Source: Federal Bureau of Investigation (FBI) State Crime Alerts (c)
William Joseph Pepe of New York has been found guilty of felony and misdemeanor charges related to his conduct during the January 6, 2021, breach of the U.S. Capitol.
Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)
COUNCIL BLUFFS, Iowa – An Altoona man was sentenced on Friday, October 18, 2024, to 117 months in federal prison for receiving child pornography.
According to public court documents, Eduardo Ibarra Mora, 34, a Mexican national, possessed 45 images and more than 60 videos containing child sexual abuse material on his phone and a social media account. After completing his term of imprisonment, Ibarra Mora will be required to serve a five-year term of supervised release. There is no parole in the federal system.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the Federal Bureau of Investigation and the Altoona Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.
Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)
DES MOINES, Iowa – A Waukee man was sentenced on October 11, 2024, to nine years in federal prison for wire fraud and money laundering.
According to public court documents and evidence presented at sentencing, William Jack Berg, 52, defrauded approximately 17 victims by purporting to be a financial advisor in central Iowa, St. Louis, Missouri, and elsewhere. Over an eight-year period, Berg deceived victims to invest in companies he created and controlled: W. Holdings of Iowa and Excel Performance Management. To further his fraud, Berg provided his victims with fictitious investment agreements, account statements, and created a website for one of the purported investment companies. Berg spent the victim’s money for his own personal expenses. Once alerted to his federal indictment, Berg attempted to destroy documents and left the state.
After completing his term of imprisonment, Berg will be required to serve a three-year term of supervised release. There is no parole in the federal system. Berg was also ordered to pay more than $1.6 million in restitution.
United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. This case was investigated by the Iowa Insurance Division’s Fraud Bureau and the Federal Bureau of Investigation. Assistant United States Attorney Adam Kerndt prosecuted the case.
This investigation was part of the Elder Justice Initiative, which supports the efforts of state and local prosecutors, law enforcement, and other elder justice professionals to combat elder abuse, neglect, and financial exploitation, with the development of training, resources, and information. Learn more about the Justice Department’s Elder Justice Initiative at http://www.justice.gov/elderjustice. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).
This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.
Source: Federal Bureau of Investigation (FBI) State Crime News
INDIANAPOLIS— Federal charges have been filed against Curtis Doughty, 27, of Muncie, with deprivation of rights under color of law.
According to court documents, Doughty was employed as a corrections officer in the Henry County Jail, as well as a member of the Sheriff’s Emergency Response Team. On February 13, 2024, Doughty participated in a scheduled search of an inmate housing pod in the jail. During the search, inmates were moved into a holding area in the recreation yard while officers searched the cells for contraband.
During the search, Doughty was one of two officers responsible for directing inmates to face the wall and remain seated. When inmate turned his head away from the wall, Doughty, without warning, shot his pepper ball gun at point blank range into the inmate’s spine. The pepper ball shot caused bodily injury to the inmate. Doughty then yelled to the other inmates in the holding area, “congratulations, you all inhale that now,” in reference to the pepper ball gas.
Shortly after the incident, other members of the team reported the incident to a commander. The commander pulled Doughty from duty and sent him home.
The FBI investigated this case, with valuable assistance provided by the Henry County Sheriff’s Office. If convicted, Doughty faces up to ten years in federal prison.
U.S. Attorney Myers thanked Assistant U.S. Attorney Peter A. Blackett, who is prosecuting this case.
A criminal information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Source: Federal Bureau of Investigation (FBI) State Crime News
INDIANAPOLIS—Martins Tochukwu Chidiobi, 34, and Lawrence Onyesonwu, 38, of Muncie, have each been sentenced to three years in federal prison, followed by two years of supervised release and payment of a $5,000 fine, after pleading guilty to aggravated identity theft and making false statements to a financial institution.
According to court documents, between on or about 2015 and their arrest date in January 2019, Chidiobi and Onyesonwu worked as Correctional Officers at the New Castle Correctional Facility, a privately managed prison within the Indiana Department of Corrections. During that time, Chidiobi and Onyesonwu stole at least five inmates’ personally identifiable information, including names, dates of birth, and social security numbers. The defendants used the stolen identities of the victim inmates to open at least nine accounts at various Indiana banks using fraudulent passports. The fraudulent passports were purportedly issued by Nigeria, Liberia, and Ghana, and included pictures of the defendants, but the names and other information of the identity theft victims.
The accounts opened by the defendants with the stolen identities were then used to receive the proceeds of broader fraud schemes. A total of at least $331,282 was deposited into the defendants’ fraudulent bank accounts from at least 11 sources. Investigators worked to identify and contact individuals who deposited funds into fraudulent accounts. Of the eleven depositors able to be identified, each was themselves the victim of a “romance scam” or other fraud scheme. Further investigation revealed that the defendants also received deposits of apparent fraud proceeds into their own personal bank accounts.
The vast majority of the over $331,282 in apparent fraud proceeds received by the defendants was withdrawn as cash. A large portion of the money was transferred into Nigerian bank accounts.
“It is simply reprehensible for correctional officers to exploit their positions to steal inmates’ identities and further the financial exploitation of scam victims,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Transnational fraud schemes have lasting repercussions for victims all over the country, and everyone who commits these crimes must be held accountable. The federal prison sentences imposed here should serve as a warning that the FBI and U.S. Attorney’s Office are committed to pursuing financial criminals and holding them accountable.”
“This sentence highlights the FBI’s resolve to investigate and prosecute those who exploit their authority for personal gain. The men and women of the FBI are committed to showing respect for the dignity of all those we protect including victims who are incarcerated,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “I am extremely proud of the work we do to protect the rights of all Americans.”
The FBI investigated this case. The sentences were imposed by U.S. District Judge James P. Hanlon.
U.S. Attorney Myers thanked Assistant U.S. Attorneys Tiffany J. Preston and Corbin D. Houston, who prosecuted this case.
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Source: Federal Bureau of Investigation (FBI) State Crime News
INDIANAPOLIS—Nathaniel Wills, 34, of Anderson, has been sentenced to 41 months in federal prison, followed by three years of supervised release, and ordered to pay $877,507 in restitution after pleading guilty to wire fraud.
According to court documents, for nearly six years, Wills was employed as an accountant and Director of Administration for an Indiana business. In these roles, Wills was entrusted with performing business accounting functions including among other things, writing and signing checks, making electronic payments, performing reconciliations between the company’s accounting and banking records, and maintaining the company’s accounting ledgers.
Beginning in August 2020, and continuing until at least February 2022, Wills defrauded his employer by transferring nearly $1 million to which he knew he was not entitled from the company’s payroll and operating accounts to his personal bank accounts.
The stolen funds were used to pay off his outstanding personal debts and for his own personal use, including online gambling.
It an attempt to conceal his scheme, Wills made false entries in the company’s accounting system by recording that transfers of funds were payments of invoices, falsifying inventory logs, listing jobs as unpaid, and voiding checks. Wills also obtained a principal advance of $80,000 from his employer’s line of credit in order to meet the company’s payroll and vendor payment obligations.
In total, Wills stole approximately $952,237.06 from his employer through 120 transactions. Wills’ conduct resulted in substantial financial hardship to the company.
“For a year and a half, this defendant repaid the trust of his employer with deceit and theft, helping himself to nearly one million dollars and cooking the books to hide the evidence,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “Fraud and embezzlement can have devastating effects on the victim individuals and companies. The federal prison sentence imposed here demonstrates that those who commit financial crimes will pay a serious price. I commend the FBI and our federal prosecutors for their efforts to investigate these crimes and hold the defendant accountable.”
“This was not just a financial crime but an act of betrayal of the defendant’s employer that could have had a devastating and crippling effect on the business and its employees,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “Anyone who believes they can steal without consequence will find out the FBI aggressively pursues those who exploit their positions of trust for personal gain to ensure they are held accountable.”
The FBI investigated this case. The sentence was imposed by U.S. District Judge James P. Hanlon.
U.S. Attorney Myers thanked Assistant U.S. Attorneys Meredith Wood and Tiffany J. Preston, who prosecuted this case.
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Source: Federal Bureau of Investigation (FBI) State Crime Alerts (c)
SAN ANTONIO – A former Border Patrol agent was sentenced in a federal court in San Antonio to 50 years in prison for 10 counts related to the production, distribution and possession of child sexual abuse material.
According to court documents, Paul Casey Whipple, 41, of Hondo, was arrested Dec. 19, 2017, during a search warrant at his residence. Agents seized evidence showing Whipple had produced and distributed hundreds of image and video files depicting a child victim engaged in sexually explicit content. The law enforcement actions came after the National Center for Missing and Exploited Children (NCMEC) received information from a foreign law enforcement agency related to seven files depicting the sexual exploitation of a prepubescent female child. Agents with the FBI, Homeland Security Investigations and IRS, worked to identify the child depicted in the images.
Whipple was indicted for four counts of production of child pornography, five counts of distribution of child pornography, and one count of possession of child pornography. He pleaded guilty to all 10 counts June 6. In addition to spending 50 years in federal prison, Whipple was ordered to pay $54,000 in restitution, forfeit the electronic items used to commit the offenses, pay a $1,000 special assessment, and serve a term of supervised release if he is released from prison.
“This significant 50-year sentence reflects the seriousness of Whipple’s heinous crimes and the devastating impact that child sexual abuse material has on its victims,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “Thank you to our federal agency partners for their thorough and dedicated investigative work in this case and were instrumental in securing this outcome. Together, we will continue to bring perpetrators to justice and strive to protect our children and our communities.”
“Whipple’s long-term exploitation of a minor is reprehensible, and we hope this sentence will grant the victim some measure of comfort in knowing he will never be able to hurt another child,” said Special Agent in Charge Aaron Tapp for the FBI’s San Antonio field office. “We want to thank our partners at the IRS for their continued assistance in keeping our communities safe.”
The FBI, HSI and IRS investigated the case.
Assistant U.S. Attorney Tracy Thompson prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Source: Office of United States Attorneys
LOS ANGELES – A brother and sister from Rosarito, Mexico, were found guilty by a jury today for their roles in a kidnapping and ransom scheme in which the brother pretended to act as an intermediary between the victim’s family and the kidnappers while his son and sister crossed the border into the United States to collect the ransom money.
Mario Alex Medina, 54, a.k.a. “Shyboy,” and María Alejandra Medina, 51, were found guilty of one count of conspiracy to commit hostage taking and one count of conspiracy to demand a ransom payment. Mario Medina also was found guilty of one count of making a foreign communication with intent to extort.
“These defendants subjected their victim and his family to a terrifying ordeal in order to illegally profit,” said United States Attorney Martin Estrada. “Such callous disregard for others and cavalier use of violence cannot and will not be tolerated. These defendants will now appropriately face justice for their crimes.”
José Salud Medina, 31, a.k.a. “Gordo,” who is Mario Medina’s son and María Medina’s nephew, is in Mexican custody on unrelated charges. He is expected to be tried separately in this case, in which he is charged with one count of conspiracy to commit hostage taking, one count of conspiracy to demand a ransom payment, and one count of making a foreign communication with intent to extort.
According to evidence presented at a four-day trial, on November 5, 2022, Mario Medina directed and helped accomplices break into the house of a neighbor, identified in court documents as “R.V.,” kidnapping the victim at gunpoint, pistol whipping him and firing a gun near his head. The next day, one of the co-conspirators placed a ransom call to the victim’s family in Los Angeles County and demanded $70,000 for his release. The kidnappers, through WhatsApp, also sent a video of the victim being beaten.
On November 10, 2022, an accomplice called R.V.’s family and threatened to kill R.V. if his family did not pay $30,000. Later that day, Mario Medina – pretending to be an intermediary between R.V.’s family and the hostage takers – told the victim’s family to meet at a McDonald’s restaurant in San Ysidro, located north of the U.S.-Mexico border, to make the ransom payment.
José and María Medina met the victim’s family the next day at the McDonald’s restaurant, collected the $30,000 ransom payment from the victim’s family, and took the money back to Mexico.
The hostage takers on November 11, 2022, then left R.V. tied up and alone in a small, subterranean trench, where Mexican law enforcement rescued him later that day.
United States District Judge Stephen V. Wilson scheduled a February 3, 2025, sentencing hearing, at which point Mario and María Medina will face a statutory maximum sentence of life in federal prison.
Operation Safe Cities establishes strategic enforcement priorities with an emphasis on prosecuting the most significant drivers of violent crime. Across this region, the most damaging and horrific crimes are committed by a relatively small number of particularly violent individuals. This strategic enforcement approach is expected to increase the number of arrests, prosecutions and convictions of recidivists engaged in the most dangerous conduct. It is designed to improve public safety across the region by targeting crimes involving illicit guns, prohibited persons possessing firearms, or robbery crews that cause havoc and extensive losses to retail establishments.
The FBI investigated this matter.
Assistant United States Attorneys Jena A. MacCabe and Derek R. Flores of the Violent and Organized Crime Section, and Michael J. Morse of the Public Corruption and Civil Rights Section are prosecuting this case.
Source: Office of United States Attorneys
MISSOULA — A former Missoula credit union employee accused of embezzling approximately $390,000 from the vault and swapping the real money with fake funds admitted to a theft charge today, U.S. Attorney Jesse Laslovich said.
The defendant, Edward Arthur Nurse, 35, of Missoula, pleaded guilty to an indictment charging him with theft from credit union. Nurse faces a maximum of 30 years in prison, a $1 million fine and five years of supervised release.
U.S. District Judge Donald W. Molloy presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for Feb. 25, 2025. Nurse was released pending further proceedings.
In court documents, the government alleged that from about July 2023 to June 2024, Nurse embezzled from his employer, Park Side Credit Union in Missoula. In June 2024, an employee discovered $340,000 in cash in the credit union’s vault had been replaced with fake funds from a company that provides fake currency as props for movies and entertainment productions. Nurse was identified as a potential suspect because his primary role was managing and balancing money in the vault. In the previous seven months, financial records showed cash deposits totaling $117,751, with each deposit for more than $10,000, into Nurse’s bank account. In addition, financial information from a local casino reflected that from March 2024 to May 2024, Nurse put more than $56,000 in cash into the business and cashed out slightly more than $8,000.
After the credit union discovered the thefts, Nurse claimed to an FBI special agent that he did not usually carry much cash and, aside from a vacation to Las Vegas, Nevada, he had not made any recent large purchases or cash deposits. The investigation determined that during the first six months of 2024, Nurse had purchased $410,000 in fake currency from a prop money company and had the money delivered to a post office box in Nurse’s name. The credit union was later informed that approximately $50,000 in fake money had been received by the Federal Reserve in July 2024. Those funds were returned and determined to be fake bills from the prop money company.
The U.S. Attorney’s Office is prosecuting the case. The FBI with assistance from the Missoula Police Department, conducted the investigation.
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Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)
Wilmington, Del. – Alfred E. Daking, Jr., an 81-year-old former Delaware resident currently serving a federal prison sentence in an unrelated case, was charged on October 22, 2024, with possession of child sexual abuse material (“CSAM”), announced David C. Weiss, U.S. Attorney for the District of Delaware.
According to the indictment, on an unknown date, Daking buried material depicting minors engaged in sexually explicit conduct in his parents’ then backyard in New Castle County, Delaware. Later, while serving a sentence in federal prison on an unrelated case, Daking told a fellow inmate that he had buried an ammunition can containing video footage in his parents’ backyard. Daking also gave that inmate a hand-drawn map of the backyard depicting the location that the ammunition can was buried on the property. Per the hand-drawn map, law enforcement searched and located an ammunition can buried underground. Both the ammunition can, and its contents were wrapped in plastic. Inside the can, law enforcement found three videocassettes and an 8mm film containing CSAM. One of the videocassettes contained a latent fingerprint that matched Daking.
U.S. Attorney Weiss stated, “For years the defendant hid evidence of his victimization of children. Today’s indictment demonstrates the commitment of my office, and our law enforcement partners to protect our communities from predatory individuals like this defendant. We will never stop working to uncover evidence of sexual exploitation and to bring the perpetrators of these heinous crimes to justice.”
The FBI investigated this case, with the assistance of New Castle County Police Department. Assistant U.S. Attorney Claudia L. Pare and Trial Attorney Angelica Carrasco of the Criminal Division’s Child Exploitation and Obscenity Section are assigned to prosecute this case.
The U.S Attorney’s Office and the FBI are seeking to identify additional victims of Daking’s. If you, your family member, or anyone that you know had contact with Daking and would like to provide additional information, please contact the FBI Baltimore Field Office at 410-265-8080.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Delaware. Related court documents and information is located on the website of the District Court for the District of Delaware or on PACER.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Source: IMF – News in Russian
October 25, 2024
In the context of the Fiftieth Meeting of the IMFC that took place in Washington, D.C. on 24th and 25th October, several IMFC members discussed the global macroeconomic and financial impact of current wars and conflicts, including with regard to Russia, Ukraine, Israel, Gaza, Lebanon, and in other places. IMFC members underscored that all states must act in a manner consistent with the Purposes and Principles of the UN Charter in its entirety. They acknowledged, however, that the IMFC is not a forum to resolve geopolitical and security issues which are discussed in other fora.
****
IMFC members agreed on the following text:
Securing a soft landing and breaking from the current low growth-high debt path are the policy priorities for the global economy. We welcome the IMF’s efforts to enhance its surveillance, lending toolkit, and capacity development, and become more representative. Looking ahead, we remain committed to multilateral cooperation to promote global prosperity and address shared challenges.
Chair
Mohammed Aljadaan, Minister of Finance, Saudi Arabia
Managing Director
Kristalina Georgieva
Members or Alternates
Ayman Alsayari, Governor of the Saudi Central Bank, Saudi Arabia (Alternate for Mohammed Aljadaan, Minister of Finance, Saudi Arabia)
Mohammed bin Hadi Al Hussaini, Minister of State for Financial Affairs, United Arab Emirates
Antoine Armand, Minister of Economy, Finance, and Industry, France
Luis Caputo, Minister of Economy, Argentina
Jim Chalmers, Treasurer of Australia
Carlos Cuerpo, Minister of Economy, Trade and Enterprise, Spain
Chrystia Freeland, Deputy Prime Minister and Minister of Finance, Canada
Giancarlo Giorgetti, Minister of Economy and Finance, Italy
Fernando Haddad, Minister of Finance, Brazil
Eelco Heinen, Minister of Finance, The Netherlands
Robert Holzmann, Governor of the Austrian National Bank, Austria
Katsunobu Kato, Minister of Finance, Japan
Karin Keller-Sutter, Minister of Finance, Switzerland
Lesetja Kganyago, Governor, South African Reserve Bank, South Africa
Christian Lindner, Federal Minister of Finance, Germany
Mays Mouissi, Minister of Economy and Participations, Gabon
Changneng Xuan, Deputy Governor of the People’s Bank of China (Alternate for Gongsheng Pan, Governor of the People’s Bank of China)
Rachel Reeves, Chancellor of the Exchequer, H.M. Treasury, United Kingdom
Ivan Chebeskov, Deputy Minister of Finance, Russian Federation (Alternate for Anton Siluanov, Minister of Finance, Russian Federation)
Nirmala Sitharaman, Minister of Finance, India
Sethaput Suthiwartnarueput, Governor, Bank of Thailand
Salah-Eddine Taleb, Governor, Bank of Algeria
Trygve Slagsvold Vedum, Minister for Finance, Norway
Janet Yellen, Secretary of the Treasury, United States
Observers
Agustín Carstens, General Manager, Bank for International Settlements (BIS)
Mohamed bin Hadi Al Hussaini, Chair, Development Committee (DC) and Minister of State for Financial Affairs, United Arab Emirates
Christine Lagarde, President, European Central Bank (ECB)
Paolo Gentiloni, Commissioner for Economy, European Commission (EC)
Klaas Knot, Chair, Financial Stability Board (FSB) and President of De Nederlandsche Bank
Richard Samans, Director, Research Department, International Labour Organization (ILO)
Mathias Cormann, Secretary-General, Organisation for Economic Co-operation and Development (OECD)
Mohannad Alsuwaidan, Economic Analyst, Organization of the Petroleum Exporting Countries (OPEC)
Ahunna Eziakonwa, Assistant Secretary-General and UNDP Assistant Administrator, United Nations (UN)
Penelope Hawkins, Officer-in-Charge, Debt and Development Finance Branch, United Nations Conference on Trade and Development (UNCTAD)
Ajay Banga, President of the World Bank Group, The World Bank (WB)
Ngozi Okonjo-Iweala, Director-General, World Trade Organization (WTO)
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org
https://www.imf.org/en/News/Articles/2024/10/25/pr24396-chairs-statement-fiftieth-meeting-of-the-imfc
Source: Office of United States Attorneys
“The recipients of this year’s awards embody the spirit and dedication of what it means to come together and work hard for the greater good,” said U.S. Attorney Parker. “These fine individuals exemplify being part of a positive community every day. They deserve our recognition and gratitude.”
The awards include:
Kaia Grant Badge of Bravery and Sacrifice Award
Springboro Police Officer Christopher Heath Martin
Officer Heath Martin, a 20-year veteran of the Springboro Police Department, was first to the scene of a fire inside a home in June 2023. Officer Martin rescued a 36-year-old man, who uses a wheelchair, from a back bedroom of the home. The victim’s battery-operated wheelchair is believed to be the cause of the fire and had exploded. The officer’s body worn camera captured his life-saving actions of finding the victim and bringing him to safety.
Law Enforcement Excellence Award
FBI Special Agent Robert Buzzard
Special Agent Buzzard serves as the lead agent on the FBI’s Southern Ohio Safe Streets Task Force (SOSSTF) and is known throughout the Miami Valley for his law enforcement excellence and expertise. The depth of his drug trafficking investigations often leads to the sources of supply outside of the United States. Examples of cases in which he was the lead agent include U.S. v. Walton et al – in which the United States successfully dismantled a sophisticated long-running drug trafficking organization led by two brothers – and U.S. v. Goddard et al – a case involving two Dayton men who were convicted on all counts for crimes related to the 2019 death of Dayton Detective and DEA Task Force Officer Jorge DelRio. The defendants were each sentenced to life in prison.
Project Safe Neighborhood’s Guardian Award
ATF Special Agent Derek Graham
Special Agent Graham has effectively and creatively investigated a significant number of firearms-related crimes in the Southern District of Ohio. He has developed a special expertise in investigating straw purchasing cases. In recent months, Special Agent Graham has investigated and solved cases involving more than 20 defendants and approximately 100 firearms. One case involved a murder and five armed robberies across jurisdictions. The shooter and getaway driver have since been sentenced to 40 years and 23 years in prison respectively. In 2024 alone, Special Agent Graham has also either completed or assisted with 57 call detail records, 61 pen registers, 92 ping orders, 69 location mappings and 21 forensic extractions for agents and task force officers, as well as local police departments.
The Project Safe Childhood Shield of Innocence Award
HSI Special Agent Sara Sellers
Since joining Homeland Security Investigations Columbus in December 2020, Special Agent Sellers has initiated more than 80 criminal investigations. Special Agent Sellers joined the Internet Crimes Against Children (ICAC) task force in July 2023 and has developed the reputation as an extremely hardworking and diligent investigator. An example of her unwavering commitment to the investigation and prosecution of child predators around the world occurred in December 2023, when Special Agent Sellers was called after hours with an investigative referral from Australia regarding a potential minor victim currently being sexually abused in Ohio. Special Agent Sellers left the restaurant at which she was dining to begin the task of locating the victim and perpetrator immediately. Within 24 hours, Special Agent Sellers had confirmed the identity of the suspect, located her and the minor victim and secured warrants to arrest the suspect and execute a search warrant to obtain additional evidence in this investigation that also spawned new leads. Special Agent Sellers continues to dedicate her efforts to protect minor victims and is helping lead an investigation abroad into an international ring of exploiters who create and distribute child sexual abuse material.
Polaris Community Service Award
Department of Veteran Affairs’ Mobile Evaluation Team, Columbus Division of Police Mobile Crisis Response Team & Columbus Public Health
The partnership between the Department of Veterans Affairs (VA) Police, Veterans Evaluation Team, and the Columbus Division of Police’s Mobile Crisis Response Team exemplifies exceptional innovation, collaboration, and dedication in community service. U.S. Attorney Parker recognized VMET’s Clinical Director Dr. Heather Robinson, Investigator Jesse King, Benjamin Stark and Alexandra Woodruff, Columbus Police Lt. Michael Voorhis, Sgt. John Cheatham and Officers Francis Scalfani, Veronica Poehler, Robert Heinzman and Anthony Roberts, and Columbus Public Health Supervisor Kerith Palletti and Social Workers Kierstin Dettmers, Kevin Kincaid, Zach Simmons and Jason Cole for the collaboration that has created a vital connection between law enforcement and the Veteran community, addressing the unique challenges faced by veterans in crisis.
By merging the specialized expertise of the VA Police Veterans Response Team with the crisis intervention skills of the Columbus Division of Police Mobile Crisis Response Team, they have established a comprehensive support system that is both empathetic and effective. Together, these teams have introduced innovative crisis intervention strategies. Through joint protocols and training sessions, they have ensured both teams are well-prepared to handle the complexities of veteran-specific mental health crises. This partnership has pioneered the integration of mental health professionals into crisis response scenarios, leading to more informed and compassionate interactions with veterans in distress.
Serve Thy Neighbor Award (Columbus)
Center for Family Safety & Healing and the Columbus Division of Police’s ACT-DV program
U.S. Attorney Parker recognized Center for Family Safety & Healing’s Interim Director Nancy Cunningham, President Melissa Graves, Justice System In-Research Supervisor Amber Howell and Sheronda Paramore, as well as Columbus Police Assistant Chief Greg Bodker and Commander Joseph Curmode for their work developing bridges to effectively link justice, advocacy and health systems and to build trust between residents and law enforcement.
Through ACT-DV, trained victim advocates respond with police officers at the scene of domestic violence crimes. This important public safety and victim services partnership increases access to support resources by offering safety planning, shelter and linkage to health/ mental health services immediately after a traumatic incident. Advocates also prepare victims for what to expect through the criminal prosecution process. Having advocates and officers work side by side supports the victims’ best interest and builds trust between community and law enforcement. This effort also helps police officers develop a deeper understanding of domestic violence and the complexity, power and danger that far too often keeps women in abusive homes.
Serve Thy Neighbor Award (Dayton)
Ms. Lisa Lucchesi, CareSource Health Plan
Ms. Lucchesi serves as the National Human Trafficking Project Manager for CareSource Health Plan, and her passion is to advocate for children who are being trafficked or at high risk of trafficking. She coordinated with local law enforcement agencies and service providers to organize a highly successful CareSource Human Trafficking Awareness Summit in Dayton. Ms. Lucchesi continues to host meetings with local and national stakeholders to focus on the crime of the sexual trafficking of minors, how to identify the victims, what resources are available for them and how to help these minor victims to improve their lives. Thanks to Ms. Lucchesi, the Dayton Police Department, Montgomery County Childrens Services and Montgomery County Juvenile Court have improved their processes in looking below the surface in identifying youth victims of sex trafficking who sadly sometimes don’t see themselves as victims.
Serve Thy Neighbor Award (Cincinnati)
John McConnaughey, Cincinnati Citizens Police Association
Mr. McConnaughey’s service to his community has included serving on the Board of Directors for the FBI Citizens’ Academy Alumni Association, as an Associate Member of the Hamilton County Police Association and as the President of the Cincinnati Citizens’ Police Association (CCPA), which provides support to the Cincinnati law enforcement community. He was one of the founders of the Gang Initiative Project and the Southern Ohio Chapter of the Midwest Gang Investigators Association. Both organizations work with the Cincinnati public schools to combat gang activity. Mr. McConnaughey is a dedicated advocate for reducing crime and violence amongst youth.
Mitch Morris, Cincinnati Works
Mr. Morris is a dedicated community servant leader, working to end gun violence in the community. He connects at-risk youth with mentors and helps them find work through Cincinnati Works. Cincinnati Works partners with people in poverty to assist them in advancing economic self-sufficiency. Mr. Morris oversees the organization’s Phoenix Program Outreach & Mentoring. His dedication to ending poverty and gun violence is unwavering.
For more information about the U.S. Attorney’s Office’s annual law enforcement awards, please contact Law Enforcement Coordinator Mitchell Seckman at 614-469-5715.
