Safe Harbor Financial, NASDAQ: SHFS, reported mixed results for its fourth quarter of 2024 and the full year that ended on Dec. 31. Revenue declines were offset by growth within its lending division.
In the company’s fourth quarter, its interest on loans increased by 82%. The full-year income grew 123% from $6.6 to $6.6.
The company’s revenue decreased to $15,2 million by 2024 from 17,6 million dollars in 2023, despite the growing lending segment. The decrease was attributed by the company to reduced deposits and income from client onboarding related to Abaca’s previous acquisition.
Terry Mendez was appointed CEO of Safe Harbor earlier this year after Sundie Seefried retired. “We are innovators in this industry as we introduced a small-business line of credit and originated debt and credit facility at competitive terms for numerous customers across the U.S.,” said Terry Mendez, who joined Safe Harbor earlier this year after Sundie Seefried retired.
A net loss of $48,3 million was recorded by the company in 2024, up from a loss of $17.3 million. The company recorded a net loss of $48.3 million for 2024, compared to a $17.3 million loss in 2023.
Safe Harbor said that it has also written off its intangible and goodwill assets on its balance sheet to zero as of the December end.
Operating expenses fell significantly to $22.3 million in 2024, versus $38.3 million in 2023 – a 42% reduction. Compensation and employee benefit expenses dropped by 25% as a result of lower stock-based pay and reduced headcount.
Safe Harbor, in addition to Partner Colorado Credit Union PCCU (end of December), entered into a modified commercial alliance agreement that eliminated Safe Harbor’s obligations regarding indemnification for loan losses. The company has also announced that its PCCU debt was successfully modified in March. This, it says will free up $6.4million in cash flow in the coming two years.
Mendez explained that the modification “greatly improves” our financial stability, as it allows us to release over $6,000,000 in cashflow within the next 2 years. It also extends the duration of the obligation until October 2030.
The adjusted EBITDA for 2024 was $2.9 millions, a decrease from $3.6 in 2023. Safe Harbor’s adjusted working capital was $2 million, according to the company.
Cash and cash-equivalents decreased to $2.3M at the close of 2024 compared with $4.9M at the conclusion of 2023.
Safe Harbor announced that it processed over $25 billion of cannabis-related money through its partner bank network since its foundation in 2001. This milestone was reached at the 10th anniversary of Safe Harbor.
Mendez stated that “one of the main reasons I chose Safe Harbor was the opportunity to expand on our solid foundation and to become a service provider who can address the clients’ needs.”
It filed an SEC notification on Monday stating that the company would require additional time in order to complete their annual report, Form 10-K. Safe Harbor stated that it needed more time to complete its annual report on Form 10-K, which included evaluating subsequent events such as debt modification and deferred tax assets.