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Merchants Bancorp Reports Fourth Quarter 2024 Results

PR Newswire

  • Full year 2024 net income of $320.4 million set a new Company record, increasing 15% compared to 2023.
  • Full year 2024 diluted earnings per common share of $6.30 reached the highest level in Company history and increased 12% compared to 2023.
  • Fourth quarter 2024 net income of $95.7 million, increased 23% compared to fourth quarter of 2023 and increased 56% compared to the third quarter 2024, which reflected a $42.4 million, or 253%, increase in noninterest income.
  • Fourth quarter 2024 diluted earnings per common share of $1.85 increased 17% compared to the fourth quarter of 2023 and increased 58% compared to the third quarter of 2024.
  • Favorable fair market value adjustments to servicing rights on loans and interest rate floor derivatives of $10.4 million and $2.6 million, respectively, positively impacted results during the fourth quarter of 2024 by approximately $0.21 per diluted common share, essentially reversing the $0.24 per share impact of negative fair market value adjustments in the third quarter of 2024.
  • Total assets of $18.8 billion surpassed any level previously reported by the Company, increasing 1% compared to September 30, 2024, and increasing 11% compared to December 31, 2023.
  • Tangible book value per common share reached a record-high of $34.15 and increased 25% compared to $27.40 in the fourth quarter of 2023 and increased 5% compared to $32.38 in the third quarter of 2024.
  • As of December 31, 2024, the Company had $4.3 billion in unused borrowing capacity with the Federal Home Loan Bank and the Federal Reserve Discount window, representing 23% of total assets.
  • Loans receivable of $10.4 billion, net of allowance for credit losses on loans, increased $92.1 million, or 1%, compared to September 30, 2024, and increased $226.2 million, or 2%, compared to December 31, 2023.
  • Core deposits increased $1.3 billion, to $9.4 billion, compared to December 31, 2023, while brokered deposits decreased $3.4 billion, to $2.5 billion.
  • On November 25, 2024, the Company completed a 7.625% Series E Preferred Stock offering resulting in proceeds of $222.7 million, net of $7.3 million in offering costs.
  • On December 27, 2024, the Company executed a credit default swap on a $1.2 billion pool of warehouse loans, to reduce risk-based capital requirements and provide credit protection for the loan pool.
  • The Company redeemed all outstanding shares of the Series B Preferred Stock for approximately $125.0 million on January 2, 2025, at the liquidation preference of $1,000 per share (equivalent to $25 per depositary share).


CARMEL, Ind.
, Jan. 28, 2025 /PRNewswire/ — Merchants Bancorp (the “Company” or “Merchants”) (Nasdaq: MBIN), parent company of Merchants Bank, today reported fourth quarter 2024 net income of $95.7 million, or diluted earnings per common share of $1.85. This compared to $77.5 million, or diluted earnings per common share of $1.58 in the fourth quarter of 2023, and compared to $61.3 million, or diluted earnings per common share of $1.17 in the third quarter of 2024.

“Our record-breaking performance in 2024, with net income of $320.4 million and earnings per share of $6.30, demonstrates that our superior business model provides for growth and higher earnings in any environment.  With total assets reaching the highest levels in company history, at $18.8 billion, and tangible book value per share increasing 25%, to an all-time high of $34.15 per share, we have remained focused on effectively managing capital and delivering exceptional value to our shareholders and stakeholders,” said Michael F. Petrie, Chairman and CEO of Merchants.

Michael J. Dunlap, President and Chief Operating Officer of Merchants, added, “Looking ahead, we remain focused on leveraging our financial flexibility to drive sustainable growth. Despite increases in nonperforming loans over the last few quarters, delinquencies have declined, and charge-offs have been minimal. Our strategic initiatives, including the recent credit risk transfer transactions, as well as common and preferred stock offerings, strengthened our capital position and further mitigated risk.  We are confident in our exceptional team’s ability to continue delivering profitable growth in the coming years.”

Net income of $95.7 million for the fourth quarter of 2024 increased by $18.2 million, or 23%, compared to the fourth quarter of 2023, primarily driven by a $24.7 million, or 72%, increase in noninterest income and a $10.3 million, or 8%, increase in net interest income, which was partially offset by a $10.6 million, or 20%, increase in noninterest expense. Noninterest income included a $10.4 million positive fair market value adjustment to servicing rights and a $2.6 million positive fair market value adjustment to derivatives, which compared to a $7.6 million negative fair market value adjustment to servicing rights and a positive fair market value adjustment of $6.6 million to derivatives in the fourth quarter of 2023.

Net income of $95.7 million for the fourth quarter 2024 increased by $34.4 million, or 56%, compared to the third quarter of 2024, primarily driven by a $42.4 million, or 253%, increase in noninterest income that reflected higher gain on sale of loans, loan servicing fees, syndication and asset management fees, and other income. Noninterest income included a $10.4 million positive fair market value adjustment to servicing rights and a $2.6 million positive fair market value adjustment to derivatives, which compared to negative adjustments of $6.7 million and $7.7 million, respectively, in the third quarter of 2024.

Total Assets
Total assets of $18.8 billion at December 31, 2024 increased by $152.8 million, or 1%, compared to September 30, 2024, and increased by $1.9 billion, or 11%, compared to December 31, 2023.  The increase compared to December 31, 2023 was primarily due to growth in loans held for sale and in the warehouse, and multi-family loan portfolios. There was also an increase in securities held to maturity compared to December 31, 2023, reflecting the purchase of a security representing healthcare loans sold into a securitization in the third quarter of 2024 that was offset by a decline in loans in the healthcare portfolio that were sold into the securitization.

Return on average assets was 2.07% for the fourth quarter of 2024 compared to 1.86% for the fourth quarter of 2023 and 1.34% for the third quarter of 2024.  Return on average assets was 1.79% for the full year 2024 compared to 1.85% for the full year 2023.

Asset Quality
The allowance for credit losses on loans of $84.4 million, as of December 31, 2024, decreased by $163,000 compared to September 30, 2024, and increased by $12.6 million, or 18%, compared to December 31, 2023.  The $163,000 decrease compared to September 30, 2024 reflected an increase in provision for credit losses on loans in the multi-family portfolio that was essentially offset by a partial charge-off of one multi-family loan that was previously fully reserved. The increase compared to December 31, 2023 was driven by a $16.7 million increase in specific reserves, primarily related to five customers.  This increase was partially offset by lower loan balances due to the securitization of healthcare loans, which reduced the allowance by approximately $4.4 million.

The $84.4 million allowance for credit losses on loans as of December 31, 2024, compared to the net charge-offs of $10.5 million over the last twelve months ended December 31, 2024, could absorb eight years of losses, assuming recent loss levels continue.

The Company recorded charge-offs for three customers, primarily in the multi-family loan portfolio, totaling $4.2 million, and recorded $113,000 of recoveries during the fourth quarter 2024. This compares to $238,000 in charge-offs and $1,000 in recoveries during the fourth quarter of 2023 and to $2.1 million in charge-offs and $7,000 of recoveries in the third quarter of 2024.

As of December 31, 2024, non-performing loans were $279.7 million, or 2.68% of gross loans receivable, compared to $210.9 million, or 2.04%, as of September 30, 2024, and $82.0 million, or 0.80%, as of December 31, 2023.  The increase in non-performing loans compared to both periods was primarily driven by multi-family and healthcare customers with delinquent payments on variable rate loans that have required higher payments largely due to higher interest rates since the loans were originated and the financial deterioration of a few sponsors.  Delinquency levels on total loans have declined by $56.3 million, to $324.6 million, compared to September 30, 2024.

All substandard loans as of December 31, 2024 have been evaluated for impairment and these loans have specific reserves of $23.4 million, including $4.2 million added during the fourth quarter of 2024. Although there has been an increase in adversely classified loans, underlying asset values remain strong overall and loans are well-collateralized.

In addition to elevated reserves for credit losses on loans compared to December 2023, the Company has been making additional efforts to reduce its credit risk through loan sale and securitization activities since 2019.  In April of 2023, as well as March and December of 2024, the Company strategically executed credit protection arrangements through a credit linked note and credit default swaps totaling $2.9 billion in loans to reduce risk of losses, with incremental coverage ranging from 13-14% of the unpaid principal balances for each arrangement.  Despite having credit protection on these loans, the Company also continues to carry an allowance for credit losses on loans held for investment. As of December 31, 2024, the balance of loans in credit protection arrangements was $2.3 billion.

Securities Available for Sale
Total securities available for sale of $980.0 million as of December 31, 2024 increased by $27.0 million, or 3%, compared to September 30, 2024, and decreased by $133.6 million, or 12%, compared to December 31, 2023.  The decrease was primarily due to maturities and repayments, as well as fair value adjustments that were partially offset by purchases.

Securities Held to Maturity
Total securities held to maturity of $1.7 billion as of December 31, 2024 decreased by $90.4 million, or 5%, compared to September 30, 2024, and increased $460.5 million, or 38%, compared to December 31, 2023. The decrease compared to September 30, 2024 was primarily due to repayments. The increase from December 31, 2023 was primarily due to purchases of senior investment securities backed by residential and healthcare loans retained as part of credit risk transfer securitization transactions originated by the Company.

Total Deposits
Total deposits of $11.9 billion at December 31, 2024 decreased by $971.9 million, or 8%, compared to September 30, 2024, and decreased by $2.1 billion, or 15%, compared to December 31, 2023. The change compared to both periods was driven by decreases in brokered certificates of deposit accounts and demand accounts.

Core deposits of $9.4 billion at December 31, 2024 decreased by $708.1 million, or 7%, from September 30, 2024 and increased by $1.3 billion, or 16%, from December 31, 2023. Core deposits represented 79% of total deposits at December 31, 2024, 78% of total deposits at September 30, 2024, and 58% of total deposits at December 31, 2023.

Total brokered deposits of $2.5 billion at December 31, 2024 decreased $263.8 million, or 9%, from September 30, 2024 and decreased $3.4 billion, or 58%, from December 31, 2023.   As of December 31, 2024, brokered certificates of deposit had a weighted average remaining duration of 49 days.

Liquidity
Cash balances of $476.6 million as of December 31, 2024 decreased by $125.3 million, or 21%, compared to September 30, 2024 and decreased by $107.8 million, or 18%, compared to December 31, 2023.  The Company continues to have significant borrowing capacity, with unused lines of credit totaling $4.3 billion as of December 31, 2024 compared to $5.1 billion at September 30, 2024 and $6.0 billion at December 31, 2023.  Furthermore, its $3.1 billion line of credit availability with the Federal Reserve Bank of Chicago alone could fund 111% of its uninsured deposits, which represented approximately 24% of total deposits as of December 31, 2024.

This liquidity enhances the ability to effectively manage interest expense and asset levels in the future. Additionally, the Company’s business model is designed to continuously sell or securitize a significant portion of its loans, which provides flexibility in managing its liquidity. 


Comparison of Operating Results for the Three Months Ended



December 31, 2024 and 2023

Net Interest Income of $134.6 million increased $10.3 million, or 8%, compared to $124.3 million, primarily due to higher interest income reflecting increases in average balances in loans and loans held for sale, as well as securities held to maturity, which were partially offset by lower average yields on loans and loans held for sale.

  • Net interest margin of 2.99% decreased 6 basis points compared to 3.05%. The margin was negatively impacted by 5 basis points in the fourth quarter of 2024 from the net reversal of $2.1 million in accrued interest income associated with the movement of loans into nonaccrual status.
  • Interest rate spread of 2.46% decreased 2 basis points compared to 2.48%.

Interest Income of $321.3 million increased $9.6 million, or 3%, primarily reflecting an increase in average balances of loans and loans held for sale, securities held to maturity, partially offset by lower average yields on loans and loans held for sale.

  • Average balances of $14.3 billion for loans and loans held for sale increased $611.1 million, or 4% compared to $13.7 billion.
  • Average balances of $1.7 billion for securities held to maturity increased $559.9 million, or 49%, compared to $1.1 billion.
  • Average yields on loans and loans held for sale of 7.43% decreased 55 basis points compared to 7.98%.

Interest Expense of $186.7 million decreased $0.7 million compared to $187.4 million.  The decrease reflected higher average balances on borrowings at lower average rates and lower average balances on certificates of deposit at lower average rates.

  • Average balances of $3.0 billion for borrowings increased by $2.3 billion, or 323%, compared to $720.5 million.
  • Average interest rates of 5.58% for borrowings decreased by 288 basis points compared to 8.46%.
  • Average balances of $4.1 billion for certificates decreased by $908.0 million, or 18%, compared to $5.0 billion.
  • Average interest rates of 5.02% for certificates of deposit decreased by 41 basis points compared to 5.43%.

Noninterest Income of $59.1 million increased $24.7 million, or 72%, primarily due to a $17.1 million, or 792%, increase in net loan servicing fees, a $5.7 million, or 29%, increase in gain on sale of loans, and a $4.4 million, or 91%, increase in syndication and asset management fees.    

  • Loan servicing fees included a $10.4 million positive fair market value adjustment to servicing rights, with a $2.5 million positive adjustment in the Banking segment and a $7.9 million positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $7.6 million negative fair market value adjustment to servicing rights in the prior period with a $1.1 million negative adjustment in the Banking segment and a $6.5 million negative adjustment in the Multi-family Mortgage Banking segment. The value of servicing rights generally increases in rising 10-year interest rate environments and declines in falling interest rate environments due to expected prepayments and earning rates on escrow deposits.
  • Gain on sale of loans increased $5.7 million, or 29%, reflecting higher volume in the multi-family loan portfolio.
  • Other income included a $2.6 million positive fair market value adjustment to derivatives compared to a $6.6 million positive fair market value adjustment in the prior period.

Noninterest Expense of $63.2 million increased $10.6 million, or 20%, compared to $52.6 million, primarily due to increases in salaries and employee benefits to support business growth, as well as a $2.4 million, or 61%, increase in deposit insurance expenses. The higher noninterest expense also reflected a $1.9 million increase in credit risk transfer premium expense associated with ongoing credit default swaps that were executed in March and December 2024.

  • The efficiency ratio of 32.62% decreased 49 basis points compared to 33.11%.


Comparison of Operating Results for the Three Months Ended



December 31, 2024 and September 30, 2024

Net Interest Income of $134.6 million increased $1.8 million, or 1%, compared to $132.8 million, primarily due to higher average balances on borrowings at lower average interest rates. Lower average balances on loans and loans held for sale and certificates of deposit continued to reprice at lower rates, which also contributed to higher net interest income.

  • Net interest margin of 2.99% remain unchanged. The margin was negatively impacted by 5 basis points in the fourth quarter of 2024 from the net reversal of $2.1 million in accrued interest income associated with the movement of loans into nonaccrual status. This compared to 6 basis points, or $2.9 million in accrued interest income in the third quarter of 2024.
  • Interest rate spread of 2.46% increased 3 basis points compared to 2.43%.

Interest Income of $321.3 million decreased $17.6 million, or 5%, compared to $338.9 million, primarily reflecting a decrease in average yield and balances on loans and loans held for sale, partially offset by increased average balances on securities held to maturity.

  • Average yields on loans and loans held for sale of 7.43% decreased 48 basis points compared to 7.91%.
  • Average balances of $14.3 billion for loans and loans held for sale decreased $317.9 million, or 2%, compared to $14.6 billion.
  • Average balances of $1.7 billion for securities held to maturity increased 413.1 million, or 32%, compared to $1.3 billion.

Interest Expense of $186.7 million decreased $19.4 million, or 9% compared to $206.1 million. The decrease was primarily driven by lower average balances and rates on certificates of deposit, as well as lower average rates on interest-bearing checking accounts. The decreases were partially offset by higher average balances on borrowings at lower average rates.  

  • Average balances of $4.1 billion for certificate of deposit accounts decreased $916.7 million, or 18%, compared to $5.0 billion.
  • Average interest rates of 5.02% for certificate of deposit accounts decreased 45 basis points compared to 5.47%.
  • Average interest rates of 4.19% for interest-bearing checking accounts decreased 51 basis points compared to 4.70%.
  • Average balances of $3.0 billion for borrowings increased $529.2 million, or 21%, compared to $2.5 billion.
  • Average interest rates of 5.58% for borrowings decreased 81 basis points compared to 6.39%.

Noninterest Income of $59.1 million increased $42.4 million, or 253%, compared $16.7 million, primarily due to a $16.5 million, or 1091%, increase in net loan servicing fees, a $10.4 million, or 536%, increase in other income, an $8.3 million, or 50%, increase in gain on sale of loans, and a $7.5 million, or 408%, increase in syndication and asset management fees. 

  • Loan servicing fees included a $10.4 million positive fair market value adjustment to servicing rights, with a $2.5 million positive adjustment in the Banking segment and a $7.9 million positive adjustment in the Multi-family Mortgage Banking segment. This compared to a $6.7 million negative fair market value adjustment to servicing rights in the prior period, with a $1.6 million negative adjustment in the Banking segment and a $5.1 million negative adjustment in the Multi-family Mortgage Banking segment. The value of servicing rights generally increases in rising 10-year interest rate environments and declines in falling interest rate environments due to expected prepayments and earning rates on escrow deposits.
  • Other income included a $2.6 million positive fair market value adjustment to derivatives compared to a $7.7 million negative fair market value adjustment to derivatives in the third quarter of 2024.
  • Gain on sale of loans increased $8.3 million reflecting higher volume in the multi-family loan portfolio.

Noninterest Expense of $63.2 million increased $1.9 million, or 3%, compared to $61.3 million, primarily driven by a $2.3 million, or 7%, increase in salaries and employee benefits reflecting higher commissions on higher production volume and a 49% increase in professional fees, which was partially offset by a 28% decrease in deposit insurance expense.

  • The efficiency ratio of 32.62% decreased 838 basis points compared to 41.00%.


About Merchants Bancorp

Ranked as a top performing U.S. public bank by S&P Global Market Intelligence, Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple segments, including Multi-family Mortgage Banking that primarily offers multi-family housing and healthcare facility financing and servicing (through this segment it also serves as a syndicator of low-income housing tax credit and debt funds); Mortgage Warehousing that offers mortgage warehouse financing, commercial loans, and deposit services; and Banking that offers retail and correspondent residential mortgage banking, agricultural lending, and traditional community banking.  Merchants Bancorp, with $18.8 billion in assets and $11.9 billion in deposits as of December 31, 2024, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Merchants Capital Investments, LLC, Merchants Capital Servicing, LLC, Merchants Asset Management, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit Merchants’ Investor Relations page at investors.merchantsbancorp.com.

Forward-Looking Statements
This press release contains forward-looking statements which reflect management’s current views with respect to, among other things, future events and financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, management cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  A number of important factors could cause actual results to differ materially from those indicated in these forward-looking statements, including the impacts of factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission.  Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.



Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)



December 31,



September 30,



June 30,



March 31,



December 31,


2024


2024


2024


2024


2023



Assets

Cash and due from banks

$              10,989

$              12,214

$              10,242

$              17,924

$              15,592

Interest-earning demand accounts

465,621

589,692

530,640

490,831

568,830

Cash and cash equivalents

476,610

601,906

540,882

508,755

584,422

Securities purchased under agreements to resell

1,559

3,279

3,304

3,329

3,349

Mortgage loans in process of securitization

428,206

430,966

209,244

142,629

110,599

Securities available for sale ($635,946, $682,975, $682,774,
$700,640 and $722,497 utilizing fair value option, respectively)

980,050

953,063

1,017,019

1,061,288

1,113,687

Securities held to maturity ($1,664,674, $1,756,203, $1,291,960,
$1,176,178 and $1,203,535 at fair value, respectively)

1,664,686

1,755,047

1,291,110

1,175,167

1,204,217

Federal Home Loan Bank (FHLB) stock and other equity securities

217,804

184,050

67,499

64,215

48,578

Loans held for sale (includes $78,170, $91,084, $102,873,
$84,513 and $86,663 at fair value, respectively)

3,771,510

3,808,234

3,483,076

3,503,131

3,144,756

Loans receivable, net of allowance for credit losses on loans
of $84,386, $84,549, $81,028, $75,712 and $71,752, respectively

10,354,002

10,261,890

10,933,189

10,690,513

10,127,801

Premises and equipment, net

58,617

53,161

46,833

42,450

42,342

Servicing rights

189,935

177,327

178,776

172,200

158,457

Interest receivable

83,409

86,612

90,360

90,303

91,346

Goodwill

8,014

8,014

8,014

8,014

15,845

Other assets and receivables

571,330

329,427

343,116

360,582

307,117

Total assets

$       18,805,732

$       18,652,976

$       18,212,422

$       17,822,576

$       16,952,516



Liabilities and Shareholders’ Equity



  Liabilities

Deposits

Noninterest-bearing

$            239,005

$            311,386

$            383,260

$            319,872

$            520,070

Interest-bearing

11,680,971

12,580,501

14,533,807

13,655,789

13,541,390

Total deposits

11,919,976

12,891,887

14,917,067

13,975,661

14,061,460

Borrowings

4,386,122

3,568,721

1,159,206

1,835,985

964,127

Deferred tax liabilities

25,289

19,530

25,098

43,935

19,923

Other liabilities

231,035

233,731

222,904

190,527

205,922

Total liabilities

16,562,422

16,713,869

16,324,275

16,046,108

15,251,432



Commitments and  Contingencies



Shareholders’ Equity

Common stock, without par value

Authorized – 75,000,000 shares

Issued and outstanding  – 45,767,166 shares, 45,764,023 shares,
45,757,567 shares, 43,354,718 shares and 43,242,928 shares

240,313

239,448

238,492

139,950

140,365

Preferred stock, without par value – 5,000,000 total shares authorized

7% Series A Preferred stock – $25 per share liquidation preference

Authorized – no shares at December 31, 2024, September 30, 2024
or June 30, 2024 and 3,500,000 shares at March 31, 2024 and December 31, 2023

Issued and outstanding – no shares at December 31, 2024, September 30, 2024
or June 30, 2024 and 2,081,800 shares at March 31, 2024 and December 31, 2023

—

—

—

50,221

50,221

6% Series B Preferred stock – $1,000 per share liquidation preference

Authorized – 125,000 shares

Issued and outstanding – 125,000 shares (equivalent to 5,000,000
depositary shares)

120,844

120,844

120,844

120,844

120,844

6% Series C Preferred stock – $1,000 per share liquidation preference

Authorized – 200,000 shares

Issued and outstanding – 196,181 shares (equivalent to 7,847,233
depositary shares)

191,084

191,084

191,084

191,084

191,084

8.25% Series D Preferred stock – $1,000 per share liquidation preference

Authorized – 300,000 shares

Issued and outstanding – 142,500 shares (equivalent to 5,700,000
depositary shares)

137,459

137,459

137,459

137,459

137,459

7.625% Series E Preferred stock – $1,000 per share liquidation preference

Authorized – 230,000 shares

Issued and outstanding – 230,000 shares (equivalent to 9,200,000
depositary shares)

222,748

—

—

—

—

Retained earnings

1,330,995

1,250,176

1,200,778

1,138,083

1,063,599

Accumulated other comprehensive (loss) income

(133)

96

(510)

(1,173)

(2,488)

Total shareholders’ equity

2,243,310

1,939,107

1,888,147

1,776,468

1,701,084

Total liabilities and shareholders’ equity

$       18,805,732

$       18,652,976

$       18,212,422

$       17,822,576

$       16,952,516

 



Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)



Three Months Ended



Change



December 31,



September 30,



December 31,



4Q24



4Q24


2024


2024


2023



vs. 3Q24



vs. 4Q23



Interest Income

Loans

$

266,719

$

290,259

$

274,971

-8 %

-3 %

Mortgage loans in process of securitization

5,662

4,062

5,294

39 %

7 %

Investment securities:

Available for sale

13,453

14,855

7,609

-9 %

77 %

Held to maturity

27,673

22,081

19,491

25 %

42 %

FHLB stock and other equity securities (dividends)

4,123

3,128

735

32 %

461 %

Other

3,716

4,543

3,659

-18 %

2 %

Total interest income

321,346

338,928

311,759

-5 %

3 %



Interest Expense

Deposits

144,009

165,675

172,061

-13 %

-16 %

Borrowed funds

42,713

40,432

15,373

6 %

178 %

Total interest expense

186,722

206,107

187,434

-9 %

—



Net Interest Income

134,624

132,821

124,325

1 %

8 %

Provision for credit losses

2,689

6,898

6,747

-61 %

-60 %



Net Interest Income After Provision for Credit Losses

131,935

125,923

117,578

5 %

12 %



Noninterest Income

Gain on sale of loans

25,020

16,731

19,342

50 %

29 %

Loan servicing fees, net

14,953

(1,509)

(2,162)

1091 %

792 %

Mortgage warehouse fees

1,413

1,620

1,950

-13 %

-28 %

Syndication and asset management fees

9,323

1,834

4,879

408 %

91 %

Other income

8,436

(1,934)

10,445

536 %

-19 %

Total noninterest income

59,145

16,742

34,454

253 %

72 %



Noninterest Expense

Salaries and employee benefits

37,536

35,218

33,259

7 %

13 %

Loan expense

704

1,114

660

-37 %

7 %

Occupancy and equipment

2,284

2,231

2,336

2 %

-2 %

Professional fees

5,135

3,439

4,157

49 %

24 %

Deposit insurance expense

6,473

8,981

4,030

-28 %

61 %

Technology expense

2,038

2,068

1,758

-1 %

16 %

Credit risk transfer premium expense

1,947

2,079

—

-6 %

100 %

Other expense

7,085

6,188

6,379

14 %

11 %

Total noninterest expense

63,202

61,318

52,579

3 %

20 %



Income Before Income Taxes

127,878

81,347

99,453

57 %

29 %

Provision for income taxes

32,212

20,074

21,980

60 %

47 %



Net Income

$

95,666

$

61,273

$

77,473

56 %

23 %

   Dividends on preferred stock

(10,728)

(7,757)

(8,667)

38 %

24 %



Net Income Available to Common Shareholders

$

84,938

$

53,516

$

68,806

59 %

23 %



Basic Earnings Per Share

$

1.86

$

1.17

$

1.59

59 %

17 %



Diluted Earnings Per Share

$

1.85

$

1.17

$

1.58

58 %

17 %



Weighted-Average Shares Outstanding

Basic

45,765,458

45,759,667

43,241,600

Diluted

45,924,176

45,910,052

43,430,973

 



Consolidated Statement of Income

(Unaudited)

(In thousands, except share data)



Twelve Months Ended



December 31,



December 31,


2024


2023



Change



Interest Income

Loans

$

1,113,397

$

959,714

16 %

Mortgage loans in process of securitization

14,488

12,652

15 %

Investment securities:

Available for sale

57,480

21,621

166 %

Held to maturity

90,075

69,983

29 %

FHLB stock and other equity securities (dividends)

9,372

2,205

325 %

Other

17,908

11,623

54 %

Total interest income

1,302,720

1,077,798

21 %



Interest Expense

Deposits

660,357

577,210

14 %

Borrowed funds

119,743

52,517

128 %

Total interest expense

780,100

629,727

24 %



Net Interest Income

522,620

448,071

17 %

Provision for credit losses

24,278

40,231

-40 %



Net Interest Income After Provision for Credit Losses

498,342

407,840

22 %



Noninterest Income

Gain on sale of loans

62,275

48,183

29 %

Loan servicing fees, net

43,673

26,198

67 %

Mortgage warehouse fees

5,539

7,701

-28 %

Loss on sale of investments available for sale (1)

(108)

—

-100 %

Syndication and asset management fees

19,693

12,355

59 %

Other income

17,040

20,231

-16 %

Total noninterest income

148,112

114,668

29 %



Noninterest Expense

Salaries and employee benefits

130,723

108,181

21 %

Loan expense

3,767

3,409

11 %

Occupancy and equipment

8,991

9,220

-2 %

Professional fees

16,229

12,704

28 %

Deposit insurance expense

26,158

13,582

93 %

Technology expense

7,819

6,515

20 %

Credit risk transfer premium expense

6,320

—

100 %

Other expense

23,805

20,990

13 %

Total noninterest expense

223,812

174,601

28 %



Income Before Income Taxes

422,642

347,907

21 %

Provision for income taxes (2)

102,256

68,673

49 %



Net Income

$

320,386

$

279,234

15 %

   Dividends on preferred stock

(34,909)

(34,670)

1 %

   Impact of preferred stock redemption

(1,823)

—

-100 %



Net Income Available to Common Shareholders

$

283,654

$

244,564

16 %



Basic Earnings Per Share

$

6.32

$

5.66

12 %



Diluted Earnings Per Share

$

6.30

$

5.64

12 %



Weighted-Average Shares Outstanding

Basic

44,855,100

43,224,042

Diluted

45,004,786

43,345,799


(1) Includes $(108) and $0 respectively, related to accumulated other comprehensive earnings reclassifications.


(2) Includes $26 and $0 respectively, related to income tax benefit for reclassification items.

 



Key Operating Results

(Unaudited)

($ in thousands, except share data)



Three Months Ended



Change



December 31,



September 30,



December 31,



4Q24



4Q24


2024


2024


2023



vs. 3Q24



vs. 4Q23

Noninterest expense

$                  63,202

$                    61,318

$           52,579

3 %

20 %

Net interest income (before provision for credit losses)

134,624

132,821

124,325

1 %

8 %

Noninterest income

59,145

16,742

34,454

253 %

72 %

Total income

$                193,769

$                  149,563

$         158,779

30 %

22 %



Efficiency ratio

32.62 %

41.00 %

33.11 %

(838)

bps

(49)

bps

Average assets

$           18,512,380

$             18,311,393

$    16,671,484

1 %

11 %

Net income

95,666

61,273

77,473

56 %

23 %

Return on average assets before annualizing

0.52 %

0.33 %

0.46 %

Annualization factor

4.00

4.00

4.00



Return on average assets

2.07 %

1.34 %

1.86 %

73

bps

21

bps



Return on average tangible common shareholders’ equity (1)

22.10 %

14.43 %

23.60 %

767

bps

(150)

bps



Tangible book value per common share (1)

$                    34.15

$                      32.38

$             27.40

5 %

25 %



Tangible common shareholders’ equity/tangible assets (1)

8.32 %

7.95 %

7.00 %

37

bps

132

bps



Consolidated ratios

Total capital/risk-weighted assets(2)

13.6

%

12.2

%

11.6

%

Tier I capital/risk-weighted assets(2)

13.0

%

11.6

%

11.1

%

Common Equity Tier I capital/risk-weighted assets(2)

9.1

%

8.9

%

7.8

%

Tier I capital/average assets(2)

12.1

%

10.5

%

10.1

%


(1) Non-GAAP financial measure – see “Reconciliation of Non-GAAP Measures” below:


(2) As defined by regulatory agencies; December 31, 2024 shown as estimates and prior periods shown as reported. 

Certain non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, they do have a number of limitations.  As such, the reader should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable  to non-GAAP financial measures that other companies use.  A reconciliation of GAAP to non-GAAP financial measures is below.  Net Income Available to Common Shareholders excludes preferred stock dividends.  Tangible common shareholders’ equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total equity.  Tangible Assets is calculated by excluding the balance of goodwill and intangible assets.  Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of shares outstanding.    



Three Months Ended



Change



December 31,



September 30,



December 31,



4Q24



4Q24


2024


2024


2023



vs. 3Q24



vs. 4Q23

Net income

$                  95,666

$                    61,273

$           77,473

56 %

23 %

Less: preferred stock dividends 

(10,728)

(7,757)

(8,667)

38 %

24 %

Net income available to common shareholders

$                  84,938

$                    53,516

$           68,806

59 %

23 %

Average shareholders’ equity

$             2,084,627

$               1,941,026

$      1,682,270

7 %

24 %

Less: average goodwill & intangibles

(8,076)

(8,092)

(16,629)

-0 %

-51 %

Less: average preferred stock

(538,970)

(449,387)

(499,608)

20 %

8 %

Average tangible common shareholders’ equity

$             1,537,581

$               1,483,547

$      1,166,033

4 %

32 %

Annualization factor

4.00

4.00

4.00

Return on average tangible common shareholders’ equity

22.10 %

14.43 %

23.60 %

767

bps

(150)

bps

Total equity

$             2,243,310

$               1,939,107

$      1,701,084

16 %

32 %

Less: goodwill and intangibles

(8,073)

(8,079)

(16,587)

—

-51 %

Less: preferred stock

(672,135)

(449,387)

(499,608)

50 %

35 %

Tangible common shareholders’ equity

$             1,563,102

$               1,481,641

$      1,184,889

5 %

32 %

Assets

$           18,805,732

$             18,652,976

$    16,952,516

1 %

11 %

Less: goodwill and intangibles

(8,073)

(8,079)

(16,587)

—

-51 %

Tangible assets

$           18,797,659

$             18,644,897

$    16,935,929

1 %

11 %

Ending common shares

45,767,166

45,764,023

43,242,928

Tangible book value per common share

$                    34.15

$                      32.38

$             27.40

5 %

25 %

Tangible common shareholders’ equity/tangible assets

8.32 %

7.95 %

7.00 %

37

bps

132

bps

 



Key Operating Results

(Unaudited)

($ in thousands, except share data)



Twelve Months Ended



December 31,



December 31,


2024


2023



Change

Noninterest expense

$         223,812

$        174,601

28 %

Net interest income (before provision for credit losses)

522,620

448,071

17 %

Noninterest income

148,112

114,668

29 %

Total income

$         670,732

$        562,739

19 %



Efficiency ratio

33.37 %

31.03 %

234

bps

Average assets

$    17,860,787

$   15,078,390

18 %

Net income

320,386

279,234

15 %

Return on average assets before annualizing

1.79 %

1.85 %

Annualization factor

1.00

1.00



Return on average assets

1.79 %

1.85 %

(6)

bps



Return on average tangible common shareholders’ equity (1)

20.16 %

22.92 %

(276)

bps



Tangible book value per common share (1)

$             34.15

$            27.40

25 %



Tangible common shareholders’ equity/tangible assets (1)

8.32 %

7.00 %

132

bps


(1) Non-GAAP financial measure – see “Reconciliation of Non-GAAP Measures” below:

Certain non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, they do have a number of limitations.  As such, the reader should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable  to non-GAAP financial measures that other companies use.  A reconciliation of GAAP to non-GAAP financial measures is below.  Net Income Available to Common Shareholders excludes preferred stock dividends.  Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets and preferred stock from the calculation of total assets.  Tangible Assets is calculated by excluding the balance of goodwill and intangible assets.  Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding.    



Twelve Months Ended



December 31,



December 31,


2024


2023



Change

Net income

$         320,386

$        279,234

15 %

Less: preferred stock dividends 

(34,909)

(34,670)

1 %

Less: preferred stock redemption

(1,823)

–

-100 %

Net income available to common shareholders

$         283,654

$        244,564

16 %

Average shareholders’ equity

$      1,900,130

$     1,583,485

20 %

Less: average goodwill & intangibles

(8,697)

(16,801)

-48 %

Less: average preferred stock

(484,391)

(499,608)

-3 %

Average tangible common shareholders’ equity

$      1,407,042

$     1,067,076

32 %

Annualization factor

1.00

1.00

Return on average tangible common shareholders’ equity

20.16 %

22.92 %

(276)

bps

Total equity

$      2,243,310

$     1,701,084

32 %

Less: goodwill and intangibles

(8,073)

(16,587)

-51 %

Less: preferred stock

(672,135)

(499,608)

35 %

Tangible common shareholders’ equity

$      1,563,102

$     1,184,889

32 %

Assets

$    18,805,732

$   16,952,516

11 %

Less: goodwill and intangibles

(8,073)

(16,587)

-51 %

Tangible assets

$    18,797,659

$   16,935,929

11 %

Ending common shares

45,767,166

43,242,928

Tangible book value per common share

$             34.15

$            27.40

25 %

Tangible common shareholders’ equity/tangible assets

8.32 %

7.00 %

132

bps

 



Merchants Bancorp



Average Balance Analysis



($ in thousands)



(Unaudited)



Three Months Ended



Three Months Ended



Three Months Ended



December 31, 2024



September 30, 2024



December 31, 2023



Average



Yield/



Average



Yield/



Average



Yield/




Balance




Interest




Rate





Balance




Interest




Rate





Balance




Interest




Rate




Assets:

Interest-earning deposits, and other interest
or dividends

$       499,308

$     7,839

6.25 %

$      484,712

$     7,671

6.30 %

$        268,083

$     4,394

6.50 %

Securities available for sale

986,063

13,453

5.43 %

1,011,146

14,855

5.84 %

716,315

7,609

4.21 %

Securities held to maturity

1,701,595

27,673

6.47 %

1,288,466

22,081

6.82 %

1,141,664

19,491

6.77 %

Mortgage loans in process of securitization

414,883

5,662

5.43 %

308,362

4,062

5.24 %

380,645

5,294

5.52 %

Loans and loans held for sale

14,285,852

266,719

7.43 %

14,603,750

290,259

7.91 %

13,674,793

274,971

7.98 %

     Total interest-earning assets

17,887,701

321,346

7.15 %

17,696,436

338,928

7.62 %

16,181,500

311,759

7.64 %

Allowance for credit losses on loans

(85,772)

(81,178)

(67,114)

Noninterest-earning assets

710,451

696,135

557,098

Total assets

$  18,512,380

$  18,311,393

$    16,671,484



Liabilities & Shareholders’ Equity:

Interest-bearing checking

$    5,579,688

58,781

4.19 %

$    5,297,908

62,603

4.70 %

5,607,744

68,899

4.87 %

Savings deposits

145,599

15

0.04 %

145,305

17

0.05 %

242,788

346

0.57 %

Money market

2,961,272

33,288

4.47 %

2,816,906

33,858

4.78 %

2,825,051

34,058

4.78 %

Certificates of deposit

4,115,462

51,925

5.02 %

5,032,159

69,197

5.47 %

5,023,434

68,758

5.43 %

    Total interest-bearing deposits

12,802,021

144,009

4.48 %

13,292,278

165,675

4.96 %

13,699,017

172,061

4.98 %

Borrowings

3,047,586

42,713

5.58 %

2,518,405

40,432

6.39 %

720,521

15,373

8.46 %

    Total interest-bearing liabilities

15,849,607

186,722

4.69 %

15,810,683

206,107

5.19 %

14,419,538

187,434

5.16 %

Noninterest-bearing deposits

352,374

327,930

366,152

Noninterest-bearing liabilities

225,772

231,754

203,524

    Total liabilities

16,427,753

16,370,367

14,989,214

    Shareholders’ equity

2,084,627

1,941,026

1,682,270

Total liabilities and shareholders’ equity

$  18,512,380

$  18,311,393

$    16,671,484



Net interest income

$  134,624

$ 132,821

$ 124,325



Net interest spread

2.46 %

2.43 %

2.48 %



Net interest-earning assets

$    2,038,094

$    1,885,753

$     1,761,962



Net interest margin

2.99 %

2.99 %

3.05 %



Average interest-earning assets to
average interest-bearing liabilities

112.86 %

111.93 %

112.22 %

 