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Source: Federal Bureau of Investigation FBI Crime News
For Davenport, arriving in the wooded highlands of Arizona 16 years ago was like a dream come true. He grew up in nearby Holcomb; in high school, he played football and wrestled with Native American classmates. He went to Mesa Community College in Phoenix and then Northern Arizona University in Flagstaff, where he studied law.
After a few years as a lawyer, he yearned for more adventure and joined the FBI in 1999. His first assignment was in the Dallas Field Office, where he worked on civil rights and public corruption cases when he wasn’t deployed on SWAT operations. He was then assigned to the resident agency in Pinetop-Lakeside where he was, for a brief period, the only special agent.
Davenport, who is retiring later this year, actively recruits others to experience working on Indian country cases. For many agents, it’s as close as you can get to frontline law enforcement—responding to active crime scenes, interviewing witness and victims and working closely with partners from other law enforcement agencies to build cases. Actively working those cases, Davenport says, helps illuminate why Indian country is as deserving of resources as anywhere else.
“Why should the reservation be overlooked simply because they’re a reservation, or because they don’t have all the amenities that Chicago or L.A. have?” Davenport said. “They’re still people, and they still deserve that same justice that everybody else does.”
Source: Office of United States Attorneys
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that JESUS MALDONADO, also known as “Zeus,” 34, of Waterbury, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 51 months of imprisonment, followed by three years of supervised release, for trafficking narcotics.
According to court documents and statements made in court, the FBI’s Waterbury Safe Streets Gang Task Force and other law enforcement agencies investigated two drug trafficking organizations based in the city of Waterbury. One organization operated in the area of William Street and the other operated in the area of Maple Avenue. The investigation, which included court-authorized wiretaps on multiple phones, video surveillance, GPS tracking of vehicles, and numerous controlled purchases of narcotics, revealed that the two organizations distributed cocaine, crack, and fentanyl through a network of sellers. The organizations shared sources of supply and worked together to further their operations.
During the investigation, Maldonado, who was involved in the William Street organization, was intercepted multiple times over a wiretap discussing the distribution of narcotics. On November 16, 2023, he was captured on video engaging in a 500-gram cocaine transaction.
Seventeen individuals were charged with federal offenses as a result of the investigation. Maldonado and several codefendants were arrested on November 29, 2023. In association with the arrests, investigators executed multiple search warrants and seized approximately 700 grams of crack cocaine, more than 900 vials (“caps”) of crack, approximately 200 grams of loose fentanyl, more than 1,600 dose bags of fentanyl/heroin, two stolen firearms, numerous rounds of ammunition, and more than $39,000 in cash.
Maldonado has been detained since his arrest. On June 24, 2024, he pleaded guilty to conspiracy to distribute and to possess with intent to distribute controlled substances.
The FBI’s Waterbury Safe Streets Gang Task includes members from the FBI, the Waterbury Police Department, the Naugatuck Police Department, and the Connecticut Department of Correction. The DEA, U.S. Marshals Service, Homeland Security Investigations (HSI), Connecticut State Police, Wolcott Police Department, and Meriden Police Department have assisted the investigation.
This case is being prosecuted by Assistant U.S. Attorneys Natasha Freismuth and Shan Patel through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts, and dismantles drug traffickers, money launderers, gangs, and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state, and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
U.S. Attorney Avery thanked the Waterbury State Attorney’s Office for its cooperation in the investigation and prosecution of this case.
Source: Federal Bureau of Investigation FBI Crime News (b)
The U.S. government is investigating the unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China.
After the FBI identified specific malicious activity targeting the sector, the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) immediately notified affected companies, rendered technical assistance, and rapidly shared information to assist other potential victims. The investigation is ongoing, and we encourage any organization that believes it might be a victim to engage its local FBI field office or CISA.
Agencies across the U.S. government are collaborating to aggressively mitigate this threat and are coordinating with our industry partners to strengthen cyber defenses across the commercial communications sector.
Source: US Department of Homeland Security
WASHINGTON: The U.S. Government is investigating the unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China.
After the FBI identified specific malicious activity targeting the sector, the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) immediately notified affected companies, rendered technical assistance, and rapidly shared information to assist other potential victims. The investigation is ongoing, and we encourage any organization that believes it might be a victim to engage its local FBI field office or CISA.
Agencies across the U.S. Government are collaborating to aggressively mitigate this threat and are coordinating with our industry partners to strengthen cyber defenses across the commercial communications sector.
###
News In Brief – Source: US Computer Emergency Readiness Team
WASHINGTON: The U.S. Government is investigating the unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China.
After the FBI identified specific malicious activity targeting the sector, the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) immediately notified affected companies, rendered technical assistance, and rapidly shared information to assist other potential victims. The investigation is ongoing, and we encourage any organization that believes it might be a victim to engage its local FBI field office or CISA.
Agencies across the U.S. Government are collaborating to aggressively mitigate this threat and are coordinating with our industry partners to strengthen cyber defenses across the commercial communications sector.
###
Source: Office of United States Attorneys
Source: Office of United States Attorneys
|
MACON, Ga. – A newly unsealed federal indictment charges a dozen defendants with allegedly participating in a methamphetamine production and trafficking conspiracy operating out of a ten-acre Walton County property. According to the indictment unsealed on Oct. 23, and the search warrant, as well as statements made public in court, on Aug. 13, 2024, a federal search warrant was executed at 2370 Mountain Creek Church Road, Monroe, Georgia, as part of a joint law enforcement operation, where agents seized a total of 4,346 grams of “finished” crystal methamphetamine, 22 gallons of liquid methamphetamine (approximately equivalent to 377 kilograms of finished crystal methamphetamine) and $5,401. A federal search warrant was also executed on a Chevrolet Traverse occupied by Yuretzi Gomez, Yirla Gomez, Rafael Gomez and Uriel Garcia where agents recovered 1,046 grams of methamphetamine and $4,350 in cash. In addition, agents seized 4,523 grams of methamphetamine inside a Camaro occupied by Jared Calhoun and Ebony Jones-Tate. The following defendant charged by indictment will have his initial appearance before U.S. Magistrate Judge Charles H. Weigle on Nov. 4: James Len Ramey, 52, of Comer, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine. The following defendants charged by indictment have had their initial appearances before U.S. Magistrate Judge Weigle: Christopher Hyatt, 44, of LaGrange, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Kendell Cawthon, 59, of Baldwin, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Bonterris Turner, 44, of Athens, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Demetrius Appling, 36, of Crawford, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Andrea Robinson, 44, of Cleveland, Georgia; is charged with one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum of 20 years in prison and a $250,000 fine; Yuretzi Adame Gomez, 39, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Yirla Adame Gomez, 24, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Rafael Gomez Flores, 21, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Uriel Garcia, 32, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Jared Calhoun, 32, of Birmingham, Alabama, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; and Ebony Jones-Tate, 32, of Birmingham, Alabama, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine. The case is being investigated by the FBI’s Middle Georgia Safe Streets Gang Task Force, the Drug Enforcement Administration (DEA), the Georgia Bureau of Investigation (GBI), the Walton County Sheriff’s Office, the Athens-Clarke County Police Department and the Georgia State Patrol (GSP). Assistant U.S. Attorney Mike Morrison is prosecuting the case for the Government. An indictment is only an allegation of criminal conduct, and all defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt. |
MACON, Ga. – A newly unsealed federal indictment charges a dozen defendants with allegedly participating in a methamphetamine production and trafficking conspiracy operating out of a ten-acre Walton County property. According to the indictment unsealed on Oct. 23, and the search warrant, as well as statements made public in court, on Aug. 13, 2024, a federal search warrant was executed at 2370 Mountain Creek Church Road, Monroe, Georgia, as part of a joint law enforcement operation, where agents seized a total of 4,346 grams of “finished” crystal methamphetamine, 22 gallons of liquid methamphetamine (approximately equivalent to 377 kilograms of finished crystal methamphetamine) and $5,401. A federal search warrant was also executed on a Chevrolet Traverse occupied by Yuretzi Gomez, Yirla Gomez, Rafael Gomez and Uriel Garcia where agents recovered 1,046 grams of methamphetamine and $4,350 in cash. In addition, agents seized 4,523 grams of methamphetamine inside a Camaro occupied by Jared Calhoun and Ebony Jones-Tate. The following defendant charged by indictment will have his initial appearance before U.S. Magistrate Judge Charles H. Weigle on Nov. 4: James Len Ramey, 52, of Comer, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine. The following defendants charged by indictment have had their initial appearances before U.S. Magistrate Judge Weigle: Christopher Hyatt, 44, of LaGrange, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Kendell Cawthon, 59, of Baldwin, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Bonterris Turner, 44, of Athens, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Demetrius Appling, 36, of Crawford, Georgia, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Andrea Robinson, 44, of Cleveland, Georgia; is charged with one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum of 20 years in prison and a $250,000 fine; Yuretzi Adame Gomez, 39, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Yirla Adame Gomez, 24, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Rafael Gomez Flores, 21, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Uriel Garcia, 32, of Mexico, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; Jared Calhoun, 32, of Birmingham, Alabama, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine; and Ebony Jones-Tate, 32, of Birmingham, Alabama, is charged with one count of conspiracy to possess with intent to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. If convicted, the defendant faces a maximum sentence of life imprisonment with a mandatory minimum sentence of ten years in prison and a $10 million fine. The case is being investigated by the FBI’s Middle Georgia Safe Streets Gang Task Force, the Drug Enforcement Administration (DEA), the Georgia Bureau of Investigation (GBI), the Walton County Sheriff’s Office, the Athens-Clarke County Police Department and the Georgia State Patrol (GSP). Assistant U.S. Attorney Mike Morrison is prosecuting the case for the Government. An indictment is only an allegation of criminal conduct, and all defendants are presumed innocent until and unless proven guilty in a court of law beyond a reasonable doubt. |
Source: Office of United States Attorneys
Damian Williams, the United States Attorney for the Southern District of New York; James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”); Thomas Fattorusso, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”); and Francis J. Russo, the Director of the New York Field Office of U.S. Customs and Border Protection (“CBP”), announced today the arrest of ARSEN LUSHER, who orchestrated a scheme to defraud more than 20 investors of more than $5 million between 2017 and 2021. LUSHER was arrested earlier today and will be presented this afternoon before U.S. Magistrate Judge Gary Stein.
U.S. Attorney Damian Williams said: “For years, the defendant allegedly solicited investors’ funds by representing that he had a hugely profitable trucking business. That wasn’t true, and the defendant instead allegedly used the funds to run a classic Ponzi scheme, enriching himself along the way. When luck ran out, the victims sustained millions of dollars in losses. Today’s arrest serves as a stark reminder that the illusion of success built on fraud and deceit will inevitably fail.”
FBI Assistant Director James E. Dennehy said: “For four years, Arsen Lusher allegedly defrauded numerous victims of more than $5 million by cycling their investments to conceal the business’s inability to produce its promised returns, and altered official tax documents to reflect inflated balances in furtherance of this ploy. The alleged empty assurances allowed the defendant to wrongfully haul in funding from investors and selfishly benefit from their losses. The FBI will continue to disrupt and hit the brakes on any investment scheme rooted in deceit.”
IRS-CI Special Agent in Charge Thomas Fattorusso said: “It’s alleged Lusher acted with impunity for years, deceiving over 20 investors out of more than five million dollars. He created a ‘get-rich-quick’ scheme, then sold his victims a dream of high-returns on their investment. Instead of a profit, investors were left with a loss of money and of trust. Today’s arrest ensures that Lusher can now be held accountable for his alleged fraud.”
CBP Director Francis J. Russo said: “U.S. Customs and Border Protection is proud to have played an important role in this investigation that resulted in the takedown of an elaborate conspiracy to defraud the United States. This case serves as a great example of how collaborative law enforcement efforts can dismantle nefarious enterprises that cause economic harm to their competitors.”
According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]
Between 2017 and 2021, LUSHER engaged in a scheme to defraud more than 20 victims of more than $5 million. LUSHER and a small group of trusted lieutenants acting at LUSHER’s direction solicited investments from the victims, usually by representing that LUSHER had a profitable trucking business that enjoyed delivery and installation contracts with multiple large retailers. LUSHER and his lieutenants typically represented that the victims’ investments would fund the purchase of trucks, each truck costing around $45,000. Through written and signed investment agreements, LUSHER and his lieutenants normally guaranteed the victims that their investments would generate high rates of return over a fixed period—typically between 30 and 40 percent over one or two years. In that way, LUSHER succeeded in raising more than $40 million.
In fact, though, LUSHER did not have a large trucking business. Instead, LUSHER had a small trucking business that performed a small amount of work—less than $300,000—for just one large retailer. The amount that LUSHER earned from his legitimate trucking business could not have compensated the victims and produced the promised returns.
Indeed, LUSHER did not use the victims’ funds to purchase trucks or to grow his trucking business. Instead, for years, LUSHER engaged in a Ponzi scheme: LUSHER paid earlier victims with later victims’ funds. LUSHER also used the victims’ funds to enrich himself, such as by gambling or shopping for high-end goods. In that way, LUSHER was able to sustain his scheme for a number of years. But in early 2021, the scheme collapsed, leaving numerous victims with losses totaling more than $5 million.
LUSHER used fake documents to carry out his scheme. For example, in December 2020, LUSHER caused to be sent to a particular victim an apparent U.S. Income Tax Return for an S Corporation for one of the companies that LUSHER controlled and used to perpetrate his scheme. That alleged tax return was falsified: the accountant listed as having prepared the return did not, in fact, prepare it. And in February 2021, LUSHER altered account balances on an email sent by a bank employee to make it appear that LUSHER’s companies had healthy account balances when, in fact, they did not. Specifically, while the bank employee wrote that LUSHER’s companies had account balances of $8,767.26 and $320.76, LUSHER altered the bank employee’s email before forwarding it to state that his companies had account balances of $1,228,767.26 and $987,320.76 (italics and bold added). In other words, LUSHER altered the bank employee’s email such that the account balances for his companies were approximately 140 times and 3,078 times greater than they actually were. LUSHER then caused that falsified email to be sent to a particular victim.
If you believe you or your family has been a victim of LUSHER’s fraud, please contact XtremeHDtips@fbi.gov.
* * *
LUSHER, 49, of Millstone, New Jersey, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.
The statutory maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Williams praised the outstanding investigative work of the FBI, the IRS, the CBP, and the New York City Police Department.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Joseph H. Rosenberg is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth in this press release, constitute only allegations, and every fact described should be treated as an allegation.
Source: China State Council Information Office 2
Bian Zhigang, deputy head of the China National Space Administration (CNSA), speaks at the payloads handover ceremony held by CNSA in Beijing, capital of China, Oct. 24, 2024. [CNSA/Handout via Xinhua]
The scientific payloads for space breeding and other sci-tech experiments carried by China’s first reusable and returnable satellite, Shijian-19, were delivered to Chinese and foreign users on Thursday.
At the payloads handover ceremony held by the China National Space Administration (CNSA) in Beijing on Thursday, the CNSA and the China Aerospace Science and Technology Corporation signed payload delivery certificates with domestic and international users, including those from Thailand and Pakistan.
Bian Zhigang, deputy head of CNSA, said the Shijian-19 mission fully leverages the advantages of the new generation retrievable space experiment platform, conducting space breeding experiments of about 1,000 species of germplasm resources, providing crucial support for the innovation of germplasm resources in China. The mission has also offered a valuable in-orbit validation opportunity for domestically produced components and raw materials.
According to Meng Lingjie, director of the Earth Observation System and Data Center under the CNSA, the Shijian-19 mission has made a breakthrough in its recovery module. The satellite platform can be reused more than 10 times, significantly reducing manufacturing costs and improving operational efficiency.
The satellite serves as a space testing platform that enables convenient transportation of payloads between Earth and space, offering high-quality experimental services, said Meng, adding that it has wide-ranging applications in space sci-tech experiments such as space breeding as well as space pharmaceutical and material manufacturing.
China successfully retrieved its first reusable and returnable test satellite, Shijian-19, at the Dongfeng landing site in north China’s Inner Mongolia Autonomous Region at 10:39 a.m. (Beijing Time), Oct. 11, 2024, said the China National Space Administration (CNSA). [Photo/Xinhua]
The satellite carried 500 kg of experiment payloads back to Earth, greatly enhancing the capability for payload recovery, according to Meng. It can also provide a high-quality microgravity environment for experiments.
When the satellite was in orbit, seven new technology experiments were carried out, including microgravity hydrogen production, low-frequency magnetic communications, inflatable sealed cabin and wireless power transmission.
The satellite also carried nine space science payloads to conduct research in fields such as carbon nanomaterials and devices, solid catalyst materials, and oral and dental science materials.
According to Liu Luxiang, executive director general of the Institute of Crop Sciences under the Chinese Academy of Agricultural Sciences, the Shijian-19 mission carried seeds of about 1,800 plant materials and more than 1,000 species of microorganisms, encompassing nearly all major kinds of agricultural products.
The mission not only provides solid support to China’s space breeding, but also creates a collaboration platform for international counterparts, said Liu, who is also the chief scientist of China’s space breeding project. The satellite carried rice seeds from Thailand, seeds of wheat, rice, corn and beans from Pakistan, as well as crop seeds from other countries.
“In face of the challenge of global food security, it is necessary to continuously enhance food production, develop new genetic resources that promote nutrition and health, and cultivate new grain varieties that are more resilient to climate change with improved stress tolerance,” Liu said.
Over the past 30 years, China has developed over 300 crop varieties through its space breeding technologies. These varieties cover an annual cultivation area of about 2 million hectares, with remarkable social and economic benefits, according to Liu.
The Shijian-19 satellite was sent into orbit from the Jiuquan Satellite Launch Center in northwest China on Sept. 27. It returned to Earth on Oct. 11.
Source: GlobeNewswire (MIL-OSI)
QPR SOFTWARE PLC STOCK EXCHANGE RELEASE 25 October 2024, AT 9.00 AM EET
QPR Software Plc Interim Report for January-September 2024: The growth in SaaS net sales supports positive development, with profitability improving already for the eighth consecutive quarter compared to the same period last year. The most significant achievement of the third quarter was the signing of a contract with a global luxury brand.
FINANCIAL DEVELOPMENT BRIEFLY
JULY-SEPTEMBER 2024
JANUARY-SEPTEMBER 2024
OUTLOOK FOR 2024
The company monitors the development of the world’s economic situation and geopolitical tensions. The slowly budding recovery of economic growth, falling interest rates and normalizing inflation will improve the financial position of customers, and investment decisions can be expected to accelerate towards the end of 2024.
Supported by the current contract base and the projected growth of SaaS (Software as a Service) net sales, QPR expects the growth of SaaS net sales to be double-digit and estimates that the entire software net sales will grow in 2024 (2023: 5,122 thousand euros).
The company expects the operating result to improve significantly in the financial year 2024. The operating result in 2023 was -813 thousand euros.
CEO REVIEW
In the third quarter, we continued to execute our strategy as planned, and the company’s turnaround is progressing steadily. We have achieved our eighth consecutive quarter of improved results compared to the same period last year, indicating positive development. However, growth this time was modest, as market recovery has been slower than anticipated. Strengthening customer relationships, expanding our partner network, and acquiring new clients continue to support long-term growth. The most significant achievement of the quarter was securing a contract with a global luxury brand, which selected QPR ProcessAnalyzer to optimize its business processes, solidifying our position as a leader in process mining.
SaaS revenue grew by 15% in July-September, while software revenue decreased by 3%, mainly due to the timing of deals. Overall revenue declined because of our decision to discontinue external consulting services in Finland at the end of 2023. Our positive EBITDA, totaling EUR 269,000, increased by 11% compared to the previous year. The company’s result was slightly negative, and the timing of individual deals continues to significantly impact quarterly outcomes. This quarter also saw one-off write-offs related to the relocation of our headquarters, which affected the results.
One of our most significant product development milestones was advancing our flagship product, QPR ProcessAnalyzer, into a native app on the Snowflake Marketplace. This development significantly changes how process mining software is bought and sold, offering our customers using Snowflake cloud services a fast and straightforward way to acquire software cost-effectively. Our goal is to have our product listed on the Snowflake Marketplace by the end of October.
At the core of our strategy is the development of our international partner network. In the first half of the year, we established several key partnerships in the United States, which have led to active sales efforts to attract new customers. We continue to seek new potential partners, and the EDGE 2024 Supply Chain Conference held in Nashville in September was an important part of this strategy.
The market situation in the Middle East also showed positive development in the third quarter. Our strong partner network and growing interest in our process mining solutions provide excellent opportunities for expanding our market share. Snowflake has acquired several customers in the region, which also presents us with new opportunities to expand in this market.
Our focus now turns to the final quarter of the year, where we plan to leverage our strengths and focus on securing deals effectively. Despite challenges in the business environment, we believe in our innovations and strategic partnerships that support the company’s long-term growth goals.
QPR appointed Taru Mäkinen as CFO in July, and under her leadership, our financial processes are being developed to support our growth strategy. Additionally, Antti Kivalo started as the company’s new Sales Director at the beginning of September.
I would like to extend my warmest thanks to our customers, partners, and investors for their trust. A special thank you also to all our employees for their hard work towards the success of our company.
Heikki Veijola
CEO
KEY FIGURES
| EUR in thousands, unless otherwise indicated |
July-Sept, 2024 | July-Sept, 2023 | Change, % |
Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 |
| Net sales | 1,409 | 1,806 | -22 | 4,651 | 5,951 | -22 | 7,550 |
| EBITDA | 269 | 242 | 11 | 745 | 213 | 249 | 182 |
| % of net sales | 19.1 | 13.4 | 16.0 | 3.6 | 2.4 | ||
| Operating result | -6 | -12 | 55 | -39 | -529 | 93 | -813 |
| % of net sales | -0.4 | -0.7 | -0.8 | -8.9 | -10.8 | ||
| Result before tax | -33 | -37 | 11 | -107 | -617 | 83 | -924 |
| Result for the period | -33 | -37 | 11 | -107 | -617 | 83 | -924 |
| % of net sales | -2.4 | -2.1 | -2.3 | -10.4 | -12.2 | ||
| Earnings per share, EUR (basic and diluted) |
-0.002 | -0.002 | 11 | -0.006 | -0.038 | 84 | -0.055 |
| Equity per share, EUR | 0.018 | 0.036 | -48 | 0.019 | 0.036 | -48 | 0.020 |
| Cash flow from operating activities |
34 | -640 | 105 | -226 | 20 | -1,202 | 850 |
| Cash and cash equivalents | 99 | 181 | -46 | 99 | 181 | -45 | 885 |
| Net borrowings | 1,513 | 1,639 | -8 | 1,513 | 1,639 | -8 | 934 |
| Gearing, % | 451.3 | 257.2 | 75 | 451.3 | 257.2 | 75 | 268.3 |
| Equity ratio, % | 11.0 | 13.7 | -20 | 11.0 | 13.7 | -20 | 8.1 |
| Return on equity, % | -38.6 | -49.7 | 22 | -41.8 | -146.4 | 71 | -221.5 |
| Return on investment, % | -6.3 | -11.6 | 23 | -9.0 | -35.9 | 75 | -42.0 |
REPORTING AND BUSINESS OPERATIONS
QPR Software Plc is a pioneer in business process optimization solutions and has positioned itself as a leading player in Digital Twin of an Organization (DTO) technology and one of the most advanced process mining software companies in the world.
QPR innovates, develops, and delivers software for analyzing, monitoring and modeling the operations of organizations. The company also offers consulting services to ensure that customers get full value from the software and associated methods.
QPR Software reports one business segment, which is Organizational Development of organizations. In addition to this, the Company reports revenue from products and services as follows: Software licenses, Renewable software licenses, Software maintenance services, Cloud services, and Consulting.
The company’s reported recurring revenues consist of SaaS net sales, maintenance services, as well as revenue from renewable licenses. Licenses are sold to customers for perpetual use or for an agreed, limited period. The revenue from SaaS and maintenance services is recorded monthly as recurring revenue over the contract period.
Renewable software licenses are sold to customers as a user right with an indefinite-term contract. These contracts are automatically renewed at the end of the agreed period, usually one year, unless the agreement is terminated within the notice. Renewable license revenue is recognized at one point in time, in the beginning of the invoicing period, yet at the earliest on the delivery.
The geographical areas reported are Finland, the rest of Europe (including Turkey), and the rest of the world. Net sales are reported according to the location of the customer’s headquarters. Until 2023, the company provided consulting services, predominantly to public administration, which were unrelated to its core business. In the end of 2023, the company discontinued these activities. In the future, the company will prioritize offering consulting services tailored to the software it develops, aiming to deliver maximum added value to its customers.
The company began reporting the production costs of the cloud platform within the materials and services expense category starting from 2024. The figures for the comparative period will be presented at the end of this interim report’s table section, according to both reported and 2024 cost groupings.
NET SALES DEVELOPMENT
NET SALES BY PRODUCT GROUP
| EUR in thousands | July-Sept, 2024 | July-Sept, 2023 | Change, % |
Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 | |
| Software licenses | 85 | 174 | -51 | 406 | 383 | 6 | 485 | |
| Renewable software licenses | 43 | 78 | -45 | 334 | 453 | -26 | 504 | |
| Software maintenance services | 430 | 428 | 0 | 1,268 | 1,272 | 0 | 1,720 | |
| SaaS | 673 | 585 | 15 | 2,020 | 1,754 | 15 | 2,371 | |
| Consulting | 179 | 541 | -67 | 623 | 2,089 | -70 | 2,469 | |
| Total | 1,409 | 1,806 | -22 | 4,651 | 5,951 | -22 | 7,550 |
NET SALES BY GEOGRAPHIC AREA
| EUR in thousands | July-Sept, 2024 | July-Sept, 2023 | Change, % |
Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 | |
| Finland | 555 | 793 | -30 | 1,881 | 2,799 | -33 | 3,499 | |
| Europe incl. Turkey | 623 | 702 | -11 | 2,026 | 2,398 | -16 | 3,128 | |
| Rest of the world | 232 | 310 | -25 | 745 | 754 | -1 | 923 | |
| Total | 1,409 | 1,806 | -22 | 4,651 | 5,951 | -22 | 7,550 |
JULY-SEPTEMBER 2024
The net sales for July to September was 1,409 thousand euros (1,806), and it decreased by 22% compared to the same period last year. The group discontinued consulting services outside our core business in Finland at the end of 2023. The proportion of recurring revenue in the total revenue increased from 56 percent to 79 percent.
SaaS net sales, which is at the core of our strategy, grew by 15%, and software net sales decreased by 3% during July-September.
The software license net sales was 85 thousand euros (174), representing a 51% decrease. The decline was due to larger individual new license deals in the comparison period, which exceeded the new license deals reported in the current period. Expansions with existing customers partially offset the lower new customer license sales. The net sales mainly consisted of additional sales through partner transactions and to existing and new customers, additional sales to existing direct customers, as well as the expansion of the partner network, which brought new commercial opportunities and customer relationships.
The net sales from renewable software licenses was 43 thousand euros (78), a decrease of 45%. This decline was primarily due to the expiration of individual customer contracts and the earlier renewal timing, partially offset by new customer acquisitions and price increases made in response to inflationary pressures.
The net sales from software maintenance services amounted to 430 thousand euros (428). The net sales was positively impacted by Middle Eastern customers transitioning to a software maintenance model, increased maintenance revenue from new license acquisitions, and winning back lost customers. Additionally, price increases to counter inflationary pressures and favorable exchange rate effects contributed to the net sales growth. However, the growth was offset by customer churn and a decline in revenue from certain individual customers.
SaaS net sales grew by 15% and amounted to 673 thousand (585). The growth was primarily driven by new customer acquisitions, the expansion of existing customer relationships, and price increases to counter inflationary pressures. On the other hand, customer churn and a decrease in revenue from individual clients had a negative impact on the overall SaaS revenue development.
Net sales from consulting was 179 thousand euros (541), a 67% decrease due to the company’s discontinuation of consulting services outside its core business in Finland. During the comparison period, the company had a large customer project in Europe, but no similar project occurred in this reporting period.
The Group’s net sales was 39 % (44) from Finland, 44% (39) from the rest of Europe (including Turkey) and 17 % (11) from the rest of the world.
JANUARY-SEPTEMBER 2024
The net sales January-September was 4,651 thousand euros (5,951), and it decreased by 22 % compared to the same period last year. This decline is due to the company’s decision to discontinue non-core consulting services in Finland at the end of 2023. The proportion of recurring revenue of the total revenue increased from 51 percent to 71 percent.
