Desjardins posts encouraging results, despite an uncertain economic situation
Financial results for the first quarter of 2025
LÉVIS, QC, May 13, 2025 /CNW/ - For the first quarter ended March 31, 2025, Desjardins Group, North America's largest financial cooperative group, recorded surplus earnings before member dividends of $738 million, down $117 million compared to the same quarter of 2024. This decrease in surplus earnings was primarily due to the results of the Property and Casualty Insurance segment, which were affected by higher claims expenses, mainly resulting from increases in both the frequency and the average cost of claims. There was also an increase in the provision for credit losses, due in particular to unfavourable developments in the economic outlook stemming from the imposition of tariffs by the new U.S. administration. In addition, there was an increase in non-interest expense to support growth in operations and enhance the service offering to members and clients. The decline in surplus earnings was partially offset by higher net interest income, mainly as a result of business growth in the Personal and Business Services segment.
For the first quarter of 2025, the provision for member dividends totalled $113 million, up $3 million from the corresponding period of 2024. Sponsorships, donations and scholarships amounted to $26 million, of which $13 million came from the caisses' Community Development Fund.
"Despite economic uncertainty, Desjardins has posted solid financial results for the first quarter," said Guy Cormier, President and Chief Executive Officer of Desjardins Group. "Forbes included Desjardins in its prestigious list of the World's Best Banks 2025, which is a sign that our proactive approach to supporting our members and clients is being noticed. What's more, I'm genuinely proud of our employees' sustained commitment to the members and businesses that have been hit the hardest by the tariffs."
125 years of ambition
A bold and visionary idea was took shape in Lévis 125 years ago. Alphonse and Dorimène Desjardins laid the foundation for a unique cooperative movement with the goal of providing Francophones with the means to achieve their ambitions. Their goal was to build a more just society and enable everyone to achieve their potential. That is how Desjardins Group originated, and we continue to pursue this ambition while remaining true to the values of our founders. Today, Desjardins is a leader in socio-economic development, and the financial institution will be celebrating its 125th anniversary over the coming months under the theme "125 years of ambition." This will be an opportunity to highlight the ambition of some of its 7.8 million members and clients from all walks of life and across Canada and how Desjardins supports them.
Doing what's best for members and clients
Committed to providing support
In light of the trade tensions with the United States, Desjardins is supporting its members and clients, in both Personal and Business Services. Desjardins teams remain fully mobilized to provide proactive support to those businesses most affected by tariffs, by contacting them directly to ensure they receive the support they need.
Together with its economic team, Desjardins provides analysis and recommendations to help its members and clients find their way in this uncertain economic climate. Desjardins is in contact with various economic stakeholders to ensure that solutions are put forward and is helping its business members access them.
To continue helping people better understand the economic environment, Jimmy Jean, Vice-President and Chief Economist at Desjardins Group, and Emna Braham, President and CEO of the Institut du Québec, presented their first economic web conference (in French only) of the year, on March 27. Among other things, the conference touched on the economic impacts of trade tensions with the U.S. and the impacts on consumers.
High-performance products for members and clients
Desjardins won the first Prix Mentorat en lumière (in French only), presented by Mentorat Québec. This award recognizes active mentoring programs that contribute to people's personal, professional and social development while supporting the growth of Québec organizations.
Desjardins won nine FundGrade A+® Awards in February, from Fundata Canada Inc. These awards are given to Canadian investment funds that have delivered the best risk-adjusted returns and maintained high FundGrade ratings over a full calendar year. The award-winning funds include one mutual fund, two responsible investment exchange-traded funds and six guaranteed investment funds.
Forbes magazine has ranked Desjardins among the top 10 Canadian companies of its prestigious World's Best Banks 2025 ranking. This ranking lists financial institutions around the world that have succeeded in maintaining the trust of their clients and meeting their financial needs.
Committed to communities
Through the Goodspark Fund, Desjardins stimulates social and economic activity in communities. During the first quarter, Desjardins made a contribution to enable Patro Laval to expand in Québec (in French only) and confirmed support for Cycle Momentum, a clean technology consortium, promoting the "Lab-à-la-Start-up" project. Since 2017, the Goodspark Fund has supported 920 projects totalling $211 million in commitments.
Through several initiatives, Desjardins helps promote better access to housing, an issue that is affecting all the regions of Québec, as housing costs account for an increasingly large share of household budgets. As part of a partnership with the Government of Québec, Desjardins has committed to supporting the construction of more than 1,750 affordable housing units by the end of 2025. As of March 31, 2025, eight projects totalling 1,190 units are open and operating and 11 projects totalling 772 units are under construction, particularly in the Bas-Saint-Laurent, Centre-du-Québec, Estrie, Laval, Montréal and Outaouais regions.
Desjardins is also maintaining its commitment to work toward a more sustainable and inclusive economy through its initiatives to accelerate the energy transition and its range of responsible finance products and services.
Financial highlights
Comparison of first quarter 2025 with first quarter 2024:
Surplus earnings before member dividends of $738 million, down $117 million.
Total net revenue of $3,682 million, up $118 million or 3.3%:
Net interest income of $1,967 million, up $234 million or 13.5%, due to growth in average residential mortgages and business loans outstanding.
Insurance service result of $290 million, down $119 million, as a result of the increase in net claims expenses in the Property and Casualty Insurance segment.
Net insurance finance result of $174 million, down $136 million, due in particular to developments in the financial markets.
Other income of $1,251 million, up $139 million, mainly due to growth in assets under management and assets under administration.
Provision for credit losses of $210 million, compared to $133 million for the comparable period in 2024. The provision for the first quarter of 2025 reflects, in particular, a migration in credit quality and unfavourable developments in the economic outlook related in particular to the imposition of tariffs by the new U.S. administration.
Gross non-interest expense of $2,736 million, up $180 million or 7.0%, compared to the first quarter of 2024 due to increased spending on personnel, including wage indexation. There was also greater spending on technology to support growth in operations and enhance the service offering to members and clients.
$139 million returned to members and the community,(1) up $2 million or 1.5%.
___________________________________
(1) For additional information on supplementary financial measures, see "Non-GAAP Financial Measures and Other Financial Measures" on page 4.
Other highlights:
Tier 1A capital ratio(1) of 22.4%, compared to 22.2% as at December 31, 2024.
