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Globe and Mail
6 hours ago
- Business
- Globe and Mail
NorthWestern Reports Second Quarter 2025 Financial Results
NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the second quarter of 2025. Net income for the period was $21.2 million, or $0.35 per diluted share, as compared with net income of $31.7 million, or $0.52 per diluted share, for the same period in 2024. This decrease was primarily due to lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, operating, administrative and general costs, and interest expense. These were partly offset by higher retail rates, higher electric transmission, and natural gas transportation revenues. NorthWestern's second quarter 2025 non-GAAP net income and earnings per share were $24.1 million and $0.40, respectively, compared to $32.2 million and $0.53 in 2024. See 'Adjusted Non-GAAP Earnings' and 'Non-GAAP Financial Measures' sections below for more information on these measures. 'We are pleased to report another quarter of strong operational performance, reinforcing our dedication to delivering safe, reliable, and affordable energy to our customers and communities. On July 1st, we successfully completed the acquisition of Energy West's natural gas distribution system in Montana, welcoming over 33,000 valued customers and 43 highly-skilled employees to our team. We also are happy to announce our third large-load letter of intent. We're actively working with an experienced developer, Quantica Infrastructure, to evaluate the transmission infrastructure and generation resources needed to support their proposed 500 megawatt project in Montana,' said Brian Bird, President and Chief Executive Officer. 'Earnings for the second quarter met our expectations, though they were lower than last year, primarily due to the delay in implementing updated interim rates in Montana. In late May, ahead of a productive public hearing, we implemented updated interim electric rates that more closely align with current service costs. An outcome in the rate review is expected early in the fourth quarter this year.' Mr. Bird continued, ' The operational and financial progress this quarter continues to advance our strategic objectives that benefit our customers and investors." FINANCIAL OUTLOOK Initiating 2025 Guidance and Affirming Long-Term Growth Rates We are initiating 2025 non-GAAP earnings guidance of $3.53 - $3.65 per diluted share. This guidance is based upon, but not limited to, the following major assumptions: Final approval of all material aspects of NorthWestern's settlement position in the currently pending Montana general rate review; Normal weather in our service territories; An effective income tax rate of approximately 12%-15%; and Diluted average shares outstanding of approximately 61.5 million. We are affirming our long-term (five-year) diluted earnings per share growth guidance of 4% to 6%, based on an updated 2024 adjusted diluted non-GAAP EPS baseline of $3.40. Additionally, we are affirming our $2.7 billion capital investment plan for 2025-2029, which is expected to support rate base growth of 4% to 6% from an updated 2024 base year of approximately $5.4 billion. We plan to fund this capital program through a combination of cash from operations and secured debt issuances. Any incremental investments in generation, transmission, or other strategic growth opportunities may require equity financing. Dividend Declared NorthWestern Energy Group's Board of Directors has declared a quarterly common stock dividend of $0.66 per share payable on September 30, 2025, to shareholders of record as of September 15, 2025. Looking ahead, we remain committed to maintaining a dividend payout ratio within our targeted range of 60-70% over the long term. Additional information regarding this release can be found in the earnings presentation at COMPANY UPDATES Regulatory Update Montana Rate Review - In July 2024, we filed a Montana electric and natural gas rate review with the Montana Public Service Commission (MPSC). In November 2024, the MPSC partially approved our requested interim rates effective December 1, 2024, subject to refund. Subsequently, we modified our request through rebuttal testimony. In March 2025, we filed a natural gas settlement with certain parties. In April 2025, we filed a partial electric settlement with certain other parties. Both settlements are subject to approval by the MPSC. The partial electric settlement includes, among other things, agreement on base revenue increases (excluding base revenues associated with Yellowstone County Generating Station (YCGS)), allocated cost of service, rate design, updates to the amount of revenues associated with property taxes (excluding property taxes associated with YCGS), regulatory policy issues related to requested changes in regulatory mechanisms, and agreement to support a separate motion for revised electric interim rates. The partial electric settlement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account. The natural gas settlement includes, among other things, agreement on base revenues, allocated cost of service, rate design, updates to the amount of revenues associated with property taxes, and agreement to support a separate motion for revised natural gas interim rates. The details of our filing request, as adjusted in rebuttal testimony are set forth below: (1) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs. The details of our interim rates granted are set forth below: (1) These electric interim rates were effective December 1, 2024, through May 22, 2025. See further discussion on revised electric interim rates below. (2) These natural gas interim rates were effective December 1, 2024, and are expected to remain in effect until the MPSC final order rates are effective. (3) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs. (4) Our requested interim property tax base increase went into effect on January 1, 2025, as part of our 2024 property tax tracker filing. The details of our settlement agreement are set forth below: (1) We implemented these electric rates on July 2, 2025, on an interim basis, subject to refund. (2) These items were not included within the partial electric settlement and will be contested items that are expected to be determined in the MPSC's final order. (3) Intervenor positions on YCGS propose up to an $11.6 million reduction to the base rate revenue request and an additional $38.4 million decrease to the PCCAM base. (4) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs. On May 23, 2025, as permitted by Montana statute, we implemented our initially requested electric rates, reflecting a base rate revenue increase of $156.5 million, on an interim basis, subject to refund with interest. Within our June 30, 2025 financial statements, we have deferred base rate revenues collected between May 23, 2025, and June 30, 2025, down to our requested revised electric interim rates of $110.3 million as shown within the above table. As of June 30, 2025, we have deferred approximately $3.5 million of base rate revenues collected. On June 20, 2025, we submitted the revised electric interim rates as shown within the above table to the MPSC for approval. The MPSC subsequently approved this request and the rates were implemented on July 2, 2025. As discussed above, if the MPSC chooses to accept the intervenors positions on the remaining contested issues or does not accept the Settlement Agreements in its final order, losses related to excess interim revenues collected will be incurred. Additionally, any difference between interim and final approved rates will be refunded to customers with interest. However, if final approved rates are higher than interim rates, we will not recover the difference. A hearing on the electric and natural gas rate review was held in June 2025, and final briefs are due in August 2025. Interim rates will remain in effect on a refundable basis, with interest, until the MPSC issues a final order. Nebraska Natural Gas Rate Review - In June 2025, the Nebraska Public Service Commission approved a settlement agreement increasing base rate annual revenue by $2.4 million and final rates were implemented on