Taxation – Page 241 – NewzIntel.com

MIL-OSI Security: Feeding our Future Defendant Sentenced to 17 Years in Prison For His Role in $250 Million Fraud Scheme

Source: Office of United States Attorneys

MINNEAPOLIS – A Bloomington man has been sentenced to 210 months in prison followed by three years of supervised release for his role in a $250 million fraud scheme that exploited a federally funded child nutrition program during the COVID-19 pandemic, announced Acting U.S. Attorney Lisa D. Kirkpatrick. The defendant was also ordered to pay restitution in the amount of $47,920,514.

“The defendant committed a brazen fraud that shamelessly stole taxpayer money intended to feed children during a global pandemic. He lined his pockets, here and abroad, with millions,” said Acting U.S. Attorney Kirkpatrick. “As the Court found, he doubled down on his crimes by obstructing justice. This significant sentence should serve as a clear warning to anyone who would seek to exploit and defraud government programs. You will be held accountable.”

As proven at trial, Mukhtar Mohamed Shariff, 34, and his co-defendants devised and carried out a multi-million fraud scheme to defraud the Federal Child Nutrition Program. As the chief executive officer of Afrique Hospitality Group, Shariff obtained, misappropriated, and laundered millions of dollars in program funds that were intended as reimbursements for the cost of serving meals to children. Their scheme was accomplished by exploiting changes in the nutrition program intended to ensure underserved children received adequate nutrition during the COVID-19 pandemic. Shariff and his co-defendants created and submitted fraudulent meal count sheets purporting to document the number of children and meals served at each site and false invoices purporting to document the purchase of food to be served to children at the sites. The conspirators also submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day. These rosters were fabricated and created using fake names.

The Federal Child Nutrition Program, administered by the U.S. Department of Agriculture (USDA), is a federally funded program designed to provide free meals to children in need. The USDA’s Food and Nutrition Service administers the program throughout the nation by distributing federal funds to state governments. In Minnesota, the Minnesota Department of Education (MDE) administers and oversees the Federal Child Nutrition Program. Meals funded by the Federal Child Nutrition Program are served by “sites.” Each site participating in the program must be sponsored by an authorized sponsoring organization. Sponsors must submit an application to MDE for each site. Sponsors are also responsible for monitoring each of their sites and preparing reimbursement claims for their sites. The USDA then provides MDE federal reimbursement funds on a per-meal basis. MDE provides those funds to the sponsoring agency who, in turn, pays the reimbursements to the sites under its sponsorship. The sponsoring agency retains 10 to 15 percent of the funds as an administrative fee.

During the COVID-19 pandemic, the USDA waived some of the standard requirements for participation in the Federal Child Nutrition Program. Among other things, the USDA allowed for-profit restaurants to participate in the program, and it allowed for off-site food distribution to children outside of educational programs.

Following a seven-week trial in U.S. District Court before Judge Nancy E. Brasel in June 2024, Shariff was convicted of one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, and one count of money laundering. In handing down the sentence today, Judge Brasel commented that Shariff’s conduct showed a “staggering lack of respect for the law,” and that taxpayers were “outraged by the brazenness of the crime.”

The case is the result of an investigation by the FBI, IRS – Criminal Investigations, and the U.S. Postal Inspection Service.

Assistant U.S. Attorneys for the District of Minnesota Joseph H. Thompson, Harry M. Jacobs, Matthew S. Ebert, and Daniel W. Bobier prosecuted the case. Assistant U.S. Attorney Craig Baune is handling the seizure and forfeiture of assets.

MIL Security OSI –

January 25, 2025

MIL-OSI: Linkage Global Inc Announces Fiscal Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

TOKYO, Jan. 24, 2025 (GLOBE NEWSWIRE) — Linkage Global Inc (“Linkage Cayman”, or the “Company”), a cross-border e-commerce integrated services provider headquartered in Japan, today announced its financial results for the fiscal year ended September 30, 2024.

Fiscal Year 2024 Financial Highlights

Total revenues decreased by approximately 19.19% from USD12.73 million for the fiscal year ended September 30, 2023 to USD10.29 million for the fiscal year ended September 30, 2024.
Our new fully managed e-commerce operation services that was launched in April 2024, generated USD3.28 million in revenue.
Gross profit increased by approximately USD2.31 million, or 123.91%, from USD1.86 million for the fiscal year ended September 30, 2023 to USD4.17 million for the fiscal year ended September 30, 2024.
Net loss decreased by USD0.21 million, or 32.69%, from USD0.65 million for the fiscal year ended September 30, 2023 to USD0.44 million for the fiscal year ended September 30, 2024.

Mr. Zhihua Wu, Chairman and CEO of the Company, commented: “For the fiscal year ended September 30, 2024, total revenues decreased by about 19.19% from USD12.73 million in 2023 to USD10.29 million, primarily attributable to the decrease of cross-border sales. Specifically, cross-border revenues fell by USD4.11 million, with our Japanese subsidiary experiencing a 53.12% decline. This was largely driven by yen depreciation, which raised prices in Japan and resulted in a decline in consumers’ purchasing power. It was also exacerbated by the depreciation of the Japanese yen against U.S. dollars.”

“Our integrated e-commerce services saw a rise of USD1.67 million, thanks to our new fully managed e-commerce operation services, which generated USD3.28 million in revenue. However, digital marketing revenues plummeted from USD1.53 million to USD0.31 million because Google updated agreements with more stringent criteria for incentives. In order to cope with the change of policies from Google, we actively engaged in direct and indirect cooperations with other social platforms, such as TikTok and Facebook.”

“Our gross profit increased by USD2.31 million or 123.91% to USD 4.17 million, largely due to the new business fully managed e-commerce operation services with gross profit of USD2.94 million and gross profit margin of 89.62%.”

“Looking ahead, while we faced challenges in fiscal year of 2024, our expansion in integrated e-commerce positions us for future growth. We remain committed to enhancing partnerships, optimizing operations, and exploring new market opportunities. These strategies will help us navigate market fluctuations and achieve sustainable growth in the coming years.”

Fiscal Year 2024 Financial Results

Revenues

Total revenues decreased by approximately USD2.44million, or 19.19%, from approximately USD12.73 million for the year ended September 30, 2023 to approximately USD10.29 million for the year ended September 30, 2024, primarily attributable to the decrease of cross-border sales.

Our breakdown of revenues by revenue streams for the years ended September 30, 2024 and 2023 is summarized below:

	For the Years Ended September 30,
	2024		2023
	USD		USD
Cross border Sales		6,476,939		10,587,053
Integrated E-commerce services		3,812,742		2,146,286
Fully managed e-commerce operation services		3,280,002		—
Digital marketing services		312,180		1,527,247
Others		220,560		619,039
Total revenues		10,289,681		12,733,339

Our breakdown of revenues by geographic areas for the years ended September 30, 2024, and 2023 is summarized below:

	For the Years Ended September 30,
	2024		2023
	USD		USD
Japan		4,101,865		8,749,200
Hong Kong		3,612,126		1,987,182
China		2,575,690		1,996,957
Total revenues		10,289,681		12,733,339

Revenues from cross-border sales fell by USD 4.11 million, or 38.82%, from USD10.59 million in 2023 to USD6.48 million in 2024. Our Japanese subsidiary, EXTEND, accounted for USD 4.10 million or 39.86% of total revenues, but saw a 53.12% decline. This drop was primarily due to the yen’s depreciation, which increased prices and reduced consumer purchasing power for non-essential 3C electronic products. The decrease was also exacerbated by the depreciation of the Japanese yen against U.S. dollars. The average exchange rate also worsened, dropping from $1=¥138.93 in 2023 to $1=¥150.33 in 2024, respectively, resulting in a decrease of 8.20%.

Revenues from integrated e-commerce services rose by USD1.67 million or 77.64%, from USD2.15 million to USD3.81 million, driven by a new fully managed e-commerce operation generating USD3.28 million.

Revenues from digital marketing services dropped to USD0.31 million due to stricter Google incentive policies and a 40.76% decline in merchant numbers. To adapt, we are partnering with platforms like TikTok and Facebook while expanding our e-commerce services.

Revenues from training, consulting, and TikTok agent services decreased by USD0.40 million or 64.37%, from USD 0.62 million to USD 0.22 million.