Total capital ratio(1) of 25.3%, compared to 24.2% as at December 31, 2024.
Total assets grew 3.6% since December 31, 2024, to $487.9 billion as at March 31, 2025.
Several securities issues were completed during the first quarter of 2025, including under the legislative covered bond program, the multi-currency medium-term note program, and the Canadian Non-Viability Contingent Capital (NVCC) program. All of these transactions made it possible to adequately meet the liquidity needs of Desjardins Group and to diversify its sources of financing. For further details, please refer to the Management's Discussion and Analysis for the first quarter of 2025, on page 41.
In March 2025, Moody's affirmed the ratings for instruments issued by the Fédération des caisses Desjardins du Québec while maintaining their outlook as "stable". This assessment reflects the strength of Desjardins Group in Québec, where it has leading market shares in multiple industries.
_____________________________________
(1) In accordance with the Capital Adequacy Guideline for financial services cooperatives issued by the Autorité des marchés financiers (AMF).
Non-GAAP financial measures and other financial measures
To measure its performance, Desjardins Group uses different Canadian generally accepted accounting principles (GAAP) (International Financial Reporting Standards (IFRS)) financial measures and various other financial measures, some of which are non-GAAP financial measures. Regulation 52-112 respecting Non-GAAP and Other Financial Measures Disclosure (Regulation 52-112) provides guidance to issuers disclosing specified financial measures, including the following measures used by Desjardins Group:
A non-GAAP financial measure;
Supplementary financial measures.
Non-GAAP financial measure
The non-GAAP financial measure used by Desjardins Group in this press release, and which does not have a standardized definition, is not directly comparable to similar measures used by other companies, and may not be directly comparable to any GAAP measure. It is defined as follows:
Return to members and the community
As a cooperative financial group contributing to the development of communities, Desjardins Group gives its members and clients the support they need to be financially empowered. The amounts returned to members and the community, a non-GAAP financial measure, are used to present the overall amount returned to the community and are composed of member dividends, as well as sponsorships, donations and scholarships.
More detailed information about the amounts returned to members and the community may be found in the "Financial Highlights" table on the following page.
Supplementary financial measures
In accordance with Regulation 52-112, supplementary financial measures are used to show historical or expected future financial performance, financial position or cash flows. In addition, these measures are not disclosed in the financial statements. Desjardins Group uses certain supplementary financial measures, and their composition is presented in the Glossary on pages 46 to 53 of the MD&A for the first quarter of 2025.
FINANCIAL HIGHLIGHTSAs at and for the
(in millions of dollars and as a percentage)three-month periods endedMarch 31,2025
December 31, 2024(1)
March 31, 2024(1)
Results
Net interest income
$
1,967
$
1,962
$
1,733
Net insurance service income464882719
Other income1,2511,1141,112
Total net revenue3,6823,9583,564
Provision for credit losses210272133
Net non-interest expense2,5032,6592,311
Surplus earnings before member dividends(2)
$
738
$
826
$
855
Contribution to surplus earnings by business segment(3)Personal and Business Services
$
399
$
293
$
384Wealth Management and Life and Health Insurance16875173Property and Casualty Insurance34453280Other137518$
738
$
826
$
855
Returned to members and the community(4)Member dividends
$
113
$
107
$
110Sponsorships, donations and scholarships(5)263627$
139
$
143
$
137
IndicatorsReturn on equity(6)7.8 %8.2 %9.8 %Credit loss provisioning rate(6)0.280.380.21Gross credit-impaired loans/gross loans(6)0.830.810.80Liquidity coverage ratio(7)172165152Net stable funding ratio(7)131129125Productivity index – Personal and Business Services(6)70.473.170.8Insurance and annuity premiums – Wealth Management and Life and Health Insurance(6)
$
1,688
$
1,585
$
1,772Total contractual service margin (CSM) - Wealth Management and Life and Health Insurance(8)2,5782,5852,630Direct premiums written – Property and Casualty Insurance(6)1,6711,8301,556
On-balance sheet and off-balance sheetAssets
$
487,946
$
470,942
$
435,819Loans, net of allowance for credit losses296,328289,597269,012Deposits309,379300,946281,189Equity39,37138,69035,169Assets under administration(6)614,643600,968549,580Assets under management(6)107,029104,22089,549
Capital measuresTier 1A capital ratio(9)22.4 %22.2 %21.0 %Tier 1 capital ratio(9)22.422.221.0Total capital ratio(9)25.324.222.0TLAC ratio(10)33.132.929.8Leverage ratio(9)7.67.67.4TLAC leverage ratio(10)11.011.210.4Risk-weighted assets(9)
$
151,882
$
149,621
$
142,266
Other informationNumber of employees (full-time equivalent)51,40650,78550,669(1)
Some data have been restated to conform with the current period's presentation.
(2)
The breakdown by line item is presented in the Statement of Income in the Interim Combined Financial Statements.
(3)
The breakdown by line item is presented in Note 11, "Segmented information" to the Interim Combined Financial Statements.
(4)
For more information on non-GAAP financial measures, see "Non-GAAP financial measures and other financial measures" on page 4.
(5)
Including $13 million from the caisses' Community Development Fund ($23 million for the fourth quarter of 2024 and $11 million for the first quarter of 2024).
(6)
For additional information on supplementary financial measures, see "Non-GAAP Financial Measures and Other Financial Measures" on page 4.
(7)
In accordance with the Liquidity Adequacy Guideline issued by the AMF.
(8)
Total CSM of $2,826 million ($2,844 million as at March 31, 2024) presented net of reinsurance for a total of $248 million ($214 million as at March 31, 2024). Included in the line items "Insurance contract liabilities" and "Reinsurance contract assets (liabilities)" on the Combined Balance Sheets. For more information, see Note 7, "Insurance and reinsurance contracts," to the Interim Combined Financial Statements.
(9)
In accordance with the Capital Adequacy Guideline for financial services cooperatives issued by the AMF.
(10)
In accordance with the Total Loss Absorbing Capacity Guideline ("TLAC Guideline") issued by the AMF and based on risk-weighted assets and exposures for purposes of the leverage ratio at the level of the resolution group, which is deemed to be Desjardins Group, excluding Caisse Desjardins Ontario Credit Union Inc.