Supplemental Results

(Unaudited)

($ in thousands)



Net Income



Net Income



Three Months Ended



Twelve Months Ended



December 31,



September 30,



December 31,



December 31,


2024


2024


2023


2024


2023




Segment

Multi-family Mortgage Banking

$            22,183

$            8,068

$               8,580

$         55,897

$         36,473

Mortgage Warehousing

24,402

15,940

26,362

82,802

73,525

Banking

56,287

44,983

49,996

210,073

194,398

Other

(7,206)

(7,718)

(7,465)

(28,386)

(25,162)

Total

$            95,666

$          61,273

$             77,473

$       320,386

$       279,234



Total Assets



December 31, 2024



September 30, 2024



December 31, 2023



Amount


%



Amount


%



Amount


%




Segment

Multi-family Mortgage Banking

$          479,099

2 %

$        453,281

2 %

$           411,097

2 %

Mortgage Warehousing

6,000,624

32 %

5,842,489

31 %

4,522,175

27 %

Banking

11,761,202

63 %

12,035,581

65 %

11,760,943

69 %

Other

564,807

3 %

321,625

2 %

258,301

2 %

Total

$     18,805,732

100 %

$   18,652,976

100 %

$      16,952,516

100 %



Gain on Sale of Loans



Gain on Sale of Loans



Three Months Ended



Twelve Months Ended



December 31,



September 30,



December 31,



December 31,


2024


2024


2023


2024


2023




Loan Type

Multi-family

$            24,026

$          15,302

$             19,082

$         56,834

$         42,979

Single-family

413

690

(183)

1,907

1,247

Small Business Association (SBA)

581

739

443

3,534

3,957

Total

$            25,020

$          16,731

$             19,342

$         62,275

$         48,183



Servicing Rights



Servicing Rights



Three Months Ended



Twelve Months Ended



December 31,



September 30,



December 31,



December 31,


2024


2024


2023


2024


2023

Balance, beginning of period

$          177,327

$        178,776

$           162,141

$       158,457

$       146,248

Additions

Purchased servicing

–

–

513

$                   –

$              513

Originated servicing

5,373

7,370

5,591

$         18,670

$         14,755

Subtractions

Paydowns

(3,172)

(2,090)

(2,190)

$          (9,901)

$          (7,621)

Changes in fair value

10,407

(6,729)

(7,598)

22,709

4,562

Balance, end of period

$          189,935

$        177,327

$           158,457

$       189,935

$       158,457

 



Supplemental Results

(Unaudited)

($ in thousands)



Loans Receivable and Loans Held for Sale



December 31,



September 30,



December 31,


2024


2024


2023

Mortgage warehouse repurchase agreements

$       1,446,068

$     1,213,429

$           752,468

Residential real estate (1)

1,322,853

1,317,234

1,324,305

Multi-family financing

4,624,299

4,456,129

4,006,160

Healthcare financing

1,484,483

1,733,674

2,356,689

Commercial and commercial real estate (2)(3)

1,476,211

1,548,689

1,643,081

Agricultural production and real estate

77,631

71,391

103,150

Consumer and margin loans

6,843

5,893

13,700

Loans receivable

10,438,388

10,346,439

10,199,553

    Less: Allowance for credit losses on loans

84,386

84,549

71,752

Loans receivable, net

$     10,354,002

$   10,261,890

$      10,127,801

Loans held for sale

3,771,510

3,808,234

3,144,756

Total loans, net of allowance

$     14,125,512

$   14,070,124

$      13,272,557


(1)  Includes $1.2 billion, $1.2 billion and $1.2 billion of All-In-One © first-lien home equity lines of credit as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.


(2) Includes $0.9 billion, $0.9 billion and $1.1 billion of revolving  lines of credit collateralized primarily by mortgage servicing rights as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.


(3)  Includes only $18.7 million, $19.3 million and $8.4 million of non-owner occupied commercial real estate as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively. 



Loan Credit Risk Profile



December 31, 2024



September 30, 2024



December 31, 2023



Amount


%



Amount


%



Amount


%

Pass

$       9,741,087

93.4 %

$     9,707,205

93.8 %

$        9,879,659

96.9 %

Special mention

379,969

3.6 %

351,407

3.4 %

191,267

1.9 %

Substandard

317,332

3.0 %

287,827

2.8 %

128,577

1.2 %

Doubtful

—

—

—

—

50

—

Loans receivable

$     10,438,388

100.0 %

$   10,346,439

100.0 %

$      10,199,553

100.0 %

Charge-offs (year-to-date)

$            10,587

$            6,437

$               9,791

Recoveries (year-to-date)

$                 136

$                 23

$                    41



Nonperforming Loans



December 31,



September 30,



December 31,


2024


2024


2023

Nonaccrual loans

$          279,716

$        210,811

$             73,847

90 days past due and still accruing

6

91

8,168

Total nonperforming loans

$          279,722

$        210,902

$             82,015

Other real estate owned

$              8,209

$               896

—

Total nonperforming assets

$          287,931

$        211,798

$             82,015

Nonperforming loans to total loans receivable

2.68 %

2.04 %

0.80 %

Nonperforming assets to total assets

1.53 %

1.14 %

0.48 %



Delinquent Loans



December 31,



September 30,



December 31,


2024


2024


2023

Delinquent loans:

    Loans receivable

$          292,263

$        257,459

$           183,529

    Loans held for sale

32,343

123,445

16,500

Total delinquent loans

$          324,606

$        380,904

$           200,029

Total loans receivable and loans held for sale

$     14,209,898

$   14,154,673

$      13,344,309

   Delinquent loans to total loans

2.28 %

2.69 %

1.50 %

 

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SOURCE Merchants Bancorp

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The Andersons, Inc. to Release Fourth Quarter and Full Year Results on February 18

PR Newswire


MAUMEE, Ohio
, Jan. 28, 2025 /PRNewswire/ — The Andersons, Inc. (Nasdaq: ANDE) will release its financial results for the fourth quarter and full year 2024 after 4 p.m. Eastern on Tuesday, February 18, 2024. The company will host a webcast on Wednesday, February 19, 2024, at 8:30 a.m. Eastern to discuss the results and provide a company update.

To listen over the phone, please dial 888-317-6003 (U.S. toll-free) or 412-317-6061 (international toll) and use elite entry number: 3381023. To watch the webcast, go to https://app.webinar.net/k56MoWjneK8 and submit the requested information as directed. A replay of the webcast will be available on the Investors page of www.andersonsinc.com.

About The Andersons, Inc. 
The Andersons, Inc., named in 2024 as one of The Americas’ Fastest Growing Companies by the Financial Times and one of America’s Climate Leaders by USA Today, is a diversified company rooted in agriculture that conducts business in the agribusiness and renewable sectors. Guided by its Statement of Principles, The Andersons is committed to providing extraordinary service to its customers, helping its employees improve, supporting its communities, and increasing the value of the company. For more information, please visit www.andersonsinc.com.

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SOURCE The Andersons, Inc.

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Allison Transmission Schedules Fourth Quarter and Full Year 2024 Earnings Conference Call

PR Newswire


INDIANAPOLIS
, Jan. 28, 2025  /PRNewswire/ — Allison Transmission Holdings Inc. (NYSE: ALSN), a leading designer and manufacturer of conventional and electrified vehicle propulsion solutions and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions for commercial and defense vehicles, today announced that it will hold its fourth quarter and full year 2024 financial results conference call at 5:00 p.m. EST on Tuesday, February 11, 2025. David S. Graziosi, Chair & Chief Executive Officer, and G. Frederick Bohley, Chief Operating Officer, Chief Financial Officer & Treasurer, will review the company’s financial performance for the period. The news release announcing the financial results will be issued post market on Tuesday, February 11.

The dial-in phone number for the conference call is +1-877-425-9470 and the international dial-in number is +1-201-389-0878. A live webcast of the conference call will be available online at ir.allisontransmission.com in addition to the fourth quarter results press release on the ‘News Releases’ page. For those unable to participate in the conference call, a replay will be available from 9:00 p.m. EST on February 11 until 11:59 p.m. EST on February 25. The replay dial-in phone number is +1-844-512-2921 and the international replay dial-in number is +1-412-317-6671. The replay passcode is 13751140.

About Allison Transmission

Allison Transmission (NYSE: ALSN) is a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions that Improve the Way the World Works. Allison products are used in a wide variety of applications, including on-highway vehicles (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining, construction and agriculture) and defense vehicles (tactical wheeled and tracked). Founded in 1915, the company is headquartered in Indianapolis, Indiana, USA. With a presence in more than 150 countries, Allison has regional headquarters in the Netherlands, China and Brazil, manufacturing facilities in the USA, Hungary and India, as well as global engineering resources, including electrification engineering centers in Indianapolis, Indiana, Auburn Hills, Michigan and London in the United Kingdom. Allison also has approximately 1,600 independent distributor and dealer locations worldwide. For more information, visit allisontransmission.com.

 

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SOURCE Allison Transmission Holdings Inc.

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CNB Financial Corporation Reports Fourth Quarter and Full-Year 2024 Results

CLEARFIELD, Pa., Jan. 28, 2025 (GLOBE NEWSWIRE) — CNB Financial Corporation (“Corporation”) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the three and twelve months ended December 31, 2024.


Executive Summary

  • Net income available to common shareholders (“earnings”) was $14.0 million, or $0.66 per diluted share, for the three months ended December 31, 2024, compared to earnings of $12.9 million, or $0.61 per diluted share, for the three months ended September 30, 2024. The quarterly increase was a result of an increase in net interest income combined with a reduction in non-interest expense, partially offset by a decrease in non-interest income, as discussed in more detail below. The increase in fourth quarter 2024 earnings and diluted earnings per share when compared to earnings of $12.9 million, or $0.62 per diluted share, in the quarter ended December 31, 2023 was primarily due to increases in both net interest income and non-interest income, coupled with a decrease in non-interest expense, partially offset by an increase in the provision for credit losses.
  • Earnings were $50.3 million, or $2.39 per diluted share, for the twelve months ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the twelve months ended December 31, 2023. The decrease in earnings and diluted earnings per share comparing the twelve months ended December 31, 2024 to the twelve months ended December 31, 2023 was primarily due to the rise in deposit costs year over year, as discussed in more detail below.
  • At December 31, 2024, loans totaled $4.5 billion excluding the balances of syndicated loans. This adjusted total of $4.5 billion in loans represented a quarterly increase of $6.6 million, or 0.15% (0.58% annualized), compared to the same adjusted total loans measured as of September 30, 2024, and a year-over-year increase of $169.4 million, or 3.88%, compared to the same adjusted total loans measured as of December 31, 2023. The increase in loans for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 was primarily driven by commercial and residential real estate growth across our regions, including growth in CNB’s Private Banking division. This growth was partially offset by a larger volume of loan payoffs during the quarter. The year-over-year growth in loans as of December 31, 2024 compared to loans as of December 31, 2023 resulted primarily from growth in commercial and residential real estate loans in the Corporation’s more recent expansion markets of Cleveland, OH and Roanoke, VA. Additional growth occurred in commercial and residential real estate loans in the Columbus, OH market, commercial industrial loans in the Erie, PA market, and residential real estate loans in CNB Bank’s Private Banking division.
    • At December 31, 2024, the Corporation’s balance sheet reflected an increase in syndicated lending balances of $10.4 million compared to September 30, 2024. The increase in syndicated lending balances was the result of the Corporation identifying loans with the combination of meeting the Corporation’s traditionally disciplined high credit quality standards, and with favorable yields versus investment alternatives. Year over year, the Corporation’s balance sheet reported a decrease in syndicated lending balances of $28.8 million compared to December 31, 2023, resulting from scheduled paydowns or early payoffs of certain syndicated loans. The syndicated loan portfolio totaled $79.9 million, or 1.73% of total loans, at December 31, 2024, compared to $69.5 million, or 1.51% of total loans, at September 30, 2024 and $108.7 million, or 2.43% of total loans, at December 31, 2023. The Corporation closely manages the level and composition of its syndicated loan portfolio to ensure it continues to provide a high credit quality, profitable use of excess liquidity to complement the Corporation’s loan growth from its in-market customer relationships.
  • At December 31, 2024, total deposits were $5.4 billion, reflecting a quarterly increase of $154.4 million, or 2.96% (11.78% annualized), compared to September 30, 2024, and a year-over-year increase of $372.6 million, or 7.45%, compared to total deposits measured as of December 31, 2023. The increase in deposit balances compared to September 30, 2024 was primarily attributable to an increase in retail and business savings and retail time deposits. Additional deposit and liquidity profile details were as follows:
    • At December 31, 2024, the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 27.71% of total CNB Bank deposits. However, when excluding $101.9 million of affiliate company deposits and $429.0 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $986.0 million, or approximately 18.01% of total CNB Bank deposits as of December 31, 2024.
      • The level of adjusted uninsured deposits at December 31, 2024 was relatively unchanged compared to the level at September 30, 2024, when the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 28.50% of total CNB Bank deposits. Excluding $103.1 million of affiliate company deposits and $462.7 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $950.6 million, or approximately 17.87% of total CNB Bank deposits as of September 30, 2024.
    • At December 31, 2024, the average deposit balance per account for CNB Bank was approximately $34 thousand, which has remained consistently at this level for an extended period. CNB Bank has experienced increases in the volume of business deposits, as well as retail customer household deposits, including those that continue to be added after the 2023 launches of (i) CNB Bank’s “At Ease” account, a service for U.S. service member and veteran families, and (ii) CNB Bank’s women-focused banking division, Impressia Bank.
    • At December 31, 2024, the Corporation had $375.0 million of cash equivalents held in CNB Bank’s interest-bearing deposit account at the Federal Reserve. These excess funds, when combined with collective contingent liquidity resources of $4.6 billion including (i) available borrowing capacity from the Federal Home Bank of Pittsburgh (“FHLB”) and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in the total on-hand and contingent liquidity sources for the Corporation as of December 31, 2024 to be approximately 5.0 times the estimated amount of adjusted uninsured deposit balances discussed above.
  • At December 31, 2024, September 30, 2024 and December 31, 2023, the Corporation had no outstanding short-term borrowings from the FHLB or the Federal Reserve’s Discount Window.
  • At December 31, 2024, the Corporation’s pre-tax net unrealized losses on available-for-sale and held-to-maturity securities totaled $74.8 million, or 12.25% of total shareholders’ equity, compared to $62.5 million, or 10.30% of total shareholders’ equity, at September 30, 2024 and $82.2 million, or 14.40% of total shareholders’ equity, at December 31, 2023. The change in unrealized losses during the fourth quarter 2024 was primarily due to changes in the yield curve compared to the third quarter of 2024, coupled with the Corporation’s scheduled bond maturities, which were all realized at par. Importantly, all regulatory capital ratios for the Corporation would still exceed regulatory “well-capitalized” levels as of December 31, 2024, September 30, 2024, and December 31, 2023 if the net unrealized losses at the respective dates were fully recognized. Additionally, the Corporation maintained approximately $100.7 million of liquid funds at its holding company, which more than covers the $74.8 million in unrealized losses on investments held primarily in its wholly-owned banking subsidiary, as an immediately available source of contingent capital to be down-streamed to CNB Bank, if necessary.
  • Total nonperforming assets were approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $42.0 million, or 0.70% of total assets, as of September 30, 2024, and $31.8 million, or 0.55% of total assets, as of December 31, 2023. The increase in nonperforming assets for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was primarily due to one commercial multifamily relationship totaling $20.4 million with a specific reserve balance of $885 thousand. Management does not believe there is a risk of significant additional loss exposure beyond the specific reserves related to this loan relationship and is actively working with the borrower and their real estate broker to facilitate the sale of the property. The increase in non-performing assets at December 31, 2024 compared to December 31, 2023 was due to the loan relationship discussed above, as well as certain commercial and industrial and owner-occupied commercial real estate relationships as previously disclosed in the second quarter of 2024 and a commercial relationship (consisting of various loan types) in the third quarter of 2024. For the three months ended December 31, 2024, net loan charge-offs were $2.1 million, or 0.19% (annualized) of average total loans and loans held for sale, compared to $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended September 30, 2024, and $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended December 31, 2023. The increase in net loan charge-offs during the quarter ended December 31, 2024 was primarily related to (i) an owner-occupied commercial real estate relationship with a charge-off of $750 thousand (remaining balance of approximately $3.8 million with specific reserves of $1.4 million), and (ii) a nonowner-occupied commercial real estate relationship for $625 thousand (no remaining balance).
  • Pre-provision net revenue (“PPNR”), a non-GAAP measure, was $21.6 million for the three months ended December 31, 2024, compared to $19.7 million and $18.4 million for the three months ended September 30, 2024 and December 31, 2023, respectively.1 The fourth quarter 2024 PPNR, when compared to the third quarter of 2024, reflected increases in net interest income and reductions in non-interest expense, partially offset by a reduction in quarterly non-interest income. The increase in PPNR for the three months ended December 31, 2024, compared to the three months ended December 31, 2023 was primarily attributable to the increases in net interest income and non-interest income. PPNR was $76.6 million for the twelve months ended December 31, 2024 compared to $77.8 million for the twelve months ended December 31, 2023.1 The decrease in PPNR for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 was primarily attributable to the significant year-over-year increase in deposit costs, coupled with increases in certain personnel costs (primarily from new offices and personnel added in the recently added expansion markets of Cleveland, OH and Roanoke, VA). Also, the Corporation incurred additional technology expenses for the recently completed full implementation of certain franchise-wide business development and customer relationship management applications.

1 This release contains references to certain financial measures that are not defined under U.S. Generally Accepted Accounting Principles (“GAAP”). Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. A reconciliation of these non-GAAP financial measures is provided in the “Reconciliation of Non-GAAP Financial Measures” section.

Commenting on the Corporation’s positive quarterly results, Michael Peduzzi, President and CEO of both the Corporation and CNB Bank, stated, “CNB’s performance for the fourth quarter of 2024 continued the favorable trend of increased earnings for each of the most recent three quarters. This favorable earnings trend is the result of a continued implementation of the fundamental strategic initiatives that we continue to focus on – deepening existing customer relationships while adding new clients in both interest-earning and fee-based activities, remaining committed to our traditionally disciplined loan and investment underwriting standards, employing risk-based and market-relevant loan and deposit pricing, and continuing solid risk measurement and management practices. While we remain confident in the continued growth and increasing profitability of our current multi-state core franchise, we are very excited by the prospect of expanding our business development model across all of our financial services, and realizing even greater back-office efficiencies of operating scale, with our recently announced plan to add over $2 billion in assets with our intended acquisition of ESSA Bancorp, Inc. (“ESSA Bancorp”) and its banking subsidiary, ESSA Bank & Trust, based primarily in northeastern Pennsylvania (collectively, “ESSA”).

With full consideration of the impact of the prospective merger and the additional skilled employees and resources from both internal leadership development efforts and the ESSA employee base, we remain intently focused on achieving qualitative growth across our commercial, retail, and wealth management activities, while controlling the growth in staffing levels and overhead costs. Our collective Board and employee team is committed to our core strategic principles, including a focus on delivering increasing profitable and desirable financial services, while striving to most effectively realize the accretive value of our prospective acquisition, for the mutually beneficial and sustainable success of our valued investors and growing client base across our expanding franchise.”