Cost of Revenues

Cost of revenues decreased by 43.68% from approximately USD10.87 million for the year ended September 30, 2023 to approximately USD6.12 million for the year ended September 30, 2024.

Gross Profit

Gross profit increased by approximately USD2.31 million, or 123.91%, from USD1.86 million for the year ended September 30, 2023 to USD4.17 million for the year ended September 30, 2024. The increase was primarily attributable by the new business fully managed e-commerce operation services with gross profit of USD2.94 million and gross profit margin of 89.62%. The high gross profit margin is mainly due to the low cost, which was mainly composed of the salaries of the operation personnel.

Gross profit margin of cross-border sales increased from 7.82% for the year ended September 30, 2023 to 13.99% for the year ended September 30, 2024. The decrease was mainly due to that the depreciation of the Japanese yen has led to a rise in prices of goods in Japan.

Gross profit margin of integrated e-commerce related services increased from 48.10% for the year ended September 30, 2023 to 85.52% for the year ended September 30, 2024. The increase was primarily attributable by the new business fully managed e-commerce operation services with gross profit of USD2.94 million and gross profit margin of 89.62%.

Operating Expenses

Operating expenses increased from USD2.43 million for the year ended September 30, 2023 to USD4.24 million for the year ended September 30, 2024, representing a year-on-year increase of 74.49%. This increase was primarily attributable to the increases in our general and administrative expenses, offsetting the decreases in selling and marketing expenses and research and development expenses.

Other income/(expenses), net

Other non-operating income increased from USD0.01 million for the year ended September 30, 2023 to USD0.02 million for the year ended September 30, 2024. Investment income increased by 2003.35% from USD2,119 for the year ended September 30, 2023 to approximately USD44,570 for the year ended September 30, 2024.

Income taxes

Income tax (expenses) /benefits decreased by USD0.65 million, from USD0.06 million of tax benefit for the year ended September 30, 2023 to USD0.59 million of tax expenses for the year ended September 30, 2024. This decrease was primarily attributable to net profit for the year ended September 30, 2024, and the valuation allowance for deferred tax assets.

Net (loss)

As a result of the foregoing, net loss decreased by USD0.21 million, or 32.69%, from USD0.65 million for the year ended September 30, 2023 to USD0.44 million for the year ended September 30, 2024.

About Linkage Global Inc

Linkage Global Inc is a holding company incorporated in the Cayman Islands with no operations of its own. Linkage Cayman conducts its operations through its operating subsidiaries in Japan, Hong Kong, and mainland China. As a cross-border e-commerce integrated services provider headquartered in Japan, through its operating subsidiaries, the Company has developed a comprehensive service system comprised of two lines of business complementary to each other, including (i) cross-border sales and (ii) integrated e-commerce services. For more information, please visit http://www.linkagecc.com.

Safe Harbor Statement

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “approximates,” “assesses,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s annual reports on Form 20-F and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

Investor Relations
WFS Investor Relations Inc.
Connie Kang, Partner
Email: ckang@wealthfsllc.com

Linkage Global Inc CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND 2023 (In U.S. dollars, except for share and per share data, or otherwise noted)

	As of September 30,
	2024			2023
	USD
ASSETS
Current assets
Cash and cash equivalents		2,000,732			1,107,480
Accounts receivable, net		6,302,696			2,011,047
Inventories, net		66,331			679,732
Deferred offering costs		—			1,076,253
Deposits paid to media platforms		482,650			3,717,773
Prepaid expenses and other current assets, net		2,689,581			1,053,687
Short-term loan to third party		410,000			—
Total current assets		11,951,990			9,645,972

Non-current assets
Property and equipment, net		85,807			158,642
Deferred tax assets		—			149,129
Right-of-use assets, net		653,730			624,945
Other non-current assets		—			54,825
Total non-current assets		739,537			987,541
TOTAL ASSETS		12,691,527			10,633,513

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		624,723			1,142,667
Accrued expenses and other current liabilities		236,813			309,986
Short-term debts		32,810			—
Current portion of long-term debts		428,702			535,226
Contract liabilities		533,625			530,488
Amounts due to related parties		314,544			1,413,604
Lease liabilities – current		231,978			187,214
Convertible bonds		964,865			—
Income tax payable		1,017,619			581,235
Total current liabilities		4,385,679			4,700,420

Non-current liabilities
Long-term debts		839,560			1,996,326
Lease liabilities – noncurrent		441,504			439,854
Total non-current liabilities		1,281,064			2,436,180
Total liabilities		5,666,743			7,136,600

Commitments and contingencies (Note 22)

Shareholders’ equity
Ordinary shares (par value of US$0.00025 per share; 200,000,000 ordinary shares authorized, 21,500,000 and 20,000,000 ordinary shares issued and outstanding as of September 30, 2024 and 2023, respectively) *		5,375			5,000
Additional paid in capital		5,591,596			1,549,913
Statutory reserve		11,348			11,348
Retained earnings		1,613,217			2,052,553
Accumulated other comprehensive loss		(196,752	)		(121,901	)
Total shareholders’ equity		7,024,784			3,496,913
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		12,691,527			10,633,513

Linkage Global Inc CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) FOR THE YEARS ENDED SEPTEMBER 30, 2024, 2023 AND 2022 (In U.S. dollars, except for share and per share data, or otherwise noted)

	For the years ended September 30,
	2024			2023			2022
	USD
Revenues		10,289,681			12,733,339			22,028,303
Cost of revenues		(6,123,025	)		(10,872,484	)		(18,323,802	)
Gross profit		4,166,656			1,860,855			3,704,501

Operating expenses
General and administrative expenses		(3,506,075	)		(1,373,695	)		(1,047,552	)
Selling and marketing expenses		(434,856	)		(595,804	)		(812,062	)
Research and development expenses		(302,280	)		(588,108	)		(628,350	)
Gain from disposal of property and equipment		—			125,804			193,191
Total operating expenses		(4,243,211	)		(2,431,803	)		(2,294,773	)
Operating (loss)/profit		(76,555	)		(570,948	)		1,409,728

Other income/(expenses)
Investment income		44,570			2,119			8,402
Impairment loss from equity investment		—			(60,046	)		—
Interest income/(expenses), net		160,685			(102,360	)		(79,455	)
Other non-operating income		21,644			14,557			113,658
Total other income/(expenses), net		226,899			(145,730	)		42,605

Income/(loss) before income taxes		150,344			(716,678	)		1,452,333
Income tax (provision)/ benefit		(589,680	)		63,950			(385,958	)
Net (loss)/income		(439,336	)		(652,728	)		1,066,375

Net (loss)/income		(439,336	)		(652,728	)		1,066,375
Other comprehensive income
Foreign currency translation adjustment		(74,851	)		(15,524	)		(57,722	)
Total comprehensive (loss) /income attributable to the Company’s ordinary shareholders		(514,187	)		(668,252	)		1,008,653

Earnings per ordinary share attributable to ordinary shareholders
Basic and Diluted*		(0.02	)		(0.03	)		0.05
Weighted average number of ordinary shares outstanding
Basic and Diluted*		21,175,342			20,000,000			20,000,000

Linkage Global Inc CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2024, 2023 AND 2022 (In U.S. dollars, except for share and per share data, or otherwise noted)

	For the years ended September 30,
	2024			2023			2022
	USD
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income		(439,336	)		(652,728	)		1,066,375

Adjustments to reconcile net (loss)/income to net cash (used in) /provided by operating activities:
Effect of exchange rate changes		(226,846	)		—			—
Allowance for credit loss		958,584			116,428			—
Depreciation and amortization		86,911			83,226			81,625
Amortization of lease right-of-use assets		224,451			180,464			—
Share of profit from long-term investment		—			(2,119	)		(8,402	)
Disposal gain from property and equipment		—			(125,804	)		(193,191	)
Inventory write-downs		11,858			19,981			21,282
Deferred tax expenses/(benefits)		148,239			(160,402	)		80,519
Long-term investment impairment		—			60,046			—
Changes in operating assets and liabilities:
Accounts receivable, net		(5,023,387	)		36,738			(910,221	)
Other non-current assets		—			—			(61,039	)
Prepaid expenses and other current asset, net		1,870,567			(3,871,930	)		(520,377	)
Inventories, net		601,543			(359,859	)		(78,455	)
Accounts payable		(517,944	)		624,347			(11,703	)
Contract liabilities		3,137			84,680			371,639
Accrued expenses and other current liabilities		(37,987	)		(25,816	)		152,448
Amounts due from related parties		—			34,552			(40,098	)
Amounts due to related parties		446,469			139,772			946,379
Tax payable		436,384			113,597			272,148
Operating lease liabilities		(178,037	)		(178,341	)		—
Net cash (used in)/provided by operating activities		(1,635,394	)		(3,883,168	)		1,168,928

