,151				9,464
Net Loans and Leases (Charged-Off) Recovered		(3,933	)			(2,519	)			290				(10,241	)			(6,465	)
Provision for Credit Losses		7,400				1,800				7,500				15,500				21,300
Balance at End of Period	$	197,397			$	193,930			$	192,570			$	197,397			$	192,570
Components:
Allowance for Credit Losses	$	163,700			$	160,517			$	154,795			$	163,700			$	154,795
Reserve for Unfunded Commitments		33,697				33,413				37,775				33,697				37,775
Total Allowance for Credit Losses and Reserve for Unfunded Commitments	$	197,397			$	193,930			$	192,570			$	197,397			$	192,570
Average Loans and Leases Outstanding	$	14,304,806			$	14,358,049			$	14,349,402			$	14,325,065			$	14,238,309
Ratio of Net Loans and Leases Charged-Off (Recovered) to Average Loans and Leases Outstanding⁽¹⁾		0.11		%		0.07		%		(0.01	)	%		0.10		%		0.06		%
Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding		1.15		%		1.12		%		1.08		%		1.15		%		1.08		%
Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases		9.18x				8.91x				10.59x				9.18x				10.59x

⁽¹⁾Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

Loans and Leases by Year of Origination and Credit Quality Indicator

Table 13

Revolving

Loans

Converted

Term Loans

Revolving

to Term

Amortized Cost Basis by Origination Year

Loans

Amortized

(dollars in thousands)

2024

2023

2022

2021

2020

Prior

Cost Basis

Total

Commercial Lending

Commercial and Industrial

Risk rating:

Pass

$

100,174

$

82,175

$

191,861

$

256,997

$

20,866

$

266,720

$

1,026,457

$

13,396

$

1,958,646

Special Mention

303

1

7,327

48

398

1,371

18,239

—

27,687

Substandard

—

8,251

219

358

2,033

32,296

—

43,157

Other ⁽¹⁾

10,797

10,542

7,779

3,074

1,052

1,723

45,620

—

80,587

Total Commercial and Industrial

111,274

92,718

215,218

260,338

22,674

271,847

1,122,612

13,396

2,110,077

Current period gross charge-offs

—

578

333

89

221

1,543

—

2,764

Commercial Real Estate

Risk rating:

Pass

118,884

347,480

810,746

649,133

325,887

1,774,529

87,188

7,760

4,121,607

Special Mention

3,587

2,261

7,537

41,384

3,306

11,973

7,815

—

77,863

Substandard

—

54,984

1,003

—

9,548

149

—

65,684

Other ⁽¹⁾

—

135

—

135

Total Commercial Real Estate

122,471

349,741

873,267

691,520

329,193

1,796,185

95,152

7,760

4,265,289

Current period gross charge-offs

—

400

—

400

Construction

Risk rating:

Pass

61,677

246,176

361,974

241,212

58,820

46,344

4,484

—

1,020,687

Special Mention

—

164

—

164

Other ⁽¹⁾

4,970

9,468

12,022

3,575

1,199

3,463

701

—

35,398

Total Construction

66,647

255,644

373,996

244,787

60,019

49,971

5,185

—

1,056,249

Current period gross charge-offs

—

Lease Financing

Risk rating:

Pass

126,380

105,523

66,764

15,483

23,133

89,254

—

426,537

Special Mention

—

42

100

300

5

—

447

Substandard

4,899

602

343

—

5,844

Total Lease Financing

131,279

106,167

67,207

15,783

23,138

89,254

—

432,828

Current period gross charge-offs

—

Total Commercial Lending

$

431,671

$

804,270

$

1,529,688

$

1,212,428

$

435,024

$

2,207,257

$

1,222,949

$

21,156

$

7,864,443

Current period gross charge-offs

$

—

$

578

$

333

$

89

$

221

$

1,943

$

—

$

—

$

3,164

Revolving

Loans

Converted

Term Loans

Revolving

to Term

Amortized Cost Basis by Origination Year

Loans

(continued)

Amortized

(dollars in thousands)

2024

2023

2022

2021

2020

Prior

Cost Basis

Total

Residential Lending

Residential Mortgage

FICO:

740 and greater

$

113,307

$

206,224

$

504,141

$

956,983

$

503,160

$

1,129,857

$

—

$

—

$

3,413,672

680 – 739

11,614

28,638

65,128

109,018

66,719

157,263

—

438,380

620 – 679

1,519

1,792

22,921

19,854

11,651

37,979

—

95,716

550 – 619

—

896

3,703

6,707

2,269

15,751

—

29,326

Less than 550

—

286

2,380

3,818

2,959

5,569

—

15,012

No Score ⁽³⁾

543

7,117

16,923

10,512

5,553

52,526

—

93,174

Other ⁽²⁾

8,148

12,786

16,721

14,776

11,222

30,022

8,105

—

101,780

Total Residential Mortgage

135,131

257,739

631,917

1,121,668

603,533

1,428,967

8,105

—

4,187,060

Current period gross charge-offs

—

Home Equity Line

FICO:

740 and greater

—

930,909

1,730

932,639

680 – 739

—

167,097

1,137

168,234

620 – 679

—

36,540

985

37,525

550 – 619

—

14,514

581

15,095

Less than 550

—

4,477

571

5,048

No Score ⁽³⁾

—

1,282

—

1,282

Total Home Equity Line

—

1,154,819

5,004

1,159,823

Current period gross charge-offs

—

Total Residential Lending

$

135,131

$

257,739

$

631,917

$

1,121,668

$

603,533

$

1,428,967

$

1,162,924

$

5,004

$

5,346,883

Current period gross charge-offs

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

—

$

—

Consumer Lending

FICO:

740 and greater

71,777

71,423

94,710

51,952

18,512

10,435

121,278

128

440,215

680 – 739

51,651

51,667

49,864

23,959

9,995

7,497

77,278

525

272,436

620 – 679

21,223

20,604

21,700

12,515

5,155

5,577

35,665

851

123,290

550 – 619

4,116

7,348

9,802

5,983

2,862

3,862

12,674

825

47,472

Less than 550

1,071

3,266

6,247

3,999

1,783

2,492

4,836

525

24,219

No Score ⁽³⁾

2,291

117

47

—

7

8

42,658

205

45,333

Other ⁽²⁾

—

296

911

101

981

74,790

—

77,079

Total Consumer Lending

$

152,129

$

154,425

$

182,666

$

99,319

$

38,415

$

30,852

$

369,179

$

3,059

$

1,030,044

Current period gross charge-offs

$

385

$

1,403

$

2,107

$

1,085

$

518

$

2,234

$

4,952

$

544

$

13,228

Total Loans and Leases

$

718,931

$

1,216,434

$

2,344,271

$

2,433,415

$

1,076,972

$

3,667,076

$

2,755,052

$

29,219

$

14,241,370

Current period gross charge-offs

$

385

$

1,981

$

2,440

$

1,174

$

739

$

4,177

$

4,952

$

544

$

16,392

⁽¹⁾Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score. As of September 30, 2024, the majority of the loans in this population were current.

⁽²⁾Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating. As of September 30, 2024, the majority of the loans in this population were current.

⁽³⁾No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.


GAAP to Non-GAAP Reconciliation	Table 14
	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
(dollars in thousands)	2024			2024			2023			2024			2023
Income Statement Data:
Net income	$	61,492		$	61,921		$	58,221		$	177,633		$	187,481

Average total stockholders’ equity	$	2,588,806		$	2,512,471		$	2,367,422		$	2,532,911		$	2,337,292
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible stockholders’ equity	$	1,593,314		$	1,516,979		$	1,371,930		$	1,537,419		$	1,341,800

Average total assets	$	24,046,696		$	23,958,913		$	24,727,893		$	24,064,208		$	24,699,826
Less: average goodwill		995,492			995,492			995,492			995,492			995,492
Average tangible assets	$	23,051,204		$	22,963,421		$	23,732,401		$	23,068,716		$	23,704,334

Return on average total stockholders’ equity⁽¹⁾		9.45	%		9.91	%		9.76	%		9.37	%		10.72	%
Return on average tangible stockholders’ equity (non-GAAP)⁽¹⁾		15.35	%		16.42	%		16.84	%		15.43	%		18.68	%

Return on average total assets⁽¹⁾		1.02	%		1.04	%		0.93	%		0.99	%		1.01	%
Return on average tangible assets (non-GAAP)⁽¹⁾		1.06	%		1.08	%		0.97	%		1.03	%		1.06	%



	As of			As of			As of			As of
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands, except per share amounts)	2024			2024			2023			2023
Balance Sheet Data:
Total stockholders’ equity	$	2,648,034		$	2,550,312		$	2,486,066		$	2,351,009
Less: goodwill		995,492			995,492			995,492			995,492
Tangible stockholders’ equity	$	1,652,542		$	1,554,820		$	1,490,574		$	1,355,517

Total assets	$	23,780,285		$	23,991,791		$	24,926,474		$	24,912,524
Less: goodwill		995,492			995,492			995,492			995,492
Tangible assets	$	22,784,793		$	22,996,299		$	23,930,982		$	23,917,032

Shares outstanding		127,886,167			127,879,012			127,618,761			127,609,934

Total stockholders’ equity to total assets		11.14	%		10.63	%		9.97	%		9.44	%
Tangible stockholders’ equity to tangible assets (non-GAAP)		7.25	%		6.76	%		6.23	%		5.67	%

Book value per share	$	20.71		$	19.94		$	19.48		$	18.42
Tangible book value per share (non-GAAP)	$	12.92		$	12.16		$	11.68		$	10.62

⁽¹⁾Annualized for the three and nine months ended September 30, 2024 and 2023 and three months ended June 30, 2024.

The MIL Network –

January 25, 2025

MIL-OSI: Pacific Financial Corp Earns $2.6 Million, or $0.25 per Diluted Share for Third Quarter 2024; Tangible Book Value Per Share Up 6.6% During Quarter; Board of Directors Declares Quarterly Cash Dividend of $0.14 per Share

Source: GlobeNewswire (MIL-OSI)

ABERDEEN, Wash., Oct. 25, 2024 (GLOBE NEWSWIRE) — Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.6 million, or $0.25 per diluted share for the third quarter of 2024, compared to $2.1 million, or $0.21 per diluted share for the second quarter of 2024, and $3.6 million, or $0.35 per diluted share for the third quarter of 2023. All results are unaudited.

Pacific Financials’ third quarter 2024 operating results reflected the following changes from the second quarter of 2024: (1) higher net interest income as the rise in loan and investment yields outpaced the rise in deposit and borrowing costs; (2) a negative provision for credit losses due to lower provision for unfunded loans; (3) lower non-interest income due to smaller gains on the sale of loans and investment securities; (4) slightly lower non-interest expenses; (5) a small decrease in total gross loans of 0.6% offset by an increase in the purchase of investment securities with the balance of investment securities increasing $18.1 million, or 6.5% during the third quarter; (6) an increase in total deposits of 2.6% to $1.0 billion at September 30, 2024, and (7) a $6.2 million increase in shareholder equity, or 5.4%. Tangible book value per share increased 6.6% during the quarter to $10.47.

The board of directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on October 23, 2024. The dividend will be payable on November 22, 2024 to shareholders of record on November 8, 2024. Additionally, the Board of Directors has authorized an additional $2.6 million toward future repurchases, or approximately 2.0% of total shares outstanding. The current stock repurchase program expires in November 2024.

“Our core operations continue to remain strong,” said Denise Portmann, President and Chief Executive Officer. “Our focused efforts on deposit retention, combined with the efforts of our new commercial loan and deposit teams, resulted in increased business relationships during the third quarter. Additionally, we added to our investment securities portfolio to increase yields. During the fourth quarter, we will be closing our mortgage banking division which we anticipate will improve the efficiency of our operation and improve earnings. However, the fourth quarter will reflect some one-time charges related to severance, contract and lease terminations.”

Third Quarter 2024 Financial Highlights:

Return on average assets (“ROAA”) was 0.90%, compared to 0.76% for the second quarter 2024, and 1.21% for the third quarter 2023.
Return on average equity (“ROAE”) was 8.77%, compared to 7.47% from the preceding quarter, and 13.16% from the third quarter a year earlier.
Net interest income was $11.2 million, compared to $10.8 million for the second quarter of 2024, and $12.3 million for the third quarter of 2023.
Net interest margin (“NIM”) increased to 4.19%, compared to 4.15% from the preceding quarter, and 4.37% for the third quarter a year ago. The increase in the net interest margin in the most recent quarter was due to increased yields on interest-earning assets outpacing the increased cost of interest-bearing liabilities.
Provision for credit losses was a benefit of $66,000 for the third quarter ended September 30, 2024 compared to a provision of $304,000 for the preceding quarter and $244,000 in the third quarter a year ago. The benefit largely reflected lower provisions for unfunded loans relative to prior periods.
Gross loans balances held in portfolio decreased by $4.4 million, or less than 1% to $699.6 million at September 30, 2024, compared to $704.0 million at June 30, 2024, and increased by $27.6 million, or 4%, from $672.0 million at September 30, 2023.
Total deposits increased $25.8 million to $1.01 billion, compared to $985.6 million at June 30, 2024, and decreased from $1.05 billion at September 30, 2023. Core deposits represented 87% of total deposits, with non-interest bearing deposits representing 38% of total deposits at September 30, 2024.
Coverage of short-term funds available to uninsured and uncollateralized deposits was 229% at September 30, 2024 and June 30, 2024. Uninsured or uncollateralized deposits were 25% of total deposits at September 30, 2024, and 24% at June 30, 2024.
Asset quality remains solid with nonperforming assets to total assets at 0.10%, compared to 0.12% three months earlier, and 0.10% at September 30, 2023. Accruing loans past due 30 or more days represent only 0.03% of total loans at September 30, 2024.
Tangible book value per share increased 6.6% during the quarter to $10.47 per share at September 30, 2024 from $9.82 per share at June 30, 2024. The increase was largely the result of a decline in interest rates and its impact on the fair market value of securities.
Pacific Financial and Bank of the Pacific continued to exceed regulatory well-capitalized requirements. At September 30, 2024 Pacific Financial’s estimated leverage ratio was 11.6% and its estimated total risk-based capital ratio was 17.9%.

Balance Sheet Review

Total assets increased 3% to $1.16 billion at September 30, 2024, compared to $1.12 billion at June 30, and decreased 2% from $1.18 billion at September 30, 2023.

Liquidity metrics continued to remain strong with total liquidity, both on and off balance sheet sources, at $576.8 million as of September 30, 2024. The Bank has established collateralized credit lines with borrowing capacity from the Federal Home Loan Bank of Des Moines (FHLB) and from the Federal Reserve Bank of San Francisco, as well as $60.0 million in unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end.

The following table summarizes the Bank’s available liquidity:

LIQUIDITY (unaudited)	Period Ended						Change from									% of Deposits
($ in 000s)	Period Ended						Change from									% of Deposits

		Sep 30,		Jun 30,		Sep 30,		Jun 30, 2024				Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024		2024		2023		$	%			$		%		2024		2024		2023
Short-term Funding
Cash and cash equivalents	$	85,430	$	63,183	$	147,970	$	22,247	35	%	$	(62,540	)	-42	%	8	%	6	%	14	%
Unencumbered AFS Securities		154,565		139,581		123,842		14,984	11	%		30,723		25	%	15	%	14	%	12	%
Secured lines of Credit (FHLB, FRB)		336,771		332,674		318,557		4,097	1	%		18,214		6	%	33	%	34	%	30	%
Short-term Funding	$	576,766	$	535,438	$	590,369	$	41,328	8	%	$	(13,603	)	-2	%	56	%	54	%	56	%

Investment securities: The investment securities portfolio increased 6% to $296.8 million, compared to $278.7 million at June 30, 2024 and increased 3% compared to the like period a year ago. The increase from the prior quarter was primarily due to the purchase of collateralized mortgage obligations and mortgage backed securities. U.S. Treasury bonds, and securities issued by the U.S. Government sponsored agencies accounted for 85% of the investment portfolio as of September 30, 2024, June 30, 2024, and September 30, 2023. Within that total, collateralized mortgage obligations accounted for 48% of the investment portfolio at September 30, 2024, compared to 45% the previous quarter.

The average adjusted duration to reset of the investment securities portfolio was 4.2 years at September 30, 2024. Net unrealized losses on the investments classified as available for sale declined $7.2 million to $14.8 million ($11.5 million after-tax) at September 30, 2024, or 5% of AFS portfolio.

Gross loans balances excluding loans held for sale decreased $4.4 million, or 1%, to $699.6 million at September 30, 2024, compared to $704.0 million at June 30, 2024. During the third quarter, loan pipelines and originations slowed from prior levels as borrowers continued to adjust to higher interest rates and economic uncertainty. Due primarily to loan amortization the loan portfolio reflected slight declines in most categories except multi-family lending which increased $2.8 million. Year-over-year loan growth was 4%, or $27.6 million, with the largest increases in residential 1-4 family and multi-family loans which increased $14.8 million and $11.7 million, respectively. Loans classified as commercial real estate for regulatory concentration purposes totaled $261.3 million at September 30, 2024, or 185% of total risk based capital.

The Company continues to manage concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. In addition, the loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets.

Credit quality: Non-performing assets were minimal and remained at $1.1 million, or 0.10% of total assets at September 30, 2024, compared to $1.2 million, or 0.10% at September 30, 2023. The Company has zero other real estate owned as of September 30, 2024 and accruing loans past due more than 30 days represent only 0.04% of total loans.

Allowance for credit losses (“ACL”) for loans was $8.9 million, or 1.27% of gross loans at September 30, 2024, compared to $8.9 million or 1.26% of loans at June 30, 2024 and $8.3 million or 1.24% at September 30, 2023.

A negative provision for credit losses of $66,000 was recorded in the current quarter, reflecting less allowance requirements for unfunded loans. This compares to a provision for credit losses of $304,000 in the second quarter of 2024 and $244,000 for the third quarter of 2023. Net charge-offs for the current quarter remained minimal and reflected a net recovery of $11,000, compared to a net charge-off of $56,000 for the preceding quarter and $125,000 for the third quarter one year ago.

Total deposits increased to $1.01 billion at September 30, 2024, compared to $985.6 million at June 30, 2024 and decreased from $1.05 billion at September 30, 2023. The bank has focused efforts to retain customer relationships resulting in a $22.1 million increase in business deposits.

Non-interest-bearing account balances, composed of commercial banking relationships, are the largest component of the deposit portfolio at 38% at September 30, 2024 and June 30, 2024. Money market deposits currently represent the second largest component of the deposit base and increased $11.5 million from the linked quarter and $12.8 million from the same quarter a year ago and represent 19%, 18%, and 17%, of total deposits, at September 30, 2024, June 30, 2024, and September 30, 2023, respectively. Interest-bearing demand deposits are the third largest component of the deposit base representing 18% of total deposits at September 30, 2024. Pacific Financial continues to benefit from a strong core deposit base, with core deposits representing 87% of total deposits at quarter end.

Shareholder’s equity increased $6.2 million, or 5% to $121.1 million at September 30, 2024, compared to $114.9 million at June 30, 2024, and increased $14.5 million, or 14% compared to $106.6 million at September 30, 2023. The increase in shareholders’ equity during the current quarter was due to quarterly net income, a decrease in unrealized losses on available-for-sale securities and dividends paid to shareholders. Net unrealized losses (after-tax) on available-for-sale securities were $11.5 million at September 30, 2024 compared to $17.1 million at June 30, 2024, and $23.1 million at September 30, 2023. This decrease in net unrealized losses reflects lower longer-term market interest rates at the end of the quarter.

Book value per common share was $11.78 at September 30, 2024, compared to $11.12 at June 20, 2024, and $10.22 at September 30, 2023. The Company’s tangible common equity ratio was 9.4% at September 30, 2024 and 9.1% at June 30, 2024, compared to 8.0% at September 30, 2023. Regulatory capital ratios of both the Company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the Company’s leverage ratio at 11.6% and total risk-based capital ratio at 17.9% as of September 30, 2024. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.

The current stock repurchase program expires in November 2024. The Board of Directors has authorized an additional $2.6 million toward future repurchases, or approximately 2.0% of total shares outstanding.

Income Statement Review

Net interest income increased $438,000 to $11.2 million for the third quarter of 2024, compared to $10.8 million for the second quarter of 2024, and decreased $1.1 million compared to $12.3 million for the third quarter a year ago. The change in the current quarter compared to the preceding quarter reflects higher yields on a larger investment portfolio and an increase in loan yields due primarily to repricing of loans. Increasing deposit costs offset some of the benefit from higher yielding investments and loans. For the current quarter compared to the like period a year ago, funding costs have outpaced the rising yields on investments and loans.

The Bank’s net interest margin continued to remain strong at 4.19% for the quarter ended September 30, 2024 compared to 4.15% the preceding quarter. For the third quarter ended September 30, 2023, the net interest margin was 4.37% reflecting lower funding costs relative to more recent periods.

Yields on total interest earning assets increased 14 basis points to 5.29% for the third quarter of 2024 compared to 5.15% for the prior quarter and 5.06% in the like quarter a year ago. Average loan yields increased to 5.99% during the current quarter, compared to 5.80% for the preceding quarter and 5.71% for the third quarter 2023.

The Bank’s total cost of funds increased to 1.15% for the current quarter, compared to 1.05% for the preceding quarter, and 0.72% for the third quarter 2023. The increase in the costs of deposits was due to retention efforts and competitive pricing of deposit products. The percentage of non-interest bearing deposits remained high at 38% for the current quarter.

Noninterest income decreased to $1.7 million for the current quarter, compared to $2.0 million for the linked quarter and increased from $1.6 million a year earlier. The decrease compared to the linked quarter was primarily due to decreased mortgage banking loan production and no gains on the sale of investment securities.

The company plans to close its mortgage banking division by the end of 2024 which is expected to reduce non-interest income offset by a reduction of personnel and overhead expenses associated with the operation. The elimination of the mortgage banking division is expected to improve the efficiency of the company after severance and contract termination expenses are realized in the fourth quarter of 2024.

Fee and service charge income remained consistent in the third quarter of 2024 at $1.2 million compared to the previous quarter and the third quarter of 2023.

Noninterest expenses decreased to $9.7 million for the third quarter of 2024 compared to $9.8 million for the prior quarter and increased from $9.1 million for the third quarter of 2023. Within the total of noninterest expenses for the current quarter compared to the prior quarter, the largest category of salaries and employee benefits remained at $6.3 million. Similarly, data processing and occupancy expenses remained consistent to the prior quarter.

The company’s efficiency ratio decreased to 75.48% for the third quarter of 2024, compared to 77.34% in the preceding quarter and increased from 65.78% in the same quarter a year ago. The increase in the efficiency ratio relative to the previous year primarily relates to the decreased net interest margin and higher overhead expenses related to the hiring, building and marketing of new commercial loan and deposit teams.

Income tax expense: Federal and Oregon state income tax expenses totaled $633,000 for the current quarter, and $454,000 for the preceding quarter, resulting in effective tax rates of 19.6% and 17.6%, respectively. These income tax expenses reflect the benefits of tax exempt income and credits on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank owned life insurance.

FINANCIAL HIGHLIGHTS (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
FINANCIAL HIGHLIGHTS (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
(In 000s, except per share data)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023					Sep 30,			Sep 30,
		2024			2024			2023			$		%			$		%			2024			2023			$		%
Earnings Ratios & Data
Net Income	$	2,594		$	2,126		$	3,645		$	468		22	%	$	(1,051	)	-29	%	$	7,370		$	11,663		$	(4,293	)	-37	%
Return on average assets		0.90	%		0.76	%		1.21	%		0.14	%				-0.31	%				0.87	%		1.28	%		-0.41	%
Return on average equity		8.77	%		7.47	%		13.16	%		1.30	%				-4.39	%				8.52	%		14.34	%		-5.82	%
Efficiency ratio ⁽¹⁾		75.48	%		77.34	%		65.78	%		-1.86	%				9.70	%				75.67	%		64.64	%		11.03	%
Net-interest margin %⁽²⁾		4.19	%		4.15	%		4.37	%		0.04	%				-0.18	%				4.24	%		4.40	%		-0.16	%

Share Ratios & Data
Basic earnings per share	$	0.25		$	0.21		$	0.35		$	0.04		19	%	$	(0.10	)	-29	%	$	0.71		$	1.12		$	(0.41	)
Diluted earning per share	$	0.25		$	0.21		$	0.35		$	0.04		19	%	$	(0.10	)	-29	%	$	0.71		$	1.12		$	(0.41	)
Book value per share⁽³⁾	$	11.78		$	11.12		$	10.22		$	0.66		6	%	$	1.56		15	%
Tangible book value per share⁽⁴⁾	$	10.47		$	9.82		$	8.93		$	0.65		7	%	$	1.54		17	%
Common shares outstanding		10,283			10,336			10,427			(53	)	-1	%		(144	)	-1	%
PFLC stock price	$	11.65		$	9.76		$	10.00		$	1.89		19	%	$	1.65		17	%
Dividends paid per share	$	0.14		$	0.14		$	0.13		$	–		0	%	$	0.01		8	%	$	0.42		$	0.39		$	0.03		8	%

Balance Sheet Data
Assets	$	1,158,410		$	1,124,295		$	1,181,975		$	34,115		3	%	$	(23,565	)	-2	%
Portfolio Loans	$	699,603		$	703,977		$	671,969		$	(4,374	)	-1	%	$	27,634		4	%
Deposits	$	1,011,473		$	985,627		$	1,051,256		$	25,846		3	%	$	(39,783	)	-4	%
Investments	$	296,792		$	278,728		$	289,152		$	18,064		6	%	$	7,640		3	%
Shareholders equity	$	121,087		$	114,923		$	106,601		$	6,164		5	%	$	14,486		14	%

Liquidity Ratios
Short-term funding to uninsured
and uncollateralized deposits		229	%		229	%		254	%		0	%				-25	%
Uninsured and uncollateralized
deposits to total deposits		25	%		24	%		22	%		1	%				3	%
Portfolio loans to deposits ratio		69	%		71	%		63	%		-2	%				6	%

Asset Quality Ratios
Non-performing assets to assets		0.10	%		0.12	%		0.10	%		-0.02	%				0.00	%
Non-accrual loans to portfolio loans		0.16	%		0.19	%		0.18	%		-0.03	%				-0.02	%
Loan losses to avg portfolio loans		-0.01	%		0.03	%		0.07	%		-0.04	%				-0.08	%				0.01	%		0.04	%		-0.03	%
ACL to portfolio loans		1.27	%		1.26	%		1.24	%		0.01	%				0.03	%

Capital Ratios (PFC)
Total risk-based capital ratio		17.9	%		17.6	%		17.6	%		0.3	%				0.3	%
Tier 1 risk-based capital ratio		16.7	%		16.4	%		16.5	%		0.3	%				0.2	%
Common equity tier 1 ratio		15.0	%		14.8	%		14.8	%		0.2	%				0.2	%
Leverage ratio		11.6	%		11.7	%		10.7	%		-0.1	%				0.9	%
Tangible common equity ratio		9.4	%		9.1	%		8.0	%		0.3	%				1.4	%

⁽¹⁾ Non-interest expense divided by net interest income plus noninterest income.
⁽²⁾ Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.
⁽³⁾ Book value per share is calculated as the total common shareholders’ equity divided by the period ending number of common stock shares outstanding.
⁽⁴⁾ Tangible book value per share is calculated as the total common shareholders’ equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding.

INCOME STATEMENT (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
INCOME STATEMENT (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
($ in 000s)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023					Sep 30,			Sep 30,
		2024			2024			2023			$		%			$		%			2024			2023			$		%
Interest Income
Loan interest & fee income	$	10,520		$	10,109		$	9,549		$	411		4	%	$	971		10	%	$	30,853		$	27,166		$	3,687		14	%
Interest bearing cash income		1,108			847			2,322			261		31	%		(1,214	)	-52	%		2,890			7,669			(4,779	)	-62	%
Investment income		2,503			2,410			2,371			93		4	%		132		6	%		7,388			6,832			556		8	%
Interest Income		14,131			13,366			14,242			765		6	%		(111	)	-1	%		41,131			41,667			(536	)	-1	%

Interest Expense
Deposits interest expense		2,684			2,358			1,716			326		14	%		968		56	%		7,033			3,437			3,596		105	%
Other borrowings interest expense		243			242			246			1		0	%		(3	)	-1	%		727			682			45		7	%
Interest Expense		2,927			2,600			1,962			327		13	%		965		49	%		7,760			4,119			3,641		88	%
Net Interest Income		11,204			10,766			12,280			438		4	%		(1,076	)	-9	%		33,371			37,548			(4,177	)	-11	%
Provision (benefit) for credit losses		(66	)		304			244			(370	)	-122	%		(310	)	-127	%		271			409			(138	)	-34	%
Net Interest Income after provision		11,270			10,462			12,036			808		8	%		(766	)	-6	%		33,100			37,139			(4,039	)	-11	%

Non-Interest Income
Fees and service charges		1,225			1,198			1,248			27		2	%		(23	)	-2	%		3,523			3,695			(172	)	-5	%
Gain on sale of investments, net		–			121			–			(121	)	-100	%		–		-100	%		121			(154	)		275		-179	%
Gain on sale of loans, net		267			445			170			(178	)	-40	%		97		57	%		865			540			325		60	%
Income on bank-owned insurance		188			182			174			6		3	%		14		8	%		550			509			41		8	%
Other non-interest income		7			17			18			(10	)	-59	%		(11	)	-61	%		34			53			(19	)	-36	%
Non-Interest Income		1,687			1,963			1,610			(276	)	-14	%		77		5	%		5,093			4,643			450		10	%

Non-Interest Expense
Salaries and employee benefits		6,341			6,321			5,560			20		0	%		781		14	%		18,656			17,006			1,650		10	%
Occupancy		601			564			501			37		7	%		100		20	%		1,806			1,536			270		18	%
Furniture, Fixtures & Equipment		286			267			252			19		7	%		34		13	%		837			808			29		4	%
Marketing & donations		201			176			160			25		14	%		41		26	%		531			380			151		40	%
Professional services		233			327			301			(94	)	-29	%		(68	)	-23	%		897			941			(44	)	-5	%
Data Processing & IT		1,185			1,165			1,161			20		2	%		24		2	%		3,541			3,490			51		1	%
Other		883			1,025			1,207			(142	)	-14	%		(324	)	-27	%		2,839			3,174			(335	)	-11	%
Non-Interest Expense		9,730			9,845			9,142			(115	)	-1	%		588		6	%		29,107			27,335			1,772		6	%
Income before income taxes		3,227			2,580			4,504			647		25	%		(1,277	)	-28	%		9,086			14,447			(5,361	)	-37	%
Provision for income taxes		633			454			859			179		39	%		(226	)	-26	%		1,716			2,784			(1,068	)	-38	%
Net Income	$	2,594		$	2,126		$	3,645		$	468		22	%		(1,051	)	-29	%	$	7,370		$	11,663		$	(4,293	)	-37	%

Effective tax rate		19.6	%		17.6	%		19.1	%		2.0	%				0.5	%				18.9	%		19.3	%		-0.4	%

BALANCE SHEET (unaudited)	Period Ended									Change from										% of Total
($ in 000s)	Period Ended									Change from										% of Total

		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024			2024			2023			$		%			$		%		2024		2024		2023
Assets
Cash on hand and in banks	$	20,621		$	17,362		$	12,052		$	3,259		19	%	$	8,569		71	%	2	%	2	%	2	%
Interest bearing deposits		80,522			58,586			146,886			21,936		37	%		(66,364	)	-45	%	7	%	5	%	12	%
Investment securities		296,792			278,728			289,152			18,064		6	%		7,640		3	%	26	%	25	%	24	%
Loans held-for-sale		140			4,051			637			(3,911	)	-97	%		(497	)	-78	%	0	%	0	%	0	%
Portfolio Loans, net of deferred fees		698,974			703,322			671,134			(4,348	)	-1	%		27,840		4	%	60	%	63	%	57	%
Allowance for credit losses		(8,897	)		(8,859	)		(8,347	)		(38	)	0	%		(550	)	7	%	-1	%	-1	%	-1	%
Net loans		690,077			694,463			662,787			(4,386	)	-1	%		27,290		4	%	60	%	62	%	56	%
Premises & equipment		17,124			15,571			13,756			1,553		10	%		3,368		24	%	2	%	2	%	2	%
Goodwill & Other Intangibles		13,435			13,435			13,435			–		0	%		–		0	%	1	%	1	%	1	%
Bank-owned life Insurance		28,084			27,860			27,321			224		1	%		763		3	%	2	%	2	%	2	%
Other assets		11,615			14,239			15,949			(2,624	)	-18	%		(4,334	)	-27	%	1	%	1	%	1	%
Total Assets	$	1,158,410		$	1,124,295		$	1,181,975		$	34,115		3	%	$	(23,565	)	-2	%	100	%	100	%	100	%