Other Balance Sheet Highlights

  • Book value per common share was $26.34 at December 31, 2024, reflecting an increase from $26.13 at September 30, 2024 and $24.57 at December 31, 2023. Tangible book value per common share, a non-GAAP measure, was $24.24 as of December 31, 2024, reflecting an increase of $0.21, or 3.48% (annualized) from $24.03 as of September 30, 2024 and a year-over-year increase of $1.78, or 7.93%, from $22.46 as of December 31, 2023.1 The increases in book value per common share and tangible book value per common share from September 30, 2024 to December 31, 2024 were primarily due to a $10.2 million increase in retained earnings, partially offset by a $6.3 million increased in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio for the fourth quarter of 2024. The increases in book value per common share and tangible book value per common share from December 31, 2023 to December 31, 2024 were primarily due to (i) a $35.4 million increase in retained earnings over the twelve months ended December 31, 2024, (ii) the Corporation’s repurchase of 23,988 common shares at a weighted average price of $18.38 in the second quarter of 2024, and (iii) a $2.5 million decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio for the past twelve months.


Loan Portfolio Profile

  • As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and if any concentration risk issues could lead to additional credit loss exposure. In the current post-pandemic and relatively inflationary economic environment, the Corporation has continued to evaluate its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio. Even given the Corporation’s historically sound underwriting protocols and high credit quality standards for borrowers in the commercial real estate industry segments, the Corporation monitors numerous relevant sensitivity elements, including occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally. At December 31, 2024, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios:
    • Commercial office loans:
      • There were 112 outstanding loans, totaling $113.7 million, or 2.47% of total Corporation loans outstanding;
      • There were no nonaccrual commercial office loans at December 31, 2024;
      • There were no past due commercial office loans at December 31, 2024; and
      • The average outstanding balance per commercial office loan was $1.0 million.
    • Commercial hospitality loans:
      • There were 170 outstanding loans, totaling $321.6 million, or 6.98% of total Corporation loans outstanding;
      • There were no nonaccrual commercial hospitality loans at December 31, 2024;
      • There were no past due commercial hospitality loans at December 31, 2024; and
      • The average outstanding balance per commercial hospitality loan was $1.9 million.
    • Commercial multifamily loans:
      • There were 225 outstanding loans, totaling $367.6 million, or 7.98% of total Corporation loans outstanding;
      • There were two nonaccrual commercial multifamily loan that totaled $20.7 million, or 5.62% of total multifamily loans outstanding. As previously discussed, one customer relationship did have a specific reserve of $885 thousand, while the other customer relationship did not have a related specific loss reserve at December 31, 2024;
      • There were three past due commercial multifamily loans that totaled $21.1 million, or 5.75% of total commercial multifamily loans outstanding at December 31, 2024; and
      • The average outstanding balance per commercial multifamily loan was $1.6 million.

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be high volatility commercial real estate (“HVCRE”) credits.


Performance Ratios

  • Annualized return on average equity was 9.79% for the three months ended December 31, 2024, compared to 9.28% and 9.97% for the three months ended September 30, 2024 and December 31, 2023, respectively. Return on average equity was 9.21% for the twelve months ended December 31, 2024 compared to 10.54% for the twelve months ended December 31, 2023.
  • Annualized return on average tangible common equity, a non-GAAP measure, was 10.90% for the three months ended December 31, 2024, compared to 10.33% and 11.27% for the three months ended September 30, 2024 and December 31, 2023, respectively.1 Return on average tangible common equity, a non-GAAP measure, was 10.25% for the twelve months ended December 31, 2024 compared to 11.98% for the twelve months ended December 31, 2023.1
  • The Corporation’s efficiency ratio was 63.68% for the three months ended December 31, 2024, compared to 66.34% and 67.66% for the three months ended September 30, 2024 and December 31, 2023, respectively. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP measure, was 63.02% for the three months ended December 31, 2024, compared to 65.58% and 66.93% for the three months ended September 30, 2024 and December 31, 2023, respectively.1 The decrease for the three months ended December 31, 2024 compared to the three months ended September 30, 2024 was primarily driven by an increase in net interest income, coupled with lower non-interest expenses, primarily due to decreases in salaries and benefits, as discussed in more detail below.
  • The Corporation’s efficiency ratio was 66.20% for the twelve months ended December 31, 2024, compared to 65.13% for the twelve months ended December 31, 2023. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.47% for the twelve months ended December 31, 2024, compared to 64.45% the twelve months ended December 31, 2023.1


Revenue

  • Total revenue (net interest income plus non-interest income) was $59.4 million for the three months ended December 31, 2024, an increase when compared to $58.5 million and $56.8 million for the three months ended September 30, 2024 and December 31, 2023, respectively.
    • Net interest income was $49.0 million for the three months ended December 31, 2024, compared to $47.5 million and $47.7 million for the three months ended September 30, 2024 and December 31, 2023, respectively. When comparing the fourth quarter of 2024 to the third quarter of 2024, the increase in net interest income of $1.6 million, or 3.28% (13.05% annualized), was primarily driven by targeted interest-bearing deposit rate decreases as a result of the Federal Reserve rate decreases since mid-September 2024.
    • Net interest margin was 3.44%, 3.43% and 3.54% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.43%, 3.42% and 3.51% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.1
      • The yield on earning assets of 5.84% for the three months ended December 31, 2024 decreased 14 basis points from September 30, 2024 and increased 2 basis points from December 31, 2023. The decrease in yield compared to September 30, 2024 was attributable to the net impact of declining interest rates on floating-rate loans as a result of the Federal Reserve decreases to the Prime rate (upon which the majority of the Corporation’s floating rate loans are indexed).
      • The cost of interest-bearing liabilities of 3.03% for the three months ended December 31, 2024 decreased 18 basis points from September 30, 2024 and increased 14 basis points from December 31, 2023. When comparing the fourth quarter of 2024 to the third quarter of 2024, the decrease in the cost of interest-bearing liabilities is primarily the result of the Corporation’s targeted interest-bearing deposit rate decreases in response to the Federal Reserve rate decreases since mid-September 2024.
  • Total revenue was $226.6 million for the twelve months ended December 31, 2024 compared to $223.2 million for the twelve months ended December 31, 2023.
    • Net interest income was $187.5 million for the twelve months ended December 31, 2024 compared to $189.8 million for the twelve months ended December 31, 2023. When comparing the twelve months ended December 31, 2024 to the twelve months ended December 31, 2023, the decrease in net interest income of $2.4 million, or 1.24%, was due to an increase in the Corporation’s interest expense, as a result of targeted interest-bearing deposit rate increases to ensure both deposit growth and retention, more than offsetting the interest income growth from both year-over-year loan growth and the impact of higher interest rates for much of the 2024 year resulting in greater income on loans, coupled with a higher average balance of earnings on excess liquidity maintained as interest-bearing deposits with the Federal Reserve.
    • Net interest margin was 3.41% and 3.63% for the twelve months ended December 31, 2024 and 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.39% and 3.61% for the twelve months ended December 31, 2024 and 2023, respectively.1
      • The yield on earning assets of 5.88% for the twelve months ended December 31, 2024 increased 31 basis points from the twelve months ended December 31, 2023. The increase in yield compared to December 31, 2023 was attributable to the net benefit of higher interest rates on both variable-rate loans and new loan production.
      • The cost of interest-bearing liabilities of 3.11% for the twelve months ended December 31, 2024 increased 62 basis points from the twelve months ended December 31, 2023 primarily as a result of the Corporation’s targeted interest-bearing deposit rate increases for deposit retention and growth initiatives given the competitive environment resulting from the numerous Federal Reserve rate hikes since the first quarter of 2022 that did not start to have some easing measures until late in 2024.
  • Total non-interest income was $10.3 million for the three months ended December 31, 2024 compared to $11.0 million and $9.1 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The three months ended December 31, 2024 included increases in net realized and unrealized losses on equity securities compared to the three months ended September 30, 2024. The increase in fourth quarter 2024 non-interest income compared to the three months ended December 31, 2023 was primarily due to increased wealth and asset management fees and higher pass-through income from small business investment companies (“SBICs”), partially offset by an increase in net realized and unrealized losses on equity securities.
  • Total non-interest income was $39.1 million for the twelve months ended December 31, 2024 compared to $33.3 million for the twelve months ended December 31, 2023. This increase was primarily due to higher pass-through income from SBICs coupled with an increase in net realized and unrealized gains on equity securities and an increase in wealth and asset management fees.


Non-Interest Expense

  • For the three months ended December 31, 2024 total non-interest expense was $37.8 million, compared to $38.8 million and $38.5 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The decrease of $979 thousand, or 2.52%, from the three months ended September 30, 2024, was primarily due to a decrease in salaries and benefits. The decrease in salaries and benefits resulted primarily from a decrease in incentive compensation accruals (which are based on various components of the Corporation’s financial performance for the year), coupled with the timing of retirement plan contribution accruals and lower supplemental executive retirement plan accruals with the departure of an executive during the fourth quarter, as previously disclosed. The $645 thousand decrease in non-interest expense compared to the three months ended December 31, 2023 was primarily due to lower salaries and benefits driven by reduced incentive compensation accruals, along with a decrease in quarterly advertising expense. These decreases were partially offset by higher card processing and interchange expenses resulting from fourth quarter 2023 accrual adjustments related to changes in the Corporation’s cardholder rewards program.
  • For the twelve months ended December 31, 2024 total non-interest expense was $150.0 million, compared to $145.3 million for the twelve months ended December 31, 2023. The increase of $4.7 million, or 3.21%, from the twelve months ended December 31, 2023 was primarily a result of an increase in salaries and benefits and technology expenses The increase in salaries and benefits was driven by an increase in personnel costs related to annual merit increases and growth in the Corporation’s staff and new offices in its expansion markets (Cleveland, OH and Roanoke, VA), while the increase in technology was primarily due to usage and licensing increases in year-over-year investments in applications aimed at enhancing both customer online banking capabilities, customer call center communications, and in-branch technology delivery channels.


Income Taxes

  • Income tax expense for the three months ended December 31, 2024 was $3.6 million, representing a 19.14% effective tax rate, compared to $3.3 million, representing an 19.31% effective tax rate, for the three months ended September 30, 2024 and $3.2 million, representing a 18.45% effective tax rate, for the three months ended December 31, 2023. Income tax expense for the twelve months ended December 31, 2024 was $12.8 million, representing an 18.98% effective tax rate compared to $13.8 million, representing a 19.22% effective tax rate, for the twelve months ended December 31, 2023.


Asset Quality

  • Based upon the addition of one larger nonaccrual loan relationship in the fourth quarter of 2024 as discussed above, total nonperforming assets were approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $42.0 million, or 0.70% of total assets, as of September 30, 2024, and $31.8 million, or 0.55% of total assets, as of December 31, 2023.
  • The allowance for credit losses measured as a percentage of total loans was 1.03% as of December 31, 2024 compared to 1.02% as of September 30, 2024 and 1.03% as of December 31, 2023. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 84.08% as of December 31, 2024, compared to 117.03% and 154.63% as of September 30, 2024 and December 31, 2023, respectively. The change in the allowance for credit losses as a percentage of nonaccrual loans was primarily attributable to the levels of nonperforming assets, as discussed above.
  • The provision for credit losses was $2.9 million for the three months ended December 31, 2024, compared to $2.4 million and $1.2 million for the three months ended September 30, 2024 and December 31, 2023, respectively. The $549 thousand increase in the provision expense for the fourth quarter of 2024 compared to the third quarter of 2024 was primarily a result of increased net loan charge-offs in the fourth quarter of 2024. The $1.7 million increase in the provision expense for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was primarily due to both required provisioning to cover loan portfolio growth, and the increased net loan charge-offs in the fourth quarter of 2024 compared to the fourth quarter of 2023.
  • As discussed in more detail above, for the three months ended December 31, 2024, net loan charge-offs were $2.1 million, or 0.19% (annualized) of average total loans and loans held for sale, compared to $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended September 30, 2024, and $1.2 million, or 0.11% (annualized) of average total loans and loans held for sale, during the three months ended December 31, 2023.
  • For the twelve months ended December 31, 2024, net loan charge-offs were $7.5 million, or 0.17%, of average total loans and loans held for sale, compared to $3.4 million, or 0.08%, of average total loans and loans held for sale, during the twelve months ended December 31, 2023, with a couple of the larger charge-offs occurring in the first and second quarters of 2024, as previously disclosed in those periods.


Capital

  • As of December 31, 2024, the Corporation’s total shareholders’ equity was $610.7 million, representing an increase of $4.3 million, or 0.71% (2.84% annualized), from September 30, 2024 and an increase of $39.4 million, or 6.91%, from December 31, 2023. The changes resulted from an increase in the Corporation’s retained earnings (net income, partially offset by the common and preferred stock dividends paid) and a decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio. The additions to shareholders equity from retained earnings were also partially offset by the Corporation’s repurchase of some of its common stock.
  • Regulatory capital ratios for the Corporation continue to exceed regulatory “well-capitalized” levels as of December 31, 2024, consistent with prior periods.
  • As of December 31, 2024, the Corporation’s ratio of common shareholders’ equity to total assets was 8.93% compared to 9.12% at September 30, 2024 and 8.93% at December 31, 2023. As of December 31, 2024, the Corporation’s ratio of tangible common equity to tangible assets, a non-GAAP measure, was 8.28% compared to 8.45% at September 30, 2024 and 8.22% at December 31, 2023. The decrease in the December 31, 2024 ratio compared to September 30, 2024 was primarily the result of an increase in accumulated other comprehensive loss, partially offset by an increase in retained earnings, as discussed above.1


Recent Events

  • On January 10, 2025, the Corporation announced that the Corporation and CNB Bank entered into a definitive merger agreement (the “Merger Agreement”) with ESSA in an all-stock transaction. Under the terms of the Merger Agreement, each outstanding share of ESSA Bancorp common stock will be converted into the right to receive 0.8547 shares of the Corporation’s common stock. The transaction is currently expected to close in the third quarter of 2025, subject to customary closing conditions, including the receipt of regulatory approvals, and approval by the shareholders of ESSA Bancorp and the Corporation.

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated assets of approximately $6.2 billion. CNB Financial Corporation conducts business primarily through its principal subsidiary, CNB Bank. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers. CNB Bank operations include a private banking division, one drive-up office, one mobile office, and 55 full-service offices in Pennsylvania, Ohio, New York, and Virginia. CNB Bank, headquartered in Clearfield, Pennsylvania, with offices in Central and North Central Pennsylvania, serves as the multi-brand parent to various divisions. These divisions include ERIEBANK, based in Erie, Pennsylvania, with offices in Northwest Pennsylvania and Northeast Ohio; FCBank, based in Worthington, Ohio, with offices in Central Ohio; BankOnBuffalo, based in Buffalo, New York, with offices in Western New York; Ridge View Bank, based in Roanoke, Virginia, with offices in the Southwest Virginia region; and Impressia Bank, a division focused on banking opportunities for women, which operates in CNB Bank’s primary market areas. Additional information about CNB Financial Corporation may be found at www.CNBBank.bank.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the Corporation’s financial condition, liquidity, results of operations, future performance and business. These forward-looking statements are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. Forward-looking statements include statements with respect to beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond the Corporation’s control). Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would” and “could.” The Corporation’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry; (ii) changes in interest rates; (iii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (v) changes in general business, industry or economic conditions or competition; (vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (vii) governmental approvals of the Corporation’s pending merger with ESSA may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (viii) the Corporation’s shareholders and/or the shareholders of ESSA may fail to approve the merger; (ix) higher than expected costs or other difficulties related to integration of combined or merged businesses; (x) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (xi) changes in the quality or composition of our loan and investment portfolios; (xii) adequacy of loan loss reserves; (xiii) increased competition; (xiv) loss of certain key officers; (xv) deposit attrition; (xvi) rapidly changing technology; (xvii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xviii) changes in the cost of funds, demand for loan products or demand for financial services; and (xix) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on the Corporation’s financial position and results of operations. For more information about factors that could cause actual results to differ from those discussed in the forward-looking statements, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of and the forward-looking statement disclaimers in the Corporation’s annual and quarterly reports filed with the Securities and Exchange Commission.

The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this press release. Factors or events that could cause the Corporation’s actual results to differ may emerge from time to time, and it is not possible for the Corporation to predict all of them. The Corporation undertakes no obligation to publicly update or revise any forward-looking statements included in this press release or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur and you should not put undue reliance on any forward-looking statements.

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
       
  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023

Income Statement
 		                 
Interest and fees on loans $ 74,164     $ 75,725     $ 73,014     $ 293,544     $ 273,223  
Interest and dividends on securities and cash and cash equivalents   9,514       7,510       6,194       31,926       20,473  
Interest expense   (34,634 )     (35,749 )     (31,514 )     (138,001 )     (103,867 )
Net interest income   49,044       47,486       47,694       187,469       189,829  
Provision for credit losses   2,930       2,381       1,242       9,222       5,993  
Net interest income after provision for credit losses   46,114       45,105       46,452       178,247       183,836  
Non-interest income                  
Wealth and asset management fees   1,976       2,060       1,684       7,845       7,251  
Service charges on deposit accounts   1,712       1,790       1,803       6,990       7,372  
Other service charges and fees   770       796       727       2,973       3,010  
Net realized gains (losses) on available-for-sale securities   83       (9 )     —       74       52  
Net realized and unrealized gains (losses) on equity securities   (13 )     656       543       754       (387 )
Mortgage banking   93       197       160       673       676  
Bank owned life insurance   784       775       734       3,110       2,945  
Card processing and interchange income   2,222       2,241       2,082       8,666       8,301  
Other non-interest income   2,694       2,467       1,404       8,029       4,115  
Total non-interest income   10,321       10,973       9,137       39,114       33,335  
Non-interest expenses                  
Salaries and benefits   18,501       19,572       19,200       74,536       71,062  
Net occupancy expense of premises   3,816       3,701       3,719       14,737       14,509  
Technology expense   5,743       5,417       5,525       21,805       20,202  
Advertising expense   684       623       1,048       2,545       3,133  
State and local taxes   1,090       1,256       1,018       4,726       4,126  
Legal, professional, and examination fees   986       940       1,247       4,217       4,414  
FDIC insurance premiums   864       846       978       3,718       3,879  
Card processing and interchange expenses   1,325       1,193       756       4,575       5,025  
Other non-interest expense   4,796       5,236       4,959       19,143       18,992  
Total non-interest expenses   37,805       38,784       38,450       150,002       145,342  
Income before income taxes   18,630       17,294       17,139       67,359       71,829  
Income tax expense   3,566       3,340       3,162       12,784       13,809  
Net income   15,064       13,954       13,977       54,575       58,020  
Preferred stock dividends   1,076       1,076       1,076       4,302       4,302  
Net income available to common shareholders $ 13,988     $ 12,878     $ 12,901     $ 50,273     $ 53,718  
                   
Ending shares outstanding   20,987,992       20,994,730       20,896,439       20,987,992       20,896,439  
Average diluted common shares outstanding   20,929,885       20,911,862       20,841,528       20,900,037       20,944,376  
Diluted earnings per common share $ 0.66     $ 0.61     $ 0.62     $ 2.39     $ 2.55  
Cash dividends per common share $ 0.180     $ 0.180     $ 0.175     $ 0.710     $ 0.700  
Dividend payout ratio   27 %     30 %     28 %     30 %     27 %
                                       