Cash flow from investing activities
Purchase of property and equipment		—			(12,137	)		(481,391	)
Proceeds from disposal of property and equipment		—			1,745,094			1,265,217
Proceed from withdrawal of long-term investment		44,570			93,574			—
Provide short-term loan to third party		(410,000	)		—			—
Purchase of long-term investments		—			—			(40,098	)
Net cash (used in)/provided by investing activities		(365,430	)		1,826,531			743,728

Cash flow from financing activities
Proceeds from issuance of Class A ordinary shares upon the completion of IPO		5,356,417			—			—
Proceeds from issuance of convertible bonds		999,957			—			—
Payment of service fees for convertible bonds		(351,000	)		—			—
Proceeds from short-term debts		133,044			—			160,391
Proceeds from long-term debts		—			1,238,592			1,167,861
Repayments of short-term debts		(101,778	)		(107,963	)		(280,692	)
Repayments of long-term debts		(1,325,703	)		(1,918,181	)		(1,001,815	)
Proceed of interest-free loan from related parties		3,031,467			—			—
Repayments of loans to a related party		(4,593,092	)		—			—
Capital contribution from shareholder		—			1,430,612			—
Payments for deferred offering costs		(273,287	)		(1,041,447	)		—
Net cash provided by/(used in) financing activities		2,876,025			(398,387	)		45,745
Effect of exchange rate changes		18,051			(123,887	)		(51,067	)
Net change in cash and cash equivalents		893,252			(2,578,911	)		1,907,334
Cash and cash equivalents, beginning of the year		1,107,480			3,686,391			1,779,057
Cash and cash equivalents, end of the year		2,000,732			1,107,480			3,686,391

Supplemental disclosures of cash flow information:
Income tax paid		2,050			150,124			33,291
Interest expense paid		48,607			65,901			57,776

Supplemental disclosures of non-cash activities:
Obtaining right-of-use assets in exchange for operating lease liabilities		209,652			805,409			N/A

The MIL Network –

January 25, 2025

MIL-OSI: Ninepoint Partners Announces Estimated January 2025 Cash Distributions for Ninepoint Cash Management Fund – ETF Series

Source: GlobeNewswire (MIL-OSI)

TORONTO, Jan. 24, 2025 (GLOBE NEWSWIRE) — Ninepoint Partners LP (“Ninepoint Partners”) today announced the estimated January 2025 cash distribution for the ETF Series of Ninepoint Cash Management Fund (the “Fund”). Ninepoint Partners expects to issue a press release on or about January 30, 2025, which will provide the final distribution rate. The record date for the cash distribution is January 31, 2025, payable on February 7, 2025.

All estimates in this document are based on the accounting data as of January 24, 2025. Due to subscriptions and/or redemptions and/or other factors, the final January 2025 distribution may differ from these estimates and the difference could be material. The information included in this letter is for reference purposes only. Please reconcile all information against your official client statements. This is not intended to be a statement for official tax reporting purposes or any form of tax advice.

The actual taxable amounts of distributions for 2025, including the tax characteristics of the distributions, will be reported to CDS Clearing and Depository Services Inc. in early 2026. Securityholders can contact their brokerage firm for this information.

The per-unit estimated January distribution is detailed below:

Ninepoint ETF Series	Ticker	Cash Distribution per unit	Notional Distribution per unit	CUSIP
Ninepoint Cash Management Fund	NSAV	$0.13608	$0.00000	65443X105

About Ninepoint Partners

Based in Toronto, Ninepoint Partners LP is one of Canada’s leading alternative investment management firms overseeing approximately $7 billion in assets under management and institutional contracts. Committed to helping investors explore innovative investment solutions that have the potential to enhance returns and manage portfolio risk, Ninepoint offers a diverse set of alternative strategies spanning Equities, Fixed Income, Alternative Income, Real Assets, F/X and Digital Assets.

For more information on Ninepoint Partners LP, please visit http://www.ninepoint.com or for inquiries regarding the offering, please contact us at (416) 943-6707 or (866) 299-9906 or invest@ninepoint.com.

Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not residents in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

Please note that distribution factors (breakdown between income, capital gains and return of capital) can only be calculated when a fund has reached its year-end. Distribution information should not be relied upon for income tax reporting purposes as this is only a component of total distributions for the year. For accurate distribution amounts for the purpose of filing an income tax return, please refer to the appropriate T3/T5 slips for that particular taxation year. Please refer to the prospectus or offering memorandum of each Fund for details of the Fund’s distribution policy.

The payment of distributions and distribution breakdown, if applicable, is not guaranteed and may fluctuate. The payment of distributions should not be confused with a Fund’s performance, rate of return, or yield. If distributions paid by the Fund are greater than the performance of the Fund, then an investor’s original investment will shrink. Distributions paid as a result of capital gains realized by a Fund and income and dividends earned by a Fund are taxable in the year they are paid. An investor’s adjusted cost base will be reduced by the amount of any returns of capital. If an investor’s adjusted cost base goes below zero, then capital gains tax will have to be paid on the amount below zero.

Sales Inquiries:

Ninepoint Partners LP
Neil Ross
416-945-6227
nross@ninepoint.com

The MIL Network –

January 25, 2025

MIL-OSI Security: Former CEO of Startup Software Company Sentenced to 30 Months in Federal Prison for Tax Scheme

Source: Office of United States Attorneys

CONCORD – A Bedford man was sentenced yesterday in federal court for his scheme to willfully fail to pay more than $14 million in payroll taxes owed to the IRS and failing to file and pay his personal taxes, Acting U.S. Attorney Jay McCormack and Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division announce.

Andrew Park, 49, was sentenced by U.S. District Court Judge Landya McCafferty to 30 months in federal prison and three years of supervised release. She also ordered Park to pay $639,821.78 in restitution, the amount of tax and interest not repaid at the time of sentencing, to the United States. She also ordered Park pay a fine of $15,000. In July 2024, Park pleaded guilty to willful failure to pay over payroll taxes and willful failure to file a tax return.

Park was the co-founder and CEO of a startup technology company. Park was responsible for all financial matters related to the company, including for filing the company’s quarterly payroll tax returns and collecting and paying over Social Security, Medicare and income taxes withheld from the employees’ wages to the IRS, as well as the matching Social Security and Medicare taxes the company owed. Park was also responsible for collecting and paying over state and local taxes to those respective governments.

From the company’s founding in 2014 through the third quarter of 2021, Park withheld federal, state and local taxes from the wages of the company’s employees but did not pay them over to the IRS and state and local tax authorities as required by law. He also did not pay over the portion of the payroll taxes that the company owed. Park did so even though a payroll service company that he hired to process the employees’ payroll notified him hundreds of times that the taxes were due, and four employees of the company complained that the Social Security Administration reported no withholdings had been paid over by the company on their behalf.

From 2013 through 2020, Park also did not file individual tax returns as required by law, despite the fact that he paid himself a salary of approximately $250,000 each year.

In total, Park caused a tax loss to the IRS exceeding $14.7 million.

“For many years, the defendant took elaborate steps to defraud the IRS by not filing or paying his personal income taxes and by using his employees’ payroll taxes as free capital to grow his business. Then, when matters got out of hand, he falsely told his investors that his company was tax compliant to secure the funds to try to make the problem disappear,” said Acting United States Attorney Jay McCormack. “The substantial sentence imposed by the court reflects the seriousness of the defendant’s conduct and his disregard for our nation’s tax laws and sends a message to deter other would-be tax fraudsters who might seek to enrich themselves at the expense of honest taxpayers.”