Our SaaS net sales, which is at the core of our strategy, grew by 15%, and software net sales grew by 4% in the January-September period. The proportion of software net sales in the total net sales grew from 65 percent to 87 percent.
The net sales from software licenses was 406 thousand euros (383) and it grew by 6%. The growth was primarily driven by an increase in partner sales volume, particularly among customers in the Middle East, as well as the expansion with a global pharmaceutical company in accordance with a previous agreement. Additionally, the company achieved broader success in partner sales across multiple geographical regions.
The net sales from renewable software licenses amounted to 334 thousand euros (453), a decrease of 26%. The decline was driven by several factors, including customer churn, individual customers transitioning to a SaaS service model, and negative currency exchange effects. These factors were partially offset by new customer acquisitions and price increases implemented to counter inflationary pressure.
The net sales from software maintenance services amounted to 1,268 thousand euros (1,272). The decline in net sales was negatively impacted by customer churn, a decrease in revenue from individual customers, and, to a lesser extent, the transition of existing customers to the SaaS service model. The decline was partially offset by the expansion of cooperation with existing customers, the inclusion of Middle Eastern customers’ projects under maintenance services, new customer contracts, and the previously agreed expansion with a global pharmaceutical company. Additionally, price increases to counter inflationary pressures and favorable currency exchange rate effects contributed to net sales growth.
SaaS net sales grew by 15% to 2,020 thousand euros (1,754). The growth was primarily driven by the expansion of existing customer relationships and successes in acquiring new customers. The shift of customers from licenses to the SaaS service model and, to some extent, price increases due to inflationary pressures also contributed to the growth. On the other hand, fluctuations in exchange rates and customer churn had a negative impact on the development of SaaS net sales.
Consulting revenue was 623 thousand euros (2,089), a decrease of 70%, following the company’s discontinuation of consulting services outside its core business in Finland. Additionally, the company recognized revenue from fixed-price projects in the Middle East according to their to their completion status during the first half of 2023. These projects were completed in the second quarter of the same year. In the comparison period, the company had a large customer project in Europe, but there was no similar project during this reporting period.
The Group’s net sales was 40% (49) from Finland, 44% (40) from the rest of Europe (including Turkey) and 16 % (11) from the rest of the world.
FINANCIAL DEVELOPMENT
JULY-SEPTEMBER 2024
The group’s EBITDA for July-September was 269 thousand euros (242), an improvement of 27 thousand euros compared to the previous year. The operating profit was -6 thousand euros (-12), an increase of 6 thousand euros compared to the reference period. The season’s result was -33 thousand euros (-37).
The active measures implemented by the company in 2023 to improve cost structure and enhance business profitability are already partially visible in the first half of 2024 and to be fully realized by the third quarter.
The Group’s variable costs amounted to 210 thousand euros (240). The decrease in costs was mainly due to lower partner commissions, resulting from lower software license sales through partners compared to the reference period.
The company’s fixed expenses amounted to 931 thousand euros (1,324), a decrease of 30% compared to the same period last year. This decrease was due to savings programs implemented in the second and final quarters of 2023, as well as reduced personnel expenses resulting from change negotiations. The full impact of the cost-saving measures materialized starting from the third quarter of 2024. The effect of these savings was partially offset by lower product development capitalizations, investments in reorganizing the company’s operational activities, and a one-time write-off of 24 thousand euros related to the company’s headquarters relocation.
Earnings per share were -0.002 euros (-0.002) per share.
JANUARY-SEPTEMBER 2024
The Group’s EBITDA for January–September was 745 thousand euros (213), an increase of 532 thousand euros compared to the previous year. The operating result was -39 thousand euros (-529), showing an improvement of 490 thousand euros compared to the same period last year. The result for the period was -107 thousand euros, which is a significant improvement from the previous year (-612).
The active measures implemented by the company in 2023 to improve cost structure and develop business profitability are already partially visible in the first quarter of 2024 and fully realized by the third quarter.
The Group’s variable costs amounted to 693 thousand euros (1,013). The decrease in expenses was primarily due to the completion of challenging fixed-price software delivery projects in the Middle East during the second quarter of 2023. This completion significantly reduced the need for external services, further lowering costs.
The company’s fixed expenses amounted to 3,214 thousand euros (4,726 thousand), a decrease of 32% compared to the same period last year. This decrease was driven by cost-saving programs implemented in the second and final quarters of 2023, as well as lower personnel expenses resulting from the outcomes of change negotiations. The full impact of the cost-saving measures realized starting from the third quarter of 2024. The effect of these savings was partially offset by lower R&D capitalizations and investments required for the reorganization of the company’s operational activities.
Earnings per share were EUR -0.006 (-0.038) per share.
FINANCE AND INVESTMENTS
The cash flow from operations during the review period amounted to -226 thousand euros (20). The main reason for this change compared to the comparable period was successful collection in the last quarter of 2023, particularly regarding the advanced license payments for 2024. A larger portion of the prepayments was collected in the final quarter of 2023, leading in lower cash flow from annual licenses in the first quarter of 2024. Annual billing is mostly concentrated around the end of the year, making it seasonal.
The change in working capital was affected by higher sales commissions paid to the company’s personnel for 2023, as well as holiday compensation for employees who left due to the change negotiations. The negative cash flow was also due to the fact that the largest new deals occurred in a market where payment behavior is slow.
The positive cash flow from operations in the third quarter was driven by successful receivables collection and lower costs. Compared to the same period last year, a significant reduction in expenses is a key reason for the clear improvement in operational cash flow. During the comparison period, the company conducted a directed share issue, resulting in significantly higher cash flow from financing activities.
Net financial expenses amounted to 19 thousand euros (30), including exchange losses of 1 thousand euros (4).
Investments totaled 357 thousand euros (511), and those were mainly research and development investments.
The company’s financing net cash flow for the period January to September was -318 thousand euros (656). The negative net cash flow was primarily due to the company reducing its loan by 500 thousand euros and having a credit limit in use. Additionally, during the comparison period, the company raised 760 thousand euros through a directed share issue.
The group’s financial situation is fair. At the end of the review period, the group’s cash and cash equivalents were 99 thousand euros (181). Short-term receivables were 1,290 thousand (1,468).
Euro-denominated receivables accounted for 68%, and 68% of invoices had not yet matured. Of the total amount of short-term receivables, the share of 1-30 days overdue receivables was 16%, 30-60 days 11% and more than 60 days 5%.
The group has a credit limit of 500,000 euros available.
At the end of the review period, the group had a bank loan of EUR 1,000 thousand, of which 500 thousand euros was long-term. In accordance with the original financing agreement, the first installment of EUR 0.5 million was due on January 31, 2024. After this, installments of EUR 0.5 million will mature annually in January 2025 and 2026. The covenants related to the loan are based on the company’s EBITDA and equity ratio. The EBITDA of the covenants is tested every six months, and the equity ratio is tested annually according to the situation on the last day of the year. The EBITDA exceeded the agreed covenant limit for the first half of the year.
The company’s free cash flow, including operating and investment cash flows, and office lease costs totaled -37 thousand euros (-735) in the third quarter. The significant improvement in free cash flow is due to both lower operating expenses and enhanced receivables collection. From January to September, free cash flow was -486 thousand euros (-595). The change was influenced by shifts in the timing of operating cash flows, which were mitigated by a significant decrease in investment cash flows and lower paid office lease costs.
The equity ratio was 11%, lower than the comparison period (14%) due to a loss of -307 thousand euros in the final quarter of 2023 and a -107 thousand euros loss for the reporting period, January to September. Additionally, the new lease agreement signed in June 2024 negatively impacts the company’s equity ratio, as the IFRS 16 interest effect increases the lease liability by approximately 100 thousand euros.
PRODUCT DEVELOPMENT
QPR has positioned itself as a leading player in Digital Twin of an Organization (DTO) technology. The company innovates and develops software products that analyze, measure, and model the operations of organizations. The Company develops the following software products: QPR ProcessAnalyzer, QPR EnterpriseArchitect, QPR ProcessDesigner, and QPR Metrics.
In the third quarter of the year, product development expenses amounted to 183 thousand euros (248), and 69 thousand euros (80) of development costs were capitalized on the balance sheet. Product development depreciation was recorded at 228 thousand euros (220). The amortization period for capitalized development costs is four years.
PERSONNEL
At the end of the review period, the group employed 29 people (52). The average number of personnel in April-June was 28 (60).
The average age of the personnel is 45 (47) years. Women account for 23% (23) of employees, and men for 77% (76). Of all personnel, 21% (16) work in sales and marketing, 32% (31) in consulting and customer care, 40% (42) in product development, and 7% (11) in administration.
Personnel expenses were 2,499 thousand euros (4,085), of which the share of salaries and bonuses was 2,127 thousand euros (3,406).
For incentive purposes, the company has a bonus program covering the entire personnel. The top management’s short-term remuneration consists of monetary salary, fringe benefits and a possible annual bonus, mainly determined by the net sales development of the group and profit units. In addition, the company has a stock option program for key personnel.
SHARES AND SHAREHOLDER
| Trading of shares | Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 |
| Shares traded, pcs | 3,407,075 | 1,729,586 | 97 | 3,538,455 |
| Volume, EUR | 1,685,250 | 898,702 | 88 | 1,585,931 |
| % of shares | 19.0 | 9.7 | 96 | 19.8 |
| Average trading price, EUR | 0.49 | 0.52 | -5 | 0.45 |
| Average trading value per day, EUR | 8,917 | 4,755 | 88 | 6,318 |
| Treasury shares acquired during the year, pcs | 0 | 0 | 0 | 0 |
| Shares and market capitalization | Sept 30, 2024 | Sept 30, 2023 | Change, % |
Dec 31, 2023 |
| Total number of shares, pcs | 18,175,192 | 18,175,192 | 0 | 18,175,192 |
| Treasury shares, pcs | 256,849 | 339,471 | -24 | 339,471 |
| Book counter value, EUR | 0.11 | 0.11 | – | 0.11 |
| Outstanding shares, pcs | 17,918,343 | 17,835,721 | 0 | 17,835,721 |
| Number of shareholders | 2,117 | 1,863 | 14 | 1,943 |
| Closing price, EUR | 0.60 | 0.39 | 54 | 0.33 |
| Market capitalization, EUR | 10,751,006 | 6,938,095 | 55 | 5,957,131 |
| Book counter value of all treasury shares, EUR |
28,253 | 37,342 | -24 | 37,342 |
| Total purchase value of all treasury shares, EUR |
244,349 | 347,552 | -30 | 347,552 |
| Treasury shares, % of all shares | 1.4 | 1.9 | -26 | 1.9 |
GOVERNANCE
The Annual General Meeting of QPR Software Plc was held on May 15, 2024, in Helsinki. The General Meeting adopted the Company’s financial statements for the financial year 2023 and discharged the members of the Board of Directors and the CEO from liability. The General Meeting resolved that no dividend be paid based on the balance sheet adopted for the financial year ended on December 31, 2023, and adopted the Company’s Remuneration Report and Remuneration Policy. Further, the General Meeting resolved to authorize the Board of Directors to decide on share issues and on the issue of other special rights entitling to shares as well as on the acquisition of own shares.
Annual accounts and the use of the profit shown on the balance sheet
The General Meeting adopted the Company’s financial statements and discharged the members of the Board of Directors and the CEO from liability for the financial period January 1 – December 31, 2023. The General Meeting resolved that no dividend be paid based on the balance sheet adopted for the financial year ended on December 31, 2023.
Remuneration of the members of the Board of Directors and the Auditor
The General Meeting resolved that the Chairman of the Board of Directors be paid EUR 45,000 per year and the other members of the Board of Directors EUR 25,000 per year. Approximately 40 percent of the remuneration will be paid in shares and 60 percent in cash. The shares will be granted as soon as possible after the Annual General Meeting and if the insider regulations allow it. The members of the Board of Directors will also be reimbursed for travel and other expenses incurred while they are managing the Company’s affairs.
The remuneration of the Auditor shall be paid according to the reasonable invoice.
Board of Directors and Auditor
The General Meeting confirmed that the number of Board members is four (4). Pertti Ervi was re-elected as the Chairman of the Board of Directors and Antti Koskela and Jukka Tapaninen were re-elected as members of the Board of Directors. Linda von Schantz was elected as a new member of the Board of Directors.
Authorised Public Accountants KPMG Oy Ab was re-elected as the Company’s auditor. KPMG Oy Ab has announced that Petri Kettunen, Authorized Public Accountant, will act as the principal auditor.
Authorization of the Board of Directors to decide on share issues and on the issue of other special rights entitling to shares
The General Meeting resolved to authorize the Board of Directors to decide on issuances of new shares and conveyances of the own shares held by the Company (share issue) either in one or more instalments. The share issues can be carried out against payment or without consideration on terms to be determined by the Board of Directors. The authorization also includes the right to issue special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act, which entitle to the Company’s new shares or own shares held by the Company against consideration. Based on the authorization, the maximum number of new shares that may be issued and own shares held by the Company that may be conveyed in share issues or on the basis of special rights is 6,361,317 shares. The authorization includes the right to deviate from the shareholders’ pre-emptive subscription right. The authorization is in force until the next Annual General Meeting.
Authorization of the Board of Directors to decide the acquisition of own shares
The General Meeting resolved to authorize the Board of Directors to decide on the acquisition of the Company’s own shares. Based on the authorization, an aggregate maximum amount of 500,000 own shares may be acquired, either in one or more instalments. The authorization includes the right to acquire own shares otherwise than in proportion to the existing shareholdings of the Company’s shareholders, using the Company’s non-restricted shareholders’ equity. The authorization is in force until the next Annual General Meeting.
SHORT-TERM RISKS AND UNCERTAINTIES
Internal control and risk management at QPR Software aim to ensure that the Company operates efficiently and effectively, distributes reliable information, complies with regulations and operational principles, reaches its strategic goals, reacts to changes in the market and operational environment, and that business continuity is secured considering the financial position.
The Company has identified the following three groups of risks related to its operations: risks related to business operations (country, customer, personnel, legal), risks related to information and products (QPR products, IPR, data privacy, and security), and risks related to financing and liquidity (foreign currency, short-term cash flow).
The Company has an insurance policy covering property, operational, and liability risks. Financial risks include reasonable credit risk concerning individual business partners, which is characteristic of any international business. QPR seeks to limit this credit risk by continuously monitoring standard payment terms, receivables, and credit limits.
Approximately 68% of the Group’s trade receivables were in euros at the end of the quarter (79%). At the end of the quarter, the Company had not hedged its non-euro trade receivables.
EVENTS AFTER THE REVIEW PERIOD
No events after the review period.
QPR SOFTWARE PLC
BOARD OF DIRECTORS
For further information:
Heikki Veijola
Chief Executive Officer
QPR Software Plc
Tel. +358 40 922 6029
QPR Software in Brief
QPR Software (Nasdaq Helsinki) is a leading player in the Digital Twin of an Organization (DTO) use case and one of the most advanced process mining software companies in the world. The company innovates, develops, and delivers software for analyzing, monitoring, and modeling organizational operations. Additionally, QPR provides consulting services to ensure its customers derive full benefits from the software and associated methodologies.
www.qpr.com
DISTRIBUTION
Nasdaq Helsinki
Key medias
www.qpr.com
INTERIM REPORT JANUARY-SEPTEMBER
QPR Software’s Board of Directors has approved this interim report for January 1–September 30, 2024, to be published.
The financial figures for the full fiscal year 2023 presented in the interim report have been audited. The interim report financial figures are unaudited.
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
| EUR in thousands, unless otherwise indicated |
July-Sept, 2024 | July-Sept, 2023 | Change, % |
Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 |
| Net sales | 1,409 | 1,806 | -22 | 4,651 | 5,951 | -22 | 7,550 |
| Other operating income | – | – | – | – | 1 | – | 1 |
| Materials and services | 210 | 240 | -13 | 693 | 1,013 | -32 | 896 |
| Employee benefit expenses | 658 | 1,056 | -38 | 2,499 | 4,085 | -39 | 5,287 |
| Other operating expenses | 273 | 268 | 2 | 714 | 640 | 12 | 1,186 |
| EBITDA | 269 | 242 | 11 | 745 | 213 | 249 | 182 |
| Depreciation and amortization | 274 | 254 | 8 | 784 | 743 | 6 | 995 |
| Operating result | -6 | -12 | 55 | -39 | -530 | 93 | -813 |
| Financial income and expenses | -28 | -25 | -12 | -68 | -87 | 22 | -111 |
| Result before tax | -33 | -37 | 11 | -107 | -617 | 83 | -924 |
| Income taxes | – | – | – | 0 | – | 0 | – |
| Result for the period | -33 | -37 | 11 | -107 | -617 | 83 | -924 |
| Earnings per share, EUR (basic and diluted) |
-0.002 | -0.002 | 11 | -0.006 | -0.038 | 84 | -0.055 |
| Consolidated statement of comprehensive income: |
|||||||
| Result for the period | -33 | -37 | 11 | -107 | -617 | 83 | -924 |
| Exchange differences on translating foreign operations |
3 | – | – | 2 | 1 | 100 | 1 |
| Total comprehensive income | -30 | -37 | 19 | -105 | -616 | 83 | -925 |
CONDENSED CONSOLIDATED BALANCE SHEET
| EUR in thousands | Sept 30, 2024 | Sept 30, 2023 | Change, % |
Dec 31, 2023 |
| Assets | ||||
| Non-current assets: | ||||
| Intangible assets | 1,788 | 2,357 | -24 | 2,245 |
| Goodwill | 358 | 358 | 0 | 358 |
| Tangible assets | 30 | 95 | -69 | 81 |
| Right-of-use assets | 393 | 320 | 23 | 318 |
| Other non-current assets | 277 | 277 | 0 | 277 |
| Total non-current assets | 2,847 | 3,407 | -16 | 3,279 |
| Current assets: | ||||
| Trade and other receivables | 1,782 | 1,896 | -6 | 1,706 |
| Cash and cash equivalents | 100 | 181 | -45 | 884 |
| Total current assets | 1,881 | 2,077 | -9 | 2,590 |
| Total assets | 4,728 | 5,484 | -14 | 5,869 |
| Equity and liabilities | ||||
| Equity: | ||||
| Share capital | 80 | 80 | 0 | 80 |
| Other funds | 21 | 21 | 1 | 21 |
| Treasury shares | -244 | -348 | -30 | -348 |
| Translation differences | -68 | -67 | -1 | -67 |
| Invested non-restricted equity fund | 4,925 | 4,925 | 0 | 4,925 |
| Retained earnings | -4,379 | -3,974 | -10 | -4,263 |
| Equity attributable to shareholders of the parent company |
335 | 637 | -47 | 348 |
| Total equity | 335 | 637 | -47 | 348 |
| Non-current liabilities: | ||||
| Interest-bearing liabilities | 500 | 1,000 | -50 | 1,000 |
| Interest-bearing lease liabilities | 386 | 209 | 85 | 192 |
| Total non-current liabilities | 886 | 1,209 | -27 | 1,192 |
| Current liabilities: | ||||
| Provisions | – | – | – | – |
| Interest-bearing liabilities | 697 | 500 | 39 | 500 |
| Interest-bearing lease liabilities | 29 | 110 | -73 | 126 |
| Advances received | 1,169 | 841 | 39 | 1,558 |
| Accrued expenses and prepaid income | 1,102 | 1,496 | -26 | 1,539 |
| Trade and other payables | 511 | 690 | -26 | 607 |
| Total current liabilities | 3,507 | 3,638 | -4 | 4,329 |
| Total liabilities | 4,393 | 4,847 | -9 | 5,521 |
| Total equity and liabilities | 4,728 | 5,484 | -14 | 5,869 |
CONSOLIDATED CONDENCED CASH FLOW STATEMENT
| EUR in thousands | July-Sept, 2024 | July-Sept, 2023 | Change, % |
Jan-Sept, 2024 | Jan-Sept, 2023 | Change, % |
Jan-Dec, 2023 |
| Cash flow from operating activities: | |||||||
| Result for the period | -33 | -37 | 10 | -107 | -555 | 81 | -924 |
| Adjustments to the result | 381 | 264 | 44 | 962 | 745 | 29 | 1,078 |
| Working capital changes | -282 | -791 | 64 | -1,001 | -54 | -1,755 | 821 |
| Interest and other financial expenses paid |
-32 | -74 | -57 | -79 | -104 | -24 | -107 |
| Income taxes paid | – | -2 | – | – | -11 | – | -19 |
| Net cash from operating activities | 34 | -640 | 105 | -226 | 20 | -1,228 | 849 |
| Cash flow from investing activities: | |||||||
| Purchases of tangible and intangible assets |
-68 | -80 | -15 | -246 | -512 | -52 | -620 |
| Proceeds from sales of tangible and intangible assets | 6 | – | – | 6 | – | – | – |
| Net cash used in investing activities | -62 | -80 | 22 | -240 | -512 | 53 | -620 |
| Cash flow from financing activities: | |||||||
| Proceeds from short term borrowings |
102 | – | – | 1,197 | 1,500 | -20 | 1,500 |
| Repayments of short term borrowings |
– | – | – | -1,500 | -1,500 | 0 | -1,500 |
| Payment of lease liabilities | -3 | -15 | -81 | -15 | -103 | -86 | -121 |
| Share issue net | – | 760 | – | – | 760 | – | 760 |
| Net cash used in financing activities | 99 | 745 | -87 | -318 | 656 | -149 | 639 |
| Net change in cash and cash equivalents |
70 | 26 | -169 | -784 | 164 | 578 | 868 |
| Cash and cash equivalents at the beginning of the period |
31 | 156 | -80 | 884 | 17 | 5,100 | 17 |
| Effects of exchange rate changes on cash and cash equivalents |
-2 | – | – | -1 | – | – | – |
| Cash and cash equivalents at the end of the period |
99 | 181 | -46 | 99 | 181 | -45 | 884 |
*Including non-interest bearing short term liabilities related to cash flow for investment
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| EUR in thousands | Share capital |
Other funds |
Translation differences |
Treasury shares |
Invested non- restricted equity fund |
Retained earnings |
Total |
| Equity Jan 1, 2023 | 1,359 | 21 | -66 | -406 | 2,943 | -3,364 | 487 |
| Stock option scheme | 36 | 36 | |||||
| Reduction of share capital | -1,279 | 1,279 | 0 | ||||
| Disposal of own shares | 58 | -10 | 48 | ||||
| Share issue, net | 703 | 703 | |||||
| Comprehensive income | -1 | -924 | -925 | ||||
| Equity Dec 31, 2023 | 80 | 21 | -67 | -348 | 4,925 | -4,263 | 348 |
| Stock option scheme | 46 | 46 | |||||
| Reduction of share capital | 0 | ||||||
| Disposal of own shares | 103 | -55 | 48 | ||||
| Share issue, net | 0 | ||||||
| Comprehensive income | -2 | -107 | -109 | ||||
| Equity Sept 30, 2024 | 80 | 21 | -68 | -244 | 4,925 | -4,379 | 335 |
NOTES TO INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report complies with the requirements of IAS 34” Interim Financial Reporting”.
The interim report does not contain full notes and other information presented in the financial statements, and therefore the interim report should be read in conjunction with the Financial Statements Bulletin published for 2023.
In preparing the interim report, the same accounting principles have been followed as in the 2023 annual financial statements, except for new standards and standard amendments that came into effect starting January 1, 2024. The new standards and standard amendments had no significant impact on QPR Software’s consolidated financial statements.
The company began reporting the production costs of the cloud platform within the materials and services expense category starting from 2024. The figures for the comparative period will be presented at the end of this interim report’s table section, according to both reported and 2024 cost groupings.
Considering the company’s financial position, this financial statement has been prepared on a going concern basis. The company entered into a refinancing agreement in January 2023.
In preparation of the consolidated financial report, company’s management is required to make estimates and assumptions regarding the future and to consider the appropriate application of accounting principles, which means that actual results may differ from those estimated.
All amounts presented in this report are consolidated figures, unless otherwise noted. The amounts presented in the report are rounded, so the sum of individual figures may differ from the sum reported.
INTANGIBLE AND TANGIBLE ASSETS
| EUR in thousands | Jan-Sept, 2024 | Jan-Sept, 2023 | Jan-Dec, 2023 |
| Increase in intangible assets: | |||
| Acquisition cost Jan 1 | 14,836 | 14,217 | 14,217 |
| Increase | 246 | 512 | 619 |
| Acquisition cost at the end of the period | 15,082 | 14,729 | 14,836 |
| Increase in tangible assets: | |||
| Acquisition cost Jan 1 | 2,816 | 2,816 | 2,816 |
| Increase | 111 | – | – |
| Acquisition cost at the end of the period | 2,927 | 2,816 | 2,816 |
CHANGES IN INTEREST-BEARING LIABILITIES
| EUR in thousands | Jan-Sept, 2024 | Jan-Sept, 2023 | Jan-Dec, 2023 |
| Interest-bearing liabilities Jan 1 | 1,818 | 2,279 | 2,279 |
| Proceeds from borrowings | 1,197 | 1,500 | 1,500 |
| IFRS 16 – change in lease liability | 97 | -335 | -319 |
| Repayments | 1,500 | 1,623 | 1,641 |
| Acquisition cost at Sept 30 | 1,612 | 1,820 | 1,818 |
PLEDGES AND COMMITMENTS
| EUR in thousands | Sept 30, 2024 | Sept 30, 2023 | Change, % |
Dec 31, 2023 |
| Business mortgages (held by the Company) | 2,382 | 2,381 | 0 | 2,382 |
| Minimum lease payments based on lease agreements: | ||||
| Maturing in less than one year | 30 | 30 | -1 | 30 |
| Maturing in 1-5 years | 3 | 34 | -90 | 27 |
| Total | 34 | 65 | -48 | 57 |
| Total pledges and commitments | 2,416 | 2,445 | -1 | 2,439 |
CONSOLIDATED INCOME STATEMENT BY QUARTER (2023 RESTATED)
| EUR in thousands | July-Sept, 2024 | April-June, 2024 |
Jan-Mar, 2024 |
Oct-Dec, 2023 |
July-Sept, 2023 |
| Net sales | 1,409 | 1,473 | 1,769 | 1,599 | 1,806 |
| Other operating income | – | – | – | – | – |
| Materials and services | 210 | 223 | 260 | 229 | 240 |
| Employee benefit expenses | 658 | 820 | 1,021 | 1,202 | 1,056 |
| Other operating expenses | 273 | 249 | 193 | 199 | 268 |
| EBITDA | 269 | 181 | 295 | -31 | 242 |
| Depreciation and amortization | 274 | 247 | 263 | 252 | 254 |
| Operating result | -6 | -66 | 32 | -283 | -12 |
| Financial income and expenses | -28 | -21 | -20 | -24 | -25 |
| Result before tax | -33 | -87 | 13 | -307 | -37 |
| Income taxes | – | – | – | – | – |
| Result for the period | -33 | -87 | 13 | -307 | -37 |
CONSOLIDATED INCOME STATEMENT BY QUARTER (2023 AS PUBLISHED)
| EUR in thousands | July-Sept, 2024 | April-June, 2024 |
Jan-Mar, 2024 |
Oct-Dec, 2023 |
July-Sept, 2023 |
| Net sales | 1,409 | 1,473 | 1,769 | 1,599 | 1,806 |
| Other operating income | – | – | – | – | |
| Materials and services | 210 | 223 | 260 | 134 | 147 |
| Employee benefit expenses | 658 | 820 | 1,021 | 1,202 | 1,056 |
| Other operating expenses | 273 | 249 | 193 | 294 | 361 |
| EBITDA | 269 | 181 | 295 | -31 | 242 |
| Depreciation and amortization | 274 | 247 | 263 | 252 | 254 |
| Operating result | -6 | -66 | 32 | -283 | -12 |
| Financial income and expenses | -28 | -21 | -20 | -24 | -25 |
| Result before tax | -33 | -87 | 13 | -307 | -37 |
| Income taxes | – | – | – | – | – |
| Result for the period | -33 | -87 | 13 | -307 | -37 |
GROUP KEY FIGURES
| EUR in thousands, unless otherwise indicated |
Jan-Sept or Sept 30, 2024 | Jan-Sept or Sept 30, 2023 | Jan-Dec or Dec 31, 2023 |
| Net sales | 4,651 | 5,951 | 7,550 |
| Net sales growth, % | -21.8 | 4.8 | -3.5 |
| EBITDA | 745 | 213 | 182 |
| % of net sales | 16.0 | 3.6 | 2.4 |
| Operating result | -39 | -530 | -813 |
| % of net sales | -0.8 | -8.9 | -10.8 |
| Result before tax | -107 | -617 | -924 |
| % of net sales | -2.3 | -10.4 | -12.2 |
| Result for the period | -107 | -617 | -924 |
| % of net sales | -2.3 | -10.4 | -12.2 |
| Return on equity (per annum), % | -41.8 | -146.4 | -221.5 |
| Return on investment (per annum), % | -9.0 | -35.9 | -42.0 |
| Cash and cash equivalents | 99 | 181 | 885 |
| Net borrowings | 1,513 | 1,639 | 934 |
| Equity | 335 | 637 | 348 |
| Gearing, % | 451 | 257 | 268 |
| Equity ratio, % | 11.0 | 13.7 | 8.1 |
| Total balance sheet | 4,728 | 5,484 | 5,869 |
| Investments in non-current assets | 357 | 511 | 637 |
| % of net sales | 7.7 | 8.6 | 8.4 |
| Product development expenses | 740 | 1,113 | 1,427 |
| % of net sales | 15.9 | 18.7 | 18.9 |
| Average number of personnel | 39 | 60 | 57 |
| Personnel at the beginning of period | 49 | 85 | 85 |
| Personnel at the end of period | 30 | 52 | 49 |
| Earnings per share, EUR (basic and diluted) |
-0.006 | -0.038 | -0.055 |
| Equity per share, EUR | 0.019 | 0.036 | 0.020 |
Source: United States Department of Justice (Human Trafficking)
Defendant chased victim, firing shots, as she tried to escape from him on Aurora Avenue
Seattle – A California man pleaded guilty today to two federal felonies related to his sex trafficking of adult female victims, announced U.S. Attorney Tessa M. Gorman. Winston Cornell Burt aka “Dice Capone,” 32 of Hemet, California, was arrested November 6, 2022, after he allegedly brutally assaulted a 20-year-old woman and engaged in a rolling gun battle as she fled in a van driven by a man who picked her up from the roadway. Burt pleaded guilty to Sex Trafficking through Force, Fraud, and Coercion and Unlawful Possession of Firearms. Burt is scheduled for sentencing by U.S. District Judge John H. Chun on February 3, 2025.