Liabilities & Shareholders’ Equity
Deposits	$	1,011,473		$	985,627		$	1,051,256		$	25,846		3	%	$	(39,783	)	-4	%	87	%	88	%	89	%
Borrowings		13,403		$	13,403		$	13,403			–		0	%		–		0	%	1	%	1	%	1	%
Other liabilities		12,447		$	10,342		$	10,715			2,105		20	%		1,732		16	%	1	%	1	%	1	%
Shareholders’ equity		121,087		$	114,923		$	106,601			6,164		5	%		14,486		14	%	11	%	10	%	9	%
Liabilities & Shareholders’ Equity	$	1,158,410		$	1,124,295		$	1,181,975		$	34,115		3	%	$	(23,565	)	-2	%	100	%	100	%	100	%

INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from										% of Total
INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from										% of Total
($ in 000s)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024			2024			2023			$		%			$		%		2024		2024		2023
Investment Securities
Collateralized mortgage obligations	$	141,842		$	125,937		$	126,376		$	15,905		13	%	$	15,466		12	%	48	%	45	%	45	%
Mortgage backed securities		41,264			37,159			38,322			4,105		11	%		2,942		8	%	14	%	13	%	13	%
U.S. Government and agency securities		68,961			72,504			82,292			(3,543	)	-5	%		(13,331	)	-16	%	23	%	27	%	27	%
Municipal securities		44,725			43,128			42,162			1,597		4	%		2,563		6	%	15	%	15	%	15	%
Investment Securities	$	296,792		$	278,728		$	289,152		$	18,064		6	%	$	7,640		3	%	100	%	100	%	100	%

Held to maturity securities	$	42,301		$	43,244		$	56,469		$	(943	)	-2	%	$	(14,168	)	-25	%	14	%	16	%	20	%
Available for sale securities	$	254,491		$	235,484		$	232,683		$	19,007		8	%	$	21,808		9	%	86	%	84	%	80	%

Government & Agency securities	$	252,039		$	235,570		$	246,956		$	16,469		7	%	$	5,083		2	%	85	%	85	%	85	%
AAA, AA, A rated securities	$	44,084		$	42,471		$	41,025		$	1,613		4	%	$	3,059		7	%	15	%	15	%	14	%
Non-rated securities	$	669		$	687		$	1,171		$	(18	)	-3	%	$	(502	)	-43	%	0	%	0	%	0	%

AFS Unrealized Gain (Loss)	$	(14,804	)	$	(21,978	)	$	(29,783	)	$	7,174		-33	%	$	14,979		-50	%	-5	%	-8	%	-10	%

PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from										% of Total
PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended									Change from										% of Total
($ in 000s)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024			2024			2023			$		%			$		%		2024		2024		2023
Portfolio Loans
Commercial & agriculture	$	73,002		$	74,952		$	73,232		$	(1,950	)	-3	%	$	(230	)	0	%	10	%	11	%	11	%
Real estate:
Construction and development		46,569			47,856			42,584			(1,287	)	-3	%		3,985		9	%	7	%	7	%	6	%
Residential 1-4 family		105,298			105,807			90,449			(509	)	0	%		14,849		16	%	15	%	14	%	14	%
Multi-family		60,773			58,003			49,092			2,770		5	%		11,681		24	%	9	%	8	%	7	%
CRE — owner occupied		167,086			169,491			164,057			(2,405	)	-1	%		3,029		2	%	24	%	24	%	25	%
CRE — non owner occupied		157,347			157,591			154,993			(244	)	0	%		2,354		2	%	22	%	22	%	23	%
Farmland		26,553			27,195			27,641			(642	)	-2	%		(1,088	)	-4	%	4	%	4	%	4	%
Consumer		62,975			63,082			69,921			(107	)	0	%		(6,946	)	-10	%	9	%	10	%	10	%
Portfolio Loans		699,603			703,977			671,969			(4,374	)	-1	%		27,634		4	%	100	%	100	%	100	%
Less: ACL		(8,897	)		(8,859	)		(8,347	)
Less: deferred fees		(629	)		(655	)		(835	)
Net loans	$	690,077		$	694,463		$	662,787

Regulatory Commercial Real Estate	$	261,292		$	260,068		$	244,277		$	1,224		0	%	$	17,015		7	%	37	%	37	%	36	%
Total Risk Based Capital⁽¹⁾	$	140,971		$	140,176		$	137,473		$	795		1	%	$	3,498		3	%
CRE to Risk Based Capital⁽¹⁾		185	%		186	%		178	%				-1	%				7	%

CRE–MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited)	Period Ended						Change from										% of Total
	Period Ended						Change from										% of Total
($ in 000s)
		Sep 30,		Jun 30,		Sep 30,		Jun 30, 2024					Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024		2024		2023		$		%			$		%		2024		2024		2023
Collateral Composition⁽²⁾
Multifamily	$	63,099	$	63,243	$	54,677	$	(144	)	0	%	$	8,422		15	%	27	%	27	%	26	%
Retail		37,685		36,074		28,657		1,611		4	%		9,028		32	%	16	%	16	%	13	%
Hospitality		30,844		30,248		32,190		596		2	%		(1,346	)	-4	%	13	%	13	%	15	%
Mini Storage		25,758		23,619		20,977		2,139		9	%		4,781		23	%	11	%	11	%	10	%
Office		22,921		23,266		27,075		(345	)	-1	%		(4,154	)	-15	%	10	%	10	%	13	%
Mixed Use		22,708		23,520		22,457		(812	)	-3	%		251		1	%	10	%	10	%	11	%
Industrial		13,912		13,691		10,898		221		2	%		3,014		28	%	6	%	6	%	5	%
Warehouse		7,582		7,631		6,204		(49	)	-1	%		1,378		22	%	3	%	3	%	3	%
Special Purpose		6,968		7,014		7,146		(46	)	-1	%		(178	)	-2	%	3	%	3	%	3	%
Other		3,174		3,213		3,380		(39	)	-1	%		(206	)	-6	%	1	%	1	%	1	%
Total	$	234,651	$	231,519	$	213,661	$	3,132		1	%	$	20,990		10	%	100	%	100	%	100	%

⁽¹⁾ Bank of the Pacific
⁽²⁾ Includes loans in process of construction

CREDIT QUALITY (unaudited)	Period Ended									Change from
CREDIT QUALITY (unaudited)	Period Ended									Change from
($ in 000s)		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Jun 30, 2024
		2024			2024			2023			$		%			$		%
Risk Rating Distribution
Pass	$	691,199		$	694,272		$	664,327		$	(3,073	)	0	%		26,872		4	%
Special Mention		4,789			4,731			1,626			58		1	%		3,163		195	%
Substandard		3,615			4,974			6,016			(1,359	)	-27	%		(2,401	)	-40	%
Portfolio Loans	$	699,603		$	703,977		$	671,969		$	(4,374	)	-1	%	$	27,634		4	%

Nonperforming Assets
Nonaccruing loans		1,138			1,370			1,219		$	(232	)	-17	%		(81	)	-7	%
Other real estate owned		–			–			–			–		0	%		–		0	%
Nonperforming Assets	$	1,138		$	1,370		$	1,219		$	(232	)	-17	%		(81	)	-7	%

Credit Metrics
Classified loans¹ to portfolio loans		0.52	%		0.71	%		0.90	%		-0.19	%				-0.38	%
ACL to classified loans¹		246.11	%		178.11	%		132.68	%		68.00	%				113.43	%
Loans past due 30+ days to portfolio loans²		0.03	%		0.04	%		0.25	%		-0.01	%				-0.22	%
Nonperforming assets to total assets		0.10	%		0.12	%		0.10	%		-0.02	%				0.00	%
Nonaccruing loans to portfolio loans		0.16	%		0.19	%		0.18	%		-0.03	%				-0.02	%

⁽¹⁾ Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower’s financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected.
⁽²⁾ Excludes non-accrual loans

DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended						Change from										% of Total
DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited)	Period Ended						Change from										% of Total
($ in 000s)
		Sep 30,		Jun 30,		Sep 30,		Jun 30, 2024					Sep 30, 2023				Sep 30,		Jun 30,		Sep 30,
		2024		2024		2023		$		%			$		%		2024		2024		2023
Deposits
Interest-bearing demand	$	183,337	$	179,278	$	208,091	$	4,059		2	%	$	(24,754	)	-12	%	18	%	19	%	20	%
Money market		192,185		180,727		179,367		11,458		6	%		12,818		7	%	19	%	18	%	17	%
Savings		117,131		121,851		138,981		(4,720	)	-4	%		(21,850	)	-16	%	12	%	12	%	13	%
Time deposits (CDs)		133,995		125,560		92,720		8,435		7	%		41,275		45	%	13	%	13	%	9	%
Total interest-bearing deposits		626,648		607,416		619,159		19,232		3	%		7,489		1	%	62	%	62	%	59	%
Non-interest bearing demand		384,825		378,211		432,097		6,614		2	%		(47,272	)	-11	%	38	%	38	%	41	%
Total deposits	$	1,011,473	$	985,627	$	1,051,256	$	25,846		3	%	$	(39,783	)	-4	%	100	%	100	%	100	%

Insured Deposits	$	636,725	$	632,923	$	666,308	$	3,802		1	%	$	(414,008	)	-62	%	63	%	64	%	63	%
Collateralized Deposits		122,448		118,966		152,960		3,482		3	%		(30,512	)	-20	%	12	%	12	%	15	%
Uninsured Deposits		252,300		233,738		231,988		18,562		8	%		404,737		174	%	25	%	24	%	22	%
Total Deposits	$	1,011,473	$	985,627	$	1,051,256	$	25,846		3	%	$	(39,783	)	-4	%	100	%	100	%	100	%

Consumer Deposits	$	458,097	$	458,249	$	466,877	$	(152	)	0	%	$	(8,780	)	-2	%	45	%	47	%	44	%
Business Deposits		420,845		398,719		429,443		22,126		6	%		(8,598	)	-2	%	42	%	40	%	41	%
Public Deposits		132,531		128,659		154,936		3,872		3	%		(22,405	)	-14	%	13	%	13	%	15	%
Total Deposits	$	1,011,473	$	985,627	$	1,051,256	$	25,846		3	%	$	(39,783	)	-4	%	100	%	100	%	100	%

NET INTEREST MARGIN (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
NET INTEREST MARGIN (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
($ in 000s)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023					Sep 30,			Sep 30,
		2024			2024			2023			$		%			$		%			2024			2023			$		%

Average Interest Bearing Balances
Portfolio loans	$	697,904		$	699,404		$	665,300		$	(1,500	)	0	%	$	32,604		5	%	$	695,418		$	653,619		$	41,799		6	%
Loans held for sale	$	1,276		$	1,593		$	497		$	(317	)	-20	%	$	779		157	%	$	1,155		$	601		$	554		92	%
Investment securities	$	285,947		$	283,637		$	284,041		$	2,310		1	%	$	1,906		1	%	$	287,315		$	285,538		$	1,777		1	%
Interest-bearing cash	$	81,755		$	62,494		$	172,119		$	19,261		31	%	$	(90,364	)	-53	%	$	71,080		$	206,259		$	(135,179	)	-66	%
Total interest-earning assets	$	1,066,882		$	1,047,128		$	1,121,957		$	19,754		2	%	$	(55,075	)	-5	%	$	1,054,968		$	1,146,017		$	(91,049	)	-8	%
Non-interest bearing deposits	$	383,332		$	387,740		$	441,782		$	(4,408	)	-1	%	$	(58,450	)	-13	%	$	388,672		$	457,750		$	(69,078	)	-15	%
Interest-bearing deposits	$	615,388		$	596,121		$	619,183		$	19,267		3	%	$	(3,795	)	-1	%	$	600,694		$	628,978		$	(28,284	)	-4	%
Total Deposits	$	998,720		$	983,861		$	1,060,965		$	14,859		2	%	$	(62,245	)	-6	%	$	989,366		$	1,086,728		$	(97,362	)	-9	%
Borrowings	$	13,403		$	13,404		$	13,403		$	(1	)	0	%	$	–		0	%	$	13,403		$	13,401		$	2		0	%
Total interest-bearing liabilities	$	628,791		$	609,525		$	632,586		$	19,266		3	%	$	(3,795	)	-1	%	$	614,097		$	642,379		$	(28,282	)	-4	%

Yield / Cost $⁽¹⁾
Portfolio loans	$	10,509		$	10,092		$	9,570		$	417		4	%	$	939		10	%	$	30,834		$	27,208		$	3,626		13	%
Loans held for sale	$	22		$	28		$	8		$	(6	)	-21	%	$	14		175	%	$	55		$	28		$	27		96	%
Investment securities	$	2,535		$	2,442		$	2,405		$	93		4	%	$	130		5	%	$	7,485		$	6,954		$	531		8	%
Interest-bearing cash	$	1,108		$	847		$	2,322		$	261		31	%	$	(1,214	)	-52	%	$	2,890		$	7,669		$	(4,779	)	-62	%
Total interest-earning assets	$	14,174		$	13,410		$	14,306		$	764		6	%	$	(132	)	-1	%	$	41,265		$	41,859		$	(594	)	-1	%
Interest-bearing deposits	$	2,684		$	2,358		$	1,716		$	326		14	%	$	968		56	%	$	7,033		$	3,437		$	3,596		105	%
Borrowings	$	243		$	242		$	246		$	1		0	%	$	(3	)	-1	%	$	727		$	682		$	45		7	%
Total interest-bearing liabilities	$	2,927		$	2,600		$	1,962		$	327		13	%	$	965		49	%	$	7,760		$	4,119		$	3,641		88	%
Net interest income	$	11,247		$	10,810		$	12,344		$	437		4	%		(1,097	)	-9	%	$	33,505		$	37,740		$	(4,235	)	-11	%

Yield / Cost %⁽¹⁾
Yield on portfolio loans		5.99	%		5.80	%		5.71	%		0.19	%				0.28	%				5.92	%		5.57	%		0.35	%
Yield on investment securities		3.53	%		3.46	%		3.36	%		0.07	%				0.17	%				3.48	%		3.26	%		0.22	%
Yield on interest-bearing cash		5.39	%		5.46	%		5.35	%		-0.07	%				0.04	%				5.43	%		4.97	%		0.46	%
Cost of interest-bearing deposits		1.74	%		1.59	%		1.10	%		0.15	%				0.64	%				1.56	%		0.73	%		0.83	%
Cost of borrowings		7.21	%		7.26	%		7.28	%		-0.05	%				-0.07	%				7.25	%		6.80	%		0.45	%
Cost of deposits and borrowings		1.15	%		1.05	%		0.72	%		0.10	%				0.43	%				1.03	%		0.50	%		0.53	%

Yield on interest-earning assets		5.29	%		5.15	%		5.06	%		0.14	%				0.23	%				5.22	%		4.88	%		0.34	%
Cost of interest-bearing liabilities		1.85	%		1.72	%		1.23	%		0.13	%				0.62	%				1.69	%		0.86	%		0.83	%
Net interest spread		3.44	%		3.43	%		3.83	%		0.01	%				-0.39	%				3.53	%		4.02	%		-0.49	%
Net interest margin		4.19	%		4.15	%		4.37	%		0.04	%				-0.18	%				4.24	%		4.40	%		-0.16	%

⁽¹⁾ Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%.

ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited)	Quarter Ended									Change From											Nine Months Ended					Change
($ in 000s)
		Sep 30,			Jun 30,			Sep 30,			Jun 30, 2024					Sep 30, 2023					Sep 30,			Sep 30,
		2024			2024			2023			$		%			$		%			2024			2023			$		%
Allowance for Credit Losses
Beginning of period balance	$	8,859		$	8,580		$	8,223		$	279		3	%	$	636		8	%	$	8,530		$	8,236		$	294		4	%
Impact of CECL Adoption (ASC 326)		–			–			–			–		-100	%		–		-100	%		–			(157	)		157		-100	%
Charge-offs		(5	)		(57	)		(126	)		52		-91	%		121		-96	%		(97	)		(259	)		162		-63	%
Recoveries		16			1			1			15		1500	%		15		1500	%		19			55			(36	)	-65	%
Net (charge-off) recovery		11			(56	)		(125	)		67		-120	%		136		-109	%		(78	)		(204	)		126		-62	%
Provision (benefit)		27			335			249			(308	)	-92	%		(222	)	-89	%		445			472			(27	)	-6	%
End of period balance	$	8,897		$	8,859		$	8,347		$	38		0	%	$	550		7	%	$	8,897		$	8,347		$	550		7	%

Net charge-off (recovery) to
average portfolio loans		-0.01	%		0.03	%		0.07	%		-0.04	%				-0.08	%				0.01	%		0.04	%		-0.03	%
ACL to portfolio loans		1.27	%		1.26	%		1.24	%		0.01	%				0.03	%				1.27	%		1.24	%		0.03	%

Allowance for unfunded loans
Beginning of period balance	$	617		$	648		$	754		$	(31	)	-5	%	$	(137	)	-18	%	$	698		$	203		$	495		244	%
Impact of CECL Adoption (ASC 326)		–			–			–			–		-100	%		–		-100	%		–			609			(609	)	-100	%
Provision (benefit)		(93	)		(31	)		(5	)		(62	)	200	%		(88	)	1760	%		(174	)		(63	)		(111	)	176	%
End of period balance	$	524		$	617		$	749		$	(93	)	-15	%	$	(225	)	-30	%	$	524		$	749		$	(225	)	-30	%

ABOUT PACIFIC FINANCIAL CORPORATION

Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At September 30, 2024, the Company had total assets of $1.16 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.

Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.

CONTACTS:
DENISE PORTMANN, PRESIDENT & CEO
CARLA TUCKER, EVP & CFO
360.533.8873

The MIL Network –

January 25, 2025

MIL-OSI United Kingdom: Budget will invest in foundations of future growth

Source: United Kingdom – Executive Government & Departments

Chancellor Rachel Reeves is in Washington D.C. for her first IMF Annual Meetings, where she will say that the Budget is about investing in future growth.

Chancellor Rachel Reeves at the IMF Annual Meetings in Washington D.C.

Reeves will set out how public investment will drive innovation in science and technology, the transition to clean energy, and upgraded infrastructure.
Chancellor to represent British interests in G7, G20 and IMF discussions on the global economy, international financial system and ongoing support for Ukraine.

Rachel Reeves will tell her global counterparts that the Government’s first Budget will “invest in the foundations of future growth,” as she attends her first annual meetings of the International Monetary Fund (IMF) in Washington D.C as Chancellor.

The Chancellor will pledge that the Budget next week will be “built on the rock of economic stability” to fix the foundations and deliver change. She will set out how public investment will help fuel mission-led government, from boosting investment in science and technology, transitioning to clean energy and upgrading infrastructure.

The Chancellor will attend G7, G20 and IMF meetings to represent Britain’s interests on issues including the global economy, the international financial system and ongoing support for Ukraine. This follows the UK’s announcement of its £2.26bn contribution to the G7’s Extraordinary Revenue Acceleration (ERA) Loans for Ukraine scheme, backed by the profits from sanctioned Russian sovereign assets. She will also hold a series of bilateral meetings with her international counterparts.

Chancellor of the Exchequer Rachel Reeves said:

A Britain built on the rock of economic stability is a Britain that is a strong and credible international partner. I’ll be in Washington to tell the world that our upcoming Budget will be a reset for our economy as we invest in the foundations of future growth.

It’s from this solid base that we will be able to best represent British interests and show leadership on the major issues like the conflicts in the Middle East and Ukraine.

At the Annual Meetings, Chancellor Reeves will support proposals to expand financing for development, needed for countries to meet the United Nations’ Sustainable Development Goals and tackle unsustainable debt. She will also press for all G20 countries to meet G20 best practice on debt transparency and move swiftly to implement support for countries facing pressing liquidity problems. The Chancellor will welcome the agreement of a new G20 roadmap to scale up financing to developing countries through Multilateral Development Banks.

It is the 80th anniversary year of the founding of the IMF and the World Bank, established at a conference in Bretton Woods, New Hampshire in 1944 to promote international cooperation on economic and monetary policies. At this years’ gathering the Chancellor will also call for change to the global financial system to deliver a fairer deal for vulnerable countries.

The IMF released its latest survey of the global economy on Tuesday, in which the UK’s growth forecast was upgraded to 1.1% in 2024. Whilst this is welcome, the Chancellor will make clear to her counterparts that there will be more long-term decisions required to reinforce stability and deliver on the promise of change at her first Budget on 30 October.

The Chancellor’s trip to Washington D.C. follows the International Investment Summit earlier this month, at which it was announced that nearly 38,000 jobs are set to be created across the UK thanks to a total of £63 billion in investment commitments from businesses around the world. The vote of confidence in the UK is a clear sign Britain is open for business and ready to drive sustainable growth across the country.

Published 25 October 2024

MIL OSI United Kingdom –

January 25, 2025

MIL-OSI Security: Windsor Mill Woman Sentenced To Over Five Years’ Imprisonment In Connection With Conspiracy Involving Fraudulently Obtaining And Attempting To Obtain More Than $3 Million In Covid-19 Cares Act Loans

Source: Office of United States Attorneys

Glenn Used COVID-19 CARES Act Funds to Pay for a Vacation to Jamaica, a Mercedes-Benz, Luxury Jewelry, including a 31 Carat Diamond Necklace and items from Luis Vuitton, Neiman Marcus, Dior, Cartier, Gucci, Chanel and Hermes.

Baltimore, Maryland – On October 23, 2024, Tomeka Glenn, a/k/a “Tomeka Harris” and “Tomeka Davis,” age 47, of Windsor Mill, Maryland, was sentenced by United States District Judge Richard D. Bennett to 65 months’ imprisonment and 3 years of supervised release in connection with her conviction on conspiracy to commit wire fraud relating to the submission of millions of dollars in fraudulent COVID-19 CARES Act Paycheck Protection Program and Economic Injury Disaster Loan applications. Judge Bennett also directed Glenn to pay restitution in the amount of $3,016,275.62.

Glenn’s co-defendant Kevin Davis, age 43, also of Windsor Mill, Maryland, pleaded guilty on January 25, 2024 to being a felon in possession of a firearm and ammunition. Judge Bennett on May 22, 2024 sentenced him to 24 months’ imprisonment.

The sentence was announced by Erek L. Barron, U.S. Attorney for the District of Maryland; Special Agent in Charge William J. Delbagno of the Federal Bureau of Investigation (“FBI”) Baltimore Field Office; and Chief Robert McCullough of the Baltimore County Police Department.

Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program, administered through the Small Business Administration (“SBA”). The SBA also offered an Economic Injury Disaster Loan (EIDL) and/or an EIDL advance to help businesses meet their financial obligations. An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.

According to Glenn’s plea agreement, beginning in June 2020 and continuing through March 2021, Glenn and various co-conspirators prepared numerous false and fraudulent EIDL and PPP loan applications for various businesses (including some that did not exist in any legitimate capacity) that included false information concerning, among other things, number of employees, monthly payroll costs, and revenue. The PPP applications also routinely included false and fraudulent Internal Revenue Service (“IRS”) tax forms and bank statements, which were submitted by Glenn to substantiate the false representations made in the applications.

Glenn admitted that she received kickback payments from the loan borrowers in exchange for her assistance in connection with the submission of fraudulent PPP and EIDL applications, ultimately receiving more than $400,000 in kickbacks in connection with the scheme. These kickbacks typically amounted to 10% to 20% of the loan amount. In total, the kickback scheme resulted in the disbursement of at least $2,715,649.12 in fraudulently obtained PPP and EIDL funds in connection with 23 fraudulent PPP and EIDL loans.

According to Glenn’s plea agreement, Glenn and Davis, received $300,726.50 in PPP/EIDL funds for various entities that they controlled, and Glenn attempted to obtain $601,511.20 in additional fraudulent PPP and EIDL funds too.

Glenn used the fraudulently obtained funds to pay for a luxury vacation at a resort in Jamaica, to purchase a 2021 Mercedes-Benz S580 sedan valued at $148,171.60, to buy thousands of dollars in luxury jewelry, as well as numerous other luxury goods, including items from Luis Vuitton, Neiman Marcus, Dior, Cartier, Gucci, Chanel, and Hermes.

At the time of her scheme, neither Glenn nor Davis had any legitimate source of income, and in May 2020, each applied for unemployment insurance benefits in the State of Maryland. In addition, as detailed in Davis and Glenn’s plea agreements, on January 6, 2023, law enforcement executed a federal search warrant at their residence. Davis and Glenn were present at the residence at the time of the search and were arrested in connection with the fraudulent COVID-19 CARES Act loans. According to Davis’s plea agreement, during the execution of the search warrant, law enforcement found and seized four firearms loaded with ammunition—a 9mm firearm, and three .40 caliber firearms. Later investigation revealed that one of the .40 caliber firearms had earlier been reported stolen by its owner. As further detailed in Davis’s plea, the firearms were hidden by Davis in the air ducts of the residence: two firearms were hidden in the main bedroom air duct where Davis slept and kept his personal effects; the other two firearms were in the air duct of the bathroom closets to the main bedroom. Moreover, two of the firearms were further stuffed in socks in an attempt to hide them. Davis admitted that he possessed and secreted the firearms in the air ducts of his home (and in the socks) in an attempt to conceal them from law enforcement after learning that federal agents had a warrant to search his home. As admitted to at his plea, Davis’s concealment of the firearms constitutes attempted obstruction of the administration of justice with respect to the investigation. Each of the four firearms recovered from Davis’s home on January 6, 2023 were later found to have his DNA on them. A later review of Davis’s iCloud account revealed the existence of, among other things, a series of videos depicting Davis handling firearms, including a shotgun and an assault rifle. Davis knew that his previous felony conviction prohibited him from possessing firearms or ammunition.

As part of their plea agreements, Glenn and Davis will be required to forfeit their interest in any assets derived from or obtained by them as a result of, or used to facilitate the commission of, their illegal activities. Specifically, Glenn is required to forfeit a money judgment in the amount of at least $700,726.50; the 2021 Mercedes-Benz; cash in bank accounts she controlled that were held in the names of business entities; and jewelry, including her 3.03 carat yellow diamond engagement ring, Rolex, Cartier and Breitling watches, and a Diamond Miami Cuban Link Chain with 31.5 carats of VS1 diamonds. Davis must forfeit the firearms and ammunition.

The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.

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

U.S. Attorney Barron commended the FBI, the SBA-OIG, and the Baltimore County Police Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Paul A. Riley, who is prosecuting the case. He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber and Paralegal Specialist Juliette Jarman.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.

# # #

MIL Security OSI –

January 25, 2025

MIL-OSI Security: Georgia Woman Sentenced to 12 Years in Prison for $30M COVID-19 Unemployment Fraud Scheme and Firearms Charge

Source: Office of United States Attorneys

A Georgia woman was sentenced yesterday for her role in a scheme to defraud the Georgia Department of Labor (GaDOL) out of tens of millions of dollars in benefits meant to assist unemployed individuals during the COVID-19 pandemic.

Tyshion Nautese Hicks, 32, of Vienna, was sentenced to 12 years in prison, three years of supervised release, and ordered to pay restitution in an amount to be determined at a later date. Hicks’ total sentence includes a penalty of three consecutive years in prison, imposed yesterday in relation to a separate charge of illegal possession of a machine gun prosecuted by the U.S. Attorney’s Office for the Middle District of Georgia.

According to court documents and evidence presented in court, from March 2020 through November 2022, Hicks and her co-conspirators caused more than 5,000 fraudulent unemployment insurance (UI) claims to be filed with the GaDOL, resulting in at least $30 million in stolen benefits.

“In one of the largest COVID fraud schemes ever prosecuted, the defendant and her coconspirators filed more than 5,000 fraudulent COVID unemployment insurance claims using stolen identities and unlawfully obtained more than $30 million in benefits,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “In doing so, the defendant and her co-conspirators exploited a program designed to alleviate pandemic-related economic hardship to enrich themselves at the expense of federal taxpayers. Yesterday’s sentence underscores the department’s commitment to investigating and prosecuting those who steal from the public fisc.”

To execute the scheme, Hicks and others created fictitious employers and fabricated lists of purported employees using personally identifiable information (PII) from thousands of identity theft victims and filed fraudulent unemployment insurance claims on the GaDOL website. The co-conspirators obtained PII for use in the scheme from a variety of sources, including by paying an employee of an Atlanta-area health care and hospital network to unlawfully obtain patients’ PII from the hospital’s databases, and by purchasing PII from other sources over the internet. Using victims’ PII, Hicks and her co-conspirators caused the stolen UI funds to be disbursed via prepaid debit cards mailed to addresses of their choice, many of which were in and around Cordele and Vienna. Hicks additionally paid a local U.S. Postal Service (USPS) carrier to unlawfully divert mail containing debit cards loaded with over $512,000 in fraud proceeds to her and coached another co-conspirator on how to create her own fictitious employer account via Facebook Messenger.

In February, Hicks pleaded guilty to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. Seven of Hicks’ co-conspirators have previously pleaded guilty or been sentenced in the investigation.

“Tyshion Nautese Hicks and her co-conspirators used the stolen PII of unwitting victims to file numerous fraudulent claims for UI benefits with the Georgia Department of Labor,” said Special Agent in Charge Mathew Broadhurst of the U.S. Department of Labor, Office of Inspector General (DOL-OIG) Southeast Regional Office. “We will continue to work with our federal and state law enforcement partners to safeguard UI benefit programs for those who need them.”

“The sentence received by the defendant is the outcome of IRS Criminal Investigation’s commitment to investigating and prosecuting those who attempt to defraud various agencies by filing fraudulent claims using another person’s identifying information,” said Special Agent in Charge Demetrius Hardeman of the IRS Criminal Investigation (IRS-CI) Atlanta Field Office.

“Postal Inspectors will continue to work with our law enforcement partners to hold individuals accountable for engaging in fraudulent schemes to manipulate the COVID-19 program for their own financial gain,” said Inspector in Charge Tommy D. Coke of the U.S. Postal Inspection Service (USPIS) Atlanta Division. “The sentencing should serve as a deterrence and shows that this type of behavior will not be tolerated.”

“Yesterday’s sentencing underlines our commitment to holding those who exploit federal relief programs for personal gain accountable,” said Special Agent in Charge Jonathan Ulrich of the USPS Office of Inspector General (USPS-OIG). “As proven in this case, our criminal investigators along with our law enforcement partners will work together and diligently pursue anyone who attempts to exploit programs created to help legitimate people and businesses affected by the global pandemic.”

“Hicks chose to commit fraud, further depleting limited funds designated to help individuals struggling to survive during the pandemic,” said Special Agent in Charge Frederick D. Houston of the U.S. Secret Service (USSS) Atlanta Field Office. “She and her co-conspirators also stole the personally identifiable information, caring only about self-enrichment, not the lives adversely affected. This case signifies our commitment to protect citizens and businesses from fraud and identity theft. We will continue to work with our local, state, and federal law enforcement partners to prosecute those who abuse these programs.”

“Homeland Security Investigations will aggressively pursue those who exploit unemployment benefits meant for those in need, ensuring that justice is served, and resources are preserved for legitimate claimants,” said Acting Special Agent in Charge Steven N. Schrank of the Homeland Security Investigations (HSI) Atlanta Office.

“Yesterday’s sentencing sends a clear message that those committing fraud will be held accountable,” said Inspector General Joseph V. Cuffari of the Department of Homeland Security Office of Inspector General (DHS-OIG). “DHS-OIG and our law enforcement partners will continue to prioritize protecting our country from these kinds of schemes.”

DOL-OIG, IRS-CI, USPS-OIG, USPIS, USSS, HSI, and DHS-OIG investigated the case.

Trial Attorneys Lyndie Freeman, Siji Moore, Matthew Kahn, and Andrew Jaco of the Criminal Division’s Fraud Section prosecuted the fraud case.

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

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

MIL Security OSI –

January 25, 2025

MIL-OSI: North Dallas Bank & Trust Co. Announces Second Quarter Earnings

Source: GlobeNewswire (MIL-OSI)

DALLAS, Oct. 25, 2024 (GLOBE NEWSWIRE) — NDBT (North Dallas Bank & Trust Co.), an independent community bank established in 1961, today announced net earnings for three months of $502,493 or $0.20 per share, and net earnings for nine months of $2,186,955 or $0.85 per share, for the periods ending September 30, 2024.

Earnings were prepared internally without review by the company’s independent accountants. Financial results are the results of past performance, events and market conditions, and are not a guarantee for future results. Any forward-looking implications derived from this information may differ materially from actual results.

Further information about the earning and financial performance is available from Glenn Henry, Chief Financial Officer, by contacting NDBT.

ABOUT NDBT
Founded in 1961, NDBT (North Dallas Bank & Trust Co.) is an independent community bank with five banking centers located in Dallas, Addison, Frisco, Las Colinas, and Plano. Headquartered on the corner of Preston Road and LBJ at 12900 Preston Road in Dallas, NDBT is dedicated to helping people make smarter choices in business and life by offering authentic banking solutions, wealth management, and innovative online banking tools. NDBT is Member FDIC and an Equal Housing Lender. For more information, call 972.716.7100, or visit online at www.ndbt.com.