“Yesterday’s sentencing of Andrew Park is a strong reminder that payment of individual and business taxes is an obligation, not a choice,” said Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “When Andrew Park made the decision not to pay taxes for himself and his business, he also made the decision to cheat his employees and other honest taxpayers. Investigations of employment tax fraud is a priority for Internal Revenue Service Criminal Investigation as our system of taxation depends on everybody paying their fair share.”

IRS-Criminal Investigation led the investigation. Assistant U.S. Attorney Matthew T. Hunter and Assistant Chief Eric Powers of the Tax Division are prosecuting the case.

###

MIL Security OSI –

January 25, 2025

MIL-OSI: South Plains Financial, Inc. Reports Fourth Quarter and Year-End 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

LUBBOCK, Texas, Jan. 24, 2025 (GLOBE NEWSWIRE) — South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the “Company”), the parent company of City Bank (“City Bank” or the “Bank”), today reported its financial results for the quarter and year ended December 31, 2024.

Fourth Quarter 2024 Highlights

Net income for the fourth quarter of 2024 was $16.5 million, compared to $11.2 million for the third quarter of 2024 and $10.3 million for the fourth quarter of 2023.
Diluted earnings per share for the fourth quarter of 2024 was $0.96, compared to $0.66 for the third quarter of 2024 and $0.61 for the fourth quarter of 2023.
Average cost of deposits for the fourth quarter of 2024 was 229 basis points, compared to 247 basis points for the third quarter of 2024 and 224 basis points for the fourth quarter of 2023.
Net interest margin, calculated on a tax-equivalent basis, was 3.75% for the fourth quarter of 2024, compared to 3.65% for the third quarter of 2024 and 3.52% for the fourth quarter of 2023.
Return on average assets for the fourth quarter of 2024 was 1.53% annualized, compared to 1.05% annualized for the third quarter of 2024 and 0.99% annualized for the fourth quarter of 2023.
Tangible book value (non-GAAP) per share was $25.40 as of December 31, 2024, compared to $25.75 as of September 30, 2024 and $23.47 as of December 31, 2023.
The consolidated total risk-based capital ratio, common equity tier 1 risk-based capital ratio, and tier 1 leverage ratio at December 31, 2023 were 16.74%, 12.41%, and 11.33%, respectively. These ratios significantly exceeded the minimum regulatory levels necessary to be deemed “well-capitalized”.

Full Year 2024 Highlights

Full year net income of $49.7 million in 2024, compared to $62.7 million in 2023.
Diluted earnings per share of $2.92 in 2024, compared to $3.62 in 2023.
The Bank’s wholly-owned subsidiary, Windmark Insurance Agency, Inc. (“Windmark”), was sold in the second quarter of 2023 for $36.1 million, resulting in a gain, net of related charges and taxes, of $22.9 million or $1.32 of diluted earnings per share.
Loans held for investment grew $40.9 million, or 1.4%, during 2024.
Total assets were $4.23 billion at December 31, 2024, compared to $4.20 billion at December 31, 2023.
Return on average assets of 1.17% for the full year 2024, compared to 1.54% for 2023.

Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “I am very proud of our performance this past year as we successfully navigated a challenging environment with a focus on delivering strong financial results. We tightly managed our liquidity to optimize our profitability and return metrics while maintaining our conservative approach to underwriting and risk management. We have also managed the anticipated decline in our indirect auto portfolio as well as a heightened level of loan payoffs and paydowns that has obscured the strong, underlying loan production that has built through the year. Importantly, we are seeing a growing level of optimism across our customer base that is translating into the strongest new business production pipeline that we have seen in more than two years. This bodes positively for the year ahead where we expect to deliver low to mid-single digit loan growth for the full year 2025. Additionally, we are seeing deposit pricing fall across our markets which contributed to our strong margin expansion in the fourth quarter.”

Results of Operations, Quarter Ended December 31, 2024

Net Interest Income

Net interest income was $38.5 million for the fourth quarter of 2024, compared to $37.3 million for the third quarter of 2024 and $35.2 million for the fourth quarter of 2023. Net interest margin, calculated on a tax-equivalent basis, was 3.75% for the fourth quarter of 2024, compared to 3.65% for the third quarter of 2024 and 3.52% for the fourth quarter of 2023. The average yield on loans was 6.69% for the fourth quarter of 2024, compared to 6.68% for the third quarter of 2024 and 6.29% for the fourth quarter of 2023. The average cost of deposits was 229 basis points for the fourth quarter of 2024, which is 18 basis points lower than the third quarter of 2024 and 5 basis points higher than the fourth quarter of 2023.

Interest income was $61.3 million for the fourth quarter of 2024, compared to $61.6 million for the third quarter of 2024 and $57.2 million for the fourth quarter of 2023. Interest income decreased $316 thousand in the fourth quarter of 2024 from the third quarter of 2024, which was primarily comprised of a decrease of $243 thousand in loan interest income. The decline in loan interest income was due primarily to a decrease in average loans of $20.2 million. Interest income increased $4.1 million in the fourth quarter of 2024 compared to the fourth quarter of 2023. This increase was primarily due to an increase of average loans of $30.5 million and higher loan interest rates during the period, resulting in growth of $3.4 million in loan interest income.

Interest expense was $22.8 million for the fourth quarter of 2024, compared to $24.3 million for the third quarter of 2024 and $22.1 million for the fourth quarter of 2023. Interest expense decreased $1.6 million compared to the third quarter of 2024 and increased $702 thousand compared to the fourth quarter of 2023. The $1.6 million decrease was primarily as a result of a 24 basis point decline in the cost of interest-bearing deposits. The $702 thousand increase was primarily a result of growth in average interest-bearing deposits of $136.0 million.

Noninterest Income and Noninterest Expense

Noninterest income was $13.3 million for the fourth quarter of 2024, compared to $10.6 million for the third quarter of 2024 and $9.1 million for the fourth quarter of 2023. The increase from the third quarter of 2024 was primarily due to an increase of $3.1 million in mortgage banking revenues, mainly from an increase of $3.5 million in the fair value adjustment of the mortgage servicing rights assets as interest rates that affect the value increased in the fourth quarter of 2024. This growth was partially offset by approximately $700 thousand in insurance proceeds received for property damage in the third quarter of 2024. The increase in noninterest income for the fourth quarter of 2024 as compared to the fourth quarter of 2023 was primarily due to an increase of $3.3 million in mortgage banking activities revenue mainly from a rise of $3.0 million in the fair value adjustment of the mortgage servicing rights assets as interest rates that affect the value increased in the fourth quarter of 2024.

Noninterest expense was $29.9 million for the fourth quarter of 2024, compared to $33.1 million for the third quarter of 2024 and $30.6 million for the fourth quarter of 2023. The $3.2 million decrease from the third quarter of 2024 was largely the result of a decline of $1.4 million in personnel expenses, primarily from decreased health insurance costs of $668 thousand, as annual rebates were received in the fourth quarter, and a reduction of $400 thousand in mortgage commissions as mortgage activity slowed in the fourth quarter. There were also decreases in net occupancy expense, professional service expenses, and the ineffectiveness related to fair value hedges on municipal securities. The decrease in noninterest expense for the fourth quarter of 2024 as compared to the fourth quarter of 2023 was largely the result of a decrease of $593 thousand in personnel expenses, related to the decline in health insurance costs previously noted.

Loan Portfolio and Composition

Loans held for investment were $3.06 billion as of December 31, 2024, compared to $3.04 billion as of September 30, 2024 and $3.01 billion as of December 31, 2023. The $17.7 million, or 2.3% annualized, increase during the fourth quarter of 2024 as compared to the third quarter of 2024 occurred primarily as a result of organic loan growth experienced in commercial owner-occupied real estate loans. As of December 31, 2024, loans held for investment increased $40.9 million, or 1.4%, from December 31, 2023, primarily attributable to organic loan growth, occurring mainly in multi-family property loans, direct-energy loans, commercial owner-occupied real estate loans, and single-family property loans, partially offset by decreases in consumer auto loans and construction, land, and development loans.