According to records filed in the case, Burt self-identifies as a “pimp” who led a sex trafficking enterprise through California, Arizona, and Washington. The young women in the case were required to provide all the money they earned in prostitution to Burt. Three women had his name tattooed on their faces – an apparent sign of “ownership.”
On November 2, 2022, Burt assaulted the 20-year-old victim in this case by kicking her, punching her, and pistol whipping her after she indicated she wanted to stop working for Burt. The assault occurred at an Airbnb in south Seattle. Three days later, on November 5, 2022, Burt assaulted the victim again and forced her to strip to her underwear. The victim tried to escape from the rental home by jumping out a third story window. The defendant and two women working for him forced her into a car and drove towards a motel on north Aurora Avenue. Burt was armed with a gun, but the victim was able to get out of the car and ran into traffic on Aurora wearing only her underwear. Burt and his female assistants tried to force the victim back into their car, but the victim stayed in the middle of the roadway until finally picked up by a driver who saw her in distress.
Even after the victim was driven away in a van, Burt gave chase on Aurora Avenue and fired shots at the van with the victim inside. The driver was eventually able to evade Burt and called the Washington State Patrol for assistance.
Ultimately law enforcement responded to the scene and got the victim to Harborview Medical Center for treatment.
Burt was arrested on November 6, 2022, as he was attempting to leave the Airbnb in south Seattle.
As part of the plea agreement, Burt also agrees to plead guilty to charges in King County Superior Court: three counts of Assault 2; Drive-by Shooting; Unlawful Imprisonment; and Assault-3
The plea agreement calls for the forfeiture of both firearms and more than $72,000 in cash.
Sex trafficking by force, fraud or coercion is punishable by a mandatory minimum 15 years in prison and up to life in prison and illegal possession of a firearm is punishable by ten years in prison. Both the prosecution and defense have agreed to recommend 15 years in prison to run concurrent with any sentence imposed in state court.
The case was investigated by the Seattle Police Department and the FBI with assistance from the Washington State Patrol (WSP).
Senior Deputy King County Prosecutor Alexandra Voorhees worked closely with the FBI, Seattle Police Department and Assistant United States Attorney Kate Crisham on this case.
Source: The Conversation – UK – By Leonie Fleischmann, Senior Lecturer in International Politics, City St George’s, University of London
Western political leaders were quick to argue that the killing of Hamas leader, Yahya Sinwar, on October 17 presented a window of opportunity. Perhaps the decapitation of the militant group’s senior command would be a chance for renewed ceasefire talks and the release of the Israeli hostages.
The US president, Joe Biden, urged the Israeli government the following day to “make this moment an opportunity” to end the war in Gaza. But Israel had already launched a major operation in northern Gaza. On October 12, the IDF posted a message in Arabic on social media sites warning civilians living in an area designated as D5 on Israel’s grid map of Gaza to evacuate. It said the area would soon be a “dangerous combat zone” and ordered people to move to safe areas in the south of Gaza.
This process has continued as the IDF has renewed its offensive in the north of the enclave, with an estimated 400,000 people affected, about 20% of the population of Gaza. The UN reported on October 21 that only a “trickle” of food aid has been allowed into north Gaza over the previous week. The Israeli military has denied this. But it has also been reported that the emergency polio vaccination campaign in north Gaza has had to be suspended, due to Israeli bombardment and a lack of access to UN personnel.
The forcible transfer of a population during war is illegal under international law, as is denying access to humanitarian aid for civilians. But there are fears that there is a plan to move Palestinians out of north Gaza in a plan which could pave the way for settlers to move in.
The liberal Haaretz newspaper, a consistent critic of the Netanyahu government, published an editorial on October 22 saying that there was mounting evidence that Israel is now pursuing a policy of siege and starvation to force the complete evacuation of the civilian population of northern Gaza. In doing this, the newspaper said, Israel is implementing the now notorious “generals’ plan”. It asserted:
Make no mistake, [the generals’ plan] is a war crime, and it runs contrary to UN Security Council decision 2334, which states that land may not be taken through force, referring to acts of war.
The “generals’ plan” is attributed to retired Maj. Gen. Giora Eiland, a former head of national security in Israel. As a strategy to defeat Hamas (something which has proved elusive in 12 months of bitter fighting in Gaza) it proposes the wholesale transfer of north Gaza’s population south beyond the Netzarim corridor. A siege would be imposed on those who remain.
In late September Eiland argued in an interview with Haaretz that “it’s permissible and even recommended to starve an enemy to death, provided you’ve allowed the civilians corridors of exits beforehand. And that is exactly what I am proposing”.
Israeli prime minister, Benjamin Netanyahu, recently told US secretary of state, Antony Blinken, that Israel is not planning to lay siege to northern Gaza. But the evidence of the military’s actions on the ground suggests otherwise. Since October 6 the IDF has been conducting what it calls a “clearing operation” in Jabalia, north of Gaza City, channelling civilians south while launching airstrikes against the Jabalia refugee camp, where it says units of Hamas are embedded.
There is widespread concern that the end game in north Gaza will include the return of settlers. A conference on October 22 attended by members of the ruling Likud Party, including several ministers in the Netanyahu government, heard the national security minister, Itamar Ben Gvir, assert that “encouraging emigration” of Palestinian residents of Gaza would be the “most ethical” solution to the conflict. The finance minister, Bezalel Smotrich, told journalists on his way to the conference that the Gaza Strip was “part of the Land of Israel” and that “without settlements, there is no security”.
Settlers were moved out of the the Gaza Strip in 2005, under the then prime minister Ariel Sharon’s Disengagement Plan. The plan dismantled 21 settlements in the Strip, relocating an estimated 8,000 settlers. Many vowed at the time that they would return one day.
There was a Jewish presence on the Gaza Strip from biblical times until 1929, when they were driven out during the Arab revolts, in which 133 Gazan Jews were killed. After the six-day war in 1967, Israel occupied the Sinai Peninsula, the Gaza Strip, the West Bank, East Jerusalem, and the Golan Heights. In the aftermath of the war, the main focus of settlement was national security, rather than religious ideology. Here the driving force was Israel’s deputy prime minister, Yigal Allon, who believed that national security could be guaranteed by building settlements.
As a consequence, in the 1970s, the Labour government established the initial modern settlements in the Gaza Strip. The settlements divided the enclave such that the Palestinian inhabitants in each area were isolated from each other, thus enabling Israeli control.
UK-based historian Ahron Bregman, a former Israeli army officer (who has written for The Conversation on the conflict between Israelis and Palestinians), warned in a post on X about how national security could once again be used as a pretext for settlements to be established in north Gaza.
The current operation in northern Gaza feels like a particularly ominous moment, not only in the Hamas-Israel war, but in the history of the Israeli-Palestinian conflict. Rather than use the opportunity of a weakened Hamas to reach a ceasefire and hostage deal and allow the people of Gaza to attempt to rebuild their shattered lives, Israel appears to be illegally, immorally and irreversibly changing the realities on the ground.
Leonie Fleischmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Israel’s ‘generals’ plan’ to clear Palestinians from north of Gaza could pave the way for settlers to return – https://theconversation.com/israels-generals-plan-to-clear-palestinians-from-north-of-gaza-could-pave-the-way-for-settlers-to-return-241987
Source: GlobeNewswire (MIL-OSI)
WARSAW, Ind., Oct. 25, 2024 (GLOBE NEWSWIRE) — Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $23.3 million for the three months ended September 30, 2024, which represents a decrease of $1.9 million, or 8%, compared with net income of $25.3 million for the three months ended September 30, 2023. Diluted earnings per share were $0.91 for the third quarter of 2024 and decreased $0.07, or 7%, compared to $0.98 for the third quarter of 2023. On a linked quarter basis, net income increased $789,000, or 3%, from second quarter 2024 net income of $22.5 million. Diluted earnings per share increased $0.04, or 5%, from $0.87 on a linked quarter basis.
Pretax pre-provision earnings, which is a non-GAAP measure, were $30.8 million for the three months ended September 30, 2024, an increase of $666,000, or 2%, compared to $30.1 million for the three months ended September 30, 2023. On a linked quarter basis, pretax pre-provision earnings decreased $4.6 million, or 13%, compared to $35.4 million for the second quarter of 2024.
The company further reported net income of $69.3 million for the nine months ended September 30, 2024, versus $64.1 million for the comparable period of 2023, an increase of $5.1 million, or 8%. Diluted earnings per share also increased 8% to $2.69 for the nine months ended September 30, 2024, versus $2.49 for the comparable period of 2023. Pretax pre-provision earnings were $95.5 million for the nine months ended September 30, 2024, an increase of $15.7 million, or 20%, compared to $79.8 million for the nine months ended September 30, 2023.
“Our long-term track record of serving our clients and communities through organic loan and deposit growth continued during the third quarter of 2024 and we are pleased with our performance for the quarter,” commented David M. Findlay, Chairman and Chief Executive Officer. “We continue to be encouraged by the strength of economic activity in our Indiana markets and are really well positioned to take advantage of the ongoing growth and investment we are seeing throughout our footprint.”
Quarterly Financial Performance
Third Quarter 2024 versus Third Quarter 2023 highlights:
Third Quarter 2024 versus Second Quarter 2024 highlights:
Capital Strength
The company’s total capital as a percentage of risk-weighted assets improved to 15.75% at September 30, 2024, compared to 15.13% at September 30, 2023 and 15.53% at June 30, 2024. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as “well capitalized” and reflect a strengthening of the company’s strong capital base.
The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.47% at September 30, 2024, compared to 8.62% at September 30, 2023 and 9.91% at June 30, 2024. Unrealized losses from available-for-sale investment securities improved to $154.5 million at September 30, 2024, compared to $266.4 million at September 30, 2023 and $194.9 million at June 30, 2024. When excluding the impact of accumulated other comprehensive income (loss) on tangible common equity and tangible assets, the company’s ratio of adjusted tangible common equity to adjusted tangible assets, a non-GAAP financial measure, improved to 12.29% at September 30, 2024, compared to 11.74% at September 30, 2023 and 12.18% at June 30, 2024.
Kristin L. Pruitt, President, commented, “Our capital structure is a critical strength of our balance sheet, as it has been for a very long time. This exceptionally strong capital retention supports our plans for continued organic growth as well as total return to shareholders through our common stock dividend.”
As announced on October 8, 2024, the board of directors approved a cash dividend for the third quarter of $0.48 per share, payable on November 5, 2024, to shareholders of record as of October 25, 2024. The third quarter dividend per share represents a 4% increase from the $0.46 dividend per share paid for the third quarter of 2023.
Loan Portfolio
Average total loans of $5.06 billion in the third quarter of 2024, increased $214.6 million, or 4%, from $4.85 billion for the third quarter of 2023, and increased $29.5 million, or 1%, from $5.03 billion for the second quarter of 2024.
Average total loans for the nine months ended September 30, 2024 were $5.02 billion, an increase of $232.1 million, or 5%, from $4.79 billion for the nine months ended September 30, 2023.
“Loan growth has been steady in 2024 and has been funded through healthy deposit growth. We are seeing increased activity with our manufacturing clients as we experienced $91 million, or 6%, of commercial and industrial loan growth as compared to September 30, 2023. In addition, commercial real estate loan balances increased as our relationships with in-market long-term clients expanded with projects moving forward supported by good demand and high-quality developments. As a result, commercial real estate and multi-family loans grew $128 million, or 5% year over year,” noted Findlay. “Our retail and consumer lending teams have also experienced healthy growth of $54 million or 9% in the last year. Our highly diverse loan portfolio growth continues, and it is gratifying to see both commercial and consumer lending positively impacting our balance sheet growth.”
Total loans, net of deferred loan fees, increased by $211.0 million, or 4%, from $4.87 billion as of September 30, 2023 to $5.08 billion as of September 30, 2024. The increase in loans occurred across much of the portfolio with our commercial real estate and multi-family residential loan portfolio growing by $127.4 million, or 5%, our commercial and industrial loan portfolio growing by $90.7 million, or 6%, and our consumer 1-4 family mortgage loans portfolio growing by $36.3 million, or 8%. These increases were offset by a decrease to total agribusiness and agricultural loans of $22.1 million, or 6%, and a decrease to other commercial loans of $31.6 million, or 25%. On a linked quarter basis, total loans net of deferred loan fees increased by $29.6 million, or 1%, from $5.05 billion at June 30, 2024. The linked quarter increase was primarily a result of growth in construction and land development loans of $70.9 million, or 11%, and growth in total consumer loans of $21.7 million, or 4%. Offsetting this growth were declines in total commercial and industrial loans of $33.4 million, or 2%, and in owner occupied loans of $19.6 million, or 2%.
Commercial loan originations for the third quarter included approximately $316.0 million in loan originations, offset by approximately $308.0 million in commercial loan pay downs. Line of credit usage increased to 41% as of September 30, 2024, compared to 39% at September 30, 2023 and was unchanged from 41% as of June 30, 2024. Total available lines of credit contracted by $69.0 million, or 1%, as compared to a year ago, and line usage increased by $96.0 million, or 5%, over that period. The company has limited exposure to commercial office space borrowers, all of which are in the bank’s Indiana markets. Loans totaling $102.6 million for this sector represented 2% of total loans at September 30, 2024, an increase of $1.4 million, or 1%, from June 30, 2024. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 210% of total risk-based capital at September 30, 2024.
Diversified Deposit Base
The bank’s diversified deposit base has grown on a year over year basis and on a linked quarter basis.
| DEPOSIT DETAIL (unaudited, in thousands) |
|||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | |||||||||||||||
| Retail | $ | 1,709,899 | 29.3 | % | $ | 1,724,777 | 29.9 | % | $ | 1,761,235 | 31.1 | % | |||||
| Commercial | 2,304,041 | 39.5 | 2,150,127 | 37.3 | 2,154,853 | 38.1 | |||||||||||
| Public funds | 1,726,869 | 29.6 | 1,727,593 | 30.0 | 1,563,557 | 27.7 | |||||||||||
| Core deposits | 5,740,809 | 98.4 | 5,602,497 | 97.2 | 5,479,645 | 96.9 | |||||||||||
| Brokered deposits | 96,504 | 1.6 | 161,040 | 2.8 | 177,430 | 3.1 | |||||||||||
| Total | $ | 5,837,313 | 100.0 | % | $ | 5,763,537 | 100.0 | % | $ | 5,657,075 | 100.0 | % | |||||
Total deposits increased $180.2 million, or 3%, from $5.66 billion as of September 30, 2023 to $5.84 billion as of September 30, 2024. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $261.2 million, or 5%. Total core deposits at September 30, 2024 were $5.74 billion and represented 98% of total deposits, as compared to $5.48 billion and 97% of total deposits at September 30, 2023. Brokered deposits were $96.5 million, or 2% of total deposits, at September 30, 2024, compared to $177.4 million, or 3% of total deposits, at September 30, 2023.
The change in composition of core deposits since September 30, 2023 reflects growth in commercial deposits and public funds deposits. As of September 30, 2024, commercial deposits as a percentage of total deposits increased to 39%, from 38%, public fund deposits as a percentage of total deposits increased to 30%, from 28%, and retail deposits as a percentage of total deposits contracted to 29%, from 31%, compared to balances a year ago. Commercial deposits grew annually by $149.2 million, or 7%, to $2.30 billion. Public funds deposits grew annually by $163.3 million, or 10%, to $1.73 billion. Retail deposits contracted annually by $51.3 million, or 3%, to $1.71 billion. Growth in public funds was positively impacted by the addition of a new public funds customer in the Lake City Bank footprint which included the addition of its operating accounts. Net retail outflows since September 30, 2023, reflect the continued utilization of deposits from peak savings levels during 2021.
Findlay noted, “We are pleased with annual core deposit growth of 5% or $261 million in 2024. The deposit mix shift that began in early 2023 has stabilized with growth in noninterest bearing deposits during the third quarter of 2024. Our retail banking team has done a terrific job continuing to drive market share growth in our core Indiana markets and we are pleased with our market share performance in all of our Indiana markets. Core deposit gathering is a strategic focus, continues to improve and today represents 98% of total deposits, up from 97% a year ago.”
On a linked quarter basis, total deposits increased $73.8 million, or 1%, from $5.76 billion at June 30, 2024 to $5.84 billion at September 30, 2024. Core deposits increased by $138.3 million, or 2%, while brokered deposits decreased by $64.5 million, or 40%. Linked quarter growth in core deposits resulted from growth in commercial deposits of $153.9 million, or 7%. Offsetting the increase in commercial deposits was contraction in retail deposits of $14.9 million, or 1%, and contraction in public funds deposits of $724,000, or less than 1%.
Average total deposits were $5.88 billion for the third quarter of 2024, an increase of $307.7 million, or 6%, from $5.57 billion for the third quarter of 2023. Average interest-bearing deposits drove the increase to average total deposits and increased by $481.2 million, or 12%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $422.1 million, or 15%, and growth in average time deposits of $108.4 million, or 11%. Offsetting these increases was a decrease to average savings deposits of $49.4 million, or 15%. Average noninterest-bearing demand deposits decreased by $173.5 million, or 12%.
On a linked quarter basis, average total deposits increased by $60.2 million, or 1%, from $5.82 billion for the second quarter of 2024 to $5.88 billion for the third quarter of 2024. Average interest-bearing deposits drove the increase to total average deposits, which increased by $46.9 million, or 1%. Contributing to the overall growth of interest-bearing deposits was an increase to total average time deposits of $35.5 million, or 3%, and an increase to interest bearing checking accounts of $20.4 million, or 1%. Offsetting these increases was a decrease to average savings deposits of $8.9 million, or 3%. Average noninterest-bearing demand deposits increased by $13.3 million, or 1%.
Checking account trends compared to September 30, 2023, include growth of $181.7 million, or 14%, in aggregate public fund checking account balances and growth of $144.7 million, or 7%, in aggregate commercial checking account balances, and a contraction of $2.5 million, or less than 1%, in aggregate retail checking account balances. The number of accounts has also grown for all three segments, with growth of 14% for public funds accounts, 3% for commercial accounts and 2% for retail accounts.
Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 61% as of September 30, 2024, compared to 54% at both June 30, 2024 and September 30, 2023, reflecting the growth in public fund deposits over the period. Deposits not covered by FDIC deposit insurance or the Indiana Public Deposit Insurance Fund (which insures public funds deposits in Indiana), were 32% of total deposits as of September 30, 2024, compared to 29% at June 30, 2024, and 28% as of September 30, 2023. As of September 30, 2024, 98% of deposit accounts had deposit balances less than $250,000.
Liquidity Overview
The bank has robust liquidity resources. These resources include secured borrowings available from the Federal Home Loan Bank and the Federal Reserve Bank Discount Window. In addition, the bank has unsecured borrowing capacity through long established relationships within the brokered deposits markets, Federal Funds lines from correspondent bank partners, and Insured Cash Sweep (ICS) one-way buy funds available from the Intrafi network. As of September 30, 2024, the company had access to an aggregate of $3.7 billion in liquidity from these sources, compared to $3.3 billion at both September 30, 2023 and June 30, 2024. Utilization from these sources totaled $96.5 million at September 30, 2024, compared to $267.4 million at September 30, 2023 and $161.0 million at June 30, 2024. Core deposits have historically represented, and currently represent, the primary funding resource of the bank at 98% of total deposits and purchased funds.
Investment Portfolio Overview
Total investment securities were $1.15 billion at September 30, 2024, reflecting an increase of $42.8 million, or 4%, as compared to $1.11 billion at September 30, 2023. On a linked quarter basis, investment securities increased $24.0 million, or 2%, due primarily to improvement in the fair market value of available-for-sale securities of $40.4 million and partially offset by portfolio cash flows of $15.1 million. Investment securities represented 17% of total assets on September 30, 2024, September 30, 2023 and June 30, 2024. The ratio of investment securities as a percentage of total assets remains elevated over historical levels of approximately 12% to 14%. The company expects the investment securities portfolio as a percentage of assets to continue to decrease over time as the proceeds from pay downs, sales and maturities are used to fund loan portfolio growth and for general liquidity purposes. Tax equivalent adjusted effective duration for the investment portfolio was 6.3 years at September 30, 2024, compared to 6.7 years and 6.5 years at September 30, 2023 and June 30, 2024, respectively. Tax equivalent adjusted effective duration of the investment portfolio remains elevated as compared to 4.0 years at December 31, 2019 prior to the deployment of excess liquidity to the investment portfolio and the increased rate environment. The company anticipates receiving principal and interest cash flows of approximately $26.4 million throughout the remainder of 2024 and $104.7 million during 2025 from its investment securities portfolio.
Net Interest Margin
Net interest margin was 3.16% for the third quarter of 2024, representing a 5 basis point decrease from 3.21% for the third quarter of 2023. Earning assets yields increased by 23 basis points to 6.04% for the third quarter of 2024 from 5.81% for the third quarter of 2023. The increase in earning asset yields was offset by an increase in the company’s funding costs of 28 basis points as interest expense as a percentage of average earning assets increased to 2.88% for the third quarter of 2024 from 2.60% for the third quarter of 2023. Increased industry competition for deposits has driven funding costs as a percentage of average earning assets to rise more aggressively than earning asset yields since the third quarter of 2023. Notably, the deposit mix shift from noninterest bearing deposits to interest bearing deposits encountered by the company during the recent monetary tightening cycle has stabilized with noninterest bearing deposits representing 22% of total deposits at September 30, 2024, compared to 24% at September 30, 2023 and 21% at June 30, 2024. In 2019, prior to the pandemic and the related stimulus plans, the ratio of noninterest bearing deposits to total deposits stood at 24% as of December 31, 2019.
Linked quarter net interest margin contracted by 1 basis point to 3.16% for the third quarter of 2024, compared to 3.17% for the second quarter of 2024. Average earning asset yields decreased by 3 basis points from 6.07% during the second quarter of 2024 to 6.04% during the third quarter of 2024 and were partially offset by a 2 basis point decrease in interest expense as a percentage of average earning assets from 2.90% to 2.88%.
“Net interest margin has stabilized and has responded well to the first federal fund rate decrease of 50 basis points late in the third quarter. The bank’s net interest margin expanded by 4 basis points on a linked quarter basis, excluding the impact of increased nonperforming loans. In addition, noninterest bearing deposits grew modestly during the quarter as compared to June 30, 2024. While our balance sheet continues to be assets sensitive, we are encouraged by the impact of the Federal Reserve Bank rate action,” commented Lisa M. O’Neill, Executive Vice President and Chief Financial Officer.
The cumulative loan beta, which measures the sensitivity of a bank’s average loan yield to changes in short-term interest rates, was 56% for the recent rate-tightening cycle, compared to 61% during the prior tightening cycle from 2016 through 2019. The cumulative deposit beta, which measures the sensitivity of a bank’s deposit cost to changes in short-term interest rates, was 54% for the recent rate-tightening cycle, compared to 45% during the prior tightening cycle.
Net interest income was $49.3 million for the third quarter of 2024, representing an increase of $880,000, or 2%, as compared to $48.4 million for the third quarter of 2023. On a linked quarter basis, net interest income increased $977,000, or 2%, from $48.3 million for the second quarter of 2024. Net interest income decreased by $3.5 million, or 2%, from $148.4 million for the nine months ended September 30, 2023, to $145.0 million for the nine months ended September 30, 2024.
Asset Quality
The company recorded a provision for credit losses of $3.1 million in the third quarter of 2024, an increase of $2.7 million, as compared to $400,000 in the third quarter of 2023. On a linked quarter basis, the provision expense decreased by $5.4 million, from $8.5 million for the second quarter of 2024. The elevated provision expense during the second quarter of 2024 was primarily attributable to an increase in the specific reserve allocation from the downgrade of a $43.3 million credit to an industrial company in Northern Indiana in conjunction with the relationship’s placement on nonperforming status. Additional specific reserves of $4.7 million were allocated to this credit during the third quarter of 2024.
The ratio of allowance for credit losses to total loans was 1.65% at September 30, 2024, up from 1.48% at September 30, 2023, and 1.60% at June 30, 2024. Net charge offs in the third quarter of 2024 were $143,000, compared to $353,000 in the third quarter of 2023 and $949,000 during the linked second quarter of 2024. Annualized net charge offs to average loans were 0.01% for the third quarter of 2024, compared to 0.03% for the third quarter of 2023 and 0.08% for the linked second quarter of 2024.
Nonperforming assets increased $41.3 million, or 247%, to $58.1 million as of September 30, 2024, versus $16.7 million as of September 30, 2023. On a linked quarter basis, nonperforming assets increased $427,000, or 1%, compared to $57.6 million as of June 30, 2024. The ratio of nonperforming assets to total assets at September 30, 2024 increased to 0.87% from 0.26% at September 30, 2023 and declined from 0.88% at June 30, 2024. The increase in nonperforming assets was primarily driven by the industrial borrower relationship referenced above.
Total individually analyzed and watch list loans increased by $81.2 million, or 44%, to $267.6 million as of September 30, 2024, versus $186.4 million as of September 30, 2023. On a linked quarter basis, total individually analyzed and watch list loans decreased by $687,000, or less than 1%, from $268.3 million at June 30, 2024. Watch list loans as a percentage of total loans increased by 144 basis points to 5.27% at September 30, 2024, compared to 3.83% at September 30, 2023, and decreased by 4 basis points from 5.31% at June 30, 2024. The increase in individually analyzed and watch list loans between September 30, 2024 and September 30, 2023 was primarily driven by downgrades to four commercial relationships individually greater than $10.0 million, net of paydowns, payoffs and upgrades to other relationships.
“Overall, we continue to observe stable economic conditions in our Lake City Bank footprint. The commencement of the Federal Reserve Bank easing cycle will provide some interest relief to variable rate borrowers, in particular for commercial real estate clients. We believe that loan demand could accelerate for our commercial and industrial sector if the Federal Reserve Bank takes additional easing actions,” stated Findlay.
