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  • MIL-OSI USA: Speech of Commissioner Summer K. Mersinger to Keynote at the S&P Global Commodity Insights Nodal Trader Conference

    Source: US Commodity Futures Trading Commission

    Good morning, and thank you for the warm welcome.  A special thank you to Nodal for inviting me to join your annual Trader Conference again this year.  It is truly an honor to address all of you this morning.  I am more than two years into my role as a commissioner at the Commodity Futures Trading Commission, and I still feel humbled by the opportunity to stand on a stage with a microphone to address accomplished professionals like all of you.  My children, on the other hand, are surprised that anyone would want to hear me talk about anything, and they are even more shocked that I would need a microphone to be heard as they are convinced that the only volume I ever use when speaking is shouting.

    The topic for my speech on today’s agenda is:  New Perspectives on Energy Trading and Power Markets, and I plan to focus on the road ahead for these markets.  But before discussing the road ahead, I will start with a story from my childhood about when I learned to drive.  I say this is a story from my childhood because in South Dakota, children as young as fourteen years old are allowed to obtain a driver’s license.  As much as I miss my home state, when I look at my fourteen-year-old son and think about him driving, I see the wisdom in Virginia’s approach.

    At the ripe old age of twelve, my dad decided it was time for me to learn how to drive.  As a tall child, I could reach the gas and brake pedals, which was apparently the minimum criteria for beginning driving lessons on the farm.  To be honest, I was scared to death of driving.  But my parents said I should learn because if there was ever an emergency, and I was the only one home, I may need to drive for help.  That logic just made me scared of driving and being left alone on the farm.

    My experience as a parent teaching two teenagers to drive involved multiple practice sessions in empty parking lots before slowly graduating to quiet side roads before paying another adult to do the really scary stuff, such as driving on highways and making left turns across oncoming traffic.  I suspect that sounds familiar to many in this room as well. 

    But that suburban approach is not how I learned to drive.  My lesson – notice I said lesson, not lessons—was a little more hands-off.  On the day I learned to drive, my dad had me jump in the passenger seat of his 1977 blue Chevy pick-up truck to take a ride with him.  Oddly, my older brother jumped in another farm truck and followed close behind.

    After driving a few miles away from our house, my dad drove the truck into the middle of a freshly plowed field.  Dad threw the truck into park, jumped out, and told me to slide over to the driver’s seat.  He then shut the door, leaned into the window, and told me to drive around the field until I was comfortable enough to drive myself home.  At that point, I realized why my brother had followed us in another vehicle—it was my dad’s getaway car.

    Honestly, I panicked.  I screamed, pleaded, and begged.  But my dad was confident in his approach.  And he left me with this advice:  always keep your eyes on the road.  But don’t just look at the road immediately in front of the vehicle; be sure to watch the road ahead so you know where you are going—and so that you do not smash into a deer.

    I’m sharing this story with you today for two reasons.  First, to offer some entertainment.

    Second, I found the advice my dad gave me that day relevant to the topic for my speech today.  Specifically, I want to share with you some thoughts and observations on energy markets, the road ahead for these markets, and potential down-the-road effects on the derivatives markets that are regulated by the CFTC.

    Being a derivatives regulator can feel a little like being that driver who is looking down the road to see what is ahead.  Our markets are forward looking, offering a view into points off in the distance so drivers are prepared for the path ahead.  But, just like a careful driver needs to see what is right in front of the vehicle as much as what is on the road ahead, careful regulation requires us to also keep our eyes on current market conditions, in addition to ensuring the reliability and safety of the futures markets, which reflect the road ahead.  The CFTC is always surveilling markets, spotting trends, and monitoring for risk that could impact the futures markets.

    Now, here is where this speech will diverge from my story of learning to drive.  While I was left to teach myself how to drive and had no one willing to share their expertise with me, our work at the CFTC in following markets occurs with the benefit of a variety of internal resources (such as the Market Intelligence Branch of the Division of Market Oversight and the Office of the Chief Economist) as well as external resources (such as our advisory committees).

    At the CFTC, we have five advisory committees, each of which is sponsored by a commissioner.  These committees are comprised of subject matter experts representing a variety of viewpoints, such as private sector stakeholders, non-profit groups, academia, and other governmental entities.  As many of you know, especially those who are members, I sponsor the Energy and Environmental Markets Advisory Committee.

    Growing up on a farm in South Dakota, I always understood that the price of energy had a major impact on whether it was a good year or a bad year for the farm.  Even at a young age, I could tell you the exact cost-per-gallon of diesel because either my dad was grumbling about it as he left for the field, or it was the topic of discussion at the local café in town where the older farmers convened for their morning coffee.

    The price of diesel determined the cost of running planters, tractors, combines, and trucks.  The cost of fertilizers and pesticides are also directly linked to fossil fuel input prices, and spreading those fertilizers and pesticides required hiring a spray pilot whose services were priced based on the cost of the aviation fuel.

    Even after our crops were harvested, energy costs were critical.  Energy prices influenced the cost of storage at the grain elevators and transportation; barges and ships run on bunker fuel and trains need diesel.  Everything in the farm economy depends on the price of energy.  You might have perfect temperatures, exactly the right amount of rain at exactly the right time, and high yields but still see your net profit shrink due to high energy prices.

    As the only Commissioner with a background in production agriculture, sponsoring the Commission’s Agriculture Advisory Committee may have seemed like the obvious choice.  But I saw the EEMAC as an opportunity to focus on sectors critical to the agricultural economy and to study those energy markets to understand their impact on the markets we regulate.  The goal is for the energy futures complex to serve end-users who need to hedge those costs and to mitigate the frequent price volatility experienced by the underlying cash markets.

    As the EEMAC has held meetings and participated in discussions around energy markets, we have heard over and over that the United States has critical gaps in its energy and power infrastructure.  As those gaps widen, so do risks to the stability of these markets that become more sensitive and less resilient to forces beyond US control.  Instability and volatility in spot energy markets and prices have a direct impact on the derivative products we regulate.

    Energy infrastructure’s impact on energy prices is something that cannot be ignored, and this reality has become even more apparent in the last decade.  Of course, it makes sense that energy transmission and delivery directly impact the cost to the end consumer.  However, truly understanding how energy infrastructure market fundamentals influence energy spot and derivatives prices requires hearing directly from hardworking domestic energy producers and seeing the infrastructure up close.

    With that in mind, the EEMAC has held a series of meetings on the road, and members of the advisory committee have joined me in getting outside of Washington to see our energy production and infrastructure and to talk directly with the experts who manage these facilities.

    In our first meeting, we visited Oklahoma and focused on more traditional energy markets such as crude oil and natural gas.[1]  We visited Cushing, Oklahoma, where the WTI Crude Oil contract settles to see the pipelines and storage facilities as well as to talk with those in charge of storing, blending, and moving the oil to locations throughout the US.  During the EEMAC meeting, a witness from the Federal Energy Regulatory Commission described an anomaly in the price of natural gas in New England.[2]  Despite having one of the largest concentrations of natural gas in the Marcellus Shale just over two hundred miles away, a lack of pipeline capacity makes it impossible to fully supply New England with gas from the Marcellus Shale.[3]  This situation means that New England relies on liquified natural gas (“LNG”) supplies from tanker ships.  As a result, the price New England end users pay is based on the Henry Hub price for exported LNG, rather than the domestic production price.  This circumstance creates an unusual situation where the spot price that a natural gas-fired power plant in Massachusetts pays for its fuel is more dependent on Europe’s desire for natural gas and a global market thousands of miles away than on the price and availability of natural gas produced two states away in Pennsylvania.

    To examine power markets and electrification, we held meetings in Roy, Utah; Nashville, Tennessee; and Golden, Colorado.[4]  In the course of those meetings, we had the opportunity to tour a large Ford EV production facility in Spring Hill, Tennessee, the Bingham Canyon Copper Mine in Utah, and a startup company looking to reuse mine tailings to produce critical metals and minerals in Golden, Colorado.

    Here in the United States, we have some of the largest deposits of the metals necessary for power generation, transmission, and use, but large gaps in our infrastructure and policies render these advantages almost meaningless.  In Golden, Colorado, we learned that despite a startup company’s cutting-edge technology that can turn mine waste into critical metals and minerals, China’s dominance in rare earth markets means that they can manipulate prices at will and squeeze out competition and force any US production into bankruptcy.

    Southwest of Salt Lake City, Utah, we toured the Bingham Canyon Copper Mine.  The Bingham County Mine is the largest man-made excavation in the world.[5]  It’s also the world’s deepest open pit mine, and it has produced more copper than any other mine in the world.[6]  As you can probably guess, the US has abundant supplies of copper; however, because of a lack of domestic smelting capacity, much of the copper mined in the US must be shipped overseas, often to China, to be processed and refined.  In fact, since 2000, China has been responsible for 75% of the global smelter capacity growth.[7]

    Finally, in Spring Hill, Tennessee, we learned that car companies are increasingly concerned  about logistical challenges reducing their  ability to provide cost-competitive electric vehicles.  This is not an idle concern.  Just four weeks ago, Rivian disclosed that it will be forced to reduce production and decrease its sales target in 2024 by almost 20% because of difficulties sourcing a component used in its electric motor.[8]  And last week, to secure a steady supply of lithium, GM announced an almost $1 billion investment in the Thacker Pass mine in Nevada.[9]

    For years, the problem for domestic energy policy was how to mine, drill, and import enough raw materials to satisfy America’s growing energy demand.[10]  Even after the oil glut of the 1980s and lower energy prices, we were still concerned with our reliance on foreign energy.[11]  The continuous mantra of Presidents starting with Richard Nixon was the concept of “Energy Independence” as a policy goal.[12]  Now, not because of government mandates, plans, or policies, but thanks to technological innovation, hard work, and the deployment of private capital, that goal has largely been achieved.  We have the raw materials in the ground that we need to power American energy independence; however, we need our infrastructure to catch-up with our domestic supply.

    Returning to my driving lesson, when I look at the road ahead, I see the United States coming to a crossroads.  One road leads to more resilient infrastructure, lower prices, and energy abundance.  The other road leads to energy scarcity, higher prices, and a loss of energy independence.  The direction we take as a country will have a major impact on the energy markets and the futures markets we regulate at the CFTC.  Unfortunately, gaps in energy infrastructure lead to instability and volatility in energy markets, which have a direct impact on the derivatives markets.  If derivatives markets fail to offer adequate price discovery and risk mitigation, they will no longer serve producers and end users as appropriate tools to hedge their exposure.  That is a road we cannot afford to go down.

    As a regulator, the CFTC is not the driver of this car, but we definitely have an interest in taking the road that leads to liquid, stable, and vibrant derivatives markets that serve as a tool for hedging against risk. We can do that by ensuring that new derivative products come to market efficiently without the fear of litigation or unreasonable staff positions, and by cultivating new market structures that minimize conflicts and instill market confidence.  Our enforcement efforts should be focused on ‘bad actors’ and not on trying to shortcut deliberative policymaking.  The CFTC should prefer “responsible regulation” over “regulation by enforcement.”  To arrive at our desired destination, we all need to keep our eyes on the road, to see what is right in front of us while simultaneously paying attention to the road ahead.

    Thank you for taking this road trip with me today.  I look forward to answering your questions.

    [1] CFTC Energy and Environmental Markets Advisory Committee meeting in Stillwater, Oklahoma, September 20, 2022.

    [4] CFTC Energy and Environmental Markets Advisory Committee meeting in Nashville, Tennessee, February 28, 2023.  CFTC Energy and Environmental Markets Advisory Committee meeting in Roy, Utah, June 27, 2023.  CFTC Energy and Environmental Markets Advisory Committee meeting in Golden, Colorado, February 13, 2024.

    [5] Kristine L. Pankow, Jeffrey R. Moore, J. Mark Hale, Keith D. Koper, Tex Kubacki, Katherine M. Whidden, and Michael K. McCarter.  “Massive landslide at Utah copper mine generates wealth of geophysical data.” Geological Society of America, vol. 24, no. 1, January 2014.

    [7] Securing Copper Supply: No China, No Energy Transition, WoodsMcKenzie, August 2024, Nick Pickens, Robin Griffin, Eleni Joanides, and Zhifei Liu.

    [8] Ed Ludlow and Kiel Porter. “Rivian Misstep Triggered Parts Shortage Hobbling Its EV Output.” Bloomberg, October 7, 2024.

    [9] Camilla Hodgson.  “General Motors increases investment in lithium mine to nearly $1bn.” Financial Times, October 6, 2024.

    [10] US Energy Information Administration, “U.S. energy facts explained, Imports & Exports.”  Last updated July 15, 2024, with data from the Monthly Energy Review.

    [12] Charles Homans, “Energy Independence: A Short History.”  Foreign Policy, January 3, 2012.

    MIL OSI USA News –

  • MIL-OSI: WENDEL: Q3 2024 Trading Update

    Source: GlobeNewswire (MIL-OSI)

    PRESS RELEASE – OCTOBER 24, 2024

    Fully diluted1Net Asset Value of €184.5

    up +13.7 %2year-to-date (+5.3% since June 30)

    With the announced acquisition of Monroe Capital, Wendel dramatically expands its Asset Management platform and rebalances its business model towards more recurring cash flows and growth

    Fully diluted Net Asset Value3as of September 30, 2024: €184.5 per share

    • Fully diluted NAV per share up +16.1%4 since the start of the year when restating for the €4 dividend paid in May 2024 reflecting:
      • Strong increase in Bureau Veritas’ share price (+34% YTD)
      • Slight decrease in value of non-listed assets
      • Positive contribution of Asset Management activities (IK Partners), reflecting the increase in market multiples

    Very active implementation of new strategic directions and active portfolio rotation

    • Principal Investment:
      • €2.3 billion proceeds and value crystallization through the sale of 9% of Bureau Veritas’ share capital and the disposal of Constantia Flexibles
      • €0.7 billion invested including €625 million in Globeducate, closed on October 16
    • Asset Management:
      • €0.4 billion invested for the acquisition of 51% of IK Partners
      • $1.13 billion will be invested in equity to acquire 75% of Monroe Capital, as announced on October 22, 2024 (closing expected in the first half of 2025)

    Wendel Asset Management business is now a significant performance driver

    • Considering the announced acquisition of Monroe Capital, Wendel’s Asset Management platform will represent c.€31bn of AuM in private assets5
    • In 2025, Wendel AM business is expected to generate c.€160m6 of Fee Related Earnings (“FRE”) and c.€185m of total pre-tax profit in 2025
    • IK Partners Fee Paying AuM up +19% over the first 9 months of 2024

    Consolidated 9M 2024 sales of €5,918.1 million, up +14.6% overall and +8.9% organically

    • Very strong organic growth at Bureau Veritas (+10.4% over 9 months)
    • Solid growth at CPI (+7.9%)    
    • ACAMS (+8%) in total over 9 months, due to the earlier timing of a flagship conference than in 2023
    • Encouraging first 9 months for Stahl (+1.6% total growth), with Q3 (-4.7%) impacted by a mixed environment in its industry
    • Scalian: slight decrease of -0.2% over 9 months

    Strong financial structure and committed to remain Investment Grade

    • Debt maturity of 3.9 years with an average cost of 2.4%
    • LTV ratio at -6.8% as of September 30, 2024, and 18.9%7 on a pro forma basis
    • Pro forma total liquidity of €1.48 billion as of September 30, 2024, including €0.5 billion in cash and €875 million in committed credit facility (fully undrawn)
    Laurent Mignon, Wendel Group CEO, commented:

    “The first nine months of 2024 have been generating good value creation for shareholders, with fully diluted Net Asset Value growing by 13.7%, driven notably by Bureau Veritas’ strong stock price and operating performances.

    We continue to enhance our cash flow generation and value creation profile, by executing our strategic plan with determination, rigor and financial discipline, as demonstrated by the Monroe Capital acquisition, announced two days ago, while also focusing on premium assets in our principal investment activities, highlighted by the recent acquisition of Globeducate.

    Our transformation to a dual-strategy model is now well-grounded, with top partners in asset management such as IK Partners in private equity and now Monroe Capital in private credit.

    Following the investment in Globeducate and the announced acquisition of Monroe Capital, the priorities of Wendel’s teams are to create value on existing assets, to successfully build the private asset management platform around IK Partners and Monroe Capital, and to maintain a solid financial structure.”

    Wendel’s net asset value as of September 30, 2024: €184.5 per share on a fully diluted basis

    Wendel’s Net Asset Value (NAV) as of September 30, 2024, was prepared by Wendel to the best of its knowledge and on the basis of market data available at this date and in compliance with its methodology.

    Fully diluted Net Asset Value was €184.5 per share as of September 30, 2024 (see detail in the table below), as compared to €162.3 on December 31, 2023, representing an increase of +13.7% since the start of the year and +16.1% restated for the dividend paid in 2024. Compared to the last 20-day average share price as of September 30, the discount to the September 30, 2024, fully diluted NAV per share was -50.6%.

    Bureau Veritas contributed very positively to the increase in Net Asset Value: on September 30, its 20-day average share price was up strongly (+34.3%) compared to December 31, 2023. Impacts from share price movements from IHS Towers (-30.0%) and Tarkett (-2.8%) were negligible given the weight of Bureau Veritas in the NAV. Total value creation per share of listed assets was therefore +€26.1 over the first nine months of 2024 on a fully diluted basis.

    Unlisted assets’ contribution to the growth of the NAV was slightly negative over the first nine months of the year with a total change per share of -€1.2, reflecting a positive evolution of the market multiples and from bolt-on acquisitions, more than entirely offset by negative FX effect and selective downward revisions of outlooks for the current year (compared to December 31, 2023).

    Asset management activities were consolidated and accounted in the NAV for the first time at the end of June following the acquisition of IK Partners. There is no sponsor money included in the NAV yet, as no capital has been called. IK Partners’ valuation is up by €1.5 per share over the third quarter, driven by positive market multiples evolution.

    Cash operating costs and net financing results impacted NAV by -€1.2 over 9 months, as Wendel benefited from a positive carry. The impact of year-to-date share buybacks on fully diluted NAV per share is +€1.4 per share more as of September 30, 2024, than as of December 31, 2023. Other assets and liabilities impacted NAV by -€0.5.

    Total Net Asset Value increase amounted to €26.2 per share over the first nine months of the year before dividend payment.

    Fully diluted NAV per share of €184.5 as of September 30, 2024

    (in millions of euros)     09/30/2024 12/31/2023
    Listed investments Number of shares Share price (1) 3,800 3,867
    Bureau Veritas 120.3m/160.8m €29.9/€22.2 3,591 3,575
    IHS 63.0m/63.0m $3.1/$4.4 174 251
    Tarkett   €8.9/€9.1 35 40
    Investment in unlisted assets (2) 3,158 4,360
    Asset Management Activities (3) 449 –
    Other assets and liabilities of Wendel and holding companies (4) 95 6
    Net cash position & financial assets (5) 3,027 1,286
    Gross asset value     10,530 9,518
    Wendel bond debt     -2,386 -2,401
    IK Partners transaction deferred payment -131 –
    Net Asset Value     8,012 7,118
    Of which net debt     509 -1,115
    Number of shares     44,430,864 44,430,554
    Net Asset Value per share €180.3 €160.2
    Wendel’s 20 days share price average   €91.1 €79.9
    Premium (discount) on NAV -49.5% -50.1%
    Number of shares – fully diluted 42,469,744 43,302,016
    Fully diluted Net Asset Value, per share €184.5 €162.3
    Premium (discount) on fully diluted NAV -50.6% -50.8%

    (1)   Last 20 trading days average as of September 30, 2024, and December 31, 2023.

    (2)   Investments in unlisted companies (Stahl, Crisis Prevention Institute, ACAMS, Scalian, Wendel Growth as of September 30, 2024, also included Constantia Flexibles as of December 31, 2023). Aggregates retained for the calculation exclude the impact of IFRS16.

    (3)   IK Partners’ activity, no sponsor money has been called at this stage. It is therefore not included in the NAV at this stage.

    (4)   Of which 1,961,120 treasury shares as of September 30, 2024, and 1,128,538 treasury shares as of December 31, 2023.

    (5)   Cash position and financial assets of Wendel and holdings.

    Assets and liabilities denominated in currencies other than the euro have been converted at exchange rates prevailing on the date of the NAV calculation.

    If co-investment and management LTIP conditions are realized, subsequent dilutive effects on Wendel’s economic ownership are accounted for in NAV calculations. See page 246 of the 2023 Universal Registration Document.

    Wendel’s Principal Investments’ portfolio rotation

    Since the beginning of the year, Wendel has realized a total of €2.3 billion in disposals for its own account and has invested €0.7 billion, reflecting the acceleration of the diversification of its investment portfolio, in line with the strategy announced a few months ago:

    • Wendel announced on January 4, 2024, that it had completed the sale of Constantia Flexibles, generating total net proceeds9 for Wendel of €1,121 million for its shares, i.e. a valuation over 10% higher than the latest NAV on record before the announcement of the transaction (as at March 31, 2023).
    • Wendel announced on April 5, 2024, that it had successfully completed the sale of 40.5 million shares in Bureau Veritas, representing c.9% of the Company’s share capital, for total proceeds of approximately €1.1 billion. The transaction was carried out at a price of €27.127, or a discount of 3% from the previous day’s share price.
    • Wendel Growth realized its investment in Preligens, a leader in artificial intelligence (AI) for aerospace and defence, generating net proceeds to Wendel of c.€14.6M, translating into a gross IRR of 28%10. In addition, Wendel Growth announced on June 11, 2024, the acquisition of a minority stake in YesWeHack through an equity investment of €14.5 million.
    • Wendel reinvested €43.7m in Scalian upon the acquisition of MANNARINO Systems & Software on June 21, 2024. This Canadian company is a leading engineering services specialist for advanced technology R&D for the aviation sector, primarily in North America, with recognized expertise in safety-critical embedded software and systems.
    • On October 16, 2024, Wendel completed the acquisition of c.50% of Globeducate, one of the world’s leading international K-12 education groups, from Providence Equity Partners. Wendel invested €625 million of equity, at an Enterprise Value of c.€2 billion11, to join Providence, and both firms will now own c.50% of the group.

    Wendel’s Asset Management platform evolution

    Acquisition of Monroe Capital dramatically expands Wendel’s Asset Management platform and rebalances its business model towards more recurring cash flows and growth

    Wendel announced on October 22 that it had entered into a definitive partnership agreement including the acquisition of 75% of Monroe Capital LLC (“Monroe Capital” or “the Company”), and a sponsoring program of $800 million to accelerate Monroe Capital’s growth, and will invest in GP commitment for up to $200 million.

    For Wendel, the acquisition of a controlling stake in Monroe Capital, a private credit market leader focused on the U.S. lower middle market that has established an outstanding track record, would represent a significant and transformational advancement of the strategy it announced in March 2023 to develop its third-party asset management platform to complement its longstanding Principal Investment business.

    With IK Partners and Monroe Capital, Wendel’s third party asset management platform will reach c.€31 billion in AUM12, c.€ 455 million revenues, c.€160 million pre-tax FRE (c.€101 million in pre-tax FRE (Wendel share) by 2025 and is expected to reach €150 million (Wendel share) in pre-tax FRE by 2027 through double-digit organic growth.

    For more information, see the October 22, 2024, announcement on http://www.wendelgroup.com.

    Third Party Asset Management value creation and performance

    9 months 2024 performance

    Over the first nine months of 2024, IK Partners had particularly strong activity, generating a total of €126.4 million in revenue. Total Assets under Management (€13.3 billion, of which €3.3 billion of Dry Powder13) grew by 20% since the beginning of the year, and FPAuM14 (€9.0 billion) by 19%. Over the period, €1.7 billion of new funds were raised (IK X, PFIII and IK SO) and 7 exits have been announced, for over €1.2 billion.

    Sponsor money invested by Wendel

    Wendel committed €400 million in IK Partners funds, of which €300 million in IK X. These commitments have not yet been called.

    Principal Investment companies’ value creation and performance

    Listed Assets: 36% of Gross Asset Value

    Bureau Veritas – Strong Q3 2024 organic revenue growth; refocused portfolio with ongoing acquisitions acceleration, in line with the LEAP | 28 strategy; 2024 revenue outlook upgraded

    (Full consolidation)

    Revenue in the first nine months of 2024 totaled € 4,569.6 million, a 5.6% increase year-to-date.

    Revenue in the third quarter of 2024 amounted to € 1,547.9 million, an 8.8% increase compared to Q3 2023. Organic growth achieved a strong 13.0%, which led to 10.5% on a 9-month basis. The scope effect was a positive 0.5%, reflecting bolt-on acquisitions (contributing to +1.1%) realized in the past few quarters and partly offset by the impact of small divestments completed over the last twelve months (contributing to -0.6%). Currency fluctuations had a negative impact of 4.7%, due to the strength of the euro against most currencies.

    Three businesses delivered very strong organic growth: Marine & Offshore, up 13.2%, Industry, up 23.8%, and Certification, up 17.7%. Buildings & Infrastructure further recovered, up 9.3% organically in the third quarter (after 4.3% in the first half) while both Consumer Products Services and Agri Food & Commodities grew high-single digits organically, both reflecting improving market trends.

    Based on the 9-month performance, leveraging a healthy and growing sales pipeline and strong underlying market growth, Bureau Veritas now expects to deliver for the full year 2024:

    • 9 to 10% organic revenue growth (from “high single-digit” previously);
    • Improvement in adjusted operating margin at constant exchange rates;
    • Strong cash flow, with a cash conversion above 90%.

    For more information: https://group.bureauveritas.com

    Tarkett – Slight organic decrease year-to-date, with Q3 2024 solid organic sales growth of +2.4%, as Sports division grew at a sustained pace in the most important quarter of the year. Activity remained sluggish in flooring, particularly in EMEA and the CIS countries

    (Equity method)

    Revenue in the first nine months of 2024 amounted to €2,560.7 million, down by -1.2% compared to the same period of 2023, reflecting an organic decline of -0.4%. Sales prices remained stable over the financial year, i.e. -0.3% compared to the first nine months of 2023. In Q3 2024, Group net sales came to €1,002 million, up +1.8% compared to the third quarter of 2023. Organic growth reached +2.4%. Sales prices remained broadly stable over the year, with a slight decline of -0.5% compared to the third quarter of 2023.

    For more information: https://www.tarkett-group.com/en/investors/

    IHS Towers (not consolidated) – IHS Towers will report its Q3 2024 results in the coming weeks

    Unlisted Assets: 30% of Gross Asset Value

      Sales (in millions)
      9 months 2023 9 months 2024
    Stahl €677.3 €687.9
    CPI $103.6 $112.0
    ACAMS $67.9 $76.8
    Scalian €402.2 €401.3

    Stahl – Total sales up 1.6% for the first 9 months of 2024 on the back of Q3 market challenges in the leather market for automotive and luxury goods

    (full consolidation) 

    Stahl, the world leader in specialty coatings for flexible materials, posted total sales of €687.9 million in the first 9 months of 2024, representing a total increase of +1.6% over the period. Organically, sales were slightly down -0.4%, in a context of tougher markets in automotive and luxury goods, while FX contributed -1.3%. The acquisition of ICP Industrial Solutions Group (ISG) in March 2023 contributed positively (+3.3%) to total sales variation.

    Stahl Q3 sales were down -4.7% (-3.1% organically and -1.6% due to FX) linked to the weaker market performance of the automotive and luxury goods sectors, notably in August, which was a particularly quiet month this year as many Italian tanneries were inactive for a four-week period due to reduced activity.

    On September 27, Stahl completed the acquisition of WEILBURGER Coatings, a leading German-based manufacturer of water-based and energy cured coatings for the graphic arts and packaging industry. The transaction significantly strengthens Stahl’s packaging coatings division and supports its strategy to broaden its franchise for specialty coatings for flexible materials. This acquisition strengthens Stahl’s strategic position in Europe, positioning the company as the second-largest packaging coatings player in the region. WEILBURGER Coatings posted sales of €70 million in 2023 and has over 140 employees, primarily based in Germany.

    Stahl also announced it maintained its Platinum EcoVadis rating for the third consecutive year, reaffirming its commitment to sustainability. In August, Stahl was awarded the Living Wage certification strengthening its commitment to fair compensation and employee well-being.

    Crisis Prevention Institute reports +8.2% revenue as compared with 9M 2023

    (full consolidation)

    CPI recorded first nine months 2024 revenues of $112 million, up +8.2% compared to 9M 2023, or +8.1% organically (FX impact was +0.1%), resulting from the addition of new certified instructors across end markets and geographies, and strong consumption of training materials, signifying active training of broader staff throughout the Company’s primary customers in educational, healthcare and human services settings. The company’s year-to-date results include relatively flat year-over-year revenue for the third quarter, however, reflecting what management describes as a temporary, seasonal slowdown in new certified instructors and a difficult year-over-year comparison resulting from an unusually large enterprise program added in the third quarter of 2023.

    2024 continues to be a pivotal year for CPI in growing its impact and reach, including further global expansion with the opening of its first office in the United Arab Emirates, and new program launches, including Reframing Behavior, a new certification program designed to help educators build a more positive, supportive learning environment and prevent disruptive classroom behavior. In addition, regulatory and legislative actions continue to provide support for workplace violence prevention programs and related training, including expanded requirements in New York, Texas and California during 2024.

    ACAMS – ACAMS reports positive total growth amid accelerated transformation

    (full consolidation)

    ACAMS, the global leader in training and certifications for anti-money laundering and financial crime prevention professionals, reported year-to-date bookings of $78 million, roughly flat with reported bookings for the same period in 2023, and revenue of $77 million for the first nine months of 2024, representing 8% year-over-year growth. The results for the first nine months of 2024 reflect continued growth and market expansion in North America and Europe, largely offset by declines with customers in the Asia-Pacific region. As well, the year-to-date results include the impact of ACAMS’ flagship Las Vegas conference that was held in the third quarter of 2024 and fourth quarter of 2023. Excluding the impact of this timing difference would reduce year-over-year bookings and revenue growth for the nine months ending September 30, 2024, to -0.8% and +0.3%, respectively.

    The Company has made considerable progress in its transformation this year. Having largely completed its separation and transition to a stand-alone, independent company in 2023, ACAMS has made many investments instrumental to the Company’s future growth, including organizational changes led by the CEO, Neil Sternthal, who joined ACAMS in early 2024 and subsequently added several executives, including a new Chief Financial Officer and a Chief Revenue Officer, investments in the Company’s technology platform, business analytics and sales organizations, and new product development, most notably with the planned introduction of its Certified Anti-Fraud Specialist (CAFS) certification.

    Scalian – Slight decrease of total sales of -0.2% year-to-date, in a context of overall market slowdown

    (full consolidation since July 2023.)  

    Scalian, a European leader in digital transformation, project management and operational performance consulting, reported total revenues of €401.3 million over the first 9 months in a context of continued industry slowdown, in particular supply chain tensions in the aeronautic sector as well as the turndown of the European automotive sector. Sales are down by -2.5% organically and benefited from a positive scope effect of +2.3%.