Deposits and Borrowings

Deposits totaled $3.62 billion as of December 31, 2024, compared to $3.72 billion as of September 30, 2024 and $3.63 billion as of December 31, 2023. Deposits decreased by $94.8 million, or 2.6%, in the fourth quarter of 2024 from September 30, 2024. As of December 31, 2024, deposits were essentially unchanged, from December 31, 2023. Noninterest-bearing deposits were $935.5 million as of December 31, 2024, compared to $998.5 million as of September 30, 2024 and $974.2 million as of December 31, 2023. Noninterest-bearing deposits represented 25.8% of total deposits as of December 31, 2024. The quarterly change in total deposits was mainly due to the seasonal decline in escrow accounts of approximately $35 million and a planned reduction of approximately $50 million in customer sweep deposits as part of balance sheet management. Deposits were essentially unchanged, year-over-year, with an increase in interest-bearing deposits offset by a decline in noninterest-bearing deposits.

Asset Quality

The Company recorded a provision for credit losses in the fourth quarter of 2024 of $1.2 million, compared to $495 thousand in the third quarter of 2024 and $600 thousand in the fourth quarter of 2023. The provision during the fourth quarter of 2024 was largely attributable to net charge-off activity and increased loan balances.

The ratio of allowance for credit losses to loans held for investment was 1.42% as of December 31, 2024, compared to 1.41% as of September 30, 2024 and 1.41% as of December 31, 2023.

The ratio of nonperforming assets to total assets was 0.58% as of December 31, 2024, compared to 0.59% as of September 30, 2024 and 0.14% as of December 31, 2023. Annualized net charge-offs were 0.11% for the fourth quarter of 2024, compared to 0.11% for the third quarter of 2024 and 0.08% for the fourth quarter of 2023.

Capital

Book value per share decreased to $26.67 at December 31, 2024, compared to $27.04 at September 30, 2024. The change was primarily driven by a decrease in accumulated other comprehensive income (“AOCI”) of $18.2 million, partially offset by $14.0 million of net income after dividends paid. The decrease in AOCI was attributed to the after-tax decrease in fair value of our available for sale securities, net of fair value hedges, as a result of increases in long-term market interest rates during the period. The tangible common equity to tangible assets ratio (non-GAAP) increased 15 basis points to 9.92% in the fourth quarter of 2024.

Conference Call

South Plains will host a conference call to discuss its fourth quarter and year-end 2024 financial results today, January 24, 2025, at 10:00 a.m., Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-877-407-9716 (international callers please dial 1-201-493-6779) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call and conference materials will be available on the Company’s website at https://www.spfi.bank/news-events/events.

A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed on the investor section of the Company’s website as well as by dialing 1-844-512-2921 (international callers please dial 1-412-317-6671). The pin to access the telephone replay is 13750452. The replay will be available until February 7, 2025.

About South Plains Financial, Inc.

South Plains is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas. City Bank is one of the largest independent banks in West Texas and has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. South Plains provides a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas. Its principal business activities include commercial and retail banking, along with investment, trust and mortgage services. Please visit https://www.spfi.bank for more information.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Pre-Tax, Pre-Provision Income. The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

A reconciliation of non-GAAP financial measures to GAAP financial measures is provided at the end of this press release.

Available Information

The Company routinely posts important information for investors on its web site (under http://www.spfi.bank and, more specifically, under the News & Events tab at http://www.spfi.bank/news-events/press-releases). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this document.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to future events and South Plains’ financial performance. Any statements about South Plains’ expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. South Plains cautions that the forward-looking statements in this press release are based largely on South Plains’ expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond South Plains’ control. Factors that could cause such changes include, but are not limited to, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; potential recession in the United States and our market areas; the impacts related to or resulting from uncertainty in the banking industry as a whole; increased competition for deposits in our market areas and related changes in deposit customer behavior; the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; increases in unemployment rates in the United States and our market areas; declines in commercial real estate values and prices; uncertainty regarding United States fiscal debt, deficit and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events; the impact of changes in U.S. presidential administrations or Congress, including potential changes in U.S. and international trade policies and the resulting impact on the Company and its customers; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential costs related to the impacts of climate change; current or future litigation, regulatory examinations or other legal and/or regulatory actions; and changes in applicable laws and regulations. Additional information regarding these risks and uncertainties to which South Plains’ business and future financial performance are subject is contained in South Plains’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of such documents, and other documents South Plains files or furnishes with the SEC from time to time, which are available on the SEC’s website, http://www.sec.gov. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements due to additional risks and uncertainties of which South Plains is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results. Due to these and other possible uncertainties and risks, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Any forward-looking statements presented herein are made only as of the date of this press release, and South Plains does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, new information, the occurrence of unanticipated events, or otherwise, except as required by applicable law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Contact:	Mikella Newsom, Chief Risk Officer and Secretary
	(866) 771-3347
	investors@city.bank

Source: South Plains Financial, Inc.


South Plains Financial, Inc.
Consolidated Financial Highlights – (Unaudited)
(Dollars in thousands, except share data)

	As of and for the quarter ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Selected Income Statement Data:
Interest income	$	61,324		$	61,640		$	59,208		$	58,727		$	57,236
Interest expense		22,776			24,346			23,320			23,359			22,074
Net interest income		38,548			37,294			35,888			35,368			35,162
Provision for credit losses		1,200			495			1,775			830			600
Noninterest income		13,319			10,635			12,709			11,409			9,146
Noninterest expense		29,948			33,128			32,572			31,930			30,597
Income tax expense		4,222			3,094			3,116			3,143			2,787
Net income		16,497			11,212			11,134			10,874			10,324
Per Share Data (Common Stock):
Net earnings, basic	$	1.01		$	0.68		$	0.68		$	0.66		$	0.63
Net earnings, diluted		0.96			0.66			0.66			0.64			0.61
Cash dividends declared and paid		0.15			0.14			0.14			0.13			0.13
Book value		26.67			27.04			25.45			24.87			24.80
Tangible book value (non-GAAP)		25.40			25.75			24.15			23.56			23.47
Weighted average shares outstanding, basic		16,400,361			16,386,079			16,425,360			16,429,919			16,443,908
Weighted average shares outstanding, dilutive		17,161,646			17,056,959			16,932,077			16,938,857			17,008,892
Shares outstanding at end of period		16,455,826			16,386,627			16,424,021			16,431,755			16,417,099
Selected Period End Balance Sheet Data:
Cash and cash equivalents	$	359,082		$	471,167		$	298,006		$	371,939		$	330,158
Investment securities		577,240			606,889			591,031			599,869			622,762
Total loans held for investment		3,055,054			3,037,375			3,094,273			3,011,799			3,014,153
Allowance for credit losses		43,237			42,886			43,173			42,174			42,356
Total assets		4,232,239			4,337,659			4,220,936			4,218,993			4,204,793
Interest-bearing deposits		2,685,366			2,720,880			2,672,948			2,664,397			2,651,952
Noninterest-bearing deposits		935,510			998,480			951,565			974,174			974,201
Total deposits		3,620,876			3,719,360			3,624,513			3,638,571			3,626,153
Borrowings		110,354			110,307			110,261			110,214			110,168
Total stockholders’ equity		438,949			443,122			417,985			408,712			407,114
Summary Performance Ratios:
Return on average assets (annualized)		1.53	%		1.05	%		1.07	%		1.04	%		0.99	%
Return on average equity (annualized)		14.88	%		10.36	%		10.83	%		10.72	%		10.52	%
Net interest margin ⁽¹⁾		3.75	%		3.65	%		3.63	%		3.56	%		3.52	%
Yield on loans		6.69	%		6.68	%		6.60	%		6.53	%		6.29	%
Cost of interest-bearing deposits		3.12	%		3.36	%		3.33	%		3.27	%		3.14	%
Efficiency ratio		57.50	%		68.80	%		66.72	%		67.94	%		68.71	%
Summary Credit Quality Data:
Nonperforming loans	$	24,023		$	24,693		$	23,452		$	3,380		$	5,178
Nonperforming loans to total loans held for investment		0.79	%		0.81	%		0.76	%		0.11	%		0.17	%
Other real estate owned		530			973			755			862			912
Nonperforming assets to total assets		0.58	%		0.59	%		0.57	%		0.10	%		0.14	%
Allowance for credit losses to total loans held for investment		1.42	%		1.41	%		1.40	%		1.40	%		1.41	%
Net charge-offs to average loans outstanding (annualized)		0.11	%		0.11	%		0.10	%		0.13	%		0.08	%