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
       
  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023

Average Balances
 		                 
Total loans and loans held for sale $ 4,556,770     $ 4,536,702     $ 4,463,644     $ 4,491,304     $ 4,396,341  
Investment securities   744,149       722,577       730,050       733,055       760,976  
Total earning assets   5,674,794       5,503,832       5,343,817       5,499,187       5,232,117  
Total assets   6,085,277       5,907,115       5,719,313       5,894,958       5,601,371  
Noninterest-bearing deposits   832,168       795,771       759,781       781,780       793,713  
Interest-bearing deposits   4,442,150       4,319,606       4,217,771       4,328,430       4,037,554  
Shareholders’ equity   612,184       597,984       556,245       592,550       550,333  
Tangible common shareholders’ equity (non-GAAP)(1)   510,308       496,091       454,294       490,647       448,355  
                   

Average Yields (annualized)
 		                 
Total loans and loans held for sale   6.50 %     6.66 %     6.51 %     6.55 %     6.23 %
Investment securities   2.40 %     2.19 %     1.96 %     2.19 %     1.96 %
Total earning assets   5.84 %     5.98 %     5.82 %     5.88 %     5.57 %
Interest-bearing deposits   3.00 %     3.19 %     2.86 %     3.08 %     2.42 %
Interest-bearing liabilities   3.03 %     3.21 %     2.89 %     3.11 %     2.49 %
                   

Performance Ratios (annualized)
 		                 
Return on average assets   0.98 %     0.94 %     0.97 %     0.93 %     1.04 %
Return on average equity   9.79 %     9.28 %     9.97 %     9.21 %     10.54 %
Return on average tangible common equity (non-GAAP)(1)   10.90 %     10.33 %     11.27 %     10.25 %     11.98 %
Net interest margin, fully tax equivalent basis (non-GAAP)(1)   3.43 %     3.42 %     3.51 %     3.39 %     3.61 %
Efficiency Ratio, fully tax equivalent basis (non-GAAP)(1)   63.02 %     65.58 %     66.93 %     65.47 %     64.45 %
                   

Net Loan Charge-Offs
 		                 
CNB Bank net loan charge-offs $ 1,719     $ 837     $ 747     $ 5,782     $ 1,702  
Holiday Financial net loan charge-offs   425       383       487       1,730       1,739  
Total Corporation net loan charge-offs $ 2,144     $ 1,220     $ 1,234     $ 7,512     $ 3,441  
Annualized net loan charge-offs / average total loans and loans held for sale   0.19 %     0.11 %     0.11 %     0.17 %     0.08 %
                                       

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
           
  December 31,

2024 		  September 30,

2024 		  December 31,

2023

Ending Balance Sheet
 		         
Cash and due from banks $ 63,771     $ 75,214     $ 54,789  
Interest-bearing deposits with Federal Reserve   375,009       281,972       164,385  
Interest-bearing deposits with other financial institutions   4,255       3,723       2,872  
Total cash and cash equivalents   443,035       360,909       222,046  
Debt securities available-for-sale, at fair value   468,546       378,965       341,955  
Debt securities held-to-maturity, at amortized cost   306,081       328,152       388,968  
Equity securities   10,456       10,389       9,301  
Loans held for sale   762       768       675  
Loans receivable          
Syndicated loans   79,882       69,470       108,710  
Loans   4,529,074       4,522,438       4,359,718  
Total loans receivable   4,608,956       4,591,908       4,468,476  
Less: allowance for credit losses   (47,357 )     (46,644 )     (45,832 )
Net loans receivable   4,561,599       4,545,264       4,422,644  
Goodwill and other intangibles   43,874       43,874       43,874  
Core deposit intangible   206       223       280  
Other assets   357,451       346,300       323,214  
Total Assets $ 6,192,010     $ 6,014,844     $ 5,752,957  
           
Noninterest-bearing demand deposits $ 819,680     $ 841,292     $ 728,881  
Interest-bearing demand deposits   706,796       681,056       803,093  
Savings   3,122,028       3,040,769       2,960,282  
Certificates of deposit   722,860       653,832       506,494  
Total deposits   5,371,364       5,216,949       4,998,750  
Subordinated debentures   20,620       20,620       20,620  
Subordinated notes, net of issuance costs   84,570       84,495       84,267  
Other liabilities   104,761       86,417       78,073  
Total liabilities   5,581,315       5,408,481       5,181,710  
Common stock   —       —       —  
Preferred stock   57,785       57,785       57,785  
Additional paid in capital   219,876       219,304       220,495  
Retained earnings   381,296       371,086       345,935  
Treasury stock   (4,689 )     (4,516 )     (6,890 )
Accumulated other comprehensive loss   (43,573 )     (37,296 )     (46,078 )
Total shareholders’ equity   610,695       606,363       571,247  
Total liabilities and shareholders’ equity $ 6,192,010     $ 6,014,844     $ 5,752,957  
           
Book value per common share $ 26.34     $ 26.13     $ 24.57  
Tangible book value per common share (non-GAAP)(1) $ 24.24     $ 24.03     $ 22.46  
                       

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
           
  December 31,

2024 		  September 30,

2024 		  December 31,

2023

Capital Ratios
 		         
Tangible common equity / tangible assets (non-GAAP)(1)   8.28 %     8.45 %     8.22 %
Tier 1 leverage ratio(2)   10.43 %     10.59 %     10.54 %
Common equity tier 1 ratio(2)   11.76 %     11.64 %     11.49 %
Tier 1 risk-based ratio(2)   13.41 %     13.30 %     13.20 %
Total risk-based ratio(2)   16.16 %     16.06 %     15.99 %
           

Asset Quality Detail
 		         
Nonaccrual loans $ 56,323     $ 39,855     $ 29,639  
Loans 90+ days past due and accruing   653       666       55  
Total nonperforming loans   56,976       40,521       29,694  
Other real estate owned   2,509       1,514       2,111  
Total nonperforming assets $ 59,485     $ 42,035     $ 31,805  
           

Asset Quality Ratios
 		         
Nonperforming assets / Total loans + OREO   1.29 %     0.92 %     0.71 %
Nonperforming assets / Total assets   0.96 %     0.70 %     0.55 %
Ratio of allowance for credit losses on loans to nonaccrual loans   84.08 %     117.03 %     154.63 %
Allowance for credit losses / Total loans   1.03 %     1.02 %     1.03 %
           
           
Consolidated Financial Data Notes:          
(1)Management uses non-GAAP financial information in its analysis of the Corporation’s performance. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Corporation’s management believes that investors may use these non-GAAP measures to analyze the Corporation’s financial performance without the impact of unusual items or events that may obscure trends in the Corporation’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
(2)Capital ratios as of December 31, 2024 are estimated pending final regulatory filings.
 

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
   
  Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
  Three Months Ended,
  December 31, 2024   September 30, 2024   December 31, 2023
  Average
Balance		   Annual
Rate		   Interest
Inc./Exp.		   Average
Balance		   Annual
Rate		   Interest
Inc./Exp.		   Average
Balance		   Annual
Rate		   Interest
Inc./Exp.
ASSETS:                                  
Securities:                                  
Taxable(1) (4) $ 711,286     2.36 %   $ 4,487   $ 690,098     2.14 %   $ 3,980   $ 694,369     1.89 %   $ 3,626
Tax-exempt(1) (2) (4)   25,489     2.67       184     25,368     2.57       178     27,590     2.55       198
Equity securities(1) (2)   7,374     5.77       107     7,111     5.71       102     8,091     5.54       113
Total securities(4)   744,149     2.40       4,778     722,577     2.19       4,260     730,050     1.96       3,937
Loans receivable:                                  
Commercial(2) (3)   1,458,902     6.77       24,824     1,457,192     7.02       25,708     1,467,452     7.07       26,165
Mortgage and loans held for sale(2) (3)   2,965,914     6.12       45,633     2,947,787     6.25       46,278     2,860,619     5.99       43,166
Consumer(3)   131,954     11.93       3,956     131,723     11.93       3,950     135,573     11.38       3,890
Total loans receivable(3)   4,556,770     6.50       74,413     4,536,702     6.66       75,936     4,463,644     6.51       73,221
Interest-bearing deposits with the Federal Reserve and other financial institutions   373,875     5.08       4,771     244,553     5.33       3,279     150,123     6.06       2,292
Total earning assets   5,674,794     5.84     $ 83,962     5,503,832     5.98     $ 83,475     5,343,817     5.82     $ 79,450
Noninterest-bearing assets:                                  
Cash and due from banks   59,445               58,472               55,815          
Premises and equipment   124,398               118,404               109,469          
Other assets   273,326               272,377               256,253          
Allowance for credit losses   (46,686 )             (45,970 )             (46,041 )        
Total non interest-bearing assets   410,483               403,283               375,496          
TOTAL ASSETS $ 6,085,277             $ 5,907,115             $ 5,719,313          
LIABILITIES AND SHAREHOLDERS’ EQUITY:                                  
Demand—interest-bearing $ 686,359     0.83 %   $ 1,437   $ 682,690     0.86 %   $ 1,477   $ 778,488     0.55 %   $ 1,081
Savings   3,068,451     3.26       25,139     3,076,351     3.55       27,461     2,920,026     3.36       24,712
Time   687,340     4.02       6,953     560,565     4.03       5,684     519,257     3.50       4,587
Total interest-bearing deposits   4,442,150     3.00       33,529     4,319,606     3.19       34,622     4,217,771     2.86       30,380
Short-term borrowings   —     0.00       —     —     0.00       —     0     0.00       0
Finance lease liabilities   212     3.75       2     236     5.06       3     305     3.90       3
Subordinated notes and debentures   105,153     4.17       1,103     105,077     4.26       1,124     104,849     4.28       1,131
Total interest-bearing liabilities   4,547,515     3.03     $ 34,634     4,424,919     3.21     $ 35,749     4,322,925     2.89     $ 31,514
Demand—noninterest-bearing   832,168               795,771               759,781          
Other liabilities   93,410               88,441               80,362          
Total Liabilities   5,473,093               5,309,131               5,163,068          
Shareholders’ equity   612,184               597,984               556,245          
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,085,277             $ 5,907,115             $ 5,719,313          
Interest income/Earning assets     5.84 %   $ 83,962       5.98 %   $ 83,475       5.82 %   $ 79,450
Interest expense/Interest-bearing liabilities     3.03       34,634       3.21       35,749       2.89       31,514
Net interest spread     2.81 %   $ 49,328       2.77 %   $ 47,726       2.93 %   $ 47,936
Interest income/Earning assets     5.84 %     83,962       5.98 %     83,475       5.82 %     79,450
Interest expense/Earning assets     2.41       34,634       2.56       35,749       2.31       31,514
Net interest margin (fully tax-equivalent)     3.43 %   $ 49,328       3.42 %   $ 47,726       3.51 %   $ 47,936
                                               
_____________________________________
(1)Includes unamortized discounts and premiums.
(2)Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023 was $284 thousand, $240 thousand and $242 thousand, respectively.
(3)Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income. In addition, loans receivable interest income consists of loans receivable fees, including PPP deferred processing fees.
(4)Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023 was $(47.0) million, $(51.1) million and $(68.5) million, respectively.
 

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
   
  Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
  Twelve Months Ended,
  December 31, 2024   December 31, 2023
  Average
Balance		   Annual
Rate		   Interest
Inc./Exp.		   Average
Balance		   Annual
Rate		   Interest
Inc./Exp.
ASSETS:                      
Securities:                      
Taxable(1) (4) $ 700,078     2.14 %   $ 16,059   $ 720,818     1.89 %   $ 14,766
Tax-exempt(1) (2) (4)   25,919     2.60       731     30,153     2.59       844
Equity securities(1) (2)   7,058     5.71       403     10,005     5.09       509
Total securities(4)   733,055     2.19       17,193     760,976     1.96       16,119
Loans receivable:                      
Commercial(2) (3)   1,440,667     6.88       99,184     1,501,202     6.63       99,587
Mortgage and loans held for sale(2) (3)   2,920,537     6.15       179,645     2,765,484     5.77       159,606
Consumer(3)   130,100     11.95       15,547     129,655     11.47       14,868
Total loans receivable(3)   4,491,304     6.55       294,376     4,396,341     6.23       274,061
Interest-bearing deposits with the Federal Reserve and other financial institutions   274,828     5.41       14,856     74,800     6.03       4,513
Total earning assets   5,499,187     5.88     $ 326,425     5,232,117     5.57     $ 294,693
Noninterest-bearing assets:                      
Cash and due from banks   56,295               54,824          
Premises and equipment   116,341               107,635          
Other assets   269,167               251,725          
Allowance for credit losses   (46,032 )             (44,930 )        
Total non interest-bearing assets   395,771               369,254          
TOTAL ASSETS $ 5,894,958             $ 5,601,371          
LIABILITIES AND SHAREHOLDERS’ EQUITY:                      
Demand—interest-bearing $ 705,488     0.77 %   $ 5,451   $ 853,632     0.54 %   $ 4,626
Savings   3,052,031     3.46       105,675     2,666,905     2.92       77,782
Time   570,911     3.92       22,367     517,017     2.97       15,362
Total interest-bearing deposits   4,328,430     3.08       133,493     4,037,554     2.42       97,770
Short-term borrowings   —     0.00       —     35,224     5.07       1,787
Finance lease liabilities   247     4.45       11     339     4.42       15
Subordinated notes and debentures   105,039     4.28       4,497     104,735     4.10       4,295
Total interest-bearing liabilities   4,433,716     3.11     $ 138,001     4,177,852     2.49     $ 103,867
Demand—noninterest-bearing   781,780               793,713          
Other liabilities   86,912               79,473          
Total Liabilities   5,302,408               5,051,038          
Shareholders’ equity   592,550               550,333          
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 5,894,958             $ 5,601,371          
Interest income/Earning assets     5.88 %   $ 326,425       5.57 %   $ 294,693
Interest expense/Interest-bearing liabilities     3.11       138,001       2.49       103,867
Net interest spread     2.77 %   $ 188,424       3.08 %   $ 190,826
Interest income/Earning assets     5.88 %     326,425       5.57 %     294,693
Interest expense/Earning assets     2.49       138,001       1.96       103,867
Net interest margin (fully tax-equivalent)     3.39 %   $ 188,424       3.61 %   $ 190,826
                               
_____________________________________
(1)Includes unamortized discounts and premiums.
(2)Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the twelve months ended December 31, 2024 and 2023, was $955 thousand and $997 thousand, respectively.
(3)Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income. In addition, loans receivable interest income consists of loans receivable fees, including PPP deferred processing fees.
(4)Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the twelve months ended December 31, 2024 and 2023 was $(53.1) million and $(61.1) million, respectively.
 

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
 
Reconciliation of Non-GAAP Financial Measures
           
  December 31,

2024 		  September 30,

2024 		  December 31,

2023
Calculation of tangible book value per common share and tangible common

equity / tangible assets (non-GAAP): 		         
Shareholders’ equity $ 610,695     $ 606,363     $ 571,247  
Less: preferred equity   57,785       57,785       57,785  
Common shareholders’ equity   552,910       548,578       513,462  
Less: goodwill and other intangibles   43,874       43,874       43,874  
Less: core deposit intangible   206       223       280  
Tangible common equity (non-GAAP) $ 508,830     $ 504,481     $ 469,308  
           
Total assets $ 6,192,010     $ 6,014,844     $ 5,752,957  
Less: goodwill and other intangibles   43,874       43,874       43,874  
Less: core deposit intangible   206       223       280  
Tangible assets (non-GAAP) $ 6,147,930     $ 5,970,747     $ 5,708,803  
           
Ending shares outstanding   20,987,992       20,994,730       20,896,439  
           
Book value per common share (GAAP) $ 26.34     $ 26.13     $ 24.57  
Tangible book value per common share (non-GAAP) $ 24.24     $ 24.03     $ 22.46  
           
Common shareholders’ equity / Total assets (GAAP)   8.93 %     9.12 %     8.93 %
Tangible common equity / Tangible assets (non-GAAP)   8.28 %     8.45 %     8.22 %
           

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
 
Reconciliation of Non-GAAP Financial Measures
       
  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023
Calculation of net interest margin:                  
Interest income $ 83,678     $ 83,235     $ 79,208     $ 325,470     $ 293,696  
Interest expense   34,634       35,749       31,514       138,001       103,867  
Net interest income $ 49,044     $ 47,486     $ 47,694     $ 187,469     $ 189,829  
                   
Average total earning assets $ 5,674,794     $ 5,503,832     $ 5,343,817     $ 5,499,187     $ 5,232,117  
                   
Net interest margin (GAAP) (annualized)   3.44 %     3.43 %     3.54 %     3.41 %     3.63 %
                   
Calculation of net interest margin (fully tax equivalent basis) (non-GAAP):                  
Interest income $ 83,678     $ 83,235     $ 79,208     $ 325,470     $ 293,696  
Tax equivalent adjustment (non-GAAP)   284       240       242       955       997  
Adjusted interest income (fully tax equivalent basis) (non-GAAP)   83,962       83,475       79,450       326,425       294,693  
Interest expense   34,634       35,749       31,514       138,001       103,867  
Net interest income (fully tax equivalent basis) (non-GAAP) $ 49,328     $ 47,726     $ 47,936     $ 188,424     $ 190,826  
                   
Average total earning assets $ 5,674,794     $ 5,503,832     $ 5,343,817     $ 5,499,187     $ 5,232,117  
Less: average mark to market adjustment on investments (non-GAAP)   (46,988 )     (51,075 )     (68,546 )     (53,087 )     (61,089 )
Adjusted average total earning assets, net of mark to market (non-GAAP) $ 5,721,782     $ 5,554,907     $ 5,412,363     $ 5,552,274     $ 5,293,206  
                   
Net interest margin, fully tax equivalent basis (non-GAAP) (annualized)   3.43 %     3.42 %     3.51 %     3.39 %     3.61 %
                                       

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
 
Reconciliation of Non-GAAP Financial Measures
       
  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023
Calculation of PPNR (non-GAAP):

(1)
 		                 
Net interest income $ 49,044     $ 47,486     $ 47,694     $ 187,469     $ 189,829  
Add: Non-interest income   10,321       10,973       9,137       39,114       33,335  
Less: Non-interest expense   37,805       38,784       38,450       150,002       145,342  
PPNR (non-GAAP) $ 21,560     $ 19,675     $ 18,381     $ 76,581     $ 77,822  
                   
(1)Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation’s ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies.