    Scalian announced the acquisition of Dulin Technology in January 2024, a Spanish-based consulting firm specializing in cybersecurity for the financial sector, and MANNARINO Systems & Software in June 2024, a Canadian-based company that is a leading engineering services specialist with a unique know-how in advanced technology R&D for the aviation sector.

    Agenda

    Friday, December 6, 2024,

    2024 Investor Day.

    Wednesday, February 26, 2025

    Full-Year 2024 Results – Publication of NAV as of December 31, 2024, and Full-Year consolidated financial statements (post-market release)

    Thursday, April 24, 2025

    Q1 2025 Trading update – Publication of NAV as of March 31, 2025 (post-market release)

    Thursday, May 15, 2025

    Annual General Meeting

    Wednesday, July 30, 2025

    H1 2025 results – Publication of NAV as of June 30, 2025, and condensed Half-Year consolidated financial statements (post-market release)

    Appendix 1: Nine-month 2024 sales of Group companies

    Nine-month 2024 consolidated sales

    (in millions of euros) 9-month 2023 9-month 2024            Δ Organic Δ
    Bureau Veritas 4,328.0 4,569.6 +5.6% +10.4%
    Stahl (1) 677.3 687.9 +1.6% -0.4%
    Scalian (2) n.a. 409.3 n.a. n.a.
    Crisis Prevention Institute 95.6 103.1 +7.9% +8.1%
    ACAMS (3) 62.7 70.6 +12.6% +8.6%
    IK Partners(4) n.a. 77.6 n.a. n.a.
    Consolidated net sales (3)(4) 5,163.5 5,918.1 +14.6% +8.9%

    (1)   Acquisition of ICP Industrial Solutions Group (ISG) since March 2023 (sales’ contribution of €70.8M vs €62.7M as of 9M 2023)
    (2)   Scalian has a different reporting date to Wendel. Consequently, sale’s contribution corresponds to 9 months’ sales between October 1st 2023 and June 30 2024.
    (3)   The sales include a PPA restatement for an impact of -€0.5M (vs -€3.2M as of 9M 2023). Excluding this restatement, the sales amount to €71.3M vs. €66.1M as of 9M 2023. The total growth of +12.6% include a PPA effect of +4.5% and the conference revenue which generated $5,9M while this event occurred in Q4 2023 last year.        
    (4)   Contribution of five months of sales        
                                                                            

    Nine-month 2024 sales of equity accounted companies

    (in millions of euros) 9-month 2023 9-month 2024           Δ Organic Δ
    Tarkett(5) 2,592.6 2,560.7 -1.2% -0.4%

    (5)   Sales price adjustments in CIS countries are historically intended to compensate for currency movements and are therefore excluded from the “organic growth” indicator.

    Q3 2024 sales of Group companies

    Q3 2024 consolidated sales

    (in millions of euros) Q3 2023 Q3 2024             Δ Organic Δ
    Bureau Veritas 1,423.8 1,547.9 +8.8% +13.0%
    Stahl 234.3 223.3 -4.7% -3.1%
    Scalian (1) n.a. 131.1 n.a. n.a.
    Crisis Prevention Institute 42.0 41.2 -1.8% -1.0%
    ACAMS (2) 20.2 26.1 +29.1% +28.6%
    IK Partners n.a. 44.2 n.a. n.a.
    Consolidated net sales 1,720.2 2,013.8 +17.1% +10.6%

    (1)   Scalian has a different reporting date to Wendel. Consequently, sale’s contribution corresponds to 3 months’ sales between April 1st 2024 and June 30 2024.
    (2)   ACAMS Q3 2024 sales includes the conference which generated $5,9M, while this event occurred in Q4 2023 last year.                        

    Q3 2024 sales of equity accounted companies

    (in millions of euros) Q3 2023 Q3 2024           Δ Organic Δ
    Tarkett(3) 984.3 1,002.0 +1.8% +2.4%

    (3)   Sales price adjustments in CIS countries are historically intended to offset exchange rate movements, and are therefore excluded from the “organic growth” indicator.

    1 Fully-diluted NAV per share assumes all treasury shares are cancelled and a complementary liability is booked to account for all LTIP related securities in the money as of the valuation date.
    2 +13.7% compared with fully diluted NAV of €162.3 as of Dec. 31, 2023.
    3 Fully diluted of share buybacks and treasury shares. Without adjusting for dilution, NAV stands at €8,012m and €180.3 per share.
    4 Including the €4.0 per share dividend paid in 2024, and on a non-fully diluted basis NAV is up 15.0%.
    5 As of September 2024.
    6 c.€101m of FRE expected in 2025, Wendel share.

    7 Proforma of Globeducate acquisition (€-625m), sponsor money commitment in IK (€-400m), IK Partners transaction deferred payment (€-131m), Monroe Capital 75% acquisition (including estimated earnout) and GP commitments in Monroe Capital ($-200m for 2025).

    8 Proforma of Globeducate acquisition (€-625m), sponsor money commitment in IK (€-400m), IK Partners transaction deferred payment (€-131m), Monroe Capital 75% acquisition (including estimated earnout) and GP commitments in Monroe Capital ($-200m for 2025).

    9 Net proceeds after ticking fees, financial debt, dilution to the benefit of the Company’s minority investors, transaction costs and other debt-like adjustments.
    10 Gross IRR of 28%. Net IRR of 26%.
    11 EV including IFRS 16 impacts. Excluding IFRS 16, EV stands at c.€1.86 billion.
    12 As of September 2024

    13 Commitments not yet invested

    14 Fee Paying AuM

    Attachment

    The MIL Network –

  • MIL-OSI: SBM Offshore divests minority interest in FPSO Sepetiba

    Source: GlobeNewswire (MIL-OSI)

    October 24, 2024

    SBM Offshore announces it has completed the divestment of a 13.5% ownership interest in the special purpose companies related to the lease and operation of the FPSO Sepetiba to China Merchants Financial Leasing (Hong Kong) Holding Co., Limited (CMFL). This follows the announcement on February 10, 2022, of an agreement whereby CMFL would acquire its ownership interest after the FPSO Sepetiba had commenced operations. SBM Offshore is operator of the FPSO and will remain the majority shareholder with 51% ownership interest.

    FPSO Sepetiba is installed at the Mero unitized field located in the Santos Basin, approximately 180 kilometers offshore Rio de Janeiro in Brazil. The Mero unitized field is operated by Petrobras (38.6%), in partnership with Shell Brasil (19.3%), TotalEnergies (19.3%), CNPC (9.65%), CNOOC (9.65%) and Pré-Sal Petróleo S.A. (PPSA) (3.5%), representing the government in the non-contracted area.

    Corporate Profile

    SBM Offshore designs, builds, installs and operates offshore floating facilities for the offshore energy industry. As a leading technology provider, we put our marine expertise at the service of a responsible energy transition by reducing emissions from fossil fuel production, while developing cleaner solutions for alternative energy sources.

    More than 7,400 SBMers worldwide are committed to sharing their experience to deliver safe, sustainable and affordable energy from the oceans for generations to come.

    For further information, please visit our website at www.sbmoffshore.com.

    Financial Calendar   Date Year
    Third Quarter 2024 Trading Update   November 14 2024
    Full Year 2024 Earnings   February 20 2025
    Annual General Meeting   April 9 2025
    First Quarter 2025 Trading Update   May 15 2025
    Half Year 2025 Earnings   August 7 2025

    For further information, please contact:

    Investor Relations

    Wouter Holties
    Corporate Finance & Investor Relations Manager

    Media Relations

    Evelyn Tachau Brown
    Group Communications & Change Director

    Market Abuse Regulation

    This press release may contain inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

    Disclaimer

    Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. These statements may be identified by words such as ‘expect’, ‘should’, ‘could’, ‘shall’ and similar expressions. Such forward-looking statements are subject to various risks and uncertainties. The principal risks which could affect the future operations of SBM Offshore N.V. are described in the ‘Impact, Risk and Opportunity Management’ section of the 2023 Annual Report.

    Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results and performance of the Company’s business may vary materially and adversely from the forward-looking statements described in this release. SBM Offshore does not intend and does not assume any obligation to update any industry information or forward-looking statements set forth in this release to reflect new information, subsequent events or otherwise.

    This release contains certain alternative performance measures (APMs) as defined by the ESMA guidelines which are not defined under IFRS. Further information on these APMs is included in the Half-Year Management Report accompanying the Half Year Earnings 2024 report, available on our website https://www.sbmoffshore.com/investors/financial-disclosures.

    Nothing in this release shall be deemed an offer to sell, or a solicitation of an offer to buy, any securities. The companies in which SBM Offshore N.V. directly and indirectly owns investments are separate legal entities. In this release “SBM Offshore” and “SBM” are sometimes used for convenience where references are made to SBM Offshore N.V. and its subsidiaries in general. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

    “SBM Offshore®“, the SBM logomark, “Fast4Ward®”, “emissionZERO®” and “F4W®” are proprietary marks owned by SBM Offshore.

    Attachment

    The MIL Network –

  • MIL-OSI: Vanguard Announces Cash Distributions for the Vanguard ETFs

    Source: GlobeNewswire (MIL-OSI)

    TORONTO, Oct. 24, 2024 (GLOBE NEWSWIRE) — Vanguard Investments Canada Inc. today announced the final October 2024 cash distributions for certain Vanguard ETFs, listed below, that trade on Toronto Stock Exchange (TSX). Unitholders of record on October 31, 2024 will receive cash distributions payable on November 07, 2024. Details of the “per unit” distribution amounts are as follows: 

    Vanguard ETF® TSX
    Ticker
    Symbol    		 Distribution
    per Unit ($)    		 CUSIP ISIN Payment
    Frequency
    Vanguard Retirement Income ETF Portfolio VRIF 0.081577 92211X109 CA92211X1096 Monthly
    Vanguard FTSE Canadian Capped REIT Index ETF VRE 0.078389 92203B107 CA92203B1076 Monthly
    Vanguard FTSE Canadian High Dividend Yield Index ETF VDY 0.157956 92203Q104 CA92203Q1046 Monthly
               

    To learn more about the TSX-listed Vanguard ETFs, please visit www.vanguard.ca

    About Vanguard

    Canadians own CAD $103 billion in Vanguard assets, including Canadian and U.S.-domiciled ETFs and Canadian mutual funds. Vanguard Investments Canada Inc. manages CAD $70 billion in assets (as of April 30, 2024) with 37 Canadian ETFs and six mutual funds currently available. The Vanguard Group, Inc. is one of the world’s largest investment management companies and a leading provider of company-sponsored retirement plan services. Vanguard manages USD $9.3 trillion (CAD $12.8 trillion) in global assets, including over USD $2.7 trillion (CAD $3.7 trillion) in global ETF assets (as of March 30, 2024). Vanguard has offices in the United States, Canada, Mexico, Europe and Australia. The firm offers 423 funds, including ETFs, to its more than 50 million investors worldwide.

    Vanguard operates under a unique operating structure. Unlike firms that are publicly held or owned by a small group of individuals, The Vanguard Group, Inc. is owned by Vanguard’s U.S.-domiciled funds and ETFs. Those funds, in turn, are owned by Vanguard clients. This unique mutual structure aligns Vanguard interests with those of its investors and drives the culture, philosophy, and policies throughout the Vanguard organization worldwide. As a result, Canadian investors benefit from Vanguard’s stability and experience, low-cost investing, and client focus. For more information, please visit vanguard.ca.

    For more information, please contact:
    Matt Gierasimczuk
    Vanguard Canada Public Relations
    Phone: 416-263-7087
    matthew_gierasimczuk@vanguard.com

    Important information

    Commissions, management fees, and expenses all may be associated with investment funds. Investment objectives, risks, fees, expenses, and other important information are contained in the prospectus; please read it before investing. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated. Vanguard funds are managed by Vanguard Investments Canada Inc. and are available across Canada through registered dealers.

    London Stock Exchange Group companies include FTSE International Limited (“FTSE”), Frank Russell Company (“Russell”), MTS Next Limited (“MTS”), and FTSE TMX Global Debt Capital Markets Inc. (“FTSE TMX”). All rights reserved. “FTSE®”, “Russell®”, “MTS®”, “FTSE TMX®” and “FTSE Russell” and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under licence. All information is provided for information purposes only. No responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication. Neither the London Stock Exchange Group companies nor any of its licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Indexes or the fitness or suitability of the Indexes for any particular purpose to which they might be put.

    The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by The Vanguard Group, Inc. (Vanguard).   Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”);   Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Vanguard.  Vanguard ETFs are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.

    The MIL Network –

  • MIL-OSI Economics: Trade Policy Review: Maldives

    Source: World Trade Organization

    The following documents are available:

    Secretariat report

    A detailed report written independently by the WTO Secretariat.

    Government report

    A policy statement by the government of the member under review.

    From the meeting

    The Secretariat and Government reports are discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB).

    Background

    Trade Policy Reviews are an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals. Significant developments that may have an impact on the global trading system are also monitored. All WTO members are subject to review, with the frequency of review depending on the country’s size.

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    MIL OSI Economics –

  • MIL-OSI Economics: WTO hosts event on role of youth in promoting “Trade for Peace” in fragile states

    Source: WTO

    Headline: WTO hosts event on role of youth in promoting “Trade for Peace” in fragile states

    In his opening remarks, Deputy Director-General Xiangchen Zhang said: “The youth are not just the leaders of tomorrow; they are the change-makers of today.” He stressed the importance of including young voices in decision-making, noting that the WTO’s Trade for Peace (T4P) Programme’s Future Leaders Initiative aims to empower youth as active agents of stability and prosperity.
    An “Intergenerational Perspectives on Trade and Peace” panel brought together Ambassador Alan Wolff, Distinguished Visiting Fellow at the Peterson Institute for International Economics, Ms. Afomia Andualem, CEO and Co-Founder of Agelgil Eco- Packaging in Ethiopia, Mr. Eric Andrew, a WTO Young Trade Leader and Founder of AgrofixiNG in Nigeria, and Ms. Maria Guterres, Vice-Coordinator of the Timorese Youth Initiative for Development.
    The panelists explored the historical connection between trade and peace, with each speaker sharing their perspectives on how youth can contribute to fostering peace through trade.
    The event saw the launch of videos showcasing findings from students of the University of St. Gallen University in Switzerland and from experts in the area of trade and peace. These videos stemmed from a project with the University of St. Gallen undertaken from September to December 2023 aimed at delving into the intersection of trade and peace.
    The videos sparked lively breakout discussions, where participants explored practical steps to enhance youth involvement in the link between trade and peace. The discussions also encompassed the research findings of students taking part in the autumn 2023 TradeLab International Economic Law Clinic at the Geneva Graduate Institute, who explored the interlinkages between trade and peace agreements and negotiations.
    The event culminated in a collective call to action, delivered by Kérshia Cavele, Project Coordinator of the Trade for Peace Programme, urging policymakers to support youth-driven initiatives and create pathways for sustainable peace through trade. She noted that the event underscored the growing recognition of youth as essential players in addressing the challenges facing fragile and conflict affected states. By fostering academic insights with real-world experiences, the “Trade for Peace: Future Leaders Initiative” continues to pave the way for innovative solutions that leverage the multilateral trading system as a tool for peacebuilding.
    The youth event was organized during the 2024 Geneva Peace Week, which brings together organizations in Geneva and their international partners to share knowledge and best practice. At the Opening Ceremony, Ms. Milzat Salime of the WTO’s Trade for Peace team emphasized the vital role of youth in peacebuilding. WTO Deputy Director General Xiangchen Zhang participated in a high-level panel titled Peace, Trade, Development and Innovations: Insights from International Leaders and Ms Maika Oshikawa, Director of the WTO’s Accessions Division, delivered opening remarks in the session titled Trade and SME-led Growth in Fragile and Conflict-Affected Settings: Key Principles for Inter-Agency Collaboration.
    Background
    The Trade for Peace (T4P) Programme emerged from the vision of the g7+ WTO Accessions Group, a group of fragile and conflict-affected states (FCS) associated with WTO accession. Launched at the 11th WTO Ministerial Conference in 2017, the Group’s aim is to integrate FCS into the multilateral trading system through WTO membership, strengthening economic and trade policy frameworks while promoting transparency and good governance. Initially organized under the “Trade for Peace through WTO Accession” initiative, it expanded into the T4P Programme in 2021.
    The T4P Programme highlights trade and economic integration as key components in fostering durable peace and stability in fragile regions. Building on this foundation, the Trade for Peace: Future Leaders Initiative extends these efforts by engaging youth, focusing on raising awareness of their role in peacebuilding through trade, providing platforms for their voices, and fostering innovative solutions.

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    MIL OSI Economics –

  • MIL-OSI USA: Baldwin Calls on Biden Administration to Investigate China’s Role in Fueling the Fentanyl Crisis

    US Senate News:

    Source: United States Senator for Wisconsin Tammy Baldwin

    WASHINGTON, D.C. – Today, U.S. Senator Tammy Baldwin (D-WI) called on the Biden Administration to hold the People’s Republic of China (PRC) accountable for its role in actively supporting the production and export of fentanyl into the United States. Baldwin urged the Biden administration to heed the call from a group of families whose loved ones died of fentanyl overdoses and launch a formal probe into China’s role in fueling the U.S. synthetic opioid crisis.

    “I have heard from parents who have lost children, law enforcement fighting on the front lines, and advocates urging for change – all demanding we do more to stop the scourge of fentanyl. There is no doubt that the actions of the PRC have left hundreds of thousands of Americans dead and countless families in mourning,” wrote Senator Baldwin in a letter to USTR Representative Tai.

    Last week, a group of families impacted by the fentanyl crisis filed a petition under Section 301 of the Trade Act of 1974 to call on United States Trade Representative (USTR) Katherine Tai to initiate a full investigation into China’s  role in the fentanyl crisis. Over the past two decades, the PRC has become one of the most significant global centers for the manufacture, purchase, and exportation of illicit drugs and precursor chemicals. According to the petition filed by the families impacted by fentanyl, over 97 percent of all illicit fentanyl present in the U.S. originates from the PRC. The petition recommends a variety of trade countermeasures, including imposing tariffs on at least $50 billion on Chinese goods and services, and banning Chinese shipments from entering the U.S. via the de minimis loophole.

    “Despite the U.S. government’s best efforts through diplomatic channels, it has become obvious that the PRC will not voluntarily crack down on its fentanyl producers and exports. Until the PRC takes serious action to hold its own companies accountable, I urge you to seek redress for the harm inflicted upon American families. I therefore urge you to expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on the American people and our economy,” wrote Senator Baldwin.

    Senator Baldwin has long been fighting to combat the fentanyl and opioid crisis, disrupting supply chains and bolstering support for prevention and recovery services. Senator Baldwin introduced the bipartisan Ensure Accountability in the De Minimis Act to hold countries like China accountable for sending hundreds of billions of dollars’ worth of products into the U.S. market, undermining U.S. manufacturers and letting illicit substances into our communities. Last year, Senators Baldwin and Bill Cassidy, M.D. (R-LA) introduced the De Minimis Reciprocity Act to close the de minimis loophole by excluding untrustworthy countries like China from using the de minimis channel.

    A full version of the letter is available here and below.

    Dear Ambassador Tai,

    I write to express support for a petition filed under Section 301 of the Trade Act of 1974 on behalf of families who have lost loved ones to illicit fentanyl. I ask that you review the petition and initiate a full investigation into the role of the People’s Republic of China (PRC) in the fentanyl crisis, which is devastating families and the U.S. economy.

    While Congress and the Administration have worked to hold China accountable and secure commitments from the PRC, the petition alleges that the PRC continues to actively support the production and export of illicit fentanyl to the United States and has failed to implement sufficient measures to prevent these exports. We have a responsibility to use every tool available to halt the flow of fentanyl into the United States. For that reason, I urge you to take up an investigation to examine the PRC’s acts, policies, and practices that have caused severe economic harm to the United States—to say nothing of the tragic deaths of hundreds of thousands of Americans—and consider appropriate countermeasures. As described in the petition, the economic impacts of the fentanyl crisis include undermining U.S. employment and the labor market. The need for supportive services and criminal justice expenditures also put increased pressure on state and local government budgets.

    Over the past two decades, the PRC has become one of the most significant global centers for the manufacture, purchase, and exportation of illicit drugs and precursor chemicals. According to the petition filed by Facing Fentanyl, Inc., over 97 percent of all illicit fentanyl present in the U.S. originates in the PRC. Illicit synthetic fentanyl can be produced incredibly cheaply; one kilogram can be produced for less than $1,000 and sold for $80,000. Despite its low production cost, it is 50 times stronger than heroin.

    Illicit synthetic fentanyl has been the deadliest of drugs exported by the PRC, leading to the deaths of over 70,000 Americans in 2022. In Wisconsin, synthetic opioids were identified in 91 percent of opioid overdose deaths and 73 percent of all overdose deaths in the past year. Early data indicates that the number of fentanyl deaths grew by 97 percent between 2019 and 2021. In 2022, more than 1,400 Wisconsinites died from an opioid overdose.

    While the U.S. government is actively engaging with the PRC on this issue, it is imperative that we hold China accountable for its commitment to cracking down on the flow of illicit fentanyl and precursor chemicals that are fueling this crisis. Despite productive steps, the PRC has continued to provide tax incentives and other financial support for businesses – often state-owned – that export fentanyl and the illicit chemicals necessary to produce fentanyl to the U.S and countries in the Western hemisphere. The PRC has impeded investigations and prosecutions that seek to stop illicit drug manufacturers while willfully failing to identify and prosecute companies from manufacturing, selling, and exporting fentanyl to the U.S. Furthermore, the PRC conceals business operations involved in fentanyl trade and ignores money laundering schemes by companies that profit from illicit activities.

    I have heard from parents who have lost children, law enforcement fighting on the front lines, and advocates urging for change – all demanding we do more to stop the scourge of fentanyl. There is no doubt that the actions of the PRC have left hundreds of thousands of Americans dead and countless families in mourning. Despite the U.S. government’s best efforts through diplomatic channels, it has become obvious that the PRC will not voluntarily crack down on its fentanyl producers and exports. Until the PRC takes serious action to hold its own companies accountable, I urge you to seek redress for the harm inflicted upon American. I therefore urge you to expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on the American people and our economy.

    Thank you for your attention to this serious matter, and I look forward to continuing to work with you to halt the flow of deadly fentanyl into the United States.

    Sincerely,

    MIL OSI USA News –

  • MIL-OSI: Live Oak Bancshares, Inc. Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    WILMINGTON, N.C., Oct. 23, 2024 (GLOBE NEWSWIRE) — Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported third quarter of 2024 net income of $13.0 million, or $0.28 per diluted share.

    “Live Oak delivered historic production levels this quarter as our teams continue to put capital into the hands of business owners across the country,” said Live Oak Chairman and Chief Executive Officer James S. (Chip) Mahan III. “We believe our business momentum is in an exciting place and our conservative approach to growth is driving positive operating leverage, revenue, and deeper customer relationships.”

    Third Quarter 2024 Key Measures

    (Dollars in thousands, except per share data)       Increase (Decrease)    
      3Q 2024   2Q 2024   Dollars   Percent   3Q 2023
    Total revenue(1) $ 129,932     $ 125,479     $ 4,453       3.5 %   $ 127,301  
    Total noninterest expense   77,589       77,656       (67 )     (0.1 )     74,262  
    Income before taxes   17,841       36,058       (18,217 )     (50.5 )     42,760  
    Effective tax rate   27.0 %     25.2 %     n/a       n/a       6.9 %
    Net income $ 13,025     $ 26,963     $ (13,938 )     (51.7 )%   $ 39,793  
    Diluted earnings per share   0.28       0.59       (0.31 )     (52.5 )     0.88  
    Loan and lease production:                  
    Loans and leases originated $ 1,757,856     $ 1,171,141     $ 586,715       50.1 %   $ 1,073,255  
    % Fully funded   42.4 %     38.2 %     n/a       n/a       52.2 %
    Total loans and leases: $ 10,191,868     $ 9,535,766     $ 656,102       6.9 %   $ 8,775,235  
    Total assets:   12,607,346       11,868,570       738,776       6.2       10,950,460  
    Total deposits:   11,400,547       10,707,031       693,516       6.5       10,003,642  

    (1) Total revenue consists of net interest income and total noninterest income.

    Loans and Leases

    As of September 30, 2024, the total loan and lease portfolio was $10.19 billion, 6.9% above its level at June 30, 2024, and 16.1% above its level a year ago. Excluding historical Paycheck Protection Program loans, the third quarter of 2024 was the Company’s highest loan production quarter of all time. Compared to the second quarter of 2024, loans and leases held for investment increased $659.8 million, or 7.2%, to $9.83 billion while loans held for sale decreased $3.7 million, or 1.0%, to $360.0 million. Average loans and leases were $9.76 billion during the third quarter of 2024 compared to $9.38 billion during the second quarter of 2024. 

    The total loan and lease portfolio at September 30, 2024, and June 30, 2024, was comprised of 34.5% and 36.4% of guaranteed loans, respectively.

    Loan and lease originations totaled $1.76 billion during the third quarter of 2024, an increase of $586.7 million, or 50.1%, from the second quarter of 2024. Loan and lease originations increased $684.6 million, or 63.8%, from the third quarter of 2023.

    Deposits

    Total deposits increased to $11.40 billion at September 30, 2024, an increase of $693.5 million compared to June 30, 2024, and an increase of $1.40 billion compared to September 30, 2023. The increase in total deposits from prior periods was to support growth in the loan and lease portfolio as well as the Company’s targeted liquidity levels.

    Average total interest-bearing deposits for the third quarter of 2024 increased $287.5 million, or 2.8%, to $10.56 billion, compared to $10.27 billion for the second quarter of 2024. The ratio of average total loans and leases to average interest-bearing deposits was 92.5% for the third quarter of 2024, compared to 91.4% for the second quarter of 2024.

    Borrowings

    Borrowings totaled $115.4 million at September 30, 2024 compared to $117.7 million and $25.8 million at June 30, 2024, and September 30, 2023, respectively. During the first quarter of 2024, the Company increased long-term borrowings by $100.0 million through an unsecured 5.95% fixed rate 60-month term loan with a third party correspondent bank. This increase in borrowings was to strategically enhance capital levels in order to accommodate future growth expectations.

    Net Interest Income

    Net interest income for the third quarter of 2024 was $97.0 million compared to $91.3 million for the second quarter of 2024 and $89.4 million for the third quarter of 2023. The net interest margin for the third quarter of 2024 and second quarter of 2024 was 3.33% and 3.28%, respectively, an increase of five basis points quarter over quarter. During the third quarter of 2024, the average cost of interest-bearing liabilities increased by two basis points, while the average yield on interest-earning assets increased by six basis points.

    The increase in net interest income for the third quarter of 2024 compared to the third quarter of 2023 was largely driven by growth in average loans and leases held for investment. Partially mitigating this increase was a decrease in the net interest margin by four basis points arising from an increase in deposits and borrowings, combined with the increase in average cost of funds, outpacing the increase in average yield on interest-earning assets.

    Noninterest Income

    Noninterest income for the third quarter of 2024 was $32.9 million, a decrease of $1.2 million compared to the second quarter of 2024, and a decrease of $5.0 million compared to the third quarter of 2023. The primary drivers in noninterest income changes are outlined below.

    The loan servicing asset revaluation resulted in a loss of $4.2 million for the third quarter of 2024 compared to a $11.3 million gain for the third quarter of 2023. This decrease between periods was principally due to the third quarter of 2023 change in valuation techniques used to estimate the fair value of servicing rights which resulted in a nonrecurring gain of $13.7 million during that period.

    Net gains on sales of loans was $16.6 million, a $2.3 million increase compared to the second quarter of 2024 and a $4.0 million increase compared to the third quarter of 2023. The increase in net gains on sales of loans for both compared periods was the result of higher levels of market premiums combined with increased loan sale volumes. The average guaranteed loan sale premium was 107%, 106% and 105% for the third and second quarters of 2024 and third quarter of 2023, respectively. The volume of guaranteed loans sold was $266.3 million for the third quarter of 2024 compared to $250.5 million sold in the second quarter of 2024 and $225.6 million sold in the third quarter of 2023.

    Loans accounted for under the fair value option had a net gain of $2.3 million for the third quarter of 2024, compared to a net gain of $172 thousand for the second quarter of 2024 and a net loss of $568 thousand for the third quarter of 2023. The increased levels of net gains arising from the valuation of loans accounted for under the fair value option compared to the second quarter of 2024 was largely associated with lower market interest rates. The increase in net gains when compared to the third quarter of 2023 was principally due to the third quarter of 2023 change in valuation techniques used to estimate the fair value of loans measured at fair value, which resulted in a nonrecurring gain of $1.3 million during that period.

    Management fee income decreased by $2.2 million, as compared to both the second quarter of 2024 and third quarter of 2023. This decrease was the result of a restructuring of the Canapi Funds in the third quarter of 2024. In connection with that restructuring, the Company’s subsidiary Canapi Advisors voluntarily withdrew as an advisor to the funds. The Company remains an investor in the Canapi Funds and continues its focus on new and emerging financial technology companies.

    Other noninterest income for the third quarter of 2024 totaled $7.1 million compared to $11.0 million for the second quarter of 2024 and $3.5 million for the third quarter of 2023. The quarter over quarter decrease of $3.9 million was largely related to a $6.7 million gain arising from the sale of one of the Company’s aircraft in the second quarter of 2024, partially offset by a $2.4 million gain from the sale of a building in the third quarter of 2024. The $3.6 million increase compared to the third quarter of 2023 was largely related to the above mentioned $2.4 million gain from the sale of an idle building and accompanying land that was determined earlier in 2024 not to be best suited to serve the Company’s future expansion plans.

    Noninterest Expense

    Noninterest expense for the third quarter of 2024 totaled $77.6 million compared to $77.7 million for the second quarter of 2024 and $74.3 million for the third quarter of 2023. Compared to the third quarter of 2023, the increase in noninterest expense was principally impacted by smaller balance increases in various expense categories, partially offset by $2.2 million in decreased levels of FDIC insurance expense. The decrease in FDIC insurance expense was the product of favorable changes in the Company’s FDIC assessment rates.

    Asset Quality

    During the third quarter of 2024, the Company recognized net charge-offs for loans carried at historical cost of $1.7 million, compared to $8.3 million in the second quarter of 2024 and $9.1 million in the third quarter of 2023. Net charge-offs as a percentage of average held for investment loans and leases carried at historical cost, annualized, for the quarters ended September 30, 2024, June 30, 2024, and September 30, 2023, was 0.08%, 0.38% and 0.48%, respectively.

    Unguaranteed nonperforming (nonaccrual) loans and leases, excluding $8.7 million and $9.6 million accounted for under the fair value option at September 30, 2024, and June 30, 2024, respectively, increased to $49.4 million, or 0.52% of loans and leases held for investment which are carried at historical cost, at September 30, 2024, compared to $37.3 million, or 0.42%, at June 30, 2024.

    Provision for Credit Losses

    The provision for credit losses for the third quarter of 2024 totaled $34.5 million compared to $11.8 million for the second quarter of 2024 and $10.3 million for the third quarter of 2023. The level of provision expense in the third quarter of 2024 was primarily the result of specific reserve increases on individually evaluated loans and continued growth of the loan and lease portfolio. Provision expense for three individually evaluated loan relationships amounted to $13.6 million, or 60.0% and 56.3% of the increase in the total provision for loan and lease losses when compared to the second quarter of 2024 and third quarter of 2023, respectively.