Strong capital base
Desjardins Group maintains strong capitalization levels, in accordance with Basel III rules. As at March 31, 2025, its Tier 1A and total capital ratios stood at 22.4% and 25.3%, respectively, compared to 22.2% and 24.2%, respectively, as at December 31, 2024.
Analysis of business segment results
PERSONAL AND BUSINESS SERVICES SEGMENT
Results for the first quarter
For the first quarter of 2025, surplus earnings before member dividends were $399 million, up $15 million from the same period in 2024, mainly due to higher net interest income related to business growth, as well as other income. This increase in surplus earnings was offset by a higher provision for credit losses compared to the corresponding period in 2024. In addition, there was an increase in net non-interest expense to support growth in operations and enhance the services offered to members and clients.
WEALTH MANAGEMENT AND LIFE AND HEALTH INSURANCE SEGMENT
Results for the first quarter
For the first quarter of 2025, the segment posted $168 million in net surplus earnings, down $5 million compared to the corresponding period of 2024, mainly due to a decrease in the net insurance finance result due to developments in the financial markets. This decrease was partly offset by the increase in the insurance service result stemming from a more favourable experience.
PROPERTY AND CASUALTY INSURANCE SEGMENT
Results for the first quarter
For the first quarter of 2025, the segment posted $34 million in net surplus earnings, down $246 million, from the same period of 2024. This decrease was mainly due to higher claims expenses for the current year in automobile and property insurance, a lower net insurance finance result and the effect of the loss component on onerous contracts, which was more unfavourable than in the corresponding quarter of 2024. In addition, the first quarter of 2025 was marked by two major events, namely freezing rain in Ontario and water and wind damage in Québec and Ontario, whereas no catastrophes or major events occurred during the corresponding quarter of 2024. This decrease in surplus earnings was partly offset by higher insurance revenue due to premium growth in automobile and property insurance.
OTHER CATEGORY
Results for the first quarter
For the first quarter of 2025, the Other category posted net surplus earnings of $137 million, compared to net surplus earnings of $18 million in the first quarter of 2024. The Other category includes mainly treasury activities.
More detailed financial information can be found in Desjardins Group's interim Management's Discussion and Analysis (MD&A) for the first quarter of 2025, available on the Desjardins website or on the SEDAR+ website, at www.sedarplus.com (under the Fédération des caisses Desjardins du Québec profile).
About Desjardins Group
Desjardins Group is the largest cooperative financial group in North America and the sixth largest in the world, with assets of $487.9 billion as at March 31, 2025. It has been named one of the top employers in Canada by both Forbes magazine and Mediacorp. It has also been recognized as one of the World's Best Banks 2025 by Forbes. The organization has more than 56,100 skilled employees. To meet the diverse needs of its members and clients, Desjardins offers a full range of products and services to individuals and businesses through its extensive distribution network, its online platforms, and its subsidiaries across Canada. Ranked among the world's strongest banks according to The Banker magazine, Desjardins has one of the highest capital ratios and one of the highest credit ratings in the industry. In 2025, Desjardins Group is celebrating its 125th anniversary, marking more than a century of focusing its ambitions and expertise on being there for members and clients.
Caution concerning forward-looking statements
Desjardins Group's public communications often include oral or written forward-looking statements, within the meaning of applicable securities legislation, particularly in Québec, Canada and the United States. This press release contains forward-looking statements that may be incorporated in other filings with Canadian regulators or in any other communications. In addition, Desjardins Group's representatives may make verbal forward-looking statements to investors, the media and others.
The forward-looking statements include, but are not limited to, comments on Desjardins Group's objectives regarding financial performance, priorities, vision, operations, targets and commitments, its strategies to achieve them, its results and its financial position, economic as well as financial market conditions, the outlook for the Québec, Canadian, U.S. and global economies, and the regulatory environment in which we operate. Such forward-looking statements are typically identified by words or phrases such as "target," "objective," "timing," "outlook," "believe," "predict," "foresee," "expect," "intend," "have as a goal," "estimate," "plan," "forecast," "anticipate," "aim," "propose," "should" and "may," words and expressions of similar import, and future and conditional verbs, in all grammatical variants.
By their very nature, such statements require us to make assumptions, and are subject to uncertainties and inherent risks, both general and specific. Desjardins Group cautions readers against placing undue reliance on forward-looking statements when making decisions since a number of factors, many of which are beyond Desjardins Group's control and the effects of which can be difficult to predict, could influence, individually or collectively, the accuracy of the assumptions, predictions, forecasts or other forward-looking statements, including those in this press release. Although Desjardins Group believes that the expectations expressed in these forward-looking statements are reasonable and founded on valid bases, it cannot guarantee that these expectations will materialize or prove to be accurate. It is also possible that these assumptions, predictions, forecasts or other forward-looking statements, as well as Desjardins Group's objectives and priorities, may not materialize or may prove to be inaccurate, and that actual future results, conditions, actions or events may differ materially from targets, expectations, estimates or intentions that have been explicitly or implicitly put forward. Readers who rely on these forward-looking statements must carefully consider these risk factors and other uncertainties and potential events, including the uncertainty inherent in forward-looking statements.
The factors that may affect the accuracy of the forward-looking statements in this press release include those discussed in the "Risk management" section of Desjardins Group's 2024 annual MD&A and of its MD&A for the first quarter of 2025, and include credit, market, liquidity, operational, insurance, strategic and reputation risk, environmental, social and governance risk, and regulatory risk.
Such factors also include those related to security (including cybersecurity) breaches, fraud risk, the housing market and household and corporate indebtedness, technological and regulatory developments, including changes to liquidity and capital adequacy guidelines, and requirements relating to their presentation and interpretation, as well as interest rate fluctuations, inflation, climate change, geopolitical uncertainty, artificial intelligence, data risk, a trade dispute with the United States, and the impact that tariffs imposed on certain Canadian exported goods, as well as any resulting retaliatory tariffs, could notably have on goods and services, businesses in certain industries, and the Canadian economy. Furthermore, there are factors related to general economic and business conditions in regions in which Desjardins Group operates; monetary policies; the critical accounting estimates and accounting standards applied by Desjardins Group; new products and services to maintain or increase Desjardins Group's market share; geographic concentration; changes in the credit ratings assigned to Desjardins Group; reliance on third parties; the ability to recruit and retain talent; and tax risk. Other factors include unexpected changes in consumer spending and saving habits, the potential impact of international conflicts on operations, public health crises, such as pandemics and epidemics, or any other similar events affecting the local, national or global economy, as well as Desjardins Group's ability to anticipate and properly manage the risks associated with these factors despite a disciplined risk management environment. Additional information about these factors is found in the "Risk management" section of Desjardins Group's 2024 Annual Report and of its MD&A for the first quarter of 2025.