  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023
Calculation of efficiency ratio:                  
Non-interest expense $ 37,805     $ 38,784     $ 38,450     $ 150,002     $ 145,342  
                   
Non-interest income $ 10,321     $ 10,973     $ 9,137     $ 39,114     $ 33,335  
Net interest income   49,044       47,486       47,694       187,469       189,829  
Total revenue $ 59,365     $ 58,459     $ 56,831     $ 226,583     $ 223,164  
Efficiency ratio   63.68 %     66.34 %     67.66 %     66.20 %     65.13 %
                   
Calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP):                  
Non-interest expense $ 37,805     $ 38,784     $ 38,450     $ 150,002     $ 145,342  
Less: core deposit intangible amortization   16       18       19       73       84  
Adjusted non-interest expense (non-GAAP) $ 37,789     $ 38,766     $ 38,431     $ 149,929     $ 145,258  
                   
Non-interest income $ 10,321     $ 10,973     $ 9,137     $ 39,114     $ 33,335  
                   
Net interest income $ 49,044     $ 47,486     $ 47,694     $ 187,469     $ 189,829  
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP)   1,508       1,473       1,383       5,635       5,425  
Add: tax exempt investment and loan income (fully tax equivalent basis) (non-GAAP)   2,111       2,123       1,968       8,068       7,635  
Adjusted net interest income (fully tax equivalent basis) (non-GAAP)   49,647       48,136       48,279       189,902       192,039  
Adjusted net revenue (fully tax equivalent basis) (non-GAAP) $ 59,968     $ 59,109     $ 57,416     $ 229,016     $ 225,374  
                   
Efficiency ratio (fully tax equivalent basis) (non-GAAP)   63.02 %     65.58 %     66.93 %     65.47 %     64.45 %
                                       

 
CNB FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL DATA

Unaudited

(dollars in thousands, except per share data)
 
Reconciliation of Non-GAAP Financial Measures
       
  Three Months Ended   Twelve Months Ended
  December 31,

2024 		  September 30,

2024 		  December 31,

2023 		  December 31,

2024 		  December 31,

2023
Calculation of return on average tangible common equity (non-GAAP):                  
Net income $ 15,064     $ 13,954     $ 13,977     $ 54,575     $ 58,020  
Less: preferred stock dividends   1,076       1,076       1,076       4,302       4,302  
Net income available to common shareholders $ 13,988     $ 12,878     $ 12,901     $ 50,273     $ 53,718  
                   
Average shareholders’ equity $ 612,184     $ 597,984     $ 556,245     $ 592,550     $ 550,333  
Less: average goodwill & intangibles   44,091       44,108       44,166       44,118       44,193  
Less: average preferred equity   57,785       57,785       57,785       57,785       57,785  
Tangible common shareholders’ equity (non-GAAP) $ 510,308     $ 496,091     $ 454,294     $ 490,647     $ 448,355  
                   
Return on average equity (GAAP) (annualized)   9.79 %     9.28 %     9.97 %     9.21 %     10.54 %
Return on average common equity (GAAP) (annualized)   10.04 %     9.48 %     10.27 %     9.40 %     10.91 %
Return on average tangible common equity (non-GAAP) (annualized)   10.90 %     10.33 %     11.27 %     10.25 %     11.98 %
                                        



Contact: Tito L. Lima
Treasurer
(814) 765-9621

Posted on

Lucid Announces New Chief Financial Officer

PR Newswire


NEWARK, Calif.
, Jan. 28, 2025 /PRNewswire/ — Lucid Group, Inc. (NASDAQ: LCID), maker of the world’s most advanced electric vehicles, today announced the appointment of Taoufiq Boussaid as Chief Financial Officer, planned to become effective February 25, 2025. Interim CFO Gagan Dhingra will be promoted to Senior Vice President, Finance and Accounting and also continue as Chief Accounting Officer, reporting to Boussaid once he assumes the CFO role.

“Taoufiq is joining Lucid at a pivotal time as we ramp up production of the Lucid Gravity SUV and accelerate our progress toward achieving our strategic goals,” said Peter Rawlinson, CEO and CTO of Lucid. “With decades of experience in strategic finance and operational transformation, Taoufiq will bring valuable expertise to our leadership team. His proven ability to align financial strategy with business objectives will be critical in scaling our operations efficiently and effectively as we prepare for the launch of our midsize vehicles. I would also like to extend my gratitude to Gagan for his leadership as interim CFO and his continued contributions to Lucid’s success.” 

Boussaid brings extensive public company finance leadership experience to the Lucid team, where he will focus on aligning key strategic, operational, and financial processes with Lucid’s profit and growth objectives while driving initiatives to enhance shareholder value. Boussaid, 53, previously served as Group Chief Financial Officer of N.V. Bekaert S.A., a Belgium-listed industrial steel and coatings technology company, from July 2019 through October 2024, where he successfully led finance transformation efforts, improved operational efficiency, and contributed to significant debt reduction and value creation for shareholders. In 2007, he joined Bombardier Transportation, where he progressively advanced through the finance organization across various geographies, ultimately serving as Vice President Finance for EMEA and Asia Pacific. Alongside his finance roles, he also held operational responsibilities, overseeing the French and North African businesses of Bombardier Transportation. Earlier in his career, he served in key finance positions at United Technologies Corporation, including as Chief Financial Officer for their Carrier Heating Systems business in Europe. Boussaid began his career in international finance as an audit manager with Ernst & Young Global Limited in France and The Coca-Cola Company in the United States.

About Lucid Group

Lucid (NASDAQ: LCID) is a Silicon Valley-based technology company focused on creating the most advanced EVs in the world. The award-winning Lucid Air and new Lucid Gravity deliver best-in-class performance, sophisticated design, expansive interior space and unrivaled energy efficiency. Lucid assembles both vehicles in its state-of-the-art, vertically integrated factory in Arizona. Through its industry-leading technology and innovations, Lucid is advancing the state-of-the-art of EV technology for the benefit of all.

Investor Relations Contact

[email protected]

Media Contact

[email protected]

Forward-Looking Statements

This communication includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “shall,” “expect,” “anticipate,” “believe,” “seek,” “target,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the expected timing of Boussaid’s appointment and Lucid’s expectations related to continued ramp-up in production of the Lucid Gravity and acceleration of progress toward executing Lucid’s business plan. Actual events and circumstances may differ from these forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, including those factors discussed under the heading “Risk Factors” in Part II, Item 1A of Lucid’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, as well as other documents Lucid has filed or will file with the Securities and Exchange Commission. If any of these risks materialize or Lucid’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Lucid currently does not know or that Lucid currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Lucid’s expectations, plans or forecasts of future events and views as of the date of this communication. Lucid anticipates that subsequent events and developments will cause Lucid’s assessments to change. However, while Lucid may elect to update these forward-looking statements at some point in the future, Lucid specifically disclaims any obligation to do so. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/lucid-announces-new-chief-financial-officer-302362561.html

SOURCE Lucid Group

Posted on

F5’s Alignment with Hybrid Multicloud Trends Contributes to Record First Quarter Results with 11% Revenue Growth, Including 22% Software Revenue Growth and 18% Systems Revenue Growth

F5’s Alignment with Hybrid Multicloud Trends Contributes to Record First Quarter Results with 11% Revenue Growth, Including 22% Software Revenue Growth and 18% Systems Revenue Growth

SEATTLE–(BUSINESS WIRE)–
F5, Inc. (NASDAQ: FFIV) today announced financial results for its first quarter fiscal year 2025 for the period ended December 31, 2024.

“F5’s alignment with significant secular trends, a more stable IT spending environment, and our strong execution led to another record quarter,” said François Locoh-Donou, F5’s President and CEO. “Our first quarter revenue of $766 million reflects 11% growth year over year and includes a 22% increase in software revenue and 18% systems revenue growth from the first quarter of fiscal year 2024.”

“We are seeing new opportunities emerge in two main areas: hybrid multicloud and AI,” continued Locoh-Donou. “F5’s innovation in anticipation of widespread hybrid multicloud adoption means we can simplify the crushing complexity of these environments in ways competitors cannot and is leading to new revenue potential. Additionally, our unique ability to rapidly and securely move the large amounts of enterprise data necessary for AI inferencing and retrieval augmented generation positions F5 as a crucial player as businesses start to implement AI on a large scale.”

First Quarter Performance Summary

First quarter fiscal year 2025 revenue totaled $766 million, compared with $693 million in the first quarter of fiscal year 2024. Software revenue of $209 million grew 22% and systems revenue of $160 million grew 18% from the year-ago period. Global services revenue of $398 million grew 3% from the year-ago period.

GAAP gross profit for the first quarter of fiscal year 2025 was $626 million, representing GAAP gross margin of 81.7%. This compares with GAAP gross profit of $556 million in the year-ago period, which represented GAAP gross margin of 80.3%. Non-GAAP gross profit for the first quarter of fiscal year 2025 was $643 million, representing non-GAAP gross margin of 83.9%. This compares with non-GAAP gross profit of $575 million in the year-ago period, which represented non-GAAP gross margin of 83.1%.

GAAP operating profit for the first quarter of fiscal year 2025 was $205 million, representing GAAP operating margin of 26.8%. This compares with GAAP operating profit of $165 million in the year-ago period, which represented GAAP operating margin of 23.8%. Non-GAAP operating profit for the period was $286 million, representing non-GAAP operating margin of 37.4%. This compares to non-GAAP operating profit of $246 million in the year-ago period, which represented non-GAAP operating margin of 35.5%.

GAAP net income for the first quarter of fiscal year 2025 was $166 million, or $2.82 per diluted share compared to $138 million, or $2.32 per diluted share, in the first quarter of fiscal year 2024. Non-GAAP net income for the first quarter of fiscal year 2025 was $227 million, or $3.84 per diluted share, compared to $205 million, or $3.43 per diluted share, in the first quarter of fiscal year 2024.

Performance Summary Tables

 
GAAP Measures Non-GAAP Measures
($ in millions except EPS) Q1 FY2025 Q1 FY2024 ($ in millions except EPS) Q1 FY2025 Q1 FY2024
Revenue

$

766

 

$

693

 
Gross profit

$

626

 

$

556

 

 Gross profit

$

643

 

$

575

 
Gross margin

 

81.7

%

 

80.3

%

 Gross margin

 

83.9

%

 

83.1

%
Operating profit

$

205

 

$

165

 

 Operating profit

$

286

 

$

246

 
Operating margin

 

26.8

%

 

23.8

%

 Operating margin

 

37.4

%

 

35.5

%
Net income

$

166

 

$

138

 

 Net income

$

227

 

$

205

 
EPS

$

2.82

 

$

2.32

 

 EPS

$

3.84

 

$

3.43

 

A reconciliation of GAAP to non-GAAP measures is included in the attached Consolidated Income Statements. Additional information about non-GAAP financial information is included in this release.

Business Outlook

For the second quarter of fiscal year 2025, F5 expects to deliver revenue in the range of $705 million to $725 million, with non-GAAP earnings in the range of $3.02 to $3.14 per diluted share.

For fiscal year 2025, F5 raised its revenue growth expectations to 6% to 7% growth from fiscal year 2024, up from its prior guidance of 4% to 5% growth. The company also raised its fiscal year 2025 non-GAAP earnings per share expectations to reflect 6.5% to 8.5% growth over fiscal year 2024, up from its prior guidance of 5% to 7% growth. On a tax-neutral basis, the midpoint of F5’s fiscal year 2025 non-GAAP earnings per share guidance reflects better than 10% growth year over year.

All forward-looking non-GAAP measures included in the Company’s business outlook exclude estimates for amortization of intangible assets, share-based compensation expenses, significant effects of tax legislation and judicial or administrative interpretation of tax regulations (including the impact of income tax reform), non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of any future acquisitions or divestitures, acquisition-related charges and write-downs, restructuring charges, facility exit costs, or other non-recurring charges that may occur in the period. F5 is unable to provide a reconciliation of non-GAAP earnings guidance measures to corresponding U.S. generally accepted accounting principles or GAAP measures on a forward-looking basis without unreasonable effort due to the overall high variability and low visibility of most of the foregoing items that have been excluded. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically varied and may continue to vary significantly from quarter to quarter.

Live Webcast and Conference Call

F5 will host a live webcast to review its financial results and outlook today, January 28, 2025, at 4:30 pm ET. The live webcast is accessible from the investor relations page of F5.com. To participate in the live call via telephone in the U.S. and Canada, dial +1 (877) 407-0312. Outside the U.S. and Canada, dial +1 (201) 389-0899. Please call at least five minutes prior to the call start time. The webcast replay will be archived on the investor relations portion of F5’s website.

Forward Looking Statements

This press release contains forward-looking statements including, among other things, F5’s alignment with significant secular trends, that opportunities are emerging in hybrid multicloud and AI, F5’s innovation in anticipation of widespread hybrid multicloud adoption means we can simplify the crushing complexity of these environments in ways competitors cannot and is leading to new revenue potential, F5’s unique ability to rapidly and securely move the large amounts of enterprise data necessary for AI inferencing and retrieval augmented generation positions F5 as a crucial player as businesses start to implement AI on a large scale, the Company’s future financial performance including revenue, earnings growth, future customer demand, and the performance and benefits of the Company’s products. These, and other statements that are not historical facts, are forward-looking statements. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors. Such forward-looking statements involve risks and uncertainties, as well as assumptions and other factors that, if they do not fully materialize or prove correct, could cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: customer acceptance of offerings; disruptions to the global supply chain resulting in inability to source required parts for F5’s products or the ability to only do so at greatly increased prices thereby impacting our revenues and/or margins; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; F5’s ability to successfully integrate acquired businesses’ products with F5 technologies; the ability of F5’s sales professionals and distribution partners to sell new solutions and service offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into F5’s markets, and new product and marketing initiatives by our competitors; increased sales discounts; the business impact of the acquisitions and potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of completion of acquisitions; uncertain global economic conditions which may result in reduced customer demand for our products and services and changes in customer payment patterns; litigation involving patents, intellectual property, shareholder and other matters, and governmental investigations; potential security flaws in the Company’s networks, products or services; cybersecurity attacks on its networks, products or services; natural catastrophic events; a pandemic or epidemic; F5’s ability to sustain, develop and effectively utilize distribution relationships; F5’s ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5’s ability to expand in international markets; the unpredictability of F5’s sales cycle; the ability of F5 to execute on its share repurchase program including the timing of any repurchases; future prices of F5’s common stock; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K and other documents that we may file or furnish from time to time, which could cause actual results to vary from expectations. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in F5’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. All forward-looking statements in this press release are based on information available as of the date hereof and qualified in their entirety by this cautionary statement. F5 assumes no obligation to revise or update these forward-looking statements.

GAAP to non-GAAP Reconciliation

F5’s management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its products, services operations, and certain costs of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is GAAP net income excluding, as applicable, stock-based compensation, amortization and impairment of purchased intangible assets, facility-exit costs, acquisition-related charges, net of taxes, restructuring charges, and certain non-recurring tax expenses and benefits, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure of non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the Company would accrue if it used non-GAAP results instead of GAAP results to calculate the Company’s tax liability.

The non-GAAP adjustments, and F5’s basis for excluding them from non-GAAP financial measures, are outlined below:

Stock-based compensation. Stock-based compensation consists of expense for stock options, restricted stock, and employee stock purchases through the Company’s Employee Stock Purchase Plan. Although stock-based compensation is an important aspect of the compensation of F5’s employees and executives, management believes it is useful to exclude stock-based compensation expenses to better understand the long-term performance of the Company’s core business and to facilitate comparison of the Company’s results to those of peer companies.

Amortization and impairment of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives, and generally cannot be changed or influenced by management after the acquisition. On a non-recurring basis, when certain events or circumstances are present, management may also be required to write down the carrying value of its purchased intangible assets and recognize impairment charges. Management does not believe these charges accurately reflect the performance of the Company’s ongoing operations; therefore, they are not considered by management in making operating decisions. However, investors should note that the use of intangible assets contributed to F5’s revenues earned during the periods presented and will contribute to F5’s future period revenues as well.

Facility-exit costs. F5 has incurred certain non-recurring right-of-use asset impairment charges, and other related recurring costs in connection with the exit of its leased facilities. These charges are not representative of the ongoing activity or costs to the business. As a result, these charges are being excluded to provide investors with a more comparable measure of costs associated with ongoing operations.

Acquisition-related charges, net. F5 does not acquire businesses on a predictable cycle and the terms and scope of each transaction can vary significantly and are unique to each transaction. F5 excludes acquisition-related charges from its non-GAAP financial measures to provide a useful comparison of the Company’s operating results to prior periods and to its peer companies. Acquisition-related charges consist of planning, execution and integration costs incurred directly as a result of an acquisition.

Restructuring charges. F5 has incurred restructuring charges that are included in its GAAP financial statements, primarily related to workforce reductions and costs associated with exiting facility-lease commitments. F5 excludes these items from its non-GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business.

Management believes that non-GAAP net income per share provides useful supplemental information to management and investors regarding the performance of the Company’s core business operations and facilitates comparisons to the Company’s historical operating results. Although F5’s management finds this non-GAAP measure to be useful in evaluating the performance of the core business, management’s reliance on this measure is limited because items excluded from such measures could have a material effect on F5’s earnings and earnings per share calculated in accordance with GAAP. Therefore, F5’s management will use its non-GAAP earnings and earnings per share measures, in conjunction with GAAP earnings and earnings per share measures, to address these limitations when evaluating the performance of the Company’s core business. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP.

F5 believes that presenting its non-GAAP measures of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the Company’s core business and is used by management in its own evaluation of the Company’s performance. Investors are encouraged to look at GAAP results as the best measure of financial performance. However, while the GAAP results are more complete, the Company provides investors these supplemental measures since, with reconciliation to GAAP, it may provide additional insight into the Company’s operational performance and financial results.

For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section in our attached Condensed Consolidated Income Statements entitled “Non-GAAP Financial Measures.”

About F5

F5 is a multicloud application security and delivery company committed to bringing a better digital world to life.​​​​​​​ F5 partners with the world’s largest, most advanced organizations to secure every app — on premises, in the cloud, or at the edge. F5 enables businesses to continuously stay ahead of threats while delivering exceptional, secure digital experiences for their customers. For more information, go to f5.com. (NASDAQ: FFIV)

You can also follow @F5 on X (Twitter) or visit us on LinkedIn and Facebook for more information about F5, its partners, and technologies. F5 is a trademark, service mark, or tradename of F5, Inc., in the U.S. and other countries. All other product and company names herein may be trademarks of their respective owners.

SOURCE: F5, Inc.

F5, Inc.