Noninterest Income
The company’s noninterest income increased $1.1 million, or 10%, to $11.9 million for the third quarter of 2024, compared to $10.8 million for the third quarter of 2023. Wealth advisory fees increased $420,000, or 18%, driven by growth in customers and favorable market performance. Other income increased $429,000, or 72%, primarily from an improvement to income from the company’s limited partnership investments. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $11.9 million for the third quarter of 2024, an increase of $1.1 million, or 10%, compared to $10.8 million for the third quarter of 2023.
Noninterest income for the third quarter of 2024 decreased by $8.5 million, or 42%, on a linked quarter basis from $20.4 million during the second quarter of 2024. Second quarter noninterest income benefited from the net gain recognized on the exchange and partial redemption of the company’s Visa shares of $9.0 million. The company’s remaining Visa Class C shares were redeemed during the third quarter of 2024 for a net loss of $15,000. Offsetting this linked quarter decrease was an increase to other income of $333,000, or 48%, and an increase to bank owned life insurance income of $178,000, or 20%. Adjusted core noninterest income increased by $504,000, or 4%, compared to $11.4 million for the linked second quarter of 2024.
Noninterest income increased by $12.3 million, or 38%, to $45.0 million for the nine months ended September 30, 2024, compared to $32.7 million for the prior year nine-month period. The increase in noninterest income was driven primarily by the net gain on Visa shares of $9.0 million. Additionally, other income increased $2.0 million, or 105%, wealth advisory fees increased $1.0 million, or 15%, bank owned life insurance income increased $601,000, or 25%, and mortgage banking income increased $252,000. Other income increased primarily due to improved performance from limited partnership investment income and the receipt of a $1.0 million insurance recovery related to the 2023 wire fraud loss. Improved market performance of the company’s variable bank owned life insurance policies, which are tied to the performance of the equity markets, drove the increase to bank owned life insurance income. Mortgage banking income increased from pipeline expansion and a related positive impact to mortgage rate lock income. Offsetting these increases was a decrease to interest rate swap fee income of $794,000, or 100%, due to no new swap fee activity during the period. Adjusted core noninterest income for the nine months ended September 30, 2024 was $35.0 million, an increase of $2.3 million, or 7%, compared to $32.7 million for the nine months ended September 30, 2023.
“While not robust, we are pleased to report that revenue growth for the nine months ended September 30, 2024, was $8.9 million, or 5% as compared to the same period in 2023. Noninterest income, and in particular, wealth advisory fees are positively impacting the improvement in revenue,” stated Findlay. “It is rewarding to see this important part of the business growing and positively impacting revenue growth at the bank.”
Noninterest Expense
Noninterest expense increased $1.3 million, or 4%, to $30.4 million for the third quarter of 2024, compared to $29.1 million during the third quarter of 2023. Driving the third quarter 2024 increase to noninterest expense were increases to salaries and benefits expense of $499,000, or 3%, data processing fees and supplies expense of $389,000, or 12%, and corporate and business development expense of $168,000, or 14%, as compared to the third quarter of 2023. Adjusted core noninterest expense, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $30.4 million for the third quarter of 2024, an increase of $1.3 million, or 4%, compared to $29.1 million for the third quarter of 2023.
On a linked quarter basis, noninterest expense decreased by $2.9 million, or 9%, from $33.3 million during the second quarter of 2024. Other expense decreased by $3.6 million, or 58%, primarily due to the recognition of a $4.5 million legal accrual in the second quarter 2024. Offsetting the decrease to noninterest expense was an increase in salaries and employee benefits of $318,000, or 2%. Adjusted core noninterest expense increased by $1.6 million, or 6%, compared to $28.8 million for the linked second quarter of 2024.
Noninterest expense decreased by $6.8 million, or 7%, for the nine months ended September 30, 2024 to $94.4 million compared to $101.3 million for the nine months ended September 30, 2023. The $18.1 million wire fraud loss recorded during the second quarter of 2023 was the primary driver of the decrease between these periods. Offsetting this decrease were increases to salaries and employee benefits expense of $6.1 million, or 14%, other expense of $3.2 million, or 41%, data processing fees of $1.1 million, or 11%, and professional fees of $391,000, or 6%. The increase to salaries and benefits expense resulted primarily from increases to salaries and wages of $2.3 million, performance-based incentive compensation of $2.2 million, health insurance expense of $695,000 and variable deferred compensation related to the company’s variable bank owned life insurance of $536,000. The increase for data processing fees resulted from continued investment in customer-facing and operational technology solutions. Professional fees increased due to higher costs to implement technology solutions. Adjusted core noninterest expense was $89.9 million for the nine months ended September 30, 2024, an increase of $4.8 million, or 6%, from $85.1 million recorded during the comparable period of 2023.
The company’s efficiency ratio was 49.7% for the third quarter of 2024, compared to 49.1% for the third quarter of 2023 and 48.5% for the linked second quarter of 2024. The company’s adjusted core efficiency ratio, a non-GAAP measure that excludes the impact of certain non-routine operating events, was 49.7% for the third quarter of 2024, compared to 48.2% for the linked second quarter of 2024 and 49.1% for the third quarter of 2023.
The company’s efficiency ratio was 49.7% for the nine months ended September 30, 2024, compared to 55.9% for the comparable period in 2023. The company’s adjusted core efficiency ratio was 50.0% for the nine months ended September 30, 2024, compared to 47.0% for the comparable period in 2023.
Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under “LKFN.” Lake City Bank, a $6.6 billion bank headquartered in Warsaw, Indiana, was founded in 1872 and serves Central and Northern Indiana communities with 54 branch offices and a robust digital banking platform. Lake City Bank’s community banking model prioritizes building in-market long-term customer relationships while delivering technology-forward solutions for retail and commercial clients.
This document contains, and future oral and written statements of the company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “continue,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. The company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Numerous factors could cause the company’s actual results to differ from those reflected in forward-looking statements, including the effects of economic, business and market conditions and changes, particularly in our Indiana market area, including prevailing interest rates and the rate of inflation; governmental monetary and fiscal policies; the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities; and changes in borrowers’ credit risks and payment behaviors, as well as those identified in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q.
| LAKELAND FINANCIAL CORPORATION THIRD QUARTER 2024 FINANCIAL HIGHLIGHTS |
|||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| (Unaudited – Dollars in thousands, except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
| END OF PERIOD BALANCES | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Assets | $ | 6,645,371 | $ | 6,568,807 | $ | 6,426,844 | $ | 6,645,371 | $ | 6,426,844 | |||||||||
| Investments | 1,147,806 | 1,123,803 | 1,105,026 | 1,147,806 | 1,105,026 | ||||||||||||||
| Loans | 5,081,990 | 5,052,341 | 4,870,965 | 5,081,990 | 4,870,965 | ||||||||||||||
| Allowance for Credit Losses | 83,627 | 80,711 | 72,105 | 83,627 | 72,105 | ||||||||||||||
| Deposits | 5,837,313 | 5,763,537 | 5,657,075 | 5,837,313 | 5,657,075 | ||||||||||||||
| Brokered Deposits | 96,504 | 161,040 | 177,430 | 96,504 | 177,430 | ||||||||||||||
| Core Deposits (1) | 5,740,809 | 5,602,497 | 5,479,645 | 5,740,809 | 5,479,645 | ||||||||||||||
| Total Equity | 699,181 | 654,590 | 557,184 | 699,181 | 557,184 | ||||||||||||||
| Goodwill Net of Deferred Tax Assets | 3,803 | 3,803 | 3,803 | 3,803 | 3,803 | ||||||||||||||
| Tangible Common Equity (2) | 695,378 | 650,787 | 553,381 | 695,378 | 553,381 | ||||||||||||||
| Adjusted Tangible Common Equity (2) | 832,813 | 820,534 | 780,756 | 832,813 | 780,756 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||
| Total Assets | $ | 6,656,464 | $ | 6,642,954 | $ | 6,498,984 | $ | 6,618,102 | $ | 6,448,316 | |||||||||
| Earning Assets | 6,329,287 | 6,295,281 | 6,145,894 | 6,280,677 | 6,103,538 | ||||||||||||||
| Investments | 1,128,705 | 1,118,776 | 1,171,426 | 1,135,304 | 1,210,540 | ||||||||||||||
| Loans | 5,064,348 | 5,034,851 | 4,849,758 | 5,023,556 | 4,791,431 | ||||||||||||||
| Total Deposits | 5,880,177 | 5,819,962 | 5,572,466 | 5,777,234 | 5,537,379 | ||||||||||||||
| Interest Bearing Deposits | 4,635,993 | 4,589,059 | 4,154,825 | 4,527,524 | 4,028,087 | ||||||||||||||
| Interest Bearing Liabilities | 4,649,745 | 4,666,136 | 4,382,380 | 4,616,129 | 4,246,648 | ||||||||||||||
| Total Equity | 670,160 | 638,999 | 592,510 | 651,457 | 594,063 | ||||||||||||||
| INCOME STATEMENT DATA | |||||||||||||||||||
| Net Interest Income | $ | 49,273 | $ | 48,296 | $ | 48,393 | $ | 144,985 | $ | 148,436 | |||||||||
| Net Interest Income-Fully Tax Equivalent | 50,383 | 49,493 | 49,712 | 148,558 | 152,436 | ||||||||||||||
| Provision for Credit Losses | 3,059 | 8,480 | 400 | 13,059 | 5,550 | ||||||||||||||
| Noninterest Income | 11,917 | 20,439 | 10,835 | 44,968 | 32,650 | ||||||||||||||
| Noninterest Expense | 30,393 | 33,333 | 29,097 | 94,431 | 101,265 | ||||||||||||||
| Net Income | 23,338 | 22,549 | 25,252 | 69,288 | 64,141 | ||||||||||||||
| Pretax Pre-Provision Earnings (2) | 30,797 | 35,402 | 30,131 | 95,522 | 79,821 | ||||||||||||||
| PER SHARE DATA | |||||||||||||||||||
| Basic Net Income Per Common Share | $ | 0.91 | $ | 0.88 | $ | 0.99 | $ | 2.70 | $ | 2.51 | |||||||||
| Diluted Net Income Per Common Share | 0.91 | 0.87 | 0.98 | 2.69 | 2.49 | ||||||||||||||
| Cash Dividends Declared Per Common Share | 0.48 | 0.48 | 0.46 | 1.44 | 1.38 | ||||||||||||||
| Dividend Payout | 52.75 | % | 55.17 | % | 46.94 | % | 53.53 | % | 36.95 | % | |||||||||
| Book Value Per Common Share (equity per share issued) | $ | 27.22 | $ | 25.49 | $ | 21.75 | $ | 27.22 | $ | 21.75 | |||||||||
| Tangible Book Value Per Common Share (2) | 27.07 | 25.34 | 21.60 | 27.07 | 21.60 | ||||||||||||||
| Market Value – High | $ | 72.25 | $ | 66.62 | $ | 57.00 | $ | 73.22 | $ | 77.07 | |||||||||
| Market Value – Low | 57.45 | 57.59 | 44.46 | 57.45 | 43.05 | ||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| (Unaudited – Dollars in thousands, except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
| PER SHARE DATA (continued) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Basic Weighted Average Common Shares Outstanding | 25,684,407 | 25,678,231 | 25,613,456 | 25,673,275 | 25,601,493 | ||||||||||||||
| Diluted Weighted Average Common Shares Outstanding | 25,767,739 | 25,742,871 | 25,693,535 | 25,754,357 | 25,709,841 | ||||||||||||||
| KEY RATIOS | |||||||||||||||||||
| Return on Average Assets | 1.39 | % | 1.37 | % | 1.54 | % | 1.40 | % | 1.33 | % | |||||||||
| Return on Average Total Equity | 13.85 | 14.19 | 16.91 | 14.21 | 14.44 | ||||||||||||||
| Average Equity to Average Assets | 10.07 | 9.62 | 9.12 | 9.84 | 9.21 | ||||||||||||||
| Net Interest Margin | 3.16 | 3.17 | 3.21 | 3.16 | 3.33 | ||||||||||||||
| Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income) | 49.67 | 48.49 | 49.13 | 49.71 | 55.92 | ||||||||||||||
| Loans to Deposits | 87.06 | 87.66 | 86.10 | 87.06 | 86.10 | ||||||||||||||
| Investment Securities to Total Assets | 17.27 | 17.11 | 17.19 | 17.27 | 17.19 | ||||||||||||||
| Tier 1 Leverage (3) | 12.18 | 11.98 | 11.64 | 12.18 | 11.64 | ||||||||||||||
| Tier 1 Risk-Based Capital (3) | 14.50 | 14.28 | 13.88 | 14.50 | 13.88 | ||||||||||||||
| Common Equity Tier 1 (CET1) (3) | 14.50 | 14.28 | 13.88 | 14.50 | 13.88 | ||||||||||||||
| Total Capital (3) | 15.75 | 15.53 | 15.13 | 15.75 | 15.13 | ||||||||||||||
| Tangible Capital (2) | 10.47 | 9.91 | 8.62 | 10.47 | 8.62 | ||||||||||||||
| Adjusted Tangible Capital (2) | 12.29 | 12.18 | 11.74 | 12.29 | 11.74 | ||||||||||||||
| ASSET QUALITY | |||||||||||||||||||
| Loans Past Due 30 – 89 Days | $ | 829 | $ | 1,615 | $ | 1,782 | $ | 829 | $ | 1,782 | |||||||||
| Loans Past Due 90 Days or More | 95 | 26 | 19 | 95 | 19 | ||||||||||||||
| Nonaccrual Loans | 57,551 | 57,124 | 16,290 | 57,551 | 16,290 | ||||||||||||||
| Nonperforming Loans | 57,646 | 57,150 | 16,309 | 57,646 | 16,309 | ||||||||||||||
| Other Real Estate Owned | 384 | 384 | 384 | 384 | 384 | ||||||||||||||
| Other Nonperforming Assets | 21 | 90 | 45 | 21 | 45 | ||||||||||||||
| Total Nonperforming Assets | 58,051 | 57,624 | 16,738 | 58,051 | 16,738 | ||||||||||||||
| Individually Analyzed Loans | 77,654 | 78,533 | 16,739 | 77,654 | 16,739 | ||||||||||||||
| Non-Individually Analyzed Watch List Loans | 189,918 | 189,726 | 169,621 | 189,918 | 169,621 | ||||||||||||||
| Total Individually Analyzed and Watch List Loans | 267,572 | 268,259 | 186,360 | 267,572 | 186,360 | ||||||||||||||
| Gross Charge Offs | 231 | 1,076 | 480 | 1,811 | 6,766 | ||||||||||||||
| Recoveries | 88 | 127 | 127 | 407 | 715 | ||||||||||||||
| Net Charge Offs/(Recoveries) | 143 | 949 | 353 | 1,404 | 6,051 | ||||||||||||||
| Net Charge Offs/(Recoveries) to Average Loans | 0.01 | % | 0.08 | % | 0.03 | % | 0.04 | % | 0.17 | % | |||||||||
| Credit Loss Reserve to Loans | 1.65 | 1.60 | 1.48 | 1.65 | 1.48 | ||||||||||||||
| Credit Loss Reserve to Nonperforming Loans | 145.07 | 141.23 | 442.11 | 145.07 | 442.11 | ||||||||||||||
| Nonperforming Loans to Loans | 1.13 | 1.13 | 0.33 | 1.13 | 0.33 | ||||||||||||||
| Nonperforming Assets to Assets | 0.87 | 0.88 | 0.26 | 0.87 | 0.26 | ||||||||||||||
| Total Individually Analyzed and Watch List Loans to Total Loans | 5.27 | % | 5.31 | % | 3.83 | % | 5.27 | % | 3.83 | % | |||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| (Unaudited – Dollars in thousands, except per share data) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
| PER SHARE DATA (continued) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| OTHER DATA | |||||||||||||||||||
| Full Time Equivalent Employees | 639 | 653 | 614 | 639 | 614 | ||||||||||||||
| Offices | 54 | 53 | 53 | 54 | 53 | ||||||||||||||
___________________
(1) Core deposits equals deposits less brokered deposits.
(2) Non-GAAP financial measure – see “Reconciliation of Non-GAAP Financial Measures”.
(3) Capital ratios for September 30, 2024 are preliminary until the Call Report is filed.
| CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | |||||||
| | September 30, 2024 |
December 31, 2023 |
|||||
| | (Unaudited) | | |||||
| ASSETS | |||||||
| Cash and due from banks | $ | 86,785 | $ | 70,451 | |||
| Short-term investments | 73,405 | 81,373 | |||||
| Total cash and cash equivalents | 160,190 | 151,824 | |||||
| | |||||||
| Securities available-for-sale, at fair value | 1,016,649 | 1,051,728 | |||||
| Securities held-to-maturity, at amortized cost (fair value of $118,861 and $119,215, respectively) | 131,157 | 129,918 | |||||
| Real estate mortgage loans held-for-sale | 3,148 | 1,158 | |||||
| | |||||||
| Loans, net of allowance for credit losses of $83,627 and $71,972 | 4,998,363 | 4,844,562 | |||||
| | |||||||
| Land, premises and equipment, net | 59,987 | 57,899 | |||||
| Bank owned life insurance | 112,075 | 109,114 | |||||
| Federal Reserve and Federal Home Loan Bank stock | 21,420 | 21,420 | |||||
| Accrued interest receivable | 28,471 | 30,011 | |||||
| Goodwill | 4,970 | 4,970 | |||||
| Other assets | 108,941 | 121,425 | |||||
| Total assets | $ | 6,645,371 | $ | 6,524,029 | |||
| | |||||||
| | |||||||
| LIABILITIES | |||||||
| Noninterest bearing deposits | $ | 1,284,527 | $ | 1,353,477 | |||
| Interest bearing deposits | 4,552,786 | 4,367,048 | |||||
| Total deposits | 5,837,313 | 5,720,525 | |||||
| Federal Funds purchased | 30,000 | 0 | |||||
| Federal Home Loan Bank advances | 0 | 50,000 | |||||
| Total borrowings | 30,000 | 50,000 | |||||
| Accrued interest payable | 14,784 | 20,893 | |||||
| Other liabilities | 64,093 | 82,818 | |||||
| Total liabilities | 5,946,190 | 5,874,236 | |||||
| | |||||||
| STOCKHOLDERS’ EQUITY | |||||||
| Common stock: 90,000,000 shares authorized, no par value | |||||||
| 25,974,017 shares issued and 25,506,084 outstanding as of September 30, 2024 | |||||||
| 25,903,686 shares issued and 25,430,566 outstanding as of December 31, 2023 | 128,346 | 127,692 | |||||
| Retained earnings | 724,550 | 692,760 | |||||
| Accumulated other comprehensive income (loss) | (138,136 | ) | (155,195 | ) | |||
| Treasury stock, at cost (467,933 shares and 473,120 shares as of September 30, 2024 and December 31, 2023, respectively) | (15,668 | ) | (15,553 | ) | |||
| Total stockholders’ equity | 699,092 | 649,704 | |||||
| Noncontrolling interest | 89 | 89 | |||||
| Total equity | 699,181 | 649,793 | |||||
| Total liabilities and equity | $ | 6,645,371 | $ | 6,524,029 | |||
| CONSOLIDATED STATEMENTS OF INCOME (unaudited – in thousands, except share and per share data) | |||||||||||||||
| | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| | 2024 | 2023 | 2024 | 2023 | |||||||||||
| NET INTEREST INCOME | |||||||||||||||
| Interest and fees on loans | |||||||||||||||
| Taxable | $ | 86,118 | $ | 78,910 | $ | 252,386 | $ | 223,499 | |||||||
| Tax exempt | 298 | 1,008 | 1,830 | 2,869 | |||||||||||
| Interest and dividends on securities | |||||||||||||||
| Taxable | 2,908 | 3,077 | 9,051 | 9,966 | |||||||||||
| Tax exempt | 3,921 | 4,023 | 11,800 | 12,387 | |||||||||||
| Other interest income | 1,773 | 1,605 | 4,721 | 3,604 | |||||||||||
| Total interest income | 95,018 | 88,623 | 279,788 | 252,325 | |||||||||||
| | | | | | |||||||||||
| Interest on deposits | 45,556 | 37,108 | 131,083 | 95,637 | |||||||||||
| Interest on short-term borrowings | 189 | 3,122 | 3,720 | 8,252 | |||||||||||
| Total interest expense | 45,745 | 40,230 | 134,803 | 103,889 | |||||||||||
| | | | | | |||||||||||
| NET INTEREST INCOME | 49,273 | 48,393 | 144,985 | 148,436 | |||||||||||
| | | | | | |||||||||||
| Provision for credit losses | 3,059 | 400 | 13,059 | 5,550 | |||||||||||
| | | | | | |||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 46,214 | 47,993 | 131,926 | 142,886 | |||||||||||
| | | | | | |||||||||||
| NONINTEREST INCOME | |||||||||||||||
| Wealth advisory fees | 2,718 | 2,298 | 7,770 | 6,769 | |||||||||||
| Investment brokerage fees | 438 | 408 | 1,438 | 1,370 | |||||||||||
| Service charges on deposit accounts | 2,835 | 2,735 | 8,332 | 8,091 | |||||||||||
| Loan and service fees | 2,955 | 2,934 | 8,855 | 8,782 | |||||||||||
| Merchant and interchange fee income | 898 | 938 | 2,653 | 2,744 | |||||||||||
| Bank owned life insurance income | 1,068 | 1,009 | 2,994 | 2,393 | |||||||||||
| Interest rate swap fee income | 0 | 0 | 0 | 794 | |||||||||||
| Mortgage banking income (loss) | (7 | ) | (50 | ) | 68 | (184 | ) | ||||||||
| Net securities gains (losses) | 0 | (35 | ) | (46 | ) | (16 | ) | ||||||||
| Net gain (loss) on Visa shares | (15 | ) | 0 | 8,996 | 0 | ||||||||||
| Other income | 1,027 | 598 | 3,908 | 1,907 | |||||||||||
| Total noninterest income | 11,917 | 10,835 | 44,968 | 32,650 | |||||||||||
| | | | | | |||||||||||
| NONINTEREST EXPENSE | |||||||||||||||
| Salaries and employee benefits | 16,476 | 15,977 | 49,467 | 43,414 | |||||||||||
| Net occupancy expense | 1,721 | 1,621 | 5,159 | 4,874 | |||||||||||
| Equipment costs | 1,452 | 1,325 | 4,207 | 4,189 | |||||||||||
| Data processing fees and supplies | 3,768 | 3,379 | 11,419 | 10,305 | |||||||||||
| Corporate and business development | 1,369 | 1,201 | 4,015 | 3,930 | |||||||||||
| FDIC insurance and other regulatory fees | 966 | 871 | 2,571 | 2,469 | |||||||||||
| Professional fees | 2,089 | 2,114 | 6,675 | 6,284 | |||||||||||
| Wire fraud loss | 0 | 0 | 0 | 18,058 | |||||||||||
| Other expense | 2,552 | 2,609 | 10,918 | 7,742 | |||||||||||
| Total noninterest expense | 30,393 | 29,097 | 94,431 | 101,265 | |||||||||||
| | | | | | |||||||||||
| INCOME BEFORE INCOME TAX EXPENSE | 27,738 | 29,731 | 82,463 | 74,271 | |||||||||||
| Income tax expense | 4,400 | 4,479 | 13,175 | 10,130 | |||||||||||
| NET INCOME | $ | 23,338 | $ | 25,252 | $ | 69,288 | $ | 64,141 | |||||||
| | | | | | |||||||||||
| BASIC WEIGHTED AVERAGE COMMON SHARES | 25,684,407 | 25,613,456 | 25,673,275 | 25,601,493 | |||||||||||
| | | | | | |||||||||||
| BASIC EARNINGS PER COMMON SHARE | $ | 0.91 | $ | 0.99 | $ | 2.70 | $ | 2.51 | |||||||
| | |||||||||||||||
| DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,767,739 | 25,693,535 | 25,754,357 | 25,709,841 | |||||||||||
| | |||||||||||||||
| DILUTED EARNINGS PER COMMON SHARE | $ | 0.91 | $ | 0.98 | $ | 2.69 | $ | 2.49 | |||||||
| LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands) |
||||||||||||||||||||
| September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
||||||||||||||||||
| Commercial and industrial loans: | ||||||||||||||||||||
| Working capital lines of credit loans | $ | 678,079 | 13.3 | % | $ | 697,754 | 13.8 | % | $ | 589,345 | 12.1 | % | ||||||||
| Non-working capital loans | 814,804 | 16.0 | 828,523 | 16.4 | 812,875 | 16.7 | ||||||||||||||
| Total commercial and industrial loans | 1,492,883 | 29.3 | 1,526,277 | 30.2 | 1,402,220 | 28.8 | ||||||||||||||
| | ||||||||||||||||||||
| Commercial real estate and multi-family residential loans: | ||||||||||||||||||||
| Construction and land development loans | 729,293 | 14.3 | 658,345 | 13.0 | 633,920 | 13.0 | ||||||||||||||
| Owner occupied loans | 810,453 | 15.9 | 830,018 | 16.4 | 811,175 | 16.6 | ||||||||||||||
| Nonowner occupied loans | 766,821 | 15.1 | 762,365 | 15.1 | 740,783 | 15.2 | ||||||||||||||
| Multifamily loans | 243,283 | 4.8 | 252,652 | 5.0 | 236,581 | 4.8 | ||||||||||||||
| Total commercial real estate and multi-family residential loans | 2,549,850 | 50.1 | 2,503,380 | 49.5 | 2,422,459 | 49.6 | ||||||||||||||
| | ||||||||||||||||||||
| Agri-business and agricultural loans: | ||||||||||||||||||||
| Loans secured by farmland | 157,413 | 3.1 | 161,410 | 3.2 | 183,241 | 3.8 | ||||||||||||||
| Loans for agricultural production | 200,971 | 4.0 | 199,654 | 4.0 | 197,287 | 4.0 | ||||||||||||||
| Total agri-business and agricultural loans | 358,384 | 7.1 | 361,064 | 7.2 | 380,528 | 7.8 | ||||||||||||||
| | ||||||||||||||||||||
| Other commercial loans | 94,309 | 1.9 | 96,703 | 1.9 | 125,939 | 2.6 | ||||||||||||||
| Total commercial loans | 4,495,426 | 88.4 | 4,487,424 | 88.8 | 4,331,146 | 88.8 | ||||||||||||||
| | ||||||||||||||||||||
| Consumer 1-4 family mortgage loans: | ||||||||||||||||||||
| Closed end first mortgage loans | 261,462 | 5.1 | 259,094 | 5.1 | 247,114 | 5.1 | ||||||||||||||
| Open end and junior lien loans | 210,275 | 4.1 | 197,861 | 3.9 | 189,611 | 3.9 | ||||||||||||||
| Residential construction and land development loans | 14,200 | 0.3 | 12,952 | 0.3 | 12,888 | 0.3 | ||||||||||||||
| Total consumer 1-4 family mortgage loans | 485,937 | 9.5 | 469,907 | 9.3 | 449,613 | 9.3 | ||||||||||||||
| | | |||||||||||||||||||
| Other consumer loans | 103,547 | 2.1 | 97,895 | 1.9 | 93,737 | 1.9 | ||||||||||||||
| Total consumer loans | 589,484 | 11.6 | 567,802 | 11.2 | 543,350 | 11.2 | ||||||||||||||
| Subtotal | 5,084,910 | 100.0 | % | 5,055,226 | 100.0 | % | 4,874,496 | 100.0 | % | |||||||||||
| Less: Allowance for credit losses | (83,627 | ) | (80,711 | ) | | (72,105 | ) | | ||||||||||||
| Net deferred loan fees | (2,920 | ) | (2,885 | ) | | (3,531 | ) | | ||||||||||||
| Loans, net | $ | 4,998,363 | $ | 4,971,630 | | $ | 4,798,860 | | ||||||||||||
| LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands) |
||||||||
| September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
||||||
| Noninterest bearing demand deposits | $ | 1,284,527 | $ | 1,212,989 | $ | 1,377,650 | ||
| Savings and transaction accounts: | ||||||||
| Savings deposits | 276,468 | 283,809 | 315,651 | |||||
| Interest bearing demand deposits | 3,273,405 | 3,274,179 | 2,891,683 | |||||
| Time deposits: | ||||||||
| Deposits of $100,000 or more | 787,095 | 776,314 | 756,107 | |||||
| Other time deposits | 215,818 | 216,246 | 315,984 | |||||
| Total deposits | $ | 5,837,313 | $ | 5,763,537 | $ | 5,657,075 | ||
| FHLB advances and other borrowings | 30,000 | 55,000 | 90,000 | |||||
| Total funding sources | $ | 5,867,313 | $ | 5,818,537 | $ | 5,747,075 | ||
| LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED) |
||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | Three Months Ended June 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||
| (fully tax equivalent basis, dollars in thousands) | Average Balance |
Interest Income |
Yield (1)/ Rate |
Average Balance |
Interest Income |
Yield (1)/ Rate |
Average Balance |
Interest Income |
Yield (1)/ Rate |
|||||||||||||||||||||
| Earning Assets | ||||||||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||||||||
| Taxable (2)(3) | $ | 5,037,855 | $ | 86,118 | 6.80 | % | $ | 4,993,270 | $ | 84,226 | 6.78 | % | $ | 4,791,156 | $ | 78,910 | 6.53 | % | ||||||||||||
| Tax exempt (1) | 26,493 | 366 | 5.50 | 41,581 | 783 | 7.57 | 58,602 | 1,258 | 8.52 | |||||||||||||||||||||
| Investments: (1) | ||||||||||||||||||||||||||||||
| Securities | 1,128,705 | 7,871 | 2.77 | 1,118,776 | 8,082 | 2.91 | 1,171,426 | 8,169 | 2.77 | |||||||||||||||||||||
| Short-term investments | 2,841 | 35 | 4.90 | 2,836 | 35 | 4.96 | 2,533 | 29 | 4.54 | |||||||||||||||||||||
| Interest bearing deposits | 133,393 | 1,738 | 5.18 | 138,818 | 1,807 | 5.24 | 122,177 | 1,576 | 5.12 | |||||||||||||||||||||
| Total earning assets | $ | 6,329,287 | $ | 96,128 | 6.04 | % | $ | 6,295,281 | $ | 94,933 | 6.07 | % | $ | 6,145,894 | $ | 89,942 | 5.81 | % | ||||||||||||
| Less: Allowance for credit losses | (81,353 | ) | (74,166 | ) | (71,997 | ) | ||||||||||||||||||||||||
| Nonearning Assets | ||||||||||||||||||||||||||||||
| Cash and due from banks | 63,744 | 64,518 | 68,669 | |||||||||||||||||||||||||||
| Premises and equipment | 59,493 | 58,702 | 58,782 | |||||||||||||||||||||||||||
| Other nonearning assets | 285,293 | 298,619 | 297,636 | |||||||||||||||||||||||||||
| Total assets | $ | 6,656,464 | $ | 6,642,954 | $ | 6,498,984 | ||||||||||||||||||||||||
| Interest Bearing Liabilities | ||||||||||||||||||||||||||||||
| Savings deposits | $ | 280,180 | $ | 45 | 0.06 | % | $ | 289,107 | $ | 48 | 0.07 | % | $ | 329,557 | $ | 57 | 0.07 | % | ||||||||||||
| Interest bearing checking accounts | 3,295,911 | 33,822 | 4.08 | 3,275,502 | 33,323 | 4.09 | 2,873,795 | 27,891 | 3.85 | |||||||||||||||||||||
| Time deposits: | ||||||||||||||||||||||||||||||
| In denominations under $100,000 | 215,020 | 1,914 | 3.54 | 217,146 | 1,871 | 3.47 | 211,039 | 1,507 | 2.83 | |||||||||||||||||||||
| In denominations over $100,000 | 844,882 | 9,775 | 4.60 | 807,304 | 9,121 | 4.54 | 740,434 | 7,654 | 4.10 | |||||||||||||||||||||
| Miscellaneous short-term borrowings | 13,752 | 189 | 5.48 | 77,077 | 1,077 | 5.62 | 227,555 | 3,121 | 5.44 | |||||||||||||||||||||
| Total interest bearing liabilities | $ | 4,649,745 | $ | 45,745 | 3.91 | % | $ | 4,666,136 | $ | 45,440 | 3.92 | % | $ | 4,382,380 | $ | 40,230 | 3.64 | % | ||||||||||||
| Noninterest Bearing Liabilities | ||||||||||||||||||||||||||||||
| Demand deposits | 1,244,184 | 1,230,903 | 1,417,641 | |||||||||||||||||||||||||||
| Other liabilities | 92,375 | 106,916 | 106,453 | |||||||||||||||||||||||||||
| Stockholders’ Equity | 670,160 | 638,999 | 592,510 | |||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 6,656,464 | $ | 6,642,954 | $ | 6,498,984 | ||||||||||||||||||||||||
| Interest Margin Recap | ||||||||||||||||||||||||||||||
| Interest income/average earning assets | 96,128 | 6.04 | % | 94,933 | 6.07 | % | 89,942 | 5.81 | % | |||||||||||||||||||||
| Interest expense/average earning assets | 45,745 | 2.88 | 45,440 | 2.90 | 40,230 | 2.60 | ||||||||||||||||||||||||
| Net interest income and margin | $ | 50,383 | 3.16 | % | $ | 49,493 | 3.17 | % | $ | 49,712 | 3.21 | % | ||||||||||||||||||
(1) Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983, included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $1.11 million, $1.20 million and $1.32 million in the three-month periods ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(2) Loan fees, which are immaterial in relation to total taxable loan interest income for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, are included as taxable loan interest income.