    The allowance for credit losses on loans and leases totaled $168.7 million at September 30, 2024, compared to $137.9 million at June 30, 2024. The allowance for credit losses on loans and leases as a percentage of total loans and leases held for investment carried at historical cost was 1.78% and 1.57% at September 30, 2024, and June 30, 2024, respectively.

    Income Tax

    Income tax expense and related effective tax rate was $4.8 million and 27.0% for the third quarter of 2024, $9.1 million and 25.2% for the second quarter of 2024 and $3.0 million and 6.9% for the third quarter of 2023, respectively. The lower level of income tax expense for the third quarter of 2024 compared to the second quarter of 2024 was primarily the result of the decreased level of pretax income. The higher level of income tax expense for the third quarter of 2024 as compared to the third quarter of 2023 was primarily the result of lower levels of anticipated investment tax credits in 2024 as compared to the prior year.

    Conference Call

    Live Oak will host a conference call to discuss the Company’s financial results and business outlook tomorrow, October 24, 2024, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 04478. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:

    Live Telephone Dial-In

    U.S.: 800.549.8228
    International: +1 646.564.2877
    Pass Code: None Required

    Live Webcast Log-In

    Webcast Link: investor.liveoakbank.com
    Registration: Name and Email Required
    Multi-Factor Code: Provided After Registration

    Important Note Regarding Forward-Looking Statements

    Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company’s status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; the impacts of global health crises and pandemics, such as the Coronavirus Disease 2019 (COVID-19) pandemic, on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; a reduction in or the termination of the Company’s ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems or those of its third-party service providers; technological risks and developments, including cyber threats, attacks, or events; competition from other lenders; the Company’s ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company’s business; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company’s ability to comply with regulatory requirements and expectations; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

    About Live Oak Bancshares, Inc.

    Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoakbank.com.

    Contacts:

    Walter J. Phifer | CFO | Investor Relations | 910.202.6926
    Claire Parker | Corporate Communications | Media Relations | 910.597.1592

    Live Oak Bancshares, Inc.
    Quarterly Statements of Income (unaudited)
    (Dollars in thousands, except per share data)

      Three Months Ended   3Q 2024 Change vs.
      3Q 2024   2Q 2024   1Q 2024   4Q 2023   3Q 2023   2Q 2024   3Q 2023
    Interest income                     %   %
    Loans and fees on loans $ 192,170     $ 181,840     $ 176,010     $ 169,531     $ 162,722       5.7       18.1  
    Investment securities, taxable   9,750       9,219       8,954       8,746       8,701       5.8       12.1  
    Other interest earning assets   7,016       7,389       7,456       8,259       9,188       (5.0 )     (23.6 )
    Total interest income   208,936       198,448       192,420       186,536       180,611       5.3       15.7  
    Interest expense                          
    Deposits   110,174       105,358       101,998       96,695       90,914       4.6       21.2  
    Borrowings   1,762       1,770       311       265       287       (0.5 )     513.9  
    Total interest expense   111,936       107,128       102,309       96,960       91,201       4.5       22.7  
    Net interest income   97,000       91,320       90,111       89,576       89,410       6.2       8.5  
    Provision for credit losses   34,502       11,765       16,364       8,995       10,279       193.3       235.7  
    Net interest income after provision for credit losses   62,498       79,555       73,747       80,581       79,131       (21.4 )     (21.0 )
    Noninterest income                          
    Loan servicing revenue   8,040       7,347       7,624       7,342       6,990       9.4       15.0  
    Loan servicing asset revaluation   (4,207 )     (2,878 )     (2,744 )     (3,974 )     11,335       (46.2 )     (137.1 )
    Net gains on sales of loans   16,646       14,395       11,502       12,891       12,675       15.6       31.3  
    Net gain (loss) on loans accounted for under the fair value option   2,255       172       (219 )     (170 )     (568 )     1211.0       497.0  
    Equity method investments (loss) income   (1,393 )     (1,767 )     (5,022 )     47       (1,034 )     21.2       (34.7 )
    Equity security investments gains (losses), net   909       161       (529 )     (384 )     (783 )     464.6       216.1  
    Lease income   2,424       2,423       2,453       2,439       2,498       —       (3.0 )
    Management fee income   1,116       3,271       3,271       3,309       3,277       (65.9 )     (65.9 )
    Other noninterest income   7,142       11,035       9,761       8,607       3,501       (35.3 )     104.0  
    Total noninterest income   32,932       34,159       26,097       30,107       37,891       (3.6 )     (13.1 )
    Noninterest expense                          
    Salaries and employee benefits   44,524       46,255       47,275       44,274       42,947       (3.7 )     3.7  
    Travel expense   2,344       2,328       2,438       1,544       2,197       0.7       6.7  
    Professional services expense   3,287       3,061       1,878       3,052       1,762       7.4       86.5  
    Advertising and marketing expense   2,473       3,004       3,692       2,501       3,446       (17.7 )     (28.2 )
    Occupancy expense   2,807       2,388       2,247       2,231       2,129       17.5       31.8  
    Technology expense   9,081       7,996       7,723       8,402       7,722       13.6       17.6  
    Equipment expense   3,472       3,511       3,074       3,480       3,676       (1.1 )     (5.5 )
    Other loan origination and maintenance expense   4,872       3,659       3,911       3,937       3,498       33.2       39.3  
    Renewable energy tax credit investment impairment (recovery)   115       170       (927 )     14,575       —       (32.4 )     100.0  
    FDIC insurance   1,933       2,649       3,200       4,091       4,115       (27.0 )     (53.0 )
    Other expense   2,681       2,635       3,226       5,117       2,770       1.7       (3.2 )
    Total noninterest expense   77,589       77,656       77,737       93,204       74,262       (0.1 )     4.5  
    Income before taxes   17,841       36,058       22,107       17,484       42,760       (50.5 )     (58.3 )
    Income tax expense (benefit)   4,816       9,095       (5,479 )     1,321       2,967       (47.0 )     62.3  
    Net income $ 13,025     $ 26,963     $ 27,586     $ 16,163     $ 39,793       (51.7 )     (67.3 )
    Earnings per share                          
    Basic $ 0.28     $ 0.60     $ 0.62     $ 0.36     $ 0.89       (53.3 )     (68.5 )
    Diluted $ 0.28     $ 0.59     $ 0.60     $ 0.36     $ 0.88       (52.5 )     (68.2 )
    Weighted average shares outstanding                          
    Basic   45,073,482       44,974,942       44,762,308       44,516,646       44,408,997          
    Diluted   45,953,947       45,525,082       45,641,210       45,306,506       45,268,745          

    Live Oak Bancshares, Inc.
    Quarterly Balance Sheets (unaudited)
    (Dollars in thousands)

      As of the quarter ended   3Q 2024 Change vs.
      3Q 2024   2Q 2024   1Q 2024   4Q 2023   3Q 2023   2Q 2024   3Q 2023
    Assets                     %   %
    Cash and due from banks $ 666,585     $ 615,449     $ 597,394     $ 582,540     $ 534,774       8.3       24.6  
    Certificates of deposit with other banks   250       250       250       250       3,750       —       (93.3 )
    Investment securities available-for-sale   1,233,466       1,151,195       1,120,622       1,126,160       1,099,878       7.1       12.1  
    Loans held for sale   359,977       363,632       310,749       387,037       572,604       (1.0 )     (37.1 )
    Loans and leases held for investment(1)   9,831,891       9,172,134       8,912,561       8,633,847       8,202,631       7.2       19.9  
    Allowance for credit losses on loans and leases   (168,737 )     (137,867 )     (139,041 )     (125,840 )     (121,273 )     (22.4 )     (39.1 )
    Net loans and leases   9,663,154       9,034,267       8,773,520       8,508,007       8,081,358       7.0       19.6  
    Premises and equipment, net   267,032       267,864       258,071       257,881       258,041       (0.3 )     3.5  
    Foreclosed assets   8,015       8,015       8,561       6,481       6,701       —       19.6  
    Servicing assets   52,553       51,528       49,343       48,591       47,127       2.0       11.5  
    Other assets   356,314       376,370       387,059       354,476       346,227       (5.3 )     2.9  
    Total assets $ 12,607,346     $ 11,868,570     $ 11,505,569     $ 11,271,423     $ 10,950,460       6.2       15.1  
    Liabilities and shareholders’ equity                          
    Liabilities                          
    Deposits:                          
    Noninterest-bearing $ 258,844     $ 264,013     $ 226,668     $ 259,270     $ 239,536       (2.0 )     8.1  
    Interest-bearing   11,141,703       10,443,018       10,156,693       10,015,749       9,764,106       6.7       14.1  
    Total deposits   11,400,547       10,707,031       10,383,361       10,275,019       10,003,642       6.5       14.0  
    Borrowings   115,371       117,745       120,242       23,354       25,847       (2.0 )     346.4  
    Other liabilities   83,672       82,745       74,248       70,384       70,603       1.1       18.5  
    Total liabilities   11,599,590       10,907,521       10,577,851       10,368,757       10,100,092       6.3       14.8  
    Shareholders’ equity                          
    Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding   —       —       —       —       —       —       —  
    Class A common stock (voting)   361,925       356,381       349,648       344,568       340,929       1.6       6.2  
    Class B common stock (non-voting)   —       —       —       —       —       —       —  
    Retained earnings   707,026       695,172       669,307       642,817       627,759       1.7       12.6  
    Accumulated other comprehensive loss   (61,195 )     (90,504 )     (91,237 )     (84,719 )     (118,320 )     32.4       48.3  
    Total shareholders’ equity   1,007,756       961,049       927,718       902,666       850,368       4.9       18.5  
    Total liabilities and shareholders’ equity $ 12,607,346     $ 11,868,570     $ 11,505,569     $ 11,271,423     $ 10,950,460       6.2       15.1  

    (1) Includes $343.4 million, $363.0 million, $379.2 million, $388.0 million and $410.1 million measured at fair value for the quarters ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.

     

    Live Oak Bancshares, Inc.
    Statements of Income (unaudited)
    (Dollars in thousands, except per share data)

      Nine Months Ended
      September 30, 2024   September 30, 2023
    Interest income      
    Loans and fees on loans $ 550,020     $ 454,136  
    Investment securities, taxable   27,923       24,751  
    Other interest earning assets   21,861       22,852  
    Total interest income   599,804       501,739  
    Interest expense      
    Deposits   317,530       243,512  
    Borrowings   3,843       2,498  
    Total interest expense   321,373       246,010  
    Net interest income   278,431       255,729  
    Provision for credit losses   62,631       42,328  
    Net interest income after provision for credit losses   215,800       213,401  
    Noninterest income      
    Loan servicing revenue   23,011       20,057  
    Loan servicing asset revaluation   (9,829 )     8,860  
    Net gains on sales of loans   42,543       33,654  
    Net gain (loss) on loans accounted for under the fair value option   2,208       (3,369 )
    Equity method investments (loss) income   (8,182 )     (6,041 )
    Equity security investments gain (losses), net   541       (585 )
    Lease income   7,300       7,568  
    Management fee income   7,658       10,015  
    Other noninterest income   27,938       11,467  
    Total noninterest income   93,188       81,626  
    Noninterest expense      
    Salaries and employee benefits   138,054       130,778  
    Travel expense   7,110       7,378  
    Professional services expense   8,226       4,685  
    Advertising and marketing expense   9,169       10,058  
    Occupancy expense   7,442       6,259  
    Technology expense   24,800       23,456  
    Equipment expense   10,057       11,517  
    Other loan origination and maintenance expense   12,442       10,867  
    Renewable energy tax credit investment (recovery) impairment   (642 )     69  
    FDIC insurance   7,782       12,579  
    Other expense   8,542       12,035  
    Total noninterest expense   232,982       229,681  
    Income before taxes   76,006       65,346  
    Income tax expense   8,432       7,611  
    Net income $ 67,574     $ 57,735  
    Earnings per share      
    Basic $ 1.50     $ 1.30  
    Diluted $ 1.48     $ 1.28  
    Weighted average shares outstanding      
    Basic   44,937,409       44,298,798  
    Diluted   45,707,245       45,023,739  

    Live Oak Bancshares, Inc.
    Quarterly Selected Financial Data
    (Dollars in thousands, except per share data)

      As of and for the three months ended
      3Q 2024   2Q 2024   1Q 2024   4Q 2023   3Q 2023
    Income Statement Data                  
    Net income $ 13,025     $ 26,963     $ 27,586     $ 16,163     $ 39,793  
    Per Common Share                  
    Net income, diluted $ 0.28     $ 0.59     $ 0.60     $ 0.36     $ 0.88  
    Dividends declared   0.03       0.03       0.03       0.03       0.03  
    Book value   22.32       21.35       20.64       20.23       19.12  
    Tangible book value(1)   22.24       21.28       20.57       20.15       19.04  
    Performance Ratios                  
    Return on average assets (annualized)   0.43 %     0.93 %     0.98 %     0.58 %     1.46 %
    Return on average equity (annualized)   5.21       11.39       11.93       7.36       18.68  
    Net interest margin   3.33       3.28       3.33       3.32       3.37  
    Efficiency ratio(1)   59.72       61.89       66.89       77.88       58.34  
    Noninterest income to total revenue   25.35       27.22       22.46       25.16       29.76  
    Selected Loan Metrics                  
    Loans and leases originated $ 1,757,856     $ 1,171,141     $ 805,129     $ 981,703     $ 1,073,255  
    Outstanding balance of sold loans serviced   4,452,750       4,292,857       4,329,097       4,238,328       4,028,575  
    Asset Quality Ratios                  
    Allowance for credit losses to loans and leases held for investment(3)   1.78 %     1.57 %     1.63 %     1.53 %     1.56 %
    Net charge-offs(3) $ 1,710     $ 8,253     $ 3,163     $ 4,428     $ 9,122  
    Net charge-offs to average loans and leases held for investment(2) (3)   0.08 %     0.38 %     0.15 %     0.22 %     0.48 %
                       
    Nonperforming loans and leases at historical cost(3)                  
    Unguaranteed $ 49,398     $ 37,340     $ 43,117     $ 39,285     $ 33,255  
    Guaranteed   166,177       122,752       105,351       95,678       65,837  
    Total   215,575       160,092       148,468       134,963       99,092  
    Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment(3)   0.52 %     0.42 %     0.51 %     0.48 %     0.43 %
                       
    Nonperforming loans at fair value(4)                  
    Unguaranteed $ 8,672     $ 9,590     $ 7,942     $ 7,230     $ 6,518  
    Guaranteed   49,822       51,570       47,620       41,244       39,378  
    Total   58,494       61,160       55,562       48,474       45,896  
    Unguaranteed nonperforming fair value loans to fair value loans held for investment(4)   2.53 %     2.64 %     2.09 %     1.86 %     1.59 %
                       
    Capital Ratios                  
    Common equity tier 1 capital (to risk-weighted assets)   11.19 %     11.85 %     11.89 %     11.73 %     11.63 %
    Tier 1 leverage capital (to average assets)   8.60       8.71       8.69       8.58       8.56  

    Notes to Quarterly Selected Financial Data
    (1) See accompanying GAAP to Non-GAAP Reconciliation.
    (2) Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized.
    (3) Loans and leases at historical cost only (excludes loans measured at fair value).
    (4) Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).

    Live Oak Bancshares, Inc.
    Quarterly Average Balances and Net Interest Margin
    (Dollars in thousands)

      Three Months Ended
    September 30, 2024    		   Three Months Ended
    June 30, 2024
      Average Balance   Interest   Average Yield/Rate   Average Balance   Interest   Average Yield/Rate
    Interest-earning assets:                      
    Interest-earning balances in other banks $ 519,340     $ 7,016       5.37 %   $ 555,570     $ 7,389       5.35 %
    Investment securities   1,287,410       9,750       3.01       1,263,675       9,219       2.93  
    Loans held for sale   409,902       9,859       9.57       387,824       9,329       9.67  
    Loans and leases held for investment(1)   9,354,522       182,311       7.75       8,997,164       172,511       7.71  
    Total interest-earning assets   11,571,174       208,936       7.18       11,204,233       198,448       7.12  
    Less: Allowance for credit losses on loans and leases   (137,285 )             (136,668 )        
    Noninterest-earning assets   567,098               562,488          
    Total assets $ 12,000,987             $ 11,630,053          
    Interest-bearing liabilities:                      
    Interest-bearing checking $ 350,239     $ 4,892       5.56 %   $ 304,505     $ 4,267       5.64 %
    Savings   5,043,930       51,516       4.06       4,804,037       48,617       4.07  
    Money market accounts   134,481       190       0.56       128,625       186       0.58  
    Certificates of deposit   5,028,830       53,576       4.24       5,032,856       52,288       4.18  
    Total deposits   10,557,480       110,174       4.15       10,270,023       105,358       4.13  
    Borrowings   116,925       1,762       6.00       119,321       1,770       5.97  
    Total interest-bearing liabilities   10,674,405       111,936       4.17       10,389,344       107,128       4.15  
    Noninterest-bearing deposits   237,387               223,026          
    Noninterest-bearing liabilities   90,079               70,667          
    Shareholders’ equity   999,116               947,016          
    Total liabilities and shareholders’ equity $ 12,000,987             $ 11,630,053          
    Net interest income and interest rate spread     $ 97,000       3.01 %       $ 91,320       2.97 %
    Net interest margin           3.33               3.28  
    Ratio of average interest-earning assets to average interest-bearing liabilities           108.40 %             107.84 %

    (1) Average loan and lease balances include non-accruing loans and leases.

    Live Oak Bancshares, Inc.
    GAAP to Non-GAAP Reconciliation
    (Dollars in thousands)

      As of and for the three months ended
      3Q 2024   2Q 2024   1Q 2024   4Q 2023   3Q 2023
    Total shareholders’ equity $ 1,007,756     $ 961,049     $ 927,718     $ 902,666     $ 850,368  
    Less:                  
    Goodwill   1,797       1,797       1,797       1,797       1,797  
    Other intangible assets   1,606       1,644       1,682       1,721       1,759  
    Tangible shareholders’ equity (a) $ 1,004,353     $ 957,608     $ 924,239     $ 899,148     $ 846,812  
    Shares outstanding (c)   45,151,691       45,003,856       44,938,673       44,617,673       44,480,215  
    Total assets $ 12,607,346     $ 11,868,570     $ 11,505,569     $ 11,271,423     $ 10,950,460  
    Less:                  
    Goodwill   1,797       1,797       1,797       1,797       1,797  
    Other intangible assets   1,606       1,644       1,682       1,721       1,759  
    Tangible assets (b) $ 12,603,943     $ 11,865,129     $ 11,502,090     $ 11,267,905     $ 10,946,904  
    Tangible shareholders’ equity to tangible assets (a/b)   7.97 %     8.07 %     8.04 %     7.98 %     7.74 %
    Tangible book value per share (a/c) $ 22.24     $ 21.28     $ 20.57     $ 20.15     $ 19.04  
    Efficiency ratio:                  
    Noninterest expense (d) $ 77,589     $ 77,656     $ 77,737     $ 93,204     $ 74,262  
    Net interest income   97,000       91,320       90,111       89,576       89,410  
    Noninterest income   32,932       34,159       26,097       30,107       37,891  
    Total revenue (e) $ 129,932     $ 125,479     $ 116,208     $ 119,683     $ 127,301  
    Efficiency ratio (d/e)   59.72 %     61.89 %     66.89 %     77.88 %     58.34 %
    Pre-provision net revenue (e-d) $ 52,343     $ 47,823     $ 38,471     $ 26,479     $ 53,039  
                                           

    This press release presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company’s business, for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.

    The MIL Network –

  • MIL-OSI Security: Former Federal Employee Pleads Guilty to Mishandling Classified Materials

    Source: Office of United States Attorneys

    Margaret Anne Ashby, 26, of Henderson, Nevada, pleaded guilty today for mishandling sensitive documents as a former employee of a Department of Defense component agency.

    As described in the plea agreement, starting in March 2020, Ashby was a civilian employee of a Department of Defense component agency located in the Southern District of Georgia, and during this time held a top secret security clearance as required for her employment.

    From February 2022 to May 2022, Ashby, without authority, knowingly removed documents and materials containing classified information “concerning the national defense or foreign relations of the United States . . . with the intent to retain them at unauthorized locations, including her residence in the Southern District of Georgia and in digital files saved via a personal computing device located in the Southern District of Georgia.”

    A sentencing date has not yet been set. Ashby faces a maximum penalty of five years in prison and three years of supervised release for mishandling sensitive documents, along with substantial financial penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, U.S. Attorney Jill E. Steinberg for the Southern District of Georgia, and Robert Wells of the FBI National Security Branch announced the case.

    The FBI investigated the case.

    Assistant U.S. Attorneys L. Alexander Hamner and Darron J. Hubbard for the Southern District of Georgia and Trial Attorney David J. Ryan of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

    MIL Security OSI –

  • MIL-OSI Security: Santa Maria Man Charged with Weapon of Mass Destruction Offense in Connection with Bomb Attack in Lobby of County Courthouse

    Source: Office of United States Attorneys

    LOS ANGELES – A three-count federal grand jury indictment returned today charges a Santa Barbara County man with committing a bomb attack at a courthouse in Santa Maria in which several people were injured.

    Nathaniel James McGuire, 20, of Santa Maria, was charged with one count of using a weapon of mass destruction, one count of maliciously damaging a building by means of explosive, and one count of possessing unregistered destructive devices. McGuire has been in custody since his arrest in September, shortly after the attack. 

    McGuire’s arraignment is scheduled for October 25 in United States District Court in downtown Los Angeles.

    “The facts alleged in the indictment are disturbing,” said United States Attorney Martin Estrada. “The new charge of using a weapon of mass destruction underscores how seriously we are treating this misconduct and my office’s determination to hold accountable those who seek to bring violence upon our courts, law enforcement personnel, and the public.” 

    “Any time an individual commits such an act of terror, victims are traumatized and there is a potential for tragic consequences” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “If convicted, Mr. McGuire faces significant prison time thanks to the combined efforts of our local and federal law enforcement partners.” 

    “We are grateful that the FBI and the U.S. Attorney’s Office have taken this serious case to the grand jury, and that they have returned an indictment,” said Santa Barbara County Sheriff Bill Brown. “This crime shocked our entire community and we are pleased to see that the suspect in this case is being held accountable.”

    According to the indictment and criminal complaint, on September 25, McGuire entered a courthouse of Santa Barbara County Superior Court and threw a bag into the lobby. The bag exploded and McGuire left the courthouse on foot. The explosion injured at least five people who were near the bomb when it exploded.

    Shortly thereafter, McGuire was apprehended and detained by law enforcement officials as he was trying to access a red Ford Mustang car parked outside the building. McGuire allegedly yelled that the government had taken his guns and that everyone needed to fight, rise up, and rebel.

    Inside the car, a deputy saw ammunition, a flare gun, and a box of fireworks. A search of the car revealed a shotgun, a rifle, more ammunition, a suspected bomb, and 10 Molotov cocktails. Law enforcement later rendered the bomb safe. McGuire told law enforcement he intended to re-enter the courthouse with the firearms in order to kill a judge.

    A search of McGuire’s residence revealed an empty can with nails glued to the outside, a duffel bag containing matches, black powder, used and unused fireworks, and papers that appeared to be recipes for explosive material.

    An indictment is merely an allegation that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

    If convicted of all charges, McGuire would face a mandatory minimum sentence of seven years in federal prison and a statutory maximum sentence of life in federal prison.

    The FBI’s Joint Terrorism Task Force, the Santa Barbara County Sheriff’s Office, and Santa Maria Police Department are investigating this matter.

    Assistant United States Attorneys Mark Takla and Kathrynne N. Seiden of the Terrorism and Export Crimes Section are prosecuting this case with substantial assistance from Trial Attorney Patrick Cashman of the Counterterrorism Section in the Department of Justice’s National Security Division.

    MIL Security OSI –

  • MIL-OSI USA: Duckworth, Durbin Join Congressional Democrats in Filing Amicus Brief Urging Ninth Circuit Court to Affirm that EMTALA Requires Hospitals to Provide Emergency Stabilizing Care, Including Abortion Care, Preempting Idaho’s Dacronian Abortion Ban

    US Senate News:

    Source: United States Senator for Illinois Tammy Duckworth
    October 22, 2024
    After the Supreme Court dismissed the case, returning it to the Ninth Circuit Court, 259 Members of Congress ask the Ninth Circuit to affirm district court decision that under EMTALA, hospitals participating in Medicare must provide emergency stabilizing treatment to patients, including abortion care when necessary
    [WASHINGTON, D.C.] – Today, U.S. Senator Tammy Duckworth (D-IL) and U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, joined more than 250 Members of Congress in submitting an amicus brief to the U.S. Court of Appeals for the Ninth Circuit in Moyle v. United States and Idaho v. United States, two consolidated cases concerning the Emergency Medical Treatment and Labor Act (EMTALA) under consideration by the en banc Ninth Circuit.  EMTALA is a federal law that requires hospitals that receive Medicare funding to provide necessary “stabilizing treatment” to patients experiencing medical emergencies, which can include abortion care.
    After the Dobbs decision in 2022, a draconian anti-abortion law in Idaho went into effect that makes it a felony for a doctor to terminate a patient’s pregnancy unless it is “necessary” to prevent the patient’s death.  The United States sued the State of Idaho, arguing that the state’s law is preempted by EMTALA in those circumstances in which abortion may not be necessary to prevent imminent death, but still constitutes the necessary stabilizing treatment for a patient’s emergency medical condition.  The district court agreed; it held that in those limited, but critically important situations, EMTALA requires Medicare-participating hospitals to provide abortion as an emergency medical treatment.  Idaho Republicans appealed that ruling to the Supreme Court, which lifted the injunction and took the case in January.  In March, 258 Members filed an amicus brief, asking the Supreme Court to affirm the district court decision.  In June, the Supreme Court dismissed the case but without a ruling on the merits, sending the case back to the Ninth Circuit Court and reinstating the district court’s injunction.
    In their brief in support of the Justice Department, the lawmakers ask the Ninth Circuit to uphold the district court’s ruling.  They argue that the congressional intent, text and history of EMTALA make clear that covered hospitals must provide abortion care when it is the necessary stabilizing treatment for a patient’s emergency medical condition and that EMTALA preempts Idaho’s abortion ban in emergency situations that present a serious threat to a patient’s health.
    “[T]he 99th Congress passed EMTALA to ensure that every person who visits a Medicare-funded hospital with an ‘emergency medical condition’ is offered stabilizing treatment,” the Members write in their amicus brief.  “Congress chose broad language for that mandate, requiring hospitals that participate in the Medicare program to provide ‘such treatment as may be required to stabilize the medical condition.’… That text—untouched by Congress for the past three decades—makes clear that in situations in which a doctor determines that abortion constitutes the ‘[n]ecessary stabilizing treatment’ for a pregnant patient, federal law requires the hospital to offer it.  Yet Idaho has made providing that care a felony, in direct contravention of EMTALA’s mandate.”
    Importantly, the Members note that in this case, “respecting the supremacy of federal law is about more than just protecting our system of government; it is about protecting people’s lives.  If this Court allows Idaho’s near-total abortion ban to supersede federal law, pregnant patients in Idaho will continue to be denied appropriate medical treatment, placing them at heightened risk for medical complications and severe adverse health outcomes… And health care providers, unwilling to let Idaho’s law override their medical judgment regarding their patients’ best interests, will continue their exile from Idaho, creating maternity-care ‘deserts’ all over the state.”  The Members point to numerous reports of OB/GYNs leaving Idaho en masse since the state’s abortion ban went into effect.  Idaho has since lost 55 percent of its maternal-fetal medicine specialists and three rural hospitals have shut down maternity services altogether.
    “These are not hypothetical scenarios.  Because Idaho’s abortion ban contains no clear exceptions for the ‘emergency medical conditions’ covered by EMTALA, it forces physicians to wait until their patients are on the verge of death before providing abortion care. The result in other states with similar laws has been ‘significant maternal morbidity,’” write the Members, pointing to harrowing reports of pregnant women with severe health complications being denied necessary abortion care, including an Idaho woman who was flown to Utah for an abortion while hemorrhaging, leaking amniotic fluid and terrified that she would not survive to care for her two other children.  “Federal law does not allow Idaho to endanger the lives of its residents in this way.”
    In their brief, the Members also clarify that the references to “unborn child” in EMTALA were intended to expand hospitals’ obligations with respect to providing stabilizing treatment—not contract them or take away the obligation to provide abortion care in certain circumstances.
    The Members’ brief also counters an argument from Idaho and its amici that the Supremacy Clause does not apply in this case because EMTALA was passed using Spending Clause authority, and therefore acts only as a condition on Medicare funding.  The Members make clear that all laws passed by Congress are entitled to preemption—regardless of their source of constitutional authority and states cannot pass laws that make it impossible for private parties to accept federal funding, inhibiting the purpose of the federal law. 
    “EMTALA requires abortion when necessary to stabilize a patient with an emergency medical condition, Idaho’s near-total abortion ban is preempted to the extent that it prevents doctors from providing that care,” the Members write. “This Court should reject Appellants’ novel theory that EMTALA is not entitled to preemptive effect because it was enacted pursuant to Congress’s spending power.  Under the Supremacy Clause, all ‘the constitutional laws enacted by congress,’ constitute ‘the supreme Law of the Land,’. As the Supreme Court has repeatedly held, the principle of federal supremacy applies to laws passed pursuant to Congress’s spending authority no less than it does to laws effectuating other enumerated powers.”
    “In sum, EMTALA plainly requires hospitals that participate in the Medicare program to provide abortion care when, in a doctor’s medical judgment, it constitutes the ‘[n]ecessary stabilizing treatment’ for a patient’s ‘emergency medical condition.’”
    The lawmakers conclude by asking the Ninth Circuit to affirm the district court’s decision that EMTALA requires Medicare-participating hospitals to provide abortion care when it is necessary as emergency medical treatment.
    In the Senate, the amicus brief was signed by 48 U.S. Senators, including Duckworth and Durbin.  Also signing the amicus brief were U.S. Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Ron Wyden (D-OR), Tammy Baldwin (D-WI), Michael Bennet (D-CO), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Sherrod Brown (D-OH), Laphonza Butler (D-CA), Maria Cantwell (D-WA), Ben Cardin (D-MD), Tom Carper (D-DE), Bob Casey Jr. (D-NJ), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Martin Heinrich (D-NM), George Helmy (D-NJ), John Hickenlooper (D-CO), Mazie Hirono (D-HI), Tim Kaine (D-VA), Mark Kelly (D-AZ), Angus King Jr. (D-ME), Amy Klobuchar (D-MN), Ben Ray Luján (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR), Chris Murphy (D-CT), Alex Padilla (D-CA), Gary Peters (D-MI), Jack Reed (D-RI), Jacky Rosen (D-NV), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Kyrsten Sinema (I-AZ), Tina Smith (D-MN), Debbie Stabenow (D-MI), Jon Tester (D-MT), Chris Van Hollen (D-MD), Mark Warner (D-VA), Raphael Warnock (D-GA), Elizabeth Warren (D-MA), Peter Welch (D-VT), Sheldon Whitehouse (D-RI).
    In the House, the brief was signed by 211 U.S. Representatives.
    The lawmakers’ amicus brief to the Supreme Court can be read in full HERE.
    -30-

    MIL OSI USA News –

  • MIL-OSI New Zealand: First RMA Amendment Bill passes third reading

    Source: New Zealand Government

    The coalition Government’s Resource Management (Freshwater and Other Matters) Amendment Bill has passed its third reading in Parliament, delivering on the Government’s commitment to improve resource management laws and give greater certainty to councils and consent applicants, RMA Reform Minister Chris Bishop, Agriculture Minister Todd McClay, Environment Minister Penny Simmonds and Associate Minister for the Environment Andrew Hoggard say.