It is important to note that the above list of factors that could influence future results is not exhaustive. Other factors could have an effect on Desjardins Group's results. Additional information about these and other factors is found in the "Risk management" section of Desjardins Group's 2024 Annual MD&A and of its MD&A for the first quarter of 2025.
The significant economic assumptions underlying the forward-looking statements in this document are described in the "Economic environment and outlook" section of Desjardins Group's 2024 MD&A and of its MD&A for the first quarter of 2025 and can be updated in the interim MD&As subsequently filed. Readers are cautioned to consider the foregoing factors when reading this section. To determine economic growth forecasts in general, and for the financial services sector in particular, Desjardins Group mainly uses historical economic data provided by recognized and reliable organizations, empirical and theoretical relationships between economic and financial variables, expert judgments, and identified upside and downside risks for the domestic and global economies. In light of the changing circumstances of the U.S. trade dispute and the resulting impact on the Canadian economy, financial market conditions, commercial operations, and Desjardins Group's financial results and financial position, there is greater uncertainty about our economic assumptions than in previous periods, as these assumptions are based on uncertain future developments and it is difficult to predict how significant the long-term impact of U.S. tariffs will be.
Any forward-looking statements contained in this press release represent the views of management only as at the date hereof, and are presented for the purpose of assisting readers in understanding and interpreting Desjardins Group's financial position as at the dates indicated or its results for the periods then ended, as well as its strategic priorities and objectives as considered as at the date hereof. These forward-looking statements may not be appropriate for other purposes. Desjardins Group does not undertake to update any oral or written forward-looking statements that could be made from time to time by or on behalf of Desjardins Group, except as required under applicable securities legislation.
Basis of presentation of financial information
The financial information in this document comes primarily from the Annual and Interim Combined Financial Statements. Those statements have been prepared by Desjardins Group's management in accordance with IFRS issued by the International Accounting Standards Board (IASB) and the accounting requirements of the AMF, which do not differ from IFRS. IFRS represent Canada's GAAP. The Interim Combined Financial Statements of Desjardins Group have been prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting." All the accounting policies were applied as described in Note 2, "Accounting policies," to the Annual Combined Financial Statements.
This press release has been prepared in accordance with the current regulations of the Canadian Securities Administrators (CSA) on continuous disclosure obligations. Unless otherwise indicated, all amounts are presented in Canadian dollars ($) and are primarily from Desjardins Group's annual and interim combined financial statements.
SOURCE Desjardins Group
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The Inferred Mineral Resource totals 5.6 Mt at 2.21 g/t Au, 10.9 g/t Ag and 0.21% Zn, equating to 2.33 g/t AuEq. Contained metal amounts to 0.40 Moz gold, 1.95 Moz silver and 26 Mlbs zinc, resulting in a total of 0.42 Moz AuEq. See Table 1 and Figures 4 to 6 for details. The Mineral Resources reported for Zone 22 are constrained within underground resource panels below the Caracol Formation, which represent the vertical and down plunge continuation of the Camino Rojo sulphide mineralization. Zone 22 has been drilled to nearly one kilometre below the Caracol Formation and remains open at depth and down-plunge. Table 1: Camino Rojo Underground Mineral Resource Estimate: DescriptionsMeasured Indicated Measured & Indicated Inferred kt g/t koz kt g/t koz kt g/t koz kt g/t koz GOLD (Au) Heap leach 7 1.95 0 1,704 2.90 159 1,711 2.90 159 214 2.29 16CIL - - - 12,475 2.07 832 12,475 2.07 832 2,549 1.81 148FLOT/POX/CIL - - - 35,900 2.56 2,958 35,900 2.56 2,958 2,813 2.57 232Total - Gold 7 1.95 0 50,079 2.45 3,949 50,086 2.45 3,950 5,576 2.21 396 kt g/t koz kt g/t koz kt g/t koz kt g/t koz SILVER (Ag) Heap leach 7 31.5 7 1,704 13.2 722 1,711 13.3 729 214 15.1 104CIL - - - 12,475 8.7 3,480 12,475 8.7 3,480 2,549 10.2 835FLOT/POX/CIL - - - 35,900 11.1 12,847 35,900 11.1 12,847 2,813 11.2 1,010Total - Silver 7 31.5 7 50,079 10.6 17,048 50,086 10.6 17,055 5,576 10.9 1,949 kt % Mlb kt % Mlb kt % Mlb kt % Mlb ZINC (Zn) Heap leach - - - - - - - - - - - -CIL - - - - - - - - - - - -FLOT/POX/CIL - - - 35,900 0.35 278 35,900 0.35 278 2,813 0.42 26Total - Zinc 0 0 0 35,900 0.35 278 35,900 0.35 278 2,813 0.42 26 kt g/t koz kt g/t koz kt g/t koz kt g/t koz AUEQ (Au) Heap leach 7 2.11 1 1,704 3.03 166 1,711 3.03 166 214 2.44 17CIL - - - 12,475 2.11 848 12,475 2.11 848 2,549 1.85 152FLOT/POX/CIL - - - 35,900 2.72 3,142 35,900 2.72 3,142 2,813 2.75 249Total - AUEQ 7 2.11 1 50,079 2.58 4,156 50,086 2.58 4,156 5,576 2.33 418 kt g/t koz/Mlb kt g/t or % koz/Mlb kt g/t or % koz/Mlb kt g/t or % koz/Mlb TOTALS Au 7 1.95 0 50,079 2.45 3,949 50,086 2.45 3,950 5,576 2.21 396Ag 31.5 7 10.6 17,048 10.6 17,055 10.9 1,949Zn - - 0.25 278 0.25 278 0.21 26AuEq 2.11 1 2.58 4,156 2.58 4,156 2.33 418 Mineral Resources Notes: 1. CIM (2014) definitions were followed for Mineral Resources. The mineral resource estimate for Camino Rojo has an effective date of March 31, 2025. 2. The Qualified Person responsible for the mineral resource estimate is Marie-Christine Gosselin, Senior Resource Geologist of SLR Consulting (Canada) Ltd. 3. Mineral resources are estimated using a long-term price of US$2,300 /oz gold, US$1.25 /lb zinc and US$29 /oz silver and the following smelter terms: for oxide 99.9% payable Au and 98% payable Ag, and for sulphide 95% payable Au, 90% payable Ag and 95% payable Zn. Offsite costs (refining, transport and insurance) of US$145 /wmt transportation and US$230 /dmt treatment; a 2.5% NSR royalty. 4. Metallurgical recoveries vary according to geometallurgical domains from heap leach, CIL, and flotation CIL with POX and are either constant or formula based. Heap leach recoveries range from 40% to 70% for gold and from 11% to 34% for silver. For CIL and CIL with POX, gold and silver recoveries are calculated using grade dependent formulae. The underground CIL mean recovery is 92% for gold and 36% for silver. The underground CIL with POX mean recovery is 85% for gold and 41% for silver. Zinc recovery by flotation is 80%. 5. Mineral Resources are estimated in underground resource panels using NSR cut-off grades of 59.02 US$/t for leach material, 68.73 US$/t for CIL material, and 76.23 US$/t for CIL w/POX material. Underground resource panels have a minimum width of 2m. 6. The NSR for heap leach material is calculated with the following formula: NSR ($/t) = US$71.98 x Au recovery x Au grade + US$0.84 x Ag recovery x Ag grade (g/t). The NSR for CIL material is calculated with the following formula: NSR ($/t) = US$68.34 x Au recovery x Au grade (g/t) + US$0.73 x Ag recovery x Ag grade (g/t). The NSR for CIL w/POX material is calculated with the following formula: NSR ($/t) = US$68.34 x Au recovery x Au grade (g/t) + US$0.73 x Ag recovery x Ag grade (g/T) + US$0.00146 x Zn recovery x Zn grade (ppm). 