Summary: SHF Holdings Inc (NASDAQ:SHFS) shares rose 6.5% on Monday after the company, which does business as Safe Harbor Financial, disclosed an amended commercial arrangement with Partner Colorado Credit Union (PCCU). The reworked agreement lengthens the partnership to December 2031 from the prior 2029 expiration, adds automatic two-year renewal provisions and takes effect retroactively to October 1, 2025.
The company said the revised contract will deliver roughly $9 million of additional revenue across the term - equating to about $1.5 million per year - plus more than $1.5 million in cost savings. A one-time retroactive payment from PCCU of approximately $400,000 is included as the new terms are effective from October 1, 2025.
Key changes to economics
- Safe Harbor’s share of loan interest income will rise to up to 65% from roughly 37% previously - a 75% increase in its share of interest income.
- In return for the larger slice of interest income, Safe Harbor will indemnify up to 65% of potential net losses on defaulted loans; the company noted that no PCCU loans have defaulted to date.
- The agreement also immediately reduces costs, with asset hosting fees falling by about 23%, or roughly $250,000 per year.
Chief Executive Officer Terry Mendez described the amended agreement as a major change to Safe Harbor’s business model, saying it removes growth barriers and positions the company for profitable expansion.
Safe Harbor Financial provides banking, lending, and related financial services to regulated cannabis and hemp businesses through its fintech platform. The company is based in Denver and trades on the Nasdaq under the ticker SHFS.
Key points
- Contract extension to December 2031 and automatic two-year renewals secure a longer-term partnership between Safe Harbor and PCCU.
- Higher interest income participation and immediate fee reductions are expected to boost annual revenue and reduce operating costs.
- The changes primarily affect the fintech, banking and cannabis-adjacent financial services sectors.
Risks and uncertainties
- By agreeing to indemnify up to 65% of potential net losses on defaulted loans, Safe Harbor assumes increased credit risk tied to PCCU loan performance; this is relevant to the lending and banking sectors.
- Although PCCU loans have not defaulted to date, future defaults would trigger indemnity exposure under the new terms.
- Projected revenue and cost savings are based on the amended terms; realization of the full $9 million uplift and $1.5 million-plus in savings depends on future loan volumes and fee structures.
Investors reacted positively to the news, sending SHFS higher on the session following the announcement. The amended PCCU agreement combines expanded revenue participation with immediate cost relief and a retroactive payment, reshaping Safe Harbor’s near-term economics while assuming a larger share of credit risk on partnered loans.