    “Our RMA Reform programme is happening in three phases. We repealed the previous government’s excessively complicated reforms through Phase One before Christmas last year. Now in Phase Two we’re implementing a one-stop-shop fast-track consenting regime, legislating for a raft of ‘quick fixes’ to the interim RMA through two Amendment Bills and a suite of changes to national direction, and then in Phase Three we’ll fully replace the RMA with a new regime guided by private property rights,” Mr Bishop says.

    “This first Amendment Bill is focused on targeted changes that can take effect quickly and give certainty to councils and consent applicants, while new legislation to replace the RMA is developed,” Ms Simmonds says.

    “Farming, mining and other primary industries are critical to rebuilding the New Zealand economy. This Bill reduces the regulatory burden on resource consent applicants and supports development in these key sectors,” Mr McClay says.

    The Bill makes several changes to the Resource Management Act and national direction.

    The Bill:

    • clarifies that resource consent applicants no longer need to demonstrate their proposed activities follow the Te Mana o te Wai hierarchy of obligations, as set out in the National Policy Statement for Freshwater Management (NPS-FM).
    • amends stock exclusion regulations in relation to sloped land.
    • repeals the permitted and restricted discretionary intensive winter grazing regulations and replaces these with new regulations relating to critical source areas and riparian setbacks
    • aligns the consenting pathway for coal mining with the pathway for other extractive activities across the National Policy Statement for Indigenous Biodiversity (NPS-IB), NPS-FM, and the National Environmental Standards for Freshwater (NES-F).
    • suspends the requirement for councils to identify new Significant Natural Areas (SNAs) in accordance with the NPS-IB for three years, to give enough time for a thorough review of how they operate.
    • streamlines the process for preparing national direction under the RMA
    • clarifies councils’ ability to consent discharges where consent conditions will reduce effects over time
    • pauses the roll out of Freshwater Farm Plans across the country
    • restricts councils’ ability to notify new freshwater plans from 22 October 2024 until the gazettal of the replacement National Policy Statement for Freshwater Management (NPS-FM).

    Agriculture Minister Todd McClay says improving primary sector profitability is key to boosting our largest exporting sector. Regulations need to be fit-for-purpose and not place unnecessary compliance costs on farmers and growers. 

    “By removing the need for resource consent applicants to demonstrate that their activities follow the hierarchy of obligations, we’ve cut an unnecessary compliance burden and are reducing costs faced by farmers and growers,” Mr McClay says.

    “The changes to stock exclusion and winter grazing regulations represent a move to a more risk-based, catchment-focussed approach.

    “We’ve removed the low slope map and will let regional councils and individual farmers determine where stock need to be excluded, based on risk. The focus is on farm-level and regionally suitable solutions. 

    “Regional councils tell us there has been a significant improvement in winter grazing practices, with farmers changing where they plant fodder crops and how they manage winter grazing.

    “Importantly, non-regulatory measures are already in place to support the continued improvement of winter grazing practices going forward.” Mr McClay says.

    Associate Environment Minister Andrew Hoggard says freshwater farm plans are an essential for managing freshwater risks. 

    “The intention is that freshwater farm plans will provide an effective way to manage the impacts of farming activities on freshwater, including winter grazing and stock exclusion, in a risk-based and practical way.

    “These changes will help bring efficiencies to a system that was too complex. The Government has worked at pace to simplify and improve the freshwater farm plan system. We have delivered for farmers and growers.”

    The Resource Management (Freshwater and Other Matters) Amendment Bill will come into force the day after it receives Royal Assent.

    MIL OSI New Zealand News –

  • MIL-OSI USA: Wyden, Colleagues File Amicus Brief Urging Ninth Circuit Court to Affirm that Federal Law Requires Hospitals to Provide Emergency Stabilizing Care Including Abortion Care, Preempts Idaho’s Draconian Abortion Ban

    US Senate News:

    Source: United States Senator Ron Wyden (D-Ore)

    October 23, 2024

    Lawmakers: “In this case, respecting the supremacy of federal law is about more than just protecting our system of government; it is about protecting people’s lives.”

    Washington D.C.— U.S. Senator Ron Wyden said today he is among the co-leaders of an amicus brief from 259 Members of Congress submitted to the U.S. Court of Appeals for the Ninth Circuit in Moyle v. United States and Idaho v. United States, two consolidated cases concerning the Emergency Medical Treatment and Labor Act under consideration by the en banc Ninth Circuit. 

    This federal law known as EMTALA requires hospitals that receive Medicare funding to provide necessary “stabilizing treatment” to patients experiencing medical emergencies, which can include abortion care.

    After the Dobbs decision in 2022, a draconian anti-abortion law in Idaho went into effect that makes it a felony for a doctor to terminate a pregnancy unless it is “necessary” to prevent the patient’s death. The United States sued the State of Idaho, arguing that the state’s law is preempted by EMTALA in those circumstances in which abortion may not be necessary to prevent imminent death, but still constitutes the necessary stabilizing treatment for a patient’s emergency medical condition. The district court agreed and held that in those limited, but critically important situations, EMTALA requires Medicare-participating hospitals to provide abortion as an emergency medical treatment. Idaho Republicans appealed that ruling to the Supreme Court, which lifted the injunction and took the case in January—in March, 258 Members filed an amicus brief, asking the Supreme Court to affirm the district court decision. In June, the Supreme Court dismissed the case but without a ruling on the merits, sending the case back to the Ninth Circuit Court and reinstating the district court’s injunction.

    In their brief in support of the Justice Department, the lawmakers ask the Ninth Circuit to uphold the district court’s ruling. They argue that the congressional intent, text, and history of EMTALA make clear that covered hospitals must provide abortion care when it is the necessary stabilizing treatment for a patient’s emergency medical condition, and that EMTALA preempts Idaho’s abortion ban in emergency situations that present a serious threat to a patient’s health. 

    “[T]he 99th Congress passed EMTALA to ensure that every person who visits a Medicare-funded hospital with an ‘emergency medical condition’ is offered stabilizing treatment,” the Members wrote in their amicus brief. “Congress chose broad language for that mandate, requiring hospitals that participate in the Medicare program to provide ‘such treatment as may be required to stabilize the medical condition.’… That text—untouched by Congress for the past three decades—makes clear that in situations in which a doctor determines that abortion constitutes the ‘[n]ecessary stabilizing treatment’ for a pregnant patient, federal law requires the hospital to offer it. Yet Idaho has made providing that care a felony, in direct contravention of EMTALA’s mandate.”

    Importantly, the Senate and House members note that in this case, “respecting the supremacy of federal law is about more than just protecting our system of government; it is about protecting people’s lives. If this Court allows Idaho’s near-total abortion ban to supersede federal law, pregnant patients in Idaho will continue to be denied appropriate medical treatment, placing them at heightened risk for medical complications and severe adverse health outcomes… And health care providers, unwilling to let Idaho’s law override their medical judgment regarding their patients’ best interests, will continue their exile from Idaho, creating maternity-care ‘deserts’ all over the state.” The lawmakers point to numerous reports of OB/GYNs leaving Idaho en masse since the state’s abortion ban went into effect—Idaho has since lost 55 percent of its maternal-fetal medicine specialists and three rural hospitals have shut down maternity services altogether.

    “These are not hypothetical scenarios. Because Idaho’s abortion ban contains no clear exceptions for the “emergency medical conditions” covered by EMTALA, it forces physicians to wait until their patients are on the verge of death before providing abortion care. The result in other states with similar laws has been ‘significant maternal morbidity,’” wrote the lawmakers, pointing to harrowing reports of pregnant women with severe health complications being denied necessary abortion care, including an Idaho woman who was flown to Utah for an abortion while hemorrhaging, leaking amniotic fluid, and terrified that she would not survive to care for her two other children. “Federal law does not allow Idaho to endanger the lives of its residents in this way.”

    In their brief, the lawmakers also clarify that the references to “unborn child” in EMTALA were intended to expand hospitals’ obligations with respect to providing stabilizing treatment—not contract them or take away the obligation to provide abortion care in certain circumstances.

    “In sum, EMTALA plainly requires hospitals that participate in the Medicare program to provide abortion care when, in a doctor’s medical judgment, it constitutes the ‘[n]ecessary stabilizing treatment’ for a patient’s ‘emergency medical condition.’”

    The lawmakers conclude by asking the Ninth Circuit to affirm the district court’s decision that EMTALA requires Medicare-participating hospitals to provide abortion care when it is necessary as emergency medical treatment.

    In the Senate, the amicus brief was led by Wyden with U.S Senators Chuck Schumer (D-N.Y.), Patty Murray (D-Wash.), and Dick Durbin (D-Ill.). The brief was also signed by Senators Tammy Baldwin (D-Wis.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Sherrod Brown (D-Ohio.), Laphonza Butler (D-Calif.), Maria Cantwell (D-Wash.), Ben Cardin (D-Md.), Tom Carper (D-Del.), Bob Casey Jr. (D-Pa.), Chris Coons (D-Del.), Catherine Cortez Masto (D-Nev.), Tammy Duckworth (D-Ill.), Kirtsen Gillibrand (D-N.Y.), Maggie Hassan (D-N.H.), Martin Heinrich (D-N.M.), George Helmy (D-N.J.), John Hickenlooper (D-Colo.), Mazie Hirono (D-Hawaii), Tim Kaine (D-Va.), Mark Kelly (D-Ariz.), Angus King Jr. (I-Maine), Amy Klobuchar (D-Minn.), Ben Ray Luján (D- N.M.), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.), Alex Padilla (D-Calif), Gary Peters (D- Mich.), Jack Reed (D-R.I.), Jacky Rosen (D-Nev.), Bernie Sanders (I-Vt.), Brian Schatz (D-Hawaii), Janeen Shaheen (D-N.H.), Kyrsten Sinema (I-Ariz.), Tina Smith (D-Minn.), Debbie Stabenow (D-Mich.), Jon Tester (D-Mont.), Chris Van Hollen (D-Md.), Mark Warner (D-Va.), Raphael Warnock (D-Ga.), Elizabeth Warren (D- Mass.), Peter Welch (D-Vt.), and Sheldon Whitehouse (D-R.I.).

    In the House, the brief was signed by 211 U.S. Representatives including Oregon’s U.S. Representatives Earl Blumenauer, Suzanne Bonamici, Andrea Salinas, and Val Hoyle.

    The full text of the brief is here.

    MIL OSI USA News –

  • MIL-OSI Australia: SYD elevates international dining with contemporary mix of brands

    Source: Sydney Airport

    Thursday 24 October 2024

    Sydney Airport is excited to welcome new food and beverage brands at the T1 International terminal – EARL, BARista, East x West, and Sydney Coffee Trader offering travellers an array of high-quality dining options.

    Launching in December 2024, EARL – renowned as ‘the best in the sandwich-making business’ will bring its premium fast-casual dining experience to Sydney’s international stage.

    With dozens of sandwiches in their repertoire, alongside exclusive new combinations crafted for a Sydney-centric experience, passengers can also enjoy speciality beverages from EARL’s signature brew taps, featuring seasonal drinks like yuzu-spiked cold brew and matcha oat lattes.

    Founded 15 years ago in Melbourne by former Sydneysiders Simon O’Regan and Jackie Middleton, EARL marks a return to the city where their hospitality careers began. “Sydney has always been our ‘fun town’, a place we love to visit and enjoy with friends and family, said Simon and Jackie.

    “Opening EARL at Sydney Airport feels like a significant milestone in our journey, blending our passion for premium dining with a truly global audience.”

    The established and much-loved EARL is known for its focus on quality and sustainability, aligning perfectly with Sydney Airport’s commitment to providing exceptional and responsible dining options.

    Mark Zaouk, Group Executive Commercial at Sydney Airport, said: “We are continually innovating our food and beverage options to meet changing consumer tastes, elevating our wellbeing offering while keeping true to the fast-paced environment of our dining precincts.

    “The introduction of these new brands reflects our commitment to enhancing the passenger experience and offering a diverse and dynamic range of dining choices. We are excited to see how BARista, EARL, East x West and Sydney Coffee Trader will contribute to making Sydney Airport a destination in itself.”

    BARista will open its doors later in the month, offering international travellers a premium coffee experience alongside a selection of standout gourmet dishes including the Benedict Croissant, a signature cheeseburger and flavourful Katsu Sando (crispy chicken sandwich).

    For those after a quick bite before their flight, classic favourites like the BLT and bacon and egg roll will also be available, while the Hokkaido Tarts will delight anyone with a sweet tooth. Whether you’re after a caffeine fix or a hearty meal, BARista promises a fresh and satisfying dining experience.

    East x West, which is also set to open later this year, will offer a vibrant fusion of East Asian and Western culinary influences, perfectly reflecting its name. The venue will hero Ramen dishes accompanied by a sumptuous selection of spring rolls, dumplings, and handmade bao.

    Passengers looking for something lighter can enjoy crunchy lotus chips and edamame paired perfectly with Sapporo Premium Black on tap, a rare find in Australia and exclusive to the East x West brand. Adding to the unique experience, East x West will feature a dedicated mixologist crafting expertly made cocktails, along with a curated menu of Japanese whiskies and fine wines.

    Sydney Coffee Trader located within the bustling T1 International arrivals hall will showcase exceptional coffee in partnership with Seven Miles Coffee Roasters – a welcome sight for weary travellers. The menu highlights gourmet bagels loaded with fillings and oversized sandwiches complemented by freshly made salads and chia puddings. Whether travellers need a coffee pick-me-up or a wholesome meal, Sydney Coffee Trader offers the perfect blend of quality and convenience.

    “As a local roaster, we’re excited to be partnering with Sydney Coffee Trader in showcasing our city’s vibrant coffee culture. I think this venue perfectly combines a distinctive menu of locally sourced flavours with a unique coffee experience that travellers and guests are going to love,” says James Bailey, General Manager of Seven Miles Coffee Roasters.

    The new food offerings have been developed in partnership with Emirates Leisure Retail, who recently unveiled Gusto in the T1 International dining precinct which offers passengers a contemporary take on traditional Italian fare.

    Emirates Leisure Retail also expressed their enthusiasm about expanding their partnership with Sydney Airport.

    Davina Connell, Regional Director and General Manager ANZ Emirates Leisure Retail stated, “We are thrilled to build on our strong partnership with Sydney Airport as these diverse dining options are set to elevate the airport experience to new levels.

    “Whether you’re a coffee connoisseur in search of a smooth brew to rival your favourite local café, or ready to unwind with high-street-quality Asian-inspired dishes or a quick bite, there is something to satisfy every craving.

    “These new food brands represent a significant step forward in enhancing the airport’s culinary landscape, and we look forward to unveiling them in the coming months.”

    Images of new dining options at Sydney Airport can be found here.

    Notes to editor

    Menu highlights

    EARL – located in the T1 food court before security

    Handmade sandwiches and salads

    • The Pork Belly – free-range pork belly, apple, fennel and kale coleslaw
    • Harissa Lamb – slow cooked harissa rubbed lamb, quince, herb yoghurt, green beans and almonds
    • Mushroom and Ricotta – roast field mushrooms, ricotta, EARL salsa verde, chestnuts and rocket
    • Sydney-exclusive sandwich combinations
    • Signature brew taps with seasonal drinks such as yuzu-spiked cold brew, matcha oat lattes and Single Origin batch brews

    East x West – located in the T1 food court before security

    • Ramen
    • Handmade Bao
    • Spring Rolls
    • Dumplings
    • Crunchy Lotus Chips and Edamame
    • Sapporo Premium Black on tap along with other favourites
    • Japanese whiskies, fine wines and expertly crafted cocktails prepared by an in-house mixologist

    Sydney Coffee Trader – located in T1 Arrivals

    • Freshly brewed coffee
    • Loaded gourmet bagels
    • Oversized sandwiches
    • Fresh, healthy salads
    • Chia puddings

    BARista – located beyond security

    • Gourmet dishes from breakfast to classic favourites
    • Benedict Croissant
    • Katsu Sando (Chicken Sandwich)
    • BLT
    • Bacon and Egg Roll
    • Pastries including Hokkaido Tart
    • Specialty coffee

    MIL OSI News –

  • MIL-OSI USA: Durbin, Duckworth Join Congressional Democrats In Filing Amicus Brief Urging Ninth Circuit Court To Affirm That EMTALA Requires Hospitals To Provide Emergency Stabilizing Care, Including Abortion Care, Preempting Idaho’s Draconian Abortion Ban

    US Senate News:

    Source: United States Senator for Illinois Dick Durbin
    10.23.24
    After the Supreme Court dismissed the case, returning it to the Ninth Circuit Court, 259 Members of Congress ask the Ninth Circuit to affirm district court decision that under EMTALA, hospitals participating in Medicare must provide emergency stabilizing treatment to patients, including abortion care when necessary
    WASHINGTON – Today, U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and U.S. Senator Tammy Duckworth (D-IL) joined more than 250 Members of Congress in submitting an amicus brief to the U.S. Court of Appeals for the Ninth Circuit in Moyle v. United States and Idaho v. United States, two consolidated cases concerning the Emergency Medical Treatment and Labor Act (EMTALA) under consideration by the en banc Ninth Circuit.  EMTALA is a federal law that requires hospitals that receive Medicare funding to provide necessary “stabilizing treatment” to patients experiencing medical emergencies, which can include abortion care.
    After the Dobbs decision in 2022, a draconian anti-abortion law in Idaho went into effect that makes it a felony for a doctor to terminate a patient’s pregnancy unless it is “necessary” to prevent the patient’s death.  The United States sued the State of Idaho, arguing that the state’s law is preempted by EMTALA in those circumstances in which abortion may not be necessary to prevent imminent death, but still constitutes the necessary stabilizing treatment for a patient’s emergency medical condition.  The district court agreed; it held that in those limited, but critically important situations, EMTALA requires Medicare-participating hospitals to provide abortion as an emergency medical treatment.  Idaho Republicans appealed that ruling to the Supreme Court, which lifted the injunction and took the case in January.  In March, 258 Members filed an amicus brief, asking the Supreme Court to affirm the district court decision.  In June, the Supreme Court dismissed the case but without a ruling on the merits, sending the case back to the Ninth Circuit Court and reinstating the district court’s injunction.
    In their brief in support of the Justice Department, the lawmakers ask the Ninth Circuit to uphold the district court’s ruling.  They argue that the congressional intent, text, and history of EMTALA make clear that covered hospitals must provide abortion care when it is the necessary stabilizing treatment for a patient’s emergency medical condition, and that EMTALA preempts Idaho’s abortion ban in emergency situations that present a serious threat to a patient’s health.
    “[T]he 99th Congress passed EMTALA to ensure that every person who visits a Medicare-funded hospital with an ‘emergency medical condition’ is offered stabilizing treatment,” the Members write in their amicus brief.  “Congress chose broad language for that mandate, requiring hospitals that participate in the Medicare program to provide ‘such treatment as may be required to stabilize the medical condition.’… That text—untouched by Congress for the past three decades—makes clear that in situations in which a doctor determines that abortion constitutes the ‘[n]ecessary stabilizing treatment’ for a pregnant patient, federal law requires the hospital to offer it.  Yet Idaho has made providing that care a felony, in direct contravention of EMTALA’s mandate.”
    Importantly, the Members note that in this case, “respecting the supremacy of federal law is about more than just protecting our system of government; it is about protecting people’s lives.  If this Court allows Idaho’s near-total abortion ban to supersede federal law, pregnant patients in Idaho will continue to be denied appropriate medical treatment, placing them at heightened risk for medical complications and severe adverse health outcomes… And health care providers, unwilling to let Idaho’s law override their medical judgment regarding their patients’ best interests, will continue their exile from Idaho, creating maternity-care ‘deserts’ all over the state.”  The Members point to numerous reports of OB/GYNs leaving Idaho en masse since the state’s abortion ban went into effect.  Idaho has since lost 55 percent of its maternal-fetal medicine specialists and three rural hospitals have shut down maternity services altogether.
    “These are not hypothetical scenarios.  Because Idaho’s abortion ban contains no clear exceptions for the ‘emergency medical conditions’ covered by EMTALA, it forces physicians to wait until their patients are on the verge of death before providing abortion care. The result in other states with similar laws has been ‘significant maternal morbidity,’” write the Members, pointing to harrowing reports of pregnant women with severe health complications being denied necessary abortion care, including an Idaho woman who was flown to Utah for an abortion while hemorrhaging, leaking amniotic fluid, and terrified that she would not survive to care for her two other children.  “Federal law does not allow Idaho to endanger the lives of its residents in this way.”
    In their brief, the Members also clarify that the references to “unborn child” in EMTALA were intended to expand hospitals’ obligations with respect to providing stabilizing treatment—not contract them or take away the obligation to provide abortion care in certain circumstances.
    The Members’ brief also counters an argument from Idaho and its amici that the Supremacy Clause does not apply in this case because EMTALA was passed using Spending Clause authority, and therefore acts only as a condition on Medicare funding.  The Members make clear that all laws passed by Congress are entitled to preemption—regardless of their source of constitutional authority, and states cannot pass laws that make it impossible for private parties to accept federal funding, inhibiting the purpose of the federal law. 
    “EMTALA requires abortion when necessary to stabilize a patient with an emergency medical condition, Idaho’s near-total abortion ban is preempted to the extent that it prevents doctors from providing that care,” the Members write. “This Court should reject Appellants’ novel theory that EMTALA is not entitled to preemptive effect because it was enacted pursuant to Congress’s spending power.  Under the Supremacy Clause, all ‘the constitutional laws enacted by congress,’ constitute ‘the supreme Law of the Land,’. As the Supreme Court has repeatedly held, the principle of federal supremacy applies to laws passed pursuant to Congress’s spending authority no less than it does to laws effectuating other enumerated powers.”
    “In sum, EMTALA plainly requires hospitals that participate in the Medicare program to provide abortion care when, in a doctor’s medical judgment, it constitutes the ‘[n]ecessary stabilizing treatment’ for a patient’s ‘emergency medical condition.’”
    The lawmakers conclude by asking the Ninth Circuit to affirm the district court’s decision that EMTALA requires Medicare-participating hospitals to provide abortion care when it is necessary as emergency medical treatment.
    In the Senate, the amicus brief was signed by 48 U.S. Senators, including Durbin and Duckworth.  Also signing the amicus brief were U.S. Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Ron Wyden (D-OR), Tammy Baldwin (D-WI), Michael Bennet (D-CO), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Sherrod Brown (D-OH), Laphonza Butler (D-CA), Maria Cantwell (D-WA), Ben Cardin (D-MD), Tom Carper (D-DE), Bob Casey Jr. (D-NJ), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Martin Heinrich (D-NM), George Helmy (D-NJ), John Hickenlooper (D-CO), Mazie Hirono (D-HI), Tim Kaine (D-VA), Mark Kelly (D-AZ), Angus King Jr. (D-ME), Amy Klobuchar (D-MN), Ben Ray Luján (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR), Chris Murphy (D-CT), Alex Padilla (D-CA), Gary Peters (D-MI), Jack Reed (D-RI), Jacky Rosen (D-NV), Bernie Sanders (I-VT), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Kyrsten Sinema (I-AZ), Tina Smith (D-MN), Debbie Stabenow (D-MI), Jon Tester (D-MT), Chris Van Hollen (D-MD), Mark Warner (D-VA), Raphael Warnock (D-GA), Elizabeth Warren (D-MA), Peter Welch (D-VT), Sheldon Whitehouse (D-RI).
    In the House, the brief was signed by 211 U.S. Representatives.
    The lawmakers’ amicus brief to the Supreme Court can be read in full here.
    -30-

    MIL OSI USA News –

  • MIL-Evening Report: Want to built healthier cities? Make room for bird and tree diversity

    Source: The Conversation (Au and NZ) – By Rachel Buxton, Assistant Professor, Department of Biology, Carleton University

    More than five million Canadians — approximately one in eight of us — are living with a mood, anxiety or substance use disorder. The prevalence of mental disorders is on the rise, with a third of those with a disorder reporting unmet or partially met needs for mental health-care services.

    The stresses of the city, where more than 70 per cent of Canadians now live, can increase the risk of poor mental health even further.

    When most people think about caring for their mental health, they may think about getting more exercise, getting more sleep and making sure they’re eating healthy. Increasingly, research is showing that spending time in nature surrounded by plants and wildlife can also contribute to preventing and treating mental illness.

    Our research focuses on the importance of birds and trees in urban neighbourhoods in promoting mental well-being. In our study, we combined more than a decade of health and ecological data across 36 Canadian cities and found a positive association between greater bird and tree diversity and self-rated mental health.

    The well-being benefits of healthy ecosystems will probably not come as a great surprise to urban dwellers who relish days out in the park or hiking in a nearby nature reserve. Still, the findings of our study speak to the potential of a nature-based urbanism that promotes the health of its citizens.



    Read more:
    How the health of honeybee hives can inform environmental policies in Canadian cities

    Birds, trees and human connection

    Across cultures and societies, people have strong connections with birds. The beauty of their bright song and colour have inspired art, music and poetry. Their contemporary cultural relevance has even earned them an affectionate, absurdist internet nickname: “birbs”.

    There’s something magical about catching a glimpse of a bird and hearing birdsong. For many urbanites, birds are our daily connection to wildlife and a gateway to nature. In fact, even if we don’t realize it, humans and birds are intertwined. Birds provide us with many essential services — controlling insects, dispersing seeds and pollinating our crops.

    People have similarly intimate connections with trees. The terms tree of life, family trees, even tree-hugger all demonstrate the central cultural importance trees have in many communities around the world. In cities, trees are a staple of efforts to bring beauty and tranquility.

    When the Australian city of Melbourne gave urban trees email addresses for people to report problems, residents responded by writing thousands of love letters to their favourite trees. Forest bathing, a practice of being calm and quiet among trees, is a growing wellness trend.

    Birds and trees as promoters of urban wellness

    Contact with nature and greenspace have a suite of mental health benefits.

    Natural spaces reduce stress and offer places for recreation and relaxation for urban dwellers, but natural diversity is key. A growing amount of research shows that the extent of these benefits may be related to the diversity of different natural features.

    For example, in the United States, higher bird diversity is associated with lower hospitalizations for mood and anxiety disorders and longer life expectancy. In a European study, researchers found that bird diversity was as important for life satisfaction as income.

    People’s connection to a greater diversity of birds and trees could be because we evolved to recognize that the presence of more species indicates a safer environment — one with more things to eat and more shelter. Biodiverse environments are also less work for the brain to interpret, allowing restoration of cognitive resources.

    To explore the relationship between biodiversity and mental health in urban Canada, we brought together unique datasets. First, we collected bird data sourced from community scientists, where people logged their bird sightings on an app. We then compared this data with tree diversity data from national forest inventories.

    Finally, we compared both of these data sets to a long-standing health survey that has interviewed approximately 65,000 Canadians each year for over two decades.

    We found that living in a neighbourhood with higher than average bird diversity increased reporting of good mental health by about seven per cent. While living in a neighbourhood with higher than average tree diversity increased good mental health by about five per cent.

    Importance of urban birds and trees

    The results of our study, and those of others, show a connection between urban bird and tree diversity, healthy ecosystems and people’s mental well-being. This underscores the importance of urban biodiversity conservation as part of healthy living promotion.

    Protecting wild areas in parks, planting pollinator gardens and reducing pesticide use could all be key strategies to protect urban wildlife and promote people’s well-being. Urban planners should take note.



    Read more:
    Eco-anxiety: climate change affects our mental health – here’s how to cope

    We’re at a critical juncture: just as we are beginning to understand the well-being benefits of birds and trees, we’re losing species at a faster rate than ever before. It’s estimated that there are three billion fewer birds in North America compared to the 1970s and invasive pests will kill 1.4 million street trees over the next 30 years.

    By promoting urban biodiversity, we can ensure a sustainable and healthy future for all species, including ourselves.

    Rachel Buxton receives funding from Natural Sciences and Engineering Research Council of Canada, National Institutes of Health, and Environment and Climate Change Canada.

    Emma J. Hudgins received funding from the Natural Sciences and Engineering Research Council of Canada and the Fonds de Recherche du Québec – Nature et Technologies for this work. She currently receives funding from Plant Health Australia.

    Stephanie Prince Ware has received funding from the Canadian Institutes of Health Research.

    – ref. Want to built healthier cities? Make room for bird and tree diversity – https://theconversation.com/want-to-built-healthier-cities-make-room-for-bird-and-tree-diversity-235379

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI Global: Want to built healthier cities? Make room for bird and tree diversity

    Source: The Conversation – Canada – By Rachel Buxton, Assistant Professor, Department of Biology, Carleton University

    More than five million Canadians — approximately one in eight of us — are living with a mood, anxiety or substance use disorder. The prevalence of mental disorders is on the rise, with a third of those with a disorder reporting unmet or partially met needs for mental health-care services.

    The stresses of the city, where more than 70 per cent of Canadians now live, can increase the risk of poor mental health even further.

    When most people think about caring for their mental health, they may think about getting more exercise, getting more sleep and making sure they’re eating healthy. Increasingly, research is showing that spending time in nature surrounded by plants and wildlife can also contribute to preventing and treating mental illness.

    Our research focuses on the importance of birds and trees in urban neighbourhoods in promoting mental well-being. In our study, we combined more than a decade of health and ecological data across 36 Canadian cities and found a positive association between greater bird and tree diversity and self-rated mental health.

    The well-being benefits of healthy ecosystems will probably not come as a great surprise to urban dwellers who relish days out in the park or hiking in a nearby nature reserve. Still, the findings of our study speak to the potential of a nature-based urbanism that promotes the health of its citizens.



    Read more:
    How the health of honeybee hives can inform environmental policies in Canadian cities

    Birds, trees and human connection

    Across cultures and societies, people have strong connections with birds. The beauty of their bright song and colour have inspired art, music and poetry. Their contemporary cultural relevance has even earned them an affectionate, absurdist internet nickname: “birbs”.

    There’s something magical about catching a glimpse of a bird and hearing birdsong. For many urbanites, birds are our daily connection to wildlife and a gateway to nature. In fact, even if we don’t realize it, humans and birds are intertwined. Birds provide us with many essential services — controlling insects, dispersing seeds and pollinating our crops.

    People have similarly intimate connections with trees. The terms tree of life, family trees, even tree-hugger all demonstrate the central cultural importance trees have in many communities around the world. In cities, trees are a staple of efforts to bring beauty and tranquility.