July 1, 2025. Environmental Protection Agency (EPA) Rules In April 2024, the EPA released greenhouse gas (GHG) Rules for existing coal-fired facilities and new coal and natural gas-fired facilities as well as Mercury and Air Toxics Standards (MATS) Rules. Compliance with the rules would require expensive upgrades at Colstrip Units 3 and 4 with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities. The final MATS and GHG Rules require compliance as early as 2027 and 2032, respectively. On April 8, 2025, President Trump issued a proclamation, "Regulatory Relief for Certain Stationary Sources to Promote American Energy," exempting certain coal plants, including Colstrip Units 3 and 4, Big Stone Plant, and Coyote Plant, from compliance with the MATS Rule through July 8, 2029. On June 11, 2025, the EPA issued Notices of Proposed Rulemaking to, among other things, rescind the 2024 MATS Rule. Acquisition of Energy West Montana Assets In July 2024, NW Corp entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas distribution and system operations serving approximately 33,000 customers located in Great Falls, Cut Bank, and West Yellowstone, Montana. In May 2025, the MPSC approved this acquisition and on July 1, 2025, NW Corp completed this acquisition for approximately $36.5 million in cash, which is subject to certain post-close working capital adjustments that we expect to finalize in the second half of 2025. Montana Wildfire Risk Mitigation The Montana Legislature approved House Bill 490 in April 2025, with broad bipartisan support in both the House (90-0) and Senate (40-8), and the Governor signed this bill into law in May 2025. This bill requires development, approval, and implementation of electric facilities providers' wildfire mitigation plans. Importantly, House Bill 490 helps address some preexisting liability risks facing electric facilities providers in Montana. It changes Montana law, recognizing utilities' obligation to provide a public service for customers that is different from typical businesses; circumscribes certain damages; and enacts liability protections related to wildfire and wildfire prevention efforts involving providers. More specifically, House Bill 490 precludes common law strict liability claims for damages related to wildfire and electric activities or wildfire mitigation activities; establishes a statutory standard of care, supplanting common law causes of action and other theories of recovery; and creates a rebuttable presumption that an electric facilities provider acted reasonably if it substantially followed an approved wildfire mitigation plan. The legislation also defines the availability of damages by allowing noneconomic personal injury damages only when there is bodily injury and punitive damages only when an injured party proves by clear and convincing evidence that an electric facilities provider's actions were grossly negligent or intentional. We expect to file our wildfire mitigation plan with the MPSC in the third quarter of 2025 for review and approval. Montana Data Centers In July 2025, we entered into a nonbinding letter of intent with Quantica Infrastructure to evaluate the transmission infrastructure and generation resources needed to support their proposed Phase 1 need of 5 megawatts in 2026 with growth up to 500 megawatts by 2030. This is our third signed letter of intent for data center load growth. In December 2024, we announced two separate nonbinding letters of intent to provide electric supply services for data centers being developed in Montana with a combined energy service requirement expected to be 75 megawatts beginning in early 2026 with growth of up to 400 megawatts or more by 2030. We anticipate that service could be provided through our regulated business, pending further evaluation and regulatory considerations. Montana Electric Transmission Construction In May 2025, Senate Bill 301 was passed by the Montana Legislature with unanimous bipartisan support and signed into law. The intention of this bill is to expedite and streamline the process for a public utility to construct electric transmission lines to serve the increasing demand for electricity, enhance grid reliability, and address current transmission congestion within Montana. This bill allows a public utility to request a Certificate of Public Convenience & Necessity for electric transmission lines rated higher than 69 kilovolts from the MPSC and also provides a process for a public utility to apply for advanced cost approval of electric transmission lines and related facilities before actual construction begins. Colstrip Acquisitions and Requests for Cost Recovery As previously disclosed, we entered into definitive agreements with Avista Corporation (Avista) and Puget Sound Energy (Puget) to acquire their respective interests in Colstrip Units 3 and 4 for $0 and expect to complete these acquisitions on December 31, 2025. Accordingly, we will be responsible for associated operating costs on January 1, 2026. Puget and Avista will remain responsible for their respective pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommissioning and demolition costs associated with the existing facilities that comprise their interests. During the second half of 2025 we intend to make filings with the MPSC and the Federal Energy Regulatory Commission (FERC) associated with these transactions, including recovery of incremental operating costs. Three Months Ended June 30, Six Months Ended June 30, ($ in millions, except per share amounts) 2025 2024 2025 2024 Revenues Electric $ 279.5 $ 260.1 $ 615.0 $ 603.3 Gas 63.2 59.8 194.4 192.0 Total Revenues 342.7 319.9 809.3 795.3 Operating expenses Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) 75.3 76.5 213.5 251.2 Operating and maintenance 62.3 57.4 119.0 111.5 Administrative and general 33.8 31.3 75.1 71.7 Property and other taxes 48.2 36.3 91.4 83.4 Depreciation and depletion 62.4 56.9 124.8 113.7 Total Operating Expenses 281.9 258.3 623.8 631.6 Operating income 60.8 61.6 185.5 163.7 Interest expense, net (36.3 ) (31.9 ) (72.8 ) (62.9 ) Other income, net 0.1 6.2 4.0 10.5 Income before income taxes 24.6 35.9 116.8 111.3 Income tax expense (3.4 ) (4.2 ) (18.6 ) (14.6 ) Net Income $ 21.2 $ 31.7 $ 98.2 $ 96.7 Average Common Shares Outstanding 61.4 61.3 61.4 61.3 Basic Earnings per Average Common Share $ 0.35 $ 0.52 $ 1.60 $ 1.58 Diluted Earnings per Average Common Share $ 0.35 $ 0.52 $ 1.60 $ 1.58 Note: Subtotal variances may exist due to rounding. Three Months Ended June 30, 2025 vs. 2024 Variance in revenue and fuel, purchased supply, and direct transmission expense (1) items impacting net income: Rates 19.4 (4.9 ) 14.5 0.23 Electric transmission revenue 5.7 (1.4 ) 4.3 0.07 Natural gas transportation 1.6 (0.4 ) 1.2 0.02 Production tax credits, offset within income tax benefit 1.2 (1.2 ) — — Natural gas retail volumes (4.0 ) 1.0 (3.0 ) (0.05 ) Montana property tax tracker collections (4.3 ) 1.1 (3.2 ) (0.05 ) Electric retail volumes (2.9 ) 0.7 (2.2 ) (0.04 ) Non-recoverable Montana electric supply costs (2.0 ) 0.5 (1.5 ) (0.02 ) Other (0.2 ) 0.1 (0.1 ) — Variance in expense items (2) impacting net income: Depreciation (5.5 ) 1.4 (4.1 ) (0.07 ) Interest expense (4.4 ) 1.1 (3.3 ) (0.05 ) Operating, maintenance, and administrative (10.0 ) 2.5 (7.5 ) (0.12 ) Property and other taxes not recoverable within trackers (1.5 ) 0.4 (1.1 ) (0.02 ) Other (4.4 ) (0.1 ) (4.5 ) (0.07 ) Dilution from higher share count — Second Quarter, 2025 $ 24.6 $ (3.4 ) $ 21.2 $ 0.35 Change in Net Income $ (10.5 ) $ (0.17 ) (1) Exclusive of depreciation and depletion shown separately below (2) Excluding fuel, purchased supply, and direct transmission expense (3) Income Tax (Expense) Benefit calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%. Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024 Consolidated gross margin for the three months ended June 30, 2025 was $94.5 million as compared with $92.8 million in 2024, an increase of $1.7 million, or 1.8 percent. This increase was primarily due to higher retail rates, higher electric transmission, and natural gas transportation revenues. These were partly offset by lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, and operating and maintenance costs. ($ in millions) Three Months Ended June 30, Reconciliation of gross margin to utility margin: 2025 2024 Operating Revenues $ 342.7 $ 319.9 Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) 75.3 76.5 Less: Operating and maintenance 62.3 57.4 Less: Property and other taxes 48.2 36.2 Less: Depreciation and depletion 62.4 57.0 Gross Margin 94.5 92.8 Operating and maintenance 62.3 57.4 Property and other taxes 48.2 36.2 Depreciation and depletion 62.4 57.0 Utility Margin (1) $ 267.4 $ 243.4 (1) Non-GAAP financial measure. See 'Non-GAAP Financial Measures' below. Three Months Ended June 30, ($ in millions) 2025 2024 Change % Change Utility Margin Electric $ 219.8 $ 199.2 $ 20.6 10.3 % Natural Gas 47.6 44.2 3.4 7.7 Total Utility Margin (1) $ 267.4 $ 243.4 $ 24.0 9.9 % (1) Non-GAAP financial measure. See 'Non-GAAP Financial Measures' below. Consolidated utility margin for the three months ended June 30, 2025 was $267.4 million as compared with $243.4 million for the same period in 2024, an increase of $24.0 million, or 9.9 percent. Primary components of the change in utility margin include the following: ($ in millions) Utility Margin 2025 vs. 2024 Utility Margin Items Impacting Net Income Interim rates (subject to refund) $ 17.9 Transmission revenue due to market conditions and rates 5.7 Montana natural gas transportation 1.6 Base rates 1.5 Montana property tax tracker collections (4.3 ) Natural gas retail volumes (4.0 ) Electric retail volumes (2.9 ) Non-recoverable Montana electric supply costs (2.0 ) Other (0.2 ) Change in Utility Margin Items Impacting Net Income 13.3 Utility Margin Items Offset Within Net Income Property and other taxes recovered in revenue, offset in property and other taxes 10.4 Production tax credits, offset in income tax expense 1.2 Operating expenses recovered in revenue, offset in operating and maintenance expense (0.9 ) Change in Utility Margin Items Offset Within Net Income 10.7 Increase in Consolidated Utility Margin (1) $ 24.0 (1) Non-GAAP financial measure. See 'Non-GAAP Financial Measures' below. Lower electric retail volumes were driven by unfavorable spring weather in all jurisdictions impacting residential demand, and lower commercial and industrial demand, partly offset by customer growth in all jurisdictions. Lower natural gas retail volumes were driven by unfavorable weather in all jurisdictions, partly offset by customer growth in all jurisdictions. Under the PCCAM, net supply costs higher or lower than the PCCAM base rate (PCCAM Base) (excluding qualifying facility costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the three months ended June 30, 2025, we under-collected supply costs of $7.6 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $0.8 million (10 percent of the PCCAM Base cost variance). For the three months ended June 30, 2024, we over-collected supply costs of $11.0 million resulting in a reduction to our under collection of costs, and recorded an increase in pre-tax earnings of $1.2 million (10 percent of the PCCAM Base cost variance). Three Months Ended June 30, Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Operating and maintenance $ 62.3 $ 57.4 $ 4.9 8.5 % Administrative and general 33.8 31.3 2.5 8.0 Property and other taxes 48.2 36.3 11.9 32.8 Depreciation and depletion 62.4 56.9 5.5 9.7 Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense) $ 206.7 $ 181.9 $ 24.8 13.6 % Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $206.7 million for the three months ended June 30, 2025, as compared with $181.9 million for the three months ended June 30, 2024. Primary components of the change include the following: Operating Expenses ($ in millions) 2025 vs. 2024 Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Impacting Net Income Depreciation expense due to plant additions and higher depreciation rates $ 5.5 Electric generation maintenance 3.7 Insurance expense, primarily due to increased wildfire risk premiums 3.0 Property and other taxes not recoverable within trackers 1.5 Wildfire mitigation expense, partly offset by higher base revenues 1.4 Labor and benefits (1) 1.3 Technology implementation and maintenance expenses 0.9 Uncollectible accounts (0.1 ) Other (0.2 ) Change in Items Impacting Net Income 17.0 Operating Expenses Offset Within Net Income Property and other taxes recovered in trackers, offset in revenue 10.4 Deferred compensation, offset in other income (1.2 ) Operating and maintenance expenses recovered in trackers, offset in revenue (0.9 ) Pension and other postretirement benefits, offset in other income (1) (0.5 ) Change in Items Offset Within Net Income 7.8 Increase in Operating Expenses (excluding fuel, purchased supply and direct transmission expense) $ 24.8 (1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses. We estimate property taxes throughout each year, and update those estimates based on valuation reports received from the Montana Department of Revenue. Under Montana law, we are allowed to track the increases and decreases in the actual level of state and local taxes and fees and adjust our rates to recover the increase or decrease between rate cases less the amount allocated to FERC-jurisdictional customers and net of the associated income tax benefit. Consolidated operating income for the three months ended June 30, 2025 was $60.8 million as compared with $61.6 million in the same period of 2024. This decrease was primarily due to lower retail natural gas and electric usage primarily driven by weather, Montana property tax tracker collections, non-recoverable Montana electric supply costs, depreciation, and operating, administrative and general costs. These were partly offset by higher retail rates, higher electric transmission, and natural gas transportation revenues. Consolidated interest expense was $36.3 million for the three months ended June 30, 2025 as compared with $31.9 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of Allowance for Funds Used During Construction (AFUDC). Consolidated other income was $0.1 million for the three months ended June 30, 2025 as compared with $6.2 million for the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC, a decrease in the value of deferred shares held in trust for deferred compensation, higher non-service component pension expense, and a $1.0 million expense accrual related to an estimated penalty for the previously disclosed Community Renewable Energy Project informed by a recent MPSC ruling. Consolidated income tax expense was $3.4 million for the three months ended June 30, 2025 as compared to $4.2 million for the same period of 2024. Our effective tax rate for the three months ended June 30, 2025 was 13.7% as compared with 11.8% for the same period in 2024. The following table summarizes the differences between our effective tax rate and the federal statutory rate: Three Months Ended June 30, Income tax calculated at federal statutory rate 5.2 21.0 % 7.5 21.0 % Permanent or flow-through adjustments: State income tax, net of federal provisions 0.1 0.4 0.0 0.1 Flow-through repairs deductions (2.8 ) (11.4 ) (3.0 ) (8.5 ) Production tax credits (0.6 ) (2.4 ) (2.0 ) (5.6 ) Share-based compensation (0.3 ) (1.2 ) 0.0 0.0 Amortization of excess deferred income tax (0.1 ) (0.4 ) (0.2 ) (0.5 ) Plant and depreciation flow-through items 1.5 6.1 1.1 3.0 Other, net 0.4 1.6 0.8 2.3 (1.8 ) (7.3 ) (3.3 ) (9.2 ) Income tax expense $ 3.4 13.7 % $ 4.2 11.8 % We compute income tax expense for each quarter based on the estimated annual effective tax rate for the year, adjusted for certain discrete items. Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through federal and state tax benefits of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits. Liquidity and Capital Resources As of June 30, 2025, our total net liquidity was approximately $317.9 million, including $2.9 million of cash and $315.0 million of revolving credit facility availability with no letters of credit outstanding. This compares to total net liquidity one year ago at June 30, 2024 of $393.4 million. Earnings Per Share Basic earnings per share are computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of common stock equivalent shares that could occur if unvested shares were to vest. Common stock equivalent shares are calculated using the treasury stock method, as applicable. The dilutive effect is computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding plus the effect of the outstanding unvested restricted stock and performance share awards. Average shares used in computing the basic and diluted earnings per share are as follows: Three Months Ended June 30, 2025 June 30, 2024 Basic computation 61,380,777 61,288,870 Dilutive effect of: Performance share awards (1) 103,169 68,478 Diluted computation 61,483,946 61,357,348 (1) Performance share awards are included in diluted weighted average number of shares outstanding based upon what would be issued if the end of the most recent reporting period was the end of the term of the award. Six Months Ended June 30, 2025 June 30, 2024 Basic computation 61,360,252 61,277,418 Dilutive effect of: Performance share awards (1) 95,733 56,065 Diluted computation 61,455,985 61,333,483 As of June 30, 2025, there were 68,107 shares from performance and restricted share awards which were antidilutive and excluded from the earnings per share calculations, compared to 35,933 shares as of June 30, 2024. Adjusted Non-GAAP Earnings We reported GAAP earnings of $0.35 per diluted share for the three months ended June 30, 2025 and $0.52 per diluted share for the same period in 2024. Adjusted Non-GAAP earnings per diluted share for the same periods are $0.40 and $0.53, respectively. A reconciliation of items factored into our Adjusted Non-GAAP diluted earnings are summarized below. The amount below represents a non-GAAP measure that may provide users of this data with additional meaningful information regarding the impact of certain items on our expected earnings. More information on this measure can be found in the "Non-GAAP Financial Measures" section below. (1) Income tax rate on reconciling items assumes blended federal plus state effective tax rate of 25.3%. Company Hosting Earnings Webinar NorthWestern will host an investor earnings webinar on Thursday, July 31, 2025, at 3:30 p.m. Eastern time to review its financial results for the quarter ending June 30, 2025. To register for the webinar, please visit Please go to the site at least 15 minutes in advance of the webinar to register. An archived webinar will be available shortly after the event and remain active for one year. NorthWestern Energy - Delivering a Bright Future NorthWestern Energy Group, Inc., doing business as NorthWestern Energy, provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We work to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. We do this by providing low-cost and reliable service performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 842,100 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. Our operations in Montana and Yellowstone National Park are conducted through our subsidiary, NW Corp, and our operations in South Dakota and Nebraska are conducted through our subsidiary, NWE Public Service. We have provided service in South Dakota and Nebraska since 1923 and in Montana since 2002. Non-GAAP Financial Measures This press release includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered 'non-GAAP financial measures.' Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We define Utility Margin as Operating Revenues less fuel, purchased supply, and direct transmission expense (exclusive of depreciation and depletion) as presented in our Condensed Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Condensed Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in the press release above. Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow for recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income, and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income, and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures. Special Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under "Reconciliation of Non-GAAP Items." Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that we will achieve our projections. Factors that may cause such differences include, but are not limited to: adverse determinations by regulators, such as adverse outcomes from the denial of interim rates or final rates not consistent with a reasonable ability to earn our allowed returns, as well as potential adverse federal, state, or local legislation or regulation, including costs of compliance with existing and future environmental requirements, and wildfire damages in excess of liability insurance coverage, could have a material effect on our liquidity, results of operations and financial condition; the impact of extraordinary external events and natural disasters, such as a wide-spread or global pandemic, geopolitical events, earthquake, flood, drought, lightning, weather, wind, and fire, could have a material effect on our liquidity, results of operations and financial condition; acts of terrorism, cybersecurity attacks, data security breaches, or other malicious acts that cause damage to our generation, transmission, or distribution facilities, information technology systems, or result in the release of confidential customer, employee, or Company information; supply chain constraints, recent high levels of inflation for product, services and labor costs, and their impact on capital expenditures, operating activities, and/or our ability to safely and reliably serve our customers; changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations; unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase operating costs or may require additional capital expenditures or other increased operating costs; and adverse changes in general economic and competitive conditions in the U.S. financial markets and in our service territories. Our 2024 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Globe and Mail
8 hours ago
- Business
- Globe and Mail
CVR Partners Reports Second Quarter 2025 Results
Second quarter net income of $39 million, or $3.67 per common unit; EBITDA of $67 million Announced cash distribution of $3.89 per common unit SUGAR LAND, Texas, July 30, 2025 (GLOBE NEWSWIRE) -- CVR Partners, LP (NYSE: UAN, 'CVR Partners' or the 'Partnership'), a manufacturer of ammonia and urea ammonium nitrate ('UAN') solution fertilizer products, today announced net income of $39 million, or $3.67 per common unit, and EBITDA of $67 million on net sales of $169 million for the second quarter of 2025, compared to net income of $26 million, or $2.48 per common unit, and EBITDA of $54 million on net sales of $133 million for the second quarter of 2024. 'CVR Partners achieved solid operating results for the second quarter of 2025 driven by safe, reliable operations and a combined ammonia production rate of 91 percent,' said Mark Pytosh, Chief Executive Officer. 'Supply and demand balances for nitrogen fertilizer continue to be tight and pricing has remained strong through the end of the planting season. 'With the market conditions favorable, we will continue to focus on safe, reliable operations and the generation of free cash flow,' Pytosh said. 