NORTH DALLAS BANK & TRUST CO.
12900 PRESTON ROAD
DALLAS, TEXAS

FINANCIAL HIGHLIGHTS	Three Months Ended				Nine Months Ended
	September 30				September 30
Income Statement	2024		2023		2024		2023

Interest Income	19,690,721		16,080,200		57,809,406		45,415,030
Interest Expense	11,417,563		8,497,071		32,759,175		19,553,246
Net Interest Income	8,273,158		7,583,129		25,050,231		25,861,784

Provision for Loan Losses	0		0		(440,000	)	(450,000	)
Noninterest Income	1,546,280		1,947,351		4,384,215		4,659,259
Noninterest Expenses	(9,302,724	)	(8,767,533	)	(26,524,077	)	(25,989,503	)
Income Before Taxes & Extraordinary	516,714		762,947		2,470,369		4,081,540

Income Tax	(14,221	)	(95,021	)	(258,414	)	(679,355	)
Income Tax Prior Period	(25,000	)	0		(25,000	)	0
Net Income	502,493		667,926		2,186,955		3,402,185

Earnings per Share	0.20		0.26		0.85		1.32

					Nine Month Average
	As of September 30				Ended September 30
Balance Sheet	2024		2023		2024		2023

Total Assets	1,867,355,555		1,728,752,439		1,819,265,389		1,697,914,626
Total Loans	1,211,656,001		1,133,317,827		1,206,729,021		1,057,729,435
Deposits	1,543,618,454		1,468,335,323		1,503,472,762		1,472,027,210
Stockholders’ Equity	170,479,567		160,495,368		166,294,611		160,534,861

(Prepared internally without review by
our independent accountants)

Media Contact:
Brian C. Jensen
972-716-7124
brian.jensen@ndbt.com

The MIL Network –

January 25, 2025

MIL-OSI: Fentura Financial, Inc. Announces Third Quarter 2024 Earnings (unaudited)

Source: GlobeNewswire (MIL-OSI)

Dollars in thousands except per share amounts. Certain items in the prior period financial statements have been reclassified to conform with the September 30, 2024 presentation.

FENTON, Mich., Oct. 25, 2024 (GLOBE NEWSWIRE) — Fentura Financial, Inc. (OTCQX: FETM) announces quarterly net income results of $867 and $5,637 for the three and nine months ended September 30, 2024, respectively.

Ronald L. Justice, President and CEO, stated, “We ended the 2024 third quarter with record total assets, deposits, and shareholders’ equity. These results are a testament to the continued hard work of our team members, and the local value we provide our Michigan communities. During the third quarter, we announced a merger with ChoiceOne Financial Services, Inc., pursuant to which ChoiceOne and Fentura will merge in an all-stock transaction. Once completed, the combination will create the third largest publicly traded bank in Michigan with approximately $4.3 billion in consolidated total assets and 56 offices in Western, Central and Southeastern Michigan. We continue to expect to close the transaction in the first quarter of 2025, subject to the satisfaction of customary closing conditions and regulatory approvals.”

Following is a discussion of our financial performance as of, and for the three and nine months ended September 30, 2024. At the end of this document is a list of abbreviations and acronyms.

Results of Operations (unaudited)
The following table outlines our QTD results of operations and provides certain performance measures as of, and for the three months ended:

	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
INCOME STATEMENT DATA
Interest income	$	22,194		$	21,487		$	21,541		$	21,033		$	20,416
Interest expense		10,202			9,650			9,315			8,526			7,757
Net interest income		11,992			11,837			12,226			12,507			12,659
Credit loss expense (reversal)		1,203			796			(43	)		(190	)		(309	)
Noninterest income		2,210			2,314			2,355			2,145			2,338
Noninterest expenses		11,974			10,921			11,166			10,121			10,594
Federal income tax expense		158			454			668			937			937
Net income	$	867		$	1,980		$	2,790		$	3,784		$	3,775
PER SHARE
Earnings	$	0.19		$	0.44		$	0.63		$	0.85		$	0.85
Dividends	$	0.11		$	0.11		$	0.11		$	0.10		$	0.10
Tangible book value⁽¹⁾	$	30.51		$	29.84		$	29.38		$	28.92		$	27.64
Quoted market value
High	$	40.00		$	24.39		$	27.20		$	27.20		$	23.74
Low	$	22.16		$	22.33		$	24.00		$	22.26		$	19.10
Close⁽¹⁾	$	39.07		$	22.50		$	24.40		$	27.20		$	23.74
PERFORMANCE RATIOS
Return on average assets		0.19	%		0.45	%		0.63	%		0.86	%		0.86	%
Return on average shareholders’ equity		2.37	%		5.59	%		7.98	%		11.11	%		11.27	%
Return on average tangible shareholders’ equity		2.54	%		5.98	%		8.55	%		11.94	%		12.14	%
Efficiency ratio		84.31	%		77.17	%		76.58	%		69.08	%		70.64	%
Yield on average earning assets (FTE)		5.17	%		5.18	%		5.15	%		5.06	%		4.92	%
Rate on interest bearing liabilities		3.28	%		3.22	%		3.11	%		2.90	%		2.66	%
Net interest margin to average earning assets (FTE)		2.80	%		2.85	%		2.92	%		3.01	%		3.05	%
BALANCE SHEET DATA⁽¹⁾
Total investment securities	$	99,724		$	100,167		$	103,210		$	107,615		$	109,543
Gross loans	$	1,442,389		$	1,459,929		$	1,461,465		$	1,473,471		$	1,483,720
Allowance for credit losses	$	14,700		$	15,300		$	15,300		$	15,400		$	15,400
Total assets	$	1,807,370		$	1,756,629		$	1,764,629		$	1,738,952		$	1,744,939
Total deposits	$	1,470,586		$	1,427,059		$	1,438,408		$	1,394,182		$	1,401,797
Borrowed funds	$	179,970		$	178,397		$	178,500		$	198,500		$	201,050
Total shareholders’ equity	$	146,398		$	143,301		$	141,074		$	138,702		$	132,902
Net loans to total deposits		97.08	%		101.23	%		100.54	%		104.58	%		104.75	%
Common shares outstanding		4,495,005			4,490,087			4,484,447			4,470,871			4,466,221
QTD BALANCE SHEET AVERAGES
Total assets	$	1,797,307		$	1,762,651		$	1,771,614		$	1,740,526		$	1,739,510
Earning assets	$	1,708,177		$	1,669,862		$	1,683,708		$	1,649,091		$	1,646,848
Interest bearing liabilities	$	1,237,665		$	1,204,370		$	1,205,162		$	1,165,064		$	1,156,835
Total shareholders’ equity	$	145,240		$	142,577		$	140,574		$	135,157		$	132,860
Total tangible shareholders’ equity	$	135,959		$	133,252		$	131,204		$	125,723		$	123,349
Earned common shares outstanding		4,466,951			4,461,580			4,449,376			4,443,463			4,437,415
Unvested stock grants		26,500			26,500			31,821			26,018			26,668
Total common shares outstanding		4,493,451			4,488,080			4,481,197			4,469,481			4,464,083
ASSET QUALITY
Nonperforming loans to gross loans ⁽¹⁾		0.71	%		0.66	%		0.39	%		0.38	%		0.24	%
Nonperforming assets to total assets ⁽¹⁾		0.58	%		0.56	%		0.34	%		0.35	%		0.23	%
Allowance for credit losses to gross loans ⁽¹⁾		1.02	%		1.05	%		1.05	%		1.05	%		1.04	%
Net charge-offs (recoveries) to QTD average gross loans		0.12	%		0.05	%		—	%	(0.01)%			(0.03)%
Credit loss expense (reversal) to QTD average gross loans		0.08	%		0.05	%		—	%	(0.01)%			(0.02)%
CAPITAL RATIOS⁽¹⁾
Total capital to risk weighted assets		12.48	%		12.38	%		12.27	%		11.91	%		11.59	%
Tier 1 capital to risk weighted assets		11.42	%		11.28	%		11.17	%		10.82	%		10.51	%
CET1 capital to risk weighted assets		10.40	%		10.28	%		10.17	%		9.83	%		9.53	%
Tier 1 leverage ratio		8.78	%		8.92	%		8.78	%		8.77	%		8.58	%

⁽¹⁾At end of period

The following table outlines our YTD results of operations and provides certain performance measures as of, and for the nine months ended (unaudited):

	9/30/2024			9/30/2023			9/30/2022			9/30/2021			9/30/2020
INCOME STATEMENT DATA
Interest income	$	65,222		$	58,648		$	41,438		$	35,161		$	34,355
Interest expense		29,167			19,561			3,122			2,091			4,952
Net interest income		36,055			39,087			38,316			33,070			29,403
Credit loss expense (reversal)		1,956			132			2,258			(218	)		4,652
Noninterest income		6,879			7,126			7,997			11,092			15,190
Noninterest expenses		34,061			32,547			30,870			27,815			23,939
Federal income tax expense		1,280			2,689			2,616			3,328			3,271
Net income	$	5,637		$	10,845		$	10,569		$	13,237		$	12,731
PER SHARE
Earnings	$	1.26		$	2.45		$	2.39		$	2.86		$	2.73
Dividends	$	0.33		$	0.3		$	0.27		$	0.24		$	0.225
Tangible book value⁽¹⁾	$	30.51		$	27.64		$	25.22		$	26.53		$	23.50
Quoted market value
High	$	40.00		$	24.10		$	29.25		$	27.40		$	26.00
Low	$	22.16		$	18.70		$	23.00		$	21.90		$	12.55
Close⁽¹⁾	$	39.07		$	23.74		$	23.00		$	25.75		$	16.93
PERFORMANCE RATIOS
Return on average assets		0.42	%		0.85	%		0.95	%		1.36	%		1.45	%
Return on average shareholders’ equity		5.27	%		11.15	%		11.71	%		14.55	%		15.79	%
Return on average tangible shareholders’ equity		5.64	%		12.03	%		12.75	%		15.00	%		16.40	%
Efficiency ratio		79.33	%		70.43	%		66.66	%		62.98	%		53.68	%
Yield on average earning assets (FTE)		5.17	%		4.84	%		3.99	%		3.83	%		4.12	%
Rate on interest bearing liabilities		3.20	%		2.35	%		0.49	%		0.37	%		0.93	%
Net interest margin to average earning assets (FTE)		2.86	%		3.23	%		3.69	%		3.60	%		3.52	%
BALANCE SHEET DATA⁽¹⁾
Total investment securities	$	99,724		$	109,543		$	129,886		$	138,476		$	78,179
Gross loans	$	1,442,389		$	1,483,720		$	1,350,851		$	1,015,177		$	1,060,885
Allowance for credit losses	$	14,700		$	15,400		$	12,200		$	10,500		$	10,100
Total assets	$	1,807,370		$	1,744,939		$	1,588,592		$	1,329,300		$	1,284,845
Total deposits	$	1,470,586		$	1,401,797		$	1,345,209		$	1,144,291		$	1,061,470
Borrowed funds	$	179,970		$	201,050		$	116,600		$	50,000		$	96,217
Total shareholders’ equity	$	146,398		$	132,902		$	121,630		$	124,809		$	114,081
Net loans to total deposits		97.08	%		104.75	%		99.51	%		87.80	%		98.99	%
Common shares outstanding		4,495,005			4,466,221			4,434,937			4,569,935			4,691,142
YTD BALANCE SHEET AVERAGES
Total assets	$	1,777,188		$	1,710,941		$	1,485,489		$	1,297,657		$	1,171,415
Earning assets	$	1,687,249		$	1,620,015		$	1,391,179		$	1,230,553		$	1,116,861
Interest bearing liabilities	$	1,215,731		$	1,111,687		$	858,600		$	748,472		$	711,449
Total shareholders’ equity	$	142,796		$	130,068		$	120,704		$	121,659		$	107,711
Total tangible shareholders’ equity	$	133,470		$	120,482		$	110,792		$	117,991		$	103,712
Earned common shares outstanding		4,459,303			4,428,963			4,425,818			4,630,709			4,665,951
Unvested stock grants		28,274			28,530			25,462			21,088			13,966
Total common shares outstanding		4,487,577			4,457,493			4,451,280			4,651,797			4,679,917
ASSET QUALITY
Nonperforming loans to gross loans ⁽¹⁾		0.71	%		0.24	%		0.12	%		0.82	%		0.07	%
Nonperforming assets to total assets ⁽¹⁾		0.58	%		0.23	%		0.12	%		0.63	%		0.06	%
Allowance for credit losses to gross loans ⁽¹⁾		1.02	%		1.04	%		0.90	%		1.03	%		0.95	%
Net charge-offs (recoveries) to YTD average gross loans		0.18	%	(0.03)%				0.05	%		0.02	%		0.03	%
Credit loss expense (reversal) to YTD average gross loans		0.13	%		0.01	%		0.19	%	(0.02)%				0.44	%
CAPITAL RATIOS⁽¹⁾
Total capital to risk weighted assets		12.48	%		11.59	%		10.96	%		13.63	%		15.57	%
Tier 1 capital to risk weighted assets		11.42	%		10.51	%		10.07	%		12.64	%		14.40	%
CET1 capital to risk weighted assets		10.40	%		9.53	%		9.04	%		11.33	%		12.77	%
Tier 1 leverage ratio		8.78	%		8.58	%		8.91	%		10.21	%		9.86	%

⁽¹⁾At end of period

Income Statement Breakdown and Analysis

	Quarter to Date
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Net income	$	867		$	1,980		$	2,790		$	3,784		$	3,775
Acquisition related items (net of tax)
Other acquisition related expenses		753			—			—			—			—
Amortization of core deposit intangibles		35			34			36			60			60
Total acquisition related items (net of tax)		788			34			36			60			60
Other nonrecurring items (net of tax)
Proxy contest related expenses		—			—			—			—			—
Prepayment penalties collected		(24	)		(40	)		(58	)		(85	)		(29	)
Total other nonrecurring items (net of tax)		(24	)		(40	)		(58	)		(85	)		(29	)
Adjusted net income from operations	$	1,631		$	1,974		$	2,768		$	3,759		$	3,806

Net interest income	$	11,992		$	11,837		$	12,226		$	12,507		$	12,659
Prepayment penalties collected		(31	)		(51	)		(73	)		(107	)		(37	)
Adjusted net interest income	$	11,961		$	11,786		$	12,153		$	12,400		$	12,622

PERFORMANCE RATIOS
Based on adjusted net income from operations
Earnings per share	$	0.37		$	0.44		$	0.62		$	0.85		$	0.86
Return on average assets		0.36	%		0.45	%		0.63	%		0.86	%		0.87	%
Return on average shareholders’ equity		4.47	%		5.57	%		7.92	%		11.03	%		11.37	%
Return on average tangible shareholders’ equity		4.77	%		5.96	%		8.49	%		11.86	%		12.24	%
Efficiency ratio		77.45	%		77.15	%		76.65	%		69.06	%		70.31	%

Based on adjusted net interest income
Yield on average earning assets (FTE)		5.16	%		5.17	%		5.13	%		5.03	%		4.91	%
Rate on interest bearing liabilities		3.28	%		3.22	%		3.11	%		2.90	%		2.66	%
Net interest margin to average earning assets (FTE)		2.79	%		2.84	%		2.90	%		2.98	%		3.04	%

	Year to Date September 30						Variance
		2024			2023		Amount			%
Net income	$	5,637		$	10,845		$	(5,208	)	(48.02)%
Acquisition related items (net of tax)
Other acquisition related expenses		753			—			753		N/M
Amortization of core deposit intangibles		105			180			(75	)	(41.67)%
Total acquisition related items (net of tax)		858			180			678		376.67	%
Other nonrecurring items (net of tax)
Proxy contest related expenses		—			413			(413	)	(100.00)%
Prepayment penalties collected		(122	)		(133	)		11		(8.27)%
Total other nonrecurring items (net of tax)		(122	)		280			(402	)	(143.57)%
Adjusted net income from operations	$	6,373		$	11,305		$	(4,932	)	(43.63)%

Net interest income	$	36,055		$	39,087		$	(3,032	)	(7.76)%
Prepayment penalties collected		(155	)		(169	)		14		(8.28)%
Adjusted net interest income	$	35,900		$	38,918		$	(3,018	)	(7.75)%

PERFORMANCE RATIOS
Based on adjusted net income from operations
Earnings per share	$	1.43		$	2.55		$	(1.12	)	(43.92)%
Return on average assets		0.48	%		0.88	%				(0.40)%
Return on average shareholders’ equity		5.96	%		11.62	%				(5.66)%
Return on average tangible shareholders’ equity		6.38	%		12.55	%				(6.17)%
Efficiency ratio		77.08	%		69.06	%				8.02	%

Based on adjusted net interest income
Yield on average earning assets (FTE)		5.16	%		4.83	%				0.33	%
Rate on interest bearing liabilities		3.20	%		2.35	%				0.85	%
Net interest margin to average earning assets (FTE)		2.85	%		3.22	%				(0.37)%

Average Balances, Interest Rate, and Net Interest Income

The following tables present the daily average amount outstanding for each major category of interest earning assets, nonearning assets, interest bearing liabilities, and noninterest bearing liabilities. These tables also present an analysis of interest income and interest expense for the periods indicated. All interest income is reported on a FTE basis using a federal income tax rate of 21%. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances.

Net interest income is the amount by which interest income on earning assets exceeds the interest expenses on interest bearing liabilities. Net interest income, which includes loan fees, is influenced by changes in the balance and mix of assets and liabilities and market interest rates. We exert some control over these factors; however, FRB monetary policy and competition have a significant impact. For analytical purposes, net interest income is adjusted to a FTE basis by adding the income tax savings from interest on tax exempt loans, and nontaxable investment securities, thus making period-to-period comparisons more meaningful.

	Three Months Ended
	September 30, 2024							June 30, 2024							September 30, 2023
	Average Balance			Tax Equivalent Interest		Average Yield / Rate		Average Balance			Tax Equivalent Interest		Average Yield / Rate		Average Balance			Tax Equivalent Interest		Average Yield / Rate
Interest earning assets
Total loans	$	1,450,371		$	19,599	5.38	%	$	1,462,362		$	19,550	5.38	%	$	1,477,343		$	19,170	5.15	%
Taxable investment securities		89,175			335	1.49	%		89,751			350	1.57	%		101,549			397	1.55	%
Nontaxable investment securities		10,580			57	2.14	%		11,059			62	2.25	%		12,670			70	2.19	%
Interest earning cash and cash equivalents		148,872			2,023	5.41	%		97,511			1,331	5.49	%		43,865			594	5.37	%
Federal Home Loan Bank stock		9,179			192	8.32	%		9,179			207	9.07	%		11,421			199	6.91	%
Total earning assets		1,708,177			22,206	5.17	%		1,669,862			21,500	5.18	%		1,646,848			20,430	4.92	%

Nonearning assets
Allowance for credit losses		(15,282	)						(15,300	)						(15,503	)
Premises and equipment, net		13,514							13,964							15,210
Accrued income and other assets		90,898							94,125							92,955
Total assets	$	1,797,307						$	1,762,651						$	1,739,510

Interest bearing liabilities
Interest bearing demand deposits	$	460,256		$	4,054	3.50	%	$	429,141		$	3,745	3.51	%	$	416,500		$	3,230	3.08	%
Savings deposits		261,620			416	0.63	%		266,731			408	0.62	%		290,939			429	0.59	%
Time deposits		336,570			3,865	4.57	%		330,024			3,756	4.58	%		248,389			2,280	3.64	%
Borrowed funds		179,219			1,867	4.14	%		178,474			1,741	3.92	%		201,007			1,818	3.59	%
Total interest bearing liabilities		1,237,665			10,202	3.28	%		1,204,370			9,650	3.22	%		1,156,835			7,757	2.66	%

Noninterest bearing liabilities
Noninterest bearing deposits		402,274							405,985							435,398
Accrued interest and other liabilities		12,128							9,719							14,417
Shareholders’ equity		145,240							142,577							132,860
Total liabilities and shareholders’ equity	$	1,797,307						$	1,762,651						$	1,739,510
Net interest income (FTE)				$	12,004						$	11,850						$	12,673
Net interest margin to earning assets (FTE)						2.80	%						2.85	%						3.05	%

	Nine Months Ended
	September 30, 2024							September 30, 2023
	Average Balance			Tax Equivalent Interest		Average Yield / Rate		Average Balance			Tax Equivalent Interest		Average Yield / Rate
Interest earning assets
Total loans	$	1,461,289		$	58,758	5.37	%	$	1,464,959		$	55,749	5.09	%
Taxable investment securities		91,041			1,044	1.53	%		106,158			1,250	1.57	%
Nontaxable investment securities		11,200			186	2.22	%		13,403			227	2.26	%
Interest earning cash and cash equivalents		114,540			4,673	5.45	%		24,484			955	5.21	%
Federal Home Loan Bank stock		9,179			600	8.73	%		11,011			515	6.25	%
Total earning assets		1,687,249			65,261	5.17	%		1,620,015			58,696	4.84	%

Nonearning assets
Allowance for credit losses		(15,328	)						(15,290	)
Premises and equipment, net		13,957							15,342
Accrued income and other assets		91,310							90,874
Total assets	$	1,777,188						$	1,710,941

Interest bearing liabilities
Interest bearing demand deposits	$	436,997		$	11,358	3.47	%	$	385,316		$	7,927	2.75	%
Savings deposits		266,883			1,237	0.62	%		312,762			1,336	0.57	%
Time deposits		331,113			11,265	4.54	%		196,838			4,595	3.12	%
Borrowed funds		180,738			5,307	3.92	%		216,771			5,703	3.52	%
Total interest bearing liabilities		1,215,731			29,167	3.20	%		1,111,687			19,561	2.35	%

Noninterest bearing liabilities
Noninterest bearing deposits		408,449							455,069
Accrued interest and other liabilities		10,212							14,117
Shareholders’ equity		142,796							130,068
Total liabilities and shareholders’ equity	$	1,777,188						$	1,710,941
Net interest income (FTE)				$	36,094						$	39,135
Net interest margin to earning assets (FTE)						2.86	%						3.23	%

Volume and Rate Variance Analysis

The following table sets forth the effect of volume and rate changes on interest income and expense for the periods indicated. For the purpose of this table, changes in interest due to volume and rate were determined as follows:

Volume – change in volume multiplied by the previous period’s rate.
Rate – change in the FTE rate multiplied by the previous period’s volume.

The change in interest due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

	Three Months Ended									Three Months Ended									Nine Months Ended
	September 30, 2024									September 30, 2024									September 30, 2024
	Compared To									Compared To									Compared To
	June 30, 2024									September 30, 2023									September 30, 2023
	Increase (Decrease) Due to									Increase (Decrease) Due to									Increase (Decrease) Due to
	Volume			Rate			Net			Volume			Rate			Net			Volume			Rate			Net
Changes in interest income
Total loans	$	49		$	—		$	49		$	(1,847	)	$	2,276		$	429		$	(227	)	$	3,236		$	3,009
Taxable investment securities		(2	)		(13	)		(15	)		(47	)		(15	)		(62	)		(175	)		(31	)		(206	)
Nontaxable investment securities		(2	)		(3	)		(5	)		(12	)		(1	)		(13	)		(37	)		(4	)		(41	)
Interest earning cash and cash equivalents		825			(133	)		692			1,424			5			1,429			3,672			46			3,718
Federal Home Loan Bank stock		—			(15	)		(15	)		(161	)		154			(7	)		(137	)		222			85
Total changes in interest income		870			(164	)		706			(643	)		2,419			1,776			3,096			3,469			6,565

Changes in interest expense
Interest bearing demand deposits		380			(71	)		309			359			465			824			1,162			2,269			3,431
Savings deposits		(25	)		33			8			(147	)		134			(13	)		(258	)		159			(99	)
Time deposits		158			(49	)		109			922			663			1,585			4,001			2,669			6,670
Borrowed funds		9			117			126			(896	)		945			49			(1,265	)		869			(396	)
Total changes in interest expense		522			30			552			238			2,207			2,445			3,640			5,966			9,606
Net change in net interest income (FTE)	$	348		$	(194	)	$	154		$	(881	)	$	212		$	(669	)	$	(544	)	$	(2,497	)	$	(3,041	)

	Average Yield/Rate for the Three Months Ended
	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Total earning assets	5.17	%	5.18	%	5.15	%	5.06	%	4.92	%
Total interest bearing liabilities	3.28	%	3.22	%	3.11	%	2.90	%	2.66	%
Net interest margin to earning assets (FTE)	2.80	%	2.85	%	2.92	%	3.01	%	3.05	%

	Quarter to Date Net Interest Income (FTE)
	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Interest income	$	22,194	$	21,487	$	21,541	$	21,033	$	20,416
FTE adjustment		12		13		14		14		14
Total interest income (FTE)		22,206		21,500		21,555		21,047		20,430
Total interest expense		10,202		9,650		9,315		8,526		7,757
Net interest income (FTE)	$	12,004	$	11,850	$	12,240	$	12,521	$	12,673

Noninterest Income

	Three Months Ended
	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Service charges and fees
Trust and investment services		619			607			641			433			572
ATM and debit card		541			545			512			549			568
Service charges on deposit accounts		163			162			140			211			244
Total		1,323			1,314			1,293			1,193			1,384
Net gain on sales of residential mortgage loans		211			177			143			96			164
Net gain on sales of commercial loans		133			98			296			226			—
Change in fair value of equity investments		33			(3	)		(10	)		42			(28	)
Changes in the fair value of MSR		(175	)		(44	)		(96	)		(108	)		119
Other
Mortgage servicing fees		389			386			394			398			398
Change in cash surrender value of corporate owned life insurance		206			207			204			192			181
Other		90			179			131			106			120
Total		685			772			729			696			699
Total noninterest income	$	2,210		$	2,314		$	2,355		$	2,145		$	2,338

Memo items:
Residential mortgage operations	$	425		$	519		$	441		$	386		$	681

	Nine Months Ended September 30						Variance
		2024			2023		Amount			%
Service charges and fees
Trust and investment services	$	1,867		$	1,704		$	163		9.57	%
ATM and debit card		1,598			1,669			(71	)	(4.25)%
Service charges on deposit accounts		465			686			(221	)	(32.22)%
Total		3,930			4,059			(129	)	(3.18)%
Net gain on sales of residential mortgage loans		531			523			8		1.53	%
Net gain on sales of commercial loans		527			95			432		454.74	%
Change in fair value of equity investments		20			(29	)		49		(168.97)%
Changes in the fair value of MSR		(315	)		218			(533	)	(244.50)%
Other
Mortgage servicing fees		1,169			1,210			(41	)	(3.39)%
Change in cash surrender value of corporate owned life insurance		617			531			86		16.20	%
Other		400			519			(119	)	(22.93)%
Total		2,186			2,260			(74	)	(3.27)%
Total noninterest income	$	6,879		$	7,126		$	(247	)	(3.47)%

Memo items:
Residential mortgage operations	$	1,385		$	1,951		$	(566	)	(29.01)%

Residential Mortgage Operations

Residential mortgage operations includes net gains on sales of loans, changes in the fair value of mortgage servicing rights, and mortgage servicing fees.

Net gain on sales of residential mortgage loans represents the income earned on the sale of residential mortgage loans into the secondary market. Although elevated interest rates and limited inventories have significantly driven down the volume of new originations and refinancing activity, we continue to actively sell residential mortgage loans into the secondary market. During the third quarter of 2024, residential mortgage originations sold into the secondary market totaled $10,722.

Changes in the fair value of MSR are highly correlated to changes in interest rates and prepayment speeds. During the third quarter of 2024, the fair value of the servicing portfolio decreased primarily due to a decline in the size of the servicing portfolio, as the portfolio declined by $4,741. Mortgage servicing rights are expected to continue to decline due to likely further reductions in the size of our servicing portfolio as paydowns and maturities are expected to outpace new originations.

Mortgage servicing fees includes the fees earned for servicing loans that have been sold into the secondary market. The annual decrease in mortgage servicing fees is directly related to the size of the serviced portfolio. Due to reduced levels of secondary market originations and prepayments, the serviced loan portfolio declined by $22,584, or 3.58%, since September 30, 2023. We expect mortgage servicing fees to trend modestly downward in future periods due to decreased secondary market originations.

All Other Noninterest Income

Trust and investment services includes income earned from contracts with customers to manage assets for investment and/or to transact on their accounts through the wealth management and trust department. Trust services and wealth management fees are subject to market fluctuations and interest rate changes. We expect trust and investment services fees to modestly increase in future periods.

ATM and debit card income represents fees earned on ATM and debit card transactions. We expect these fees to approximate current levels in 2024.

Service charges on deposit accounts includes fees earned from deposit customers for transaction-based charges, account maintenance and overdraft services. These charges have declined in 2024 due to a reduced level of NSF fees charged to customers based on regulatory guidance and overall industry trends. Service charges on deposit accounts are expected to approximate current levels throughout the remainder of the year.

Net gain on sales of commercial loans represents the income earned from the sale of commercial loans into the secondary market. Throughout 2024, we sold the guaranteed portion of select SBA loans. We anticipate this strategy to continue throughout the remainder of the year.

Change in cash surrender value of corporate owned life insurance is expected to modestly increase throughout 2024.

Other includes miscellaneous other income items, none of which are individually significant.

Noninterest Expenses

	Three Months Ended
	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Compensation and benefits	$	5,839	$	5,842	$	6,066	$	5,521	$	5,592
Professional services		799		963		894		695		726
Furniture and equipment		668		689		727		696		668
Occupancy		622		605		623		610		591
Data processing		751		490		547		505		576
Loan and collection		349		425		322		301		232
Advertising and promotional		312		337		348		139		506
Other
Acquisition related expenses		953		—		—		—		—
FDIC insurance premiums		275		327		299		270		330
ATM and debit card		214		188		171		158		153
Telephone and communication		95		86		109		103		115
Amortization of core deposit intangibles		44		44		45		76		75
Other general and administrative		1,053		925		1,015		1,047		1,030
Total		2,634		1,570		1,639		1,654		1,703
Total noninterest expenses	$	11,974	$	10,921	$	11,166	$	10,121	$	10,594

	Nine Months Ended September 30				Variance
		2024		2023	Amount			%
Compensation and benefits	$	17,747	$	16,876	$	871		5.16	%
Professional services		2,656		2,729		(73	)	(2.67)%
Furniture and equipment		2,084		2,079		5		0.24	%
Occupancy		1,850		1,815		35		1.93	%
Data processing		1,788		1,654		134		8.10	%
Loan and collection		1,096		929		167		17.98	%
Advertising and promotional		997		1,466		(469	)	(31.99)%
Other
Acquisition related expenses		953		—		953		N/M
FDIC insurance premiums		901		861		40		4.65	%
ATM and debit card		573		493		80		16.23	%
Telephone and communication		290		334		(44	)	(13.17)%
Amortization of core deposit intangibles		133		227		(94	)	(41.41)%
Other general and administrative		2,993		3,084		(91	)	(2.95)%
Total		5,843		4,999		844		16.88	%
Total noninterest expenses	$	34,061	$	32,547	$	1,514		4.65	%

Compensation and benefits includes salaries, commissions and incentives, employee benefits, and payroll taxes. Compensation and benefits has increased in 2024 due to an increase in the size of the organization, merit increases, and market based adjustments. We expect a modest increase in overall compensation and benefits throughout the remainder of 2024.

Professional services include expenses relating to third-party professional services. These services include, but are not limited to, regulatory, auditing, consulting, and legal. Professional services expenses are expected to approximate current levels in future periods.

Furniture and equipment and occupancy expenses primarily consist of depreciation, repairs and maintenance, certain service contracts, and other related items. These expenses are expected to approximate current levels throughout the remainder of 2024.

Data processing primarily includes the expenses relating to our core data processor. The increase in data processing in the third quarter of 2024 is primarily due to the loss of incentive credits from our core data processor following our proposed merger announcement. Data processing expenses are expected to modestly increase throughout 2024 due to annual contractual increases from our core data processor.

Loan and collection includes expenses related to the origination and collection of loans. The increase in such expenses in 2024 is due to increased levels of home ownership grants. Loan and collection expenses are expected to approximate current levels in future periods as loan growth is expected to approximate current levels.

Advertising and promotional expenses includes media costs and any donations or sponsorships. These expenses also include marketing efforts to attract new and expand existing customer loan and deposit account relationships. Total advertising and promotional expenses have declined in 2024 due to the expiration of certain long-term sponsorship commitments. Advertising and promotional expenses are expected to approximate current levels in future periods.

Acquisition related expenses includes expenses related to our proposed merger with ChoiceOne Financial Services, Inc., which was announced during the third quarter of 2024. These expenses include services rendered for investment banking, legal and accounting. We expect to incur additional acquisition related expenses in future periods.

FDIC insurance premiums typically fluctuate each period based on the size of the balance sheet, capital position and overall risk profile. FDIC insurance premiums are expected to approximate current levels in future periods.

ATM and debit card expenses fluctuate based on customer and non-customer utilization of ATMs and customer debit card volumes. We expect these fees to approximate current levels in future periods.

Telephone and communication includes expenses relating to our communication systems. These expenses are expected to approximate current levels in future periods.