7. The gold equivalent (AuEq) for heap leach material is calculated with the following formula: Au grade (g/t) + (US$0.84 x Ag recovery x Ag grade (g/t)) /(US$71.98 x Au recovery). The AuEq for CIL material is calculated with the following formula: Au grade (g/t) + (US$0.73 x Ag recovery x Ag grade (g/t)) / (US$68.34 x Au recovery). The AuEq for CIL w/POX material is calculated with the following formula: Au grade (g/t) + (US$0.73 x Ag recovery x Ag grade (g/t)) / (US$68.34 x Au recovery) + (US$0.00146 x Zn recovery x Zn grade (ppm)) / (US$68.34 x Au recovery). 8. Numbers may not add due to rounding. The Mineral Resource estimate includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The following factors, among others, could affect the mineral resource estimate: commodity price and exchange rate assumptions, pit slope angles, assumptions used in generating the resource pit shell and underground resource panels, including metal recoveries, and mining and process cost assumptions. Evolution of Camino Rojo Deposit: Orla's north-to-south drilling programs from Q4-2020 to Q4-2024, together with historical drilling data, have been instrumental in enhancing the geological model. This work has significantly refined the understanding of the distribution and geometry of sulphide-bearing veins hosted within the Caracol Formation, which includes both the oxide and much of the sulphide mineralization (except for Zone 22). Zone 22 had previously been partially intersected by historical drilling but lacked a supporting geological model to define its geometry or potential extension into the deeper carbonate-rich formations below the Caracol Formation. Orla's updated model enabled strategic drilling along a section drilled in 2023, targeting the down-plunge extension of the deposit. This drilling confirmed the model and supported follow-up drilling in 2024 to define and expand Zone 22. Initially, the development path for the sulphide component of the Camino Rojo deposit was conceived as a large open pit operation. However, initial estimates by previous operators, and later by Orla, indicated that such a scenario would require significant waste stripping, extension of the projected open pit onto a third-party property that Orla does not own, and construction of a large processing facility. The underground development scenario offers a more focused, high-value approach. This strategy involves selectively targeting higher-grade and more metallurgically favourable portions of the deposit (those amenable to direct cyanide leaching) as an initial phase of mining. Subsequent phases would address mineralization requiring pre-treatment, such as pressure oxidation, prior to cyanidation. Additionally, the underground development could operate in parallel with the ongoing oxide open pit. The upcoming PEA is expected to evaluate the underground mineral resource as an expansion of the current operation which would allow Orla to retain full project value. Development Pathway / Next Steps: Current and Planned Future Exploration In 2025, Orla is advancing a 15,000-metre drilling program aimed at upgrading and expanding the upper part of the Zone 22 resource, with 11,000 metres drilled to date. Visual drill intercepts continue to support the geological model and continuity of mineralization. This program is expected to be completed in the third quarter and is anticipated to extend and infill the down-plunge extension. The next phase of exploration to support the possible development of the underground deposit (including Zone 22) includes the planning of an underground exploration drift (decline). An exploration drift would provide access for tighter-spaced underground drilling aimed at further resource definition and, in parallel with technical studies, support advancement toward Mineral Reserve estimation. Permitting and early development planning is ongoing, and construction of an exploration drift could commence as early as 2026. In November 2024, Orla submitted permit applications to Mexico's environmental and natural resources agency, SEMARNAT (Mexico's Secretaría del Medio Ambiente y Recursos Naturales). These included amendments to the existing oxide open pit permit. Orla also requested permits for an underground portal and exploration drift to support a potential transition to underground mining at Camino Rojo. The underground portal would be established within the current final open pit. Preliminary Economic Study Engineering and metallurgical studies are currently underway and will intensify and expand, with the objective of delivering a Preliminary Economic Assessment (PEA) in 2026. This PEA is expected to provide a conceptual operational plan and demonstrate the potential value for the development of the underground operations at Camino Rojo. Development Planning While establishing the plan for an exploration decline, Orla will continue metallurgical testing and other technical work with the goal of quickly progressing into feasibility level studies and final permitting for the complete underground operations and the required surface facilities. The aim of the conceptual development plan allows for a seamless transition from open pit mining to underground operations at Camino Rojo. Camino Rojo Deposit: The Camino Rojo deposit comprises three continuous zones with distinct characteristics: The Camino Rojo Oxide Deposit ("Camino Rojo Oxides"), The Camino Rojo Sulphide Deposit ("Camino Rojo Sulphides", or "Sulphides"); and Zone 22 (Figure 2a), an extension of the Sulphides. Longitudinal Sections of the Camino Rojo deposit show the three mineralized zones and new resource block model (Figure 2a), as well as the distribution of gold grades (Figure 2b). The Camino Rojo Oxide zone extends from surface to a vertical depth of approximately 250 metres, covering 900 metres along strike and up to 400 metres in width. The Camino Rojo Sulphide zone lies between 250 and 700 metres below surface (or up to one kilometre down plunge), extending approximately one kilometre along strike and up to 400 metres in width. Zone 22 mineralization has been defined over 500 metres along strike, extending from 700 to 1,300 metres vertical depth below surface (or over 1.2 kilometres down plunge), within a width of 200 to 400 metres, predominantly concentrated along and extending from the dike structure. Figure 3 is a representative cross-section of Zone 22, showing gold mineralization within the different host rock formations. Camino Rojo Oxide and Sulphides Geological Controls The Camino Rojo Oxide and Sulphides zones are predominantly hosted within flat-lying to gently dipping graded sandstone to mudstone beds of the Caracol Formation (Fm), as well as within a steeply northwest-dipping diorite dike. The dioritic dike shows true thicknesses ranging from tens of centimetres to tens of metres, reaching up to 24 metres, with an average of approximately seven metres. Both the Caracol Formation and diorite dike have undergone potassic alteration, predominantly characterized by pervasive adularia alteration. Gold mineralization in the Camino Rojo Sulphides