'In addition, CVR Partners is pleased to declare a second quarter 2025 cash distribution of $3.89 per common unit.' Consolidated Operations Production at CVR Partners' fertilizer facilities decreased compared to the second quarter of 2024, producing a combined 197,000 tons of ammonia during the second quarter of 2025, of which 54,000 net tons were available for sale while the rest was upgraded to other fertilizer products, including 321,000 tons of UAN. During the second quarter of 2024, the fertilizer facilities produced a combined 221,000 tons of ammonia, of which 69,000 net tons were available for sale while the remainder was upgraded to other fertilizer products, including 337,000 tons of UAN. For the second quarter 2025, average realized gate prices for ammonia and UAN were up 14 percent and 18 percent, respectively, over the prior year to $593 and $317 per ton, respectively. Average realized gate prices for ammonia and UAN were $520 and $268 per ton, respectively, for the second quarter of 2024. Distributions CVR Partners also announced that on July 30, 2025, the Board of Directors of the Partnership's general partner (the 'Board') declared a second quarter 2025 cash distribution of $3.89 per common unit, which will be paid on August 18, 2025, to common unitholders of record as of August 11, 2025. CVR Partners is a variable distribution master limited partnership. As a result, its distributions, if any, will vary from quarter to quarter due to several factors, including, but not limited to, its operating performance, fluctuations in the prices received for its finished products, maintenance capital expenditures, and use of cash and cash reserves deemed necessary or appropriate by the Board. Second Quarter 2025 Earnings Conference Call CVR Partners previously announced that it will host its second quarter 2025 Earnings Conference Call on Thursday, July 31, at 11 a.m. Eastern. This Earnings Conference Call may also include discussion of the Partnership's developments, forward-looking information and other material information about business and financial matters. The second quarter 2025 Earnings Conference Call will be webcast live and can be accessed on the Investor Relations section of CVR Partners' website at For investors or analysts who want to participate during the call, the dial-in number is (877) 407-8029. The webcast will be archived and available for 14 days at A repeat of the call also can be accessed for 14 days by dialing (877) 660-6853, conference ID 13754876. Qualified Notice This release serves as a qualified notice to nominees and brokers as provided for under Treasury Regulation Section 1.1446-4(b). Please note that 100 percent of CVR Partners' distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, CVR Partners' distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate. Forward-Looking Statements This news release contains forward-looking statements. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are 'forward-looking statements,' as that term is defined under the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding future: continued safe and reliable operations; net income and net sales; drivers of our results; utilization and production rates; nitrogen fertilizer pricing, supply and demand; ability to generate free cash flow; distributions, including the timing, payment and amount (if any) thereof; ability to and levels to which we upgrade ammonia to other fertilizer products, including UAN; global fertilizer industry conditions; grain prices; crop inventory levels; farmer economics and planting seasons; direct operating expenses; capital expenditures; turnaround expense and timing; cash reserves; management changes; and other matters. You can generally identify forward-looking statements by our use of forward-looking terminology such as 'outlook,' 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'explore,' 'evaluate,' 'intend,' 'may,' 'might,' 'plan,' 'potential,' 'predict,' 'seek,' 'should,' or 'will,' or the negative thereof or other variations thereon or comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Investors are cautioned that various factors may affect these forward-looking statements, including (among others) the health and economic effects of any pandemic; impacts of the planting season on our business; CVR Energy, Inc.'s and its controlling stockholder's intention regarding potential strategic transactions involving the Partnership and ownership of our common units; potential operating hazards; costs of compliance with existing or new laws and regulations and potential liabilities arising therefrom; general economic and business conditions; political disturbances, geopolitical instability and tensions, including those arising from trade policies and tariffs; impacts of plant outages and weather conditions and events; and other risks. For additional discussion of risk factors which may affect our results, please see the risk factors and other disclosures included in our most recent Annual Report on Form 10-K, any subsequently filed Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission ('SEC') filings. These and other risks may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as of the date hereof. CVR Partners disclaims any intention or obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. About CVR Partners, LP Headquartered in Sugar Land, Texas, CVR Partners is a Delaware limited partnership focused on the production, marketing and distribution of nitrogen fertilizer products. It primarily produces urea ammonium nitrate (UAN) and ammonia, which are predominantly used by farmers to improve the yield and quality of their crops. CVR Partners' Coffeyville, Kansas, nitrogen fertilizer manufacturing facility includes a 1,300 ton-per-day ammonia unit, a 3,100 ton-per-day UAN unit and a dual-train gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen. CVR Partners' East Dubuque, Illinois, nitrogen fertilizer manufacturing facility includes a 1,075 ton-per-day ammonia unit and a 950 ton-per-day UAN unit. Investors and others should note that CVR Partners may announce material information using SEC filings, press releases, public conference calls, webcasts and the Investor Relations page of its website. CVR Partners may use these channels to distribute material information about the Partnership and to communicate important information about the Partnership, corporate initiatives and other matters. Information that CVR Partners posts on its website could be deemed material; therefore, CVR Partners encourages investors, the media, its customers, business partners and others interested in the Partnership to review the information posted on its website. Contact Information: Investor Relations Richard Roberts (281) 207-3205 InvestorRelations@ Media Relations Brandee Stephens (281) 207-3516 MediaRelations@ Non-GAAP Measures Our management uses certain non-GAAP performance measures, and reconciliations to those measures, to evaluate current and past performance and prospects for the future to supplement our financial information presented in accordance with accounting principles generally accepted in the United States ('GAAP'). These non-GAAP financial measures are important factors in assessing our operating results and profitability and include the performance and liquidity measures defined below. The following are non-GAAP measures we present for the periods ended June 30, 2025 and 2024: EBITDA - Net income (loss) before (i) interest expense, net, (ii) income tax expense (benefit) and (iii) depreciation and amortization expense. Adjusted EBITDA - EBITDA adjusted for certain significant noncash items and items that management believes are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends. Available Cash for Distribution - EBITDA for the quarter excluding noncash income or expense items (if any), for which adjustment is deemed necessary or appropriate by the Board in its sole discretion, less (i) reserves for maintenance capital expenditures, debt service and other contractual obligations and (ii) reserves for future operating or capital needs (if any), in each case, that the Board deems necessary or appropriate in its sole discretion. Available Cash for Distribution may be increased by the release of previously established cash reserves, if any, and other excess cash, at the discretion of the Board. We present these measures because we believe they may help investors, analysts, lenders, and ratings agencies analyze our results of operations and liquidity in conjunction with our GAAP results, including, but not limited to, our operating performance as compared to other publicly traded companies in the fertilizer industry, without regard to historical cost basis or financing methods, and our ability to incur and service debt and fund capital expenditures. Non-GAAP measures have important limitations as analytical tools because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. Refer to the ' Non-GAAP Reconciliations ' included herein for reconciliation of these amounts. Due to rounding, numbers presented within this section may not add or equal to numbers or totals presented elsewhere within this document. CVR Partners, LP (all information in this release is unaudited) Statement of