Amortization of core deposit intangibles relates to the core deposits acquired from Community Bancorp, Inc. on December 31, 2016 and FSB on December 1, 2021. These core deposit intangibles are being amortized using an accelerated sum-of-years-digits method over their estimated useful lives of seven years. The core deposit intangibles associated with the acquisition of Community Bancorp, Inc. were fully amortized as of December 31, 2023. The core deposit intangibles associated with the acquisition of FSB will be amortized through 2028.

Other general and administrative includes miscellaneous other expense items. Other general and administrative expenses are expected to approximate current levels in future periods.

Balance Sheet Breakdown and Analysis

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
ASSETS
Cash and due from banks	$	199,717	$	128,590	$	132,349	$	90,661	$	83,365
Total investment securities		99,724		100,167		103,210		107,615		109,543
Residential mortgage loans held-for-sale, at fair value		1,861		2,440		1,067		747		1,037
Gross loans		1,442,389		1,459,929		1,461,465		1,473,471		1,483,720
Less allowance for credit losses		14,700		15,300		15,300		15,400		15,400
Net loans		1,427,689		1,444,629		1,446,165		1,458,071		1,468,320
All other assets		78,379		80,803		81,838		81,858		82,674
Total assets	$	1,807,370	$	1,756,629	$	1,764,629	$	1,738,952	$	1,744,939

LIABILITIES AND SHAREHOLDERS’ EQUITY
Total deposits	$	1,470,586	$	1,427,059	$	1,438,408	$	1,394,182	$	1,401,797
Total borrowed funds		179,970		178,397		178,500		198,500		201,050
Accrued interest payable and other liabilities		10,416		7,872		6,647		7,568		9,190
Total liabilities		1,660,972		1,613,328		1,623,555		1,600,250		1,612,037
Total shareholders’ equity		146,398		143,301		141,074		138,702		132,902
Total liabilities and shareholders’ equity	$	1,807,370	$	1,756,629	$	1,764,629	$	1,738,952	$	1,744,939

	9/30/2024 vs 6/30/2024					9/30/2024 vs 9/30/2023
	Variance					Variance
	Amount			%		Amount			%
ASSETS
Cash and due from banks	$	71,127		55.31	%	$	116,352		139.57	%
Total investment securities		(443	)	(0.44)%			(9,819	)	(8.96)%
Residential mortgage loans held-for-sale, at fair value		(579	)	(23.73)%			824		79.46	%
Gross loans		(17,540	)	(1.20)%			(41,331	)	(2.79)%
Less allowance for credit losses		(600	)	(3.92)%			(700	)	(4.55)%
Net loans		(16,940	)	(1.17)%			(40,631	)	(2.77)%
All other assets		(2,424	)	(3.00)%			(4,295	)	(5.20)%
Total assets	$	50,741		2.89	%	$	62,431		3.58	%

LIABILITIES AND SHAREHOLDERS’ EQUITY
Total deposits	$	43,527		3.05	%	$	68,789		4.91	%
Total borrowed funds		1,573		0.88	%		(21,080	)	(10.48)%
Accrued interest payable and other liabilities		2,544		32.32	%		1,226		13.34	%
Total liabilities		47,644		2.95	%		48,935		3.04	%
Total shareholders’ equity		3,097		2.16	%		13,496		10.15	%
Total liabilities and shareholders’ equity	$	50,741		2.89	%	$	62,431		3.58	%

Cash and due from banks

	9/30/2024		6/30/2024			3/31/2024		12/31/2023		9/30/2023
Cash and due from banks
Noninterest bearing	$	37,871	$	35,437		$	26,128	$	29,997	$	35,121
Interest bearing		161,846		93,153			106,221		60,664		48,244
Total	$	199,717	$	128,590		$	132,349	$	90,661	$	83,365

	9/30/2024 vs 6/30/2024							9/30/2024 vs 9/30/2023
	Variance							Variance
	Amount		%					Amount		%
Cash and due from banks
Noninterest bearing	$	2,434		6.87	%			$	2,750		7.83	%
Interest bearing		68,693		73.74	%				113,602		235.47	%
Total	$	71,127		55.31	%			$	116,352		139.57	%

Cash and due from banks fluctuates from period to period based on loan demand and variances in deposit account balances.

Primary and secondary liquidity sources

The following table outlines our primary and secondary sources of liquidity as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Cash and cash equivalents	$	199,717	$	128,590	$	132,349	$	90,661	$	83,365
Fair value of unpledged investment securities		77,019		74,775		73,680		80,247		82,103
FHLB borrowing availability		190,000		190,000		190,000		170,000		170,000
Unsecured lines of credit		23,000		23,000		23,000		20,000		20,000
Funds available through the Fed Discount Window		109		106		107		111		110
Parent company line of credit		5,100		7,000		3,500		3,500		950
Total liquidity sources	$	494,945	$	423,471	$	422,636	$	364,519	$	356,528

The increase in cash and cash equivalents as of September 30, 2024 was due to an increase in total deposits (see “Total deposits” below).

In addition to the above liquidity sources, we also have the option of utilizing wholesale funding sources, such as brokered NOW accounts, brokered time deposits, and internet time deposits. Although wholesale funding sources are typically more expensive than core deposits and other liquidity sources, they are an integral part of our overall asset and liability management strategy.

Investment securities

	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Available-for-sale
U.S. Government and federal agency	$	19,432		$	20,430		$	20,427		$	22,425		$	23,420
State and municipal		18,997			19,108			20,403			20,460			20,992
Mortgage backed residential		44,086			45,808			47,505			49,076			50,786
Certificates of deposit		2,234			2,481			2,729			2,728			3,956
Collateralized mortgage obligations – agencies		21,640			22,213			22,778			23,320			24,062
Unrealized gain/(loss) on available-for-sale securities		(8,798	)		(12,179	)		(13,027	)		(12,760	)		(15,958	)
Total available-for-sale		97,591			97,861			100,815			105,249			107,258
Held-to-maturity state and municipal		535			791			877			878			879
Equity securities		1,598			1,515			1,518			1,488			1,406
Total investment securities	$	99,724		$	100,167		$	103,210		$	107,615		$	109,543

	9/30/2024 vs 6/30/2024									9/30/2024 vs 9/30/2023
	Variance									Variance
	Amount			%						Amount			%
Available-for-sale
U.S. Government and federal agency		(998	)	(4.88)%						$	(3,988	)	(17.03)%
State and municipal		(111	)	(0.58)%							(1,995	)	(9.50)%
Mortgage backed residential		(1,722	)	(3.76)%							(6,700	)	(13.19)%
Certificates of deposit		(247	)	(9.96)%							(1,722	)	(43.53)%
Collateralized mortgage obligations – agencies		(573	)	(2.58)%							(2,422	)	(10.07)%
Unrealized gain/(loss) on available-for-sale securities		3,381		(27.76)%							7,160		(44.87)%
Total available-for-sale		(270	)	(0.28)%							(9,667	)	(9.01)%
Held-to-maturity state and municipal		(256	)	(32.36)%							(344	)	(39.14)%
Equity securities		83			5.48	%					192			13.66	%
Total investment securities	$	(443	)	(0.44)%						$	(9,819	)	(8.96)%

The amortized cost and fair value of AFS investment securities as of September 30, 2024 were as follows:

	Maturing
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years		Securities with Variable Monthly Payments or Noncontractual Maturities		Total
U.S. Government and federal agency	$	6,481	$	12,951	$	—	$	—	$	—	$	19,432
State and municipal		1,624		15,190		1,113		1,070		—		18,997
Mortgage backed residential		—								44,086		44,086
Certificates of deposit		2,234		—		—		—		—		2,234
Collateralized mortgage obligations – agencies		—		—		—		—		21,640		21,640
Total amortized cost	$	10,339	$	28,141	$	1,113	$	1,070	$	65,726	$	106,389
Fair value	$	10,111	$	26,620	$	1,017	$	1,001	$	58,842	$	97,591

The amortized cost and fair value of HTM investment securities as of September 30, 2024 were as follows:

	Maturing
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years		Securities with Variable Monthly Payments or Noncontractual Maturities		Total
State and municipal	$	85	$	295	$	155	$	—	$	—	$	535
Fair value	$	84	$	290	$	152	$	—	$	—	$	526

Total investment securities have declined in recent periods primarily due to maturities and prepayments. As a result of overall market conditions, we have not replenished maturing securities with new purchases.

Residential mortgage loans held-for-sale, at fair value

Loans HFS represent the fair value of loans that have been committed to be sold to the secondary market, but have not yet been delivered. The level of loans HFS fluctuates based on loan demand as well as the timing of loan deliveries to the secondary market.

Loans and allowance for credit losses

As outlined in the following tables, our loan portfolio has strategically declined throughout the past 12 months. As a result of current market conditions, we expect minimal loan growth throughout the remainder of 2024. Specifically, our commercial pipeline has declined significantly, and the requests that are being presented are lower dollar balances and often carry an SBA guarantee.

The following tables outline the composition and changes in the loan portfolio as of:

	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Commercial and industrial	$	109,188		$	120,331		$	114,772		$	118,089		$	125,330
Commercial real estate		855,270			864,200			867,270			870,693			874,870
Total commercial loans		964,458			984,531			982,042			988,782			1,000,200
Residential mortgage		419,140			418,403			426,762			431,836			431,740
Home equity		55,475			53,133			48,568			48,380			47,069
Total residential real estate loans		474,615			471,536			475,330			480,216			478,809
Consumer		3,316			3,862			4,093			4,473			4,711
Gross loans		1,442,389			1,459,929			1,461,465			1,473,471			1,483,720
Allowance for credit losses		(14,700	)		(15,300	)		(15,300	)		(15,400	)		(15,400	)
Loans, net	$	1,427,689		$	1,444,629		$	1,446,165		$	1,458,071		$	1,468,320

Memo items:
Residential mortgage loans serviced for others	$	609,113		$	613,854		$	619,160		$	624,765		$	631,697

	9/30/2024 vs 6/30/2024									9/30/2024 vs 9/30/2023
	Variance									Variance
	Amount			%						Amount			%
Commercial and industrial	$	(11,143	)	(9.26)%						$	(16,142	)	(12.88)%
Commercial real estate		(8,930	)	(1.03)%							(19,600	)	(2.24)%
Total commercial loans		(20,073	)	(2.04)%							(35,742	)	(3.57)%
Residential mortgage		737			0.18	%					(12,600	)	(2.92)%
Home equity		2,342			4.41	%					8,406			17.86	%
Total residential real estate loans		3,079			0.65	%					(4,194	)	(0.88)%
Consumer		(546	)	(14.14)%							(1,395	)	(29.61)%
Gross loans		(17,540	)	(1.20)%							(41,331	)	(2.79)%
Allowance for credit losses		600		(3.92)%							700		(4.55)%
Loans, net	$	(16,940	)	(1.17)%						$	(40,631	)	(2.77)%

Memo items:
Residential mortgage loans serviced for others	$	(4,741	)	(0.77)%						$	(22,584	)	(3.58)%

The following table presents historical loan balances by portfolio segment as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Loans collectively evaluated
Commercial and industrial	$	102,523	$	113,254	$	112,542	$	115,665	$	124,860
Commercial real estate		854,038		864,026		867,270		870,524		874,701
Residential mortgage		416,864		416,130		423,881		429,109		428,927
Home equity		55,416		53,056		48,388		48,136		46,898
Consumer		3,325		3,862		4,093		4,473		4,711
Subtotal		1,432,166		1,450,328		1,456,174		1,467,907		1,480,097
Loans individually evaluated
Commercial and industrial		6,665		7,077		2,230		2,424		470
Commercial real estate		1,232		174		—		169		169
Residential mortgage		2,276		2,273		2,881		2,727		2,813
Home equity		48		77		180		244		171
Consumer		2		—		—		—		—
Subtotal		10,223		9,601		5,291		5,564		3,623
Gross Loans	$	1,442,389	$	1,459,929	$	1,461,465	$	1,473,471	$	1,483,720

The following table presents historical allowance for credit losses allocations by portfolio segment as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Allowance for credit losses for collectively evaluated loans
Commercial and industrial	$	1,436	$	1,434	$	1,300	$	1,407	$	1,362
Commercial real estate		8,347		8,903		8,359		8,467		8,703
Residential mortgage		4,131		4,133		4,202		4,409		4,439
Home equity		348		327		305		321		315
Consumer		51		80		38		44		36
Unallocated		—		—		670		355		294
Subtotal		14,313		14,877		14,874		15,003		15,149
Allowance for credit losses for individually evaluated loans
Commercial and industrial		385		423		423		363		248
Commercial real estate		—		—		—		—		—
Residential mortgage		—		—		3		34		3
Home equity		—		—		—		—		—
Consumer		2		—		—		—		—
Unallocated		—		—		—		—		—
Subtotal		387		423		426		397		251
Allowance for credit losses	$	14,700	$	15,300	$	15,300	$	15,400	$	15,400

Commercial and industrial	$	1,784	$	1,857	$	1,723	$	1,770	$	1,610
Commercial real estate		8,347		8,903		8,359		8,467		8,703
Residential mortgage		4,131		4,133		4,205		4,443		4,442
Home equity		348		327		305		321		315
Consumer		53		80		38		44		36
Unallocated		—		—		670		355		294
Allowance for credit losses	$	14,700	$	15,300	$	15,300	$	15,400	$	15,400

Loan concentration analysis

As a result of current economic conditions, there continues to be a heightened focus in the financial industry for non-owner occupied commercial real estate loans, most specifically retail and office space industries. While we continue to monitor various industries that have been impacted by the pandemic, we also continue to monitor the effects of inflation, supply chain disruption, elevated interest rates, and office space usage associated with an increased remote workforce. The overall credit quality indicators of non-owner occupied commercial real estate loan portfolio have remained strong. Performance is based on debt service coverage ratio, loan to value ratio and payment trends. As of September 30, 2024, there were no delinquencies in the non-owner occupied commercial real estate loan portfolio. We expect the non-owner occupied commercial real estate loan portfolio to experience insignificant growth, if any, in future periods.

Within the net lease and retail strip center non-owner occupied commercial real estate pools, we have exposure to Rite Aid. During the fourth quarter of 2023, Rite Aid, which operates over 2,000 retail pharmacies across 17 states, filed for Chapter 11 bankruptcy protection. During the third quarter of 2024, Rite Aid announced that it successfully emerged from bankruptcy protection and will now operate as a private company. However, all Rite Aid stores in Michigan were closed as part of the company’s restructuring. As a result, one commercial real estate loan was partially charged off and its remaining balance was moved to nonaccrual status during the third quarter of 2024. We continue to actively monitor five remaining loans previously associated with Rite Aid.

With the ongoing pressures on the office sector due to remote work capabilities and less required office space, we continue to monitor the office pool more closely for potential deterioration. It is not expected that there will be much, if any, impact on portfolio performance in this pool in the near future due to existing lease terms, tenant mix, office size, and strong underwriting at origination. Due to current economic uncertainty and the pressures noted above, it is unlikely that we will seek new loan originations in the non-owner occupied office pool in 2024.

Below is a description of each industry pool within the non-owner occupied commercial real estate loan portfolio:

Net lease: Loans in this pool represent national credit tenants (or franchisees of the same) or large regional tenants with excellent credit. These loans are typically single tenant net lease credits with strong debt service coverage ratios and lease terms that extend beyond the maturity of the loan.

Retail strip centers: Loans in this pool represent loans collateralized by retail strip centers. The tenant base within this pool consists primarily of retail space whose average lease periods run between one and ten years. Larger strip centers are usually anchored by a national or regional tenant. Guarantors in this category typically have large liquid reserves.

Office: Loans in this pool represent loans collateralized by non-owner occupied office buildings. The tenant base includes legal and other professional services whose average lease periods run from three to fifteen years.

Special use: Loans in this pool represent loans collateralized by special use buildings, which include hotels, motels, assisted living and nursing homes that are not classified as construction or SBA loans.

Industrial: Loans in this pool represent investment properties used for manufacturing and production.

Medical office: Loans in this pool represent loans collateralized by non-owner occupied medical office buildings. The tenant base includes medical services whose average lease periods run from three to fifteen years.

Self storage: Loans in this pool represent self storage buildings. Loan terms are generally five years or less and the lease terms of the units are typically on a month-to-month basis.

Mixed use: Loans in this pool represent loans collateralized by mixed use real estate. The tenant base within this pool consists primarily of office-retail, office-residential or retail-residential space. The properties are most often purchased by individuals for investment purposes.

Retail: Loans in this pool represent loans collateralized by single tenant retail buildings whose average lease periods run over five years.

The following tables present the composition of current and historical non-owner occupied commercial real estate loans, based on loan collateral, by industry pool:

	9/30/2024			6/30/2024			3/31/2024		12/31/2023			9/30/2023
Net lease	$	137,406		$	141,064		$	147,103	$	149,056		$	160,077
Retail strip centers		106,948			106,631			107,834		98,588			96,567
Office		61,897			62,237			61,657		61,822			62,959
Special use		71,307			71,006			58,278		58,710			57,612
Industrial		23,338			23,107			22,575		28,380			28,906
Medical office		24,551			24,818			25,380		25,842			28,591
Self storage		32,797			32,502			25,660		23,455			21,993
Mixed use		16,829			16,980			17,174		17,335			19,833
Retail		15,183			17,191			12,533		12,981			14,115

Total non-owner occupied commercial real estate loans	$	490,256		$	495,536		$	478,194	$	476,169		$	490,653

	9/30/2024 vs 6/30/2024								9/30/2024 vs 9/30/2023
	Variance								Variance
	Amount			%					Amount			%
Net lease	$	(3,658	)	(2.59)%					$	(22,671	)	(14.16)%
Retail strip centers		317			0.30	%				10,381			10.75	%
Office		(340	)	(0.55)%						(1,062	)	(1.69)%
Special use		301			0.42	%				13,695			23.77	%
Industrial		231			1.00	%				(5,568	)	(19.26)%
Medical office		(267	)	(1.08)%						(4,040	)	(14.13)%
Self storage		295			0.91	%				10,804			49.12	%
Mixed use		(151	)	(0.89)%						(3,004	)	(15.15)%
Retail		(2,008	)	(11.68)%						1,068			7.57	%

Total non-owner occupied commercial real estate loans	$	(5,280	)	(1.07)%					$	(397	)	(0.08)%

The following table presents the average loan size of current and historical non-owner occupied commercial real estate loans, based on loan collateral, by industry pool:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Net lease	$	1,383	$	1,291	$	1,311	$	1,316	$	1,300
Retail strip centers		2,379		2,197		2,231		2,135		2,115
Office		1,370		1,363		1,296		1,297		1,294
Special use		2,612		2,546		2,064		2,079		2,134
Industrial		933		925		941		1,092		1,072
Medical office		1,116		1,128		1,103		1,078		1,145
Self storage		1,923		1,926		1,509		1,380		1,692
Mixed use		1,324		1,334		1,321		1,333		1,240
Retail		407		513		447		461		429

Total non-owner occupied commercial real estate loans	$	1,489	$	1,448	$	1,392	$	1,379	$	1,362

The following table presents current and historical non-owner occupied commercial real estate loans, based on loan collateral, by industry pool as a percentage of gross loans:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Net lease	9.53	%	9.66	%	10.07	%	10.12	%	10.79	%
Retail strip centers	7.41	%	7.30	%	7.38	%	6.69	%	6.51	%
Office	4.29	%	4.26	%	4.22	%	4.20	%	4.24	%
Special use	4.94	%	4.86	%	3.99	%	3.98	%	3.88	%
Industrial	1.62	%	1.58	%	1.54	%	1.93	%	1.95	%
Medical office	1.70	%	1.70	%	1.74	%	1.75	%	1.93	%
Self storage	2.27	%	2.23	%	1.76	%	1.59	%	1.48	%
Mixed use	1.17	%	1.16	%	1.18	%	1.18	%	1.34	%
Retail	1.05	%	1.18	%	0.86	%	0.88	%	0.95	%

Total non-owner occupied commercial real estate loans to gross loans	33.98	%	33.93	%	32.74	%	32.32	%	33.07	%

Asset quality

The following table summarizes our current, past due, and nonaccrual loans as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Accruing interest
Current	$	1,428,014	$	1,445,780	$	1,451,432	$	1,463,668	$	1,477,386
Past due 30-89 days		4,152		4,534		4,344		4,239		2,711
Past due 90 days or more		—		14		398		—		—
Total accruing interest		1,432,166		1,450,328		1,456,174		1,467,907		1,480,097
Nonaccrual		10,223		9,601		5,291		5,564		3,623
Total loans	$	1,442,389	$	1,459,929	$	1,461,465	$	1,473,471	$	1,483,720
Total loans past due and in nonaccrual status	$	14,375	$	14,149	$	10,033	$	9,803	$	6,334

The following table summarizes the our nonperforming assets as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Nonaccrual loans	$	10,223	$	9,601	$	5,291	$	5,564	$	3,623
Accruing loans past due 90 days or more		—		14		398		—		—
Total nonperforming loans		10,223		9,615		5,689		5,564		3,623
Other real estate owned		293		293		345		597		345
Total nonperforming assets	$	10,516	$	9,908	$	6,034	$	6,161	$	3,968

The following table summarizes our charge-offs, recoveries and allowance for credit losses as of, and for the three-month periods ended:

	9/30/2024		6/30/2024		3/31/2024			12/31/2023			9/30/2023
Total charge-offs	$	1,814	$	814	$	86		$	110		$	16
Total recoveries		11		18		29			300			455
Net charge-offs (recoveries)	$	1,803	$	796	$	57		$	(190	)	$	(439	)
Allowance for credit losses	$	1,203	$	796	$	(43	)	$	(190	)	$	(309	)

During the third quarter of 2024, we partially charged off one commercial real estate loan for $1,443 related to the Rite Aid bankruptcy filing. We believe that the credit characteristics are unique and are not an indication of softening in the remainder of our commercial loan portfolio.

The following table summarizes the our primary asset quality measures as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Nonperforming loans to gross loans	0.71	%	0.66	%	0.39	%	0.38	%	0.24	%
Nonperforming assets to total assets	0.58	%	0.56	%	0.34	%	0.35	%	0.23	%
Allowance for credit losses to gross loans	1.02	%	1.05	%	1.05	%	1.05	%	1.04	%
Net charge-offs (recoveries) to QTD average gross loans	0.12	%	0.05	%	—	%	(0.01)%		(0.03)%
Credit loss expense (reversal) to QTD average gross loans	0.08	%	0.05	%	—	%	(0.01)%		(0.02)%

The following table summarizes the average loan size as of:

	9/30/2024		6/30/2024		3/31/2024		12/31/2023		9/30/2023
Commercial and industrial	$	310	$	343	$	326	$	334	$	353
Commercial real estate		901		906		900		905		896
Total commercial loans		740		754		746		752		751
Residential mortgage		235		234		234		236		234
Home equity		58		56		53		53		52
Total residential real estate loans		173		173		174		175		174
Consumer		12		13		13		13		12
Gross loans	$	335	$	337	$	336	$	337	$	335

All other assets

The following tables outline the composition and changes in other assets as of:

	9/30/2024			6/30/2024			3/31/2024		12/31/2023			9/30/2023
Premises and equipment, net	$	13,203		$	13,661		$	14,111	$	14,561		$	14,928
Federal Home Loan Bank stock		9,179			9,179			9,179		9,179			9,179
Corporate owned life insurance		28,129			27,877			27,670		27,466			27,274
Mortgage servicing rights		8,461			8,636			8,680		8,776			8,884
Accrued interest receivable		4,354			4,747			4,869		4,472			4,485
Goodwill		8,853			8,853			8,853		8,853			8,853
Other assets
Core deposit intangibles		400			444			488		533			609
Right-of-use assets		1,062			1,142			1,237		1,333			1,426
Other real estate owned		293			293			345		597			345
Other		4,445			5,971			6,406		6,088			6,691
Total		6,200			7,850			8,476		8,551			9,071
All other assets	$	78,379		$	80,803		$	81,838	$	81,858		$	82,674

	9/30/2024 vs 6/30/2024								9/30/2024 vs 9/30/2023
	Variance								Variance
	Amount			%					Amount			%
Premises and equipment, net	$	(458	)	(3.35)%					$	(1,725	)	(11.56)%
Federal Home Loan Bank stock		—			—	%				—			—	%
Corporate owned life insurance		252			0.90	%				855			3.13	%
Mortgage servicing rights		(175	)	(2.03)%						(423	)	(4.76)%
Accrued interest receivable		(393	)	(8.28)%						(131	)	(2.92)%
Goodwill		—			—	%				—			—	%
Other assets
Core deposit intangibles		(44	)	(9.91)%						(209	)	(34.32)%
Right-of-use assets		(80	)	(7.01)%						(364	)	(25.53)%
Other real estate owned		—			—	%				(52	)	(15.07)%
Other		(1,526	)	(25.56)%						(2,246	)	(33.57)%
Total		(1,650	)	(21.02)%						(2,871	)	(31.65)%
All other assets	$	(2,424	)	(3.00)%					$	(4,295	)	(5.20)%

The annual decrease in premises and equipment was due to depreciation on our existing premises and equipment.

Total deposits

The following tables outline the composition and changes in the deposit portfolio as of:

	9/30/2024			6/30/2024			3/31/2024		12/31/2023			9/30/2023
Noninterest bearing demand	$	398,338		$	404,521		$	401,518	$	423,019		$	425,820
Interest bearing
Savings		264,337			262,538			274,922		273,302			293,310
Money market demand		250,715			230,304			229,584		223,827			225,138
NOW
Retail NOW		202,030			205,383			203,614		178,892			198,271
Brokered NOW		—			—			—		—			—

Total NOW Accounts		202,030			205,383			203,614		178,892			198,271
Time deposits
Other time deposits		294,862			264,009			268,466		234,838			198,509
Brokered time deposits		60,304			60,304			60,304		60,304			60,251
Internet time deposits		—			—			—		—			498

Total time deposits		355,166			324,313			328,770		295,142			259,258

Total deposits	$	1,470,586		$	1,427,059		$	1,438,408	$	1,394,182		$	1,401,797

	9/30/2024 vs 6/30/2024								9/30/2024 vs 9/30/2023
	Variance								Variance
	Amount			%					Amount			%
Noninterest bearing demand	$	(6,183	)	(1.53)%					$	(27,482	)	(6.45)%
Interest bearing
Savings		1,799			0.69	%				(28,973	)	(9.88)%
Money market demand		20,411			8.86	%				25,577			11.36	%
NOW
Retail NOW		(3,353	)	(1.63)%						3,759			1.90	%
Brokered NOW		—			—	%				—			—	%

Total NOW Accounts		(3,353	)	(1.63)%						3,759			1.90	%
Time deposits
Other time deposits		30,853			11.69	%				96,353			48.54	%
Brokered time deposits		—			—	%				53			0.09	%
Internet time deposits		—			—	%				(498	)	(100.00)%

Total time deposits		30,853			9.51	%				95,908			36.99	%

Total deposits	$	43,527			3.05	%			$	68,789			4.91	%

Between March 2022 and July 2023, the FOMC raised its target federal funds rate 11 times, from a target range of 0.00-0.25% to 5.25-5.50%, or 525 basis points, in order to combat rising inflation. This rapid increase in interest rates led to significant competition amongst financial institutions for deposits. In September 2024, the FOMC lowered the target federal funds rate 50 basis points to a target range of 4.75-5.00%. Due to the overall uncertainty regarding potential rate changes in the future, customers have not sought out long-term funds, leading to a shift in demand to higher-yielding non-maturity deposit accounts as well as short-term time deposits.

Total borrowed funds

The following tables outline the composition and changes in borrowed funds as of:

	9/30/2024		6/30/2024			3/31/2024		12/31/2023			9/30/2023
Federal Home Loan Bank borrowings	$	160,000	$	160,000		$	160,000	$	180,000		$	180,000
Subordinated debentures		14,000		14,000			14,000		14,000			14,000
Other borrowings		5,970		4,397			4,500		4,500			7,050
Total borrowed funds	$	179,970	$	178,397		$	178,500	$	198,500		$	201,050

	9/30/2024 vs 6/30/2024							9/30/2024 vs 9/30/2023
	Variance							Variance
	Amount		%					Amount			%
Federal Home Loan Bank borrowings	$	—		—	%			$	(20,000	)	(11.11)%
Subordinated debentures		—		—	%				—			—	%
Other borrowings		1,573		35.77	%				(1,080	)	(15.32)%
Total borrowed funds	$	1,573		0.88	%			$	(21,080	)	(10.48)%

We utilize a mix of borrowed funds and organic deposit growth to fund loan demand. As loan growth has slowed in recent periods, our reliance on FHLB advances has declined.

Wholesale funding sources

Although we have been successful at growing market deposits, we utilize wholesale funding sources when necessary to fill gaps when asset growth outpaces deposit growth. Our wholesale funding sources include Federal Home Loan Bank borrowings, correspondent Fed Funds lines and brokered deposits. Although wholesale funding sources are typically more expensive than core deposits, they are an integral part of our funding.

The following tables outline the composition and changes in wholesale funding sources as of:

	9/30/2024		6/30/2024			3/31/2024		12/31/2023			9/30/2023
Federal Home Loan Bank borrowings	$	160,000	$	160,000		$	160,000	$	180,000		$	180,000
Subordinated debentures		14,000		14,000			14,000		14,000			14,000
Other borrowings		5,970		4,397			4,500		4,500			7,050
Brokered NOW accounts		—		—			—		—			—
Brokered time deposits		60,304		60,304			60,304		60,304			60,251
Internet time deposits		—		—			—		—			498
Total wholesale funds	$	240,274	$	238,701		$	238,804	$	258,804		$	261,799

	9/30/2024 vs 6/30/2024							9/30/2024 vs 9/30/2023
	Variance							Variance
	Amount		%					Amount			%
Federal Home Loan Bank borrowings	$	—		—	%				(20,000	)	(11.11)%
Subordinated debentures		—		—	%				—			—	%
Other borrowings		1,573		35.77	%				(1,080	)	(15.32)%
Brokered NOW accounts		—	N/A						—		N/A
Brokered time deposits		—		—	%				53			0.09	%
Internet time deposits		—	N/A						(498	)	(100.00)%
Total wholesale funds	$	1,573		0.66	%			$	(21,525	)	(8.22)%

Accrued interest payable and other liabilities

Accrued interest payable and other liabilities includes accrued interest payable, federal income taxes payable, deferred federal income taxes payable, and all other liabilities (none of which are individually significant).

Total shareholders’ equity

We are considered a “well-capitalized” institution, as our capital ratios exceed the minimum designated standards necessary in accordance with Basel III guidelines. As of September 30, 2024, the Bank’s total capital ratio was 12.78%, tier 1 capital ratio was 11.72%, and tier 1 leverage ratio was 9.02%. The minimum requirements to be considered well-capitalized are a total capital ratio of 10.00%, tier 1 capital ratio of 8.00%, and tier 1 leverage ratio of 5.00%. While we continue to be considered well-capitalized, we are focused on enhancing our capital ratios through earnings of the Bank as well as asset growth moderation strategies in 2024.

The following tables outline the composition and changes in shareholders’ equity as of:

	9/30/2024			6/30/2024			3/31/2024			12/31/2023			9/30/2023
Common stock	$	74,826		$	74,690		$	74,555		$	74,230		$	74,118
Retained earnings		78,467			78,094			76,607			74,309			70,972
Accumulated other comprehensive (loss) income		(6,895	)		(9,483	)		(10,088	)		(9,837	)		(12,188	)
Total shareholders’ equity	$	146,398		$	143,301		$	141,074		$	138,702		$	132,902

	9/30/2024 vs 6/30/2024									9/30/2024 vs 9/30/2023
	Variance									Variance
	Amount			%						Amount			%
Common stock	$	136			0.18	%				$	708			0.96	%
Retained earnings		373			0.48	%					7,495			10.56	%
Accumulated other comprehensive (loss) income		2,588		(27.29)%							5,293		(43.43)%
Total shareholders’ equity	$	3,097			2.16	%				$	13,496			10.15	%

The Board of Directors has authorized the repurchase of up to $10,000 of common stock. As of September 30, 2024, we had $1,393 of common stock available to repurchase through the program. We did not execute any repurchases of our common stock during 2024.

Stock Performance

The following table compares the cumulative total shareholder return on our common stock for the year-to-date, 1 year, 3 year, and 5 year periods ended September 30, 2024. The National OTC Peer Group was developed by selecting all OTC traded bank holding companies with total assets between $1 billion and $3 billion as of 03/31/2024 that had a quoted stock price on Bloomberg. The Midwest / Great Lakes OTC Peer Group represents those institutions included in the National OTC Peer Group that are headquartered in Illinois, Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin.