    When the Australian city of Melbourne gave urban trees email addresses for people to report problems, residents responded by writing thousands of love letters to their favourite trees. Forest bathing, a practice of being calm and quiet among trees, is a growing wellness trend.

    Birds and trees as promoters of urban wellness

    Contact with nature and greenspace have a suite of mental health benefits.

    Natural spaces reduce stress and offer places for recreation and relaxation for urban dwellers, but natural diversity is key. A growing amount of research shows that the extent of these benefits may be related to the diversity of different natural features.

    For example, in the United States, higher bird diversity is associated with lower hospitalizations for mood and anxiety disorders and longer life expectancy. In a European study, researchers found that bird diversity was as important for life satisfaction as income.

    People’s connection to a greater diversity of birds and trees could be because we evolved to recognize that the presence of more species indicates a safer environment — one with more things to eat and more shelter. Biodiverse environments are also less work for the brain to interpret, allowing restoration of cognitive resources.

    To explore the relationship between biodiversity and mental health in urban Canada, we brought together unique datasets. First, we collected bird data sourced from community scientists, where people logged their bird sightings on an app. We then compared this data with tree diversity data from national forest inventories.

    Finally, we compared both of these data sets to a long-standing health survey that has interviewed approximately 65,000 Canadians each year for over two decades.

    We found that living in a neighbourhood with higher than average bird diversity increased reporting of good mental health by about seven per cent. While living in a neighbourhood with higher than average tree diversity increased good mental health by about five per cent.

    Importance of urban birds and trees

    The results of our study, and those of others, show a connection between urban bird and tree diversity, healthy ecosystems and people’s mental well-being. This underscores the importance of urban biodiversity conservation as part of healthy living promotion.

    Protecting wild areas in parks, planting pollinator gardens and reducing pesticide use could all be key strategies to protect urban wildlife and promote people’s well-being. Urban planners should take note.



    Read more:
    Eco-anxiety: climate change affects our mental health – here’s how to cope

    We’re at a critical juncture: just as we are beginning to understand the well-being benefits of birds and trees, we’re losing species at a faster rate than ever before. It’s estimated that there are three billion fewer birds in North America compared to the 1970s and invasive pests will kill 1.4 million street trees over the next 30 years.

    By promoting urban biodiversity, we can ensure a sustainable and healthy future for all species, including ourselves.

    Rachel Buxton receives funding from Natural Sciences and Engineering Research Council of Canada, National Institutes of Health, and Environment and Climate Change Canada.

    Emma J. Hudgins received funding from the Natural Sciences and Engineering Research Council of Canada and the Fonds de Recherche du Québec – Nature et Technologies for this work. She currently receives funding from Plant Health Australia.

    Stephanie Prince Ware has received funding from the Canadian Institutes of Health Research.

    – ref. Want to built healthier cities? Make room for bird and tree diversity – https://theconversation.com/want-to-built-healthier-cities-make-room-for-bird-and-tree-diversity-235379

    MIL OSI – Global Reports –

  • MIL-OSI: Northfield Bancorp, Inc. Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    NOTABLE ITEMS FOR THE QUARTER INCLUDE:

    • DILUTED EARNINGS PER SHARE WERE $0.16 FOR THE CURRENT QUARTER COMPARED TO $0.14 FOR THE TRAILING QUARTER, AND $0.19 FOR THE THIRD QUARTER OF 2023.
    • NET INTEREST MARGIN REMAINED RELATIVELY STABLE AT 2.08% FOR THE CURRENT QUARTER AS COMPARED TO 2.09% FOR THE TRAILING QUARTER.
    • AVERAGE YIELD ON INTEREST-EARNING ASSETS DECREASED ONE BASIS POINT TO 4.38%, WHILE THE AVERAGE COST OF INTEREST-BEARING LIABILITIES REMAINED STABLE AT 2.95% FOR THE CURRENT QUARTER AS COMPARED TO THE TRAILING QUARTER.
    • DEPOSITS (EXCLUDING BROKERED) DECREASED MODESTLY BY $5.1 MILLION, OR LESS THAN 1% ANNUALIZED, COMPARED TO JUNE 30, 2024, AND INCREASED $15.0 MILLION, OR 0.5% ANNUALIZED, FROM DECEMBER 31, 2023. COST OF DEPOSITS AT SEPTEMBER 30, 2024 WAS 2.07% AS COMPARED TO 2.10% AT JUNE 30, 2024.
    • LOAN BALANCES DECLINED BY $27.2 MILLION, OR 2.7% ANNUALIZED, FROM JUNE 30, 2024, WITH DECREASES IN COMMERCIAL, MULTIFAMILY AND RESIDENTIAL REAL ESTATE LOANS OFFSET BY INCREASES IN HOME EQUITY, CONSTRUCTION AND LAND, AND COMMERCIAL AND INDUSTRIAL LOANS.
    • ASSET QUALITY REMAINS STRONG DESPITE AN INCREASE IN NON-PERFORMING LOANS IN THE CURRENT QUARTER. NON-PERFORMING LOANS TO TOTAL LOANS WAS 0.75% AT SEPTEMBER 30, 2024 AND 0.42% AT JUNE 30, 2024.
    • THE COMPANY MAINTAINED STRONG LIQUIDITY WITH APPROXIMATELY $597 MILLION IN UNPLEDGED AVAILABLE-FOR-SALE SECURITIES AND LOANS READILY AVAILABLE-FOR-PLEDGE OF APPROXIMATELY $699 MILLION.
    • THE COMPANY REPURCHASED 560,683 SHARES FOR A COST OF $6.3 MILLION. THERE IS NO REMAINING CAPACITY UNDER THE CURRENT REPURCHASE PROGRAM.
    • CASH DIVIDEND DECLARED OF $0.13 PER SHARE OF COMMON STOCK, PAYABLE ON NOVEMBER 20, 2024, TO STOCKHOLDERS OF RECORD AS OF NOVEMBER 6, 2024.

    WOODBRIDGE, N.J., Oct. 23, 2024 (GLOBE NEWSWIRE) — NORTHFIELD BANCORP, INC. (Nasdaq:NFBK) (the “Company”), the holding company for Northfield Bank, reported net income of $6.5 million, or $0.16 per diluted share for the three months ended September 30, 2024, compared to $6.0 million, or $0.14 per diluted share, for the three months ended June 30, 2024, and $8.2 million, or $0.19 per diluted share, for the three months ended September 30, 2023. For the nine months ended September 30, 2024, net income totaled $18.7 million, or $0.45 per diluted share, compared to $29.4 million, or $0.67 per diluted share, for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, net income reflected $795,000, or $0.02 per share, of additional tax expense related to options that expired in June 2024, and $683,000, or $0.01 per share, of severance expense related to staffing realignments. For the nine months ended September 30, 2023, net income reflected $440,000, or $0.01 per share of severance expense. The decrease in net income for the nine months ended September 30, 2024, compared to the comparable prior year period was primarily the result of a decrease in net interest income, which was negatively impacted by higher funding costs, partially offset by improved interest and non-interest income.

    Commenting on the quarter, Steven M. Klein, the Company’s Chairman, President and Chief Executive Officer stated, “In the third quarter, the Northfield team continued to focus on financial performance, serving the businesses and consumers in our marketplace, and improving upon our operating efficiencies.” Mr. Klein continued, “We delivered solid financial performance for the quarter, increasing our net income, and earnings per share, as we manage our strong capital levels, core deposit and loan relationships, asset quality, and operating expenses. While significant risks remain, the decrease in short-term market interest rates late in the third quarter should provide increased economic activity in our marketplace and opportunities for our Company.”

    Mr. Klein further noted, “I am pleased to announce that the Board of Directors has declared a cash dividend of $0.13 per common share, payable on November 20, 2024 to stockholders of record on November 6, 2024.”

    Results of Operations

    Comparison of Operating Results for the Nine Months Ended September 30, 2024 and 2023

    Net income was $18.7 million and $29.4 million for the nine months ended September 30, 2024 and September 30, 2023, respectively. Significant variances from the comparable prior year period are as follows: a $10.9 million decrease in net interest income, a $1.3 million increase in the provision for credit losses on loans, a $1.5 million increase in non-interest income, a $3.2 million increase in non-interest expense, and a $3.1 million decrease in income tax expense.

    Net interest income for the nine months ended September 30, 2024, decreased $10.9 million, or 11.4%, to $84.8 million, from $95.7 million for the nine months ended September 30, 2023 due to a $34.8 million increase in interest expense, which was partially offset by a $23.9 million increase in interest income. The increase in interest expense was largely driven by the cost of interest-bearing liabilities, which increased by 96 basis points to 2.93% for the nine months ended September 30, 2024, from 1.97% for the nine months ended September 30, 2023, driven primarily by a 114 basis point increase in the cost of interest-bearing deposits from 1.42% to 2.56% for the nine months ended September 30, 2024, and a 31 basis point increase in the cost of borrowings from 3.58% to 3.89% due to rising market interest rates and a shift in the composition of the deposit portfolio towards higher-costing certificates of deposit and a greater reliance on borrowings. The increase in interest expense was also due to a $277.1 million, or 7.0%, increase in the average balance of interest-bearing liabilities, including an increase of $149.8 million in the average balance of borrowed funds and a $127.1 million increase in average interest-bearing deposits. The increase in interest income was primarily due to a $156.1 million, or 2.9%, increase in the average balance of interest-earning assets coupled with a 47 basis point increase in the yield on interest-earning assets, which increased to 4.35% for the nine months ended September 30, 2024, from 3.88% for the nine months ended September 30, 2023, due to the rising rate environment. The increase in the average balance of interest-earning assets was primarily due to increases in the average balance of interest-earning deposits in financial institutions of $111.7 million, the average balance of other securities of $91.6 million, and the average balance of mortgage-backed securities of $88.5 million, partially offset by a decrease in the average balance of loans of $133.4 million.

    Net interest margin decreased by 34 basis points to 2.07% for the nine months ended September 30, 2024, from 2.41% for the nine months ended September 30, 2023. The decrease in net interest margin was primarily due to interest-bearing liabilities repricing at a faster rate than interest-earning assets. The net interest margin was negatively affected by approximately 12 basis points due to a $300 million low risk leverage strategy implemented in the first quarter of 2024. In January 2024, the Company borrowed $300.0 million from the Federal Reserve Bank through the Bank Term Funding Program at favorable terms and conditions and invested the proceeds in interest-bearing deposits in other financial institutions and investment securities. The Company accreted interest income related to purchased credit-deteriorated (“PCD”) loans of $1.1 million for the nine months ended September 30, 2024, as compared to $1.0 million for the nine months ended September 30, 2023. Net interest income for the nine months ended September 30, 2024, included loan prepayment income of $648,000 as compared to $1.3 million for the nine months ended September 30, 2023.

    The provision for credit losses on loans increased by $1.3 million to $2.3 million for the nine months ended September 30, 2024, compared to $1.1 million for the nine months ended September 30, 2023, primarily due to an increase in the specific reserve component of the allowance for credit losses, which was partially offset by a decrease in the general reserve component of the allowance for credit losses. The increase in the specific reserve was related to a single commercial and industrial relationship totaling $12.5 million that experienced credit deterioration and was placed on non-accrual during the current quarter, which has a specific reserve of $1.3 million and incurred a charge-off of $878,000. The decline in the general reserve component of the allowance for credit losses resulted from a decline in loan balances and an improvement in the macroeconomic forecast for the current period within our Current Expected Credit Loss (“CECL”) model, partially offset by an increase in reserves related to changes in model assumptions, including the slowing of prepayment speeds, and an increase in reserves in the commercial and industrial and home equity and lines of credit portfolios related to an increase in non-performing loans in these portfolios and higher loan balances. Net charge-offs were $4.7 million for the nine months ended September 30, 2024, primarily due to $3.9 million in net charge-offs on small business unsecured commercial and industrial loans, as compared to net charge-offs of $5.2 million for the nine months ended September 30, 2023. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio, which totaled $31.0 million at September 30, 2024.

    Non-interest income increased by $1.5 million, or 18.7%, to $9.8 million for the nine months ended September 30, 2024, compared to $8.3 million for the nine months ended September 30, 2023. The increase was primarily due to increases of $790,000 in fees and service charges for customer services, related to an increase in overdraft fees and service charges on deposit accounts, $260,000 in income on bank owned life insurance, and $874,000 in gains on trading securities, net. Partially offsetting the increases was a $303,000 decrease in other income, primarily due to lower swap fee income. Gains on trading securities in the nine months ended September 30, 2024, were $1.6 million, as compared to $723,000 in the nine months ended September 30, 2023. The trading portfolio is utilized to fund the Company’s deferred compensation obligation to certain employees and directors of the plan. The participants of this plan, at their election, defer a portion of their compensation. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the plan.

    Non-interest expense increased $3.2 million, or 5.2%, to $65.7 million for the nine months ended September 30, 2024, compared to $62.5 million for the nine months ended September 30, 2023. The increase was primarily due to a $3.3 million increase in employee compensation and benefits, primarily attributable to higher salary expense, related to annual merit increases and higher medical expense, and an increase of $874,000 in deferred compensation expense, which is described above, and had no effect on net income. Employee compensation and benefits expense also includes severance expense of $683,000 for the nine months ended September 30, 2024, as compared to $440,000 for the nine months ended September 30, 2023. During the second quarter of 2024, due to current economic conditions, the Company implemented a workforce reduction plan which included modest layoffs and staffing realignments. The annual estimated cost savings of this plan is $2.0 million, pre-tax. Partially offsetting the increase was a $461,000 decrease in stock compensation expense related to performance stock awards not expected to vest. Additionally, non-interest expense included a $727,000 increase in credit loss expense/(benefit) for off-balance sheet exposure due to a provision of $337,000 recorded during the nine months ended September 30, 2024, as compared to a benefit of $390,000 for the comparative prior year period. The benefit in the prior year period was attributable to a decrease in the pipeline of loans committed and awaiting closing. Partially offsetting the increases was a $552,000 decrease in advertising expense due to a change in marketing strategy and the timing of specific deposit and lending campaigns.

    The Company recorded income tax expense of $7.9 million for the nine months ended September 30, 2024, compared to $11.0 million for the nine months ended September 30, 2023, with the decrease due to lower taxable income partially offset by a higher effective tax rate. The effective tax rate for the nine months ended September 30, 2024, was 29.7% compared to 27.2% for the nine months ended September 30, 2023. In June 2024, options granted in 2014 expired and resulted in additional tax expense of $795,000, contributing to the higher effective tax rate for the nine months ended September 30, 2024.

    Comparison of Operating Results for the Three Months Ended September 30, 2024 and 2023

    Net income was $6.5 million and $8.2 million for the quarters ended September 30, 2024 and September 30, 2023, respectively. Significant variances from the comparable prior year quarter are as follows: a $1.5 million decrease in net interest income, a $2.4 increase in the provision for credit losses on loans, a $1.5 million increase in non-interest income, a $189,000 decrease in non-interest expense, and a $513,000 decrease in income tax expense.

    Net interest income for the quarter ended September 30, 2024, decreased $1.5 million, or 4.9%, to $28.2 million, from $29.7 million for the quarter ended September 30, 2023, due to an $8.0 million increase in interest expense, partially offset by an $6.6 million increase in interest income. The increase in interest expense was largely driven by the impact of rising market interest rates and a $227.0 million, or 5.7%, increase in the average balance of interest-bearing liabilities, including increases of $158.4 million and $68.4 million in the average balance of interest-bearing deposits and borrowed funds, respectively. The increase in interest income was primarily due to a $155.1 million, or 3.0%, increase in the average balance of interest-earning assets coupled with a 38 basis point increase in yields on interest-earning assets due to the rising rate environment. The increase in the average balance of interest-earning assets was due to increases in the average balance of mortgage-backed securities of $240.3 million, the average balance of other securities of $64.0 million, and the average balance of interest-earning deposits in financial institutions of $26.8 million, partially offset by decreases in the average balance of loans outstanding of $172.8 million and the average balance of Federal Home Loan Bank of New York stock of $3.2 million.

    Net interest margin decreased by 17 basis points to 2.08% for the quarter ended September 30, 2024, from 2.25% for the quarter ended September 30, 2023, primarily due to the cost of interest-bearing liabilities increasing faster than the repricing of interest-earning assets. The cost of interest-bearing liabilities increased by 64 basis points to 2.95% for the quarter ended September 30, 2024, from 2.31% for the quarter ended September 30, 2023, driven primarily by a 77 basis point increase in the cost of interest-bearing deposits from 1.82% to 2.59%, and a 30 basis point increase in the cost of borrowings from 3.63% to 3.93%. The increase in the cost of interest-bearing liabilities was partially offset by an increase in the yield on interest-earning assets, which increased by 38 basis points to 4.38% for the quarter ended September 30, 2024, from 4.00% for the quarter ended September 30, 2023. Net interest income for the quarter ended September 30, 2024, included loan prepayment income of $87,000, as compared to $183,000 for the quarter ended September 30, 2023. The Company accreted interest income related to PCD loans of $327,000 for the quarter ended September 30, 2024, as compared to $325,000 for the quarter ended September 30, 2023.

    The provision for credit losses on loans increased by $2.4 million to $2.5 million for the quarter ended September 30, 2024, from a provision of $188,000 for the quarter ended September 30, 2023, primarily due to an increase in the specific reserve component of the allowance for credit losses, which was partially offset by a decrease in the general reserve component of the allowance for credit losses. The increase in the specific reserve was related to a single commercial and industrial relationship that experienced credit deterioration and was placed on non-accrual during the current quarter, which has a specific reserve of $1.3 million and incurred a charge-off of $878,000. The decline in the general reserve component of the allowance for credit losses resulted from a decline in loan balances and an improvement in the macroeconomic forecast for the current period within our CECL model, partially offset by an increase in reserves related to changes in model assumptions, including the slowing of prepayment speeds, and an increase in reserves in the commercial and industrial portfolio related to an increase in non-performing loans and higher loan balances. Net charge-offs were $2.1 million for the quarter ended September 30, 2024, and included $1.4 million in net charge-offs on small business unsecured loans, as compared to net charge-offs of $2.9 million for the quarter ended September 30, 2023.

    Non-interest income increased by $1.5 million, or 68.7%, to $3.6 million for the quarter ended September 30, 2024, from $2.1 million for the quarter ended September 30, 2023, primarily due to a $294,000 increase in fees and service charges, primarily related to higher overdraft fees, a $1.0 million increase in gains on trading securities, net, and a $185,000 increase in other income, primarily due to higher swap fee income. For the quarter ended September 30, 2024, gains on trading securities, net, were $710,000, compared to losses of $295,000 in the quarter ended September 30, 2023. Gains and losses on trading securities have no effect on net income since participants benefit from, and bear the full risk of, changes in the trading securities market values. Therefore, the Company records an equal and offsetting amount in compensation expense, reflecting the change in the Company’s obligations under the Plan.

    Non-interest expense decreased by $189,000, or 0.9%, to $20.4 million for the quarter ended September 30, 2024, from $20.6 million for the quarter ended September 30, 2023. The decrease was primarily due to decreases of $386,000 in occupancy expense, attributable to lower real estate taxes, common area maintenance and electricity costs, $214,000 in data processing costs, attributable to a decrease in ongoing core processing costs related to a prior technology-related contract renewed at favorable terms, and $132,000 in advertising expense. Partially offsetting the decreases was a $504,000 increase in compensation and employee benefits, which included a $1.0 million increase in expense related to the Company’s deferred compensation plan which is described above, and had no effect on net income, that was offset by lower medical expense.

    The Company recorded income tax expense of $2.4 million for the quarter ended September 30, 2024, compared to $2.9 million for the quarter ended September 30, 2023, with the decrease due to lower taxable income. The effective tax rate for the quarter ended September 30, 2024 was 26.6%, compared to 26.0% for the quarter ended September 30, 2023.

    Comparison of Operating Results for the Three Months Ended September 30, 2024 and June 30, 2024

    Net income was $6.5 million and $6.0 million for the quarters ended September 30, 2024, and June 30, 2024, respectively. Significant variances from the prior quarter are as follows: an $458,000 decrease in net interest income, a $3.2 million increase in the provision for credit losses on loans, a $719,000 increase in non-interest income, a $2.6 million decrease in non-interest expense, and an $850,000 decrease in income tax expense.

    Net interest income for the quarter ended September 30, 2024, decreased by $458,000, or 1.6%, primarily due to a $902,000 decrease in interest income, partially offset by a $444,000 decrease in interest expense on deposits and borrowings. The decrease in interest income was primarily due to a $124.4 million decrease in the average balance of interest-earning assets. The decrease in the average balance of interest-earning assets was primarily due to decreases in the average balance of interest-earning deposits in financial institutions of $91.6 million, the average balance of other securities of $60.5 million, and the average balance of loans outstanding of $48.1 million, partially offset by an increase in the average balance of mortgage-backed securities of $76.5 million. The decrease in interest expense on deposits and borrowings was primarily due to a $105.8 million, or 2.5%, decrease in the average balance of interest-bearing liabilities attributable to a $73.2 million decrease in the average balance of interest-bearing deposits and a $32.7 million decrease in the average balance of borrowed funds.

    Net interest margin decreased by one basis point to 2.08% from 2.09% for the quarter ended June 30, 2024, primarily due to a one basis point decrease in yields on interest-earning assets whereas the cost of interest-bearing liabilities remained level. Net interest income for the quarter ended September 30, 2024, included loan prepayment income of $87,000 as compared to $210,000 for the quarter ended June 30, 2024. The Company accreted interest income related to PCD loans of $327,000 for the quarter ended September 30, 2024, as compared to $321,000 for the quarter ended June 30, 2024.

    The provision for credit losses on loans increased by $3.2 million to $2.5 million for the quarter ended September 30, 2024, from a benefit of $618,000 for the quarter ended June 30, 2024. The increase in the provision for the current quarter was primarily due to an increase in the specific reserve component of the allowance for credit losses, attributable to a single commercial and industrial relationship that experienced credit deterioration and was placed on non-accrual during the current quarter, higher reserves related to changes in model assumptions during the current quarter, including the slowing of prepayment speeds and higher net-charge-offs. Net charge-offs were $2.1 million for the quarter ended September 30, 2024, as compared to net charge-offs of $1.6 million for the quarter ended June 30, 2024.

    Non-interest income increased by $719,000, or 25.1%, to $3.6 million for the quarter ended September 30, 2024, from $2.9 million for the quarter ended June 30, 2024. The increase was primarily due to a $522,000 increase in gains on sales of trading securities, net, and a $192,000 increase in other income, primarily due to higher swap fee income. For the quarter ended September 30, 2024, gains on trading securities, net, were $710,000, compared to gains of $188,000 for the quarter ended June 30, 2024.

    Non-interest expense decreased by $2.6 million, or 11.4%, to $20.4 million for the quarter ended September 30, 2024, from $23.0 million for the quarter ended June 30, 2024. The decrease was primarily due to a $2.0 million decrease in compensation and employee benefits, primarily attributable to a decrease in salaries and medical expense due to lower employee headcount, partially offset by a $522,000 increase in expense related to the Company’s deferred compensation plan which had no effect on net income. Also contributing to the decrease were decreases of $192,000 in occupancy expense, $397,000 in data processing costs, attributable to a decrease in ongoing core processing costs resulting from a prior technology-related contract renewed at favorable terms, $200,000 in advertising expense, and $122,000 in other non-interest expense. Partially offsetting the decreases was a $262,000 increase in professional fees, primarily due to an increase in outsourced audit services.

    The Company recorded income tax expense of $2.4 million for the quarter ended September 30, 2024, compared to $3.2 million for the quarter ended June 30, 2024. The effective tax rate for the quarter ended September 30, 2024 was 26.6%, compared to 35.0% for the quarter ended June 30, 2024. During the quarter ended June 30, 2024, options granted in 2014 expired and resulted in additional tax expense of $795,000, contributing to the higher effective tax rate for the quarter ended June 30, 2024.

    Financial Condition

    Total assets increased by $132.5 million, or 2.4%, to $5.73 billion at September 30, 2024, from $5.60 billion at December 31, 2023. The increase was primarily due to increases in available-for-sale debt securities of $268.0 million, or 33.7%, and cash and cash equivalents of $3.4 million, or 1.5%, partially offset by a decrease in loans receivable of $139.7 million, or 3.3%.

    Cash and cash equivalents increased by $3.4 million, or 1.5%, to $232.9 million at September 30, 2024, from $229.5 million at December 31, 2023. Balances fluctuate based on the timing of receipt of security and loan repayments and the redeployment of cash into higher-yielding assets such as loans and securities, or the funding of deposit outflows or borrowing maturities.

    Loans held-for-investment, net, decreased by $139.7 million, or 3.3%, to $4.06 billion at September 30, 2024 from $4.20 billion at December 31, 2023, primarily due to decreases in multifamily, commercial and one-to-four family residential real estate loans, partially offset by increases in home equity and lines of credit, construction and land, and commercial and industrial loans. The decrease in loan balances reflects the Company remaining strategically focused on both managing the concentration of its commercial and multifamily real estate loan portfolios and disciplined loan pricing, as well as lower customer demand in the recent elevated interest rate environment. Multifamily loans decreased $110.1 million, or 4.0%, to $2.64 billion at September 30, 2024 from $2.75 billion at December 31, 2023, commercial real estate loans decreased $51.4 million, or 5.5%, to $878.2 million at September 30, 2024 from $929.6 million at December 31, 2023, one-to-four family residential loans decreased $11.1 million, or 6.9%, to $149.7 million at September 30, 2024 from $160.8 million at December 31, 2023, and other loans decreased $925,000, or 35.8%, to $1.7 million at September 30, 2024 from $2.6 million at December 31, 2023. Partially offsetting these decreases were increases in commercial and industrial loans of $19.1 million, or 12.3%, to $174.4 million at September 30, 2024 from $155.3 million at December 31, 2023, home equity and lines of credit of $8.4 million, or 5.2%, to $171.9 million at September 30, 2024 from $163.5 million at December 31, 2023, and construction and land loans of $2.1 million, or 6.6%, to $33.0 million at September 30, 2024 from $31.0 million at December 31, 2023.

    As of September 30, 2024, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital was estimated at approximately 447%. Management believes that Northfield Bank (the “Bank”) maintains appropriate risk management practices including risk assessments, board-approved underwriting policies and related procedures, which include monitoring Bank portfolio performance, performing market analysis (economic and real estate), and stressing of the Bank’s commercial real estate portfolio under severe, adverse economic conditions. Although management believes the Bank has implemented appropriate policies and procedures to manage its commercial real estate concentration risk, the Bank’s regulators could require it to implement additional policies and procedures or could require it to maintain higher levels of regulatory capital, which might adversely affect its loan originations, the Company’s ability to pay dividends, and overall profitability.

    Our real estate portfolio includes credit risk exposure to loans collateralized by office buildings and multifamily properties in New York State subject to some form of rent regulation limiting rent increases for rent stabilized multifamily properties. At September 30, 2024, office-related loans represented $183.6 million, or 4.5% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 59%. Approximately 41% were owner-occupied. The geographic locations of the properties collateralizing our office-related loans are: 50.7% in New York, 47.8% in New Jersey and 1.5% in Pennsylvania. At September 30, 2024, our largest office-related loan had a principal balance of $90.0 million (with a net active principal balance for the Bank of $29.9 million as we have a 33.3% participation interest), was secured by an office facility located in Staten Island, New York, and was performing in accordance with its original contractual terms. At September 30, 2024, multifamily loans that have some form of rent stabilization or rent control totaled approximately $447.5 million, or approximately 11% of our total loan portfolio, with an average balance of $1.7 million (although we have originated these type of loans in amounts substantially greater than this average) and a weighted average loan-to-value ratio of 51%. At September 30, 2024, our largest rent-regulated loan had a principal balance of $16.9 million, was secured by an apartment building located in Staten Island, New York, and was performing in accordance with its original contractual terms. Management continues to closely monitor its office and rent-regulated portfolios. For further details on our rent-regulated multifamily portfolio see “Asset Quality”.

    PCD loans totaled $9.3 million and $9.9 million at September 30, 2024 and December 31, 2023, respectively. The majority of the remaining PCD loan balance consists of loans acquired as part of a Federal Deposit Insurance Corporation-assisted transaction. The Company accreted interest income of $327,000 and $1.1 million attributable to PCD loans for the three and nine months ended September 30, 2024, respectively, as compared to $325,000 and $1.0 million for the three and nine months ended September 30, 2023, respectively. PCD loans had an allowance for credit losses of approximately $2.9 million at September 30, 2024.

    Loan balances are summarized as follows (dollars in thousands):

      September 30, 2024   June 30, 2024   December 31, 2023
    Real estate loans:          
    Multifamily $         2,640,944     $         2,665,202     $         2,750,996  
    Commercial mortgage           878,173               896,157               929,595  
    One-to-four family residential mortgage           149,682               151,948               160,824  
    Home equity and lines of credit           171,946               167,852               163,520  
    Construction and land           33,024               32,607               30,967  
    Total real estate loans           3,873,769               3,913,766               4,035,902  
    Commercial and industrial loans           174,253               165,586               154,984  
    PPP loans           160               202               284  
    Other loans           1,660               2,322               2,585  
    Total commercial and industrial, PPP, and other loans           176,073               168,110               157,853  
    Loans held-for-investment, net (excluding PCD)           4,049,842               4,081,876               4,193,755  
    PCD loans           9,264               9,344               9,899  
    Total loans held-for-investment, net $         4,059,106     $         4,091,220     $         4,203,654  

    The Company’s available-for-sale debt securities portfolio increased by $268.0 million, or 33.7%, to $1.06 billion at September 30, 2024, from $795.5 million at December 31, 2023. The increase was primarily attributable to purchases of securities, partially offset by paydowns, maturities and calls. At September 30, 2024, $869.4 million of the portfolio consisted of residential mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. In addition, the Company held $74.9 million in U.S. Government agency securities, $118.5 million in corporate bonds, substantially all of which were investment grade, and $684,000 in municipal bonds at September 30, 2024. Unrealized losses, net of tax, on available-for-sale debt securities and held-to-maturity securities approximated $19.6 million and $219,000, respectively, at September 30, 2024, and $32.5 million and $279,000, respectively, at December 31, 2023.

    Equity securities were $10.7 million at September 30, 2024 and $10.6 million at December 31, 2023. Equity securities are primarily comprised of an investment in a Small Business Administration Loan Fund. This investment is utilized by the Bank as part of its Community Reinvestment Act program.

    Total liabilities increased $132.3 million, or 2.7%, to $5.03 billion at September 30, 2024, from $4.90 billion at December 31, 2023. The increase was primarily attributable to an increase in borrowings of $131.6 million, partially offset by a decrease in total deposits of $2.9 million. The Company routinely utilizes brokered deposits and borrowed funds to manage interest rate risk, the cost of interest-bearing liabilities, and funding needs related to loan originations and deposit activity.