zone is controlled by mutually crosscutting, centimetre-scale Au-Ag-Zn±Pb-bearing veins that dip moderately to steeply northwest and shallowly southwest. These vein sets define gold-bearing mineralized domains that are up to tens of metres thick. In the northeastern portion of the deposit, gold-bearing veins crosscut the dioritic dike. Down plunge, to the southwest and toward the base of the Caracol Formation, these veins continue to crosscut the dike and locally exploit the intrusive contact. Oxidation is pervasive within the upper 150-200 metres of the deposit, transitioning to sulphide mineralization between 200 and 250 metres below surface. However, oxidation extends as deep as 650 metres along structures. Zone 22: Initial drilling to resource in two years; open for upgrade and expansion Ongoing exploration at Camino Rojo continues to expand the deposit's footprint and refine geological understanding, defining additional mineralization beyond the currently outlined mineral resource. Drilling by Orla, guided by the updated geological model, has confirmed that mineralization extends into lower stratigraphic units, showing styles distinct from those hosted in the overlying Caracol Formation. Zone 22, which represents the vertical and down-plunge continuation of the Camino Rojo Sulphides, has been drilled to nearly one kilometre below the Caracol Formation, extending into the limestone-rich Indidura, Cuesta del Cura, La Peña, and Cupido formations. The zone remains open at depth and down-plunge. To date, mineralization has been identified across all rock formations exposed or drilled at Camino Rojo. The Indidura Formation marks the transition to semi-massive to massive sulphide (Au-Ag-Zn) replacement along bedding (manto) and dioritic dike margins. Individual manto intersections are typically decimetre-scale and are traceable for up to 300 metres along strike and up to 150 metres into the hanging wall and footwall of the dike. Calc-silicate skarn alteration and associated Au-Ag-Cu mineralization are constrained to a halo along the hanging wall and footwall of the dike, extending tens of metres from the dike. Metallurgical Test work and Recovery Model: Metallurgical testing of the Camino Rojo deposit has been conducted through multiple programs by previous operators. Since 2021, Orla has focused on defining optimal recovery processes and maximizing metal recoveries from higher-grade zones suitable for underground mining. This has included bottle roll, flotation, and oxidation test work on both master composite and variability samples from the Camino Rojo Sulphides. All Orla metallurgical studies for the Camino Rojo Sulphides have been completed by Blue Coast Research of Parksville, Canada under the guidance of Andrew Kelly, Based on the metallurgical testing results to date, three conceptual mineral resource process streams have been identified that inform the recovery model assumptions of the Camino Rojo underground mineral resource (Measured, Indicated, Inferred): Heap leach (existing infrastructure), 3% of the tonnage of the underground Mineral Resource, with gold recovery ranging from 40% to 70% Carbon-in-leach (CIL), 27% of the tonnage of the underground Mineral Resource, with a mean gold recovery of 92%, and a mean silver recovery of 36% CIL with Pressure Oxidation (POX): 70% of the tonnage of the underground Mineral Resource, with a mean gold recovery of 85%, and a mean silver recovery of 41%. A separate zinc concentrate can be produced prior to POX with zinc recovery of 80% expected from the highest-grade zones. Figures 4 and 5 illustrates the resource block model based on these three process streams in cross-sectional and longitudinal views, respectively. While some material in the Caracol-hosted mineralization may require POX as a pre-treatment, initial metallurgical results from variability testing in Zone 22 are encouraging, with cyanidation tests returning high gold recoveries, and flotation results demonstrating high zinc recovery at reasonable concentrate grades. Previous news releases outlining Orla's metallurgical test programs and results for Caracol and Zone 22 mineralization are available on the company's website, or under Orla's profile on SEDAR+ at or and on EDGAR at Metallurgical test work is continuing in 2025 to support the planned 2026 PEA, which would include a flow sheet for optimal treatment of the Camino Rojo mineralization. Mineral Resource Details The Camino Rojo underground Mineral Resource was estimated in accordance with the 2014 CIM Definition Standards on Mineral Resources and Reserves, and the 2019 CIM Best Practice Guidelines for the Estimation of Mineral Resources and Mineral Reserves. Geological modeling was completed by Orla in collaboration with SLR Consulting (Canada) Ltd, integrating data from over 400,000 metres of core and 28,000 metres of reverse circulation (RC) drilling. This includes approximately 85,000 metres of drilling performed by Orla between 2020 and 2024. The estimate was generated using inverse distance cubed (ID³) and inverse distance squared (ID2) interpolation, incorporating capping and outlier restriction of composites to limit the influence of high-grade outliers for gold (Au), silver (Ag), and zinc (Zn). Interpolations were constrained by mineralization domains corresponding to the different styles observed in both the oxide zone (including Kp alteration, high-grade veins, and low-grade shell) and the sulphide zone (including high-grade veins, mantos, skarn, and low-grade shell). Figure 6 presents the Camino Rojo mineral resource block model, classified as Measured, Indicated and Inferred categories. An updated technical report on Camino Rojo (the "Technical Report"), which will contain the Mineral Resource estimate discussed in this release, will be filed within 45 days of the date hereof in accordance with NI 43-101. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. Data Verification Marie-Christine Gosselin, Senior Resource Geologist at SLR Consulting (Canada) Ltd and the Qualified Person for the Camino Rojo Mineral Resource estimate, visited the site from January 22 to 25, 2024. During the visit, collar locations were verified, along with core storage, security, and sampling procedures. Core from both mineralized and unmineralized zones was examined. The database was reviewed and considered suitable for Mineral Resource estimation. Sampling and assay data from the drill core are monitored through a quality assurance–quality control ("QA/QC") program designed to follow industry best practices. Qualified Persons Statement The scientific and technical information in this news release related to the mineral resource estimate was reviewed and approved by Marie-Christine Gosselin, Senior Resource Geologist with SLR Consulting (Canada) Ltd, who is a Qualified Person as defined under NI 43-101. The contents of this news release pertaining to the metallurgical test program were provided, reviewed and approved by Andrew Kelly, of Blue Coast Research Ltd., who is a Qualified Person as defined under NI 43-101. All other scientific and technical information in this news release was also reviewed and approved by Mr. J. Andrew Cormier, P. Eng., Chief Operating Officer of the Company, and Mr. Sylvain Guerard, P. Geo., Senior Vice President, Exploration of the Company, who are Qualified Persons as