(3) Nonaccrual loans are included in the average balance of taxable loans.
Reconciliation of Non-GAAP Financial Measures
Tangible common equity, adjusted tangible common equity, tangible assets, adjusted tangible assets, tangible book value per common share, tangible common equity to tangible assets, adjusted tangible common equity to adjusted tangible assets, and pretax pre-provision earnings are non-GAAP financial measures calculated based on GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Adjusted tangible assets and adjusted tangible common equity remove the fair market value adjustment impact of the available-for-sale investment securities portfolio in accumulated other comprehensive income (loss) (“AOCI”). Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding less true treasury stock. Pretax pre-provision earnings is calculated by adding net interest income to noninterest income and subtracting noninterest expense. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company’s value meaningful to understanding of the company’s financial information and performance.
A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| Sep. 30, 2024 | Jun. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |||||||||||||||
| Total Equity | $ | 699,181 | $ | 654,590 | $ | 557,184 | $ | 699,181 | $ | 557,184 | |||||||||
| Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||||||
| Plus: DTA Related to Goodwill | 1,167 | 1,167 | 1,167 | 1,167 | 1,167 | ||||||||||||||
| Tangible Common Equity | 695,378 | 650,787 | 553,381 | 695,378 | 553,381 | ||||||||||||||
| Market Value Adjustment in AOCI | 137,435 | 169,747 | 227,375 | 137,435 | 227,375 | ||||||||||||||
| Adjusted Tangible Common Equity | 832,813 | 820,534 | 780,756 | 832,813 | 780,756 | ||||||||||||||
| Assets | $ | 6,645,371 | $ | 6,568,807 | $ | 6,426,844 | $ | 6,645,371 | $ | 6,426,844 | |||||||||
| Less: Goodwill | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | (4,970 | ) | |||||||||
| Plus: DTA Related to Goodwill | 1,167 | 1,167 | 1,167 | 1,167 | 1,167 | ||||||||||||||
| Tangible Assets | 6,641,568 | 6,565,004 | 6,423,041 | 6,641,568 | 6,423,041 | ||||||||||||||
| Market Value Adjustment in AOCI | 137,435 | 169,747 | 227,375 | 137,435 | 227,375 | ||||||||||||||
| Adjusted Tangible Assets | 6,779,003 | 6,734,751 | 6,650,416 | 6,779,003 | 6,650,416 | ||||||||||||||
| Ending Common Shares Issued | 25,684,916 | 25,679,066 | 25,614,163 | 25,684,916 | 25,614,163 | ||||||||||||||
| Tangible Book Value Per Common Share | $ | 27.07 | $ | 25.34 | $ | 21.60 | $ | 27.07 | $ | 21.60 | |||||||||
| Tangible Common Equity/Tangible Assets | 10.47 | % | 9.91 | % | 8.62 | % | 10.47 | % | 8.62 | % | |||||||||
| Adjusted Tangible Common Equity/Adjusted Tangible Assets | 12.29 | % | 12.18 | % | 11.74 | % | 12.29 | % | 11.74 | % | |||||||||
| Net Interest Income | $ | 49,273 | $ | 48,296 | $ | 48,393 | $ | 144,985 | $ | 148,436 | |||||||||
| Plus: Noninterest Income | 11,917 | 20,439 | 10,835 | 44,968 | 32,650 | ||||||||||||||
| Minus: Noninterest Expense | (30,393 | ) | (33,333 | ) | (29,097 | ) | (94,431 | ) | (101,265 | ) | |||||||||
| Pretax Pre-Provision Earnings | $ | 30,797 | $ | 35,402 | $ | 30,131 | $ | 95,522 | $ | 79,821 | |||||||||
Adjusted core noninterest income, adjusted core noninterest expense, adjusted earnings before income taxes, core operational profitability, core operational diluted earnings per common share and adjusted core efficiency ratio are non-GAAP financial measures calculated based on GAAP amounts. These adjusted amounts are calculated by excluding the impact of the net gain on Visa shares, legal accrual, and wire fraud loss and associated insurance and loss recoveries and adjustments to salaries and employee benefits expense for the periods presented below. Management considers these measures of financial performance to be meaningful to understanding the company’s core business performance for these periods.
A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| Sep. 30, 2024 | Jun. 30, 2024 | Sep. 30, 2023 | Sep. 30, 2024 | Sep. 30, 2023 | |||||||||||||||
| Noninterest Income | $ | 11,917 | $ | 20,439 | $ | 10,835 | $ | 44,968 | $ | 32,650 | |||||||||
| Less: Net (Gain) Loss on Visa Shares | 15 | (9,011 | ) | 0 | (8,996 | ) | 0 | ||||||||||||
| Less: Insurance Recoveries | 0 | 0 | 0 | (1,000 | ) | 0 | |||||||||||||
| Adjusted Core Noninterest Income | $ | 11,932 | $ | 11,428 | $ | 10,835 | $ | 34,972 | $ | 32,650 | |||||||||
| Noninterest Expense | $ | 30,393 | $ | 33,333 | $ | 29,097 | $ | 94,431 | $ | 101,265 | |||||||||
| Less: Legal Accrual | 0 | (4,537 | ) | 0 | (4,537 | ) | 0 | ||||||||||||
| Less: Wire Fraud Loss | 0 | 0 | 0 | 0 | (18,058 | ) | |||||||||||||
| Plus: Salaries and Employee Benefits (1) | 0 | 0 | 0 | 0 | 1,850 | ||||||||||||||
| Adjusted Core Noninterest Expense | $ | 30,393 | $ | 28,796 | $ | 29,097 | $ | 89,894 | $ | 85,057 | |||||||||
| Earnings Before Income Taxes | $ | 27,738 | $ | 26,922 | $ | 29,731 | $ | 82,463 | $ | 74,271 | |||||||||
| Adjusted Core Impact: | |||||||||||||||||||
| Noninterest Income | 15 | (9,011 | ) | 0 | (9,996 | ) | 0 | ||||||||||||
| Noninterest Expense | 0 | 4,537 | 0 | 4,537 | 16,208 | ||||||||||||||
| Total Adjusted Core Impact | 15 | (4,474 | ) | 0 | (5,459 | ) | 16,208 | ||||||||||||
| Adjusted Earnings Before Income Taxes | 27,753 | 22,448 | 29,731 | 77,004 | 90,479 | ||||||||||||||
| Tax Effect | (4,404 | ) | (3,261 | ) | (4,479 | ) | (11,817 | ) | (14,123 | ) | |||||||||
| Core Operational Profitability (2) | $ | 23,349 | $ | 19,187 | $ | 25,252 | $ | 65,187 | $ | 76,356 | |||||||||
| Diluted Earnings Per Common Share | $ | 0.91 | $ | 0.87 | $ | 0.98 | $ | 2.69 | $ | 2.49 | |||||||||
| Impact of Adjusted Core Items | 0.00 | (0.13 | ) | 0.00 | (0.16 | ) | 0.48 | ||||||||||||
| Core Operational Diluted Earnings Per Common Share | $ | 0.91 | $ | 0.74 | $ | 0.98 | $ | 2.53 | $ | 2.97 | |||||||||
| Adjusted Core Efficiency Ratio | 49.66 | % | 48.22 | % | 49.13 | % | 49.95 | % | 46.97 | % | |||||||||
(1) In 2023, long-term, incentive-based compensation accruals were reduced as a result of the wire fraud loss and associated insurance and loss recoveries.
(2) Core operational profitability was $11,000 higher and $3.4 million lower than reported net income for the three months ended September 30, 2024 and June 30, 2024, respectively. Core operational profitability was $4.1 million lower and $12.2 million higher than reported net income for the nine months ended September 30, 2024 and 2023, respectively.
Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
Source: African Development Bank Group
What: Chemicals and Fertilizers Sectors Roundtable and Clinics
Who: The African Development Bank, in collaboration with the Chemicals and Fertilizers Export Council and the Chamber of Chemical Industries
When: 10 am GMT+3; 28 October 2024
Where: Fairmont Nile City Hotel
The African Development Bank, in collaboration with Egypt’s Chemicals and Fertilizers Export Council and the Chamber of Chemical Industries will host an investment and trade roundtable and clinic for top Egyptian Chemicals and Fertilizer companies on 28 October 2024 at Cairo’s Fairmont Nile City Hotel.
The Roundtable will bring together African Development Bank private sector experts with top 30 manufacturers and other stakeholders to discuss collaboration opportunities in support of boosting the chemicals and fertilizers industry sectors. Participants will learn about the Bank’s financial and non-financial support for Industrial and Trade Development.
The event will also feature presentations from the private sector unit at the Ministry of International Cooperation to highlight its new partnerships and donor coordination platform (Hafez). The roundtable will benefit from contributions by African Development Bank and African Continental Free Trade Area trade experts, and the Egyptian Commercial Services representative in Africa, on practical guidelines and trade solutions to enhance Egypt’s two-way trade with other African countries.
AGENDA
| 10:00 – 10:30 | REGISTRATION | |||
| 10:30 – 10:40 | Opening by Dr Ghada Abuzaid, Principal Industrial Programs Coordinator, AfDB AfDB Video |
|||
| 10:40 – 11:00 | WELCOME | Welcome Remarks African Development Bank Export Council and Chamber of Chemicals & Fertilizers |
Mr. Abdourahmane Diaw, Country Manager, AfDB Dr. Sherif El Gabaly, Chairman, Chamber of Chemicals and Fertilizers |
|
| 11:00 – 11:15 | Egyptian Chemicals & Fertilizers Sector State of Affairs, Market Trends and Exports Potential | Mr. Khaled Abo El Makarem, Chairman of the Export Council and Deputy Chairman of the Chamber |
||
| 11:15 – 11:40 | LEARN | 1st Panel: Partnerships and Financial Support to the Egyptian Chemical Industries & Takeaways |
Context setting by Dr Ghada Abuzaid and Top expertise panel. Dr. Tamer Taha, Head of Private sector, Innovation and Entrepreneurship, Ministry of International Cooperation and Planning Mr. Fernando Rodriques, Regional Lead Non-Sovereign Operations, AfDB Opening |
|
| 11:40 – 12:20 | 2nd Panel: Egyptian private sector contributions to developing the chemicals and fertilizers sector in Egypt and Africa & Takeaways |
Context setting by Mr. Yehia El Minshawy international Cooperation Manager and leading CEO Panelists Makarem Tex TCL MOPCO UNOX APG Eagle Chemicals |
||
| 12:20 – 13:00 | 3rd Panel: Potential of intra-Africa trade in promoting Egyptian Chemicals & fertilizers sectors & Takeaways |
Context setting by Dr. Khaled Melad, Head of the African Department, Egyptian Commercial Services and continental intra-Africa trade experts. Representatives of ECS in Africa – Ghana, Senegal, Kenya and Tanzania Mr. Abou Fall, Principal Trade Facilitation Expert, AfDB Mr. Mohamed Ali, Director of Trade in goods and competition, Africa Continental Free Trade Area (AfCFTA) |
||
| 13:00 – 13:15 | AfDB’s Recent Support to Chemicals and Fertilizers Regional Champions | Case Study – OCP, Morocco Case Study – SPIH, Cote d’Ivoire and Ghana Ms. Christelle N’Guessan, Senior Investment Officer, AfDB |
||
| ROUNDTABLE’S OFFICIAL PHOTOS | ||||
| 13:30 – 14:30 | CONNECT | Lunch and Networking to All. Participation in clinics is by invitation only. | ||
Source: GlobeNewswire (MIL-OSI)
Glass Lewis Recognizes the Value Creation and Additional Upside that the Hope Bancorp Merger Provides to Territorial Shareholders
Glass Lewis Acknowledges the Substantial Concerns and Risks Posed by Blue Hill’s Secrecy, Lack of Transparency and the Absence of Crucial, Material Information
Glass Lewis Agrees with Board’s Decision Not to Consider the Blue Hill Preliminary Indication of Interest a Superior Proposal
Territorial Board Urges Shareholders to Follow the Recommendations from Glass Lewis and ISS and Vote “FOR” the Hope Bancorp Merger TODAY
HONOLULU, Oct. 25, 2024 (GLOBE NEWSWIRE) — Territorial Bancorp Inc. (NASDAQ: TBNK) (“Territorial” or the “Company”) today announced that leading independent proxy advisory firm Glass, Lewis & Co., LLC (“Glass Lewis”) has joined Institutional Shareholder Services (“ISS”) in recommending that Territorial shareholders vote “FOR” the Company’s pending merger with Hope Bancorp, Inc. (NASDAQ: HOPE) (“Hope Bancorp”).
The Company’s Special Meeting of Stockholders to vote on the transaction is scheduled to be held on November 6, 2024 at 8:30am, Hawai‘i Time. Time is short. The Special Meeting is fast approaching. Territorial shareholders are urged to vote TODAY. Voting is simple. For more information, visit the Company’s website at https://www.territorialandhopecombination.com.
Commenting on the Glass Lewis and ISS reports, Territorial issued the following statement:
The Territorial Board of Directors and management team collectively own 9.2% of Territorial’s outstanding shares. We are confident that the Hope Bancorp transaction is the best path forward for Territorial, our shareholders, customers, employees and the local communities we serve. We have already voted all of our shares FOR the transaction, and we urge our fellow Territorial shareholders to join us and also follow the recommendations from the Territorial Board, Glass Lewis and ISS by voting FOR the Hope Bancorp transaction today.
Glass Lewis stated in its October 24, 2024 reporti:
On the favorable financial aspects associated with the Hope Bancorp merger:
On the uncertainty, risks and concerns associated with Blue Hill’s preliminary indication of interest, including its lack of financing, the secrecy of its investors and doubts about its ability to close a transaction at all:
In affirming that the Territorial Board reached the right conclusion with respect to the Blue Hill preliminary indication of interest and the determination that it is not a superior proposal or likely to lead to a proposal that is superior to the Hope Bancorp transaction:
| Your Vote is Important
Territorial Shareholders are Urged to Vote FOR the Hope Bancorp Merger TODAY. Voting is quick and easy. Call toll-free: |
About Us
Territorial Bancorp Inc., headquartered in Honolulu, Hawaiʻi, is the stock holding company for Territorial Savings Bank. Territorial Savings Bank is a state-chartered savings bank which was originally chartered in 1921 by the Territory of Hawaiʻi. Territorial Savings Bank conducts business from its headquarters in Honolulu, Hawaiʻi, and has 28 branch offices in the state of Hawaiʻi. For additional information, please visit https://www.tsbhawaii.bank/.
Additional Information about the Hope Merger and Where to Find It
In connection with the proposed Hope Merger, Hope has filed with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4, containing the Proxy Prospectus, which has been mailed or otherwise delivered to Territorial’s stockholders on or about August 29, 2024, as supplemented September 12, 2024. Hope and Territorial may file additional relevant materials with the SEC. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY PROSPECTUS, AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR FURNISHED OR WILL BE FILED OR FURNISHED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. You may obtain any of the documents filed with or furnished to the SEC by Hope or Territorial at no cost from the SEC’s website at www.sec.gov.
Forward-Looking Statements
Some statements in this news release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, expectations regarding the low-cost core deposit base, diversification of the loan portfolio, expansion of market share, capital to support growth, strengthened opportunities, enhanced value, geographic expansion, and statements about the proposed transaction being immediately accretive. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words “will,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions. With respect to any such forward-looking statements, Territorial Bancorp claims the protection provided for in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Hope Bancorp’s actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in any forward-looking statements. The closing of the proposed transaction is subject to regulatory approvals, the approval of Territorial Bancorp stockholders, and other customary closing conditions. There is no assurance that such conditions will be met or that the proposed merger will be consummated within the expected time frame, or at all. If the transaction is consummated, factors that may cause actual outcomes to differ from what is expressed or forecasted in these forward-looking statements include, among things: difficulties and delays in integrating Hope Bancorp and Territorial Bancorp and achieving anticipated synergies, cost savings and other benefits from the transaction; higher than anticipated transaction costs; deposit attrition, operating costs, customer loss and business disruption following the merger, including difficulties in maintaining relationships with employees and customers, may be greater than expected; and required governmental approvals of the merger may not be obtained on its proposed terms and schedule, or without regulatory constraints that may limit growth. Other risks and uncertainties include, but are not limited to: possible further deterioration in economic conditions in Hope Bancorp’s or Territorial Bancorp’s areas of operation or elsewhere; interest rate risk associated with volatile interest rates and related asset-liability matching risk; liquidity risks; risk of significant non-earning assets, and net credit losses that could occur, particularly in times of weak economic conditions or times of rising interest rates; the failure of or changes to assumptions and estimates underlying Hope Bancorp’s or Territorial Bancorp’s allowances for credit losses; potential increases in deposit insurance assessments and regulatory risks associated with current and future regulations; the outcome of any legal proceedings that may be instituted against Hope Bancorp or Territorial Bancorp; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of either or both parties to the proposed transaction; and diversion of management’s attention from ongoing business operations and opportunities. For additional information concerning these and other risk factors, see Hope Bancorp’s and Territorial Bancorp’s most recent Annual Reports on Form 10-K. Hope Bancorp and Territorial Bancorp do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
Investor / Media Contacts:
Walter Ida
SVP, Director of Investor Relations
808-946-1400
walter.ida@territorialsavings.net
i Permission to use quotes neither sought nor obtained
Source: GlobeNewswire (MIL-OSI)
ABERDEEN, Wash., Oct. 25, 2024 (GLOBE NEWSWIRE) — Pacific Financial Corporation (OTCQX: PFLC), (“Pacific Financial”) or the (“Company”), the holding company for Bank of the Pacific (the “Bank”), reported net income of $2.6 million, or $0.25 per diluted share for the third quarter of 2024, compared to $2.1 million, or $0.21 per diluted share for the second quarter of 2024, and $3.6 million, or $0.35 per diluted share for the third quarter of 2023. All results are unaudited.
Pacific Financials’ third quarter 2024 operating results reflected the following changes from the second quarter of 2024: (1) higher net interest income as the rise in loan and investment yields outpaced the rise in deposit and borrowing costs; (2) a negative provision for credit losses due to lower provision for unfunded loans; (3) lower non-interest income due to smaller gains on the sale of loans and investment securities; (4) slightly lower non-interest expenses; (5) a small decrease in total gross loans of 0.6% offset by an increase in the purchase of investment securities with the balance of investment securities increasing $18.1 million, or 6.5% during the third quarter; (6) an increase in total deposits of 2.6% to $1.0 billion at September 30, 2024, and (7) a $6.2 million increase in shareholder equity, or 5.4%. Tangible book value per share increased 6.6% during the quarter to $10.47.
The board of directors of Pacific Financial declared a quarterly cash dividend of $0.14 per share on October 23, 2024. The dividend will be payable on November 22, 2024 to shareholders of record on November 8, 2024. Additionally, the Board of Directors has authorized an additional $2.6 million toward future repurchases, or approximately 2.0% of total shares outstanding. The current stock repurchase program expires in November 2024.
“Our core operations continue to remain strong,” said Denise Portmann, President and Chief Executive Officer. “Our focused efforts on deposit retention, combined with the efforts of our new commercial loan and deposit teams, resulted in increased business relationships during the third quarter. Additionally, we added to our investment securities portfolio to increase yields. During the fourth quarter, we will be closing our mortgage banking division which we anticipate will improve the efficiency of our operation and improve earnings. However, the fourth quarter will reflect some one-time charges related to severance, contract and lease terminations.”
Third Quarter 2024 Financial Highlights:
Balance Sheet Review
Total assets increased 3% to $1.16 billion at September 30, 2024, compared to $1.12 billion at June 30, and decreased 2% from $1.18 billion at September 30, 2023.
Liquidity metrics continued to remain strong with total liquidity, both on and off balance sheet sources, at $576.8 million as of September 30, 2024. The Bank has established collateralized credit lines with borrowing capacity from the Federal Home Loan Bank of Des Moines (FHLB) and from the Federal Reserve Bank of San Francisco, as well as $60.0 million in unsecured borrowing lines from various correspondent banks. There was no balance outstanding on any of these facilities at quarter-end.
The following table summarizes the Bank’s available liquidity:
| LIQUIDITY (unaudited) | Period Ended | Change from | % of Deposits | ||||||||||||||||||||
| ($ in 000s) | |||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | ||||||||||||||
| Short-term Funding | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 85,430 | $ | 63,183 | $ | 147,970 | $ | 22,247 | 35 | % | $ | (62,540 | ) | -42 | % | 8 | % | 6 | % | 14 | % | ||
| Unencumbered AFS Securities | 154,565 | 139,581 | 123,842 | 14,984 | 11 | % | 30,723 | 25 | % | 15 | % | 14 | % | 12 | % | ||||||||
| Secured lines of Credit (FHLB, FRB) | 336,771 | 332,674 | 318,557 | 4,097 | 1 | % | 18,214 | 6 | % | 33 | % | 34 | % | 30 | % | ||||||||
| Short-term Funding | $ | 576,766 | $ | 535,438 | $ | 590,369 | $ | 41,328 | 8 | % | $ | (13,603 | ) | -2 | % | 56 | % | 54 | % | 56 | % | ||
Investment securities: The investment securities portfolio increased 6% to $296.8 million, compared to $278.7 million at June 30, 2024 and increased 3% compared to the like period a year ago. The increase from the prior quarter was primarily due to the purchase of collateralized mortgage obligations and mortgage backed securities. U.S. Treasury bonds, and securities issued by the U.S. Government sponsored agencies accounted for 85% of the investment portfolio as of September 30, 2024, June 30, 2024, and September 30, 2023. Within that total, collateralized mortgage obligations accounted for 48% of the investment portfolio at September 30, 2024, compared to 45% the previous quarter.
The average adjusted duration to reset of the investment securities portfolio was 4.2 years at September 30, 2024. Net unrealized losses on the investments classified as available for sale declined $7.2 million to $14.8 million ($11.5 million after-tax) at September 30, 2024, or 5% of AFS portfolio.
Gross loans balances excluding loans held for sale decreased $4.4 million, or 1%, to $699.6 million at September 30, 2024, compared to $704.0 million at June 30, 2024. During the third quarter, loan pipelines and originations slowed from prior levels as borrowers continued to adjust to higher interest rates and economic uncertainty. Due primarily to loan amortization the loan portfolio reflected slight declines in most categories except multi-family lending which increased $2.8 million. Year-over-year loan growth was 4%, or $27.6 million, with the largest increases in residential 1-4 family and multi-family loans which increased $14.8 million and $11.7 million, respectively. Loans classified as commercial real estate for regulatory concentration purposes totaled $261.3 million at September 30, 2024, or 185% of total risk based capital.
The Company continues to manage concentration limits that establish maximum exposure levels by certain industry segments, loan product types, geography and single borrower limits. In addition, the loan portfolio continues to be well-diversified and is collateralized with assets predominantly within the Company’s Western Washington and Oregon markets.
Credit quality: Non-performing assets were minimal and remained at $1.1 million, or 0.10% of total assets at September 30, 2024, compared to $1.2 million, or 0.10% at September 30, 2023. The Company has zero other real estate owned as of September 30, 2024 and accruing loans past due more than 30 days represent only 0.04% of total loans.