Operations Data Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per unit data) 2025 2024 2025 2024 Net sales (1) $ 168,559 $ 132,901 $ 311,425 $ 260,565 Operating costs and expenses: Cost of materials and other 32,547 26,114 60,448 51,441 Direct operating expenses (exclusive of depreciation and amortization) 60,517 46,870 115,003 102,539 Depreciation and amortization 20,861 20,040 38,902 39,331 Cost of sales 113,925 93,024 214,353 193,311 Selling, general and administrative expenses 8,034 6,308 15,922 13,618 Loss on asset disposal 282 5 242 13 Operating income 46,318 33,564 80,908 53,623 Other (expense) income: Interest expense, net (7,580) (7,510) (15,307) (15,175) Other income, net 30 165 255 325 Income before income tax expense 38,768 26,219 65,856 38,773 Income tax benefit — — — (25) Net income $ 38,768 $ 26,219 $ 65,856 $ 38,798 Basic and diluted earnings per common unit $ 3.67 $ 2.48 $ 6.23 $ 3.67 Distributions declared per common unit 2.26 1.92 4.01 3.60 EBITDA* $ 67,209 $ 53,769 $ 120,065 $ 93,279 Available Cash for Distribution* 41,102 20,113 65,027 40,425 Weighted-average common units outstanding: Basic and Diluted 10,570 10,570 10,570 10,570 ____________________ * See 'Non-GAAP Reconciliations' section below for a reconciliation of these amounts. (1) Below are the components of net sales: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Components of net sales: Fertilizer product sales $ 153,852 $ 119,400 $ 282,465 $ 237,215 Other 14,707 13,501 28,960 23,350 Total net sales $ 168,559 $ 132,901 $ 311,425 $ 260,565 Selected Balance Sheet Data (in thousands) June 30, 2025 December 31, 2024 Cash and cash equivalents $ 114,400 $ 90,857 Working capital (inclusive of cash and cash equivalents) 171,924 122,192 Total assets 997,996 1,018,724 Total debt and finance lease obligation, including current portion 569,968 568,851 Total liabilities 681,455 725,654 Total partners' capital 316,541 293,070 Selected Cash Flow Data Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Net cash flow provided by (used in): Operating activities $ 24,102 $ 8,608 $ 79,493 $ 51,025 Investing activities (4,883) (5,413) (10,690) (10,730) Financing activities (26,594) (20,293) (45,260) (38,050) Net (decrease) increase in cash and cash equivalents $ (7,375) $ (17,098) $ 23,543 $ 2,245 Capital Expenditures Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Maintenance $ 6,560 $ 4,831 $ 10,253 $ 9,103 Growth 4,187 64 6,426 403 Total capital expenditures $ 10,747 $ 4,895 $ 16,679 $ 9,506 Key Operating Data Three Months Ended June 30, Six Months Ended June 30, (percent of capacity utilization) 2025 2024 2025 2024 Ammonia utilization rate (1) 91 % 102 % 96 % 96 % ____________________ (1) Reflects our ammonia utilization rate on a consolidated basis. Utilization is an important measure used by management to assess operational output at each of the Partnership's facilities. Utilization is calculated as actual tons produced divided by capacity. We present our utilization for the three and six months ended June 30, 2025 and 2024 and take into account the impact of our current turnaround cycles on any specific period. Additionally, we present utilization solely on ammonia production rather than each nitrogen product as it provides a comparative baseline against industry peers and eliminates the disparity of plant configurations for upgrade of ammonia into other nitrogen products. With our efforts being primarily focused on ammonia upgrade capabilities, this measure provides a meaningful view of how well we operate. Sales and Production Data Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Consolidated sales volumes (thousand tons): Ammonia 57 43 117 113 UAN 345 330 681 614 Consolidated product pricing at gate (dollars per ton): (1) Ammonia $ 593 $ 520 $ 573 $ 525 UAN 317 268 287 268 Consolidated production volume (thousand tons): Ammonia (gross produced) (2) 197 221 413 414 Ammonia (net available for sale) (2) 54 69 117 130 UAN 321 337 668 643 Feedstock: Petroleum coke used in production (thousands of tons) 130 133 261 261 Petroleum coke used in production (dollars per ton) $ 56.68 $ 62.96 $ 49.54 $ 69.21 Natural gas used in production (thousands of MMBtus) (3) 1,897 2,213 4,057 4,361 Natural gas used in production (dollars per MMBtu) (3) $ 3.29 $ 1.93 $ 4.00 $ 2.51 Natural gas in cost of materials and other (thousands of MMBtus) (3) 2,201 1,855 3,807 3,620 Natural gas in cost of materials and other (dollars per MMBtu) (3) $ 3.63 $ 1.85 $ 4.05 $ 2.65 ____________________ (1) Product pricing at gate represents sales less freight revenue divided by product sales volume in tons and is shown in order to provide a pricing measure that is comparable across the fertilizer industry. (2) Gross tons produced for ammonia represent total ammonia produced, including ammonia produced that was upgraded into other fertilizer products. Net tons available for sale represent ammonia available for sale that was not upgraded into other fertilizer products. (3) The feedstock natural gas shown above does not include natural gas used for fuel. The cost of fuel natural gas is included in direct operating expense. Key Market Indicators Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Ammonia — Southern plains (dollars per ton) $ 576 $ 523 $ 569 $ 545 Ammonia — Corn belt (dollars per ton) 630 565 624 581 UAN — Corn belt (dollars per ton) 403 288 364 290 Natural gas NYMEX (dollars per MMBtu) $ 3.51 $ 2.32 $ 3.69 $ 2.21 Q3 2025 Outlook The table below summarizes our outlook for certain operational statistics and financial information for the third quarter of 2025. See 'Forward-Looking Statements' above. Q3 2025 Low High Ammonia utilization rate 93 % 98 % Direct operating expenses (in millions) (1) $ 60 $ 65 Total capital expenditures (in millions) (2) $ 20 $ 25 ____________________ (1) Direct operating expenses are shown exclusive of depreciation and amortization, turnaround expenses, and impacts of inventory adjustments. (2) Capital expenditures are disclosed on an accrual basis. Non-GAAP Reconciliations Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Available Cash for Distribution Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Net income $ 38,768 $ 26,219 $ 65,856 $ 38,798 Interest expense, net 7,580 7,510 15,307 15,175 Income tax benefit — — — (25) Depreciation and amortization 20,861 20,040 38,902 39,331 EBITDA and Adjusted EBITDA 67,209 53,769 120,065 93,279 Adjustments (Reserves)/Releases: Accrued interest expense (excluding capitalized interest) (9,064) (8,485) (18,023) (16,970) Future operating needs (1) — — (8,000) — Capital expenditures (2) (14,015) (21,106) (25,608) (29,653) Turnaround expenditures, net (3) (2,308) (3,235) (5,130) (6,593) Equity method investment (4) (720) (830) 1,723 362 Available cash for distribution (5) $ 41,102 $ 20,113 $ 65,027 $ 40,425 Common units outstanding 10,570 10,570 10,570 10,570 ____________________ (1) Amount consists of reserves established by the Board for potential future cash needs related to nitrogen fertilizer seasonality and feedstock price volatility. (2) Amount consists of maintenance capital expenditures, including additional reserves for future profit and growth projects, net of any releases of previously reserved funds, of $7.5 million and $15.4 million for the three and six months ended June 30, 2025, respectively, and $16.3 million and $20.6 million for the three and six months ended June 30, 2024, respectively. (3) Amount consists of reserves for periodic, planned turnarounds, net of expenditures incurred in the period. (4) Amount consists of distributions received by the Partnership adjusted for the amortization of deferred revenue related to the 45Q transaction. (5) Amount represents the cumulative available cash for distribution based on full year results. However, available cash for distribution is calculated quarterly, with distributions (if any) being paid in the following period. The Partnership declared and paid a cash distribution of $1.75 and $2.26 per common unit related to the fourth quarter of 2024 and the first quarter of 2025, respectively, and declared a cash distribution of $3.89 per common unit related to the second quarter of 2025 to be paid in August 2025.