Consolidated Balance Sheets

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

2024

 

2024
 
Assets
Current assets
Cash and cash equivalents

$

1,150,907

 

$

1,074,602

 
Accounts receivable, net of allowances of $4,955 and $4,585

 

484,989

 

 

389,024

 
Inventories

 

73,239

 

 

76,378

 
Other current assets

 

632,893

 

 

569,467

 
Total current assets

 

2,342,028

 

 

2,109,471

 
 
Property and equipment, net

 

149,979

 

 

150,943

 
Operating lease right-of-use assets

 

198,206

 

 

178,180

 
Long-term investments

 

11,177

 

 

8,580

 
Deferred tax assets

 

378,334

 

 

365,951

 
Goodwill

 

2,312,362

 

 

2,312,362

 
Other assets, net

 

508,555

 

 

487,517

 
Total assets

$

5,900,641

 

$

5,613,004

 
 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable

$

53,611

 

$

67,894

 
Accrued liabilities

 

316,369

 

 

300,076

 
Deferred revenue

 

1,217,664

 

 

1,121,683

 
Total current liabilities

 

1,587,644

 

 

1,489,653

 
 
Deferred tax liabilities

 

7,702

 

 

7,179

 
Deferred revenue, long-term

 

728,596

 

 

676,276

 
Operating lease liabilities, long-term

 

242,872

 

 

215,785

 
Other long-term liabilities

 

98,076

 

 

94,733

 
Total long-term liabilities

 

1,077,246

 

 

993,973

 
 
Commitments and contingencies
 
Shareholders’ equity
Preferred stock, no par value; 10,000 shares authorized, no shares issued and outstanding

 

–

 

 

–

 
Common stock, no par value; 200,000 shares authorized, 58,132 and 58,094
shares issued and outstanding

 

9,461

 

 

5,889

 
Accumulated other comprehensive loss

 

(24,199

)

 

(20,912

)
Retained earnings

 

3,250,489

 

 

3,144,401

 
Total shareholders’ equity

 

3,235,751

 

 

3,129,378

 
Total liabilities and shareholders’ equity

$

5,900,641

 

$

5,613,004

 
 
F5, Inc.
Consolidated Income Statements
(unaudited, in thousands, except per share amounts)
 
 

Three Months Ended

December 31,

2024

 

2023
 
Net revenues
Products

$

368,497

 

$

305,859

 
Services

 

397,992

 

 

386,738

 
Total

 

766,489

 

 

692,597

 
 
Cost of net revenues (1)(2)(3)(4)
Products

 

82,836

 

 

82,708

 
Services

 

57,674

 

 

53,681

 
Total

 

140,510

 

 

136,389

 
Gross profit

 

625,979

 

 

556,208

 
 
Operating expenses (1)(2)(3)(4)
Sales and marketing

 

206,035

 

 

198,927

 
Research and development

 

130,518

 

 

119,575

 
General and administrative

 

73,023

 

 

64,718

 
Restructuring charges

 

11,321

 

 

8,472

 
Total

 

420,897

 

 

391,692

 
 
Income from operations

 

205,082

 

 

164,516

 
Other income, net

 

3,962

 

 

9,882

 
Income before income taxes

 

209,044

 

 

174,398

 
Provision for income taxes

 

42,599

 

 

36,016

 
Net income

$

166,445

 

$

138,382

 
 
 
Net income per share – basic

$

2.85

 

$

2.34

 
Weighted average shares – basic

 

58,305

 

 

59,122

 
 
Net income per share – diluted

$

2.82

 

$

2.32

 
Weighted average shares – diluted

 

59,058

 

 

59,653

 
 
 
Non-GAAP Financial Measures
 
Net income as reported

$

166,445

 

$

138,382

 
Stock-based compensation expense

 

57,908

 

 

56,002

 
Amortization and impairment of purchased intangible assets

 

10,143

 

 

14,315

 
Facility-exit costs

 

1,220

 

 

1,538

 
Acquisiton-related charges

 

691

 

 

801

 
Restructuring charges

 

11,321

 

 

8,472

 
Tax effects related to above items

 

(20,756

)

 

(14,783

)
Net income excluding stock-based compensation expense, amortization and impairment
of purchased intangible assets, facility-exit costs, acquisition-related charges, and
restructuring charges, net of tax effects (non-GAAP) – diluted

$

226,972

 

$

204,727

 
 
Net income per share excluding stock-based compensation expense, amortization and
impairment of purchased intangible assets, facility-exit costs, acquisition-related charges,
and restructuring charges, net of tax effects (non-GAAP) – diluted

$

3.84

 

$

3.43

 
 
Weighted average shares – diluted

 

59,058

 

 

59,653

 
 
(1) Includes stock-based compensation expense as follows:
Cost of net revenues

$

7,400

 

$

7,684

 
Sales and marketing

 

21,167

 

 

21,596

 
Research and development

 

16,481

 

 

16,018

 
General and administrative

 

12,860

 

 

10,704

 

$

57,908

 

$

56,002

 
 
(2) Includes amortization and impairment of purchased intangible assets as follows:
Cost of net revenues

$

9,284

 

$

11,233

 
Sales and marketing

 

718

 

 

2,788

 
Research and development

 

94

 

 

94

 
General and administrative

 

47

 

 

200

 

$

10,143

 

$

14,315

 
 
(3) Includes facility-exit costs as follows:
Cost of net revenues

$

124

 

$

156

 
Sales and marketing

 

414

 

 

483

 
Research and development

 

364

 

 

542

 
General and administrative

 

318

 

 

357

 

$

1,220

 

$

1,538

 
 
(4) Includes acquisition-related charges as follows:
Cost of net revenues

$

–

 

$

20

 
Sales and marketing

 

–

 

 

65

 
Research and development

 

500

 

 

153

 
General and administrative

 

191

 

 

563

 

$

691

 

$

801

 
 

F5, Inc.

Consolidated Statements of Cash Flows

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

Three months ended

 

December 31,

 

2024

 

2023
 
Operating activities
Net income

$

166,445

 

$

138,382

 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation

 

57,908

 

 

56,002

 
Depreciation and amortization

 

22,666

 

 

29,266

 
Non-cash operating lease costs

 

7,943

 

 

8,392

 
Deferred income taxes

 

(11,944

)

 

(11,203

)
Other

 

1,623

 

 

722

 
Changes in operating assets and liabilities (excluding effects of the acquisition of businesses):
Accounts receivable

 

(98,188

)

 

(58,713

)
Inventories

 

3,139

 

 

34

 
Other current assets

 

(57,069

)

 

(32,164

)
Other assets

 

(34,544

)

 

2,949

 
Accounts payable and accrued liabilities

 

6,554

 

 

(13,447

)
Deferred revenue

 

148,300

 

 

54,990

 
Lease liabilities

 

(10,051

)

 

(9,892

)
Net cash provided by operating activities

 

202,782

 

 

165,318

 
 
Investing activities
Purchases of investments

 

(1,900

)

 

(1,000

)
Maturities of investments

 

–

 

 

2,913

 
Purchases of property and equipment

 

(8,073

)

 

(9,048

)
Net cash used in investing activities

 

(9,973

)

 

(7,135

)
 
Financing activities
Proceeds from the exercise of stock options and
purchases of stock under employee stock purchase plan

 

23,695

 

 

21,876

 
Payments for repurchase of common stock, including excise taxes

 

(125,010

)

 

(150,018

)
Taxes paid related to net share settlement of equity awards .

 

(13,368

)

 

(6,830

)
Net cash used in financing activities

 

(114,683

)

 

(134,972

)
 
Net increase in cash, cash equivalents and restricted cash

 

78,126

 

 

23,211

 
Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(3,568

)

 

2,264

 
Cash, cash equivalents and restricted cash, beginning of period

 

1,078,340

 

 

800,835

 
Cash, cash equivalents and restricted cash, end of period

$

1,152,898

 

$

826,310

 
 
Supplemental disclosures of cash flow information
Cash paid for amounts included in the measurement of lease liabilities

$

10,851

 

$

12,982

 
Supplemental disclosures of non-cash activities
Right-of-use assets obtained in exchange for lease obligations

$

35,084

 

$

4,846

 

 

Investors

Suzanne DuLong

+1 (206) 272-7049

[email protected]

Media

Rob Gruening

+1 (206) 272-6208

[email protected]

KEYWORDS: United States North America Washington

INDUSTRY KEYWORDS: Software Technology Data Management Security

MEDIA:

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Posted on

Nextracker Reports Q3 FY25 Financial Results

Nextracker Reports Q3 FY25 Financial Results

Reaffirms FY25 Revenue Outlook and Raises FY25 Profit Outlook

FREMONT, Calif.–(BUSINESS WIRE)–
Nextracker (Nasdaq: NXT), a global market leader of intelligent solar trackers, foundations, and software solutions, today announced financial results for the third quarter of fiscal year 2025, ended December 31, 2024.

Financial Summary

(In millions, except per share)
 

 

Q3 FY25*

Q2 FY25*

Q3 FY24

Revenue

$679

$636

$710

GAAP Gross Profit

$241

$225

$210

GAAP Gross Margin

35.5%

35.4%

29.5%

GAAP Net Income

$117

$117

$128

GAAP Net Income Margin

17.3%

18.5%

18.0%

GAAP Diluted EPS

$0.79

$0.79

$0.87

 

 

 

 

Adjusted Gross Profit

$245

$228

$212

Adjusted Gross Margin

36.0%

35.9%

29.9%

Adjusted EBITDA

$186

$173

$168

Adjusted EBITDA Margin

27.4%

27.2%

23.6%

Adjusted Net Income

$154

$145

$142

Adjusted Diluted EPS

$1.03

$0.97

$0.96

*Q3 FY25 and Q2 FY25 GAAP and adjusted results include approximately $52 million and $51 million, respectively, of IRA 45X advanced manufacturing tax credit vendor rebates (“45X credits”). Q3 FY24 results do not include 45X credits.

 

Please refer to Nextracker’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K for more information on 45X credits and schedules III, IV and V attached to this press release for a reconciliation of non-GAAP to GAAP financial measures. Additional information can be found on the Investor Relations section of our website.

Business Highlights

  • Record backlog increased to significantly greater than $4.5 billion, supported by robust demand in all key regions for the company with meaningful contributions from new products
  • Expanded manufacturing and supply chain network to over 70 manufacturing partners operating more than 90 facilities across 19 countries, totaling over 50 GW/year of capacity, enabling local content with superior on-time delivery and customer satisfaction
  • Shipped the first 100% U.S. domestic content solar trackers*
  • Deployed newly launched products and features at scale, including:

    • NX Horizon Hail Pro™: Industry-leading 75-degree stow capability to mitigate against hail risk
    • NX Horizon Hail Pro™: Automated stowing for proactive storm response
    • NX Horizon-XTR™: Feature doubles XTR’s ability to conform to sloping terrain
    • NX-Anchor™: Advanced foundations solutions solving challenging geotechnical conditions
  • Launched significant expansion of R&D and innovation capability:

    • Expanded U.S. R&D facility and Customer Center of Excellence
    • Partnered with UC Berkeley and launched CAL-NEXT Center for Solar Energy Research, a $6.5 million commitment to advance solar technology

    • Inaugurated the India R&D Center for Solar Excellencein Hyderabad
    • Expanded Center for Solar Excellence in Brazil

*Per U.S. Treasury Guidance

“We’re very pleased with the company’s execution, delivering record revenue and profit year-to-date driven by strong demand,” said Dan Shugar, founder and CEO of Nextracker. “In the quarter, we successfully deployed several of our newly launched products and features at scale, expanding our total addressable market. In addition, we continue to increase our investment in R&D to drive rapid customer centric innovation ensuring our solutions remain at the forefront of solar technology while driving value for stakeholders worldwide.”

“Our strong year-to-date financial performance, coupled with our growth in backlog enables us to raise our FY25 profit outlook,” said Chuck Boynton, CFO of Nextracker. “The company is on incredibly solid financial footing with $418 million of operating cash flow year-to-date, ending the quarter with over $693 million in cash and equivalents.”

FY2025 Annual Outlook

Reaffirms FY25 revenue outlook and raises FY25 profit outlook

 

Updated Outlook

Previous Outlook

Revenue

$2.8 to $2.9 billion

$2.8 to $2.9 billion

GAAP Net Income

$467 to $497 million

$378 to $408 million

GAAP Diluted EPS

$3.11 to $3.31

$2.50 to $2.70

Adjusted EBITDA

$700 to $740 million

$625 to $665 million

Adjusted Diluted EPS

$3.75 to $3.95

$3.10 to $3.30

Adjusted EBITDA and adjusted diluted EPS exclude approximately $120 million and $0.64, respectively, for stock-based compensation, acquisition related costs and net intangible amortization.

Q3 FY2025 Earnings Call

January 28, 2025

2:00 p.m. PT / 5:00 p.m. ET

Live webcast available oninvestors.nextracker.com

We encourage you to review our Q3 FY25 Shareholder Letter, which, along with this press release, is available on the Nextracker Investor Relations website and includes important information for Nextracker shareholders that supplements and expands on the information in this press release.

The webcast replay will be available on the Nextracker Investor Relations website following the conclusion of the event.

Upcoming Events

On March 4, Chuck Boynton, Nextracker Chief Financial Officer, will participate in a fireside chat at the Jefferies Power, Utilities and Clean Energy Conference.

About Nextracker

Nextracker is a leading provider of integrated solar trackers, foundations, and software solutions used in ground-mounted utility-scale and distributed generation solar projects around the world. Our product portfolio enables solar PV power plants to follow the sun’s movement across the sky and optimize plant performance. With power plants operating in more than forty countries worldwide, Nextracker offers solar tracker technologies that increase energy production while reducing costs for significant plant ROI. For more information, please visit www.nextracker.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the trends for future solar adoption, the expected benefits of the Ojjo, Inc. and Solar Pile International acquisitions, the expected benefits of our new product launches, such as Hail Pro-75, Hail Pro Automated Stowing, XTR 1.5 and NX-Anchor, our domestic content capabilities, the expected benefits from the expansion of our R&D facilities, initiatives and capabilities, and Nextracker’s outlook for fiscal 2025 and other periods. These forward-looking statements are based on various assumptions and on the current expectations of Nextracker’s management. These statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties that are described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Nextracker’s most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-K and other documents that Nextracker has filed or will file with the Securities and Exchange Commission. There may be additional risks that Nextracker is not aware of or that Nextracker currently believes are immaterial that could also cause actual results to differ from the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Nextracker assumes no obligation to update these forward-looking statements.

Use of Adjusted Financial Information

An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedules III, IV and V attached to this press release, and can be found, along with other financial information including the Earnings Presentation, on the investor relations section of our website at investors.nextracker.com.

Channels for Disclosure of Information

Nextracker intends to announce material information to the public through the Nextracker Investor Relations website investors.nextracker.com, SEC filings, press releases, public conference calls, and public webcasts. Nextracker uses these channels to communicate with its investors, customers, and the public about the company, its offerings, and other issues. As such, Nextracker encourages investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.

Schedule I

Nextracker Inc.

Unaudited condensed consolidated statements of operations and comprehensive income

(In thousands, except per share data)
 

 

Three-month periods ended

 

December 31, 2024

 

September 27, 2024

 

December 31, 2023

Revenue

$

679,363

 

 

$

635,571

 

 

$

710,426

 

Cost of sales

 

438,460

 

 

 

410,776

 

 

 

500,701

 

Gross profit

 

240,903

 

 

 

224,795

 

 

 

209,725

 

Selling, general and administrative expenses

 

70,573

 

 

 

72,127

 

 

 

48,356

 

Research and development

 

20,094

 

 

 

19,193

 

 

 

12,897

 

Operating income

 

150,236

 

 

 

133,475

 

 

 

148,472

 

Interest expense

 

3,798

 

 

 

3,665

 

 

 

3,227

 

Other income, net

 

(13,778

)

 

 

(7,382

)

 

 

(21,534

)

Income before income taxes

 

160,216

 

 

 

137,192

 

 

 

166,779

 

Provision for income taxes

 

42,842

 

 

 

19,928

 

 

 

38,818

 

Net income and comprehensive income

 

117,374

 

 

 

117,264

 

 

 

127,961

 

Less: Net income attributable to non-controlling interests and redeemable non-controlling interests

 

2,091

 

 

 

1,873

 

 

 

86,565

 

Net income attributable to Nextracker Inc.

$

115,283

 

 

$

115,391

 

 

$

41,396

 

 

 

 

 

 

 

Earnings per share attributable to Nextracker Inc. common stockholders

 

 

 

 

 

Basic

$

0.80

 

 

$

0.80

 

 

$

0.67

 

Diluted

$

0.79

 

 

$

0.79

 

 

$

0.87

 

Weighted-average shares used in computing per share amounts:

 

 

 

 

 

Basic

 

143,664

 

 

 

143,479

 

 

 

62,109

 

Diluted

 

149,028

 

 

 

149,079

 

 

 

147,344

 

Nextracker Inc.

Unaudited condensed consolidated statements of operations and comprehensive income (continued)

(In thousands, except per share data)
 

 

Nine-month periods ended

 

December 31, 2024

 

December 31, 2023

Revenue

$

2,034,855

 

 

$

1,763,326

 

Cost of sales

 

1,331,717

 

 

 

1,290,747

 

Gross profit

 

703,138

 

 

 

472,579

 

Selling, general and administrative expenses

 

203,527

 

 

 

126,865

 

Research and development

 

55,806

 

 

 

29,270

 

Operating income

 

443,805

 

 

 

316,444

 

Interest expense

 

10,743

 

 

 

9,975

 

Other income, net

 

(16,292

)

 

 

(18,464

)

Income before income taxes

 

449,354

 

 

 

324,933

 

Provision for income taxes

 

89,922

 

 

 

51,918

 

Net income and comprehensive income

 

359,432

 

 

 

273,015

 

Less: Net income attributable to non-controlling interests and redeemable non-controlling interests

 

7,058

 

 

 

171,937

 

Net income attributable to Nextracker Inc.

$

352,374

 

 

$

101,078

 

 

 

 

 

Earnings per share attributable to Nextracker Inc. common stockholders

 

 

 

Basic

$

2.46

 

 

$

1.78

 

Diluted

$

2.41

 

 

$

1.86

 

Weighted-average shares used in computing per share amounts:

 

 

 

Basic

 

143,102

 

 

 

56,789

 

Diluted

 

149,134

 

 

 

147,160

 

Schedule II

Nextracker Inc.

Unaudited condensed consolidated balance sheets

(In thousands)
 

 

As of December 31, 2024

 

As of March 31, 2024

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

693,543

 

$

474,054

Accounts receivable, net of allowance of $2,845 and $3,872, respectively

 

457,918

 

 

 

382,687

 

Contract assets

 

279,027

 

 

 

397,123

 

Inventories

 

217,301

 

 

 

201,736

 

Other current assets

 

346,732

 

 

 

312,635

 

Total current assets

 

1,994,521

 

 

 

1,768,235

 

Property and equipment, net

 

47,985

 

 

 

9,236

 

Goodwill

 

370,613

 

 

 

265,153

 

Other intangible assets, net

 

47,503

 

 

 

1,546

 

Deferred tax assets

 

472,189

 

 

 

438,272

 

Other assets

 

50,748

 

 

 

36,340

 

Total assets

$

2,983,559

 

 

$

2,518,782

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

377,466

 

 

$

456,639

 

Accrued expenses

 

72,863

 

 

 

82,410

 

Deferred revenue

 

297,007

 

 

 

225,539

 

Current portion of long-term debt

 

6,563

 

 

 

3,750

 

Other current liabilities

 

150,746

 

 

 

123,148

 

Total current liabilities

 

904,645

 

 

 

891,486

 

Long-term debt, net of current portion

 

138,770

 

 

 

143,967

 

Tax receivable agreement (TRA) liability

 

375,002

 

 

 

391,568

 

Other liabilities

 

140,182

 

 

 

99,733

 

Total liabilities

 

1,558,599

 

 

 

1,526,754

 

Total stockholders’ equity

 

1,424,960

 

 

 

992,028

 

Total liabilities and stockholders’ equity

$

2,983,559

 

 

$

2,518,782

 

Schedule III

Nextracker Inc.

Unaudited condensed consolidated statements of cash flows

(In thousands)
 

 

Nine-month periods ended

 

December 31, 2024

 

December 31, 2023

Cash flows from operating activities:

 

 

 

Net income

$

359,432

 

 

$

273,015

 

Depreciation and amortization of intangible assets

 

8,299

 

 

 

3,138

 

Changes in working capital and other, net

 

50,736

 

 

 

41,328

 

Net cash provided by operating activities

 

418,467

 

 

 

317,481

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(23,841

)

 

 

(3,850

)

Payment for business acquisitions, net of cash acquired

 

(144,675

)

 

 

—

 

Net cash used in investing activities

 

(168,516

)

 

 

(3,850

)

Cash flows from financing activities:

 

 

 

Repayment of bank borrowings

 

(2,813

)

 

 

(2,813

)

Net proceeds from issuance of Class A shares

 

—

 

 

 

552,009

 

Purchase of LLC common units from Yuma, Inc.

 

—

 

 

 

(552,009

)

Payment of revolver issuance costs

 

(6,017

)

 

 

—

 

TRA payment

 

(15,520

)

 

 

—

 

Distribution to non-controlling interest holders

 

(6,112

)

 

 

(64,365

)

Net transfers to Flex

 

—

 

 

 

(8,335

)

Other financing activities

 

—

 

 

 

(308

)

Net cash used in financing activities

 

(30,462

)

 

 

(75,821

)

Net increase in cash and cash equivalents

 

219,489

 

 

 

237,810

 

Cash and cash equivalents beginning of period

 

474,054

 

 

 

130,008

 

Cash and cash equivalents end of period

$

693,543

 

 

$

367,818

 
 

 

Nine-month periods ended

Adjusted free cash flow

December 31, 2024

 

December 31, 2023

Net cash provided by operating activities

$

418,467

 

 

$

317,481

 

Purchases of property and equipment

 

(23,841

)

 

 

(3,850

)

Adjusted free cash flow

$

394,626

 

 

$

313,631

 

Schedule IV

Nextracker Inc.