Allowance for credit losses (“ACL”) for loans was $8.9 million, or 1.27% of gross loans at September 30, 2024, compared to $8.9 million or 1.26% of loans at June 30, 2024 and $8.3 million or 1.24% at September 30, 2023.
A negative provision for credit losses of $66,000 was recorded in the current quarter, reflecting less allowance requirements for unfunded loans. This compares to a provision for credit losses of $304,000 in the second quarter of 2024 and $244,000 for the third quarter of 2023. Net charge-offs for the current quarter remained minimal and reflected a net recovery of $11,000, compared to a net charge-off of $56,000 for the preceding quarter and $125,000 for the third quarter one year ago.
Total deposits increased to $1.01 billion at September 30, 2024, compared to $985.6 million at June 30, 2024 and decreased from $1.05 billion at September 30, 2023. The bank has focused efforts to retain customer relationships resulting in a $22.1 million increase in business deposits.
Non-interest-bearing account balances, composed of commercial banking relationships, are the largest component of the deposit portfolio at 38% at September 30, 2024 and June 30, 2024. Money market deposits currently represent the second largest component of the deposit base and increased $11.5 million from the linked quarter and $12.8 million from the same quarter a year ago and represent 19%, 18%, and 17%, of total deposits, at September 30, 2024, June 30, 2024, and September 30, 2023, respectively. Interest-bearing demand deposits are the third largest component of the deposit base representing 18% of total deposits at September 30, 2024. Pacific Financial continues to benefit from a strong core deposit base, with core deposits representing 87% of total deposits at quarter end.
Shareholder’s equity increased $6.2 million, or 5% to $121.1 million at September 30, 2024, compared to $114.9 million at June 30, 2024, and increased $14.5 million, or 14% compared to $106.6 million at September 30, 2023. The increase in shareholders’ equity during the current quarter was due to quarterly net income, a decrease in unrealized losses on available-for-sale securities and dividends paid to shareholders. Net unrealized losses (after-tax) on available-for-sale securities were $11.5 million at September 30, 2024 compared to $17.1 million at June 30, 2024, and $23.1 million at September 30, 2023. This decrease in net unrealized losses reflects lower longer-term market interest rates at the end of the quarter.
Book value per common share was $11.78 at September 30, 2024, compared to $11.12 at June 20, 2024, and $10.22 at September 30, 2023. The Company’s tangible common equity ratio was 9.4% at September 30, 2024 and 9.1% at June 30, 2024, compared to 8.0% at September 30, 2023. Regulatory capital ratios of both the Company and the Bank continue to exceed the well-capitalized regulatory thresholds, with the Company’s leverage ratio at 11.6% and total risk-based capital ratio at 17.9% as of September 30, 2024. These regulatory capital ratios are estimates, pending completion and filing of regulatory reports.
The current stock repurchase program expires in November 2024. The Board of Directors has authorized an additional $2.6 million toward future repurchases, or approximately 2.0% of total shares outstanding.
Income Statement Review
Net interest income increased $438,000 to $11.2 million for the third quarter of 2024, compared to $10.8 million for the second quarter of 2024, and decreased $1.1 million compared to $12.3 million for the third quarter a year ago. The change in the current quarter compared to the preceding quarter reflects higher yields on a larger investment portfolio and an increase in loan yields due primarily to repricing of loans. Increasing deposit costs offset some of the benefit from higher yielding investments and loans. For the current quarter compared to the like period a year ago, funding costs have outpaced the rising yields on investments and loans.
The Bank’s net interest margin continued to remain strong at 4.19% for the quarter ended September 30, 2024 compared to 4.15% the preceding quarter. For the third quarter ended September 30, 2023, the net interest margin was 4.37% reflecting lower funding costs relative to more recent periods.
Yields on total interest earning assets increased 14 basis points to 5.29% for the third quarter of 2024 compared to 5.15% for the prior quarter and 5.06% in the like quarter a year ago. Average loan yields increased to 5.99% during the current quarter, compared to 5.80% for the preceding quarter and 5.71% for the third quarter 2023.
The Bank’s total cost of funds increased to 1.15% for the current quarter, compared to 1.05% for the preceding quarter, and 0.72% for the third quarter 2023. The increase in the costs of deposits was due to retention efforts and competitive pricing of deposit products. The percentage of non-interest bearing deposits remained high at 38% for the current quarter.
Noninterest income decreased to $1.7 million for the current quarter, compared to $2.0 million for the linked quarter and increased from $1.6 million a year earlier. The decrease compared to the linked quarter was primarily due to decreased mortgage banking loan production and no gains on the sale of investment securities.
The company plans to close its mortgage banking division by the end of 2024 which is expected to reduce non-interest income offset by a reduction of personnel and overhead expenses associated with the operation. The elimination of the mortgage banking division is expected to improve the efficiency of the company after severance and contract termination expenses are realized in the fourth quarter of 2024.
Fee and service charge income remained consistent in the third quarter of 2024 at $1.2 million compared to the previous quarter and the third quarter of 2023.
Noninterest expenses decreased to $9.7 million for the third quarter of 2024 compared to $9.8 million for the prior quarter and increased from $9.1 million for the third quarter of 2023. Within the total of noninterest expenses for the current quarter compared to the prior quarter, the largest category of salaries and employee benefits remained at $6.3 million. Similarly, data processing and occupancy expenses remained consistent to the prior quarter.
The company’s efficiency ratio decreased to 75.48% for the third quarter of 2024, compared to 77.34% in the preceding quarter and increased from 65.78% in the same quarter a year ago. The increase in the efficiency ratio relative to the previous year primarily relates to the decreased net interest margin and higher overhead expenses related to the hiring, building and marketing of new commercial loan and deposit teams.
Income tax expense: Federal and Oregon state income tax expenses totaled $633,000 for the current quarter, and $454,000 for the preceding quarter, resulting in effective tax rates of 19.6% and 17.6%, respectively. These income tax expenses reflect the benefits of tax exempt income and credits on tax-exempt loans and investments, affordable housing tax credit financing, and investments in bank owned life insurance.
| FINANCIAL HIGHLIGHTS (unaudited) | Quarter Ended | Change From | Nine Months Ended | Change | ||||||||||||||||||||||||||||
| (In 000s, except per share data) | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Sep 30, | ||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||
| Earnings Ratios & Data | ||||||||||||||||||||||||||||||||
| Net Income | $ | 2,594 | $ | 2,126 | $ | 3,645 | $ | 468 | 22 | % | $ | (1,051 | ) | -29 | % | $ | 7,370 | $ | 11,663 | $ | (4,293 | ) | -37 | % | ||||||||
| Return on average assets | 0.90 | % | 0.76 | % | 1.21 | % | 0.14 | % | -0.31 | % | 0.87 | % | 1.28 | % | -0.41 | % | ||||||||||||||||
| Return on average equity | 8.77 | % | 7.47 | % | 13.16 | % | 1.30 | % | -4.39 | % | 8.52 | % | 14.34 | % | -5.82 | % | ||||||||||||||||
| Efficiency ratio (1) | 75.48 | % | 77.34 | % | 65.78 | % | -1.86 | % | 9.70 | % | 75.67 | % | 64.64 | % | 11.03 | % | ||||||||||||||||
| Net-interest margin %(2) | 4.19 | % | 4.15 | % | 4.37 | % | 0.04 | % | -0.18 | % | 4.24 | % | 4.40 | % | -0.16 | % | ||||||||||||||||
| Share Ratios & Data | ||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 0.25 | $ | 0.21 | $ | 0.35 | $ | 0.04 | 19 | % | $ | (0.10 | ) | -29 | % | $ | 0.71 | $ | 1.12 | $ | (0.41 | ) | ||||||||||
| Diluted earning per share | $ | 0.25 | $ | 0.21 | $ | 0.35 | $ | 0.04 | 19 | % | $ | (0.10 | ) | -29 | % | $ | 0.71 | $ | 1.12 | $ | (0.41 | ) | ||||||||||
| Book value per share(3) | $ | 11.78 | $ | 11.12 | $ | 10.22 | $ | 0.66 | 6 | % | $ | 1.56 | 15 | % | ||||||||||||||||||
| Tangible book value per share(4) | $ | 10.47 | $ | 9.82 | $ | 8.93 | $ | 0.65 | 7 | % | $ | 1.54 | 17 | % | ||||||||||||||||||
| Common shares outstanding | 10,283 | 10,336 | 10,427 | (53 | ) | -1 | % | (144 | ) | -1 | % | |||||||||||||||||||||
| PFLC stock price | $ | 11.65 | $ | 9.76 | $ | 10.00 | $ | 1.89 | 19 | % | $ | 1.65 | 17 | % | ||||||||||||||||||
| Dividends paid per share | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | – | 0 | % | $ | 0.01 | 8 | % | $ | 0.42 | $ | 0.39 | $ | 0.03 | 8 | % | ||||||||||
| Balance Sheet Data | ||||||||||||||||||||||||||||||||
| Assets | $ | 1,158,410 | $ | 1,124,295 | $ | 1,181,975 | $ | 34,115 | 3 | % | $ | (23,565 | ) | -2 | % | |||||||||||||||||
| Portfolio Loans | $ | 699,603 | $ | 703,977 | $ | 671,969 | $ | (4,374 | ) | -1 | % | $ | 27,634 | 4 | % | |||||||||||||||||
| Deposits | $ | 1,011,473 | $ | 985,627 | $ | 1,051,256 | $ | 25,846 | 3 | % | $ | (39,783 | ) | -4 | % | |||||||||||||||||
| Investments | $ | 296,792 | $ | 278,728 | $ | 289,152 | $ | 18,064 | 6 | % | $ | 7,640 | 3 | % | ||||||||||||||||||
| Shareholders equity | $ | 121,087 | $ | 114,923 | $ | 106,601 | $ | 6,164 | 5 | % | $ | 14,486 | 14 | % | ||||||||||||||||||
| Liquidity Ratios | ||||||||||||||||||||||||||||||||
| Short-term funding to uninsured | ||||||||||||||||||||||||||||||||
| and uncollateralized deposits | 229 | % | 229 | % | 254 | % | 0 | % | -25 | % | ||||||||||||||||||||||
| Uninsured and uncollateralized | ||||||||||||||||||||||||||||||||
| deposits to total deposits | 25 | % | 24 | % | 22 | % | 1 | % | 3 | % | ||||||||||||||||||||||
| Portfolio loans to deposits ratio | 69 | % | 71 | % | 63 | % | -2 | % | 6 | % | ||||||||||||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||||||||||||||
| Non-performing assets to assets | 0.10 | % | 0.12 | % | 0.10 | % | -0.02 | % | 0.00 | % | ||||||||||||||||||||||
| Non-accrual loans to portfolio loans | 0.16 | % | 0.19 | % | 0.18 | % | -0.03 | % | -0.02 | % | ||||||||||||||||||||||
| Loan losses to avg portfolio loans | -0.01 | % | 0.03 | % | 0.07 | % | -0.04 | % | -0.08 | % | 0.01 | % | 0.04 | % | -0.03 | % | ||||||||||||||||
| ACL to portfolio loans | 1.27 | % | 1.26 | % | 1.24 | % | 0.01 | % | 0.03 | % | ||||||||||||||||||||||
| Capital Ratios (PFC) | ||||||||||||||||||||||||||||||||
| Total risk-based capital ratio | 17.9 | % | 17.6 | % | 17.6 | % | 0.3 | % | 0.3 | % | ||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 16.7 | % | 16.4 | % | 16.5 | % | 0.3 | % | 0.2 | % | ||||||||||||||||||||||
| Common equity tier 1 ratio | 15.0 | % | 14.8 | % | 14.8 | % | 0.2 | % | 0.2 | % | ||||||||||||||||||||||
| Leverage ratio | 11.6 | % | 11.7 | % | 10.7 | % | -0.1 | % | 0.9 | % | ||||||||||||||||||||||
| Tangible common equity ratio | 9.4 | % | 9.1 | % | 8.0 | % | 0.3 | % | 1.4 | % | ||||||||||||||||||||||
| (1) Non-interest expense divided by net interest income plus noninterest income. | ||||||||||||||||||||||||||||||||
| (2) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. | ||||||||||||||||||||||||||||||||
| (3) Book value per share is calculated as the total common shareholders’ equity divided by the period ending number of common stock shares outstanding. | ||||||||||||||||||||||||||||||||
| (4) Tangible book value per share is calculated as the total common shareholders’ equity less total intangible assets and liabilities, divided by the period ending number of common stock shares outstanding. |
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| INCOME STATEMENT (unaudited) | Quarter Ended | Change From | Nine Months Ended | Change | ||||||||||||||||||||||||||||
| ($ in 000s) | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Sep 30, | ||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||||||||
| Loan interest & fee income | $ | 10,520 | $ | 10,109 | $ | 9,549 | $ | 411 | 4 | % | $ | 971 | 10 | % | $ | 30,853 | $ | 27,166 | $ | 3,687 | 14 | % | ||||||||||
| Interest bearing cash income | 1,108 | 847 | 2,322 | 261 | 31 | % | (1,214 | ) | -52 | % | 2,890 | 7,669 | (4,779 | ) | -62 | % | ||||||||||||||||
| Investment income | 2,503 | 2,410 | 2,371 | 93 | 4 | % | 132 | 6 | % | 7,388 | 6,832 | 556 | 8 | % | ||||||||||||||||||
| Interest Income | 14,131 | 13,366 | 14,242 | 765 | 6 | % | (111 | ) | -1 | % | 41,131 | 41,667 | (536 | ) | -1 | % | ||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||||||||
| Deposits interest expense | 2,684 | 2,358 | 1,716 | 326 | 14 | % | 968 | 56 | % | 7,033 | 3,437 | 3,596 | 105 | % | ||||||||||||||||||
| Other borrowings interest expense | 243 | 242 | 246 | 1 | 0 | % | (3 | ) | -1 | % | 727 | 682 | 45 | 7 | % | |||||||||||||||||
| Interest Expense | 2,927 | 2,600 | 1,962 | 327 | 13 | % | 965 | 49 | % | 7,760 | 4,119 | 3,641 | 88 | % | ||||||||||||||||||
| Net Interest Income | 11,204 | 10,766 | 12,280 | 438 | 4 | % | (1,076 | ) | -9 | % | 33,371 | 37,548 | (4,177 | ) | -11 | % | ||||||||||||||||
| Provision (benefit) for credit losses | (66 | ) | 304 | 244 | (370 | ) | -122 | % | (310 | ) | -127 | % | 271 | 409 | (138 | ) | -34 | % | ||||||||||||||
| Net Interest Income after provision | 11,270 | 10,462 | 12,036 | 808 | 8 | % | (766 | ) | -6 | % | 33,100 | 37,139 | (4,039 | ) | -11 | % | ||||||||||||||||
| Non-Interest Income | ||||||||||||||||||||||||||||||||
| Fees and service charges | 1,225 | 1,198 | 1,248 | 27 | 2 | % | (23 | ) | -2 | % | 3,523 | 3,695 | (172 | ) | -5 | % | ||||||||||||||||
| Gain on sale of investments, net | – | 121 | – | (121 | ) | -100 | % | – | -100 | % | 121 | (154 | ) | 275 | -179 | % | ||||||||||||||||
| Gain on sale of loans, net | 267 | 445 | 170 | (178 | ) | -40 | % | 97 | 57 | % | 865 | 540 | 325 | 60 | % | |||||||||||||||||
| Income on bank-owned insurance | 188 | 182 | 174 | 6 | 3 | % | 14 | 8 | % | 550 | 509 | 41 | 8 | % | ||||||||||||||||||
| Other non-interest income | 7 | 17 | 18 | (10 | ) | -59 | % | (11 | ) | -61 | % | 34 | 53 | (19 | ) | -36 | % | |||||||||||||||
| Non-Interest Income | 1,687 | 1,963 | 1,610 | (276 | ) | -14 | % | 77 | 5 | % | 5,093 | 4,643 | 450 | 10 | % | |||||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 6,341 | 6,321 | 5,560 | 20 | 0 | % | 781 | 14 | % | 18,656 | 17,006 | 1,650 | 10 | % | ||||||||||||||||||
| Occupancy | 601 | 564 | 501 | 37 | 7 | % | 100 | 20 | % | 1,806 | 1,536 | 270 | 18 | % | ||||||||||||||||||
| Furniture, Fixtures & Equipment | 286 | 267 | 252 | 19 | 7 | % | 34 | 13 | % | 837 | 808 | 29 | 4 | % | ||||||||||||||||||
| Marketing & donations | 201 | 176 | 160 | 25 | 14 | % | 41 | 26 | % | 531 | 380 | 151 | 40 | % | ||||||||||||||||||
| Professional services | 233 | 327 | 301 | (94 | ) | -29 | % | (68 | ) | -23 | % | 897 | 941 | (44 | ) | -5 | % | |||||||||||||||
| Data Processing & IT | 1,185 | 1,165 | 1,161 | 20 | 2 | % | 24 | 2 | % | 3,541 | 3,490 | 51 | 1 | % | ||||||||||||||||||
| Other | 883 | 1,025 | 1,207 | (142 | ) | -14 | % | (324 | ) | -27 | % | 2,839 | 3,174 | (335 | ) | -11 | % | |||||||||||||||
| Non-Interest Expense | 9,730 | 9,845 | 9,142 | (115 | ) | -1 | % | 588 | 6 | % | 29,107 | 27,335 | 1,772 | 6 | % | |||||||||||||||||
| Income before income taxes | 3,227 | 2,580 | 4,504 | 647 | 25 | % | (1,277 | ) | -28 | % | 9,086 | 14,447 | (5,361 | ) | -37 | % | ||||||||||||||||
| Provision for income taxes | 633 | 454 | 859 | 179 | 39 | % | (226 | ) | -26 | % | 1,716 | 2,784 | (1,068 | ) | -38 | % | ||||||||||||||||
| Net Income | $ | 2,594 | $ | 2,126 | $ | 3,645 | $ | 468 | 22 | % | (1,051 | ) | -29 | % | $ | 7,370 | $ | 11,663 | $ | (4,293 | ) | -37 | % | |||||||||
| Effective tax rate | 19.6 | % | 17.6 | % | 19.1 | % | 2.0 | % | 0.5 | % | 18.9 | % | 19.3 | % | -0.4 | % | ||||||||||||||||
| BALANCE SHEET (unaudited) | Period Ended | Change from | % of Total | ||||||||||||||||||||||||
| ($ in 000s) | |||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | ||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Cash on hand and in banks | $ | 20,621 | $ | 17,362 | $ | 12,052 | $ | 3,259 | 19 | % | $ | 8,569 | 71 | % | 2 | % | 2 | % | 2 | % | |||||||
| Interest bearing deposits | 80,522 | 58,586 | 146,886 | 21,936 | 37 | % | (66,364 | ) | -45 | % | 7 | % | 5 | % | 12 | % | |||||||||||
| Investment securities | 296,792 | 278,728 | 289,152 | 18,064 | 6 | % | 7,640 | 3 | % | 26 | % | 25 | % | 24 | % | ||||||||||||
| Loans held-for-sale | 140 | 4,051 | 637 | (3,911 | ) | -97 | % | (497 | ) | -78 | % | 0 | % | 0 | % | 0 | % | ||||||||||
| Portfolio Loans, net of deferred fees | 698,974 | 703,322 | 671,134 | (4,348 | ) | -1 | % | 27,840 | 4 | % | 60 | % | 63 | % | 57 | % | |||||||||||
| Allowance for credit losses | (8,897 | ) | (8,859 | ) | (8,347 | ) | (38 | ) | 0 | % | (550 | ) | 7 | % | -1 | % | -1 | % | -1 | % | |||||||
| Net loans | 690,077 | 694,463 | 662,787 | (4,386 | ) | -1 | % | 27,290 | 4 | % | 60 | % | 62 | % | 56 | % | |||||||||||
| Premises & equipment | 17,124 | 15,571 | 13,756 | 1,553 | 10 | % | 3,368 | 24 | % | 2 | % | 2 | % | 2 | % | ||||||||||||
| Goodwill & Other Intangibles | 13,435 | 13,435 | 13,435 | – | 0 | % | – | 0 | % | 1 | % | 1 | % | 1 | % | ||||||||||||
| Bank-owned life Insurance | 28,084 | 27,860 | 27,321 | 224 | 1 | % | 763 | 3 | % | 2 | % | 2 | % | 2 | % | ||||||||||||
| Other assets | 11,615 | 14,239 | 15,949 | (2,624 | ) | -18 | % | (4,334 | ) | -27 | % | 1 | % | 1 | % | 1 | % | ||||||||||
| Total Assets | $ | 1,158,410 | $ | 1,124,295 | $ | 1,181,975 | $ | 34,115 | 3 | % | $ | (23,565 | ) | -2 | % | 100 | % | 100 | % | 100 | % | ||||||
| Liabilities & Shareholders’ Equity | |||||||||||||||||||||||||||
| Deposits | $ | 1,011,473 | $ | 985,627 | $ | 1,051,256 | $ | 25,846 | 3 | % | $ | (39,783 | ) | -4 | % | 87 | % | 88 | % | 89 | % | ||||||
| Borrowings | 13,403 | $ | 13,403 | $ | 13,403 | – | 0 | % | – | 0 | % | 1 | % | 1 | % | 1 | % | ||||||||||
| Other liabilities | 12,447 | $ | 10,342 | $ | 10,715 | 2,105 | 20 | % | 1,732 | 16 | % | 1 | % | 1 | % | 1 | % | ||||||||||
| Shareholders’ equity | 121,087 | $ | 114,923 | $ | 106,601 | 6,164 | 5 | % | 14,486 | 14 | % | 11 | % | 10 | % | 9 | % | ||||||||||
| Liabilities & Shareholders’ Equity | $ | 1,158,410 | $ | 1,124,295 | $ | 1,181,975 | $ | 34,115 | 3 | % | $ | (23,565 | ) | -2 | % | 100 | % | 100 | % | 100 | % | ||||||
| INVESTMENT COMPOSITION & CONCENTRATIONS (unaudited) | Period Ended | Change from | % of Total | ||||||||||||||||||||||||
| ($ in 000s) | |||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | ||||||||||||||||||
| Investment Securities | |||||||||||||||||||||||||||
| Collateralized mortgage obligations | $ | 141,842 | $ | 125,937 | $ | 126,376 | $ | 15,905 | 13 | % | $ | 15,466 | 12 | % | 48 | % | 45 | % | 45 | % | |||||||
| Mortgage backed securities | 41,264 | 37,159 | 38,322 | 4,105 | 11 | % | 2,942 | 8 | % | 14 | % | 13 | % | 13 | % | ||||||||||||
| U.S. Government and agency securities | 68,961 | 72,504 | 82,292 | (3,543 | ) | -5 | % | (13,331 | ) | -16 | % | 23 | % | 27 | % | 27 | % | ||||||||||
| Municipal securities | 44,725 | 43,128 | 42,162 | 1,597 | 4 | % | 2,563 | 6 | % | 15 | % | 15 | % | 15 | % | ||||||||||||
| Investment Securities | $ | 296,792 | $ | 278,728 | $ | 289,152 | $ | 18,064 | 6 | % | $ | 7,640 | 3 | % | 100 | % | 100 | % | 100 | % | |||||||
| Held to maturity securities | $ | 42,301 | $ | 43,244 | $ | 56,469 | $ | (943 | ) | -2 | % | $ | (14,168 | ) | -25 | % | 14 | % | 16 | % | 20 | % | |||||
| Available for sale securities | $ | 254,491 | $ | 235,484 | $ | 232,683 | $ | 19,007 | 8 | % | $ | 21,808 | 9 | % | 86 | % | 84 | % | 80 | % | |||||||
| Government & Agency securities | $ | 252,039 | $ | 235,570 | $ | 246,956 | $ | 16,469 | 7 | % | $ | 5,083 | 2 | % | 85 | % | 85 | % | 85 | % | |||||||
| AAA, AA, A rated securities | $ | 44,084 | $ | 42,471 | $ | 41,025 | $ | 1,613 | 4 | % | $ | 3,059 | 7 | % | 15 | % | 15 | % | 14 | % | |||||||
| Non-rated securities | $ | 669 | $ | 687 | $ | 1,171 | $ | (18 | ) | -3 | % | $ | (502 | ) | -43 | % | 0 | % | 0 | % | 0 | % | |||||
| AFS Unrealized Gain (Loss) | $ | (14,804 | ) | $ | (21,978 | ) | $ | (29,783 | ) | $ | 7,174 | -33 | % | $ | 14,979 | -50 | % | -5 | % | -8 | % | -10 | % | ||||
| PORTFOLIO LOAN COMPOSITION & CONCENTRATIONS (unaudited) | Period Ended | Change from | % of Total | ||||||||||||||||||||||||
| ($ in 000s) | |||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | ||||||||||||||||||
| Portfolio Loans | |||||||||||||||||||||||||||
| Commercial & agriculture | $ | 73,002 | $ | 74,952 | $ | 73,232 | $ | (1,950 | ) | -3 | % | $ | (230 | ) | 0 | % | 10 | % | 11 | % | 11 | % | |||||
| Real estate: | |||||||||||||||||||||||||||
| Construction and development | 46,569 | 47,856 | 42,584 | (1,287 | ) | -3 | % | 3,985 | 9 | % | 7 | % | 7 | % | 6 | % | |||||||||||
| Residential 1-4 family | 105,298 | 105,807 | 90,449 | (509 | ) | 0 | % | 14,849 | 16 | % | 15 | % | 14 | % | 14 | % | |||||||||||
| Multi-family | 60,773 | 58,003 | 49,092 | 2,770 | 5 | % | 11,681 | 24 | % | 9 | % | 8 | % | 7 | % | ||||||||||||
| CRE — owner occupied | 167,086 | 169,491 | 164,057 | (2,405 | ) | -1 | % | 3,029 | 2 | % | 24 | % | 24 | % | 25 | % | |||||||||||
| CRE — non owner occupied | 157,347 | 157,591 | 154,993 | (244 | ) | 0 | % | 2,354 | 2 | % | 22 | % | 22 | % | 23 | % | |||||||||||
| Farmland | 26,553 | 27,195 | 27,641 | (642 | ) | -2 | % | (1,088 | ) | -4 | % | 4 | % | 4 | % | 4 | % | ||||||||||
| Consumer | 62,975 | 63,082 | 69,921 | (107 | ) | 0 | % | (6,946 | ) | -10 | % | 9 | % | 10 | % | 10 | % | ||||||||||
| Portfolio Loans | 699,603 | 703,977 | 671,969 | (4,374 | ) | -1 | % | 27,634 | 4 | % | 100 | % | 100 | % | 100 | % | |||||||||||
| Less: ACL | (8,897 | ) | (8,859 | ) | (8,347 | ) | |||||||||||||||||||||
| Less: deferred fees | (629 | ) | (655 | ) | (835 | ) | |||||||||||||||||||||
| Net loans | $ | 690,077 | $ | 694,463 | $ | 662,787 | |||||||||||||||||||||
| Regulatory Commercial Real Estate | $ | 261,292 | $ | 260,068 | $ | 244,277 | $ | 1,224 | 0 | % | $ | 17,015 | 7 | % | 37 | % | 37 | % | 36 | % | |||||||
| Total Risk Based Capital(1) | $ | 140,971 | $ | 140,176 | $ | 137,473 | $ | 795 | 1 | % | $ | 3,498 | 3 | % | |||||||||||||
| CRE to Risk Based Capital(1) | 185 | % | 186 | % | 178 | % | -1 | % | 7 | % | |||||||||||||||||
| CRE–MULTI-FAMILY & NON OWNER OCCUPIED COMPOSITION (unaudited) | Period Ended | Change from | % of Total | |||||||||||||||||||||
| ($ in 000s) | ||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | |||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | |||||||||||||||
| Collateral Composition(2) | ||||||||||||||||||||||||
| Multifamily | $ | 63,099 | $ | 63,243 | $ | 54,677 | $ | (144 | ) | 0 | % | $ | 8,422 | 15 | % | 27 | % | 27 | % | 26 | % | |||
| Retail | 37,685 | 36,074 | 28,657 | 1,611 | 4 | % | 9,028 | 32 | % | 16 | % | 16 | % | 13 | % | |||||||||
| Hospitality | 30,844 | 30,248 | 32,190 | 596 | 2 | % | (1,346 | ) | -4 | % | 13 | % | 13 | % | 15 | % | ||||||||
| Mini Storage | 25,758 | 23,619 | 20,977 | 2,139 | 9 | % | 4,781 | 23 | % | 11 | % | 11 | % | 10 | % | |||||||||
| Office | 22,921 | 23,266 | 27,075 | (345 | ) | -1 | % | (4,154 | ) | -15 | % | 10 | % | 10 | % | 13 | % | |||||||
| Mixed Use | 22,708 | 23,520 | 22,457 | (812 | ) | -3 | % | 251 | 1 | % | 10 | % | 10 | % | 11 | % | ||||||||
| Industrial | 13,912 | 13,691 | 10,898 | 221 | 2 | % | 3,014 | 28 | % | 6 | % | 6 | % | 5 | % | |||||||||
| Warehouse | 7,582 | 7,631 | 6,204 | (49 | ) | -1 | % | 1,378 | 22 | % | 3 | % | 3 | % | 3 | % | ||||||||
| Special Purpose | 6,968 | 7,014 | 7,146 | (46 | ) | -1 | % | (178 | ) | -2 | % | 3 | % | 3 | % | 3 | % | |||||||
| Other | 3,174 | 3,213 | 3,380 | (39 | ) | -1 | % | (206 | ) | -6 | % | 1 | % | 1 | % | 1 | % | |||||||
| Total | $ | 234,651 | $ | 231,519 | $ | 213,661 | $ | 3,132 | 1 | % | $ | 20,990 | 10 | % | 100 | % | 100 | % | 100 | % | ||||
| (1) Bank of the Pacific | ||||||||||||||||||||||||
| (2) Includes loans in process of construction | ||||||||||||||||||||||||
| CREDIT QUALITY (unaudited) | Period Ended | Change from | ||||||||||||||||||