	As of and for the quarter ended
	December 31 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Capital Ratios:
Total stockholders’ equity to total assets		10.37	%		10.22	%		9.90	%		9.69	%		9.68	%
Tangible common equity to tangible assets (non-GAAP)		9.92	%		9.77	%		9.44	%		9.22	%		9.21	%
Common equity tier 1 to risk-weighted assets		13.53	%		13.25	%		12.61	%		12.67	%		12.41	%
Tier 1 capital to average assets		12.04	%		11.76	%		11.81	%		11.51	%		11.33	%
Total capital to risk-weighted assets		17.86	%		17.61	%		16.86	%		17.00	%		16.74	%

(1)	Net interest margin is calculated as the annual net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

South Plains Financial, Inc.
Average Balances and Yields – (Unaudited)
(Dollars in thousands)

	For the Three Months Ended
	December 31, 2024							December 31, 2023

	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Assets
Loans	$	3,049,718	$	51,270		6.69	%	$	3,019,228	$	47,903		6.29	%
Debt securities – taxable		518,646		4,994		3.83	%		560,143		5,563		3.94	%
Debt securities – nontaxable		154,203		1,014		2.62	%		157,341		1,032		2.60	%
Other interest-bearing assets		390,090		4,267		4.35	%		255,454		2,963		4.60	%

Total interest-earning assets		4,112,657		61,545		5.95	%		3,992,166		57,461		5.71	%
Noninterest-earning assets		189,422							156,541

Total assets	$	4,302,079						$	4,148,707

Liabilities & stockholders’ equity
NOW, Savings, MMDA’s	$	2,249,062		16,570		2.93	%	$	2,201,190		16,894		3.04	%
Time deposits		445,173		4,566		4.08	%		357,067		3,325		3.69	%
Short-term borrowings		3		–		0.00	%		3		–		0.00	%
Notes payable & other long-term borrowings		–		–		0.00	%		–		–		0.00	%
Subordinated debt		63,938		834		5.19	%		73,740		981		5.28	%
Junior subordinated deferrable interest debentures		46,393		806		6.91	%		46,393		874		7.47	%

Total interest-bearing liabilities		2,804,569		22,776		3.23	%		2,678,393		22,074		3.27	%
Demand deposits		978,742							1,021,091
Other liabilities		77,732							59,808
Stockholders’ equity		441,036							389,415

Total liabilities & stockholders’ equity	$	4,302,079						$	4,148,707

Net interest income			$	38,769						$	35,387
Net interest margin ⁽²⁾						3.75	%						3.52	%

(1)	Average loan balances include nonaccrual loans and loans held for sale.
(2)	Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

South Plains Financial, Inc.
Average Balances and Yields – (Unaudited)
(Dollars in thousands)

	For the Twelve Months Ended
	December 31, 2024							December 31, 2023

	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Assets
Loans	$	3,054,189	$	202,301		6.62	%	$	2,924,473	$	176,627		6.04	%
Debt securities – taxable		532,730		21,090		3.96	%		570,655		21,590		3.78	%
Debt securities – nontaxable		155,168		4,076		2.63	%		185,205		4,901		2.65	%
Other interest-bearing assets		312,917		14,319		4.58	%		223,152		9,973		4.47	%

Total interest-earning assets		4,055,004		241,786		5.96	%		3,903,485		213,091		5.46	%
Noninterest-earning assets		179,527							176,495

Total assets	$	4,234,531						$	4,079,980

Liabilities & stockholders’ equity
NOW, Savings, MMDA’s	$	2,250,942		70,362		3.13	%	$	2,117,985		55,423		2.62	%
Time deposits		411,028		16,719		4.07	%		321,205		9,564		2.98	%
Short-term borrowings		3		–		0.00	%		84		5		5.95	%
Notes payable & other long-term borrowings		–		–		0.00	%		–		–		0.00	%
Subordinated debt		63,868		3,339		5.23	%		75,458		4,018		5.32	%
Junior subordinated deferrable interest debentures		46,393		3,381		7.29	%		46,393		3,276		7.06	%

Total interest-bearing liabilities		2,772,234		93,801		3.38	%		2,561,125		72,286		2.82	%
Demand deposits		968,307							1,069,280
Other liabilities		70,777							71,102
Stockholders’ equity		423,213							378,473

Total liabilities & stockholders’ equity	$	4,234,531						$	4,079,980

Net interest income			$	147,985						$	140,805
Net interest margin ⁽²⁾						3.65	%						3.61	%

(1)	Average loan balances include nonaccrual loans and loans held for sale.
(2)	Net interest margin is calculated as the annualized net interest income, on a fully tax-equivalent basis, divided by average interest-earning assets.

South Plains Financial, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)

	As of
	December 31, 2024			December 31, 2023

Assets
Cash and due from banks	$	54,114		$	62,821
Interest-bearing deposits in banks		304,968			267,337
Securities available for sale		577,240			622,762
Loans held for sale		20,542			14,499
Loans held for investment		3,055,054			3,014,153
Less: Allowance for credit losses		(43,237	)		(42,356	)
Net loans held for investment		3,011,817			2,971,797
Premises and equipment, net		52,951			55,070
Goodwill		19,315			19,315
Intangible assets		1,720			2,429
Mortgage servicing rights		26,292			26,569
Other assets		163,280			162,194
Total assets	$	4,232,239		$	4,204,793

Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	935,510		$	974,201
Interest-bearing deposits		2,685,366			2,651,952
Total deposits		3,620,876			3,626,153
Subordinated debt		63,961			63,775
Junior subordinated deferrable interest debentures		46,393			46,393
Other liabilities		62,060			61,358
Total liabilities		3,793,290			3,797,679
Stockholders’ Equity
Common stock		16,456			16,417
Additional paid-in capital		97,287			97,107
Retained earnings		385,827			345,264
Accumulated other comprehensive income (loss)		(60,621	)		(51,674	)
Total stockholders’ equity		438,949			407,114
Total liabilities and stockholders’ equity	$	4,232,239		$	4,204,793

South Plains Financial, Inc.
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands)

	Three Months Ended				Twelve Months Ended
	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023

Interest income:
Loans, including fees	$	51,262	$	47,895	$	202,270	$	176,598
Other		10,062		9,341		38,629		35,435
Total interest income		61,324		57,236		240,899		212,033
Interest expense:
Deposits		21,136		20,219		87,081		64,987
Subordinated debt		834		981		3,339		4,018
Junior subordinated deferrable interest debentures		806		874		3,381		3,276
Other		–		–		–		5
Total interest expense		22,776		22,074		93,801		72,286
Net interest income		38,548		35,162		147,098		139,747
Provision for credit losses		1,200		600		4,300		4,610
Net interest income after provision for credit losses		37,348		34,562		142,798		135,137
Noninterest income:
Service charges on deposits		2,241		1,844		8,026		7,130
Income from insurance activities		31		37		123		1,515
Mortgage banking activities		4,955		1,671		14,187		13,817
Bank card services and interchange fees		3,225		3,167		13,640		13,323
Gain on sale of subsidiary		—		—		—		33,778
Other		2,867		2,427		12,096		9,663
Total noninterest income		13,319		9,146		48,072		79,226
Noninterest expense:
Salaries and employee benefits		17,384		17,977		74,338		79,377
Net occupancy expense		3,901		3,856		16,105		16,102
Professional services		1,555		1,509		6,583		6,433
Marketing and development		1,153		880		3,782		3,453
Other		5,955		6,375		26,770		29,581
Total noninterest expense		29,948		30,597		127,578		134,946
Income before income taxes		20,719		13,111		63,292		79,417
Income tax expense		4,222		2,787		13,575		16,672
Net income	$	16,497	$	10,324	$	49,717	$	62,745

South Plains Financial, Inc.
Loan Composition
(Unaudited)
(Dollars in thousands)