defined under NI 43-101. Quality Assurance / Quality Control. For additional information on the Company's previously reported drill results, see the Company's news releases dated February 4, 2021 (Orla Mining Provides Exploration Update), September 12, 2022 (Orla Mining Advances Exploration & Growth Pipeline), January 31, 2023 (Orla Mining Continues to Intersect Wide, Higher-Grade Sulphide Zones and Expose Deeper Potential at Camino Rojo, Mexico), February 7, 2024 (Orla Mining Concludes 2023 Camino Rojo Sulphides Infill Program with Strong Results), June 26, 2024 (Orla Mining Reports Positive Drilling Intersections and Metallurgical Results at Camino Rojo Sulphide Extensions) and December 10, 2024 (Orla Expands High-Grade Mineralization 800 Metres Beyond Current Resource in Extension Drilling at Camino Rojo, Mexico). Historical drill results at Camino Rojo were completed by Goldcorp. Inc. ("Goldcorp"), a prior owner of the project. The independent Qualified Person for the mineral resource estimate, Marie-Christine Gosselin, Senior Resource Geologist with SLR Consulting (Canada) Ltd, was of the opinion that the drilling and sampling procedures for Camino Rojo drill samples by Orla (and prior to its acquisition by Goldcorp, Canplats Resources Corporation) were reasonable and adequate for the purposes of the Mineral Resource estimate, and that the QA/QC program meets industry standards. About Orla Mining Ltd. Orla's corporate strategy is to acquire, develop, and operate mineral properties where the Company's expertise can substantially increase stakeholder value. The Company has three material projects, consisting of two operating mines and one development project, all 100% owned by the Company: (1) Camino Rojo, in Zacatecas State, Mexico, an operating gold and silver open-pit and heap leach mine. The property covers over 139,000 hectares which contains a large oxide and sulphide mineral resource, (2) Musselwhite Mine, in Northwestern Ontario, Canada, an underground gold mine that has been in operation for over 25 years and produced over 6 million ounces of gold, with a long history of resource growth and conversion, and (3) South Railroad, in Nevada, United States, a feasibility-stage, open pit, heap leach gold project located on the Carlin trend in Nevada. The technical reports for the Company's material projects are available on Orla's website at and on SEDAR+ and EDGAR under the Company's profile at and respectively. Forward-looking Statements This news release contains certain "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities legislation and within the meaning of Section 27A of the United States Securities Act of 1933, as amended, Section 21E of the United States Exchange Act of 1934, as amended, the United States Private Securities Litigation Reform Act of 1995, or in releases made by the United States Securities and Exchange Commission, all as may be amended from time to time, including, without limitation, statements regarding the mineral resource estimate; the development plan for the Camino Rojo Underground, including planned drilling and the goals and timing thereof, construction of an exploration drift, publication of a Preliminary Economic Assessment, and permitting; future resource expansion in Zone 22; continued metallurgical testwork to support the planned Preliminary Economic Assessment; and the Company's goals and objectives. Forward-looking statements are statements that are not historical facts which address events, results, outcomes or developments that the Company expects to occur. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made and they involve a number of risks and uncertainties. Certain material assumptions regarding such forward-looking statements were made, including without limitation, assumptions regarding: the future price of gold and silver; anticipated costs and the Company's ability to fund its programs; the Company's ability to carry on exploration, development, and mining activities; the Company's ability to successfully integrate the Musselwhite Mine; tonnage of ore to be mined and processed; ore grades and recoveries; decommissioning and reclamation estimates; currency exchange rates remaining as estimated; prices for energy inputs, labour, materials, supplies and services remaining as estimated; the Company's ability to secure and to meet obligations under property agreements, including the layback agreement with Fresnillo plc; that all conditions of the Company's credit facility will be met; the timing and results of drilling programs; mineral reserve and mineral resource estimates and the assumptions on which they are based; the discovery of mineral resources and mineral reserves on the Company's mineral properties; that political and legal developments will be consistent with current expectations; the timely receipt of required approvals and permits, including those approvals and permits required for successful project permitting, construction, and operation of projects; the timing of cash flows; the costs of operating and exploration expenditures; the Company's ability to operate in a safe, efficient, and effective manner; the Company's ability to obtain financing as and when required and on reasonable terms; that the Company's activities will be in accordance with the Company's public statements and stated goals; and that there will be no material adverse change or disruptions affecting the Company or its properties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements involve significant known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: uncertainty and variations in the estimation of mineral resources and mineral reserves; risks related to the Company's indebtedness and gold prepayment; risks related to exploration, development, and operation activities; foreign country and political risks, including risks relating to foreign operations; tailings risks; reclamation costs; delays in obtaining or failure to obtain governmental permits, or non-compliance with permits; environmental and other regulatory requirements; loss of, delays in, or failure to get access from surface rights owners; uncertainties related to title to mineral properties; water rights; risks related to natural disasters, terrorist acts, health crises, and other disruptions and dislocations; financing risks and access to additional capital; risks related to guidance estimates and uncertainties inherent in the preparation of feasibility studies; uncertainty in estimates of production, capital, and operating costs and potential production and cost overruns; the fluctuating price of gold and silver; risks related to the Cerro Quema Project; unknown labilities in connection with acquisitions; global financial conditions; uninsured risks; climate change risks; competition from other companies and individuals; conflicts of interest; risks related to compliance with anti-corruption laws; volatility in the market price of the Company's securities; assessments by taxation authorities in multiple jurisdictions; foreign currency fluctuations; the Company's limited operating history; litigation risks; the Company's ability to identify, complete, and successfully integrate acquisitions; intervention by non-governmental organizations; outside contractor risks; risks related to historical data; the Company not having paid a dividend; risks