	# in Peer Group	YTD		1 Year		3 Year		5 Year
Fentura Financial, Inc. (OTCQX:FETM)		45.40	%	67.28	%	59.12	%	100.80	%

National OTC Peers	43	(1.01)%		(3.49)%		2.11	%	8.44	%
Fentura Ranking out of 44		1		1		4		4

Midwest / Great Lakes OTC Peers	17	(1.97)%		(5.16)%		(1.63)%		1.35	%
Fentura Ranking out of 18		1		1		1		1

Abbreviations and Acronyms

ABA: American Bankers Association	FTE: Fully taxable equivalent
ACH: Automated Clearing House	GAAP: Generally Accepted Accounting Principles
ACL: Allowance for credit losses	HFS: Held-for-sale
AFS: Available-for-sale	HTM: Held-to-maturity
AIR: Accrued interest receivable	HFS: Held-for-sale
AOCI: Accumulated other comprehensive income	HTM: Held-to-maturity
ARRC: Alternative Reference Rates Committee	IRA: Individual retirement account
ASC: Accounting Standards Codification	ITM: Interactive Teller Machine
ASU: Accounting Standards Update	LIBOR: London Interbank Offered Rate
ATM: Automated teller machine	MSR: Mortgage servicing rights
CDI: Core deposit intangible	N/M: Not meaningful
CET1: Common equity tier 1	NASDAQ: National Association of Securities Dealers Automated Quotations
COLI: Corporate owned life insurance	NOW: Negotiable order of withdrawal
DRIP: Dividend Reinvestment Plan	NSF: Non-sufficient funds
EPS: Earnings Per Common Share	OCI: Other comprehensive income
ESOP: Employee Stock Ownership Plan	OIS: Overnight Index Swap
FASB: Financial Accounting Standards Board	OREO: Other real estate owned
FDIC: Federal Deposit Insurance Corporation	OTTI: Other-than-temporary impairment
FHLB: Federal Home Loan Bank	QTD: Quarter-to-date
FHLLC: Fentura Holdings LLC	SAB: Staff Accounting Bulletin
FHLMC: Federal Home Loan Mortgage Corporation	SBA: U.S. Small Business Administration
FNMA: Federal National Mortgage Association	SEC: Securities and Exchange Commission
FOMC: Federal Open Market Committee	SERP: Supplemental Executive Retirement Plan
FRB: Federal Reserve Bank	SOFR: Secured Overnight Funding Rate
FSB: Farmers State Bank of Munith	TLM: Troubled loan modifications

About Fentura Financial, Inc. and The State Bank

Fentura Financial, Inc. is the holding company for The State Bank. It was formed in 1987 and is traded on the OTCQX exchange under the symbol FETM, and has been recognized as one of the Top 50 performing stocks on that exchange.

The State Bank is a 5-Star Bauer Financial rated commercial, retail and trust bank headquartered in Fenton, Michigan. It currently operates 20 full-service offices and one loan production center serving Bay, Genesee, Ingham, Jackson, Livingston, Oakland, Saginaw, and Shiawassee counties. The State Bank believes in the potential of banking to help create better lives, better businesses, and better communities, and works to achieve this through its full array of consumer, mortgage, SBA, commercial and wealth management banking and advisory services, together with philanthropic and volunteer support to organizations and groups within the communities it serves. More information can be found at www.thestatebank.com or www.fentura.com.

Cautionary Statement: This press release contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning future growth in earning assets and net income. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services, interest rates and fees for services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Contacts:	Ronald L. Justice	Aaron D. Wirsing
	President & CEO	Chief Financial Officer
	Fentura Financial, Inc.	Fentura Financial, Inc.
	810.714.3902	810.714.3925
	ron.justice@thestatebank.com	aaron.wirsing@thestatebank.com

The MIL Network –

January 25, 2025

MIL-OSI Russia: Dmitry Chernyshenko: Open week Nauka 0 in China is another bridge of friendship between our countries

Translation. Region: Russian Federation –

Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

October 25, 2024

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

October 25, 2024

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

October 25, 2024

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

October 25, 2024

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

October 25, 2024

Previous news Next news

Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China

Deputy Prime Minister of Russia Dmitry Chernyshenko sent greetings to the participants of the Nauka 0 festival, which opened in the city of Shenzhen in China. The event is being held as part of the foreign program of the Decade of Science and Technology, announced by the President of Russia.

“This year, the Open Week is dedicated to the 75th anniversary of the People’s Republic of China and the establishment of diplomatic relations between Russia and China. 10 years ago, Russian President Vladimir Putin and Chinese President Xi Jinping made a historic decision to establish a joint university, MSU-PPI. During this time, it has become the flagship of bilateral cooperation in higher education, science and innovation. Today, more than 3.4 thousand undergraduate and graduate students study at 14 faculties at MSU-PPI, and large advanced research centers have been created. The landmark initiative of MSU and its rector Viktor Antonovich Sadovnichy – the Open Week Nauka 0 in China – is another bridge of friendship between our countries, their university and academic communities,” the Deputy Prime Minister said.

Dmitry Chernyshenko added that the main theme of the week – “Science Around Us” – will unite more than 500 different events. Leading Russian and Chinese scientists, popularizers of science and representatives of science-intensive companies will share their knowledge and practices in the field of research and development.

Rector of Moscow University, Academician Viktor Sadovnichy, speaking about the Nauka 0 Open Week in Shenzhen, noted the importance of the event for the development of science and education.

“This is the second time that we are holding the Nauka 0 Open Week at the joint Russian-Chinese university MSU-PPI. This is a gift from the university community of Russia and China to all those who share our conviction that science and education are the key areas of civilization development and the basis for cooperation between peoples in the modern world. As part of the Nauka 0 Open Week, our students and teachers, as well as leading scientists from academic institutes, will take part in hundreds of popular science and educational events. Their goal is to once again remind society of the results and significance of the researcher’s work. It is important to demonstrate, using outstanding scientific achievements as an example, how scientists’ discoveries affect our present and future,” Viktor Sadovnichy emphasized.

On the Russian side, the festival is organized by the Ministry of Education and Science of Russia with the support of Lomonosov Moscow State University, the Russian Academy of Sciences, scientific and educational organizations and corporations. On the Chinese side, the organizers are the joint Russian-Chinese university MSU-PPI in Shenzhen, and the government of Shenzhen.

Leading Russian scientists will give popular science lectures from October 25 to 27. During master classes, festival visitors will also learn what liquid wires are, create a magnet, feed a single-celled hydra, and extract DNA from a banana. They will see a unique FNIRS device designed to read brain parameters in several people at the same time. Visitors will also try to determine the age of a fish by its scales, print their own DNA on a 3D printer, and learn Chinese calligraphy. And during a “bio tour,” participants will learn about the flora of the MSU-PPI campus.

The festival aims to tell the general public in a clear and accessible language what science is, what scientists do, how scientific research improves the quality of life and what prospects it opens up for modern man.

Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

MIL OSI Russia News –

January 25, 2025

MIL-OSI USA: Rep. Molinaro Announces Mobile Office Hours in Tompkins County

Source: United States House of Representatives – Representative Marc Molinaro (R-NY-19)

Binghamton, NY – U.S. Rep. Marc Molinaro (NY-19) today announced his constituent service team will hold mobile office hours from 11:00am to 1:00pm on Monday, October 28 at the Trumansburg Village Office.

During this event, constituents will be able to connect with representatives from Rep. Molinaro’s office to share comments and resolve issues they are having with federal agencies like the VA, IRS, and Social Security Administration.

If constituents aren’t able to make this event, Rep. Molinaro also maintains offices in Broome County and Greene County. These offices are open from 9am to 5pm, Monday through Friday. Rep. Molinaro also has satellite offices in Sullivan County, Delaware County, and Otsego County. These offices are accessible by appointment and can be made by calling (607) 242-0200 or contacting the office online.

Details for the mobile office hours are as follows:

Tompkins County

Date: Monday, October 28

Time: 11:00am – 1:00pm

Location:

Trumansburg Village Office

56 East Main St.

Trumansburg, NY 14886

MIL OSI USA News –

January 25, 2025

MIL-OSI: First Western Reports Third Quarter 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

Third Quarter 2024 Summary

Net income available to common shareholders of $2.1 million in Q3 2024, compared to $1.1 million in Q2 2024
Diluted earnings per share of $0.22 in Q3 2024, compared to $0.11 in Q2 2024
Total deposits increased 3.7% from $2.41 billion in Q2 2024 to $2.50 billion in Q3 2024. Noninterest-bearing deposits increased 19% from $397 million in Q2 2024 to $474 million in Q3 2024
Loan-to-Deposit ratio decreased from 101.9% in Q2 2024 to 95.2% in Q3 2024

DENVER, Oct. 24, 2024 (GLOBE NEWSWIRE) — First Western Financial, Inc. (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the third quarter ended September 30, 2024.

Net income available to common shareholders was $2.1 million, or $0.22 per diluted share, for the third quarter of 2024. This compares to net income of $1.1 million, or $0.11 per diluted share, for the second quarter of 2024, and net income of $3.1 million, or $0.32 per diluted share, for the third quarter of 2023.

Scott C. Wylie, CEO of First Western, commented, “We generated a higher level of profitability in the third quarter while continuing to prioritize prudent risk management and a conservative approach to new loan production. We continued to effectively control expense levels while also making investments in the business that will support our profitable growth in the future. We are executing well on our balance sheet management strategies, which resulted in further reduction in our loan-to-deposit ratio, primarily driven by a significant increase in noninterest-bearing deposits, which increased 19% from the end of the prior quarter. We also saw positive trends in asset quality, including a significant reduction in non-performing loans and classified loans, as well as increases in our book value per share and tangible book value per share, which further strengthened our balance sheet.”

“With our successful efforts to reposition our balance sheet including increasing our liquidity with a lower loan-to-deposit ratio, we are well positioned to generate a higher level of loan growth in 2025 as loan demand increases. We also expect to see expansion in our net interest margin and an increase in non-interest income from our mortgage business as interest rates decline, which should further improve our level of profitability. We are seeing positive trends in a number of key areas that we expect to continue, which we believe should result in steady improvement in our financial performance, operating leverage, and further value created for our shareholders,” said Mr. Wylie.

	For the Three Months Ended
	September 30,			June 30,			September 30,
*(Dollars in thousands, except per share data)*		2024			2024			2023
Earnings Summary
Net interest income	$	15,568		$	15,778		$	16,766
Provision for credit losses		501			2,334			329
Total non-interest income		6,972			6,972			6,099
Total non-interest expense		19,368			19,001			18,314
Income before income taxes		2,671			1,415			4,222
Income tax expense		537			339			1,104
Net income available to common shareholders		2,134			1,076			3,118
Basic earnings per common share		0.22			0.11			0.33
Diluted earnings per common share		0.22			0.11			0.32

Return on average assets (annualized)		0.30	%		0.15	%		0.44	%
Return on average shareholders’ equity (annualized)		3.43			1.73			5.08
Return on tangible common equity (annualized)⁽¹⁾		3.93			2.00			5.82
Net interest margin		2.32			2.35			2.46
Efficiency ratio⁽¹⁾		84.89			82.13			78.89

____________________

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Financial Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Operating Results for the Third Quarter 2024

Revenue

Total income before non-interest expense was $22.0 million for the third quarter of 2024, compared to $20.4 million for the second quarter of 2024. Gross revenue⁽¹⁾ was $22.7 million for the third quarter of 2024, compared to $23.1 million for the second quarter of 2024. The increase in total income before non-interest expense was primarily driven by a decrease in Provision for credit losses. Relative to the third quarter of 2023, total income before non-interest expense decreased 2.2% from $22.5 million. Gross revenue decreased 1.7% from $23.1 million for the third quarter of 2023. The decrease in total income before non-interest expense was driven by an increase in Interest expense due to higher deposit costs, offset partially by higher Interest income and Net mortgage gains.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Financial Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Net Interest Income

Net interest income for the third quarter of 2024 was $15.6 million, a decrease of 1.3% from $15.8 million in the second quarter of 2024. The decrease quarter over quarter was driven by an increase in interest expense due to an increase in interest-bearing deposits and partially due to having one additional day in the quarter. Interest income was negatively impacted by $0.4 million in the quarter due to the addition of a non-performing loan. Relative to the third quarter of 2023, net interest income decreased 7.1% from $16.8 million. The decrease compared to the prior year third quarter was due to higher Interest expense driven primarily by higher deposit costs, offset partially by higher Interest income.

Net Interest Margin

Net interest margin for the third quarter of 2024 decreased 3 basis points to 2.32% from 2.35% reported in the second quarter of 2024, primarily due to an unfavorable mix shift in average deposit balances. Net interest margin was negatively impacted by 6 basis points in the quarter due to the addition of a non-performing loan.

The yield on interest-earning assets remained flat at 5.67% in the third quarter of 2024 versus 5.67% in the second quarter of 2024 and the cost of interest-bearing deposits remained flat at 4.19% in the third quarter of 2024 versus 4.19% in the second quarter of 2024.

Relative to the third quarter of 2023, net interest margin decreased from 2.46%, primarily due to pricing pressure on interest-bearing deposits, offset partially by higher loan yields.

Non-interest Income

Non-interest income for the third quarter of 2024 remained flat at $7.0 million compared to $7.0 million in the second quarter of 2024. Activity throughout the quarter included an increase in Risk management and insurance fees, offset by decreased Net gain on mortgage loans.

Relative to the third quarter of 2023, non-interest income increased 14.8% from $6.1 million. Increases were driven primarily by increases in net gain on mortgage loans and risk management and insurance fees.

Non-interest Expense

Non-interest expense for the third quarter of 2024 was $19.4 million compared to $19.0 million for the second quarter of 2024. The increase was primarily driven by increases in Salaries and employee benefits due to increased front office headcount and Marketing expenses, partially offset by a decrease in other operational expenses due to a partial recovery on a fraud loss from the first quarter.

Relative to the third quarter of 2023, non-interest expense increased 6.0% from $18.3 million, driven primarily by an increase in Salaries and employee benefits, occupancy costs, and technology enhancements.

The Company’s efficiency ratio⁽¹⁾ was 84.9% in the third quarter of 2024, compared with 82.1% in the second quarter of 2024 and 78.9% in the third quarter of 2023.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Financial Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Income Taxes

The Company recorded Income tax expense of $0.5 million for the third quarter of 2024, compared to Income tax expense of $0.3 million for the second quarter of 2024 and $1.1 million for the third quarter of 2023. The increase in the third quarter of 2024 compared to the second quarter of 2024 was attributable to the increase in Income before income taxes.

Loans

Total loans held for investment were $2.39 billion as of September 30, 2024, a decrease of 2.85% from $2.46 billion as of June 30, 2024. The decline was primarily due to net decreases in the cash, securities and other and commercial and industrial portfolios, offset partially by net growth in the 1 – 4 family residential portfolio. Another contributing factor to the decline was the foreclosure of a property in the quarter, which decreased non-performing loans by $30 million and increased Other real estate owned (“OREO”) by $25.6 million. Relative to the third quarter of 2023, total loans held for investment decreased from $2.54 billion as of September 30, 2023.

Deposits

Total deposits were $2.50 billion as of September 30, 2024, compared to $2.41 billion as of June 30, 2024. The increase was driven primarily by an increase in Noninterest-bearing deposits. Relative to the third quarter of 2023, total deposits increased from $2.42 billion as of September 30, 2023, driven primarily by an increase in time deposits due to new and expanded deposit relationships.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were a combined $62.4 million as of September 30, 2024, a decrease of $129.1 million from $191.5 million as of June 30, 2024. The change when compared to June 30, 2024 was driven by a decrease in FHLB borrowing due to the deposit growth and loan balance decline that occurred in the quarter. Relative to the third quarter of 2023, borrowings decreased $197.5 million from $259.9 million as of September 30, 2023. The decrease in borrowings from September 30, 2023 is driven by an increase in deposits and decrease in loans.

Subordinated notes were $52.5 million as of September 30, 2024, compared to $52.5 million as of June 30, 2024. Subordinated notes increased $0.2 million from $52.3 million as of September 30, 2023.

Assets Under Management

Assets Under Management (“AUM”) increased to $7.47 billion as of September 30, 2024, compared to $7.01 billion as of June 30, 2024 and $6.40 billion as of September 30, 2023. The increase when compared to June 30, 2024 and September 30, 2023 was primarily attributable to improving market conditions resulting in an increase in the value of AUM.

Credit Quality

Non-performing assets totaled $52.1 million, or 1.79% of total assets, as of September 30, 2024, compared to $49.3 million, or 1.68% of total assets, as of June 30, 2024. The increase in non-performing assets during the quarter was primarily due to the addition of a non-performing loan and foreclosed property, partially offset by non-performing loan pay downs, charge-offs, and the sale of a non-performing loan. As of September 30, 2023, non-performing assets totaled $56.1 million, or 1.87% of total assets. Relative to the third quarter of 2023, the decrease in non-performing assets was primarily driven by pay downs, charge-offs, and the sale of a non-performing loan, partially offset by additions to Other real estate owned (“OREO”) and non-performing loans. OREO totaled $37.0 million as of September 30, 2024 an increase of $25.6 million from $11.4 million as of June 30, 2024. As of September 30, 2023, the Company held no OREO.

Non-performing loans totaled $15.0 million as of September 30, 2024, a decrease of $22.9 million from $37.9 million as of June 30, 2024. As of September 30, 2023, non-performing loans totaled $56.1 million. The decrease when compared to June 30, 2024 and September 30, 2023 was driven by the migration of one loan relationship out of non-performing loans and into OREO, pay downs, charge-offs, and the sale of a non-performing loan, partially offset by additions to non-performing loans.

During the third quarter of 2024 the Company recorded a provision expense of $0.5 million, compared to a provision expense of $2.3 million in the second quarter of 2024 and $0.3 million in the third quarter of 2023. The decrease in provision expense recorded in the third quarter of 2024 compared to second quarter of 2024 was primarily driven by decreased provision on individually analyzed loans in the third quarter.

Capital

As of September 30, 2024, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. As of September 30, 2024, the Bank was classified as “well capitalized,” as summarized in the following table:

	September 30,
	2024
Consolidated Capital
Tier 1 capital to risk-weighted assets	10.06	%
Common Equity Tier 1 (“CET1”) to risk-weighted assets	10.06
Total capital to risk-weighted assets	13.19
Tier 1 capital to average assets	8.04

Bank Capital
Tier 1 capital to risk-weighted assets	11.39	%
CET1 to risk-weighted assets	11.39
Total capital to risk-weighted assets	12.13
Tier 1 capital to average assets	9.11

Book value per common share increased 0.8% from $25.55 as of June 30, 2024 to $25.75 as of September 30, 2024. Book value per common share decreased 0.04% from $25.76 as of September 30, 2023.

Tangible book value per common share⁽¹⁾ increased 0.9% from $22.27 as of June 30, 2024, to $22.47 as of September 30, 2024. Tangible book value per common share increased 0.2% from $22.42 as of September 30, 2023.

During the third quarter of 2024, the Company repurchased 5,501 shares of its common stock at an average price of $16.27 under its stock repurchase program, which authorized the repurchase of up to 200,000 shares of its common stock. As of September 30, 2024, the Company had up to 194,499 shares remaining under the current stock repurchase authorization.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Financial Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00 p.m. ET on Friday, October 25, 2024. Telephone access: https://register.vevent.com/register/BI453d1a8caedc4cd7a7cc436a4d09c5c9.

A slide presentation relating to the third quarter 2024 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://myfw.gcs-web.com.

About First Western

First Western is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming, California, and Montana. First Western and its subsidiaries provide a fully integrated suite of wealth management services on a private trust bank platform, which includes a comprehensive selection of deposit, loan, trust, wealth planning and investment management products and services. First Western’s common stock is traded on the Nasdaq Global Select Market under the symbol “MYFW.” For more information, please visit www.myfw.com.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include “Tangible Common Equity,” “Tangible Common Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency Ratio,” “Gross Revenue,” and “Allowance for Credit Losses to Adjusted Loans”. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliation of non-GAAP financial measures to GAAP financial measures are provided at the end of this press release.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “position,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “opportunity,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, without limitation, the lack of soundness of other financial institutions or financial market utilities may adversely affect the Company; the Company’s ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions; financial institutions are interrelated because of trading, clearing, counterparty or other relationships; defaults by, or even rumors or questions about, one or more financial institutions or financial market utilities, or the financial services industry generally, may lead to market-wide liquidity problems and losses of client, creditor and counterparty confidence and could lead to losses or defaults by other financial institutions, or the Company; integration risks and projected cost savings in connection with acquisitions; the risk of geographic concentration in Colorado, Arizona, Wyoming, California, and Montana; the risk of changes in the economy affecting real estate values and liquidity; the risk in our ability to continue to originate residential real estate loans and sell such loans; risks specific to commercial loans and borrowers; the risk of claims and litigation pertaining to our fiduciary responsibilities; the risk of competition for investment managers and professionals; the risk of fluctuation in the value of our debt securities; the risk of changes in interest rates; and the risk of the adequacy of our allowance for credit losses and the risk in our ability to maintain a strong core deposit base or other low-cost funding sources. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2024 (“Form 10-K”), and other documents we file with the SEC from time to time. We urge readers of this news release to review the “Risk Factors” section our Form 10-K and any updates to those risk factors set forth in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today’s date, or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
MYFW@finprofiles.com
IR@myfw.com

First Western Financial, Inc. Condensed Consolidated Statements of Income (unaudited)
	Three Months Ended
	September 30,			June 30,			September 30,
*(Dollars in thousands, except per share amounts)*		2024			2024			2023
Interest and dividend income:
Loans, including fees	$	35,353		$	35,275		$	34,141
Loans accounted for under the fair value option		141			168			300
Debt securities		708			651			607
Interest-bearing deposits in other financial institutions		1,754			1,855			1,292
Dividends, restricted stock		134			105			141
Total interest and dividend income		38,090			38,054			36,481

Interest expense:
Deposits		21,150			20,848			17,467
Other borrowed funds		1,372			1,428			2,248
Total interest expense		22,522			22,276			19,715
Net interest income		15,568			15,778			16,766
Less: provision for credit losses		501			2,334			329
Net interest income, after provision for credit losses		15,067			13,444			16,437

Non-interest income:
Trust and investment management fees		4,728			4,875			4,846
Net gain on mortgage loans		1,451			1,820			654
Bank fees		392			327			427
Risk management and insurance fees		367			109			145
Income on company-owned life insurance		108			106			96
Net loss on loans accounted for under the fair value option		(233	)		(315	)		(252	)
Unrealized gain (loss) recognized on equity securities		24			(2	)		(19	)
Other		135			52			202
Total non-interest income		6,972			6,972			6,099
Total income before non-interest expense		22,039			20,416			22,536

Non-interest expense:
Salaries and employee benefits		11,439			11,097			10,968
Occupancy and equipment		2,126			2,080			1,807
Professional services		1,893			1,826			1,867
Technology and information systems		1,045			1,042			906
Data processing		1,101			1,101			1,159
Marketing		374			243			355
Amortization of other intangible assets		57			56			62
Other		1,333			1,556			1,190
Total non-interest expense		19,368			19,001			18,314
Income before income taxes		2,671			1,415			4,222
Income tax expense		537			339			1,104
Net income available to common shareholders	$	2,134		$	1,076		$	3,118
Earnings per common share:
Basic	$	0.22		$	0.11		$	0.33
Diluted		0.22			0.11			0.32

First Western Financial, Inc. Condensed Consolidated Balance Sheets (unaudited)
	September 30,			June 30,			September 30,
*(Dollars in thousands)*		2024			2024			2023
Assets
Cash and cash equivalents:
Cash and due from banks	$	18,979		$	6,374		$	6,439
Interest-bearing deposits in other financial institutions		257,243			239,425			265,045
Total cash and cash equivalents		276,222			245,799			271,484

Held-to-maturity debt securities (fair value of $70,826, $71,067 and $66,487, respectively), net of allowance for credit losses of $71		76,745			78,927			75,539
Correspondent bank stock, at cost		5,746			10,804			11,305
Mortgage loans held for sale, at fair value		12,324			26,856			12,105
Loans held for sale, at fair value		473			—			—
Loans (includes $8,646, $10,190, and $15,464 measured at fair value, respectively)		2,383,199			2,456,063			2,530,459
Allowance for credit losses		(18,796	)		(27,319	)		(23,175	)
Loans, net		2,364,403			2,428,744			2,507,284
Premises and equipment, net		24,350			24,657			25,410
Accrued interest receivable		10,455			11,339			11,633
Accounts receivable		4,864			5,118			5,292
Other receivables		10,397			4,875			3,052
Other real estate owned, net		37,036			11,421			—
Goodwill and other intangible assets, net		31,684			31,741			31,916
Deferred tax assets, net		4,075			6,123			6,624
Company-owned life insurance		16,849			16,741			16,429
Other assets		36,325			34,410			24,680
Total assets	$	2,911,948		$	2,937,555		$	3,002,753

Liabilities
Deposits:
Noninterest-bearing	$	473,576		$	396,702		$	476,308
Interest-bearing		2,029,478			2,014,190			1,943,688
Total deposits		2,503,054			2,410,892			2,419,996
Borrowings:
Federal Home Loan Bank and Federal Reserve borrowings		62,373			191,505			259,930
Subordinated notes		52,508			52,451			52,279
Accrued interest payable		3,339			2,243			3,203
Other liabilities		41,843			33,589			21,089
Total liabilities		2,663,117			2,690,680			2,756,497

Shareholders’ Equity
Total shareholders’ equity		248,831			246,875			246,256
Total liabilities and shareholders’ equity	$	2,911,948		$	2,937,555		$	3,002,753

First Western Financial, Inc. Consolidated Financial Summary (unaudited)
	September 30,			June 30,			September 30,
*(Dollars in thousands)*		2024			2024			2023
Loan Portfolio
Cash, Securities, and Other⁽¹⁾	$	116,856		$	143,720		$	148,669
Consumer and Other		14,978			15,645			23,975
Construction and Development		301,542			309,146			349,436
1-4 Family Residential		920,709			904,569			913,085
Non-Owner Occupied CRE		608,494			609,790			527,377
Owner Occupied CRE		176,165			189,353			208,341
Commercial and Industrial		239,660			277,973			349,515
Total		2,378,404			2,450,196			2,520,398
Loans accounted for under the fair value option		8,884			10,494			16,105
Total loans held for investment		2,387,288			2,460,690			2,536,503
Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net⁽²⁾		(4,089	)		(4,627	)		(6,044	)
Loans (includes $8,646, $10,190, and $15,464 measured at fair value, respectively)	$	2,383,199		$	2,456,063		$	2,530,459
Mortgage loans held for sale		12,324			26,856			12,105
Loans held for sale		473			—			—

Deposit Portfolio
Money market deposit accounts	$	1,350,619		$	1,342,753		$	1,388,726
Time deposits		533,452			519,597			373,459
Interest checking accounts		130,255			135,759			164,000
Savings accounts		15,152			16,081			17,503
Total interest-bearing deposits		2,029,478			2,014,190			1,943,688
Noninterest-bearing accounts		473,576			396,702			476,308
Total deposits	$	2,503,054		$	2,410,892		$	2,419,996

____________________
⁽¹⁾ Includes PPP loans of $2.6 million as of September 30, 2024, $3.1 million as of June 30, 2024, and $4.9 million as of September 30, 2023.
⁽²⁾ Includes fair value adjustments on loans held for investment accounted for under the fair value option.

First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued)
	As of or for the Three Months Ended
	September 30,			June 30,			September 30,
*(Dollars in thousands)*		2024			2024			2023
Average Balance Sheets
Assets
Interest-earning assets:
Interest-bearing deposits in other financial institutions	$	129,629		$	141,600		$	102,510
Debt securities		79,007			75,461			78,057
Correspondent bank stock		6,281			4,801			7,162
Loans		2,429,927			2,443,937			2,485,704
Mortgage loans held for sale		18,423			20,254			12,680
Loans held at fair value		9,691			11,314			16,715
Total interest-earning assets		2,672,958			2,697,367			2,702,828
Allowance for credit losses		(27,236	)		(24,267	)		(22,122	)
Noninterest-earning assets		161,072			143,514			125,774
Total assets	$	2,806,794		$	2,816,614		$	2,806,480

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,007,265		$	2,001,691		$	1,846,318
FHLB and Federal Reserve borrowings		62,589			67,196			125,250
Subordinated notes		52,470			52,414			52,242
Total interest-bearing liabilities		2,122,324			2,121,301			2,023,810
Noninterest-bearing liabilities:
Noninterest-bearing deposits		395,755			412,741			512,956
Other liabilities		40,089			34,051			24,228
Total noninterest-bearing liabilities		435,844			446,792			537,184
Total shareholders’ equity		248,626			248,521			245,486
Total liabilities and shareholders’ equity	$	2,806,794		$	2,816,614		$	2,806,480

Yields/Cost of funds (annualized)
Interest-bearing deposits in other financial institutions		5.38	%		5.27	%		5.00	%
Debt securities		3.57			3.47			3.09
Correspondent bank stock		8.49			8.80			7.81
Loans		5.74			5.75			5.42
Loan held at fair value		5.79			5.97			7.12
Mortgage loans held for sale		5.87			6.83			6.70
Total interest-earning assets		5.67			5.67			5.35
Interest-bearing deposits		4.19			4.19			3.75
Total deposits		3.50			3.47			2.94
FHLB and Federal Reserve borrowings		4.03			4.14			4.58
Subordinated notes		5.60			5.66			6.08
Total interest-bearing liabilities		4.22			4.22			3.86
Net interest margin		2.32			2.35			2.46
Net interest rate spread		1.45			1.45			1.49

First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued)
	As of or for the Three Months Ended
	September 30,			June 30,			September 30,
*(Dollars in thousands, except share and per share amounts)*		2024			2024			2023
Asset Quality
Non-performing loans	$	15,031		$	37,909		$	56,146
Non-performing assets		52,067			49,330			56,146
Net charge-offs (recoveries)		9,319			(9	)		190
Non-performing loans to total loans		0.63	%		1.54	%		2.21	%
Non-performing assets to total assets		1.79			1.68			1.87
Allowance for credit losses to non-performing loans		125.05			72.06			41.28
Allowance for credit losses to total loans		0.79			1.11			0.92
Allowance for credit losses to adjusted loans⁽¹⁾		0.79			1.12			0.92
Net charge-offs to average loans		0.38		*				0.01

Assets Under Management	$	7,465,757		$	7,011,796		$	6,395,786

Market Data
Book value per share at period end	$	25.75		$	25.55		$	25.76
Tangible book value per common share⁽¹⁾		22.47			22.27			22.42
Weighted average outstanding shares, basic		9,663,131			9,647,345			9,553,331
Weighted average outstanding shares, diluted		9,825,515			9,750,667			9,743,270
Shares outstanding at period end		9,664,101			9,660,548			9,560,209

Consolidated Capital
Tier 1 capital to risk-weighted assets		10.06	%		9.92	%		9.32	%
CET1 to risk-weighted assets		10.06			9.92			9.32
Total capital to risk-weighted assets		13.19			13.44			12.45
Tier 1 capital to average assets		8.04			7.91			7.96

Bank Capital
Tier 1 capital to risk-weighted assets		11.39	%		11.22	%		10.42	%
CET1 to risk-weighted assets		11.39			11.22			10.42
Total capital to risk-weighted assets		12.13			12.35			11.31
Tier 1 capital to average assets		9.11			8.95			8.88

____________________
⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
* Value results in an immaterial amount.

First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued)
Reconciliations of Non-GAAP Financial Measures
	As of or for the Three Months Ended
	September 30,			June 30,			September 30,
*(Dollars in thousands, except share and per share amounts)*		2024			2024			2023
Tangible Common
Total shareholders’ equity	$	248,831		$	246,875		$	246,256
Less: goodwill and other intangibles, net		31,684			31,741			31,916
Tangible common equity	$	217,147		$	215,134		$	214,340

Common shares outstanding, end of period		9,664,101			9,660,548			9,560,209
Tangible common book value per share	$	22.47		$	22.27		$	22.42
Net income available to common shareholders		2,134			1,076			3,118
Return on tangible common equity (annualized)		3.93	%		2.00	%		5.82	%

Efficiency
Non-interest expense	$	19,368		$	19,001		$	18,314
Less: amortization		57			56			62
Adjusted non-interest expense	$	19,311		$	18,945		$	18,252

Total income before non-interest expense	$	22,039		$	20,416		$	22,536
Less: unrealized (loss)/gain recognized on equity securities		24			(2	)		(19	)
Less: net loss on loans accounted for under the fair value option		(233	)		(315	)		(252	)
Plus: provision for credit losses		501			2,334			329
Gross revenue	$	22,749		$	23,067		$	23,136
Efficiency ratio		84.89	%		82.13	%		78.89	%

Allowance for Credit Loss to Adjusted Loans
Total loans held for investment	$	2,387,288		$	2,460,690		$	2,536,503
Less: PPP loans		2,603			3,129			4,876
Less: loans accounted for under fair value		8,884			10,494			16,105
Adjusted loans	$	2,375,801		$	2,447,067		$	2,515,522

Allowance for credit losses	$	18,796		$	27,319		$	23,175
Allowance for credit losses to adjusted loans		0.79	%		1.12	%		0.92	%

The MIL Network –

January 25, 2025

MIL-OSI: Glacier Bancorp, Inc. Announces Results for the Quarter and Period Ended September 30, 2024

Source: GlobeNewswire (MIL-OSI)

3rd Quarter 2024 Highlights:

Diluted earnings per share for the current quarter was $0.45 per share, an increase of 15 percent from the prior quarter diluted earnings per share of $0.39 per share.
Net income was $51.1 million for the current quarter, an increase of $6.3 million, or 14 percent, from the prior quarter net income of $44.7 million and a decrease of $1.4 million, or 3 percent, from the prior year third quarter net income of $52.4 million.
The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 2.83 percent, an increase of 15 basis points from the prior quarter net interest margin of 2.68 percent.
Net interest income was $180 million for the current quarter, an increase of $13.8 million, or 8 percent, from the prior quarter net interest income of $166 million and an increase of $13.2 million, or 8 percent, from the prior year third quarter net interest income of $167 million.
The loan portfolio of $17.181 billion increased $329 million, or 2 percent, during the current quarter and organically increased $57.6 million, or 1 percent annualized, during the current quarter.
Total core deposits of $20.711 billion, increased $613 million, or 3 percent, during the current quarter and organically increased $216 million, or 4 percent annualized, during the current quarter.
Non-interest bearing deposits of $6.408 billion, increased $314 million, or 5 percent, during the current quarter and organically increased $221 million, or 14 percent annualized, during the current quarter.
The loan yield of 5.69 percent in the current quarter increased 11 basis points from the prior quarter loan yield of 5.58 percent and increased 42 basis points from the prior year third quarter loan yield of 5.27 percent.
The total cost of funding (including non-interest bearing deposits) of 1.79 percent in the current quarter decreased 1 basis point from the prior quarter total cost of funding of 1.80 percent.
Stockholders’ equity of $3.245 billion increased $108 million, or 3 percent, during the current quarter and increased $370 million, or 13 percent, over the prior year third quarter.
The Company declared a quarterly dividend of $0.33 per share. The Company has declared 158 consecutive quarterly dividends and has increased the dividend 49 times.
The Company completed the acquisition and core system conversion of six Montana branch locations of Rocky Mountain Bank division (“RMB”) of HTLF Bank, a wholly owned subsidiary of Heartland Financial USA, Inc. with total assets of $403 million, total gross loans of $272 million and total deposits of $397 million.