    Deposits decreased $2.9 million, or 0.1%, to $3.88 billion at September 30, 2024 as compared to December 31, 2023. Brokered deposits decreased by $17.9 million, or 17.9%, due to maturities that were replaced by borrowings. Deposits, excluding brokered deposits, increased $15.0 million, or 0.4%. The increase in deposits, excluding brokered deposits, was primarily attributable to increases of $80.9 million in time deposits, partially offset by decreases of $14.9 million in transaction accounts, $14.7 million in savings accounts, and $36.3 million in money market accounts. Growth in time deposits was attributable to the current interest rate environment and offering competitive interest rates to attract deposits. Estimated gross uninsured deposits at September 30, 2024 were $1.71 billion. This total includes fully collateralized uninsured governmental deposits and intercompany deposits of $859.3 million, leaving estimated uninsured deposits of approximately $852.2 million, or 22.0%, of total deposits. At December 31, 2023, estimated uninsured deposits totaled $869.9 million, or 22.4% of total deposits.

    Deposit account balances are summarized as follows (dollars in thousands):

      September 30, 2024   June 30, 2024   December 31, 2023
    Transaction:          
    Non-interest bearing checking $         681,741     $         685,574     $         694,903  
    Negotiable orders of withdrawal and interest-bearing checking           1,230,176               1,251,342               1,231,943  
    Total transaction           1,911,917               1,936,916               1,926,846  
    Savings and money market:          
    Savings           911,067               916,598               925,744  
    Money market           265,800               255,550               302,122  
    Brokered money market           —               —               50,000  
    Total savings           1,176,867               1,172,148               1,277,866  
    Certificates of deposit:          
    $250,000 and under           585,606               568,809               525,454  
    Over $250,000           119,033               120,601               98,269  
    Brokered           82,146               —               50,000  
    Total certificates of deposit           786,785               689,410               673,723  
    Total deposits $         3,875,569     $         3,798,474     $         3,878,435  

    Included in the table above are business and municipal deposit account balances as follows (dollars in thousands):

      September 30, 2024   June 30, 2024   December 31, 2023
               
    Business customers $         869,990     $         866,403     $         893,296  
    Municipal (governmental) customers $         799,249     $         815,086     $         768,556  

    Borrowed funds increased to $1.05 billion at September 30, 2024, from $920.5 million at December 31, 2023. The increase in borrowings for the period was primarily due to a $205.5 million increase in borrowings under the Federal Reserve Bank Term Funding Program, which included favorable terms and conditions as compared to FHLB advances. Management utilizes borrowings to mitigate interest rate risk, for short-term liquidity, and to a lesser extent from time to time, as part of leverage strategies.

    The following table sets forth borrowing maturities (excluding overnight borrowings and subordinated debt) and the weighted average rate by year at September 30, 2024 (dollars in thousands):

    Year   Amount (1)   Weighted Average Rate
    2024   $25,000   4.71%
    2025   483,184   4.00%
    2026   148,000   4.36%
    2027   173,000   3.19%
    2028   154,288   3.96%
        $983,472   3.92%
             
    __________________________________________________
    (1) Borrowings maturing in 2025 include $300.0 million of FRB borrowings that can be repaid without any penalty.

    Total stockholders’ equity increased by $119,000 to $699.6 million at September 30, 2024, from $699.4 million at December 31, 2023. The increase was attributable to net income of $18.7 million for the nine months ended September 30, 2024, a $14.1 million increase in accumulated other comprehensive income, associated with an increase in the estimated fair value of our debt securities available-for-sale portfolio due to the increase in market interest rates, and a $1.9 million increase in equity award activity, partially offset by $18.1 million in stock repurchases and $16.5 million in dividend payments. On April 24, 2024, the Board of Directors of the Company approved a $5.0 million stock repurchase program, which was completed in May 2024, and on June 14, 2024, the Board of Directors of the Company approved a $10.0 million stock repurchase program. During the nine months ended September 30, 2024, the Company repurchased 1.8 million of its common stock outstanding at an average price of $10.03 for a total of $18.1 million pursuant to the approved stock repurchase programs. As of September 30, 2024, the Company had no remaining capacity under its current repurchase program.

    The Company’s most liquid assets are cash and cash equivalents, corporate bonds, and unpledged mortgage-related securities issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac, that we can either borrow against or sell. We also have the ability to surrender bank-owned life insurance contracts. The surrender of these contracts would subject the Company to income taxes and penalties for increases in the cash surrender values over the original premium payments. We also have the ability to obtain additional funding from the FHLB and Federal Reserve Bank of New York utilizing unencumbered and unpledged securities and multifamily loans. The Company expects to have sufficient funds available to meet current commitments in the normal course of business. The Company’s on-hand liquidity ratio as of September 30, 2024 was 16.4%.

    The Company had the following primary sources of liquidity at September 30, 2024 (dollars in thousands): 

    Cash and cash equivalents(1) $ 218,733
    Corporate bonds(2) $ 104,633
    Multifamily loans(2) $ 699,343
    Mortgage-backed securities (issued or guaranteed by the U.S. Government, Fannie Mae, or Freddie Mac)(2) $ 491,985
       
    __________________________________________________
    (1) Excludes $14.2 million of cash at Northfield Bank.
    (2) Represents estimated remaining borrowing potential.

    The Company and the Bank utilize the Community Bank Leverage Ratio (“CBLR”) framework. The CBLR replaces the risk-based and leverage capital requirements in the generally applicable capital rules. At September 30, 2024, the Company and the Bank’s estimated CBLR ratios were 12.03% and 12.26%, respectively, which exceeded the minimum requirement to be considered well-capitalized of 9%.

    Asset Quality

    The following table details total non-accrual loans (excluding PCD), non-performing assets, loans over 90 days delinquent on which interest is accruing, and accruing loans 30 to 89 days delinquent at September 30, 2024, June 30, 2024, and December 31, 2023 (dollars in thousands):

      September 30, 2024   June 30, 2024   December 31, 2023
    Non-accrual loans:          
    Held-for-investment          
    Real estate loans:          
    Multifamily $         2,651       $         2,691       $         2,709    
    Commercial           8,823                 10,244                 6,491    
    One-to-four family residential           66                 69                 104    
    Home equity and lines of credit           1,123                 1,124                 499    
    Commercial and industrial           15,117                 2,570                 305    
    Other           6                 6                 7    
    Total non-accrual loans           27,786                 16,704                 10,115    
    Loans delinquent 90 days or more and still accruing:          
    Held-for-investment          
    Real estate loans:          
    Multifamily           —                 —                 201    
    Commercial           1,161                 —                 —    
    One-to-four family residential           304                 136                 406    
    Home equity and lines of credit           343                 467                 711    
    Commercial and industrial           835                 —                 —    
    Total loans held-for-investment delinquent 90 days or more and still accruing           2,643                 603                 1,318    
    Total non-performing loans/assets $         30,429       $         17,307       $         11,433    
    Non-performing loans to total loans           0.75   %             0.42   %             0.27   %
    Non-performing assets to total assets           0.53   %             0.30   %             0.20   %
    Accruing loans 30 to 89 days delinquent $         16,057       $         6,265       $         8,683    

    The Company’s non-performing loans at September 30, 2024 totaled $30.4 million, or 0.75%, of total loans as compared to $11.4 million, or 0.27%, at December 31, 2023. The $19.0 million increase in non-performing loans was primarily attributable to an increase in non-performing commercial and industrial loans of $15.6 million and an increase of $3.5 million in non-performing commercial real estate loans. One commercial and industrial relationship with an outstanding balance of $12.5 million at September 30, 2024, experienced credit deterioration and was placed on non-accrual status during the third quarter of 2024. The loan is currently in the process of being restructured and we expect to receive a partial payment of $10.0 million on or before October 31, 2024, with the remaining $2.5 million to be repaid over three years. The loan was individually evaluated for impairment, we charged off $878,000 and provided a specific reserve of $1.3 million. Additionally, management evaluated the collateral from the Company and assets subject to personal guarantees and, based on current estimates, believes there is adequate collateral and assets to support the current value of the loan absent the expected repayment of $10.0 million. Another commercial and industrial relationship with an outstanding balance of $750,000 is in the process of maturity extension. Additionally, there was an increase in non-performing unsecured small business loans. Unsecured small business loans totaled $31.0 million and $37.4 million at September 30, 2024 and December 31, 2023, respectively. Management continues to closely monitor the small business unsecured commercial and industrial loan portfolio.

    The increase in non-performing commercial real estate loans was primarily attributable to one loan with a balance of $4.4 million, which was put on non-accrual status during the first quarter of 2024. Based on the results of the impairment analysis for this loan, no impairment reserve was necessary as the loan is adequately covered by collateral (a private residence and retail property, both located in New Jersey), with aggregate appraised values totaling $8.7 million.

    Accruing Loans 30 to 89 Days Delinquent

    Loans 30 to 89 days delinquent and on accrual status totaled $16.1 million, $6.3 million and $8.7 million at September 30, 2024, June 30, 2024, and December 31, 2023, respectively. The following table sets forth delinquencies for accruing loans by type and by amount at September 30, 2024, June 30, 2024, and December 31, 2023 (dollars in thousands):
      

      September 30, 2024   June 30, 2024   December 31, 2023
    Held-for-investment          
    Real estate loans:          
    Multifamily $         2,259     $         168     $         740  
    Commercial           5,689               1,557               1,010  
    One-to-four family residential           2,286               1,769               3,339  
    Home equity and lines of credit           1,369               786               817  
    Commercial and industrial loans           4,450               1,977               2,767  
    Other loans           4               8               10  
    Total delinquent accruing loans held-for-investment $         16,057     $         6,265     $         8,683  

    The increase in multifamily delinquent loans was primarily due to two relationships totaling $1.5 million that became current subsequent to September 30, 2024. The increase in commercial real estate delinquent loans was primarily due to two participation loans totaling $5.6 million that matured, and the lead bank is in the process of extending their maturity and should become current in the fourth quarter of 2024. The increase in commercial and industrial delinquent loans from December 31, 2023, was primarily due to two loans to one borrower totaling $1.5 million which we expect to become current in the fourth quarter of 2024, and, to a lesser extent, an increase in delinquencies in unsecured small business loans.

    Subsequent to the quarter end, $1.1 million of home equity and lines of credit loans, $1.5 million of one-to-four family residential loans, and $1.5 million of commercial and industrial loans became current.

    PCD Loans (Held-for-Investment)

    The Company accounts for PCD loans at estimated fair value using discounted expected future cash flows deemed to be collectible on the date acquired. Based on its detailed review of PCD loans and experience in loan workouts, management believes it has a reasonable expectation about the amount and timing of future cash flows and accordingly has classified PCD loans ($9.3 million at September 30, 2024 and $9.9 million at December 31, 2023, respectively) as accruing, even though they may be contractually past due. At September 30, 2024, 2.1% of PCD loans were past due 30 to 89 days, and 24.6% were past due 90 days or more, as compared to 2.9% and 27.1%, respectively, at December 31, 2023.

    Our multifamily loan portfolio at September 30, 2024 totaled $2.64 billion, or 65% of our total loan portfolio, of which $447.5 million, or 11%, included loans collateralized by properties in New York with units subject to some percentage of rent regulation. The table below sets forth details about our multifamily loan portfolio in New York (dollars in thousands).

    % Rent Regulated   Balance   % Portfolio Total NY Multifamily Portfolio   Average Balance   Largest Loan   LTV*   Debt Service Coverage Ratio (DSCR)*   30-89 Days Delinquent   Non-Accrual   Special Mention   Substandard
    0   $         286,728             39.1   %   $         1,166     $         16,603     51.0%   1.57x   $         1,709     $         534     $         782     $         874  
    >0-10             4,745             0.7                 1,582               2,128     51.4   1.46             —               —               —               —  
    >10-20             18,681             2.5                 1,437               2,865     49.2   1.59             —               —               —               —  
    >20-30             19,585             2.7                 2,176               5,512     54.1   1.64             —               —               —               —  
    >30-40             15,183             2.1                 1,265               3,088     48.3   1.63             —               —               —               —  
    >40-50             22,208             3.0                 1,306               2,740     48.2   1.84             —               —               —               —  
    >50-60             9,452             1.3                 1,575               2,341     39.9   2.03             —               —               —               —  
    >60-70             19,201             2.6                 3,200               11,339     53.0   1.46             —               —               —               —  
    >70-80             22,405             3.1                 2,489               4,914     48.0   1.53             —               —               —               —  
    >80-90             20,820             2.8                 1,157               3,148     46.6   1.71             —               —               —               —  
    >90-100             295,256             40.1                 1,779               16,909     52.6   1.65             —               2,117               1,204               4,482  
    Total   $         734,264     100.0   %   $         1,454     $         16,909     51.2%   1.62x   $         1,709     $         2,651     $         1,986     $         5,356  

    The table below sets forth our New York rent-regulated loans by county (dollars in thousands).

    County   Balance   LTV*   DSCR*
    Bronx   $         118,400     51.7%   1.64x
    Kings             191,745     51.5%   1.66
    Nassau             2,176     36.2%   1.88
    New York             49,871     47.3%   1.64
    Queens             38,864     44.3%   1.81
    Richmond             28,790     60.6%   1.64
    Westchester             17,689     61.8%   1.37
    Total   $         447,535     51.4%   1.65x
                 
    * Weighted Average

    None of the loans that are rent-regulated in New York are interest only. During the remainder of 2024, one loan with an aggregate principal balance of $1.8 million will re-price.

    About Northfield Bank

    Northfield Bank, founded in 1887, operates 38 full-service banking offices in Staten Island and Brooklyn, New York, and Hunterdon, Middlesex, Mercer, and Union counties, New Jersey. For more information about Northfield Bank, please visit www.eNorthfield.com.

    Forward-Looking Statements: This release may contain certain “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Northfield Bancorp, Inc. Any or all of the forward-looking statements in this release and in any other public statements made by Northfield Bancorp, Inc. may turn out to be wrong. They can be affected by inaccurate assumptions Northfield Bancorp, Inc. might make or by known or unknown risks and uncertainties as described in our SEC filings, including, but not limited to, those related to general economic conditions, particularly in the market areas in which the Company operates, changes in liquidity, the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio, competition among depository and other financial institutions, including with respect to fees and interest rates, changes in laws or government regulations or policies affecting financial institutions, including changes in the monetary policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, changes in asset quality, prepayment speeds, charge-offs and/or credit loss provisions, our ability to access cost-effective funding, changes in the value of our goodwill or other intangible assets, changes in regulatory fees, assessments and capital requirements, inflation and changes in the interest rate environment that reduce our margins, reduce the fair value of financial instruments or reduce our ability to originate loans, cyber security and fraud risks against our information technology and those of our third-party providers and vendors, the effects of war, conflict, and acts of terrorism, our ability to successfully integrate acquired entities, adverse changes in the securities markets, and the effects of the COVID-19 pandemic. Consequently, no forward-looking statement can be guaranteed. Northfield Bancorp, Inc. does not intend to update any of the forward-looking statements after the date of this release, or conform these statements to actual events.

     
    (Tables follow)
     
    NORTHFIELD BANCORP, INC.
    SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
    (Dollars in thousands, except per share amounts) (unaudited)
                   
                  At or For the
      At or For the Three Months Ended   Nine Months Ended
      September 30,   June 30   September 30,
      2024   2023   2024   2024   2023
    Selected Financial Ratios:                  
    Performance Ratios (1)                  
    Return on assets (ratio of net income to average total assets)         0.46   %           0.59   %           0.41   %           0.43   %           0.71   %
    Return on equity (ratio of net income to average equity)         3.74               4.74               3.45               3.59               5.69    
    Average equity to average total assets         12.24               12.49               12.00               12.09               12.44    
    Interest rate spread         1.42               1.69               1.44               1.42               1.91    
    Net interest margin         2.08               2.25               2.09               2.07               2.41    
    Efficiency ratio (2)         64.07               64.65               72.89               69.44               60.06    
    Non-interest expense to average total assets         1.43               1.49               1.60               1.53               1.50    
    Non-interest expense to average total interest-earning assets         1.50               1.56               1.68               1.60               1.57    
    Average interest-earning assets to average interest-bearing liabilities         128.75               132.21               128.47               128.63               133.66    
    Asset Quality Ratios:                  
    Non-performing assets to total assets         0.53               0.19               0.30               0.53               0.19    
    Non-performing loans (3) to total loans (4)         0.75               0.24               0.42               0.75               0.24    
    Allowance for credit losses to non-performing loans         115.67               378.67               200.96               115.67               378.67    
    Allowance for credit losses to total loans held-for-investment, net (5)         0.87               0.91               0.85               0.87               0.91    
    (1) Annualized where appropriate.
    (2) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income.
    (3) Non-performing loans consist of non-accruing loans and loans 90 days or more past due and still accruing (excluding PCD loans), and are included in total loans held-for-investment, net.
    (4) Includes originated loans held-for-investment, PCD loans, acquired loans and loans held-for-sale.
    (5) Includes originated loans held-for-investment, PCD loans, and acquired loans.
     
    NORTHFIELD BANCORP, INC.
    CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, except share and per share amounts) (unaudited)
     
      September 30, 2024   June 30, 2024   December 31, 2023
    ASSETS:          
    Cash and due from banks $         14,193     $         14,575     $         13,889  
    Interest-bearing deposits in other financial institutions           218,733               138,914               215,617  
    Total cash and cash equivalents           232,926               153,489               229,506  
    Trading securities           13,759               12,939               12,549  
    Debt securities available-for-sale, at estimated fair value           1,063,486               1,119,439               795,464  
    Debt securities held-to-maturity, at amortized cost           9,681               9,749               9,866  
    Equity securities           10,699               13,964               10,629  
    Loans held-for-sale           4,897               —               —  
    Loans held-for-investment, net           4,059,106               4,091,220               4,203,654  
    Allowance for credit losses           (35,197 )             (34,780 )             (37,535 )
    Net loans held-for-investment           4,023,909               4,056,440               4,166,119  
    Accrued interest receivable           19,299               19,343               18,491  
    Bank-owned life insurance           174,482               173,483               171,543  
    Federal Home Loan Bank of New York stock, at cost           37,269               41,785               39,667  
    Operating lease right-of-use assets           28,943               29,305               30,202  
    Premises and equipment, net           22,973               23,628               24,771  
    Goodwill           41,012               41,012               41,012  
    Other assets           47,516               51,785               48,577  
    Total assets $         5,730,851     $         5,746,361     $         5,598,396  
               
    LIABILITIES AND STOCKHOLDERS’ EQUITY:          
    LIABILITIES:          
    Deposits $         3,875,569     $         3,798,474     $         3,878,435  
    Securities sold under agreements to repurchase           —               —               25,000  
    Federal Home Loan Bank advances and other borrowings           990,871               1,089,727               834,272  
    Subordinated debentures, net of issuance costs           61,386               61,331               61,219  
    Lease liabilities           33,529               34,035               35,205  
    Advance payments by borrowers for taxes and insurance           22,492               26,113               25,102  
    Accrued expenses and other liabilities           47,440               43,657               39,718  
    Total liabilities           5,031,287               5,053,337               4,898,951  
               
    STOCKHOLDERS’ EQUITY:          
    Total stockholders’ equity           699,564               693,024               699,445  
    Total liabilities and stockholders’ equity $         5,730,851     $         5,746,361     $         5,598,396  
               
    Total shares outstanding           42,904,342               43,466,961               44,524,929  
    Tangible book value per share (1) $         15.35     $         15.00     $         14.78  
    (1) Tangible book value per share is calculated based on total stockholders’ equity, excluding intangible assets (goodwill and core deposit intangibles), divided by total shares outstanding as of the balance sheet date. Core deposit intangibles were $90, $111, and $154 at September 30, 2024, June 30, 2024, and December 31, 2023, respectively, and are included in other assets.
     
    NORTHFIELD BANCORP, INC.
    CONSOLIDATED STATEMENTS OF INCOME
    (Dollars in thousands, except share and per share amounts) (unaudited)
     
      For the Three Months Ended   For the Nine Months Ended
      September 30,   June 30,   September 30,
        2024       2023       2024       2024       2023  
    Interest income:                  
    Loans $         46,016     $         46,213     $         45,967     $         138,030     $         135,220  
    Mortgage-backed securities           8,493               3,664               7,355               20,246               11,170  
    Other securities           2,684               1,095               3,506               10,031               3,593  
    Federal Home Loan Bank of New York dividends           914               933               935               2,819               2,125  
    Deposits in other financial institutions           1,211               831               2,457               7,060               2,225  
    Total interest income           59,318               52,736               60,220               178,186               154,333  
    Interest expense:                  
    Deposits           20,304               13,614               20,664               60,241               31,918  
    Borrowings           9,949               8,593               10,041               30,653               24,182  
    Subordinated debt           836               837               828               2,492               2,484  
    Total interest expense           31,089               23,044               31,533               93,386               58,584  
    Net interest income           28,229               29,692               28,687               84,800               95,749  
    Provision/(benefit) for credit losses           2,542               188               (618 )             2,339               1,082  
    Net interest income after (benefit)/provision for credit losses           25,687               29,504               29,305               82,461               94,667  
    Non-interest income:                  
    Fees and service charges for customer services           1,611               1,317               1,570               4,796               4,006  
    Income on bank-owned life insurance           999               920               976               2,939               2,679  
    (Losses)/gains on available-for-sale debt securities, net           (7 )             —               1               (6 )             (17 )
    Gains/(losses) on trading securities, net           710               (295 )             188               1,597               723  
    Gain on sale of loans           —               99               51               51               134  
    Other           265               80               73               441               744  
    Total non-interest income           3,578               2,121               2,859               9,818               8,269  
    Non-interest expense:                  
    Compensation and employee benefits           11,424               10,920               13,388               37,577               34,310  
    Occupancy           3,030               3,416               3,222               9,805               10,032  
    Furniture and equipment           450               479               477               1,411               1,393  
    Data processing           1,780               1,994               2,177               6,104               6,308  
    Professional fees           943               883               681               2,433               2,622  
    Advertising           282               414               482               1,282               1,834  
    Federal Deposit Insurance Corporation insurance           626               591               649               1,863               1,763  
    Credit loss expense/(benefit) for off-balance sheet exposures           151               160               103               337               (390 )
    Other           1,692               1,710               1,814               4,891               4,598  
    Total non-interest expense           20,378               20,567               22,993               65,703               62,470  
    Income before income tax expense           8,887               11,058               9,171               26,576               40,466  
    Income tax expense           2,364               2,877               3,214               7,882               11,019  
    Net income $         6,523     $         8,181     $         5,957     $         18,694     $         29,447  
    Net income per common share:                  
    Basic $         0.16     $         0.19     $         0.14     $         0.45     $         0.67  
    Diluted $         0.16     $         0.19     $         0.14     $         0.45     $         0.67  
    Basic average shares outstanding           41,028,213               42,866,246               41,999,541               41,794,149               43,848,873  
    Diluted average shares outstanding           41,088,637               42,918,174               42,002,650               41,829,230               43,927,350  
     
    NORTHFIELD BANCORP, INC.
    ANALYSIS OF NET INTEREST INCOME
    (Dollars in thousands) (unaudited)
     
      For the Three Months Ended
      September 30, 2024   June 30, 2024   September 30, 2023
      Average Outstanding Balance   Interest   Average Yield/ Rate (1)   Average Outstanding Balance   Interest   Average Yield/ Rate (1)   Average Outstanding Balance   Interest   Average Yield/ Rate (1)
    Interest-earning assets:                                  
    Loans (2) $         4,079,974     $         46,016             4.49   %   $         4,128,105     $         45,967             4.48   %   $         4,252,752     $         46,213             4.31   %
    Mortgage-backed securities (3)           901,042               8,493             3.75                 824,498               7,355             3.59                 660,753               3,664             2.20    
    Other securities (3)           273,312               2,684             3.91                 333,855               3,506             4.22                 209,341               1,095             2.08    
    Federal Home Loan Bank of New York stock           38,044               914             9.56                 38,707               935             9.72                 41,278               933             8.97    
    Interest-earning deposits in financial institutions           99,837               1,211             4.83                 191,470               2,457             5.16                 73,005               831             4.52    
    Total interest-earning assets           5,392,209               59,318             4.38                 5,516,635               60,220             4.39                 5,237,129               52,736             4.00    
    Non-interest-earning assets           275,342                       265,702                       248,315          
    Total assets $         5,667,551             $         5,782,337             $         5,485,444          
                                       
    Interest-bearing liabilities:                                  
    Savings, NOW, and money market accounts $         2,417,725     $         12,717             2.09   %   $         2,490,372     $         13,183             2.13   %   $         2,408,218     $         8,865             1.46   %
    Certificates of deposit           700,763               7,587             4.31                 701,272               7,481             4.29                 551,904               4,749             3.41    
    Total interest-bearing deposits           3,118,488               20,304             2.59                 3,191,644               20,664             2.60                 2,960,122               13,614             1.82    
    Borrowed funds           1,008,338               9,949             3.93                 1,041,035               10,041             3.88                 939,922               8,593             3.63    
    Subordinated debt           61,350               836             5.42                 61,294               828             5.43                 61,127               837             5.43    
    Total interest-bearing liabilities           4,188,176               31,089             2.95                 4,293,973               31,533             2.95                 3,961,171               23,044             2.31    
    Non-interest bearing deposits           683,283                       691,384                       739,266          
    Accrued expenses and other liabilities           102,233                       103,082                       100,103          
    Total liabilities           4,973,692                       5,088,439                       4,800,540          
    Stockholders’ equity           693,859                       693,898                       684,904          
    Total liabilities and stockholders’ equity $         5,667,551             $         5,782,337             $         5,485,444          
                                       
    Net interest income     $         28,229             $         28,687             $         29,692      
    Net interest rate spread (4)                 1.42   %                   1.44   %                   1.69   %
    Net interest-earning assets (5) $         1,204,033             $         1,222,662             $         1,275,958          
    Net interest margin (6)                 2.08   %                   2.09   %                   2.25   %
    Average interest-earning assets to interest-bearing liabilities                 128.75   %                   128.47   %                   132.21   %
    (1) Average yields and rates are annualized.
    (2) Includes non-accruing loans.
    (3) Securities available-for-sale and other securities are reported at amortized cost.
    (4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
    (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
    (6) Net interest margin represents net interest income divided by average total interest-earning assets.
       
      For the Nine Months Ended
      September 30, 2024   September 30, 2023
      Average Outstanding Balance   Interest   Average Yield/ Rate (1)   Average Outstanding Balance   Interest   Average Yield/ Rate (1)
    Interest-earning assets:                      
    Loans (2) $         4,127,409     $         138,030             4.47   %   $         4,260,827     $         135,220             4.24   %
    Mortgage-backed securities (3)           791,850               20,246             3.42                 703,320               11,170             2.12    
    Other securities (3)           332,831               10,031             4.03                 241,280               3,593             1.99    
    Federal Home Loan Bank of New York stock           38,781               2,819             9.71                 41,093               2,125             6.91    
    Interest-earning deposits in financial institutions           184,420               7,060             5.11                 72,683               2,225             4.09    
    Total interest-earning assets           5,475,291               178,186             4.35                 5,319,203               154,333             3.88    
    Non-interest-earning assets           269,180                       244,319          
    Total assets $         5,744,471             $         5,563,522          
                           
    Interest-bearing liabilities:                      
    Savings, NOW, and money market accounts $         2,457,320     $         38,231             2.08   %   $         2,443,400     $         19,194             1.05   %
    Certificates of deposit           685,510               22,010             4.29                 572,283               12,724             2.97    
    Total interest-bearing deposits           3,142,830               60,241             2.56                 3,015,683               31,918             1.42    
    Borrowed funds           1,052,589               30,653             3.89                 902,802               24,182             3.58    
    Subordinated debt           61,294               2,492             5.43                 61,164               2,484             5.43    
    Total interest-bearing liabilities $         4,256,713               93,386             2.93       $         3,979,649               58,584             1.97    
    Non-interest bearing deposits           691,406                       788,991          
    Accrued expenses and other liabilities           101,639                       102,765          
    Total liabilities           5,049,758                       4,871,405          
    Stockholders’ equity           694,713                       692,117          
    Total liabilities and stockholders’ equity $         5,744,471             $         5,563,522          
                           
    Net interest income     $         84,800             $         95,749      
    Net interest rate spread (4)                 1.42   %                   1.91   %
    Net interest-earning assets (5) $         1,218,578             $         1,339,554          
    Net interest margin (6)                 2.07   %                   2.41   %
    Average interest-earning assets to interest-bearing liabilities                 128.63   %                   133.66   %
    (1) Average yields and rates are annualized. 
    (2) Includes non-accruing loans. 
    (3) Securities available-for-sale and other securities are reported at amortized cost.
    (4) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
    (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
    (6) Net interest margin represents net interest income divided by average total interest-earning assets.

    Company Contact:
    William R. Jacobs
    Chief Financial Officer
    Tel: (732) 499-7200 ext. 2519

    The MIL Network –

  • MIL-OSI United Kingdom: Historic visit by UK Prime Minister paves way for closer economic ties for the Commonwealth

    Source: United Kingdom – Executive Government & Departments

    The Commonwealth has a once in a generation chance to be a driving force for opportunity and growth in an increasingly contested world, the Prime Minister is set to say on a landmark visit to the Pacific this week.

    • Prime Minister to make the case that the Commonwealth has a once in a generation chance to be a driving force for opportunity and growth during visit to Samoa 

    • New UK Trade Centre of Expertise set to bolster economic ties across the grouping and unlock markets for UK businesses  

    • Keir Starmer makes history as first ever sitting UK Prime Minister to visit a Pacific Island country

    The Commonwealth has a once in a generation chance to be a driving force for opportunity and growth in an increasingly contested world, the Prime Minister is set to say on a landmark visit to the Pacific this week.  

    It comes as the government uses its foreign policy agenda to deliver for people at home, working with partners across the globe on issues such as climate change, growth and energy security. 

    Keir Starmer will arrive in Samoa for the Commonwealth Heads of Government Meeting today [Thursday 24 October], joining 55 other Commonwealth delegations to discuss the shared challenges and opportunities faced by its members.  

    In doing so, he will make history as the first UK Prime Minister to ever visit a Pacific Island country.   

    The Prime Minister will use the trip to make the case that Commonwealth countries, no matter where they are in the world, need resilient and thriving economies to face the global challenges of the day.  

    And he will tell delegates that he believes the Commonwealth offers a unique opportunity to be able to build those economies, combining major traditional markets with rapidly growing economies and resilient, innovative communities.  

    By 2027, the Commonwealth is expected be home to six of the world’s ten fastest-growing economies – Guyana, Rwanda, Bangladesh, Uganda, India and Mozambique – and have a combined GDP exceeding $19.5 trillion, while more than 60% of the grouping’s 2.5 billion population will be under 30. 

    The Commonwealth, which includes some of the UK’s biggest trading partners such as India, Canada, Australia, Singapore and South Africa, already accounts for 9% of total UK trade, worth £164 billion in 2023. And its members benefit from a 21% average reduction in bilateral trade costs, as well as higher investment flows between Commonwealth members.  

    As part of the visit, the Prime Minister will announce a new UK Trade Centre of Expertise, operating out of the Foreign Office, to drive export-led growth across the grouping. Trade specialists will provide technical and practical assistance to developing countries to help them access and compete in global markets.  