	As of
	December 31, 2024		December 31, 2023

Loans:
Commercial Real Estate	$	1,119,063	$	1,081,056
Commercial – Specialized		388,955		372,376
Commercial – General		557,371		517,361
Consumer:
1-4 Family Residential		566,400		534,731
Auto Loans		254,474		305,271
Other Consumer		64,936		74,168
Construction		103,855		129,190
Total loans held for investment	$	3,055,054	$	3,014,153

South Plains Financial, Inc.
Deposit Composition
(Unaudited)
(Dollars in thousands)

	As of
	December 31, 2024		December 31, 2023

Deposits:
Noninterest-bearing deposits	$	935,510	$	974,201
NOW & other transaction accounts		498,718		562,066
MMDA & other savings		1,741,988		1,722,170
Time deposits		444,660		367,716
Total deposits	$	3,620,876	$	3,626,153

South Plains Financial, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands)

	For the quarter ended
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Pre-tax, pre-provision income
Net income	$	16,497	$	11,212	$	11,134	$	10,874	$	10,324
Income tax expense		4,222		3,094		3,116		3,143		2,787
Provision for credit losses		1,200		495		1,775		830		600
Pre-tax, pre-provision income	$	21,919	$	14,801	$	16,025	$	14,847	$	13,711

	As of
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
Tangible common equity
Total common stockholders’ equity	$	438,949		$	443,122		$	417,985		$	408,712		$	407,114
Less: goodwill and other intangibles		(21,035	)		(21,197	)		(21,379	)		(21,562	)		(21,744	)

Tangible common equity	$	417,914		$	421,925		$	396,606		$	387,150		$	385,370

Tangible assets
Total assets	$	4,232,239		$	4,337,659		$	4,220,936		$	4,218,993		$	4,204,793
Less: goodwill and other intangibles		(21,035	)		(21,197	)		(21,379	)		(21,562	)		(21,744	)

Tangible assets	$	4,211,204		$	4,316,462		$	4,199,557		$	4,197,431		$	4,183,049

Shares outstanding		16,455,826			16,386,627			16,424,021			16,431,755			16,417,099

Total stockholders’ equity to total assets		10.37	%		10.22	%		9.90	%		9.69	%		9.68	%
Tangible common equity to tangible assets		9.92	%		9.77	%		9.44	%		9.22	%		9.21	%
Book value per share	$	26.67		$	27.04		$	25.45		$	24.87		$	24.80
Tangible book value per share	$	25.40		$	25.75		$	24.15		$	23.56		$	23.47

The MIL Network –

January 25, 2025

MIL-OSI: Lakeland Financial Reports Annual Net Income of $93.5 million, Organic Average Loan Growth of 5% and Average Deposit Growth of 4%

Source: GlobeNewswire (MIL-OSI)

WARSAW, Ind., Jan. 24, 2025 (GLOBE NEWSWIRE) — Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported net income of $93.5 million for the year ended December 31, 2024, versus $93.8 million for the year ended December 31, 2023. Diluted earnings per share were $3.63 for the twelve months ended December 31, 2024, versus $3.65 for 2023.

Net income was $24.2 million for the three months ended December 31, 2024, a decrease of $5.4 million, or 18%, compared with net income of $29.6 million for the three months ended December 31, 2023. Diluted earnings per share of $0.94 for the fourth quarter of 2024 decreased by 19% from $1.16 for the fourth quarter of 2023. On a linked quarter basis, net income increased 4%, or $852,000, from third quarter 2024 net income of $23.3 million. Linked quarter diluted earnings per share improved by 3% from $0.91 for the third quarter of 2024.

Pretax pre-provision earnings, which is a non-GAAP measure, were $128.4 million for the twelve months ended December 31, 2024, an increase of $12.3 million, or 11%, compared to $116.2 million for the twelve months ended December 31, 2023. Pretax pre-provision earnings were $32.9 million for the three months ended December 31, 2024, a decrease of $3.4 million, or 9%, compared to $36.4 million for the three months ended December 31, 2023. Pretax pre-provision earnings increased by $2.1 million, or 7%, compared to $30.8 million on a linked quarter basis.

“2024 continued a long and consistent trend of organic growth in our balance sheet. We successfully expanded both our loan and deposit franchises during the year,” stated David M. Findlay, Chairman and CEO. “We are particularly pleased with the 9-basis point expansion of our net interest margin on a linked quarter basis as we effectively managed the balance sheet throughout the year.”

Quarterly Financial Performance

Fourth Quarter 2024 versus Fourth Quarter 2023 highlights:

Tangible book value per share grew by $1.25, or 5%, to $26.47
Total risk-based capital ratio improved to 15.90%, compared to 15.47%
Tangible capital ratio improved to 10.19%, compared to 9.91%
Average loans grew by $206.9 million, or 4%, to $5.09 billion
Core deposit growth of $274.3 million, or 5%, to $5.9 billion
Average equity increased by $121.1 million, or 21%
Return on average equity of 13.87%, compared to 20.52%
Return on average assets of 1.42%, compared to 1.80%
Net interest margin improved to 3.25% versus 3.23%
Net interest income increased by $3.1 million, or 6%
Noninterest expense increased by $1.2 million, or 4%
Provision expense of $3.7 million, compared to $300,000
Net charge offs of $1.4 million versus $433,000
Watch list loans as a percentage of total loans increased to 4.13% from 3.72%

Fourth Quarter 2024 versus Third Quarter 2024 highlights:

Total risk-based capital ratio improved to 15.90% from 15.75%
Average equity growth of $23.6 million, or 4%
Average loans grew by $22.3 million, or less than 1%, to $5.09 billion
Core deposits increased by $118.6 million, or 2%, to $5.8 billion
Net interest margin improved 9 basis points to 3.25% versus 3.16%
Return on average equity of 13.87%, compared to 13.85%
Return on average assets of 1.42%, compared to 1.39%
Noninterest income decreased by $41,000, or less than 1%
Noninterest expense increased by $260,000, or 1%
Provision expense of $3.7 million, compared to $3.1 million
Individually analyzed and watch list loans declined by $56.4 million, or 21%
Watch list loans as a percentage of total loans improved to 4.13% from 5.27%

Capital Strength

The company’s total capital as a percentage of risk-weighted assets improved to 15.90% at December 31, 2024, compared to 15.47% at December 31, 2023 and 15.75% at September 30, 2024. These capital levels significantly exceeded the 10.00% regulatory threshold required to be characterized as “well capitalized” and reflect the company’s robust capital base.

The company’s tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, improved to 10.19% at December 31, 2024, compared to 9.91% at December 31, 2023. The tangible common equity ratio contracted from 10.47% at September 30, 2024. Unrealized losses from available-for-sale investment securities were $191.1 million at December 31, 2024, compared to $174.6 million at December 31, 2023 and $154.5 million at September 30, 2024. 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 12.37% at December 31, 2024, compared to 11.99% at December 31, 2023 and 12.29% at September 30, 2024.

As announced on January 14, 2025, the board of directors approved a cash dividend for the fourth quarter of $0.50 per share, payable on February 5, 2025, to shareholders of record as of January 25, 2025. The fourth quarter dividend per share represents a 4% increase from the $0.48 dividend per share paid for the fourth quarter of 2023.

“The continued growth in our capital base supports the increase in our dividend rate paid to shareholders and contributes to the growth in total return for shareholders. The compounded annual growth rate for our dividend is 15% since 2012,” stated Kristin L. Pruitt, President.

Loan Portfolio

Average total loans for the twelve months ended December 31, 2024 were $5.04 billion, an increase of $225.7 million, or 5%, from $4.81 billion for the twelve months ended December 31, 2023. Average total loans of $5.09 billion in the fourth quarter of 2024, increased $206.9 million, or 4%, from $4.88 billion for the fourth quarter of 2023, and increased $22.3 million, or less than 1%, from $5.06 billion for the third quarter of 2024.

“Loan growth in 2024 benefited from healthy increases in both our commercial and consumer lending activities,” noted Findlay. “We were pleased to report 8% growth in consumer loans, 6% growth in CRE and multi-family loans, and 2% growth in commercial and industrial loans for 2024. Our Indiana markets continue to benefit from expanding economic activity stimulated by the pro-business operating environment. We continue to be focused on active business development efforts in every market and we are looking forward to continued organic growth in 2025.”