Year-to-date 2024 Highlights:

Net income for the first nine months of 2024 was $128 million, a decrease of $40.2 million, or 24 percent, from the prior year first nine months net income of $169 million.
Interest income for the first nine months of 2024 was $843 million, an increase of $98.7 million, or 13 percent, over the $744 million of interest income for the first nine months of 2023.
The loan portfolio increased $983 million, or 6 percent, during the first nine months of 2024 and organically increased $261 million, or 2 percent, during the first nine months of 2024.
The $2.740 billion of FRB Bank Term Funding (“BTFP”) was paid off during the current year through a combination of Federal Home Loan Bank (“FHLB”) advances and cash.
Dividends declared in the first nine months of 2024 were $0.99 per share.
The Company completed the acquisition and core system conversion of Community Financial Group, Inc., the parent company of Wheatland Bank (collectively, “Wheatland”), a leading eastern Washington community bank headquartered in Spokane with total assets of $778 million.

Financial Summary

	At or for the Three Months ended									At or for the Nine months ended
(Dollars in thousands, except per share and market data)	Sep 30, 2024			Jun 30, 2024		Mar 31, 2024		Sep 30, 2023		Sep 30, 2024		Sep 30, 2023
Operating results
Net income	$	51,055		44,708		32,627		52,445		128,390		168,611
Basic earnings per share	$	0.45		0.39		0.29		0.47		1.14		1.52
Diluted earnings per share	$	0.45		0.39		0.29		0.47		1.13		1.52
Dividends declared per share	$	0.33		0.33		0.33		0.33		0.99		0.99
Market value per share
Closing	$	45.70		37.32		40.28		28.50		45.70		28.50
High	$	47.71		40.18		42.75		36.45		47.71		50.03
Low	$	35.57		34.35		34.74		26.84		34.35		26.77
Selected ratios and other data
Number of common stock shares outstanding		113,394,786		113,394,092		113,388,590		110,879,365		113,394,786		110,879,365
Average outstanding shares – basic		113,394,758		113,390,539		112,492,142		110,877,534		113,093,583		110,857,788
Average outstanding shares – diluted		113,473,107		113,405,491		112,554,402		110,886,959		113,137,861		110,882,718
Return on average assets (annualized)		0.73	%	0.66	%	0.47	%	0.75	%	0.62	%	0.83	%
Return on average equity (annualized)		6.34	%	5.77	%	4.25	%	7.12	%	5.47	%	7.72	%
Efficiency ratio		64.92	%	67.97	%	74.41	%	63.31	%	68.98	%	62.10	%
Loan to deposit ratio		83.16	%	84.03	%	82.04	%	79.25	%	83.16	%	79.25	%
Number of full time equivalent employees		3,434		3,399		3,438		3,314		3,434		3,314
Number of locations		232		231		232		221		232		221
Number of ATMs		279		286		285		274		279		274

KALISPELL, Mont., Oct. 24, 2024 (GLOBE NEWSWIRE) — Glacier Bancorp, Inc. (NYSE: GBCI) reported net income of $51.1 million for the current quarter, an increase of $6.3 million, or 14 percent from the prior quarter net income of $44.7 million and a decrease of $1.4 million, or 3 percent, from the $52.4 million of net income for the prior year third quarter. Diluted earnings per share for the current quarter was $0.45 per share, an increase of 15 percent from the prior quarter diluted earnings per share of $0.39 per share and a decrease of 4 percent from the prior year third quarter diluted earnings per share of $0.47. The decrease in net income compared to the prior year third quarter was due to the increase in funding costs and the increased costs associated with the acquisitions of Wheatland and RMB over the prior year third quarter. “Our positive business trends through the third quarter. We were very pleased to see solid earnings, margin and deposit growth,” said Randy Chesler, President and Chief Executive Officer. “We finalized the acquisition of the Rocky Mountain Bank Montana branches from Heartland and welcome the employees to the Glacier team.”

Net income for the nine months ended September 30, 2024 was $128 million, a decrease of $40.2 million, or 24 percent, from the $169 million net income for the first nine months of the prior year. Diluted earnings per share for the first nine months of 2024 was $1.13 per share, a decrease of $0.39 per share from the prior year first nine months diluted earnings per share of $1.52. The decrease in net income for the first nine months of the current year compared to the prior year first nine months was primarily due to the significant increase in funding costs. In addition, the current year-to-date results included increased operating costs and a $9.7 million provision for credit losses associated with the acquisitions of Wheatland and RMB.

On July 19, 2024, the Company completed the acquisition of six RMB branches in Montana. The branches have been combined with Glacier Bank divisions operating in Montana, including First Bank of Montana, First Security Bank of Bozeman, First Security Bank of Missoula, Valley Bank, and Western Security Bank. On January 31, 2024, the Company completed the acquisition of Wheatland, headquartered in Spokane, Washington. Wheatland had 14 branches in eastern Washington and was combined with the North Cascades Bank division under the name Wheatland Bank, division of Glacier Bank. The Wheatland Bank division now operates with a combined 23 branches in Central and Eastern Washington and is a Top 5 community bank by deposit share in Eastern Washington. The Company’s results of operations and financial condition include the Wheatland and RMB acquisitions beginning on the acquisition date of each. The following table discloses the preliminary fair value estimates of select classifications of assets and liabilities acquired:

	Wheatland		RMB
(Dollars in thousands)	January 31, 2024		July 19, 2024		Total
Total assets	$	777,659	$	403,052	$	1,180,711
Cash and cash equivalents		12,926		76,781		89,707
Debt securities		187,183		—		187,183
Loans receivable		450,403		271,569		721,972
Non-interest bearing deposits		277,651		93,534		371,185
Interest bearing deposits		339,304		303,156		642,460
Borrowings		58,500		4,305		62,805
Core deposit intangible		16,936		9,794		26,730
Goodwill		38,369		29,794		68,163

Asset Summary

										$ Change from
(Dollars in thousands)	Sep 30, 2024			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Cash and cash equivalents	$	987,833		800,779		1,354,342		1,672,094		187,054		(366,509	)	(684,261	)
Debt securities, available-for-sale		4,436,578		4,499,541		4,785,719		4,741,738		(62,963	)	(349,141	)	(305,160	)
Debt securities, held-to-maturity		3,348,698		3,400,403		3,502,411		3,553,805		(51,705	)	(153,713	)	(205,107	)
Total debt securities		7,785,276		7,899,944		8,288,130		8,295,543		(114,668	)	(502,854	)	(510,267	)
Loans receivable
Residential real estate		1,837,697		1,771,528		1,704,544		1,653,777		66,169		133,153		183,920
Commercial real estate		10,833,841		10,713,964		10,303,306		10,292,446		119,877		530,535		541,395
Other commercial		3,177,051		3,066,028		2,901,863		2,916,785		111,023		275,188		260,266
Home equity		931,440		905,884		888,013		869,963		25,556		43,427		61,477
Other consumer		401,158		394,587		400,356		402,075		6,571		802		(917	)
Loans receivable		17,181,187		16,851,991		16,198,082		16,135,046		329,196		983,105		1,046,141
Allowance for credit losses		(205,170	)	(200,955	)	(192,757	)	(192,271	)	(4,215	)	(12,413	)	(12,899	)
Loans receivable, net		16,976,017		16,651,036		16,005,325		15,942,775		324,981		970,692		1,033,242
Other assets		2,456,643		2,453,581		2,094,832		2,153,149		3,062		361,811		303,494
Total assets	$	28,205,769		27,805,340		27,742,629		28,063,561		400,429		463,140		142,208

Total debt securities of $7.785 billion at September 30, 2024 decreased $115 million, or 1 percent, during the current quarter and decreased $510 million, or 6 percent, from the prior year third quarter. Debt securities represented 28 percent of total assets at September 30, 2024 compared to 30 percent at December 31, 2023 and 30 percent at September 30, 2023.

The loan portfolio of $17.181 billion at September 30, 2024 increased $329 million, or 2 percent, during the current quarter. Excluding the RMB acquisition, the loan portfolio organically increased $57.6 million, or 1 percent annualized, during the current quarter. Excluding the RMB and Wheatland acquisitions, the loan portfolio organically increased $261 million, or 2 percent, during the first nine months of 2024 and increased $324 million, or 2 percent, from the prior year third quarter.

Credit Quality Summary

	At or for the Nine Months ended			At or for the Six Months ended		At or for the Year ended		At or for the Nine Months ended
(Dollars in thousands)	Sep 30, 2024			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Allowance for credit losses
Balance at beginning of period	$	192,757		192,757		182,283		182,283
Acquisitions		3		3		—		—
Provision for credit losses		21,138		14,157		20,790		16,609
Charge-offs		(12,406	)	(8,430	)	(15,095	)	(10,284	)
Recoveries		3,678		2,468		4,779		3,663
Balance at end of period	$	205,170		200,955		192,757		192,271
Provision for credit losses
Loan portfolio	$	21,138		14,157		20,790		16,609
Unfunded loan commitments		(1,366	)	(2,390	)	(5,995	)	(4,827	)
Total provision for credit losses	$	19,772		11,767		14,795		11,782
Other real estate owned	$	432		432		1,032		—
Other foreclosed assets		201		198		471		48
Accruing loans 90 days or more past due		11,551		4,692		3,312		3,855
Non-accrual loans		15,937		12,686		20,816		38,380
Total non-performing assets	$	28,121		18,008		25,631		42,283
Non-performing assets as a percentage of subsidiary assets		0.10	%	0.06	%	0.09	%	0.15	%
Allowance for credit losses as a percentage of non-performing loans		730	%	1,116	%	799	%	455	%
Allowance for credit losses as a percentage of total loans		1.19	%	1.19	%	1.19	%	1.19	%
Net charge-offs as a percentage of total loans		0.05	%	0.04	%	0.06	%	0.04	%
Accruing loans 30-89 days past due	$	56,213		49,678		49,967		15,253
U.S. government guarantees included in non-performing assets	$	1,802		1,228		1,503		1,057

Non-performing assets as a percentage of subsidiary assets at September 30, 2024 was 0.10 percent compared to 0.06 percent in the prior quarter and 0.15 percent in the prior year third quarter. Non-performing assets of $28.1 million at September 30, 2024 increased $10.1 million, or 56 percent, over the prior quarter and decreased $14.2 million, or 33 percent, over the prior year third quarter.

Early stage delinquencies (accruing loans 30-89 days past due) as a percentage of loans at September 30, 2024 were 0.33 percent compared to 0.29 percent for the prior quarter end and 0.09 percent for the prior year third quarter. Early stage delinquencies of $56.2 million at September 30, 2024 increased $6.5 million from the prior quarter and increased $41.0 million from prior year third quarter.

The current quarter credit loss expense of $8.0 million included $2.8 million of provision for credit losses on loans and $799 thousand of provision for credit losses on unfunded commitments from the acquisition of RMB. Excluding the acquisition of RMB, the current quarter credit loss expense was $4.4 million, including $4.2 million of credit loss expense from loans and $225 thousand of credit loss expense from unfunded loan commitments.

For the first nine months of the current year, the provision for credit losses of $19.8 million included $8.1 million of provision for credit losses on loans and $1.6 million of provision for credit losses on unfunded loan commitments from the acquisitions of Wheatland and RMB.

The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at September 30, 2024 was 1.19 percent and remained unchanged from the prior year end and the prior year third quarter. Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts and other environmental factors will continue to determine the level of the provision for credit losses for loans.

Credit Quality Trends and Provision for Credit Losses on the Loan Portfolio

(Dollars in thousands)	Provision for Credit Losses Loans		Net Charge-Offs		ACL as a Percent of Loans		Accruing Loans 30-89 Days Past Due as a Percent of Loans		Non-Performing Assets to Total Subsidiary Assets
Third quarter 2024	$	6,981	$	2,766	1.19	%	0.33	%	0.10	%
Second quarter 2024		5,066		2,890	1.19	%	0.29	%	0.06	%
First quarter 2024		9,091		3,072	1.19	%	0.37	%	0.09	%
Fourth quarter 2023		4,181		3,695	1.19	%	0.31	%	0.09	%
Third quarter 2023		5,095		2,209	1.19	%	0.09	%	0.15	%
Second quarter 2023		5,254		2,473	1.19	%	0.16	%	0.12	%
First quarter 2023		6,260		1,939	1.20	%	0.16	%	0.12	%
Fourth quarter 2022		6,060		1,968	1.20	%	0.14	%	0.12	%

Net charge-offs for the current quarter were $2.8 million compared to $2.9 million in the prior quarter and $2.2 million for the prior year third quarter. Net charge-offs of $2.8 million included $1.9 million in deposit overdraft net charge-offs and $815 thousand of net loan charge-offs.

Supplemental information regarding credit quality and identification of the Company’s loan portfolio based on regulatory classification is provided in the exhibits at the end of this press release. The regulatory classification of loans is based primarily on collateral type while the Company’s loan segments presented herein are based on the purpose of the loan.

Liability Summary

						$ Change from
(Dollars in thousands)	Sep 30, 2024		Jun 30, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Deposits
Non-interest bearing deposits	$	6,407,728	6,093,430	6,022,980	6,465,353	314,298		384,748		(57,625	)
NOW and DDA accounts		5,363,476	5,219,838	5,321,257	5,253,367	143,638		42,219		110,109
Savings accounts		2,801,077	2,862,034	2,833,887	2,872,362	(60,957	)	(32,810	)	(71,285	)
Money market deposit accounts		2,854,540	2,858,850	2,831,624	2,994,631	(4,310	)	22,916		(140,091	)
Certificate accounts		3,284,609	3,064,613	2,915,393	2,742,017	219,996		369,216		542,592
Core deposits, total		20,711,430	20,098,765	19,925,141	20,327,730	612,665		786,289		383,700
Wholesale deposits		3,334	2,994	4,026	67,434	340		(692	)	(64,100	)
Deposits, total		20,714,764	20,101,759	19,929,167	20,395,164	613,005		785,597		319,600
Repurchase agreements		1,831,501	1,629,504	1,486,850	1,499,696	201,997		344,651		331,805
Deposits and repurchase agreements, total		22,546,265	21,731,263	21,416,017	21,894,860	815,002		1,130,248		651,405
Federal Home Loan Bank advances		1,800,000	2,350,000	—	—	(550,000	)	1,800,000		1,800,000
FRB Bank Term Funding		—	—	2,740,000	2,740,000	—		(2,740,000	)	(2,740,000	)
Other borrowed funds		84,168	88,149	81,695	73,752	(3,981	)	2,473		10,416
Subordinated debentures		133,065	133,024	132,943	132,903	41		122		162
Other liabilities		397,221	365,459	351,693	347,452	31,762		45,528		49,769
Total liabilities	$	24,960,719	24,667,895	24,722,348	25,188,967	292,824		238,371		(228,248	)

Total core deposits of $20.711 billion at September 30, 2024 increased $613 million, or 3 percent, from the prior quarter and increased $786 million, or 4 percent, from the prior year end. Total core deposits organically increased $217 million, or 4 percent annualized, during the current quarter and decreased $227 million, or 1 percent, from the prior year end.

Total non-interest bearing deposits of $6.408 billion, increased $314 million, or 5 percent, from the prior quarter and increased $385 million, or 6 percent, from the prior year end. Non-interest bearing deposits organically increased $221 million, or 14 percent annualized, during the current quarter and increased $13.6 million, or 23 basis points, from the prior year end. Non-interest bearing deposits represented 31 percent of total deposits at June 30, 2024, compared to 30 percent at December 31, 2023 and 32 percent at September 30, 2023.

FHLB borrowings of $1.800 billion decreased $550 million, or 23 percent, during the current quarter. Upon maturity in the first quarter of 2024, the Company paid off its $2.740 billion BTFP borrowings with a combination of $2.140 billion in FHLB borrowings and cash.

Stockholders’ Equity Summary

										$ Change from
(Dollars in thousands, except per share data)	Sep 30, 2024			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Common equity	$	3,507,356		3,492,096		3,394,394		3,374,961		15,260		112,962		132,395
Accumulated other comprehensive loss		(262,306	)	(354,651	)	(374,113	)	(500,367	)	92,345		111,807		238,061
Total stockholders’ equity		3,245,050		3,137,445		3,020,281		2,874,594		107,605		224,769		370,456
Goodwill and intangibles, net		(1,106,336	)	(1,066,790	)	(1,017,263	)	(1,019,690	)	(39,546	)	(89,073	)	(86,646	)
Tangible stockholders’ equity	$	2,138,714		2,070,655		2,003,018		1,854,904		68,059		135,696		283,810

Stockholders’ equity to total assets		11.50	%	11.28	%	10.89	%	10.24	%
Tangible stockholders’ equity to total tangible assets		7.89	%	7.74	%	7.49	%	6.86	%
Book value per common share	$	28.62		27.67		27.24		25.93		0.95	1.38	2.69
Tangible book value per common share	$	18.86		18.26		18.06		16.73		0.60	0.80	2.13

Tangible stockholders’ equity of $2.139 billion at September 30, 2024 increased $68.1 million, or 3 percent, compared to the prior quarter and was primarily the result of a decrease in unrealized loss on the available-for-sale debt securities which was partially offset by the increase in goodwill and core deposit intangibles associated with the acquisition of RMB. Tangible stockholders’ equity at September 30, 2024 increased $136 million, or 7 percent, compared to the prior year end and was primarily due to $92.4 million of Company common stock issued for the acquisition of Wheatland and the decrease in the unrealized loss on the available-for-sale securities. The increase was partially offset by the increase in goodwill and core deposits associated with the acquisitions of Wheatland and RMB. Tangible book value per common share of $18.86 at the current quarter end increased $0.80 per share, or 4 percent, from the prior year end and increased $2.13 per share, or 13 percent, from the prior year third quarter.

Cash Dividends
On September 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.33 per share. The dividend was payable October 17, 2024 to shareholders of record on October 8, 2024. The dividend was the Company’s 158th consecutive regular dividend. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Operating Results for Three Months Ended September 30, 2024 Compared to June 30, 2024, March 31, 2024 and September 30, 2023

Income Summary
	Three Months ended									$ Change from
(Dollars in thousands)	Sep 30, 2024			Jun 30, 2024		Mar 31, 2024		Sep 30, 2023		Jun 30, 2024	Mar 31, 2024		Sep 30, 2023
Net interest income
Interest income	$	289,578		273,834		279,402		264,906		15,744	10,176		24,672
Interest expense		109,347		107,356		112,922		97,852		1,991	(3,575	)	11,495
Total net interest income		180,231		166,478		166,480		167,054		13,753	13,751		13,177
Non-interest income
Service charges and other fees		20,587		19,422		18,563		19,304		1,165	2,024		1,283
Miscellaneous loan fees and charges		4,970		4,821		4,362		4,322		149	608		648
Gain on sale of loans		4,898		4,669		3,362		4,046		229	1,536		852
Gain (loss) on sale of securities		26		(12	)	16		(65	)	38	10		91
Other income		4,223		3,304		3,686		2,633		919	537		1,590
Total non-interest income		34,704		32,204		29,989		30,240		2,500	4,715		4,464
Total income	$	214,935		198,682		196,469		197,294		16,253	18,466		17,641
Net interest margin (tax-equivalent)		2.83	%	2.68	%	2.59	%	2.58	%

Net Interest Income
The current quarter interest income of $290 million increased $15.7 million, or 6 percent, over the prior quarter and increased $24.7 million, or 9 percent, over the prior year third quarter, with both increases being primarily due to the increase in the loan yields and the increase in average balances of the loan portfolio. The loan yield of 5.69 percent in the current quarter increased 11 basis points from the prior quarter loan yield of 5.58 percent and increased 42 basis points from the prior year third quarter loan yield of 5.27 percent.

The current quarter interest expense of $109 million increased $2.0 million, or 2 percent, over the prior quarter and was primarily attributable to the increase in average deposit balances. The current quarter interest expense increased $11.5 million, or 12 percent, over the prior year third quarter and was primarily the result of an increase in rates on deposits and borrowings. Core deposit cost (including non-interest bearing deposits) was 1.37 percent for the current quarter compared to 1.36 percent in the prior quarter and 1.03 percent for the prior year third quarter. The total cost of funding (including non-interest bearing deposits) of 1.79 percent in the current quarter decreased 1 basis point from the prior quarter. The current quarter cost of funds increased 21 basis points from the prior year third quarter which was primarily the result of the increased deposit rates.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 2.83 percent, an increase of 15 basis points from the prior quarter net interest margin of 2.68 percent and was primarily driven by an increase in loan yields. The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was an increase of 25 basis points from the prior year third quarter net interest margin of 2.58 percent and was primarily driven by an increase in loan yields which more than offset the total cost of funding. Core net interest margin excludes the impact from discount accretion and non-accrual interest. Excluding the 4 basis points from discount accretion, the core net interest margin was 2.79 percent in the current quarter compared to 2.63 percent in the prior quarter and 2.55 in the prior year third quarter. “The growth in the loan portfolio at higher yields was funded primarily by the remix of lower yield cash flow from the securities portfolio,” said Ron Copher, Chief Financial Officer. “In addition, the growth in non-interest bearing deposits and the reduction in wholesale funding contributed to the improvement in the current quarter net interest margin.”

Non-interest Income
Non-interest income for the current quarter totaled $34.7 million, which was an increase of $2.5 million, or 8 percent, over the prior quarter and an increase of $4.5 million, or 15 percent, over the prior year third quarter. Service charges and other fees of $20.6 million for the current quarter increased $1.2 million, or 6 percent, compared to the prior quarter and increased $1.3 million, or 7 percent, compared to the prior year third quarter. Gain on the sale of residential loans of $4.9 million for the current quarter increased $229 thousand, or 5 percent, compared to the prior quarter and increased $852 thousand, or 21 percent, from the prior year third quarter. Other income of $4.2 million increased $919 thousand, or 28 percent, over the prior quarter and increased $1.6 million, or 60 percent, over the prior year third quarter, with both increases being driven by a $1.2 million gain on the sale of repossessed property during the current quarter.

Non-interest Expense Summary

	Three Months ended					$ Change from
(Dollars in thousands)	Sep 30, 2024		Jun 30, 2024	Mar 31, 2024	Sep 30, 2023	Jun 30, 2024		Mar 31, 2024		Sep 30, 2023
Compensation and employee benefits	$	85,083	84,434	85,789	77,387	649		(706	)	7,696
Occupancy and equipment		11,989	11,594	11,883	10,553	395		106		1,436
Advertising and promotions		4,062	4,362	3,983	4,052	(300	)	79		10
Data processing		9,196	9,387	9,159	8,730	(191	)	37		466
Other real estate owned and foreclosed assets		13	149	25	15	(136	)	(12	)	(2	)
Regulatory assessments and insurance		5,150	5,393	7,761	6,060	(243	)	(2,611	)	(910	)
Intangibles amortization		3,367	3,017	2,760	2,428	350		607		939
Other expenses		25,848	22,616	30,483	20,351	3,232		(4,635	)	5,497
Total non-interest expense	$	144,708	140,952	151,843	129,576	3,756		(7,135	)	15,132

Total non-interest expense of $145 million for the current quarter increased $3.8 million, or 3 percent, over the prior quarter and increased $15.1 million, or 12 percent, over the prior year third quarter. Compensation and employee benefits increased $7.7 million, or 10 percent, from the prior year third quarter and was driven by annual salary increases, increased performance-related compensation and increases from the acquisitions of Wheatland and RMB.

Other expenses of $25.8 million increased $3.2 million, or 14 percent, from the prior quarter, which was attributable to several miscellaneous category increases including an increase of $1.2 million in outside consulting services. In addition, the current quarter other expenses included $586 thousand of gains from the sale of former branch facilities and disposal of fixed assets compared to $1.5 million in the prior quarter. Other expenses increased $5.5 million, or 27 percent, from the prior year third quarter as a result of several miscellaneous category increases including an increase of $2.7 million in outside consulting services and an increase of $1.6 million in acquisition-related expenses. Acquisition-related expense was $1.9 million in the current quarter compared to $1.8 million in the prior quarter and $279 thousand in the prior year third quarter.

Federal and State Income Tax Expense
Tax expense during the third quarter of 2024 was $11.2 million, an increase of $1.7 million, or 18 percent, compared to the prior quarter and a decrease of $567 thousand, or 5 percent, from the prior year third quarter. The effective tax rate in the current quarter was 17.9 percent compared to 17.5 percent in the prior quarter and 18.3 percent in the prior year third quarter.

Efficiency Ratio
The efficiency ratio was 64.92 percent in the current quarter compared to 67.97 percent in the prior quarter and 63.31 percent in the prior year third quarter. The decrease from the prior quarter was principally driven by the increase in net interest income that more than offset the increase in non-interest expense.

Operating Results for Nine Months Ended September 30, 2024 Compared to September 30, 2023

Income Summary
	Nine months ended
(Dollars in thousands)	Sep 30, 2024			Sep 30, 2023			$ Change			% Change
Net interest income
Interest income	$	842,814		$	744,159		$	98,655		13	%
Interest expense		329,625			218,933			110,692		51	%
Total net interest income		513,189			525,226			(12,037	)	(2	)%
Non-interest income
Service charges and other fees		58,572			56,042			2,530		5	%
Miscellaneous loan fees and charges		14,153			12,451			1,702		14	%
Gain on sale of loans		12,929			9,974			2,955		30	%
Gain (loss) on sale of securities		30			(202	)		232		(115	)%
Other income		11,213			8,949			2,264		25	%
Total non-interest income		96,897			87,214			9,683		11	%
Total Income	$	610,086		$	612,440		$	(2,354	)	—	%
Net interest margin (tax-equivalent)		2.70	%		2.79	%

Net Interest Income
Net-interest income of $513 million for the first nine months of 2024 decreased $12.0 million, or 2 percent, over 2023 and was primarily driven by increased interest expense which outpaced the increase in interest income. Interest income of $843 million for 2024 increased $98.7 million, or 13 percent, from the prior year and was primarily attributable to the increase in the loan portfolio and an increase in loan yields. The loan yield was 5.58 percent during the first nine months of 2024, an increase of 44 basis points from the prior year first nine months loan yield of 5.14 percent.

Interest expense of $330 million for the first nine months of 2024 increased $111 million, or 51 percent, over the same period in the prior year and was primarily the result of higher interest rates on deposits. Core deposit cost (including non-interest bearing deposits) was 1.36 percent for the first nine months of 2024 compared to 0.62 percent for the same period in the prior year. The total funding cost (including non-interest bearing deposits) for the first nine months of 2024 was 1.81 percent, which was an increase of 59 basis points over the first nine months of the prior year funding cost of 1.22 percent.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during the first nine months of 2024 was 2.70 percent, a 9 basis points decrease from the net interest margin of 2.79 percent for the first nine months of the prior year. Excluding the 4 basis points from discount accretion and the 1 basis point from non-accrual interest, the core net interest margin was 2.65 percent in the first nine months of the current year compared to 2.77 percent in the prior year first nine months.

Non-interest Income
Non-interest income of $96.9 million for the first nine months of 2024 increased $9.7 million, or 11 percent, over the same period last year. Gain on sale of residential loans of $12.9 million for the first nine months of 2024 increased by $3.0 million, or 30 percent, over the first nine months of the prior year. Other income of $11.2 million for the first nine months of 2024 increased $2.3 million, or 25 percent, over the same period last year and was primarily driven by a $1.2 million gain on the sale of repossessed property during the current quarter.

Non-interest Expense Summary

	Nine months ended
(Dollars in thousands)	Sep 30, 2024		Sep 30, 2023		$ Change		% Change
Compensation and employee benefits	$	255,306	$	237,628	$	17,678	7	%
Occupancy and equipment		35,466		33,045		2,421	7	%
Advertising and promotions		12,407		12,020		387	3	%
Data processing		27,742		25,241		2,501	10	%
Other real estate owned and foreclosed assets		187		41		146	356	%
Regulatory assessments and insurance		18,304		16,277		2,027	12	%
Core deposit intangibles amortization		9,144		7,304		1,840	25	%
Other expenses		78,947		63,606		15,341	24	%
Total non-interest expense	$	437,503	$	395,162	$	42,341	11	%

Total non-interest expense of $438 million for the first nine months of 2024 increased $42.3 million, or 11 percent, over the same period in the prior year. Compensation and employee benefits expense of $255 million in the first nine months of 2024 increased $17.7 million, or 7 percent, over the same period in the prior year and was driven by annual salary increases and the acquisitions of Wheatland and RMB. Data processing expenses of $27.7 million for the first nine months of 2024 increased $2.5 million, or 10 percent, from the same period in the prior year. Regulatory assessments and insurance expense of $18.3 million for the first nine months of 2024 increased $2.0 million, or 12 percent, over the same period in the prior year which was principally due to the accrual adjustment for the FDIC special assessment. Other expenses of $78.9 million for the first nine months of 2024 increased $15.3 million, or 24 percent, from the first nine months of the prior year and was primarily driven by an increase of $8.6 million of acquisition-related expenses, which was partially offset by gains of $3.1 million from the sale of former branch facilities and disposal of fixed assets.

Provision for Credit Losses
The provision for credit loss expense was $19.8 million for the first nine months of 2024, an increase of $8.0 million, or 68 percent, over the same period in the prior year and was primarily attributable to $9.7 million from the acquisitions of Wheatland and RMB. Net charge-offs for the first nine months of 2024 were $8.7 million compared to $6.6 million in the first nine months of 2023.

Federal and State Income Tax Expense
Tax expense of $24.4 million for the first nine months of 2024 decreased $12.5 million, or 34 percent, over the prior year. The effective tax rate for the first nine months of 2024 was 16.0 percent compared to 17.9 percent for the same period in the prior year. The decrease in tax expense and the resulting effective tax rate was the result of a combination of increased federal tax credits and a decrease in the pre-tax income.

Efficiency Ratio
The efficiency ratio was 68.98 percent for the first nine months of 2024 compared to 62.10 percent for the same period of 2023. The increase from the prior year was primarily attributable to the increase in interest expense in the current year that outpaced the increase in interest income and increased non-interest expense.

Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are based on assumptions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results (express or implied) or other expectations in the forward-looking statements, including those made in this news release:

risks associated with lending and potential adverse changes in the credit quality of the Company’s loan portfolio;
changes in monetary and fiscal policies, including interest rate policies of the Federal Reserve Board, which could adversely affect the Company’s net interest income and margin, the fair value of its financial instruments, profitability, and stockholders’ equity;
legislative or regulatory changes, including increased FDIC insurance rates and assessments, changes in the review and regulation of bank mergers, or increased banking and consumer protection regulations, that may adversely affect the Company’s business and strategies;
risks related to overall economic conditions, including the impact on the economy of an uncertain interest rate environment, inflationary pressures, and geopolitical instability, including the wars in Ukraine and the Middle East;
risks associated with the Company’s ability to negotiate, complete, and successfully integrate any future acquisitions;
costs or difficulties related to the completion and integration of pending or future acquisitions;
impairment of the goodwill recorded by the Company in connection with acquisitions, which may have an adverse impact on earnings and capital;
reduction in demand for banking products and services, whether as a result of changes in customer behavior, economic conditions, banking environment, or competition;
deterioration of the reputation of banks and the financial services industry, which could adversely affect the Company’s ability to obtain and maintain customers;
changes in the competitive landscape, including as may result from new market entrants or further consolidation in the financial services industry, resulting in the creation of larger competitors with greater financial resources;
risks presented by public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow through acquisitions;
risks associated with dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank’s divisions;
material failure, potential interruption or breach in security of the Company’s systems or changes in technological which could expose the Company to cybersecurity risks, fraud, system failures, or direct liabilities;
risks related to natural disasters, including droughts, fires, floods, earthquakes, pandemics, and other unexpected events;
success in managing risks involved in the foregoing; and
effects of any reputational damage to the Company resulting from any of the foregoing.

The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

Conference Call Information
A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 25, 2024. Please note that our conference call host no longer offers a general dial-in number. Investors who would like to join the call may now register by following this link to obtain dial-in instructions: https://register.vevent.com/register/BI32ee03ea65c34bd794e0027768d383d4. To participate via the webcast, log on to: https://edge.media-server.com/mmc/p/9bh88vfv.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. (NYSE: GBCI), a member of the Russell 2000® and the S&P MidCap 400® indices, is the parent company for Glacier Bank and its Bank divisions located across its eight state Western U.S. footprint: Altabank (American Fork, UT), Bank of the San Juans (Durango, CO), Citizens Community Bank (Pocatello, ID), Collegiate Peaks Bank (Buena Vista, CO), First Bank of Montana (Lewistown, MT), First Bank of Wyoming (Powell, WY), First Community Bank Utah (Layton, UT), First Security Bank (Bozeman, MT), First Security Bank of Missoula (Missoula, MT), First State Bank (Wheatland, WY), Glacier Bank (Kalispell, MT), Heritage Bank of Nevada (Reno, NV), Mountain West Bank (Coeur d’Alene, ID), The Foothills Bank (Yuma, AZ), Valley Bank of Helena (Helena, MT), Western Security Bank (Billings, MT), and Wheatland Bank (Spokane, WA).

Glacier Bancorp, Inc. Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data)	Sep 30, 2024			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Assets
Cash on hand and in banks	$	342,105		271,107		246,525		264,067
Interest bearing cash deposits		645,728		529,672		1,107,817		1,408,027
Cash and cash equivalents		987,833		800,779		1,354,342		1,672,094
Debt securities, available-for-sale		4,436,578		4,499,541		4,785,719		4,741,738
Debt securities, held-to-maturity		3,348,698		3,400,403		3,502,411		3,553,805
Total debt securities		7,785,276		7,899,944		8,288,130		8,295,543
Loans held for sale, at fair value		46,126		39,745		15,691		29,027
Loans receivable		17,181,187		16,851,991		16,198,082		16,135,046
Allowance for credit losses		(205,170	)	(200,955	)	(192,757	)	(192,271	)
Loans receivable, net		16,976,017		16,651,036		16,005,325		15,942,775
Premises and equipment, net		466,977		451,515		421,791		415,343
Other real estate owned and foreclosed assets		633		630		1,503		48
Accrued interest receivable		114,121		102,279		94,526		104,476
Deferred tax asset		125,432		155,834		159,070		203,745
Intangibles, net		52,780		43,028		31,870		34,297
Goodwill		1,053,556		1,023,762		985,393		985,393
Non-marketable equity securities		98,285		121,810		12,755		11,330
Bank-owned life insurance		188,971		187,793		171,101		170,175
Other assets		309,762		327,185		201,132		199,315
Total assets	$	28,205,769		27,805,340		27,742,629		28,063,561
Liabilities
Non-interest bearing deposits	$	6,407,728		6,093,430		6,022,980		6,465,353
Interest bearing deposits		14,307,036		14,008,329		13,906,187		13,929,811
Securities sold under agreements to repurchase		1,831,501		1,629,504		1,486,850		1,499,696
FHLB advances		1,800,000		2,350,000		—		—
FRB Bank Term Funding		—		—		2,740,000		2,740,000
Other borrowed funds		84,168		88,149		81,695		73,752
Subordinated debentures		133,065		133,024		132,943		132,903
Accrued interest payable		35,382		31,000		125,907		91,874
Other liabilities		361,839		334,459		225,786		255,578
Total liabilities		24,960,719		24,667,895		24,722,348		25,188,967
Commitments and Contingent Liabilities		—		—		—		—
Stockholders’ Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding		—		—		—		—
Common stock, $0.01 par value per share, 234,000,000 shares authorized		1,134		1,134		1,109		1,109
Paid-in capital		2,447,200		2,445,479		2,350,104		2,348,305
Retained earnings – substantially restricted		1,059,022		1,045,483		1,043,181		1,025,547
Accumulated other comprehensive loss		(262,306	)	(354,651	)	(374,113	)	(500,367	)
Total stockholders’ equity		3,245,050		3,137,445		3,020,281		2,874,594
Total liabilities and stockholders’ equity	$	28,205,769		27,805,340		27,742,629		28,063,561

Glacier Bancorp, Inc. Unaudited Condensed Consolidated Statements of Operations

	Three Months ended							Nine months ended
(Dollars in thousands, except per share data)	Sep 30, 2024		Jun 30, 2024		Mar 31, 2024	Sep 30, 2023		Sep 30, 2024	Sep 30, 2023
Interest Income
Investment securities	$	46,371	42,165		56,218	53,397		144,754	144,697
Residential real estate loans		23,118	21,754		20,764	18,594		65,636	51,508
Commercial loans		196,901	188,326		181,472	173,437		566,699	493,706
Consumer and other loans		23,188	21,589		20,948	19,478		65,725	54,248
Total interest income		289,578	273,834		279,402	264,906		842,814	744,159
Interest Expense
Deposits		70,607	67,852		67,196	54,697		205,655	98,942
Securities sold under agreements to repurchase		14,737	13,566		12,598	10,972		40,901	24,185
Federal Home Loan Bank advances		22,344	24,179		4,249	—		50,772	26,910
FRB Bank Term Funding		—	—		27,097	30,229		27,097	63,160
Other borrowed funds		252	353		344	489		949	1,428
Subordinated debentures		1,407	1,406		1,438	1,465		4,251	4,308
Total interest expense		109,347	107,356		112,922	97,852		329,625	218,933
Net Interest Income		180,231	166,478		166,480	167,054		513,189	525,226
Provision for credit losses		8,005	3,518		8,249	3,539		19,772	11,782
Net interest income after provision for credit losses		172,226	162,960		158,231	163,515		493,417	513,444
Non-Interest Income
Service charges and other fees		20,587	19,422		18,563	19,304		58,572	56,042
Miscellaneous loan fees and charges		4,970	4,821		4,362	4,322		14,153	12,451
Gain on sale of loans		4,898	4,669		3,362	4,046		12,929	9,974
Gain (loss) on sale of securities		26	(12	)	16	(65	)	30	(202	)
Other income		4,223	3,304		3,686	2,633		11,213	8,949
Total non-interest income		34,704	32,204		29,989	30,240		96,897	87,214
Non-Interest Expense
Compensation and employee benefits		85,083	84,434		85,789	77,387		255,306	237,628
Occupancy and equipment		11,989	11,594		11,883	10,553		35,466	33,045
Advertising and promotions		4,062	4,362		3,983	4,052		12,407	12,020
Data processing		9,196	9,387		9,159	8,730		27,742	25,241
Other real estate owned and foreclosed assets		13	149		25	15		187	41
Regulatory assessments and insurance		5,150	5,393		7,761	6,060		18,304	16,277
Intangibles amortization		3,367	3,017		2,760	2,428		9,144	7,304
Other expenses		25,848	22,616		30,483	20,351		78,947	63,606
Total non-interest expense		144,708	140,952		151,843	129,576		437,503	395,162
Income Before Income Taxes		62,222	54,212		36,377	64,179		152,811	205,496
Federal and state income tax expense		11,167	9,504		3,750	11,734		24,421	36,885
Net Income	$	51,055	44,708		32,627	52,445		128,390	168,611

Glacier Bancorp, Inc. Average Balance Sheets

	Three Months ended
	September 30, 2024						June 30, 2024
(Dollars in thousands)	Average Balance		Interest & Dividends		Average Yield/ Rate		Average Balance		Interest & Dividends		Average Yield/ Rate
Assets
Residential real estate loans	$	1,850,066	$	23,118	5.00	%	$	1,796,787	$	21,754	4.84	%
Commercial loans ¹		13,957,304		198,556	5.66	%		13,740,455		189,939	5.56	%
Consumer and other loans		1,324,142		23,188	6.97	%		1,290,587		21,589	6.73	%
Total loans ²		17,131,512		244,862	5.69	%		16,827,829		233,282	5.58	%
Tax-exempt debt securities ³		1,660,643		14,710	3.54	%		1,707,269		15,111	3.54	%
Taxable debt securities ^{4, 5}		7,073,967		34,001	1.92	%		7,042,885		29,461	1.67	%
Total earning assets		25,866,122		293,573	4.52	%		25,577,983		277,854	4.37	%
Goodwill and intangibles		1,092,632						1,068,250
Non-earning assets		836,878						754,491
Total assets	$	27,795,632					$	27,400,724
Liabilities
Non-interest bearing deposits	$	6,237,166	$	—	—	%	$	6,026,709	$	—	—	%
NOW and DDA accounts		5,314,459		16,221	1.21	%		5,221,883		15,728	1.21	%
Savings accounts		2,829,203		5,699	0.80	%		2,914,538		6,014	0.83	%
Money market deposit accounts		2,887,173		15,048	2.07	%		2,904,438		14,467	2.00	%
Certificate accounts		3,211,842		33,597	4.16	%		3,037,638		31,593	4.18	%
Total core deposits		20,479,843		70,565	1.37	%		20,105,206		67,802	1.36	%
Wholesale deposits ⁶		3,122		42	5.47	%		3,726		50	5.50	%
Repurchase agreements		1,723,553		14,738	3.40	%		1,597,887		13,566	3.41	%
FHLB advances		1,828,533		22,344	4.78	%		2,007,747		24,179	4.76	%
Subordinated debentures and other borrowed funds		219,472		1,658	3.01	%		224,778		1,759	3.15	%
Total funding liabilities		24,254,523		109,347	1.79	%		23,939,344		107,356	1.80	%
Other liabilities		336,906						344,105
Total liabilities		24,591,429						24,283,449
Stockholders’ Equity
Stockholders’ equity		3,204,203						3,117,275
Total liabilities and stockholders’ equity	$	27,795,632					$	27,400,724
Net interest income (tax-equivalent)			$	184,226					$	170,498
Net interest spread (tax-equivalent)					2.73	%					2.57	%
Net interest margin (tax-equivalent)					2.83	%					2.68	%

______________________________

¹	Includes tax effect of $1.7 million and $1.6 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2024 and June 30, 2024, respectively.
²	Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.
³	Includes tax effect of $2.1 million and $2.2 million on tax-exempt debt securities income for the three months ended September 30, 2024 and June 30, 2024, respectively.
⁴	Includes interest income of $4.8 million and $1.9 million on average interest-bearing cash balances of $357.0 million and $0.14 billion for the three months ended September 30, 2024 and June 30, 2024, respectively.
⁵	Includes tax effect of $203 thousand and $211 thousand on federal income tax credits for the three months ended September 30, 2024 and June 30, 2024, respectively.
⁶	Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc. Average Balance Sheets (continued)

	Three Months ended
	September 30, 2024						September 30, 2023
(Dollars in thousands)	Average Balance		Interest & Dividends		Average Yield/ Rate		Average Balance		Interest & Dividends		Average Yield/ Rate
Assets
Residential real estate loans	$	1,850,066	$	23,118	5.00	%	$	1,649,947	$	18,594	4.51	%
Commercial loans ¹		13,957,304		198,556	5.66	%		13,120,479		174,822	5.29	%
Consumer and other loans		1,324,142		23,188	6.97	%		1,263,775		19,478	6.11	%
Total loans ²		17,131,512		244,862	5.69	%		16,034,201		212,894	5.27	%
Tax-exempt debt securities ³		1,660,643		14,710	3.54	%		1,732,227		14,486	3.34	%
Taxable debt securities ^{4, 5}		7,073,967		34,001	1.92	%		8,485,157		41,052	1.94	%
Total earning assets		25,866,122		293,573	4.52	%		26,251,585		268,432	4.06	%
Goodwill and intangibles		1,092,632						1,020,868
Non-earning assets		836,878						528,145
Total assets	$	27,795,632					$	27,800,598
Liabilities
Non-interest bearing deposits	$	6,237,166	$	—	—	%	$	6,461,350	$	—	—	%
NOW and DDA accounts		5,314,459		16,221	1.21	%		5,231,741		12,906	0.98	%
Savings accounts		2,829,203		5,699	0.80	%		2,840,620		3,492	0.49	%
Money market deposit accounts		2,887,173		15,048	2.07	%		3,039,177		12,646	1.65	%
Certificate accounts		3,211,842		33,597	4.16	%		2,462,266		23,151	3.73	%
Total core deposits		20,479,843		70,565	1.37	%		20,035,154		52,195	1.03	%
Wholesale deposits ⁶		3,122		42	5.47	%		188,523		2,502	5.27	%
Repurchase agreements		1,723,553		14,738	3.40	%		1,401,765		10,972	3.11	%
FHLB advances		1,828,533		22,344	4.78	%		—		—	—	%
FRB Bank Term Funding		—		—	—	%		2,740,000		30,229	4.38	%
Subordinated debentures and other borrowed funds		219,472		1,658	3.01	%		208,336		1,954	3.72	%
Total funding liabilities		24,254,523		109,347	1.79	%		24,573,778		97,852	1.58	%
Other liabilities		336,906						302,564
Total liabilities		24,591,429						24,876,342
Stockholders’ Equity
Stockholders’ equity		3,204,203						2,924,256
Total liabilities and stockholders’ equity	$	27,795,632					$	27,800,598
Net interest income (tax-equivalent)			$	184,226					$	170,580
Net interest spread (tax-equivalent)					2.73	%					2.48	%
Net interest margin (tax-equivalent)					2.83	%					2.58	%

______________________________

¹	Includes tax effect of $1.7 million and $1.4 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2024 and 2023, respectively.
²	Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.
³	Includes tax effect of $2.1 million and $1.9 million on tax-exempt debt securities income for the three months ended September 30, 2024 and 2023, respectively.
⁴	Includes interest income of $4.8 million and $15.1 million on average interest-bearing cash balances of $357.0 million and $1,106.1 million for the three months ended September 30, 2024 and 2023, respectively.
⁵	Includes tax effect of $203 thousand and $215 thousand on federal income tax credits for the three months ended September 30, 2024 and 2023, respectively.
⁶	Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc. Average Balance Sheets (continued)

	Nine Months ended
	September 30, 2024						September 30, 2023
(Dollars in thousands)	Average Balance		Interest & Dividends		Average Yield/ Rate		Average Balance		Interest & Dividends		Average Yield/ Rate
Assets
Residential real estate loans	$	1,798,202	$	65,636	4.87	%	$	1,570,911	$	51,508	4.37	%
Commercial loans ¹		13,737,866		571,540	5.56	%		12,910,691		498,152	5.16	%
Consumer and other loans		1,299,463		65,725	6.76	%		1,236,158		54,248	5.87	%
Total loans ²		16,835,531		702,901	5.58	%		15,717,760		603,908	5.14	%
Tax-exempt debt securities ³		1,695,965		44,978	3.54	%		1,745,764		44,978	3.44	%
Taxable debt securities ^{4, 5}		7,429,971		106,939	1.92	%		8,240,041		107,338	1.74	%
Total earning assets		25,961,467		854,818	4.40	%		25,703,565		756,224	3.93	%
Goodwill and intangibles		1,071,024						1,023,274
Non-earning assets		734,681						510,332
Total assets	$	27,767,172					$	27,237,171
Liabilities
Non-interest bearing deposits	$	6,077,392	$	—	—	%	$	6,770,242	$	—	—	%
NOW and DDA accounts		5,270,842		47,866	1.21	%		5,140,668		22,606	0.59	%
Savings accounts		2,881,273		17,368	0.81	%		2,930,420		5,070	0.23	%
Money market deposit accounts		2,913,206		43,907	2.01	%		3,253,138		28,654	1.18	%
Certificate accounts		3,083,866		96,365	4.17	%		1,638,163		34,613	2.82	%
Total core deposits		20,226,579		205,506	1.36	%		19,732,631		90,943	0.62	%
Wholesale deposits ⁶		3,603		149	5.49	%		213,465		7,999	5.01	%
Repurchase agreements		1,612,021		40,901	3.39	%		1,238,139		24,185	2.61	%
FHLB advances		1,397,258		50,772	4.77	%		738,004		26,910	4.81	%
FRB Bank Term Funding		824,672		27,097	4.39	%		1,929,322		63,160	4.38	%
Subordinated debentures and other borrowed funds		220,835		5,200	3.15	%		208,891		5,737	3.67	%
Total funding liabilities		24,284,968		329,625	1.81	%		24,060,452		218,934	1.22	%
Other liabilities		345,822						256,022
Total liabilities		24,630,790						24,316,474
Stockholders’ Equity
Stockholders’ equity		3,136,382						2,920,697
Total liabilities and stockholders’ equity	$	27,767,172					$	27,237,171
Net interest income (tax-equivalent)			$	525,193					$	537,290
Net interest spread (tax-equivalent)					2.59	%					2.71	%
Net interest margin (tax-equivalent)					2.70	%					2.79	%

______________________________

¹	Includes tax effect of $4.8 million and $4.4 million on tax-exempt municipal loan and lease income for the nine months ended September 30, 2024 and 2023, respectively.
²	Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.
³	Includes tax effect of $6.5 million and $7.0 million on tax-exempt debt securities income for the nine months ended September 30, 2024 and 2023, respectively.
⁴	Includes interest income of $17.2 million and $24.5 million on average interest-bearing cash balances of $631.7 million and $624.0 million for the nine months ended September 30, 2024 and 2023, respectively.
⁵	Includes tax effect of $629 thousand and $644 thousand on federal income tax credits for the nine months ended September 30, 2024 and 2023, respectively.
⁶	Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc. Loan Portfolio by Regulatory Classification

	Loans Receivable, by Loan Type												% Change from
(Dollars in thousands)	Sep 30, 2024			Jun 30, 2024			Dec 31, 2023			Sep 30, 2023			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Custom and owner occupied construction	$	235,915		$	233,978		$	290,572		$	306,106		1	%	(19)	%	(23)	%
Pre-sold and spec construction		203,610			198,219			236,596			287,048		3	%	(14)	%	(29)	%
Total residential construction		439,525			432,197			527,168			593,154		2	%	(17)	%	(26)	%
Land development		205,704			209,794			232,966			234,995		(2)	%	(12)	%	(12)	%
Consumer land or lots		189,705			190,781			187,545			184,685		(1)	%	1	%	3	%
Unimproved land		109,237			108,763			87,739			87,089		—	%	25	%	25	%
Developed lots for operative builders		67,140			57,140			56,142			62,485		18	%	20	%	7	%
Commercial lots		98,644			99,036			87,185			84,194		—	%	13	%	17	%
Other construction		689,638			810,536			900,547			982,384		(15)	%	(23)	%	(30)	%
Total land, lot, and other construction		1,360,068			1,476,050			1,552,124			1,635,832		(8)	%	(12)	%	(17)	%
Owner occupied		3,121,900			3,087,814			3,035,768			2,976,821		1	%	3	%	5	%
Non-owner occupied		4,001,430			3,941,786			3,742,916			3,765,266		2	%	7	%	6	%
Total commercial real estate		7,123,330			7,029,600			6,778,684			6,742,087		1	%	5	%	6	%
Commercial and industrial		1,387,538			1,400,896			1,363,479			1,363,198		(1)	%	2	%	2	%
Agriculture		1,047,320			962,384			772,458			785,208		9	%	36	%	33	%
1st lien		2,462,885			2,353,912			2,127,989			2,054,497		5	%	16	%	20	%
Junior lien		77,029			56,049			47,230			47,490		37	%	63	%	62	%
Total 1-4 family		2,539,914			2,409,961			2,175,219			2,101,987		5	%	17	%	21	%
Multifamily residential		921,138			1,027,962			796,538			714,822		(10)	%	16	%	29	%
Home equity lines of credit		1,004,300			974,000			979,891			950,204		3	%	2	%	6	%
Other consumer		221,517			220,755			229,154			233,980		—	%	(3)	%	(5)	%
Total consumer		1,225,817			1,194,755			1,209,045			1,184,184		3	%	1	%	4	%
States and political subdivisions		993,871			777,426			834,947			833,618		28	%	19	%	19	%
Other		188,792			180,505			204,111			209,983		5	%	(8)	%	(10)	%
Total loans receivable, including loans held for sale		17,227,313			16,891,736			16,213,773			16,164,073		2	%	6	%	7	%
Less loans held for sale ¹		(46,126	)		(39,745	)		(15,691	)		(29,027	)	16	%	194	%	59	%
Total loans receivable	$	17,181,187		$	16,851,991		$	16,198,082		$	16,135,046		2	%	6	%	6	%

______________________________

¹	Loans held for sale are primarily 1st lien 1-4 family loans.

Glacier Bancorp, Inc. Credit Quality Summary by Regulatory Classification

	Non-performing Assets, by Loan Type					Non- Accrual Loans	Accruing Loans 90 Days or More Past Due	Other real estate owned and foreclosed assets
(Dollars in thousands)	Sep 30, 2024		Jun 30, 2024	Dec 31, 2023	Sep 30, 2023	Sep 30, 2024	Sep 30, 2024	Sep 30, 2024
Custom and owner occupied construction	$	202	206	214	219	202	—	—
Pre-sold and spec construction		3,705	2,908	763	763	2,942	763	—
Total residential construction		3,907	3,114	977	982	3,144	763	—
Land development		583	—	35	80	22	561	—
Consumer land or lots		458	429	96	314	241	217	—
Unimproved land		—	—	—	36	—	—	—
Developed lots for operative builders		531	608	608	608	—	531	—
Commercial lots		47	47	47	188	—	47	—
Other construction		—	25	—	12,884	—	—	—
Total land, lot and other construction		1,619	1,109	786	14,110	263	1,356	—
Owner occupied		1,903	1,992	1,838	1,445	662	809	432
Non-owner occupied		1,335	257	11,016	15,105	1,335	—	—
Total commercial real estate		3,238	2,249	12,854	16,550	1,997	809	432
Commercial and Industrial		2,455	2,044	1,971	1,367	1,408	1,047	—
Agriculture		6,040	2,442	2,558	2,450	2,164	3,876	—
1st lien		6,065	2,923	2,664	2,766	3,724	2,341	—
Junior lien		279	492	180	363	279	—	—
Total 1-4 family		6,344	3,415	2,844	3,129	4,003	2,341	—
Multifamily residential		392	385	395	—	392	—	—
Home equity lines of credit		2,867	2,145	2,043	1,612	1,903	964	—
Other consumer		1,111	1,089	1,187	942	663	247	201
Total consumer		3,978	3,234	3,230	2,554	2,566	1,211	201
Other		148	16	16	1,141	—	148	—
Total	$	28,121	18,008	25,631	42,283	15,937	11,551	633

Glacier Bancorp, Inc. Credit Quality Summary by Regulatory Classification (continued)

	Accruing 30-89 Days Delinquent Loans, by Loan Type								% Change from
(Dollars in thousands)	Sep 30, 2024		Jun 30, 2024		Dec 31, 2023		Sep 30, 2023		Jun 30, 2024		Dec 31, 2023		Sep 30, 2023
Custom and owner occupied construction	$	13	$	1,323	$	2,549	$	—	(99)	%	(99)	%	n/m
Pre-sold and spec construction		1,250		816		1,219		599	53	%	3	%	109	%
Total residential construction		1,263		2,139		3,768		599	(41)	%	(66)	%	111	%
Land development		157		—		163		44	n/m		(4)	%	257	%
Consumer land or lots		747		411		624		528	82	%	20	%	41	%
Unimproved land		39		158		—		87	(75)	%	n/m		(55)	%
Commercial lots		—		—		2,159		1,245	n/m		(100)	%	(100)	%
Other construction		—		21		—		—	(100)	%	n/m		n/m
Total land, lot and other construction		943		590		2,946		1,904	60	%	(68)	%	(50)	%
Owner occupied		5,641		4,326		2,222		652	30	%	154	%	765	%
Non-owner occupied		13,785		8,119		14,471		213	70	%	(5)	%	6,372	%
Total commercial real estate		19,426		12,445		16,693		865	56	%	16	%	2,146	%
Commercial and industrial		3,125		17,591		12,905		2,946	(82)	%	(76)	%	6	%
Agriculture		16,932		5,288		594		604	220	%	2,751	%	2,703	%
1st lien		6,275		2,637		3,768		1,006	138	%	67	%	524	%
Junior lien		13		17		1		355	(24)	%	1,200	%	(96)	%
Total 1-4 family		6,288		2,654		3,769		1,361	137	%	67	%	362	%
Home equity lines of credit		4,567		5,432		4,518		3,638	(16)	%	1	%	26	%
Other consumer		2,227		2,192		3,264		1,821	2	%	(32)	%	22	%
Total consumer		6,794		7,624		7,782		5,459	(11)	%	(13)	%	24	%
Other		1,442		1,347		1,510		1,515	7	%	(5)	%	(5)	%
Total	$	56,213	$	49,678	$	49,967	$	15,253	13	%	13	%	269	%

______________________________

n/m – not measurable

Glacier Bancorp, Inc. Credit Quality Summary by Regulatory Classification (continued)

	Net Charge-Offs (Recoveries), Year-to-Date Period Ending, By Loan Type									Charge-Offs	Recoveries
(Dollars in thousands)	Sep 30, 2024			Jun 30, 2024		Dec 31, 2023		Sep 30, 2023		Sep 30, 2024	Sep 30, 2024
Pre-sold and spec construction	$	(4	)	(4	)	(15	)	(12	)	—	4
Land development		(21	)	(1	)	(135	)	(134	)	—	21
Consumer land or lots		(21	)	(22	)	(19	)	(14	)	—	21
Unimproved land		5		5		—		—		5	—
Commercial lots		319		319		—		—		319	—
Other construction		—		—		889		—		—	—
Total land, lot and other construction		282		301		735		(148	)	324	42
Owner occupied		(73	)	(73	)	(59	)	(104	)	—	73
Non-owner occupied		(3	)	(2	)	799		500		—	3
Total commercial real estate		(76	)	(75	)	740		396		—	76
Commercial and industrial		1,272		644		364		(11	)	1,839	567
Agriculture		65		68		—		—		68	3
1st lien		(34	)	(22	)	66		98		—	34
Junior lien		(60	)	(55	)	24		32		10	70
Total 1-4 family		(94	)	(77	)	90		130		10	104
Multifamily residential		—		—		(136	)	—		—	—
Home equity lines of credit		(31	)	1		(6	)	20		35	66
Other consumer		753		493		1,097		816		1,056	303
Total consumer		722		494		1,091		836		1,091	369
Other		6,561		4,611		7,447		5,430		9,074	2,513
Total	$	8,728		5,962		10,316		6,621		12,406	3,678

Visit our website at www.glacierbancorp.com

CONTACT: Randall M. Chesler, CEO
(406) 751-4722
Ron J. Copher, CFO
(406) 751-7706

The MIL Network –

January 25, 2025

MIL-OSI: Archrock Increases Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

HOUSTON, Oct. 24, 2024 (GLOBE NEWSWIRE) — Archrock, Inc. (NYSE: AROC) (“Archrock” or the “Company”) today announced that its Board of Directors has declared an increased quarterly dividend of $0.175 per share of common stock, or $0.70 per share on an annualized basis. The third quarter 2024 dividend will be paid on November 13, 2024 to all stockholders of record on November 6, 2024.

The third quarter 2024 dividend per share amount represents an increase of 6 percent over the Archrock second quarter 2024 dividend level and an increase of 13 percent over the Archrock third quarter 2023 dividend level.

“We are implementing the second increase in Archrock’s quarterly cash dividend for 2024 and fourth increase in the last two years reflecting our confidence in enduring demand growth for natural gas and our transformed platform, which are delivering excellent and consistent results. In addition, the recent acquisition of TOPS was immediately accretive to our cash available for dividend,” said Brad Childers, Archrock’s President and Chief Executive Officer.

“We remain committed to investing in high-return investments required to support our customers and increasing cash returns to shareholders, while maintaining prudent dividend and leverage coverage ratios. We look forward to updating you on our results and integration progress on our third quarter 2024 earnings call in November,” concluded Childers.

About Archrock

Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how the Company embodies its purpose, WE POWER A CLEANER AMERICA^TM, visit www.archrock.com.

Forward-Looking Statements

This press release contains forward-looking statements, which include statements about Archrock’s future financial performance and dividends. These statements are not guarantees of future performance or actions. Forward-looking statements rely on a number of assumptions concerning future events and are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Archrock expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in Archrock’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, Archrock’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and as set forth from time to time in Archrock’s filings with the Securities and Exchange Commission. These filings are available online at www.sec.gov and www.archrock.com.

For information, contact:

Megan Repine
Vice President, Investor Relations
(281) 836-8360
investor.relations@archrock.com

The MIL Network –

January 25, 2025

MIL-OSI: Midland States Bancorp, Inc. Announces 2024 Third Quarter Results

Source: GlobeNewswire (MIL-OSI)

Third Quarter 2024 Highlights:

Net income available to common shareholders of $16.2 million, or $0.74 per diluted share
Adjusted pre-tax, pre-provision earnings of $27.5 million
Tangible book value per share increased to $24.90, compared to $23.36 at June 30, 2024
Common equity tier 1 capital ratio improved to 9.00%, compared to 8.64% at June 30, 2024
Net interest margin of 3.10%, compared to 3.12% in prior quarter
Efficiency ratio of 62.8%, compared to 65.2% in prior quarter

EFFINGHAM, Ill., Oct. 24, 2024 (GLOBE NEWSWIRE) — Midland States Bancorp, Inc. (Nasdaq: MSBI) (the “Company”) today reported net income available to common shareholders of $16.2 million, or $0.74 per diluted share, for the third quarter of 2024, compared to $4.5 million, or $0.20 per diluted share, for the second quarter of 2024. This also compares to net income available to common shareholders of $9.2 million, or $0.41 per diluted share, for the third quarter of 2023.

Provision expense was $5.0 million in the third quarter of 2024 compared to $16.8 million and $5.2 million in the second quarter of 2024 and the third quarter of 2023, respectively. The elevated provision expense in the second quarter of 2024 was primarily due to credit deterioration and servicing issues involving one of our fintech partners, LendingPoint, subsequent to their system conversion in late 2023.

Jeffrey G. Ludwig, President and Chief Executive Officer of the Company, said, “We executed well in the third quarter and delivered a higher level of profitability while making continued progress on our balance sheet management strategies, which resulted in further increases in all of our capital ratios, an increase in our tangible book value per share, and an increase in our level of liquidity with a reduction in our loan-to-deposit ratio. We continue to utilize the payoffs resulting from the intentional reduction of our equipment finance and consumer portfolios to fund high quality loans generated in our community bank and the purchase of investment securities. We are also seeing good results from the investments we have made in the business, such as increasing our presence and business development efforts in the St. Louis market, where our loan balances increased at an annualized rate of 12% during the third quarter, and growth in our Wealth Management revenues due to an increase in assets under administration, partially driven by the new wealth advisors we have added in recent quarters.

Improving our credit quality is a priority and we are taking proactive steps to resolve problem loans in order to reduce our level of non-performing and classified loans going forward. We continue to closely monitor the health of our borrowers and be conservative in downgrading loans where we see the potential for weakness. We also recently added a new Chief Credit Officer whose background and experience is consistent with our increased focus on in-market relationship lending in our community bank, which will continue to result in a higher quality, lower risk loan portfolio.

“While we will remain conservative in new loan production while economic conditions remain uncertain, we are well positioned to benefit from lower interest rates and we expect positive trends in our net interest margin and revenue generated from our Wealth Management business. While maintaining disciplined expense control, we are continuing to make investments in talent and technology that will further enhance our ability to increase our market share, add attractive new client relationships in our community bank, and generate profitable growth. With the stronger balance sheet we are building, including a Total Capital Ratio of approximately 14%, we believe we are well positioned to support the continued growth of our franchise as economic conditions improve in the future and create additional value for our shareholders in the process,” said Mr. Ludwig.

Balance Sheet Highlights

Total assets were $7.75 billion at September 30, 2024, compared to $7.76 billion at June 30, 2024, and $7.97 billion at September 30, 2023. At September 30, 2024, portfolio loans were $5.75 billion, compared to $5.85 billion at June 30, 2024, and $6.28 billion at September 30, 2023.