    In turn, the partnership is expected to help UK businesses tap into some of the fastest growing economies in the world, such as Uganda and Bangladesh through strengthened economic ties. Over the long term, the project will also aim to lift economies out of poverty, reducing pressure on UK Aid and British taxpayers. 

    The Prime Minister is also expected to meet business leaders during CHOGM, as part of his personal campaign to drive investment into every corner of the United Kingdom. 

    The meeting, which will include business leaders such as Brian Moynihan, chairman and CEO of Bank of America, and John Neal, CEO of Lloyd’s of London, comes just 10 days after the UK hosted the International Investment Summit, which drove £63 billion of private investment and 38,000 jobs into the UK. 

    Prime Minister Keir Starmer said: 

    We have a once-in-a-generation opportunity to fix the foundations and change our country’s story to turn around the lives of everyday people in the UK, but we can’t do that with a protectionist approach.

    Under this government’s pragmatic and sensible approach, we must harness the opportunities to work with genuine partners – like our Commonwealth family – across the world to build resilient economies that offer real opportunity for our people, whether that is accessing untapped markets, or collaborating on grassroots innovations.

    The combined GDP of the Commonwealth is expected to exceed $19.5 trillion in the next three years, we cannot let that economic heft go to waste.

    Alongside the Commonwealth Secretary General, the Foreign Secretary is expected to convene Commonwealth foreign ministers to launch a new Commonwealth Investment Plan of Action to mobilise investment across the membership. 

    The plan will focus on small and vulnerable economies, easing barriers to trade and investment. The Foreign Secretary will also launch two new trade hubs to help female entrepreneurs in India and Sri Lanka access global markets.   

    Foreign Secretary David Lammy said: 

    The Commonwealth is a unique forum encompassing 56 countries and a third of the world’s population brought together through shared history and friendship.

    Representing some of the world’s fastest growing economies, forging stronger ties with these markets is crucial for delivering jobs and economic growth.

    This government is reconnecting Britain in the world and building partnerships that will unlock greater prosperity for all.

    During the three-day CHOGM summit, leaders will discuss some of the pressing issues facing Commonwealth nations, including climate change, education and democracy.  

    On Friday, the Prime Minister is expected to attend a lunch, hosted by the King for new heads of government, before attending two Commonwealth executive sessions, and the heads of government dinner.

    Updates to this page

    Published 24 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Only purchase safe and legal e-bikes: new Government safety campaign urges public

    Source: United Kingdom – Executive Government & Departments

    A new safety campaign to raise awareness about the dangers of buying faulty and unsafe e-bikes, e-scooters and components such as batteries has been launched

    Campaign image for DBT’s Buy Safe, Be Safe campaign

    • New campaign urges public to buy safe e-bikes and e-scooters and avoid rogue online sellers
    • E-bike and e-scooter causing fires every two days according to London Fire Brigade
    • New Product Regulation Bill beginning work to tackle dangerous goods sold online

    A new safety campaign to raise awareness about the dangers of buying faulty and unsafe e-bikes, e-scooters and components such as batteries has been launched today (Thursday 24 October).

    The Department for Business & Trade’s new “Buy Safe, Be Safe” campaign has been designed to urge the public to buy safe e-bikes and e-scooters and avoid rogue online sellers.

    E-bikes can be a cheap, healthy and modern method of travel throughout our towns and cities. However, unsafe e-bikes have resulted in hundreds of deadly fires and injured dozens of people across the UK. In 2023, the London Fire Brigade a fire every two days as a result of e-bike and e-scooter-related fires.

    Many of these fires are caused by parts incompatible with e-bikes and scooters, as well as the purchase of defective or poorly manufactured parts sold by rogue online sellers.

    The campaign focuses on three key areas encouraging consumers to only buy safe products from reputable sellers, only replace items with products recommended by the manufacturer and finally to seek professional help when converting or repairing e-bikes and e-scooters.

    The Department is partnering with retailers, manufacturers as well as online marketplaces, trade associations, consumer groups and businesses to promote the campaign. Find out more about the campaign here.

    Product Safety Minister Justin Madders said:

    E-bikes can be a great way to travel around the city, but we’ve all seen the tragic stories of unsafe e-bikes and e-scooters causing dangerous fires and taking lives.

    That’s why we’re urging everyone to check what you’re buying, check where you’re buying it from and ensure it’s safe to use.

    Local Transport Minister Simon Lightwood said:

    E-bikes have transformed our urban areas by giving people an accessible and healthy way to travel, but this is being ruined by a handful of untrustworthy online retailers.

    These rogue sellers not only risk bringing defective and dangerous batteries into people’s homes, but undermine confidence in active travel as a whole.

    That’s why I’m delighted that we are launching this campaign to make sure that people have peace of mind buying e-bikes and e-scooters from reliable sources.

    Under current laws, e-scooters are banned on public land from use except in Government rental trial areas, while e-bikes are legal to use across the country but must not exceed an output of 250 watts or travel faster than 15.5 mph.

    The public can expect to see an ongoing social media campaign including how-to video guides, as well as information materials being made available for retailers to use in stores and online to support consumers.  

    The campaign comes off the back of wider efforts to tackle dangerous goods being sold in online marketplaces. In September, the Government unveiled the new Product Regulation and Metrology Bill aimed at allowing the UK to take charge of its product regulations, boosting consumer safety and helping to further grow the economy.

    The Bill will also address the sharp rise in safety concerns around e-bikes and lithium-ion batteries and how they are sold via online marketplaces. The Bill will enable Government to better protect consumers who have for too long been at the mercy of unscrupulous suppliers, holding sellers and the online marketplaces to account if they fail to meet their responsibilities.

    And it will ensure products sold online or placed on the UK market are safe, while enabling market enforcement officials to clamp down on the sale of the product or the sellers where they are not.

    London Fire Brigade’s Assistant Commissioner for Prevention and Protection, Craig Carter, said:

    E-bikes and e-scooters are a green and sustainable way to travel around our city. However, e-bikes and e-scooters can pose a significant fire risk and particularly the batteries used to power them have become one of London’s fastest-growing fire risks. They have destroyed homes and families have sadly lost loved ones in these fires.

    From our investigations, we know many of the fires we’ve attended have involved second-hand vehicles or the bike has been modified using parts bought online.

    At this time, there is not the same level of regulation of products for e-bikes and e-scooters sold via online marketplaces or auction sites when compared to high street shops, so we cannot be confident that products meet the correct safety standard. We understand that people are trying to save money, but if you spot a deal that looks too be good to be true, it probably is.

    Halfords Head of Quality, Chris Hall, said:

    E-bikes offer numerous benefits for a healthier, greener commute. When e-bikes are purchased from reputable retailers, they’re properly certified and safe to use. Our priority is to ensure that everyone can enjoy the benefits of e-bikes without compromising on safety. The fire safety issues we’ve seen are linked to poorly manufactured, uncertified products typically bought online, as well as the use of incompatible components.

    Lesley Rudd, chief executive of consumer safety charity, Electrical Safety First said:

    E-bikes, e-scooters and their batteries are generally safe when purchased from reputable manufacturers and used correctly. However, poor-quality products – often sold via online marketplaces – improper charging, or misuse can cause ferocious fires and pose a serious risk to the buyer. Safety starts with where you shop. Sticking to reputable sellers will provide confidence that your e-bike is safe and manufactured to a high standard.

    It’s equally as important to ensure you use a charger that is designed to be compatible with your battery to avoid the risk of overcharging which may destabilise the battery and lead to a fire. We also urge consumers considering converting their push bike into e-bike to source a high-quality kit and that it is installed by a competent professional.”  

    Inga Becker-Hansen, Product Safety Advisor at the BRC, said:

    The popularity of e-bikes and e-scooters has greatly increased the number on our streets and in our homes. These products provide a convenient method of transport for many of us. However, consumers should ensure they purchase from reputable and responsible retailers, who will ensure that appropriate batteries are used and all necessary safety standards are met. We urge the public to follow government guidance and take appropriate storage and maintenance measures to ensure the safety and longevity of their purchases.

    Find full details about the ‘Buy Safe, Be Safe’ campaign here

    For our information on buying safely, how to store your product safely and best practice for charging, you can also find more information from the London Fire Brigade’s #ChargeSafe campaign.

    Updates to this page

    Published 24 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Press release: Historic visit by UK Prime Minister paves way for closer economic ties for the Commonwealth

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

    The Commonwealth has a once in a generation chance to be a driving force for opportunity and growth in an increasingly contested world, the Prime Minister is set to say on a landmark visit to the Pacific this week.

    • Prime Minister to make the case that the Commonwealth has a once in a generation chance to be a driving force for opportunity and growth during visit to Samoa 

    • New UK Trade Centre of Expertise set to bolster economic ties across the grouping and unlock markets for UK businesses  

    • Keir Starmer makes history as first ever sitting UK Prime Minister to visit a Pacific Island country

    The Commonwealth has a once in a generation chance to be a driving force for opportunity and growth in an increasingly contested world, the Prime Minister is set to say on a landmark visit to the Pacific this week.  

    It comes as the government uses its foreign policy agenda to deliver for people at home, working with partners across the globe on issues such as climate change, growth and energy security. 

    Keir Starmer will arrive in Samoa for the Commonwealth Heads of Government Meeting today [Thursday 24 October], joining 55 other Commonwealth delegations to discuss the shared challenges and opportunities faced by its members.  

    In doing so, he will make history as the first UK Prime Minister to ever visit a Pacific Island country.   

    The Prime Minister will use the trip to make the case that Commonwealth countries, no matter where they are in the world, need resilient and thriving economies to face the global challenges of the day.  

    And he will tell delegates that he believes the Commonwealth offers a unique opportunity to be able to build those economies, combining major traditional markets with rapidly growing economies and resilient, innovative communities.  

    By 2027, the Commonwealth is expected be home to six of the world’s ten fastest-growing economies – Guyana, Rwanda, Bangladesh, Uganda, India and Mozambique – and have a combined GDP exceeding $19.5 trillion, while more than 60% of the grouping’s 2.5 billion population will be under 30. 

    The Commonwealth, which includes some of the UK’s biggest trading partners such as India, Canada, Australia, Singapore and South Africa, already accounts for 9% of total UK trade, worth £164 billion in 2023. And its members benefit from a 21% average reduction in bilateral trade costs, as well as higher investment flows between Commonwealth members.  

    As part of the visit, the Prime Minister will announce a new UK Trade Centre of Expertise, operating out of the Foreign Office, to drive export-led growth across the grouping. Trade specialists will provide technical and practical assistance to developing countries to help them access and compete in global markets.  

    In turn, the partnership is expected to help UK businesses tap into some of the fastest growing economies in the world, such as Uganda and Bangladesh through strengthened economic ties. Over the long term, the project will also aim to lift economies out of poverty, reducing pressure on UK Aid and British taxpayers. 

    The Prime Minister is also expected to meet business leaders during CHOGM, as part of his personal campaign to drive investment into every corner of the United Kingdom. 

    The meeting, which will include business leaders such as Brian Moynihan, chairman and CEO of Bank of America, and John Neal, CEO of Lloyd’s of London, comes just 10 days after the UK hosted the International Investment Summit, which drove £63 billion of private investment and 38,000 jobs into the UK. 

    Prime Minister Keir Starmer said: 

    We have a once-in-a-generation opportunity to fix the foundations and change our country’s story to turn around the lives of everyday people in the UK, but we can’t do that with a protectionist approach.

    Under this government’s pragmatic and sensible approach, we must harness the opportunities to work with genuine partners – like our Commonwealth family – across the world to build resilient economies that offer real opportunity for our people, whether that is accessing untapped markets, or collaborating on grassroots innovations.

    The combined GDP of the Commonwealth is expected to exceed $19.5 trillion in the next three years, we cannot let that economic heft go to waste.

    Alongside the Commonwealth Secretary General, the Foreign Secretary is expected to convene Commonwealth foreign ministers to launch a new Commonwealth Investment Plan of Action to mobilise investment across the membership. 

    The plan will focus on small and vulnerable economies, easing barriers to trade and investment. The Foreign Secretary will also launch two new trade hubs to help female entrepreneurs in India and Sri Lanka access global markets.   

    Foreign Secretary David Lammy said: 

    The Commonwealth is a unique forum encompassing 56 countries and a third of the world’s population brought together through shared history and friendship.

    Representing some of the world’s fastest growing economies, forging stronger ties with these markets is crucial for delivering jobs and economic growth.

    This government is reconnecting Britain in the world and building partnerships that will unlock greater prosperity for all.

    During the three-day CHOGM summit, leaders will discuss some of the pressing issues facing Commonwealth nations, including climate change, education and democracy.  

    On Friday, the Prime Minister is expected to attend a lunch, hosted by the King for new heads of government, before attending two Commonwealth executive sessions, and the heads of government dinner.

    Updates to this page

    Published 24 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI New Zealand: $100m NZ-Brazil trade boost through 13 key partnerships

    Source: New Zealand Government

    Minister for Trade Todd McClay, today announced the signing of 13 Memorandums of Understanding (MOUs) between New Zealand and Brazilian companies as part of the New Zealand Trade Mission to São Paulo this week.
    “These partnerships mark a significant step in strengthening the trade relationship between the two nations and are set to generate over $100 million in revenue over the next three years,” Mr McClay says.
    “This will boost our economy and contribute towards achieving the ambitious target of doubling trade by value in 10 years.
    “These MOU’s will continue to increase market access to Latin America and deepen our people-to-people connections, while also contributing to Brazil’s economic growth. This is a win-win for both countries.
    The 13 MOUs signed today cover a broad range of sectors, including technology, healthcare, advanced manufacturing, and education, showcasing New Zealand’s diverse offerings and Brazil’s growing interest in Kiwi expertise.
    The MOUs include:

    New Zealand Brazil Business Council (NZBBC) and NZBBC Brazil – Establishing the NZBBC office in Brazil to foster further business ties.
     AD Instruments and UNESP Jaboticabal – Supplying telemetry technology to universities in São Paulo.
     AD Instruments and ANIMA Educacao – Renewing educational technology in ANIMA Group’s medical schools.
    Foot Science and IMPEC – Partnering to distribute Foot Science’s products across Brazil.
     Framecad and Placlux – Providing advanced construction technology to the InovaSteel Group.
     Framecad and Steel Corp – Delivering two Framecad systems to Steel Corp for further innovation in building systems.
     Gallagher Animal Management and D&Q Law – Launching Gallagher’s animal management operations in Brazil.
     Les Mills and Brazilian Trainer – Introducing Les Mills Pilates classes across Brazil.
    Loadscan and ASBZ – Expanding Loadscan’s presence with a new Brazilian entity.
    MindHive and ASBZ – Establishing MindHive’s Brazilian office to drive innovation and collaborative solutions.
    MindHive and JBS – Establishing MindHive’s technology in JBS processing.
    AROA and Nexgeen – Enhancing healthcare services with Nexgeen, a key healthcare provider in Brazil.
    Tait Communications and Santos Futebol Clube – Supplying communication systems to Santos Futebol ClubAROA and Nexgeen – Enhancing healthcare services with Nexgeen, a key healthcare provider in Brazil.

    “These partnership agreements highlight the importance of trade missions in driving collaboration and underscore the Government’s commitment to enhancing opportunities for innovation, trade, and shared prosperity.”

    MIL OSI New Zealand News –

  • MIL-OSI: Faircourt Asset Management Inc. Announces October Distribution

    Source: GlobeNewswire (MIL-OSI)

    Toronto, ON, Oct. 23, 2024 (GLOBE NEWSWIRE) — Faircourt Asset Management Inc., as Manager of the Faircourt Fund (NEO:FGX), is pleased to announce the monthly distribution payable on the Shares of the below listed Fund.

    Faircourt Funds Trading Symbol Distribution Amount (per share/unit) Ex-Dividend Date Record Date Payable Date
    Faircourt Gold Income Corp. FGX $0.024 October 31, 2024 October 31, 2024 November 14, 2024

    Faircourt Asset Management Inc. is the Investment Advisor for Faircourt Gold Income Corp.

    This press release is not for distribution in the United States or over United States wire services.

    For further information on the Faircourt Funds, please visit www.faircourtassetmgt.com or
    please contact 1-800-831-0304.

    You will usually pay brokerage fees to your dealer if you purchase or sell Shares of the Fund on the NEO Exchange or other alternative Canadian trading system (an “exchange”). If the Shares are purchased or sold on an exchange, investors may pay more than the current net asset value when buying Shares of the Fund and may receive less than the current net asset value when selling them.

    There are ongoing fees and expenses associated with owning units of an investment fund. An investment fund must prepare disclosure documents that contain key information about the fund. You can find more detailed information about the fund in the public filings available at www.sedar.com. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

    The MIL Network –

  • MIL-OSI China: 2nd phase of 136th Canton Fair opens in Guangzhou

    Source: People’s Republic of China – State Council News

    2nd phase of 136th Canton Fair opens in Guangzhou

    Updated: October 24, 2024 08:13 Xinhua
    A buyer selects goods at the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. The second phase of the 136th China Import and Export Fair, popularly known as the Canton Fair, opened in Guangzhou on Wednesday focusing on displaying products such as household goods, gifts, decorations, building materials and furniture. [Photo/Xinhua]
    A buyer selects goods at the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]
    People visit the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]
    A buyer visits the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]
    People visit the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]
    Buyers visit the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]
    A buyer talks with an exhibitor at the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, Oct. 23, 2024. [Photo/Xinhua]

    MIL OSI China News –

  • MIL-OSI New Zealand: NZCTU alarmed at further cuts to WorkSafe

    Source: Council of Trade Unions – CTU

    WorkSafe’s announcement that it is planning even further restructuring and cuts just months after losing 15% of its staff has alarmed the NZCTU Te Kauae Kaimahi.

    “Our health and safety regulator is a critical component of our health and safety system, and we know it already has an undercooked capacity to deliver on its role,” said NZCTU President Richard Wagstaff.

    “Taking more people out to save money to pay for tax cuts is short-term thinking that will have long term consequences for the health and safety of New Zealand workers.

    “WorkSafe is now set up to fail. They have stripped down the organisation to its bare bones, throwing whatever they can to the so called ‘front line’ inspectorate, knowing full well that without a well-resourced support function, the inspectorate will be less effective. 

    “Everyone in New Zealand has the right to expect a safe workplace and to be able to come home safely to their family at the end of the day. Sadly, these cuts will mean more workers will be at-risk.

    “This announcement is all smoke and mirrors. The fact remains that WorkSafe, remains well short of the numbers of inspectors the agency once had when it was created in 2013. At that time, we had 8.4 inspectors per 100 thousand workers (similar to Australia) and now it has been run down to 6.3 – a level we last saw when the Pike River disaster occurred.

    “Compounding this problem is the lack of support, and the expectation in this latest proposal for inspectors to pick up more administrative and other functions on top of their day job. This makes a mockery of the claims to move resources to the front line.

    “These proposals signal a further shift away from protecting workers from risks to their health and safety and towards a focus to responding to harm. WorkSafe has had to shrink away from its proper role to fit the budget.

    “Our health and safety system relies on an effective regulator. This latest announcement demonstrates yet again that health and safety is just not a priority for the Government,” said Wagstaff.

    MIL OSI New Zealand News –

  • MIL-OSI USA: October 23rd, 2024 Heinrich Cosponsors Legislation to Protect Medicare and Social Security for New Mexico’s Seniors

    US Senate News:

    Source: United States Senator for New Mexico Martin Heinrich
    WASHINGTON — U.S. Senator Martin Heinrich (D-N.M.) cosponsored the Medicare and Social Security Fair Share Act, legislation that will ensure the long-term solvency of Medicare and Social Security by reversing inequities in the tax system so that high earners contribute a fairer share. 
    “Medicare and Social Security are benefits that New Mexicans have earned over a lifetime of hard work. I’m proud to support this legislation to protect these bedrock programs for New Mexicans by making the ultrawealthy pay their fair share,” said Heinrich.
    Nearly 40% of seniors rely on Social Security for the majority of their incomes – benefits they have earned that let them retire with dignity. Medicare protects its over 60 million beneficiaries, one in five of whom have less than $15,000 in savings, from potentially catastrophic health care costs.
    Despite their bedrock importance, these programs are both at risk of not being able to fully pay out benefits within the next 15 years. Without new revenue, the Hospital Insurance Trust Fund and the Old Age and Survivors Insurance Trust Fund are expected to become insolvent in 2028 and 2033, respectively.
    The Medicare and Social Security Fair Share Act will increase funding for the Social Security and Medicare trust funds by extending the payroll tax on wages, self-employment income, and investment income to taxpayers making over $400,000. The legislation also applies a payroll tax on the pass-through business income, like hedge funds and private equity firms, of taxpayers earning more than $400,000, which will eliminate the classification of earned income as distributed business profits that is currently a major loophole. By applying these two provisions, we can extend Social Security solvency indefinitely and extend Medicare solvency by an estimated 20 years.
    The Medicare and Social Security Fair Share Act is led by U.S. Senator Sheldon Whitehouse (D-R.I.). Alongside Heinrich, the legislation is cosponsored by U.S. Senators Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), and Amy Klobuchar (D-Minn). The bill is led in the House by U.S. Representative Brendan F. Boyle (D-Pa.).
    The bill is endorsed by the Alliance for Retired Americans; American Federation of Government Employees; American Federation of Labor and Congress of Industrial Organizations; American Federation of State, County and Municipal Employees; American Federation of Teachers; Americans for Tax Fairness; Center for Medicare Advocacy; Committee for a Responsible Federal Budget; Communications Workers of America; Doctors for America; Families USA; Groundwork Collaborative; International Federation of Professional and Technical Engineers; Main Street Alliance; Mary’s Center; National Committee to Preserve Social Security and Medicare; National Council on Aging; National Education Association; NETWORK Lobby for Catholic Social Justice; People’s Action; Public Citizen; Revolving Door Project; Social Security Works; and the Teamsters.
    A one-page summary is here.
    The text of the bill is here. 
    Background
    Heinrich fought hard to pass the Inflation Reduction Act, historic legislation that lowers health care and prescription drug costs for working families. 
    This year, the Inflation Reduction Act began capping out-of-pocket costs for prescription drugs at an estimated $3,300, providing substantial relief for individuals facing high medication expenses. This new Medicare drug cap comes in tandem with several other major healthcare provisions Heinrich helped secure, including free vaccines for seniors and a $35 insulin cap for those on Medicare.
    Last year, the White House announced 48 Medicare Part B drugs that raised their prices faster than inflation, and some drug companies raised prices of certain medications faster than inflation for every quarter in 2023. The IRA provisions Heinrich helped deliver will now require these companies to pay rebates back to Medicare, saving seniors who take these drugs between $1 and $2,786 per dose, depending on their medication. 
    The IRA also reduced the cost of marketplace health insurance premiums by an average of hundreds of dollars per person, for roughly 40,000 New Mexicans.
    A longer list of provisions Heinrich helped to secure in the Inflation Reduction Act can be found here.
    Heinrich introduced the Strengthening Medicare and Reducing Taxpayer (SMART) Prices Act, legislation that builds on a provision that was included in the Inflation Reduction Act to empower Medicare to negotiate prescription drug prices for the first time. Specifically, the bill would allow prescription drugs and biologics to be eligible for negotiation five years after approval by the Food and Drug Administration (FDA) — increasing the overall amount by which Medicare can lower prices through negotiation. Additionally, the SMART Prices Act would lower Medicare Part B drug prices through negotiation two years earlier than under current law, and increase the overall number of drugs that the Department of Health & Human Services (HHS) can negotiate starting in 2026.
    Additionally, Heinrich is a cosponsor of the Pharmacy Benefit Manager Transparency Act, legislation that bans deceptive unfair pricing schemes, prohibits arbitrary clawbacks of payments made to pharmacies, and requires Pharmacy Benefit Managers (PBMs) to report to the Federal Trade Commission (FTC) how much money they make through spread pricing and pharmacy fees. 
    Heinrich also cosponsored the COLAs Don’t Count Act, legislation to exempt annual cost-of-living adjustments (COLA) from impacting the benefits of those who utilize the Supplemental Nutrition Assistance Program (SNAP) for food assistance. This would help ensure participants of SNAP are not losing benefits due to the added costs of inflation and allow families to keep food on the table.
    Heinrich recently secured committee passage of his Fiscal Year 2025 Agriculture Appropriations Bill, legislation that delivers critical new resources to fully fund WIC and ensure all eligible women, infants, and children can get the nutrition they need. It also protects vital nutrition assistance programs for families across the country.

    MIL OSI USA News –

  • MIL-OSI Economics: My Vision for ADB: Strive Together to Attain Sustainable and Inclusive Growth in the Region with Innovative and Tailored Solutions – Masato Kanda

    Source: Asia Development Bank

    ADB has played a vital role in the development of the Asia and Pacific region not only helping it become the engine room of global growth today but ensuring the region is resilient and inclusive. The many crises and challenges currently confronting us, from climate change to digitalization and gender equality, require continually striving for ADB to remain the most trusted partner for all members. Throughout my nearly four decades as a government official, I have had the tremendous opportunity to work with many dedicated professionals in the region committed to a shared vision of economic stability and prosperity, and poverty eradication.

    If I am afforded the immense privilege of being the next President of ADB, I will steadfastly commit to ensuring ADB can achieve its vision of delivering sustainable and inclusive growth to the region with innovative and tailored solutions, in alignment with the updated Strategy 2030. I can only do this by working with each and every member and delivering the New Operating Model so the ADB remains a client-first bank that maximizes its development impact, underpinned by talented and diverse staff.

    1. Background

    Since its inception in 1966, ADB has played a vital role in supporting developing member countries (DMCs) in Asia and the Pacific. Throughout its history, it has worked unflinchingly on the arduous tasks, including, most notably, facilitation of the recovery after the 1997 Asian financial crisis. Each time it faces a crisis, ADB has provided innovative solutions. The launch of the ADF (Asian Development Fund) and the bond issuance to enhance its support to DMCs after the oil shock in 1970s is a case in point. ADB also helped DMCs achieve a solid track record of growth through its financial and non-financial instruments. The real growth rate of Emerging and Developing Asia over the past 10 years was 5.6 percent, 2.5 percentage points higher than global growth.

    However, despite the clear progress toward sustainable and inclusive growth, significant challenges remain. The ongoing climate crisis and the risk of another pandemic as serious as COVID 19, indicate that ADB should be even bolder to address global public goods (GPGs) and regional public goods (RPGs). Moreover, while ADB needs to tackle these emerging tasks at a regional and global scale, it remains responsible for supporting DMCs address country-specific challenges, including not least poverty reduction. It is paramount that ADB remains the most trusted partner in the region.

    Over more than 60 years, Japan has been working with all member countries. As a former official at the Japanese Ministry of Finance, in particular during my time as Vice-Minister of Finance for International Affairs, I have had the privilege to work with inspiring leaders, dedicated professionals, and wonderful friends across Asia and the Pacific. Nothing could make me happier than the opportunity to continue to work with all of them to establish a clear pathway toward the ADB’s vision: to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

    The rest of this Vision Statement is organized as follows. In the next section, I describe the challenges and unique opportunities for the region. In section 3, I elaborate on my suggested direction that ADB should head toward. Section 4 concludes with my unwavering commitment to help champion sustainable growth in the region.

    2. Challenges and opportunities

    Climate change. The DMCs, in particular Small Island Developing States (SIDS) in the Pacific, are prone to natural disasters stemming from climate change, such as typhoons, cyclones, and rising sea levels. Moreover, Asia and the Pacific emits almost half of the world’s greenhouse gases, partly reflecting its high energy demand. However, its coal plants are relatively young, and its grid coverage is limited, complicating the transition to net-zero. Against this backdrop, ADB has spearheaded innovative climate change initiatives as the region’s climate bank. Nevertheless, bolder actions are still warranted, both on the mitigation and adaptation fronts.

    Infrastructure gap. Infrastructure lays a fundamental basis to eradicate poverty, boost potential growth and enhance regional connectivity. The region still faces a glaring gap in infrastructure. ADB has estimated that developing Asia will need $1.7 trillion annually to close the gap in infrastructure, and this figure could be larger given the modest growth over the past several years. At the same time, more actions are needed for boosting the quality of infrastructure investment, strengthening climate resilience, achieving high environmental and social standards, preserving biodiversity, and creating jobs. 

    Poverty. The number of people who are below the poverty line rose significantly after the COVID-19 crisis, setting back the fight against poverty in Asia and the Pacific by at least two years. Income poverty is often associated with poor health and lack of education, hampering human capital development and restraining growth. Rapid economic growth and a stable macroeconomic environment in the region would help address poverty across the region but this can only be achieved with certain policy actions such as those outlined below.

    Inequality. Economic growth in the region has come with widening inequality, in particular after the COVID-19 crisis. Inequality could damage social stability and cohesion and undermine economic dynamism. Also, while rapid urbanization has provided an increasing number of citizens with access to better public services (education, water and sanitary services, transportation), it can widen the gap with vulnerable people that do not have access to such basic services and the social safety net.

    Diversity. Asia and the Pacific boasts a wide variety of cultures and ethnicities. This has required, and will continue to require, ADB to tailor its supporting tools to country-specific circumstances, with due regard to size, income distribution, population dynamics, and social norms of each DMC. On procurement, while ADB remains committed to maintaining high environmental and social standards, it also needs to take country systems into account.

    Gender. ADB needs to further pursue gender equality in line with its vision. Our journey is yet to be completed: according to the United Nations, the participation of women in the labor force in Asia and the Pacific is below the global average, as is the promotion of women in leadership positions. ADB should continue to be the thought leader to transform the lives of women, by helping DMCs take decisive steps toward gender equality, while recognizing country-specific cultural and social circumstances.

    Private capital mobilization. One of the ADB’s New Operating Model (NOM)’s priorities is a shift toward the private sector. Yet, the amount of private capital mobilization has been significantly below the aspiration of various development agendas, including the Paris Agreement. Mobilizing private capital is easier said than done. The upcoming discussion on the ADB’s Private Sector Development Action Plan will lay a foundation for the ADB’s medium-term efforts to boost private capital mobilization and enable a stronger private sector in line with the ADB’s vision.

    Domestic resource mobilization. In many DMCs, tax revenues are still short of supporting their own sustainable development. The Asia Pacific Tax Hub, established in May 2021 under President Asakawa’s leadership, has helped DMCs modernize their tax systems through strategic policy dialogues, institutional capacity building, knowledge sharing, and collaboration with development partners. The potential benefits of domestic resource mobilization include more private capital mobilization through blended finance.

    Digitalization. Digital technologies can be an enabler that brings transformational impacts, allowing DMCs to leapfrog the development process that advanced economies took much longer to go through. At the same time, rapid progress in digitalization comes with costs and risks, including a digital divide and cyber threats. With the approval of its Strategy 2030 Midterm Review, ADB is pursuing a more active role on digital transformation as one of the new strategic focus areas.