related to the Company's foreign subsidiaries; risks related to the Company's accounting policies and internal controls; the Company's ability to satisfy the requirements of Sarbanes–Oxley Act of 2002; enforcement of civil liabilities; the Company's status as a passive foreign investment company (PFIC) for U.S. federal income tax purposes; information and cyber security; the Company's significant shareholders; gold industry concentration; shareholder activism; other risks associated with executing the Company's objectives and strategies; as well as those risk factors discussed in the Company's most recently filed management's discussion and analysis, as well as its annual information form dated March 18, 2025, which are available on and Except as required by the securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change. Cautionary Note to U.S. Readers This news release has been prepared in accordance with Canadian standards for the reporting of mineral resource and mineral reserve estimates, which differ from the previous and current standards of the United States securities laws. In particular, and without limiting the generality of the foregoing, the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "inferred mineral resources", "indicated mineral resources", "measured mineral resources" and "mineral resources" used or referenced in this news release are Canadian mineral disclosure terms as defined in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Definition Standards"). For United States reporting purposes, the United States Securities and Exchange Commission ("SEC") has adopted amendments to its disclosure rules (the "SEC Modernization Rules") to modernize the mining property disclosure requirements for issuers whose securities are registered with the SEC under the Securities Exchange Act of 1934, as amended. The SEC Modernization Rules more closely align the SEC's disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards, including NI 43-101, and replace the historical property disclosure requirements for mining registrants that were included in Industry Guide 7 under the U.S. Securities Act. As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multijurisdictional disclosure system (MJDS), the Company is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and provides disclosure under NI 43-101 and the CIM Definition Standards. Accordingly, mineral reserve and mineral resource information contained in this news release may not be comparable to similar information disclosed by United States companies. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of "measured mineral resources", "indicated mineral resources" and "inferred mineral resources." In addition, the SEC has amended its definitions of "proven mineral reserves" and "probable mineral reserves" to be "substantially similar" to the corresponding CIM Definition Standards that are required under NI 43-101. While the above terms are "substantially similar" to CIM Definition Standards, there are differences in the definitions under the SEC Modernization Rules and the CIM Definition Standards. There is no assurance any mineral reserves or mineral resources that the Company may report as "proven mineral reserves", "probable mineral reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources" under NI 43-101 would be the same had the Company prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules. Accordingly, information contained in this news release may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. SOURCE Orla Mining Ltd. 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Yahoo
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AM Best Revises Issuer Credit Rating Outlook to Negative for Palmetto Surety Corporation
OLDWICK, N.J., June 06, 2025--(BUSINESS WIRE)--AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of "bb+" (Fair) of Palmetto Surety Corporation (Palmetto) (headquartered in Mount Pleasant, SC). The outlook of the FSR is stable. The Credit Ratings (ratings) reflect Palmetto's balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The revised Long-Term ICR outlook to negative from stable reflects the pressure on Palmetto's overall balance sheet strength assessment, as well as risk management given the challenges related to the timely collection and reporting of its premiums and agents' balances that in 2024, resulted in a reduction in admitted assets and corresponding decline in overall surplus. Concerns related to ERM relate to management's failure to collect its premium in a timely manner and its consequential effects on capital management. Negative rating action could occur if there continues to be volatility of Palmetto's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), or if the overall balance sheet strength assessment deteriorates further as a result of a continued uptick of uncollected premiums and agents' balances in the course of collection. Additionally, negative rating action could occur if the company fails to strengthen its risk management, accounting and reporting controls resulting in the continued augmentation of uncollected premiums and outstanding agents' balances in the course of collection. Management is aware of the over 90 aging of uncollected premium receivables and has been instituting better collections procedures to improve the overall non-admitted assets for the company. This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Christine DePalma, CPCU, ARM Financial Analyst +1 908 882 1732 Edin Imsirovic Director +1 908 882 2318 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
8 hours ago
- Business Wire
AM Best Revises Issuer Credit Rating Outlook to Negative for Palmetto Surety Corporation
OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of 'bb+' (Fair) of Palmetto Surety Corporation (Palmetto) (headquartered in Mount Pleasant, SC). The outlook of the FSR is stable. The Credit Ratings (ratings) reflect Palmetto's balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The revised Long-Term ICR outlook to negative from stable reflects the pressure on Palmetto's overall balance sheet strength assessment, as well as risk management given the challenges related to the timely collection and reporting of its premiums and agents' balances that in 2024, resulted in a reduction in admitted assets and corresponding decline in overall surplus. Concerns related to ERM relate to management's failure to collect its premium in a timely manner and its consequential effects on capital management. Negative rating action could occur if there continues to be volatility of Palmetto's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), or if the overall balance sheet strength assessment deteriorates further as a result of a continued uptick of uncollected premiums and agents' balances in the course of collection. Additionally, negative rating action could occur if the company fails to strengthen its risk management, accounting and reporting controls resulting in the continued augmentation of uncollected premiums and outstanding agents' balances in the course of collection. Management is aware of the over 90 aging of uncollected premium receivables and has been instituting better collections procedures to improve the overall non-admitted assets for the company. This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