Loans

During the third quarter of 2024, outstanding loans declined by $103.2 million, or 1.8%, from June 30, 2024, as the Company continued to shrink its equipment financing and consumer loan portfolios, and focus on commercial loan opportunities in our community banking regions.

Equipment finance loan and lease balances decreased $30.0 million during the third quarter of 2024 as the Company continued to reduce its concentration of this product within the overall loan portfolio. Consumer loans decreased $82.8 million due to loan payoffs and a cessation in loans originated through GreenSky. Our Greensky-originated loan balances decreased $63.0 million during the third quarter to $475.3 million at September 30, 2024. In addition, as previously disclosed, during the fourth quarter of 2023, the Company ceased originating loans through LendingPoint. As of September 30, 2024, the Company had $96.5 million in loans that were originated through and serviced by LendingPoint. Equipment financing and consumer loans comprised 15.0% and 11.5%, respectively, of the loan portfolio at September 30, 2024, compared to 15.2% and 12.7%, respectively, at June 30, 2024.

Increases in commercial FHA warehouse lines and commercial real estate loans of $50.2 million and $89.0 million, respectively, were offset by decreases in all other loan categories.

	As of
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2024		2024		2024		2023		2023
Loan Portfolio
Commercial loans	$	863,922	$	939,458	$	913,564	$	951,387	$	943,761
Equipment finance loans		442,552		461,409		494,068		531,143		578,931
Equipment finance leases		417,531		428,659		455,879		473,350		485,460
Commercial FHA warehouse lines		50,198		—		8,035		—		48,547
Total commercial loans and leases		1,774,203		1,829,526		1,871,546		1,955,880		2,056,699
Commercial real estate		2,510,472		2,421,505		2,397,113		2,406,845		2,412,164
Construction and land development		422,253		476,528		474,128		452,593		416,801
Residential real estate		378,657		378,393		378,583		380,583		375,211
Consumer		663,234		746,042		837,092		935,178		1,020,008
Total loans	$	5,748,819	$	5,851,994	$	5,958,462	$	6,131,079	$	6,280,883

Loan Quality

Overall, credit quality metrics remained consistent this quarter compared to the second quarter of 2024, albeit, nonperforming loans were still at elevated levels. Non-performing loans increased $2.4 million to $114.6 million at September 30, 2024, compared to $112.1 million as of June 30, 2024. Substandard loans increased $32.0 million to $167.5 million at September 30, 2024, as compared to June 30, 2024, primarily due to two multi-family projects that were downgraded this past quarter.

	As of and for the Three Months Ended
(in thousands)	September 30,			June 30,			March 31,			December 31,			September 30,
(in thousands)		2024			2024			2024			2023			2023
Asset Quality
Loans 30-89 days past due	$	55,329		$	54,045		$	58,854		$	82,778		$	46,608
Nonperforming loans		114,556			112,124			104,979			56,351			55,981
Nonperforming assets		126,771			123,774			116,721			67,701			58,677
Substandard loans		167,549			135,555			149,049			184,224			143,793
Net charge-offs		11,379			2,874			4,445			5,117			3,449
Loans 30-89 days past due to total loans		0.96	%		0.92	%		0.99	%		1.35	%		0.74	%
Nonperforming loans to total loans		1.99	%		1.92	%		1.76	%		0.92	%		0.89	%
Nonperforming assets to total assets		1.64	%		1.60	%		1.49	%		0.86	%		0.74	%
Allowance for credit losses to total loans		1.49	%		1.58	%		1.31	%		1.12	%		1.06	%
Allowance for credit losses to nonperforming loans		74.90	%		82.22	%		74.35	%		121.56	%		119.09	%
Net charge-offs to average loans		0.78	%		0.20	%		0.30	%		0.33	%		0.22	%

The allowance for credit losses on loans totaled $85.8 million at September 30, 2024, compared to $92.2 million at June 30, 2024, and $66.7 million at September 30, 2023. The allowance as a percentage of total loans was 1.49% at September 30, 2024, compared to 1.58% at June 30, 2024, and 1.06% at September 30, 2023.

Notably, the Company recognized provision expense of $14.0 million in the second quarter of 2024 related to the loans originated and serviced by LendingPoint, increasing the allowance to $14.6 million on this portfolio. Credit deterioration and servicing issues following their system conversion have resulted in increased losses within this portfolio. In the third quarter of 2024, loans totaling $6.2 million were charged off. At September 30, 2024, the Company had an allowance of $8.3 million on the $96.5 million of loans serviced by LendingPoint.

Deposits

Total deposits were $6.26 billion at September 30, 2024, compared with $6.12 billion at June 30, 2024. Noninterest-bearing deposits decreased $57.9 million to $1.05 billion at September 30, 2024, while interest-bearing deposits increased $196.7 million to $5.21 billion at September 30, 2024. Brokered time deposits increased $138.0 million to $269.4 million, and represented 4.31% of total deposits at September 30, 2024.

	As of
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2024		2024		2024		2023		2023
Deposit Portfolio
Noninterest-bearing demand	$	1,050,617	$	1,108,521	$	1,212,382	$	1,145,395	$	1,154,515
Interest-bearing:
Checking		2,389,970		2,343,533		2,394,163		2,511,840		2,572,224
Money market		1,187,139		1,143,668		1,128,463		1,135,629		1,090,962
Savings		510,260		538,462		555,552		559,267		582,359
Time		849,413		852,415		845,190		862,865		885,858
Brokered time		269,437		131,424		188,234		94,533		119,084
Total deposits	$	6,256,836	$	6,118,023	$	6,323,984	$	6,309,529	$	6,405,002

Results of Operations Highlights

Net Interest Income and Margin

During the third quarter of 2024, net interest income and net interest margin, on a tax-equivalent basis, were $55.2 million and 3.10%, respectively, compared to $55.2 million and 3.12%, respectively, in the second quarter of 2024. Net interest income and net interest margin, on a tax-equivalent basis, were $58.8 million and 3.20%, respectively, in the third quarter of 2023.

Average interest-earning assets for the third quarter of 2024 were $7.07 billion, compared to $7.13 billion for the second quarter of 2024. The yield on interest-earning assets increased 7 basis points to 5.91% compared to the second quarter of 2024. Interest-earning assets averaged $7.28 billion for the third quarter of 2023.

Average loans were $5.78 billion for the third quarter of 2024, compared to $5.92 billion for the second quarter of 2024 and $6.30 billion for the third quarter of 2023. The yield on loans was 6.15% for the third quarter of 2024, up from 6.03% for the second quarter of 2024 and 5.93% for the third quarter of 2023.

Investment securities averaged $1.16 billion for the third quarter of 2024, and yielded 4.71%, compared to an average balance and yield of $1.10 billion and 4.69%, respectively, for the second quarter of 2024. The Company purchased additional higher-yielding investments resulting in the increased average balance and yield. Investment securities averaged $863.0 million for the third quarter of 2023.

Average interest-bearing liabilities for the third quarter of 2024 were $5.76 billion, compared to $5.78 billion for the second quarter of 2024. The cost of funds increased 9 basis points to 3.45% compared to the second quarter of 2024. Interest-bearing liabilities averaged $5.92 billion for the third quarter of 2023.

Average interest-bearing deposits were $5.13 billion for the third quarter of 2024, compared to $5.10 billion for the second quarter of 2024, and $5.35 billion for the third quarter of 2023. Cost of interest-bearing deposits was 3.25% in the third quarter of 2024, which represented a 14 basis point increase from the second quarter of 2024, due to increased competition.

	For the Three Months Ended
(dollars in thousands)	September 30, 2024						June 30, 2024						September 30, 2023
Interest-earning assets	Average Balance		Interest & Fees		Yield/Rate		Average Balance		Interest & Fees		Yield/Rate		Average Balance		Interest & Fees		Yield/Rate
Cash and cash equivalents	$	75,255	$	1,031	5.45	%	$	65,250	$	875	5.40	%	$	78,391	$	1,036	5.24	%
Investment securities⁽¹⁾		1,162,751		13,752	4.71			1,098,452		12,805	4.69			862,998		7,822	3.60
Loans⁽¹⁾⁽²⁾		5,783,408		89,344	6.15			5,915,523		88,738	6.03			6,297,568		94,118	5.93
Loans held for sale		7,505		124	6.57			4,910		84	6.84			6,078		104	6.80
Nonmarketable equity securities		41,137		788	7.62			44,216		963	8.76			39,347		710	7.16
Total interest-earning assets		7,070,056		105,039	5.91			7,128,351		103,465	5.84			7,284,382		103,790	5.65
Noninterest-earning assets		653,279						669,370						622,969
Total assets	$	7,723,335					$	7,797,721					$	7,907,351

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,132,640	$	41,970	3.25	%	$	5,101,365	$	39,476	3.11	%	$	5,354,356	$	37,769	2.80	%
Short-term borrowings		53,577		602	4.47			30,449		308	4.07			20,127		14	0.28
FHLB advances & other borrowings		428,739		4,743	4.40			500,758		5,836	4.69			402,500		4,557	4.49
Subordinated debt		89,120		1,228	5.48			93,090		1,265	5.47			93,441		1,280	5.43
Trust preferred debentures		50,990		1,341	10.46			50,921		1,358	10.73			50,379		1,369	10.78
Total interest-bearing liabilities		5,755,066		49,884	3.45			5,776,583		48,243	3.36			5,920,803		44,989	3.01
Noninterest-bearing deposits		1,075,712						1,132,451						1,116,988
Other noninterest-bearing liabilities		97,235						104,841						97,935
Shareholders’ equity		795,322						783,846						771,625
Total liabilities and shareholder’s equity	$	7,723,335					$	7,797,721					$	7,907,351

Net Interest Margin			$	55,155	3.10	%			$	55,222	3.12	%			$	58,801	3.20	%

Cost of Deposits					2.69	%					2.55	%					2.32	%

(1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for each of the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.
(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

For the nine months ended September 30, 2024, net interest income, on a tax-equivalent basis, decreased to $166.5 million, with a tax-equivalent net interest margin of 3.13%, compared to net interest income, on a tax-equivalent basis, of $178.6 million, and a tax-equivalent net interest margin of 3.27% for the nine months ended September 30, 2023.

The yield on earning assets increased 34 basis points to 5.84% for the nine months ended September 30, 2024 compared to the prior year. However, the cost of interest-bearing liabilities increased at a faster rate during this period, increasing 57 basis points to 3.34% for the nine months ended September 30, 2024.

	For the Nine Months Ended
(dollars in thousands)	September 30, 2024						September 30, 2023
Interest-earning assets	Average Balance		Interest & Fees		Yield/Rate		Average Balance		Interest & Fees		Yield/Rate
Cash and cash equivalents	$	69,960	$	2,857	5.45	%	$	76,939	$	2,868	4.98	%
Investment securities⁽¹⁾		1,083,597		37,265	4.59			844,946		21,103	3.33
Loans⁽¹⁾⁽²⁾		5,903,216		267,570	6.05			6,324,578		274,005	5.79
Loans held for sale		5,281		263	6.65			3,900		179	6.14
Nonmarketable equity securities		40,429		2,438	8.06			44,034		2,104	6.39
Total interest-earning assets		7,102,483		310,393	5.84			7,294,397		300,259	5.50
Noninterest-earning assets		663,967						615,383
Total assets	$	7,766,450					$	7,909,780

Interest-Bearing Liabilities
Interest-bearing deposits	$	5,142,979	$	120,660	3.13	%	$	5,223,852	$	97,791	2.50	%
Short-term borrowings		49,750		1,746	4.69			26,865		53	0.26
FHLB advances & other borrowings		414,259		13,615	4.39			471,084		15,959	4.53
Subordinated debt		91,921		3,773	5.48			96,820		3,985	5.49
Trust preferred debentures		50,873		4,088	10.73			50,216		3,887	10.35
Total interest-bearing liabilities		5,749,782		143,882	3.34			5,868,837		121,675	2.77
Noninterest-bearing deposits		1,119,764						1,184,410
Other noninterest-bearing liabilities		107,192						84,650
Shareholders’ equity		789,712						771,883
Total liabilities and shareholders’ equity	$	7,766,450					$	7,909,780

Net Interest Margin			$	166,511	3.13	%			$	178,584	3.27	%

Cost of Deposits					2.57	%					2.04	%

(1) Interest income and average rates for tax-exempt loans and investment securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.6 million for each of the nine months ended September 30, 2024 and 2023, respectively.
(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

Noninterest Income

Noninterest income was $19.3 million for the third quarter of 2024, compared to $17.7 million for the second quarter of 2024. Noninterest income for the second quarter of 2024 included a $0.2 million gain on the repurchase of subordinated debt, offset by $0.2 million of net losses on the sale of investment securities. The third quarter of 2023 included $5.0 million of losses on the sale of investment securities. Excluding these transactions, noninterest income for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 was $19.3 million, $17.6 million, and $16.5 million, respectively.

	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(in thousands)		2024			2024			2023			2024			2023
Noninterest income
Wealth management revenue	$	7,104		$	6,801		$	6,288		$	21,037		$	18,968
Service charges on deposit accounts		3,411			3,121			3,149			9,648			8,744
Interchange revenue		3,506			3,563			3,609			10,427			10,717
Residential mortgage banking revenue		697			557			507			1,781			1,452
Income on company-owned life insurance		1,982			1,925			918			5,708			2,685
Loss on sales of investment securities, net		(44	)		(152	)		(4,961	)		(196	)		(6,478	)
Other income		2,683			1,841			2,035			9,777			9,989
Total noninterest income	$	19,339		$	17,656		$	11,545		$	58,182		$	46,077

Wealth management revenue totaled $7.1 million in the third quarter of 2024, an increase of $0.3 million, or 4.5%, as compared to the second quarter of 2024, due to increases in assets under administration and estate fees. Assets under administration increased to $4.27 billion at September 30, 2024 from $4.00 billion at June 30, 2024, primarily due to improved sales activity. Assets under administration totaled $3.50 billion at September 30, 2023.

Income on company-owned life insurance income totaled $2.0 million, $1.9 million and $0.9 million for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023, respectively. The Company surrendered certain low-yielding life insurance policies and purchased additional policies in the third quarter of 2023, resulting in the increase in revenue.

Other income totaled $2.7 million in the third quarter of 2024 compared to $1.8 million in the second quarter of 2024. Income from the sale of SBA loans in the third quarter of 2024 of $0.2 million and losses from the disposition of repossessed leased assets in the second quarter of 2024 of $0.6 million resulted in the quarter over quarter increase in other income.

Noninterest Expense

Noninterest expense was $46.7 million in the third quarter of 2024, compared to $47.5 million in the second quarter of 2024 and $42.0 million in the third quarter of 2023. Noninterest expense for the second quarter of 2024 included $4.1 million of aggregate expenses related to OREO impairment and property taxes, and accruals related to various legal proceedings. Excluding these items, noninterest expense for the third quarter of 2024, the second quarter of 2024, and the third quarter of 2023 was $46.7 million, $43.4 million, and $42.0 million, respectively. Costs related to increased staffing levels, upgrades to our ATM fleet, and loan collection and OREO expenses drove the increase in noninterest expense in the third quarter of 2024 compared to the prior quarter.

The efficiency ratio improved to 62.76% for the quarter ended September 30, 2024, compared to 65.16% for the quarter ended June 30, 2024. The efficiency ratio for the third quarter of 2023 was 55.82%.

	For the Three Months Ended						For the Nine Months Ended
	September 30,		June 30,		September 30,		September 30,		September 30,
(in thousands)	2024		2024		2023		2024		2023
Noninterest expense
Salaries and employee benefits	$	24,382	$	22,872	$	22,307	$	71,356	$	69,407
Occupancy and equipment		4,393		3,964		3,730		12,499		12,052
Data processing		6,955		7,205		6,468		20,882		19,323
Professional services		1,744		2,243		1,554		6,242		4,977
Amortization of intangible assets		951		1,016		1,129		3,056		3,628
FDIC insurance		1,402		1,219		1,107		3,895		3,632
Other expense		6,906		8,960		5,743		21,149		16,395
Total noninterest expense	$	46,733	$	47,479	$	42,038	$	139,079	$	129,414

Income Tax Expense

Income tax expense was $4.1 million for the third quarter of 2024, compared to $1.7 million for the second quarter of 2024 and $11.5 million for the third quarter of 2023. The resulting effective tax rates were 18.1%, 19.9% and 50.3%, respectively. Tax expense for the third quarter of 2023 included a $1.4 million return to provision adjustment and $4.5 million associated with the surrender of company-owned life insurance policies, as previously discussed.

Capital

At September 30, 2024, Midland States Bank and the Company exceeded all regulatory capital requirements under Basel III, and Midland States Bank met the qualifications to be a ‘‘well-capitalized’’ financial institution, as summarized in the following table:

	As of September 30, 2024
	Midland States Bank	Midland States Bancorp, Inc.	Minimum Regulatory Requirements⁽²⁾
Total capital to risk-weighted assets	13.34%	13.98%	10.50%
Tier 1 capital to risk-weighted assets	12.09%	11.65%	8.50%
Common equity Tier 1 capital to risk-weighted assets	12.09%	9.00%	7.00%
Tier 1 leverage ratio	10.47%	10.10%	4.00%
Tangible common equity to tangible assets⁽¹⁾	N/A	7.03%	N/A

(1) A non-GAAP financial measure. Refer to page 16 for a reconciliation to the comparable GAAP financial measure.
(2) Includes the capital conservation buffer of 2.5%, as applicable.

The impact of rising interest rates on the Company’s investment portfolio and cash flow hedges resulted in an accumulated other comprehensive loss of $60.6 million at September 30, 2024, which reduced tangible book value by $2.84 per share.

Stock Repurchase Program

As previously disclosed, on December 5, 2023, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through December 31, 2024. During the third quarter of 2024, the Company repurchased 23,113 shares of its common stock at a weighted average price of $22.54 under its stock repurchase program.

About Midland States Bancorp, Inc.

Midland States Bancorp, Inc. is a community-based financial holding company headquartered in Effingham, Illinois, and is the sole shareholder of Midland States Bank. As of September 30, 2024, the Company had total assets of approximately $7.75 billion, and its Wealth Management Group had assets under administration of approximately $4.27 billion. The Company provides a full range of commercial and consumer banking products and services and business equipment financing, merchant credit card services, trust and investment management, insurance and financial planning services. For additional information, visit https://www.midlandsb.com/ or https://www.linkedin.com/company/midland-states-bank.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP.

These non-GAAP financial measures include “Adjusted Earnings,” “Adjusted Earnings Available to Common Shareholders,” “Adjusted Diluted Earnings Per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” “Adjusted Return on Average Tangible Common Equity,” “Adjusted Pre-Tax, Pre-Provision Earnings,” “Adjusted Pre-Tax, Pre-Provision Return on Average Assets,” “Efficiency Ratio,” “Tangible Common Equity to Tangible Assets,” “Tangible Book Value Per Share,” “Tangible Book Value Per Share excluding Accumulated Other Comprehensive Income,” and “Return on Average Tangible Common Equity.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s funding profile and profitability. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, the measures in this press release may not be comparable to other similarly titled measures as presented by other companies.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels. These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, the impact of inflation, increased deposit volatility and potential regulatory developments; changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; changes to U.S. tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “will,” “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “continue,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACTS:
Jeffrey G. Ludwig, President and CEO, at jludwig@midlandsb.com or (217) 342-7321
Eric T. Lemke, Chief Financial Officer, at elemke@midlandsb.com or (217) 342-7321
Douglas J. Tucker, SVP and Corporate Counsel, at dtucker@midlandsb.com or (217) 342-7321

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited)

	As of and for the Three Months Ended									As of and for the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands, except per share data)		2024			2024			2023			2024			2023
Earnings Summary
Net interest income	$	54,950		$	55,052		$	58,596		$	165,922		$	177,940
Provision for credit losses		5,000			16,800			5,168			35,800			14,182
Noninterest income		19,339			17,656			11,545			58,182			46,077
Noninterest expense		46,733			47,479			42,038			139,079			129,414
Income before income taxes		22,556			8,429			22,935			49,225			80,421
Income taxes		4,080			1,679			11,533			10,114			25,672
Net income		18,476			6,750			11,402			39,111			54,749
Preferred dividends		2,229			2,228			2,229			6,685			6,685
Net income available to common shareholders	$	16,247		$	4,522		$	9,173		$	32,426		$	48,064

Diluted earnings per common share	$	0.74		$	0.20		$	0.41		$	1.47		$	2.14
Weighted average common shares outstanding – diluted		21,678,242			21,734,849			21,977,196			21,732,093			22,223,986
Return on average assets		0.95	%		0.35	%		0.57	%		0.67	%		0.93	%
Return on average shareholders’ equity		9.24	%		3.46	%		5.86	%		6.62	%		9.48	%
Return on average tangible common equity⁽¹⁾		12.69	%		3.66	%		7.56	%		8.62	%		13.37	%
Net interest margin		3.10	%		3.12	%		3.20	%		3.13	%		3.27	%
Efficiency ratio⁽¹⁾		62.76	%		65.16	%		55.82	%		61.91	%		56.15	%

Adjusted Earnings Performance Summary⁽¹⁾
Adjusted earnings available to common shareholders	$	16,223		$	4,511		$	17,278		$	32,391		$	56,783
Adjusted diluted earnings per common share	$	0.74		$	0.20		$	0.78		$	1.47		$	2.53
Adjusted return on average assets		0.95	%		0.35	%		0.98	%		0.67	%		1.07	%
Adjusted return on average shareholders’ equity		9.23	%		3.46	%		10.03	%		6.61	%		10.99	%
Adjusted return on average tangible common equity		12.67	%		3.65	%		14.24	%		8.61	%		15.80	%
Adjusted pre-tax, pre-provision earnings	$	27,523		$	25,214		$	33,064		$	84,977		$	100,405
Adjusted pre-tax, pre-provision return on average assets		1.42	%		1.30	%		1.66	%		1.46	%		1.70	%

Market Data
Book value per share at period end	$	33.08		$	31.59		$	29.96
Tangible book value per share at period end⁽¹⁾	$	24.90		$	23.36		$	21.67
Tangible book value per share excluding accumulated other comprehensive income at period end⁽¹⁾	$	27.74		$	27.22		$	26.35
Market price at period end	$	22.38		$	22.65		$	20.54
Common shares outstanding at period end		21,393,905			21,377,215			21,594,546

Capital
Total capital to risk-weighted assets		13.98	%		13.83	%		12.76	%
Tier 1 capital to risk-weighted assets		11.65	%		11.23	%		10.53	%
Common equity tier 1capital to risk-weighted assets		9.00	%		8.64	%		8.07	%
Tier 1 leverage ratio		10.10	%		9.84	%		9.59	%
Tangible common equity to tangible assets⁽¹⁾		7.03	%		6.59	%		6.01	%

Wealth Management
Trust assets under administration	$	4,268,539		$	3,996,175		$	3,501,225

(1) Non-GAAP financial measures. Refer to pages 14 – 16 for a reconciliation to the comparable GAAP financial measures.

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

	As of
	September 30,			June 30,			March 31,			December 31,			September 30,
(in thousands)		2024			2024			2024			2023			2023
Assets
Cash and cash equivalents	$	121,873		$	124,646		$	167,316		$	135,061		$	132,132
Investment securities		1,216,795			1,099,654			1,044,900			920,396			839,344
Loans		5,748,819			5,851,994			5,958,462			6,131,079			6,280,883
Allowance for credit losses on loans		(85,804	)		(92,183	)		(78,057	)		(68,502	)		(66,669	)
Total loans, net		5,663,015			5,759,811			5,880,405			6,062,577			6,214,214
Loans held for sale		8,001			5,555			5,043			3,811			6,089
Premises and equipment, net		84,672			83,040			81,831			82,814			82,741
Other real estate owned		8,646			8,304			8,920			9,112			480
Loan servicing rights, at lower of cost or fair value		18,400			18,902			19,577			20,253			20,933
Goodwill		161,904			161,904			161,904			161,904			161,904
Other intangible assets, net		13,052			14,003			15,019			16,108			17,238
Company-owned life insurance		209,193			207,211			205,286			203,485			201,750
Other assets		245,932			274,244			241,608			251,347			292,460
Total assets	$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285

Liabilities and Shareholders’ Equity
Noninterest-bearing demand deposits	$	1,050,617		$	1,108,521		$	1,212,382		$	1,145,395		$	1,154,515
Interest-bearing deposits		5,206,219			5,009,502			5,111,602			5,164,134			5,250,487
Total deposits		6,256,836			6,118,023			6,323,984			6,309,529			6,405,002
Short-term borrowings		13,849			7,208			214,446			34,865			17,998
FHLB advances and other borrowings		425,000			600,000			255,000			476,000			538,000
Subordinated debt		82,744			91,656			93,617			93,546			93,475
Trust preferred debentures		51,058			50,921			50,790			50,616			50,457
Other liabilities		103,737			103,694			102,966			110,459			106,743
Total liabilities		6,933,224			6,971,502			7,040,803			7,075,015			7,211,675
Total shareholders’ equity		818,259			785,772			791,006			791,853			757,610
Total liabilities and shareholders’ equity	$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285

MIDLAND STATES BANCORP, INC.
CONSOLIDATED FINANCIAL SUMMARY (unaudited) (continued)

	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(in thousands, except per share data)		2024			2024			2023			2024			2023
Net interest income:
Interest income	$	104,834		$	103,295		$	103,585		$	309,804		$	299,615
Interest expense		49,884			48,243			44,989			143,882			121,675
Net interest income		54,950			55,052			58,596			165,922			177,940
Provision for credit losses on loans		5,000			17,000			5,168			36,000			14,182
Provision for credit losses on unfunded commitments		—			(200	)		—			(200	)		—
Total provision for credit losses		5,000			16,800			5,168			35,800			14,182
Net interest income after provision for credit losses		49,950			38,252			53,428			130,122			163,758
Noninterest income:
Wealth management revenue		7,104			6,801			6,288			21,037			18,968
Service charges on deposit accounts		3,411			3,121			3,149			9,648			8,744
Interchange revenue		3,506			3,563			3,609			10,427			10,717
Residential mortgage banking revenue		697			557			507			1,781			1,452
Income on company-owned life insurance		1,982			1,925			918			5,708			2,685
Loss on sales of investment securities, net		(44	)		(152	)		(4,961	)		(196	)		(6,478	)
Other income		2,683			1,841			2,035			9,777			9,989
Total noninterest income		19,339			17,656			11,545			58,182			46,077
Noninterest expense:
Salaries and employee benefits		24,382			22,872			22,307			71,356			69,407
Occupancy and equipment		4,393			3,964			3,730			12,499			12,052
Data processing		6,955			7,205			6,468			20,882			19,323
Professional services		1,744			2,243			1,554			6,242			4,977
Amortization of intangible assets		951			1,016			1,129			3,056			3,628
FDIC insurance		1,402			1,219			1,107			3,895			3,632
Other expense		6,906			8,960			5,743			21,149			16,395
Total noninterest expense		46,733			47,479			42,038			139,079			129,414
Income before income taxes		22,556			8,429			22,935			49,225			80,421
Income taxes		4,080			1,679			11,533			10,114			25,672
Net income		18,476			6,750			11,402			39,111			54,749
Preferred stock dividends		2,229			2,228			2,229			6,685			6,685
Net income available to common shareholders	$	16,247		$	4,522		$	9,173		$	32,426		$	48,064

Basic earnings per common share	$	0.74		$	0.20		$	0.41		$	1.47		$	2.14
Diluted earnings per common share	$	0.74		$	0.20		$	0.41		$	1.47		$	2.14

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited)

Adjusted Earnings Reconciliation

	For the Three Months Ended									For the Nine Months Ended
(dollars in thousands, except per share data)	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Income before income taxes – GAAP	$	22,556		$	8,429		$	22,935		$	49,225		$	80,421
Adjustments to noninterest income:
Loss on sales of investment securities, net		44			152			4,961			196			6,478
(Gain) on repurchase of subordinated debt		(77	)		(167	)		—			(244	)		(676	)
Total adjustments to noninterest income		(33	)		(15	)		4,961			(48	)		5,802
Adjusted earnings pre tax – non-GAAP		22,523			8,414			27,896			49,177			86,223
Adjusted earnings tax		4,071			1,675			8,389			10,101			22,755
Adjusted earnings – non-GAAP		18,452			6,739			19,507			39,076			63,468
Preferred stock dividends		2,229			2,228			2,229			6,685			6,685
Adjusted earnings available to common shareholders	$	16,223		$	4,511		$	17,278		$	32,391		$	56,783
Adjusted diluted earnings per common share	$	0.74		$	0.20		$	0.78		$	1.47		$	2.53
Adjusted return on average assets		0.95	%		0.35	%		0.98	%		0.67	%		1.07	%
Adjusted return on average shareholders’ equity		9.23	%		3.46	%		10.03	%		6.61	%		10.99	%
Adjusted return on average tangible common equity		12.67	%		3.65	%		14.24	%		8.61	%		15.80	%



Adjusted Pre-Tax, Pre-Provision Earnings Reconciliation

	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Adjusted earnings pre tax – non-GAAP	$	22,523		$	8,414		$	27,896		$	49,177		$	86,223
Provision for credit losses		5,000			16,800			5,168			35,800			14,182
Adjusted pre-tax, pre-provision earnings – non-GAAP	$	27,523		$	25,214		$	33,064		$	84,977		$	100,405
Adjusted pre-tax, pre-provision return on average assets		1.42	%		1.30	%		1.66	%		1.46	%		1.70	%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)

Efficiency Ratio Reconciliation

	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Noninterest expense – GAAP	$	46,733		$	47,479		$	42,038		$	139,079		$	129,414

Net interest income – GAAP	$	54,950		$	55,052		$	58,596		$	165,922		$	177,940
Effect of tax-exempt income		205			170			205			589			644
Adjusted net interest income		55,155			55,222			58,801			166,511			178,584

Noninterest income – GAAP		19,339			17,656			11,545			58,182			46,077
Loss on sales of investment securities, net		44			152			4,961			196			6,478
(Gain) on repurchase of subordinated debt		(77	)		(167	)		—			(244	)		(676	)
Adjusted noninterest income		19,306			17,641			16,506			58,134			51,879

Adjusted total revenue	$	74,461		$	72,863		$	75,307		$	224,645		$	230,463

Efficiency ratio		62.76	%		65.16	%		55.82	%		61.91	%		56.15	%

Return on Average Tangible Common Equity (ROATCE)

	For the Three Months Ended									For the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)		2024			2024			2023			2024			2023
Net income available to common shareholders	$	16,247		$	4,522		$	9,173		$	32,426		$	48,064

Average total shareholders’ equity—GAAP	$	795,322		$	783,846		$	771,625		$	789,712		$	771,883
Adjustments:
Preferred Stock		(110,548	)		(110,548	)		(110,548	)		(110,548	)		(110,548	)
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(13,506	)		(14,483	)		(17,782	)		(14,501	)		(18,959	)
Average tangible common equity	$	509,364		$	496,911		$	481,391		$	502,759		$	480,472
ROATCE		12.69	%		3.66	%		7.56	%		8.62	%		13.37	%

MIDLAND STATES BANCORP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (unaudited) (continued)

Tangible Common Equity to Tangible Assets Ratio and Tangible Book Value Per Share

	As of
(dollars in thousands, except per share data)	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Shareholders’ Equity to Tangible Common Equity
Total shareholders’ equity—GAAP	$	818,259		$	785,772		$	791,006		$	791,853		$	757,610
Adjustments:
Preferred Stock		(110,548	)		(110,548	)		(110,548	)		(110,548	)		(110,548	)
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(13,052	)		(14,003	)		(15,019	)		(16,108	)		(17,238	)
Tangible common equity		532,755			499,317			503,535			503,293			467,920

Less: Accumulated other comprehensive loss (AOCI)		(60,640	)		(82,581	)		(81,419	)		(76,753	)		(101,181	)
Tangible common equity excluding AOCI	$	593,395		$	581,898		$	584,954		$	580,046		$	569,101

Total Assets to Tangible Assets:
Total assets—GAAP	$	7,751,483		$	7,757,274		$	7,831,809		$	7,866,868		$	7,969,285
Adjustments:
Goodwill		(161,904	)		(161,904	)		(161,904	)		(161,904	)		(161,904	)
Other intangible assets, net		(13,052	)		(14,003	)		(15,019	)		(16,108	)		(17,238	)
Tangible assets	$	7,576,527		$	7,581,367		$	7,654,886		$	7,688,856		$	7,790,143

Common Shares Outstanding		21,393,905			21,377,215			21,485,231			21,551,402			21,594,546

Tangible Common Equity to Tangible Assets		7.03	%		6.59	%		6.58	%		6.55	%		6.01	%
Tangible Book Value Per Share	$	24.90		$	23.36		$	23.44		$	23.35		$	21.67
Tangible Book Value Per Share, excluding AOCI	$	27.74		$	27.22		$	27.23		$	26.91		$	26.35

The MIL Network –

January 25, 2025

Category: Taxation

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