    3. Ways forward

    I will now elaborate how I would work toward achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific if I were elected as President of ADB. I will maintain the “client-first” principle as the organization’s highest priority by tailoring the role of ADB to specific challenges faced by all DMCs. Moreover, ADB should fully utilize its well-established collaboration between the sovereign and non-sovereign sectors, which is one of the ADB’s great strengths. My vision below is also crafted with a clear purpose to augment the updated Strategy 2030 with the organizational vision statement and the new strategic focus areas (climate action; private sector development; regional cooperation and public goods; digital transformation; and resilience and empowerment). For this purpose, I would ensure that the Capital Utilization Plan will be ambitious and fully utilize different financial resources.

    Providing innovative financial climate solutions to DMCs. ADB has established its reputation as an innovator in climate and development finance, exemplified by IF-CAP (Innovative Finance Facility for Climate in Asia and the Pacific), which is expected to be officially launched soon. By focusing squarely on the development-climate nexus under the Climate Change Action Plan, ADB should continue to be the region’s climate bank, in line with climate as the first enhanced focus area. In the context of the ongoing MDB Evolution and the CAF (Capital Adequacy Framework) Review, ADB must be a role-model for other MDBs (Multilateral Development Banks) to foster climate mitigation and adaptation.

    Promoting private capital mobilization. With the new quantitative targets under Strategy 2030, ADB should pursue ambitious goals of mobilizing and enabling private capital, by taking concrete actions under the upcoming Private Sector Development Action Plan. Closer engagement with global and regional market participants and industry experts, as well as deepening of domestic capital markets, would help bring much needed private financial flows for sustainable growth.

    Supporting domestic resource mobilization. ADB should remain committed to helping DMCs strengthen their revenue base, paving the way for the achievement of self-sustained development over time. ADB should also make sure that this effort serves as a key ingredient for policy discussion in the context of policy-based loans (PBLs). The Asia Pacific Tax Hub should continue to play an instrumental role in this regard, by providing comprehensive diagnoses on and solutions to the underlying structural problems of revenue shortfalls.

    Fostering regional cooperation and integration. Trade and investment flows are increasingly interconnected within the region, and hence fostering regional cooperation will help garner needed development financial flows and create a favorable macroeconomic environment in the region. ADB should further promote cross-border connectivity, trade integration, and financial links, all of which are regional public goods. Regional procurement, which is being considered in line with the ADF14 agreement, is of particular importance.

    Striking the balance between GPG/RPG and country-specific demand. ADB must strategically calibrate its resource allocation so that it can help deliver GPGs/RPGs, such as air quality management, biodiversity, food and nutrition security, pandemic prevention, preparedness and response, and pollution prevention, while still paying due regard to country-specific circumstances. Enhanced policy dialogue with DMCs, along with in-house analyses on externalities in the region, should be made a priority. Staff incentive structures could be also fine-tuned in line with such an organization-wide ambition.

    Prioritizing digital transformation in a cross-cutting manner. ADB should be responsive to high client demand for digital solutions, including digital connectivity and digital literacy, among others. ADB should actively pursue policies to bring the maximum benefits from digitalization across all different sectors and pursue synergies with other development priorities, such as private capital mobilization, infrastructure development, and regional connectivity. Strengthening its support to social start-up companies with cutting-edge digital technologies could complement these efforts.

    Mainstreaming gender in overall ADB operations. A pathway to gender equality is not uniform, differing from one country to another. The new commitment following the Midterm Review of Strategy 2030 must be attained with all possible measures. ADB should continue to be a champion of gender equality in its operations to empower women in DMCs. To lead by example, ADB should also continue to promote gender equality across the organization.

    Maximizing development impact by tailoring ADB solutions to country-specific development and climate needs. The ADB’s clients widely differ in their size, level of development, development needs, and risks of vulnerabilities and fragility. ADB should fully employ its diagnosis provided by regional VPs/Departments, while ensuring that Country Partnership Strategies benefit from various analytical works by the Sector Group, Governance Thematic Group, Economic Research and Development Impact Department, and other departments. Also, outcome orientation remains a necessary condition to better achieve the organizational vision. The new window to address fragility under ADF14 could be a successful example to address immense challenges faced by fragile and conflict-affected situations (FCAS), as well as SIDS.

    Utilizing knowledge products for operations on the ground. As a regional knowledge bank, ADB has produced a wealth of analytical and knowledge products. While they are undoubtedly used by research institutes in the regions, ADB needs to be more aggressive in disseminating its analytical expertise to country and sector operations on the ground, including lending activities and policy dialogue.

    Fully operationalizing the NOM. Implementing the NOM requires continuous efforts on a multi-year basis. ADB needs to accelerate the transition to a more climate-focused and private sector-oriented business model, particularly to address global and regional challenges at scale. Staff incentive structures should be designed to establish a critical link with organization-wide priorities, such as GPGs/PRGs as well as decentralization. Also, diversity of the staff should remain one of the ADB’s core values.

    Enhancing partnerships with MDBs and DFIs. The development challenges in front of us cannot be solved by ADB alone. ADB should enhance its collaboration with other MDBs and venture into new types of cooperation, such as exposure exchange, beyond traditional co-financing and knowledge sharing. ADB could also strengthen ties with bilateral DFIs (Development Finance Institutions) in the region to create synergies and improve administrative efficiencies while maintaining high environmental and social standards.

    4. Closing remarks

    The socio-economic environment surrounding Asia and the Pacific has drastically changed since the ADB’s inception: now, the region is suffering from chronic natural disasters more often, with severer magnitude; inequality is widening despite increased national income per capita; and uncertainty is looming in the global economy and financial markets. Worse, all these complex problems are inter-connected. ADB is the only organization in the region that helps tackle these challenges, with its unparalleled financial firepower, highly motivated and dedicated staff, and regional convening power.

    More recently, ADB performed immensely in the context of the MDB Evolution over the past two years. The international community is striving hard to redefine the roles of MDBs and update their financial and operational models. Undoubtedly, ADB is, and will continue to be, a frontrunner in this global goal: it has created lending headroom of US$100 billion over the next ten years through its rigorous CAF review, launched innovative financial instruments, and aligned its tools and environmental and social standards with its peers. I am confident that the ADB’s support to DMCs in the region can be a role-model for other MDBs.

    I would also like to emphasize that throughout its history, ADB has built trust among all stakeholders inside and outside the region, including DMCs, donors, civil society, development partners, staff, and management. It is this trust that has enabled ADB to shine as a long-standing home doctor, provide the highest value-add to its clients, and connect leaders and professionals in the region.

    With these strengths, ADB has positioned itself as the most trusted and dedicated organization in Asia and the Pacific. I would like to devote all my expertise and knowledge to this great organization and work toward its vision, together with colleagues and friends from the region and beyond. I am more than ready to serve to all members.

    MIL OSI Economics –

  • MIL-OSI USA: Remarks by APNSA Jake Sullivan at the Brookings  Institution

    US Senate News:

    Source: The White House
    Brookings InstitutionWashington, D.C.
    Good morning, everyone.  And thank you so much, David, for that introduction and for having me here today.  It’s great to be back at Brookings.
    As many of you know, I was here last year to lay out President Biden’s vision for renewing American economic leadership, a vision that responded to several converging challenges our country faced: the return of intense geopolitical competition; a rise in inequality and a squeeze on the middle class; a less vibrant American industrial base; an accelerating climate crisis; vulnerable supply chains; and rapid technological change.
    For the preceding three decades, the U.S. economy had enjoyed stronger topline aggregate growth than other advanced democracies, and had generated genuine innovation and technological progress, but our economic policies had not been adapted to deal effectively with these challenges.  That’s why President Biden implemented a modern industrial strategy, one premised on investing at home in ourselves and our national strength, and on shifting the energies of U.S. foreign policy to help our partners around the world do the same.
    In practice, that’s meant mobilizing public investment to unlock private sector investment to deliver on big challenges like the clean energy transition and artificial intelligence, revitalizing our capacity to innovate and to build, creating diversified and resilient global supply chains, setting high standards for everything from labor to the environment to technology.  Because on that level playing field, our logic goes, America can compete and win.  Preserving open markets and also protecting our national security and doing all of these things together with allies and partners.
    Since I laid this vision out in my speech at Brookings last year, I’ve listened with great interest to many thoughtful responses, because these are early days.  Meaningful shifts in policy require constant iteration and reflection.  That’s what will make our policy stronger and more sustainable. 
    So, today, I’m glad to be back here at Brookings to reengage in this conversation, because I really believe that the ideas I’m here to discuss and the policies that flow from them are among the most consequential elements of the administration’s foreign as well as domestic policy, and I believe they will constitute an important legacy of Joe Biden’s presidency. 
    I want to start by reflecting on some of the questions I’ve heard and then propose a few ways to consolidate our progress.
    One overarching question is at the core of many others: Does our new approach mean that we’re walking away from a positive-sum view of the world, that America is just in it for itself at the expense of everyone else? 
    In a word, no, it doesn’t.  In fact, we’re returning to a tradition that made American international leadership such a durable force, what Alexis de Tocqueville called “interest rightly understood.”  The notion that it’s in our own self-interest to strengthen our partners and sustain a fair economic system that helps all of us prosper.
    After World War Two, we built an international economic order in the context of a divided world, an order that helped free nations recover and avoid a return to the protectionist and nationalist mistakes of the 1930s, an order that also advanced American economic and geopolitical power.
    In the 1990s, after the collapse of the Soviet Union, we took that order global, embracing the old Eastern bloc, China, India, and many developing countries.  Suddenly, the major powers were no longer adversaries or competitors.  Capital flowed freely across borders.  Global supply chains became “just in time,” without anyone contemplating potential strategic risk.
    Each of these approaches was positive-sum, and each reflected the world as it was.
    Now, the world of the 1990s is over, and it’s not coming back, and it’s not a coherent plan or critique just to wish it so.
    We’re seeing the return of great power competition.  But unlike the Cold War era, our economies are closely intertwined.  We’re on the verge of revolutionary technological change with AI, with economic and geopolitical implications.  The pandemic laid bare the fragilities in global supply chains that have been growing for decades.  The climate crisis grows more urgent with every hurricane and heat wave. 
    So we need to articulate, once again, de Tocqueville’s notion of interest rightly understood.  To us, that means pursuing a strategy that is fundamentally positive-sum, calibrated to the geopolitical realities of today and rooted in what is good for America — for American workers, American communities, American businesses, and American national security and economic strength.
    We continue to believe deeply in the mutual benefits of international trade and investment, enhanced and enabled by bold public investment in key sectors; bounded in rare but essential cases by principled controls on key national security technologies; protected against harmful non-market practices, labor and environment abuses, and economic coercion; and critically coordinated with a broad range of partners. 
    The challenges we face are not uniquely our own and nor can we solve them alone.  We want and need our partners to join us.  And given the demand signal we hear back from them, we think that in the next decade, American leadership will be measured by our ability to help our partners pull off similar approaches and build alignment and complementarity across our policies and our investments. 
    If we get that right, we can show that international economic integration is compatible with democracy and national sovereignty.  And that is how we get out of Dani Rodrik’s trilemma.
    Now, what does that mean in practice?  What does this kind of positive-sum approach mean for trade policy?  Are we walking away from trade as a core pillar of international economic policy? 
    U.S. exports and imports have recovered from their dip during the pandemic, with the real value of U.S. trade well above 2019 levels in each of the last two years.  We’re also the largest outbound source of FDI in the world. 
    So, we are not walking away from international trade and investment.  What we are doing is moving away from specific policies that, frankly, didn’t contemplate the urgent challenges we face: The climate crisis.  Vulnerable, concentrated, critical mineral and semiconductor supply chains.  Persistent attacks on workers’ rights.  And not just more global competition, but more competition with a country that uses pervasive non-market policies and practices to distort and dominate global markets. 
    Ignoring or downplaying these realities will not help us chart a viable path forward.  Our approach to trade responds to these challenges. 
    Climate is a good example.  American manufacturers are global leaders in clean steel production, yet they’ve had to compete against companies that produce steel more cheaply but with higher emissions intensity.  That’s why, earlier this year, the White House stood up a Climate and Trade Task Force, and the task force has been developing the right tools to promote decarbonization and ensure our workers and businesses engaged in cleaner production aren’t disadvantaged by firms overseas engaged in dirtier, exploitative production.
    Critical minerals are another example.  That sector is marked by extreme price volatility, widespread corruption, weak labor and environmental protections, and heavy concentration in the PRC, which artificially drops prices to keep competitors out of the marketplace. 
    If we and our partners fail to invest, the PRC’s domination of these and other supply chains will only grow, and that will leave us increasingly dependent on a country that has demonstrated its willingness to weaponize such dependencies.  We can’t accept that, and neither can our partners. 
    That’s why we are working with them to create a high-standard, critical minerals marketplace, one that diversifies our supply chains, creates a level playing field for our producers, and promotes strong workers’ rights and environmental protections.  And we’re driving towards tangible progress on that idea in just the next few weeks.
    In multiple sectors that are important to our future, not just critical minerals, but solar cells, lithium-ion batteries, electric vehicles, we see a broad pattern emerging.  The PRC is producing far more than domestic demand, dumping excess onto global markets at artificially low prices, driving manufacturers around the world out of business, and creating a chokehold on supply chains.
    To prevent a second China shock, we’ve had to act. 
    That’s what drove the decisions about our 301 tariffs earlier this year.
    Now, we know that indiscriminate, broad-based tariffs will harm workers, consumers, and businesses, both in the United States and our partners.  The evidence on that is clear.  That’s why we chose, instead, to target tariffs at unfair practices in strategic sectors where we and our allies are investing hundreds of billions of dollars to rebuild our manufacturing and our resilience. 
    And crucially, we’re seeing partners in both advanced and emerging economies reach similar conclusions regarding overcapacity and take similar steps to ward off damage to their own industries, from the EU to Canada to Brazil to Thailand to Mexico to Türkiye and beyond.  That’s a big deal.
    And it brings me back to my earlier point: We’re pursuing this new trade approach in concert with our partners.  They also recognize we need modern trade tools to achieve our objectives.  That means considering sector-specific trade agreements.  It means creating markets based on standards when that’s more effective.  And it also means revitalizing international institutions to address today’s challenges, including genuinely reforming the WTO to deal with the challenges I’ve outlined. 
    And it means thinking more comprehensively about our economic partnerships.  That’s why we created the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity.  That’s why we also gave them such catchy names. 
    Within IPEF, we finalized three agreements with 13 partners to accelerate the clean energy transition, to promote high labor standards, to fight corruption, and to shore up supply chain vulnerabilities before they become widespread disruptions.  And within APEP, we’re working to make the Western Hemisphere a globally competitive supply chain hub for semiconductors, clean energy, and more. 
    And that leads to the next question I’ve often been asked in the last year and a half: Where does domestic investment fit into all of this?  How does our positive-sum approach square with our modern industrial strategy?
    The truth is that smart, targeted government investment has always been a crucial part of the American formula.  It’s essential to catalyzing private investment and growth in sectors where market failures or other barriers would lead to under-investment.
    Somehow, we forgot that along the way, or at least we stopped talking about it.  But there was no plausible version of answers on decarbonization or supply chain resilience without recovering this tradition.  And so we have.
    We’ve made the largest investment ever to diversify and accelerate clean energy deployment through the Inflation Reduction Act.  And investments are generating hundreds of billions of dollars in private investment all across the country; rapid growth in emerging climate technologies like sustainable aviation fuels, carbon management, clean hydrogen, with investments increasing 6- to 15-fold from pre-IRA levels. 
    This will help us meet our climate commitments.  This will advance our national security.  And this will ensure that American workers and communities can seize the vast economic opportunities of the clean energy transition and that those opportunities are broadly shared.  And that last part is crucial. 
    The fact is that many communities hard hit in decades past still haven’t bounced back, and the two-thirds of American adults who don’t have college degrees have seen unacceptably poor outcomes in terms of real wages, health, and other outcomes over the last four decades.
    For many years, people assumed that these distributional issues would be solved after the fact by domestic policies.  That has not worked. 
    Advancing fairness, creating high-quality jobs, and revitalizing American communities can’t be an afterthought, which is why we’ve made them central to our approach. 
    In fact, as a result of the incentives in the IRA to build in traditional energy communities, investment in those communities has doubled under President Joe Biden.
    Now, initially, when we rolled this all out, our foreign partners worried that it was designed to undercut them, that we were attempting to shift all the clean energy investment and production around the world to the United States.
    But that wasn’t the case, and it isn’t the case. 
    We know that our partners need to invest.  In fact, we want them to invest.  The whole world benefits from the spillover effects of advances in clean energy that these investments bring. 
    And we are nowhere near the saturation point of investment required to meet our clean energy deployment goals, nor will markets alone generate the resources necessary either. 
    So, we’ve encouraged our partners to invest in their own industrial strength.  We’ve steered U.S. foreign policy towards being a more helpful partner in this endeavor.  And our partners have begun to join us.  Look at Japan’s green transformation policy, India’s production-linked incentives, Canada’s clean energy tax credit, the European Union’s Green Deal.
    As more and more countries adopt this approach, we will continue to build out the cooperative mechanisms that we know will be necessary to ensure that we’re acting together to scale up total global investment, not competing with each other over where a fixed set of investments is located.
    The same goes for investing in our high-tech manufacturing strength.  We believe that a nation that loses the capacity to build, risks losing the capacity to innovate.  So, we’re building again.
    As a result of the CHIPS and Science Act, America is on track to have five leading-edge logic and memory chip manufacturers operating at scale.  No other economy has more than two.  And we’re continuing to nurture American leadership in artificial intelligence, including through actions we’re finalizing, as I speak, to ensure that the physical infrastructure needed to train the next generation of AI models is built right here in the United States. 
    But all of this high-tech investment and development hasn’t come at the expense of our partners.  We’ve done it alongside them. 
    We’re leveraging CHIPS Act funding to make complementary investments in the full semiconductor supply chain, from Costa Rica to Vietnam. 
    We’re building a network of AI safety institutes around the world, from Canada to Singapore to Japan, to harness the power of AI responsibly. 
    And we’ve launched a new Quantum Development Group to deepen cooperation in a field that will be pivotal in the decades ahead.
    Simply put, we’re thinking about how to manage this in concert with our allies and partners, and that will make all of us more competitive.
    Now, all this leads to another question that is frequently asked:  What about your technology protection policies?  How does that fit into a positive-sum approach?
    The United States and our allies and partners have long limited the export of dual-use technologies.  This is logical and uncontroversial.  It doesn’t make sense to allow companies to sell advanced technology to countries that could use them to gain military advantage over the United States and our friends. 
    Now, it would be a mistake to attempt to return to the Cold War paradigm of almost no trade, including technological trade, among geopolitical rivals.  But as I’ve noted, we’re in a fundamentally different geopolitical context, so we’ve got to meet somewhere in the middle. 
    That means being targeted in what we restrict, controlling only the most sensitive technologies that will define national security and strategic competition.  This is part of what we mean when we say: de-risking, not decoupling.
    To strike the right balance, to ensure we’re not imposing controls in an arbitrary or reflexive manner, we have a framework that informs our decision-making.  We ask ourselves at least four questions:
    One, which sensitive technologies are or will likely become foundational to U.S. national security? 
    Two, across those sensitive technologies, where do we have distinct advantages and are likely to see maximal effort by our competitors to close the gap?  Conversely, where are we behind and, therefore, most vulnerable to coercion?
    Three, to what extent do our competitors have immediate substitutes for U.S.-sensitive technology, either through indigenous development or from third countries, that would undercut the controls?
    Four, what is the breadth and depth of the coalition we could plausibly build and sustain around a given control?
    When it comes to a narrow set of sensitive technologies, yes, the fence is high, as it should be. 
    And in the context of broader commerce, the yard is small, and we’re not looking to expand it needlessly.
    Now, beyond the realm of export controls and investment screening, we will also take action to protect sensitive data and our critical infrastructure, such as our recent action on connected vehicles from countries of concern.
    I suspect almost no one here would argue that we should build out our telecommunications architecture or our data center infrastructure with Huawei. 
    Millions of cars on the road with technology from the PRC, getting daily software updates from the PRC, sending reams of information back to the PRC, similarly doesn’t make sense, especially when we’ve already seen evidence of a PRC cyber threat to our critical infrastructure.
    We have to anticipate systemic cyber and data risks in ways that, frankly, we didn’t in the past, including what that means for the future Internet of Things, and we have to take the thoughtful, targeted steps necessary in response.
    This leads to a final, kind of fundamental question: Does this approach reflect some kind of pessimism about the United States and our inherent interests? 
    Quite the contrary.  It reflects an abiding and ambitious optimism.  We believe deeply that we can act smartly and boldly, that we can compete and win, that we can meet the great challenges of our time, and that we can deliver for all of our people here in the United States. 
    And while it’s still very early, we have some evidence of that.  This includes the strongest post-pandemic recovery of any advanced economy in the world.  There’s more work to do, but inflation has come down.  And contrary to the predictions that the PRC would overtake the U.S. in GDP either in this decade or the next, since President Biden took office, the United States has more than doubled our lead.  And last year, the United States attracted more than five times more inbound foreign direct investment than the next highest country. 
    We are once again demonstrating our capacity for resilience and reinvention, and others are noticing.  The EU’s Draghi report, published last month, mirrors key aspects of our strategy. 
    Now, as we continue to implement this vision, we will need to stay rigorous.  We will need, for example, to be bold enough to make the needed investments without veering into unproductive subsidies that crowd-out the private sector or unduly compete with our partners.
    We’re clear-eyed that our policies will involve choices and trade-offs.  That’s the nature of policy.  But to paraphrase Sartre, not to choose is also a choice, and the trade-offs only get worse the longer we leave our challenges unchecked.
    Pointing out that it’s challenging to strike the right balance is not an argument to be satisfied with the status quo.
    We have tried to start making real a new positive-sum vision, and we have tried to start proving out its value.  But we still have our work cut out for us. 
    So I’d actually like to end today with a few questions of my own, where our answers will determine our shared success: 
    First, will we sustain the political will here at home to make the investments in our own national strength that will be required of us in the years ahead? 
    Strategic investments like these need to be a bipartisan priority, and I have to believe that we’ll rise to the occasion, that we won’t needlessly give up America’s position of economic and technological leadership because we can no longer generate the political consensus to invest in ourselves.
    There is more we can do now on a bipartisan basis. 
    For example, Congress still hasn’t appropriated the science part of CHIPS and Science, even while the PRC is increasing its science and technology budget by 10 percent year on year.
    Now, whether we’re talking about investments in fundamental research, or grants and loans for firms developing critical technologies, we also have to update our approach to risk.  Some research paths are dead ends.  Some startups won’t survive.  Our innovation base and our private sector are the envy of the world because they take risks.  The art of managing risk for the sake of innovation is critical to successful geostrategic competition. 
    So, we need to nurture a national comfort with, to paraphrase FDR, bold and persistent experimentation.  And when an investment falls short, as it will, we need to maintain our bipartisan will, dust ourselves off, and keep moving forward.  To put it bluntly, our competitors hope we’re not capable of that.  We need to prove them wrong.  We need to make patient, strategic investments in our capacity to compete, and we need to ensure fiscal sustainability in order to keep making those investments over the long term.
    The second question: Will we allocate sufficient resources for investments that are needed globally? 
    Last year, here at Brookings, I talked about the need to go from billions to trillions in investment to help emerging and developing countries tackle modern challenges, including massively accelerating the speed and scale of the clean energy transition. 
    We need a Marshall Plan-style effort, investing in partners around the world and supporting homegrown U.S. innovation in growing markets like storage, nuclear, and geothermal energy. 
    Now, trillions may sound lofty and unachievable, but there is a very clear path to get there without requiring anywhere near that level of taxpayer dollars, and that path is renewed American leadership and investment in international institutions. 
    For example, at the G20 this fall, we’re spearheading an effort that calls for the international financial institutions, the major creditors in the private sector, to step up their relief for countries facing high debt service burdens so they too can invest in their future. 
    Or consider the World Bank and the IMF.  We’ve been leading the charge to make these institutions bigger and more effective, to fully utilize their balance sheets and be more responsive to the developing and emerging economies they serve.  That has already unlocked hundreds of billions of dollars in new lending capacity, at no cost to the United States.  And we can generate further investment on the scale required with very modest U.S. public investments and legislative fixes.  That depends on Congress taking action. 
    For example, our administration requested $750 million — million — from Congress to boost the World Bank’s lending capacity by over $36 billion, which, if matched by our partners, could generate over $100 billion in new resources.  This would allow the World Bank to deploy $200 for every $1 the taxpayers provide.
    We’ve asked Congress to approve investments in a new trust fund at the IMF to help developing countries build resilience and sustainability.  Through a U.S. investment in the tens of millions, we could enable tens of billions in new IMF lending.
    And outside the World Bank and the IMF, we’re asking Congress to increase funding for the Partnership for Global Infrastructure and Investment, which we launched at the G7 a couple of years ago. 
    This partnership catalyzes and concentrates investment in key corridors, including Africa and Asia, to close the infrastructure gap in developing countries.  It strengthens countries’ economic growth.  It strengthens America’s supply chains and global trusted technology vendors.  And it strengthens our partnerships in critical regions. 
    The private sector has been enthusiastic.  Together with them and our G7 partners, we’ve already mobilized tens of billions of dollars, and we can lever that up and scale that up in the years ahead with help on a bipartisan basis from the Congress.
    We need to focus on the big picture.  Holding back small sums of money has the effect of pulling back large sums from the developing world — which also, by the way, effectively cedes the field to other countries like the PRC.  There are low-cost, commonsense solutions on the table, steps that should not be the ceiling of our ambitions, but the floor.  And we need Congress to provide us the authorities and the seed funding to take those steps now.
    Finally, will we empower our agencies and develop new muscle to meet this moment? 
    Simply put, we need to ensure that we have the resources and the capabilities in the U.S. government to implement this economic vision over the long haul.  This starts by significantly strengthening our bilateral tools, answering a critique that China has a checkbook and the U.S. has a checklist. 
    Next year, the United States is going to face a critical test of whether our country is up to the task.  The DFC, the Ex-Im Bank, and AGOA, the African Growth and Opportunity Act, are all up for renewal by Congress.  This provides a once-in-a-decade chance for America to strengthen some of its most important tools of economic statecraft. 
    And think about how they can work better with the high-leverage multilateral institutions I just mentioned.  The DFC, for example, is one of our most effective instruments to mobilize private sector investments in developing countries.
    But the DFC is too small compared to the scope of investment needed, and it lacks tools our partners want, like the ability to deploy more equity as well as debt, and it’s often unable to capitalize on fast-moving investment opportunities.  So, we put forward a proposal to expand the DFC’s toolkit and make it bigger, faster, nimbler. 
    Another gap we need to bridge is to make sure we attract, retain, and empower top-tier talent with expertise in priority areas.
    We’re asking Congress to approve the resources we’ve requested for the Commerce’s Bureau of Industry Security, Treasury’s Office of Investment Security, the Department of Justice’s National Security Division. 
    If Congress is serious about America competing and winning, we need to be able to draw on America’s very best.
    Let me close with this:
    Since the end of World War Two, the United States has stood for a fair and open international economy; for the power of global connection to fuel innovation; for the power of trade and investment done right to create good jobs; for the power, as Tocqueville put it, of interest rightly understood.
    Our task ahead is to harness that power to take on the realities of today’s geopolitical moment in a way that will not only preserve America’s enduring strengths, but extend them for generations to come.  It will take more conversations like this one and iteration after iteration to forge a new consensus and perfect a new set of policies and capabilities to match the moment. 
    I hope it’s a project we can all work on together.  We can’t afford not to. 
    So, thank you.  And I look forward to continuing the conversation, including hearing some of your questions this morning. 

    MIL OSI USA News –

  • MIL-OSI China: High-tech zones collaborate to boost AI industry innovation

    Source: China State Council Information Office

    Visitors watch an AI-powered orthopedic surgical robot during the 2024 China International Fair for Trade in Services (CIFTIS) at the China National Convention Center in Beijing, capital of China, Sept. 13, 2024. [Photo/Xinhua]

    Eleven major high-tech zones in China have jointly established a collaborative network to promote innovation in the country’s AI industry, China Science Daily has reported.

    A conference on the establishment of this network held early this week in Beijing revealed that the newly-founded network features 11 major high-tech zones nationwide, including Beijing’s Zhongguancun, also dubbed China’s “Silicon Valley,” and those in the cities of Shanghai, Nanjing, Suzhou, Hangzhou, Hefei, Qingdao, Wuhan, Shenzhen, Chengdu and Xi’an, according to the report published on Tuesday.

    Wu Jiaxi, deputy director of the planning department of the Ministry of Industry and Information Technology, expressed hope that the collaborative innovation network would cultivate fertile ground for AI innovation in China — via an open and inclusive approach.

    High-tech zones are the core carriers and major hubs for AI development in China, and they have become a significant force in AI innovation, said Wu.

    He also emphasized the importance of building a community for AI innovation and development through shared benefits, as well as deepening the domestic AI industry layout through an innovation-driven model.

    During the conference, network participants announced the Zhongguancun Initiative, which aims to accelerate the development of AI technologies in areas such as chips, algorithms and models.

    The Zhongguancun Initiative also seeks to establish a comprehensive innovation and entrepreneurship service system for the entire AI industry chain and to build mechanisms for the exchange of technology, industry, capital and talent.

    The initiative encourages the establishment of open AI platforms to maximize the sharing of AI development achievements and seeks the active participation of high-tech zones in the formulation of international and national standards.

    Furthermore, it emphasizes the importance of strengthening data security and privacy protection, as well as providing regular supervision and regulatory services for AI platform companies, to ensure the traceability and reliability of AI technologies.

    MIL OSI China News –

  • MIL-OSI China: HKEX’s revenue, profit in Jan-Sept hit 2nd highest ever

    Source: China State Council Information Office

    Photo taken on July 31, 2021 shows the statues on the square of Hong Kong Exchanges and Clearing Limited (HKEX) in south China’s Hong Kong. [Photo/Xinhua]

    The Hong Kong Exchanges and Clearing Limited (HKEX) announced on Wednesday its third quarter 2024 results, which showed its revenue and profit for the first three quarters was the second-highest on record.

    HKEX reported that the group’s revenue and other income and profit for the first three quarters of 2024 was second only to the record set in the first three quarters of 2021, with the nine-month figure being 15,993 million HK dollars (2,058 million U.S. dollars), an increase of 2 percent year on year.

    Profit attributable to shareholders totaled 9,270 million HK dollars during the period from January to September this year, up by 5 million HK dollars from a year earlier.

    HKEX had a strong third quarter, achieving its second-best ever nine-month revenue and profit. The vibrancy and diversity of Hong Kong’s markets were on full display in late September, as investor sentiment turned more favorable following the announcement of economic stimulus measures in the Chinese mainland, as well as the monetary easing policies adopted by major central banks, said Bonnie Chan, chief executive officer of the HKEX.

    This drove strong volumes in all our markets, with multiple daily records achieved across the Cash, Derivatives, ETP (Exchange Traded Product) and Northbound and Southbound Stock Connect markets, Chan added.

    “By continuously expanding our product offerings, forging international partnerships, and investing in our infrastructure, we are well positioned to navigate the evolving macro-environment and propel sustained growth,” she said. (1 U.S. dollar equals 7.77 HK dollars)

    MIL OSI China News –