| ($ in 000s) | Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Jun 30, 2024 | |||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | ||||||||||||||
| Risk Rating Distribution | ||||||||||||||||||||
| Pass | $ | 691,199 | $ | 694,272 | $ | 664,327 | $ | (3,073 | ) | 0 | % | 26,872 | 4 | % | ||||||
| Special Mention | 4,789 | 4,731 | 1,626 | 58 | 1 | % | 3,163 | 195 | % | |||||||||||
| Substandard | 3,615 | 4,974 | 6,016 | (1,359 | ) | -27 | % | (2,401 | ) | -40 | % | |||||||||
| Portfolio Loans | $ | 699,603 | $ | 703,977 | $ | 671,969 | $ | (4,374 | ) | -1 | % | $ | 27,634 | 4 | % | |||||
| Nonperforming Assets | ||||||||||||||||||||
| Nonaccruing loans | 1,138 | 1,370 | 1,219 | $ | (232 | ) | -17 | % | (81 | ) | -7 | % | ||||||||
| Other real estate owned | – | – | – | – | 0 | % | – | 0 | % | |||||||||||
| Nonperforming Assets | $ | 1,138 | $ | 1,370 | $ | 1,219 | $ | (232 | ) | -17 | % | (81 | ) | -7 | % | |||||
| Credit Metrics | ||||||||||||||||||||
| Classified loans1 to portfolio loans | 0.52 | % | 0.71 | % | 0.90 | % | -0.19 | % | -0.38 | % | ||||||||||
| ACL to classified loans1 | 246.11 | % | 178.11 | % | 132.68 | % | 68.00 | % | 113.43 | % | ||||||||||
| Loans past due 30+ days to portfolio loans2 | 0.03 | % | 0.04 | % | 0.25 | % | -0.01 | % | -0.22 | % | ||||||||||
| Nonperforming assets to total assets | 0.10 | % | 0.12 | % | 0.10 | % | -0.02 | % | 0.00 | % | ||||||||||
| Nonaccruing loans to portfolio loans | 0.16 | % | 0.19 | % | 0.18 | % | -0.03 | % | -0.02 | % | ||||||||||
| (1) Classified loans include loans rated substandard or worse and are defined as loans having a well-defined weakness or weaknesses related to the borrower’s financial capacity or to pledged collateral that may jeopardize the repayment of the debt. They are characterized by the possibility that the Bank may sustain some loss if the deficiencies giving rise to the substandard classification are not corrected. | ||||||||||||||||||||
| (2) Excludes non-accrual loans | ||||||||||||||||||||
| DEPOSIT COMPOSITION & CONCENTRATIONS (unaudited) | Period Ended | Change from | % of Total | |||||||||||||||||||||
| ($ in 000s) | ||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Jun 30, | Sep 30, | |||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2024 | 2023 | |||||||||||||||
| Deposits | ||||||||||||||||||||||||
| Interest-bearing demand | $ | 183,337 | $ | 179,278 | $ | 208,091 | $ | 4,059 | 2 | % | $ | (24,754 | ) | -12 | % | 18 | % | 19 | % | 20 | % | |||
| Money market | 192,185 | 180,727 | 179,367 | 11,458 | 6 | % | 12,818 | 7 | % | 19 | % | 18 | % | 17 | % | |||||||||
| Savings | 117,131 | 121,851 | 138,981 | (4,720 | ) | -4 | % | (21,850 | ) | -16 | % | 12 | % | 12 | % | 13 | % | |||||||
| Time deposits (CDs) | 133,995 | 125,560 | 92,720 | 8,435 | 7 | % | 41,275 | 45 | % | 13 | % | 13 | % | 9 | % | |||||||||
| Total interest-bearing deposits | 626,648 | 607,416 | 619,159 | 19,232 | 3 | % | 7,489 | 1 | % | 62 | % | 62 | % | 59 | % | |||||||||
| Non-interest bearing demand | 384,825 | 378,211 | 432,097 | 6,614 | 2 | % | (47,272 | ) | -11 | % | 38 | % | 38 | % | 41 | % | ||||||||
| Total deposits | $ | 1,011,473 | $ | 985,627 | $ | 1,051,256 | $ | 25,846 | 3 | % | $ | (39,783 | ) | -4 | % | 100 | % | 100 | % | 100 | % | |||
| Insured Deposits | $ | 636,725 | $ | 632,923 | $ | 666,308 | $ | 3,802 | 1 | % | $ | (414,008 | ) | -62 | % | 63 | % | 64 | % | 63 | % | |||
| Collateralized Deposits | 122,448 | 118,966 | 152,960 | 3,482 | 3 | % | (30,512 | ) | -20 | % | 12 | % | 12 | % | 15 | % | ||||||||
| Uninsured Deposits | 252,300 | 233,738 | 231,988 | 18,562 | 8 | % | 404,737 | 174 | % | 25 | % | 24 | % | 22 | % | |||||||||
| Total Deposits | $ | 1,011,473 | $ | 985,627 | $ | 1,051,256 | $ | 25,846 | 3 | % | $ | (39,783 | ) | -4 | % | 100 | % | 100 | % | 100 | % | |||
| Consumer Deposits | $ | 458,097 | $ | 458,249 | $ | 466,877 | $ | (152 | ) | 0 | % | $ | (8,780 | ) | -2 | % | 45 | % | 47 | % | 44 | % | ||
| Business Deposits | 420,845 | 398,719 | 429,443 | 22,126 | 6 | % | (8,598 | ) | -2 | % | 42 | % | 40 | % | 41 | % | ||||||||
| Public Deposits | 132,531 | 128,659 | 154,936 | 3,872 | 3 | % | (22,405 | ) | -14 | % | 13 | % | 13 | % | 15 | % | ||||||||
| Total Deposits | $ | 1,011,473 | $ | 985,627 | $ | 1,051,256 | $ | 25,846 | 3 | % | $ | (39,783 | ) | -4 | % | 100 | % | 100 | % | 100 | % | |||
| NET INTEREST MARGIN (unaudited) | Quarter Ended | Change From | Nine Months Ended | Change | ||||||||||||||||||||||||||||
| ($ in 000s) | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Sep 30, | ||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||
| Average Interest Bearing Balances | ||||||||||||||||||||||||||||||||
| Portfolio loans | $ | 697,904 | $ | 699,404 | $ | 665,300 | $ | (1,500 | ) | 0 | % | $ | 32,604 | 5 | % | $ | 695,418 | $ | 653,619 | $ | 41,799 | 6 | % | |||||||||
| Loans held for sale | $ | 1,276 | $ | 1,593 | $ | 497 | $ | (317 | ) | -20 | % | $ | 779 | 157 | % | $ | 1,155 | $ | 601 | $ | 554 | 92 | % | |||||||||
| Investment securities | $ | 285,947 | $ | 283,637 | $ | 284,041 | $ | 2,310 | 1 | % | $ | 1,906 | 1 | % | $ | 287,315 | $ | 285,538 | $ | 1,777 | 1 | % | ||||||||||
| Interest-bearing cash | $ | 81,755 | $ | 62,494 | $ | 172,119 | $ | 19,261 | 31 | % | $ | (90,364 | ) | -53 | % | $ | 71,080 | $ | 206,259 | $ | (135,179 | ) | -66 | % | ||||||||
| Total interest-earning assets | $ | 1,066,882 | $ | 1,047,128 | $ | 1,121,957 | $ | 19,754 | 2 | % | $ | (55,075 | ) | -5 | % | $ | 1,054,968 | $ | 1,146,017 | $ | (91,049 | ) | -8 | % | ||||||||
| Non-interest bearing deposits | $ | 383,332 | $ | 387,740 | $ | 441,782 | $ | (4,408 | ) | -1 | % | $ | (58,450 | ) | -13 | % | $ | 388,672 | $ | 457,750 | $ | (69,078 | ) | -15 | % | |||||||
| Interest-bearing deposits | $ | 615,388 | $ | 596,121 | $ | 619,183 | $ | 19,267 | 3 | % | $ | (3,795 | ) | -1 | % | $ | 600,694 | $ | 628,978 | $ | (28,284 | ) | -4 | % | ||||||||
| Total Deposits | $ | 998,720 | $ | 983,861 | $ | 1,060,965 | $ | 14,859 | 2 | % | $ | (62,245 | ) | -6 | % | $ | 989,366 | $ | 1,086,728 | $ | (97,362 | ) | -9 | % | ||||||||
| Borrowings | $ | 13,403 | $ | 13,404 | $ | 13,403 | $ | (1 | ) | 0 | % | $ | – | 0 | % | $ | 13,403 | $ | 13,401 | $ | 2 | 0 | % | |||||||||
| Total interest-bearing liabilities | $ | 628,791 | $ | 609,525 | $ | 632,586 | $ | 19,266 | 3 | % | $ | (3,795 | ) | -1 | % | $ | 614,097 | $ | 642,379 | $ | (28,282 | ) | -4 | % | ||||||||
| Yield / Cost $(1) | ||||||||||||||||||||||||||||||||
| Portfolio loans | $ | 10,509 | $ | 10,092 | $ | 9,570 | $ | 417 | 4 | % | $ | 939 | 10 | % | $ | 30,834 | $ | 27,208 | $ | 3,626 | 13 | % | ||||||||||
| Loans held for sale | $ | 22 | $ | 28 | $ | 8 | $ | (6 | ) | -21 | % | $ | 14 | 175 | % | $ | 55 | $ | 28 | $ | 27 | 96 | % | |||||||||
| Investment securities | $ | 2,535 | $ | 2,442 | $ | 2,405 | $ | 93 | 4 | % | $ | 130 | 5 | % | $ | 7,485 | $ | 6,954 | $ | 531 | 8 | % | ||||||||||
| Interest-bearing cash | $ | 1,108 | $ | 847 | $ | 2,322 | $ | 261 | 31 | % | $ | (1,214 | ) | -52 | % | $ | 2,890 | $ | 7,669 | $ | (4,779 | ) | -62 | % | ||||||||
| Total interest-earning assets | $ | 14,174 | $ | 13,410 | $ | 14,306 | $ | 764 | 6 | % | $ | (132 | ) | -1 | % | $ | 41,265 | $ | 41,859 | $ | (594 | ) | -1 | % | ||||||||
| Interest-bearing deposits | $ | 2,684 | $ | 2,358 | $ | 1,716 | $ | 326 | 14 | % | $ | 968 | 56 | % | $ | 7,033 | $ | 3,437 | $ | 3,596 | 105 | % | ||||||||||
| Borrowings | $ | 243 | $ | 242 | $ | 246 | $ | 1 | 0 | % | $ | (3 | ) | -1 | % | $ | 727 | $ | 682 | $ | 45 | 7 | % | |||||||||
| Total interest-bearing liabilities | $ | 2,927 | $ | 2,600 | $ | 1,962 | $ | 327 | 13 | % | $ | 965 | 49 | % | $ | 7,760 | $ | 4,119 | $ | 3,641 | 88 | % | ||||||||||
| Net interest income | $ | 11,247 | $ | 10,810 | $ | 12,344 | $ | 437 | 4 | % | (1,097 | ) | -9 | % | $ | 33,505 | $ | 37,740 | $ | (4,235 | ) | -11 | % | |||||||||
| Yield / Cost %(1) | ||||||||||||||||||||||||||||||||
| Yield on portfolio loans | 5.99 | % | 5.80 | % | 5.71 | % | 0.19 | % | 0.28 | % | 5.92 | % | 5.57 | % | 0.35 | % | ||||||||||||||||
| Yield on investment securities | 3.53 | % | 3.46 | % | 3.36 | % | 0.07 | % | 0.17 | % | 3.48 | % | 3.26 | % | 0.22 | % | ||||||||||||||||
| Yield on interest-bearing cash | 5.39 | % | 5.46 | % | 5.35 | % | -0.07 | % | 0.04 | % | 5.43 | % | 4.97 | % | 0.46 | % | ||||||||||||||||
| Cost of interest-bearing deposits | 1.74 | % | 1.59 | % | 1.10 | % | 0.15 | % | 0.64 | % | 1.56 | % | 0.73 | % | 0.83 | % | ||||||||||||||||
| Cost of borrowings | 7.21 | % | 7.26 | % | 7.28 | % | -0.05 | % | -0.07 | % | 7.25 | % | 6.80 | % | 0.45 | % | ||||||||||||||||
| Cost of deposits and borrowings | 1.15 | % | 1.05 | % | 0.72 | % | 0.10 | % | 0.43 | % | 1.03 | % | 0.50 | % | 0.53 | % | ||||||||||||||||
| Yield on interest-earning assets | 5.29 | % | 5.15 | % | 5.06 | % | 0.14 | % | 0.23 | % | 5.22 | % | 4.88 | % | 0.34 | % | ||||||||||||||||
| Cost of interest-bearing liabilities | 1.85 | % | 1.72 | % | 1.23 | % | 0.13 | % | 0.62 | % | 1.69 | % | 0.86 | % | 0.83 | % | ||||||||||||||||
| Net interest spread | 3.44 | % | 3.43 | % | 3.83 | % | 0.01 | % | -0.39 | % | 3.53 | % | 4.02 | % | -0.49 | % | ||||||||||||||||
| Net interest margin | 4.19 | % | 4.15 | % | 4.37 | % | 0.04 | % | -0.18 | % | 4.24 | % | 4.40 | % | -0.16 | % | ||||||||||||||||
| (1) Tax-exempt income has been adjusted to a tax equivalent basis at a rate of 21%. | ||||||||||||||||||||||||||||||||
| ALLOWANCE FOR CREDIT LOSSES (ACL) (unaudited) | Quarter Ended | Change From | Nine Months Ended | Change | ||||||||||||||||||||||||||||
| ($ in 000s) | ||||||||||||||||||||||||||||||||
| Sep 30, | Jun 30, | Sep 30, | Jun 30, 2024 | Sep 30, 2023 | Sep 30, | Sep 30, | ||||||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | 2024 | 2023 | $ | % | ||||||||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||||||||||||||
| Beginning of period balance | $ | 8,859 | $ | 8,580 | $ | 8,223 | $ | 279 | 3 | % | $ | 636 | 8 | % | $ | 8,530 | $ | 8,236 | $ | 294 | 4 | % | ||||||||||
| Impact of CECL Adoption (ASC 326) | – | – | – | – | -100 | % | – | -100 | % | – | (157 | ) | 157 | -100 | % | |||||||||||||||||
| Charge-offs | (5 | ) | (57 | ) | (126 | ) | 52 | -91 | % | 121 | -96 | % | (97 | ) | (259 | ) | 162 | -63 | % | |||||||||||||
| Recoveries | 16 | 1 | 1 | 15 | 1500 | % | 15 | 1500 | % | 19 | 55 | (36 | ) | -65 | % | |||||||||||||||||
| Net (charge-off) recovery | 11 | (56 | ) | (125 | ) | 67 | -120 | % | 136 | -109 | % | (78 | ) | (204 | ) | 126 | -62 | % | ||||||||||||||
| Provision (benefit) | 27 | 335 | 249 | (308 | ) | -92 | % | (222 | ) | -89 | % | 445 | 472 | (27 | ) | -6 | % | |||||||||||||||
| End of period balance | $ | 8,897 | $ | 8,859 | $ | 8,347 | $ | 38 | 0 | % | $ | 550 | 7 | % | $ | 8,897 | $ | 8,347 | $ | 550 | 7 | % | ||||||||||
| Net charge-off (recovery) to | ||||||||||||||||||||||||||||||||
| average portfolio loans | -0.01 | % | 0.03 | % | 0.07 | % | -0.04 | % | -0.08 | % | 0.01 | % | 0.04 | % | -0.03 | % | ||||||||||||||||
| ACL to portfolio loans | 1.27 | % | 1.26 | % | 1.24 | % | 0.01 | % | 0.03 | % | 1.27 | % | 1.24 | % | 0.03 | % | ||||||||||||||||
| Allowance for unfunded loans | ||||||||||||||||||||||||||||||||
| Beginning of period balance | $ | 617 | $ | 648 | $ | 754 | $ | (31 | ) | -5 | % | $ | (137 | ) | -18 | % | $ | 698 | $ | 203 | $ | 495 | 244 | % | ||||||||
| Impact of CECL Adoption (ASC 326) | – | – | – | – | -100 | % | – | -100 | % | – | 609 | (609 | ) | -100 | % | |||||||||||||||||
| Provision (benefit) | (93 | ) | (31 | ) | (5 | ) | (62 | ) | 200 | % | (88 | ) | 1760 | % | (174 | ) | (63 | ) | (111 | ) | 176 | % | ||||||||||
| End of period balance | $ | 524 | $ | 617 | $ | 749 | $ | (93 | ) | -15 | % | $ | (225 | ) | -30 | % | $ | 524 | $ | 749 | $ | (225 | ) | -30 | % | |||||||
ABOUT PACIFIC FINANCIAL CORPORATION
Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon. At September 30, 2024, the Company had total assets of $1.16 billion and operated fifteen branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. The Company also operated loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit the Company’s website at www.bankofthepacific.com. Member FDIC.
Cautions Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other laws, including all statements in this release that are not historical facts or that relate to future plans or events or projected results of Pacific Financial Corporation and its wholly-owned subsidiary, Bank of the Pacific. Such statements are based on information available at the time of communication and are based on current beliefs and expectations of the Company’s management and are subject to risks and uncertainties, many of which are beyond our control, which could cause actual events or results to differ materially from those projected, anticipated or implied, and could negatively impact the Company’s operating and stock price performance. These risks and uncertainties include various risks associated with growing the Bank and expanding the services it provides, development of new business lines and markets, competition in the marketplace, general economic conditions, changes in interest rates, extensive and evolving regulation of the banking industry, and many other risks. Any forward-looking statements in this communication are based on information at the time the statement is made. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.
CONTACTS:
DENISE PORTMANN, PRESIDENT & CEO
CARLA TUCKER, EVP & CFO
360.533.8873
Source: Office of United States Attorneys
Glenn Used COVID-19 CARES Act Funds to Pay for a Vacation to Jamaica, a Mercedes-Benz, Luxury Jewelry, including a 31 Carat Diamond Necklace and items from Luis Vuitton, Neiman Marcus, Dior, Cartier, Gucci, Chanel and Hermes.
Baltimore, Maryland – On October 23, 2024, Tomeka Glenn, a/k/a “Tomeka Harris” and “Tomeka Davis,” age 47, of Windsor Mill, Maryland, was sentenced by United States District Judge Richard D. Bennett to 65 months’ imprisonment and 3 years of supervised release in connection with her conviction on conspiracy to commit wire fraud relating to the submission of millions of dollars in fraudulent COVID-19 CARES Act Paycheck Protection Program and Economic Injury Disaster Loan applications. Judge Bennett also directed Glenn to pay restitution in the amount of $3,016,275.62.
Glenn’s co-defendant Kevin Davis, age 43, also of Windsor Mill, Maryland, pleaded guilty on January 25, 2024 to being a felon in possession of a firearm and ammunition. Judge Bennett on May 22, 2024 sentenced him to 24 months’ imprisonment.
The sentence was announced by Erek L. Barron, U.S. Attorney for the District of Maryland; Special Agent in Charge William J. Delbagno of the Federal Bureau of Investigation (“FBI”) Baltimore Field Office; and Chief Robert McCullough of the Baltimore County Police Department.
Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses through the Paycheck Protection Program, administered through the Small Business Administration (“SBA”). The SBA also offered an Economic Injury Disaster Loan (EIDL) and/or an EIDL advance to help businesses meet their financial obligations. An EIDL advance did not have to be repaid, and small businesses could receive an advance, even if they were not approved for an EIDL loan. The maximum advance amount was $10,000.
According to Glenn’s plea agreement, beginning in June 2020 and continuing through March 2021, Glenn and various co-conspirators prepared numerous false and fraudulent EIDL and PPP loan applications for various businesses (including some that did not exist in any legitimate capacity) that included false information concerning, among other things, number of employees, monthly payroll costs, and revenue. The PPP applications also routinely included false and fraudulent Internal Revenue Service (“IRS”) tax forms and bank statements, which were submitted by Glenn to substantiate the false representations made in the applications.
Glenn admitted that she received kickback payments from the loan borrowers in exchange for her assistance in connection with the submission of fraudulent PPP and EIDL applications, ultimately receiving more than $400,000 in kickbacks in connection with the scheme. These kickbacks typically amounted to 10% to 20% of the loan amount. In total, the kickback scheme resulted in the disbursement of at least $2,715,649.12 in fraudulently obtained PPP and EIDL funds in connection with 23 fraudulent PPP and EIDL loans.
According to Glenn’s plea agreement, Glenn and Davis, received $300,726.50 in PPP/EIDL funds for various entities that they controlled, and Glenn attempted to obtain $601,511.20 in additional fraudulent PPP and EIDL funds too.
Glenn used the fraudulently obtained funds to pay for a luxury vacation at a resort in Jamaica, to purchase a 2021 Mercedes-Benz S580 sedan valued at $148,171.60, to buy thousands of dollars in luxury jewelry, as well as numerous other luxury goods, including items from Luis Vuitton, Neiman Marcus, Dior, Cartier, Gucci, Chanel, and Hermes.
At the time of her scheme, neither Glenn nor Davis had any legitimate source of income, and in May 2020, each applied for unemployment insurance benefits in the State of Maryland. In addition, as detailed in Davis and Glenn’s plea agreements, on January 6, 2023, law enforcement executed a federal search warrant at their residence. Davis and Glenn were present at the residence at the time of the search and were arrested in connection with the fraudulent COVID-19 CARES Act loans. According to Davis’s plea agreement, during the execution of the search warrant, law enforcement found and seized four firearms loaded with ammunition—a 9mm firearm, and three .40 caliber firearms. Later investigation revealed that one of the .40 caliber firearms had earlier been reported stolen by its owner. As further detailed in Davis’s plea, the firearms were hidden by Davis in the air ducts of the residence: two firearms were hidden in the main bedroom air duct where Davis slept and kept his personal effects; the other two firearms were in the air duct of the bathroom closets to the main bedroom. Moreover, two of the firearms were further stuffed in socks in an attempt to hide them. Davis admitted that he possessed and secreted the firearms in the air ducts of his home (and in the socks) in an attempt to conceal them from law enforcement after learning that federal agents had a warrant to search his home. As admitted to at his plea, Davis’s concealment of the firearms constitutes attempted obstruction of the administration of justice with respect to the investigation. Each of the four firearms recovered from Davis’s home on January 6, 2023 were later found to have his DNA on them. A later review of Davis’s iCloud account revealed the existence of, among other things, a series of videos depicting Davis handling firearms, including a shotgun and an assault rifle. Davis knew that his previous felony conviction prohibited him from possessing firearms or ammunition.
As part of their plea agreements, Glenn and Davis will be required to forfeit their interest in any assets derived from or obtained by them as a result of, or used to facilitate the commission of, their illegal activities. Specifically, Glenn is required to forfeit a money judgment in the amount of at least $700,726.50; the 2021 Mercedes-Benz; cash in bank accounts she controlled that were held in the names of business entities; and jewelry, including her 3.03 carat yellow diamond engagement ring, Rolex, Cartier and Breitling watches, and a Diamond Miami Cuban Link Chain with 31.5 carats of VS1 diamonds. Davis must forfeit the firearms and ammunition.
The District of Maryland Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act was designed to provide emergency financial assistance to Americans suffering the economic effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
U.S. Attorney Barron commended the FBI, the SBA-OIG, and the Baltimore County Police Department for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorney Paul A. Riley, who is prosecuting the case. He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber and Paralegal Specialist Juliette Jarman.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.
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Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)
On the heels of tragedy, the people of Lewiston’s strength and resilience are a powerful reminder of the bonds that unite us.
Today, the men and women of FBI Boston pause to honor and remember the 18 innocent lives that were lost, the survivors, and all their families whose lives have been changed forever.
On this day, and every day, we carry the memory of those victims with us as we go to work to make our communities safer for all we serve.
Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)
PHOENIX, Ariz. – United States Attorney Gary M. Restaino announced today that Assistant United States Attorney (AUSA) Sean Lokey will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 5, 2024, general election. AUSA Lokey has been appointed to serve as the District Election Officer for the District of Arizona, and in that capacity is responsible for overseeing the District’s handling of election day complaints of voting rights concerns, threats of violence to election officials or staff, and election fraud, in consultation with Justice Department Headquarters in Washington. Lokey has served in this role since the 2020 election cycle.
United States Attorney Restaino stated: “It takes a village to ensure that every eligible voter can cast a ballot easily and efficiently, without interference or discrimination, and with confidence their vote will be counted. This Office and our federal partners have worked collaboratively with Arizona state and local law enforcement, state and local elections officials, and other first responders of democracy like All Voting is Local, the Arizona State Bar and the Arizona Prosecuting Attorney’s Advisory Council, preparing for a smooth and safe election. We thank the many civic leaders who have sat with us in educational panels, tabletop exercises, and security discussions.”
The Department of Justice has an important role in deterring and combatting discrimination and intimidation at the polls, threats of violence directed at election officials and poll workers, and election fraud. The Department will address these violations wherever they occur. The Department’s longstanding Election Day Program furthers these goals and also seeks to ensure public confidence in the electoral process by providing local points of contact within the Department for the public to report possible federal election law violations.
Federal law protects against such crimes as threatening violence against election officials or staff, intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters, and provides that they can vote free from interference, including intimidation, and other acts designed to prevent or discourage people from voting or voting for the candidate of their choice. The Voting Rights Act protects the right of voters to mark their own ballot or to be assisted by a person of their choice (where voters need assistance because of disability or inability to read or write in English).
“Democracy demands action to protect voters’ rights, and to disrupt the efforts of those individuals and entities who seek to deny those rights,” said U.S. Attorney Restaino. “In order to respond to complaints of voting rights concerns and election fraud during the upcoming election, and to ensure that such complaints are directed to the appropriate authorities, AUSA/DEO Lokey will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: 602-514-7516.”
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public by phone at 623-466-1999 or online at https://tips.fbi.gov/.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division in Washington, D.C. by phone at 800-253-3931 or by complaint form at https://civilrights.justice.gov/.
“Ensuring free and fair elections takes a commitment from all Americans,” noted United States Attorney Restaino. “It is important that those who have knowledge about barriers to voting rights or of specific instances of fraud by individual voters make that information available to the Department of Justice.”
Please note, however, that in the case of a crime of violence or intimidation, you should call 911 immediately before contacting federal authorities. State and local police have primary jurisdiction over polling places, and almost always have faster reaction capacity in an emergency.
RELEASE NUMBER: 2024-139_Arizona-General-Election
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on X @USAO_AZ for the latest news.