Associated Press
8 hours ago
- Business
- Associated Press
F&M Bank Corp. Reports Second Quarter 2025 Earnings And Quarterly Dividend
Continued positive trends in key categories bring strong results. See associated, unaudited summary consolidated financial data for additional information. TIMBERVILLE, VA / ACCESS Newswire / July 30, 2025 / F&M Bank Corp. (the 'Company' or 'F&M'), (OTCQX:FMBM), the parent company of Farmers & Merchants Bank ('F&M Bank' or the 'Bank') today reported results for the quarter and six months ended June 30, 2025. Net income was $3.0 million or $0.84 per share for second quarter 2025, a 21% increase over net income of $2.5 million, or $0.70 per share reported for first quarter 2025. For the six months ended June 30, 2025, net income was $5.4 million or $1.53 per share, which exceeds net income of $4.2 million, or $1.21 per share, for the same period in 2024. At June 30, 2025, the Company had total assets of $1.31 billion, total loans of $848.8 million, and total deposits of $1.20 billion. This reflects growth of $9.9 million or 0.76% in total assets, $8.8 million or 1.07% in total loans, and $1.3 million or 0.11% in total deposits since December 31, 2024. During the second quarter 2025, total loans grew $21.8 million or 2.63% and total deposits declined by $3.6 million or (0.30%) since March 31, 2025. 'For the first half of 2025, F&M has continued to achieve consistent and improved financial results on a quarter-to-quarter basis, as well as year over year,' said CEO Mike Wilkerson. 'Most significant are the past four quarters of positive trends in the key categories of net income, net interest margin, yield on earning assets, cost of funds, return on average equity, return on average assets, and all capital ratios. During second quarter, loans grew by $21.8 million. We are currently projecting sustained loan demand into the third quarter. This reflects the strength of our market, as well as the hard work of our lenders. 'As a result of our efforts and a strong focus on fundamentals, tangible book value of F&M shares increased for the third consecutive quarter, and, as of June 30, 2025, stands at $25.681, an increase of 9.1%, or $2.15 per share year-to-date. 'Overall, the F&M team remains focused on our highest priority, which is to generate sufficient and sustainable profit. Doing so gives us the financial strength and liquidity to make loans that support both businesses and individuals in the Shenandoah are committed to serving this special and vibrant place we call home.' SECOND QUARTER INCOME STATEMENT REVIEW Overview Net income for second quarter 2025 was $3.0 million or $0.84 per share. This is an increase of $508,000 or $0.14 per share over first quarter 2025 and is attributed to higher net interest income and lower noninterest expenses. Return on average assets was 0.91% and return on average equity was 12.81%. Net Interest Income For second quarter 2025, net interest income totaled $10.5 million, an increase of $1.1 million from first quarter 2025, as interest income increased by $548,000 and interest expense declined by $535,000. The increase in interest income resulted from growth of $21.8 million in loans held for investment. In addition, second quarter 2025 interest income included the recovery of nonaccrual interest and fees totaling $601,000 from the resolution of two nonperforming loan relationships. The decrease in interest expense was due to lower average balances in time deposits. The Bank's net interest margin increased by 33 basis points to 3.48% on a linked-quarter basis as the earning asset yield grew by 13 basis points to 5.56%, while the cost of funds declined 19 basis points to 2.11%. Provision for Credit Losses During second quarter 2025, the Bank recorded a provision for credit losses of $1.2 million, an increase from the net recovery of credit losses of $104,000 recorded in first quarter 2025. The portion of the provision related to loans outstanding was $1.1 million and resulted from loan growth of $21.8 million, the addition of $610,000 in reserves on individually analyzed loans, net charge-offs of $532,000, and adjustments to the Allowance for Credit Losses on Loans ('ACLL') model. During the quarter, the portion of the provision related to unfunded commitments was $105,000. Noninterest Income Noninterest income totaled $2.8 million for second quarter 2025, a decrease of $55,000 from first quarter 2025. The decrease resulted from declines of $244,000 in mortgage banking income and $116,000 in wealth management income that were partially offset by increases of $228,000 in title insurance income and $111,000 in card service and interchange income. Combined, remaining noninterest income categories declined $35,000. Noninterest Expenses Noninterest expenses totaled $8.7 million for second quarter 2025, compared to $9.5 million in first quarter 2025, a decrease of $812,000. Salary expense decreased by $423,000, largely due to higher commissions paid in the first quarter 2025 related to wealth management and mortgage income and increased bonus accruals. Employee benefits expense declined by $193,000 corresponding with the decline in salary expense. There was a combined decrease of $196,000 in the remaining noninterest expense categories. BALANCE SHEET REVIEW On June 30, 2025, assets totaled $1.31 billion, an increase of $9.9 million from December 31, 2024. Total loans increased by $8.8 million to $848.8 million. There was a shift from other construction and land development loans to loans secured by farmland, residential mortgage loans, owner-occupied and non-owner-occupied loans resulting from the completion of projects. Since the end of 2024, other construction and land development loans have decreased $19.4 million, automobile loans have declined by $14.3 million and commercial and industrial loans have decreased by $7.3 million. Loans secured by farmland increased by $19.2 million, residential mortgage loans increased by $15.7 million, owner-occupied commercial real estate loans grew by $7.8 million, and non-owner-occupied commercial real estate loans grew by $6.2 million. Remaining loan categories increased by a combined $812,000. Investment securities increased by $12.4 million during the first half of 2025, the result of purchases of $40.9 million that were partially offset by $34.1 million in bond maturities and paydowns on U.S. Agency mortgage-backed securities. Other changes included net premium amortization of $348,000, and a $5.9 million improvement in unrealized loss on the bond portfolio. Since December 31, 2024, unrealized loss in the securities portfolio declined from $35.2 million to $29.3 million. Total deposits on June 30, 2025, were $1.20 billion, an increase of $1.3 million due to growth of $18.0 million in noninterest bearing deposits and a decrease of $16.7 million in interest bearing deposits, specifically time deposits. Shareholders' equity increased by $8.6 million to $94.7 million due to $5.4 million in net income, $4.7 million in other comprehensive income, $202,000 in shares issued, and $117,000 in stock-based compensation. These increases were offset by $1.8 million in dividends paid. Tangible book value per share increased from $25.531 at December 31, 2024, to $25.68 at June 30, 2025. LIQUIDITY The Company's on-balance sheet asset liquidity includes cash and cash equivalents, unpledged investment securities, and loans held for sale, which totaled $211.6 million at June 30, 2025, a decrease from $243.0 million at December 31, 2024. As of June 30, 2025, the Bank had access to off-balance sheet liquidity through unsecured Federal funds lines totaling $90.0 million. The Bank also had a secured line of credit with the Federal Home Loan Bank (FHLB) with available credit of $179.8 million as of June 30, 2025. The FHLB line of credit is secured by a blanket lien on qualifying loans. The Bank also pledged securities with a collateral value of $116.7 million to the Federal Reserve Bank discount window which may be used for overnight borrowings. It is anticipated that the Bank will receive $26.4 million from bond paydowns and maturities during the remainder of 2025, which can be used to fund future loan growth and for other purposes. LOAN PORTFOLIO The Company's loan portfolio is diversified, with its largest segment being residential mortgage loans which totaled $234.9 million, representing 27.67% of total loans at June 30, 2025. Total commercial real estate loans, both owner-occupied and non-owner-occupied, constituted $198.4 million or 23.38% of total loans at June 30, 2025. Automobile loans originated by the dealer finance division totaled $90.0 million or 10.61% of the portfolio. A breakdown of the loan portfolio segments as of June 30, 2025, and for the preceding four quarters can be found under the heading 'Performance Summary' in the table accompanying this release. ASSET QUALITY AND ALLOWANCE FOR CREDIT LOSSES Nonperforming loans (NPLs) as a percentage of total loans were 0.90% at June 30, 2025, compared to 0.84% at December 31, 2024. Net charge-offs as a percentage of average loans were 0.25% for second quarter 2025 compared to 0.09% for first quarter 2025. The ACLL was $8.3 million at June 30, 2025, an increase of $183,000 from December 31, 2025. The ACLL as a percentage of total loans was 0.98% at June 30, 2025, compared to 0.97% at December 31, 2024. The increase in ACLL percentage resulted from the addition of $610,000 in reserves on individually analyzed loans, year-to-date net charge-offs of $719,000, and adjustments to the ACLL model. The reserve for unfunded commitments was $829,000 at June 30, 2025, compared to $649,000 at December 31, 2024. DIVIDEND DECLARATION On July 24, 2025, our Board of Directors declared a dividend of $0.26 per share to common shareholders. Based on our most recent trade price of $22.00 per share, this constitutes a 4.3% yield on an annualized basis. The dividend will be paid on August 29, 2025, to shareholders of record as of August 14, 2025. 