Reconciliation of GAAP to Non-GAAP financial measures

(In thousands, except percentages and per share data)
 

 

Three-month periods ended

 

December 31, 2024

 

September 27, 2024

 

December 31, 2023

GAAP gross profit & margin

$

240,903

 

 

35.5

%

 

$

224,795

 

 

35.4

%

 

$

209,725

 

 

29.5

%

Stock-based compensation expense

 

3,084

 

 

 

 

 

2,481

 

 

 

 

 

2,497

 

 

 

Intangible amortization

 

880

 

 

 

 

 

896

 

 

 

 

 

63

 

 

 

Adjusted gross profit & margin

$

244,867

 

 

36.0

%

 

$

228,172

 

 

35.9

%

 

$

212,285

 

 

29.9

%

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income & margin

$

150,236

 

 

22.1

%

 

$

133,475

 

 

21.0

%

 

$

148,472

 

 

20.9

%

Stock-based compensation expense

 

26,980

 

 

 

 

 

29,885

 

 

 

 

 

13,037

 

 

 

Intangible amortization

 

1,780

 

 

 

 

 

1,875

 

 

 

 

 

63

 

 

 

Acquisition related costs

 

1,038

 

 

 

 

 

2,177

 

 

 

 

 

—

 

 

 

Adjusted operating income & margin

$

180,034

 

 

26.5

%

 

$

167,412

 

 

26.3

%

 

$

161,572

 

 

22.7

%

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income & margin

$

117,374

 

 

17.3

%

 

$

117,264

 

 

18.5

%

 

$

127,961

 

 

18.0

%

Stock-based compensation expense

 

26,980

 

 

 

 

 

29,885

 

 

 

 

 

13,037

 

 

 

Intangible amortization

 

1,780

 

 

 

 

 

1,875

 

 

 

 

 

63

 

 

 

Adjustment for taxes

 

6,550

 

 

 

 

 

(6,274

)

 

 

 

 

841

 

 

 

Acquisition related costs

 

1,038

 

 

 

 

 

2,177

 

 

 

 

 

—

 

 

 

Adjusted net income & margin

$

153,722

 

 

22.6

%

 

$

144,927

 

 

22.8

%

 

$

141,902

 

 

20.0

%

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income & margin

$

117,374

 

 

17.3

%

 

$

117,264

 

 

18.5

%

 

$

127,961

 

 

18.0

%

Interest, net

 

(1,865

)

 

 

 

 

455

 

 

 

 

 

(198

)

 

 

Provision for income taxes

 

42,842

 

 

 

 

 

19,928

 

 

 

 

 

38,818

 

 

 

Depreciation expense

 

2,636

 

 

 

 

 

1,067

 

 

 

 

 

1,055

 

 

 

Intangible amortization

 

1,780

 

 

 

 

 

1,875

 

 

 

 

 

63

 

 

 

Stock-based compensation expense

 

26,980

 

 

 

 

 

29,885

 

 

 

 

 

13,037

 

 

 

Acquisition related costs

 

1,038

 

 

 

 

 

2,177

 

 

 

 

 

—

 

 

 

Other tax related income, net

 

(4,413

)

 

 

 

 

—

 

 

 

 

 

(12,945

)

 

 

Adjusted EBITDA & margin

$

186,372

 

 

27.4

%

 

$

172,651

 

 

27.2

%

 

$

167,791

 

 

23.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

GAAP

$

0.79

 

 

 

 

$

0.79

 

 

 

 

$

0.87

 

 

 

Earnings per share attributable to Non-GAAP adjustments

 

0.24

 

 

 

 

 

0.18

 

 

 

 

 

0.09

 

 

 

Adjusted

$

1.03

 

 

 

 

$

0.97

 

 

 

 

$

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares used in computing per share amounts

 

149,028

 

 

 

 

 

149,079

 

 

 

 

 

147,344

 

 

 

Nextracker Inc.

Reconciliation of GAAP to Non-GAAP financial measures (continued)

(In thousands, except percentages and per share data)
 

 

Nine-month periods ended

 

December 31, 2024

 

December 31, 2023

GAAP gross profit & margin

$

703,138

 

 

34.6

%

 

$

472,579

 

 

26.8

%

Stock-based compensation expense

 

9,345

 

 

 

 

 

7,668

 

 

 

Intangible amortization

 

1,864

 

 

 

 

 

188

 

 

 

Adjusted gross profit & margin

$

714,347

 

 

35.1

%

 

$

480,435

 

 

27.2

%

 

 

 

 

 

 

 

 

GAAP operating income & margin

$

443,805

 

 

21.8

%

 

$

316,444

 

 

17.9

%

Stock-based compensation expense

 

78,766

 

 

 

 

 

39,895

 

 

 

Intangible amortization

 

3,743

 

 

 

 

 

188

 

 

 

Acquisition related costs

 

4,695

 

 

 

 

 

—

 

 

 

Adjusted operating income & margin

$

531,009

 

 

26.1

%

 

$

356,527

 

 

20.2

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

359,432

 

 

17.7

%

 

$

273,015

 

 

15.5

%

Stock-based compensation expense

 

78,766

 

 

 

 

 

39,895

 

 

 

Intangible amortization

 

3,743

 

 

 

 

 

188

 

 

 

Adjustment for taxes

 

(9,368

)

 

 

 

 

(4,040

)

 

 

Acquisition related costs

 

4,695

 

 

 

 

 

—

 

 

 

Adjusted net income & margin

$

437,268

 

 

21.5

%

 

$

309,058

 

 

17.5

%

 

 

 

 

 

 

 

 

GAAP net income & margin

$

359,432

 

 

17.7

%

 

$

273,015

 

 

15.5

%

Interest, net

 

(2,702

)

 

 

 

 

1,136

 

 

 

Provision for income taxes

 

89,922

 

 

 

 

 

51,918

 

 

 

Depreciation expense

 

4,556

 

 

 

 

 

2,950

 

 

 

Intangible amortization

 

3,743

 

 

 

 

 

188

 

 

 

Stock-based compensation expense

 

78,766

 

 

 

 

 

39,895

 

 

 

Acquisition related costs

 

4,695

 

 

 

 

 

—

 

 

 

Other tax related income, net

 

(4,413

)

 

 

 

 

(7,259

)

 

 

Adjusted EBITDA & margin

$

533,999

 

 

26.2

%

 

$

361,843

 

 

20.5

%

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

GAAP

$

2.41

 

 

 

 

$

1.86

 

 

 

Earnings per share attributable to Non-GAAP adjustments

 

0.52

 

 

 

 

 

0.24

 

 

 

Adjusted

$

2.93

 

 

 

 

$

2.10

 

 

 

 

 

 

 

 

 

 

 

Diluted shares used in computing per share amounts

 

149,134

 

 

 

 

 

147,160

 

 

 

See the accompanying notes on Schedule V attached to this press release

Schedule V

Nextracker Inc.

Notes

To supplement Nextracker’s unaudited selected financial data presented consistent with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude certain charges and gains, including adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), adjusted EBITDA margin, adjusted gross profit, adjusted gross margin, adjusted operating income, adjusted net income, adjusted diluted earnings per share, and adjusted free cash flow. These supplemental measures exclude certain legal and other charges, stock-based compensation expense and intangible amortization, other discrete events as applicable and the related tax effects. These non-GAAP measures are not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with Nextracker’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Nextracker’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of the Company’s performance.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of the Company’s operating performance on a period-to-period basis because such items are not, in our view, related to the Company’s ongoing operational performance. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, for calculating return on investment, and for benchmarking performance externally against competitors. In addition, management’s incentive compensation is determined using certain non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results “through the eyes” of management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of the Company’s ongoing operating results;

  • the ability to better identify trends in the Company’s underlying business and perform related trend analysis;

  • a better understanding of how management plans and measures the Company’s underlying business; and

  • an easier way to compare the Company’s operating results against analyst financial models and operating results of competitors that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each of the adjustments that we incorporate into non-GAAP measures, as well as the reasons for excluding each of these individual items in the reconciliations of these non-GAAP financial measures:

Stock-based compensation expense consists of non-cash charges for the estimated fair value of unvested restricted share unit and stock option awards granted to employees. The Company believes that the exclusion of these charges provides for more accurate comparisons of its operating results to peer companies due to the varying available valuation methodologies, subjective assumptions, and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact stock-based compensation expense has on its operating results.

Intangible amortization consists primarily of non-cash charges that can be impacted by, among other things, the timing and magnitude of acquisitions. The Company considers its operating results without these charges when evaluating its ongoing performance and forecasting its earnings trends, and therefore excludes such charges when presenting non-GAAP financial measures. The Company believes that the assessment of its operations excluding these costs is relevant to its assessment of internal operations and comparisons to the performance of its competitors.

The 45X Advanced Manufacturing Production Tax Credit (“45X Credit”) which was established as part of the Inflation Reduction Act (IRA), is a per-unit tax credit earned over time for each clean energy component domestically produced and sold by a manufacturer. The 45X Credit was eligible for domestic parts manufactured after January 1, 2023. The Company has executed agreements with certain suppliers to ramp up its U.S. manufacturing footprint. These suppliers produce 45X Credit eligible parts, including torque tubes, and structural fasteners, that will then be incorporated into a solar tracker. The Company has contractually agreed with these suppliers to share a portion of the credit related to Nextracker’s purchases. The Company accounts for these credits as a reduction of the purchase price of the parts acquired from the vendor and therefore a reduction of inventory until the part is sold, at which point the Company recognizes such credit as a reduction of cost of sales on the unaudited condensed consolidated statements of operations and comprehensive income. During the fourth quarter of fiscal 2024, the Company determined the amount of the 45X vendor rebates it expects to receive in accordance with the vendor contracts and recognized a cumulative reduction to cost of sales of $121.4 million related to 45X Credit vendor rebates earned on production of eligible components shipped to projects starting on January 1, 2023 through March 31, 2024. The Company believes that the assessment of its operations excluding the benefit from the vendor credits provides a more consistent comparison of its performance given the cumulative nature of the amount recorded in the fiscal fourth quarter. Beginning in the first quarter of fiscal year 2025, these 45X credit vendor rebates are not excluded from our non-GAAP financial measures.

Acquisition costs consist primarily of nonrecurring transaction costs for business acquisitions.

Adjustment for taxes relates to the tax effects of the various adjustments that we incorporate into non-GAAP measures to provide a more meaningful measure on non-GAAP net income and certain adjustments related to non-recurring settlements of tax contingencies or other non-recurring tax charges, when applicable.

Investor Contact:

Sarah Lee

[email protected]

Media Contact:

Brandy Lee

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Alternative Energy Energy Technology Software Utilities

MEDIA:

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Blue Hat Announces Receipt of Nasdaq Delisting Notice Subject to Hearing Request

XIAMEN, China, Jan. 28, 2025 (GLOBE NEWSWIRE) — Blue Hat Interactive Entertainment Technology (“Blue Hat” or the “Company”) (NASDAQ: BHAT), today announced that on January 24, 2025, it has received a letter from The Nasdaq Stock Market LLC (“Nasdaq”), notifying that the Company is not in compliance with Nasdaq Listing Rule 5810(c)(3)(A)(iii) (the “Low Priced Stocks Rule”), as the Company’s securities had a closing bid price of $0.10 or less for ten consecutive trading days from January 8, 2025 through January 23, 2025. The letter indicated that, as a result, the Nasdaq staff has determined to delist the Company’s ordinary shares from The Nasdaq Capital Market (the “Delisting Determination”).

As previously reported, on September 6, 2024, Nasdaq notified the Company that the bid price of its listed securities had closed at less than $1.00 per share over the previous 30 consecutive business days and, as a result, did not comply with Listing Rule 5550(a)(2). The Company was provided 180 calendar days, or until March 5, 2025, to regain compliance with this rule. The Delisting Determination ended the aforementioned compliance period before its expiration because the Company’s stock prices have triggered the Low Priced Stocks Rule. The Company was provided until January 31, 2025 to request an appeal of the Delisting Determination to the hearing panel.

The Company intends to request such hearing to appeal the Delisting Determination before that date, which will stay the suspension of its securities from the date of the request, during which time such securities will continue to be listed on The Nasdaq Capital Market.

If the Company fails to request an appeal of the Delisting Determination by January 31, 2025, trading of the Company’s ordinary shares will be suspended at the opening of business on February 4, 2025, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on The Nasdaq Stock Market.

The Company is considering all potential options available to it to regain compliance with the aforementioned rules, including seeking shareholders’ approval for a reverse stock split.

About Blue Hat

Blue Hat was formerly a provider of communication services, as well as a producer, developer, and operator of AR interactive entertainment games, toys, and educational materials in China. Leveraging years of technological accumulation and unique patented technology, Blue Hat is expanding its business to commodity trading, aiming to become a leading intelligent commodity trader worldwide. For more information, please visit the Company’s investor relations website at http://ir.bluehatgroup.com. The Company routinely provides important information on its website.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the Company’s SEC filings. These risks and uncertainties could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements.

Contacts:
Blue Hat Interactive Entertainment Technology
Phone: +86 (592) 228-0010
Email: [email protected]

  



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J.B. Hunt Transport Services, Inc. Announces Participation in Upcoming Investor Conferences

J.B. Hunt Transport Services, Inc. Announces Participation in Upcoming Investor Conferences

LOWELL, Ark.–(BUSINESS WIRE)–
J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) will host 1×1 Investor Meetings at the 3rd Annual Evercore ISI Travel & Transport Conference in New York, New York on Wednesday, February 5, 2025.

Executive Vice President and President of Dedicated Contract Services Brad Hicks and Chief Financial Officer and Executive Vice President of Finance John Kuhlow will address the Barclays 42nd Annual Industrial Select Conference at 11:00am EST on Wednesday, February 19, 2025. Brad Hicks and John Kuhlow will address the Citi 2025 Global Industrial Tech and Mobility Conference at 8:50am EST on Thursday, February 20, 2025. Both events are in Miami, Florida.

President and Chief Executive Officer Shelley Simpson and Executive Vice President and President of Intermodal Darren Field will address the Raymond James 46th Annual Institutional Investors Conference in Orlando, Florida at 10:25am EST on Tuesday, March 4, 2025.

Investors may access the live presentations by visiting the Investor Relations section of our website. Presentation replays will also be available on J.B. Hunt’s website following the events.

Information presented at the conference may contain forward-looking statements made by the company that involve risks, assumptions, and uncertainties difficult to predict. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2023. J.B. Hunt assumes no obligation to update any forward-looking statements to the extent the company becomes aware they will not be achieved for any reason. Interested parties may view this press release on the company’s website.

About J.B. Hunt

J.B. Hunt’s vision is to create the most efficient transportation network in North America. The company’s industry-leading solutions and mode-neutral approach generate value for customers by eliminating waste, reducing costs and enhancing supply chain visibility. Powered by one of the largest company-owned fleets in the country and third-party capacity through its J.B. Hunt 360°® digital freight marketplace, J.B. Hunt can meet the unique shipping needs of any business, from first mile to final delivery, and every shipment in-between. Through disciplined investments in its people, technology and capacity, J.B. Hunt is delivering exceptional value and service that enable long-term growth for the company and its stakeholders.

J.B. Hunt Transport Services Inc. is a Fortune 500 company, an S&P 500 company and a component of the Dow Jones Transportation Average. Its stock trades on NASDAQ under the ticker symbol JBHT. J.B. Hunt Transport Inc. is a wholly owned subsidiary of JBHT. The company’s services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, last mile, transload and more. For more information, visit www.jbhunt.com.

Brad Delco

Sr. Vice President – Finance

(479) 820-2723

KEYWORDS: Arkansas United States North America

INDUSTRY KEYWORDS: Trucking Rail Maritime Air Transport Logistics/Supply Chain Management

MEDIA:

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Stryker announces definitive agreement for the sale of its U.S. spinal implants business and plans to sell related international business

Portage, Michigan, Jan. 28, 2025 (GLOBE NEWSWIRE) — Stryker (NYSE:SYK), a global leader in medical technologies, announced today a definitive agreement to sell its U.S. spinal implants business to Viscogliosi Brothers, LLC, a family-owned investment firm specializing in the neuro-musculoskeletal space, to create a newly formed company called VB Spine, LLC.

“We believe that the spinal implants business, with its comprehensive portfolio and strong sales channel, will thrive as an independent company,” said Kevin A. Lobo, Chair and Chief Executive Officer, Stryker. “With dedicated resources and a focused strategy, the business will be well positioned to succeed as part of Viscogliosi Brothers.”

After closing, VB Spine will become a strategic partner to Stryker with exclusive access to Mako Spine and Copilot for use with VB Spine’s implants in spine procedures. The transaction will enhance the focus of both Stryker and VB Spine to meet the needs of customers and their patients and is expected to achieve faster growth and deliver greater value for all stakeholders.

“We have long admired Stryker for its comprehensive spine portfolio, incredible talent, and strong culture,” said Marc, John and Anthony Viscogliosi, Co-Founders of Viscogliosi Brothers, LLC. “We see a tremendous opportunity to provide the focus, surgeon-centric innovation, and commercial execution needed to grow the business and further impact patient lives and outcomes.”

The definitive agreement also includes a binding offer to acquire Stryker’s spinal implants business in France, subject to required consultations with employees and/or employee representatives. The sale of Stryker’s spinal implants business in other international markets is anticipated, pending satisfaction of legal and regulatory requirements, including any required consultations. The transaction is expected to close in the U.S. in the first half of 2025, subject to customary closing conditions.  Stryker’s U.S. spinal implants business and VB Spine will continue to operate as separate entities and proceed with business as usual until the transaction closes.

In connection with the transaction, Barings, LLC is an investor and financial partner to Viscogliosi Brothers.

About Stryker

Stryker is a global leader in medical technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology and Orthopaedics that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually. More information is available at www.stryker.com.

About Viscogliosi Brothers

Viscogliosi Brothers is a family-owned New York City-based family office dedicated to driving growth and innovation in the neuro-musculoskeletal industry. Established in 1999, the firm focuses on identifying and building groundbreaking innovations in healthcare, aiming to address unmet clinical needs, enhance patient outcomes, and drive cost efficiency in the healthcare system. Since its inception 26 years ago, Viscogliosi Brothers has founded, financed, operated and grown 42 businesses with operations and distribution across more than 80 countries. These businesses have positively impacted millions of patients with cutting-edge innovations in healthcare. The firm has led the transformation of multiple businesses in the spine industry specifically including: Spine Solutions, Spine Next, Paradigm Spine, Simplify Medical, Centinel Spine, Companion Spine, Spine BioPharma and Woven Orthopedics Technologies, among others. For more information, visit https://www.vbllc.com/.

About Barings

Barings is a $421+ billion* global asset management firm that partners with institutional, insurance, and intermediary clients, and supports leading businesses with flexible financing solutions. The firm, a subsidiary of MassMutual, seeks to deliver excess returns by leveraging its global scale and capabilities across public and private markets in fixed income, real assets and capital solutions.
*Assets under management as of December 31, 2024

Contacts

For investor inquiries please contact:

Jason Beach, Vice President, Finance and Investor Relations at 269-385-2600 or
[email protected]

John Nguyen, Senior Director, Investor Relations at 269-385-2600 or [email protected]

For media inquiries please contact:

Jenny Braga, Director, Communications and Public Relations at 269-385-2600 or [email protected]