1 Tangible book value per share is a non-GAAP financial measure. Further information can be found under the heading 'Non-GAAP Financial Measures' and in the non-GAAP reconciliation table accompanying this release. ### ABOUT US F&M Bank Corp. is an independent, locally owned, financial holding company offering a full range of financial services through our subsidiary, Farmers & Merchants Bank's (F&M Bank), fourteen banking offices in Rockingham, Shenandoah, and Augusta counties, Virginia, and the cities of Winchester and Waynesboro, Virginia. The Company also owns F&M Mortgage, a mortgage lending subsidiary, and VSTitle, a title company subsidiary. Founded in 1908 as a community venture to serve the farmers and merchants of the Shenandoah Valley, where both the Company and the Bank are headquartered, F&M Bank remains more committed than ever to the success of the agricultural industry, small business ventures, and the nonprofit sector.F&M's values, which are gregarious, resolute, original, and wholehearted (G.R.O.W.), combined with our brand pillars of sustenance, security, and enrichment, shape the Company's decision-making, philanthropy, and volunteerism. The only publicly traded organization based in Rockingham County, we offer a diverse suite of financial products and services, and a strong team dedicated to living our mission of being the financial partner of choice in the Shenandoah Valley, both today and tomorrow, as we have been since 1908. Additional information may be found by visiting our website, NON-GAAP FINANCIAL MEASURES The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ('GAAP') and prevailing practices in the banking industry. However, management uses certain non-GAAP measures, including tangible book value per share, to supplement the evaluation of the Company's financial condition and performance. Management believes presentation of these non-GAAP financial measures provides useful supplemental information that is essential to a proper understanding of the Company's operating results. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. A definition of tangible book value per share is included in the footnotes to the table accompanying this release. FORWARD-LOOKING STATEMENTS This press release may contain 'forward-looking statements' as defined by federal securities laws, which are subject to significant risks and uncertainties. These include statements regarding future plans, strategies, results, or expectations that are not historical facts, and are generally identified by the use of words such as 'believe,' 'expect,' 'intend,' 'anticipate,' 'will,' 'estimate,' 'project' or similar expressions. These statements are based on estimates and assumptions, and our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Our actual results could differ materially from those contemplated by these forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in local and national economies or market conditions; changes in interest rates; regulations and accounting principles; changes in policies or guidelines; loan demand and asset quality, including values of real estate and other collateral; deposit flow; the impact of competition from traditional or new sources; changes in tariffs and trade barriers, including potential changes in U.S. and international trade policies and the resulting impact on the Company and the Bank's borrowers; and other factors. Readers should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this press release. FOR MORE INFORMATION, CONTACT Lisa F. Campbell | EVP | Chief Financial Officer 540-896-1705 SOURCE: F&M Bank Corp press release
Associated Press
8 hours ago
- Business
- Associated Press
National Capital Bancorp, Inc. Reports Second Quarter Earnings and Quarterly Cash Dividend
WASHINGTON, DC / ACCESS Newswire / July 30, 2025 / National Capital Bancorp, Inc. (the 'Company') (OTCID:NACB), the holding company for The National Capital Bank of Washington ('NCB' or the 'Bank') reported net income of $1,914,000, or $1.66 per common share, for the three months ended June 30, 2025, compared to net income of $1,520,000 or $1.32 per common share, for the quarter ended June 30, 2024. For the six months ended June 30, 2025, the Company reported net income of $3,587,000, or $3.12 per share, compared to $2,690,000, or $2.34 for the six months ended June 30, 2024. Earnings per share, cash dividends per share and average shares outstanding have been adjusted to reflect the November 2024 4:1 stock split paid in the form of a stock dividend. The increase in earnings was primarily attributable to higher net interest income driven by continued net interest margin expansion. Total assets were down slightly year-over-year at $702,597,000 on June 30, 2025, compared to $715,959,000 on June 30, 2024. Total loans of $509,759,000 on June 30, 2025, decreased by $11.3 million during the quarter but have increased by $5.4 million over the past twelve months. Loan balances in the quarter were impacted by the payoff of several construction loan projects, a payoff of a maturing CRE loan, as well as lower utilization of commercial revolving credit lines. Total deposits of $611,778,000 on June 30, 2025, decreased $7.8 million during the quarter but have increased $4.1 million over the past twelve months. The Company has been focused on balanced growth with deposit growth providing funding for new loan opportunities. As a result, the Company continues to experience a relatively low reliance on wholesale funding sources and maintains strong levels of available secured borrowing capacity to meet the financing and cash flow needs of our client base as well as continuing to pursue desirable new relationship opportunities. The Company's net interest margin of 3.68% during the second quarter of 2025 increased slightly compared with 3.65% in the first quarter of 2025 and compares very favorably with 3.27% in the second quarter of 2024. Our strong mix of core deposits has allowed the Company to maintain a more stable cost of funds and combined with a favorable shift in our asset mix, has resulted in the improved net interest margin compared with the prior year. Total shareholders' equity increased to $63,281,000 on June 30, 2025 from $55,179,000 a year ago due primarily to the retained earnings for the past twelve months. For the six months ended June 30, 2025, the return on average assets and return on average equity was 1.04% and 11.78%, respectively. 'We are encouraged by the Bank's performance through the first half of 2025, highlighted by continued improvement in our net interest margin and meaningful progress in our efficiency ratio,' said Jimmy Olevson, President and Chief Executive Officer of the Bank. 'While we recognize a year-over-year slowdown in loan growth, we remain optimistic given the strength of our current loan pipeline. We remain cautious given the broader economic conditions and ongoing uncertainty in the DC market and are proactively monitoring credit quality across our loan portfolio. Our focus remains on driving long-term shareholder value, which is supported by the dedication of our exceptional team.' The Company also announced today that its Board of Directors has declared a cash dividend of $0.21 per share for shareholders of record as of August 15, 2025. The dividend payout of $241,682.70 on 1,150,870 shares is payable August 29, 2025. In February 2025, the Board of Directors approved a share repurchase program of up to $600,000, allowing for purchases from time to time, in open market or private transactions with an expiration date of February 28, 2026. This program replaced the $300,000 share repurchase program approved in 2024. There were no share repurchases during the quarter ended June 30, 2025. National Capital Bancorp, Inc. is the holding company for The National Capital Bank of Washington, which was founded in 1889 and is Washington's Oldest Bank. NCB is headquartered on Capitol Hill with offices in the Friendship Heights community in Northwest D.C., the Courthouse/Clarendon community in Arlington, Virginia and the Fox Hill senior living community of Bethesda, Maryland. NCB also operates residential mortgage and commercial lending offices and a wealth management services division. NCB product and service offerings include personal and business deposit accounts, robust online and mobile banking services and sophisticated treasury management solutions - all delivered with top-rated personal service. NCB is well positioned to serve all the banking needs of those in our communities. For more information about NCB, visit Forward-Looking Statements This news release may contain certain forward-looking statements, such as statements of the Company's plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified using words such as 'expects,' 'subject,' 'will,' 'intends,' 'will be' or 'would,' These statements are subject to change based on various important factors (some of which are beyond the Company's control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management's analysis of factors only as of the date of which they are given). These factors include general economic conditions, trends in interest rates, the ability of the Company to effectively manage its growth and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive. Contact: Randal J. Rabe, EVP, Chief Financial Officer Phone: 202-546-8000 Email: [email protected] SOURCE: NATIONAL CAPITAL BANCORP, INC. press release
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Tetra: Fiscal Q3 Earnings Snapshot
PASADENA, Calif. — PASADENA, Calif. — Tetra Tech Inc. (TTEK) on Wednesday reported net income of $113.8 million in its fiscal third quarter. The Pasadena, California-based company said it had profit of 43 cents per share. The consulting and engineering services company posted revenue of $1.37 billion in the period. Its adjusted revenue was $1.15 billion.