Total loans, net of deferred loan fees, increased by $200.6 million, or 4%, from $4.92 billion as of December 31, 2023 to $5.12 billion as of December 31, 2024. The increase in loans occurred across much of the portfolio with our commercial real estate and multi-family residential loan portfolio growing by $155.0 million, or 6%, our commercial and industrial loan portfolio growing by $30.1 million, or 2%, and our consumer 1-4 family mortgage loans portfolio growing by $34.0 million, or 7%. These increases were offset by a decrease to other commercial loans of $25.1 million, or 21%. On a linked quarter basis, total loans, net of deferred loan fees, increased by $35.7 million, or 1%, from $5.08 billion at September 30, 2024. The linked quarter increase was primarily a result of growth in total commercial real estate and multi-family residential loans of $42.7 million, or 2%, and growth in total agri-business and agricultural loans of $29.0 million, or 8%. Offsetting these increases was a decrease in total commercial and industrial loans of $42.0 million, or 3%.

Commercial loan originations for the fourth quarter included approximately $390.0 million in loan originations, offset by approximately $359.0 million in commercial loan pay downs. Line of credit usage increased to 41% as of December 31, 2024, compared to 39% at December 31, 2023 and was unchanged from 41% as of September 30, 2024. Total available lines of credit contracted by $238.0 million, or 5%, as compared to a year ago, and line usage decreased by $2.0 million, or less than 1%, 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 $101.7 million for this sector represented 2% of total loans at December 31, 2024, a decrease of $899,000, or 1%, from September 30, 2024. Commercial real estate loans secured by multi-family residential properties and secured by non-farm non-residential properties were approximately 213% of total risk-based capital at December 31, 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)

	December 31, 2024				September 30, 2024				December 31, 2023
Retail	$	1,780,726	30.2	%	$	1,709,899	29.3	%	$	1,794,958	31.4	%
Commercial		2,269,049	38.4			2,304,041	39.5			2,227,147	38.9
Public funds		1,809,631	30.7			1,726,869	29.6			1,563,015	27.3
Core deposits		5,859,406	99.3			5,740,809	98.4			5,585,120	97.6
Brokered deposits		41,560	0.7			96,504	1.6			135,405	2.4
Total	$	5,900,966	100.0	%	$	5,837,313	100.0	%	$	5,720,525	100.0	%

Total deposits increased $180.4 million, or 3%, from $5.72 billion as of December 31, 2023 to $5.90 billion as of December 31, 2024. The increase in total deposits was driven by an increase in core deposits (which excludes brokered deposits) of $274.3 million, or 5%. Total core deposits at December 31, 2024 were $5.86 billion and represented 99% of total deposits, as compared to $5.59 billion and 98% of total deposits at December 31, 2023. Brokered deposits were $41.6 million, or 1% of total deposits, at December 31, 2024, compared to $135.4 million, or 2% of total deposits, at December 31, 2023.

The increase in core deposits since December 31, 2023 reflects growth in commercial deposits and public funds deposits. Public funds deposits grew annually by $246.6 million, or 16%, to $1.81 billion. Commercial deposits grew annually by $41.9 million, or 2%, to $2.27 billion. Retail deposits contracted annually by $14.2 million, or 1%, to $1.78 billion. The increase in public funds deposits drove the change in the composition of core deposits as public funds deposits as a percentage of total deposits increased to 31%, from 27%. Commercial and retail deposits as a percentage of total deposits contracted to 38%, from 39%, and to 30%, from 31%, respectively. Growth in public funds was positively impacted by the addition of a new public funds customers in the Lake City Bank footprint which included the addition of their operating accounts.

On a linked quarter basis, total deposits increased $63.7 million, or 1%, from $5.84 billion at September 30, 2024 to $5.90 billion at December 31, 2024. Core deposits increased by $118.6 million, or 2%, while brokered deposits decreased by $54.9 million, or 57%. Linked quarter growth in core deposits resulted primarily from an increase in public funds deposits of $82.8 million, or 5%, and growth in retail deposits of $70.8 million, or 4%. Offsetting these increases was a decrease in commercial deposits of $35.0 million, or 2%.

“Core deposit growth was steady throughout 2024 and accounts for 99% of the funding sources for Lake City Bank,” commented Findlay. “We are pleased that our growth in core deposits came from every region of the bank. We continue to successfully fund the loan growth with in-market stable and diversified deposit growth. We continue to gain market share in our more mature Northern Indiana markets and implemented strategies to enhance growth in the Indianapolis market through data-driven marketing and business development efforts.”

Average total deposits were $6.01 billion for the fourth quarter of 2024, an increase of $208.5 million, or 4%, from $5.80 billion for the fourth quarter of 2023. Average interest-bearing deposits drove the increase in average total deposits and increased by $301.1 million, or 7%. Contributing to the overall growth of interest-bearing deposits was an increase to average interest-bearing checking accounts of $431.9 million, or 14%. Offsetting this increase was a reduction in average time deposits of $98.9 million, or 9%, and a decrease to average savings deposits of $31.9 million, or 10%. Average noninterest-bearing demand deposits decreased by $92.5 million, or 7%.

On a linked quarter basis, average total deposits increased by $130.9 million, or 2%, from $5.88 billion for the third quarter of 2024 to $6.01 billion for the fourth quarter of 2024. Average interest-bearing deposits drove the increase to total average deposits, which increased by $93.2 million, or 2%. An increase to interest bearing checking accounts of $209.6 million, or 6%, drove the increase to average interest-bearing deposits on a linked quarter basis. Offsetting this increase was a decrease to total average time deposits of $111.1 million, or 10%. Average noninterest-bearing demand deposits increased by $37.7 million, or 3%.

Checking account trends as of December 31, 2024 compared to December 31, 2023, include growth of $310.5 million, or 24%, in aggregate public fund checking account balances, growth of $24.5 million, or 1%, in aggregate commercial checking account balances, and expansion of $34.4 million, or 4%, in aggregate retail checking account balances. The number of accounts has also grown for all three segments, with growth of 7% for public funds accounts, 2% for commercial accounts and 1% for retail accounts during 2024.

Deposits not covered by FDIC deposit insurance as a percentage of total deposits were 62% as of December 31, 2024, compared to 61% at September 30, 2024, and 57% at December 31, 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 December 31, 2024, compared to 32% at September 30, 2024, and 31% as of December 31, 2023. As of December 31, 2024, 98% of deposit accounts had deposit balances less than $250,000.

Net Interest Margin

Net interest margin was 3.25% for the fourth quarter of 2024, representing a 2 basis point increase from 3.23% for the fourth quarter of 2023. Earning assets yields decreased by 15 basis points to 5.81% for the fourth quarter of 2024 from 5.96% for the fourth quarter of 2023. The decrease in earning asset yields was offset by a decrease in the company’s funding costs of 17 basis points as interest expense as a percentage of average earning assets decreased to 2.56% for the fourth quarter of 2024, compared to 2.73% for the fourth quarter of 2023.

Linked quarter net interest margin expanded by 9 basis point to 3.25% for the fourth quarter of 2024, compared to 3.16% for the third quarter of 2024. Average earning asset yields decreased by 23 basis points from 6.04% during the third quarter of 2024 to 5.81% during the fourth quarter of 2024 and were offset by a 32 basis point decrease in interest expense as a percentage of average earning assets from 2.88% to 2.56%. The cumulative 100 basis point decline in the Federal Funds Rate during 2024, drove the reduction in funding costs that provided for the net interest margin expansion through deposit repricing. Notably, the deposit mix shift from noninterest bearing deposits to interest bearing deposits experienced by the company during the monetary tightening cycle of March 2022 through September 2024 has stabilized with noninterest bearing deposits representing 22% of total deposits at December 31, 2024, compared to 24% at December 31, 2023 and 22% at September 30, 2024.

“Our thoughtful and strategic balance sheet management strategies led to healthy net interest margin expansion of 9 basis points during the fourth quarter,” noted Lisa M. O’Neill, Executive Vice-President and Chief Financial Officer. “Net interest margin expansion resulted from reduced deposit costs that outpaced loan repricing due to falling short term rates. Our public fund balances are largely tied to the effective federal funds rate, and we also continue to benefit from fixed rate loan repricing to the higher interest rate environment.”

The loan beta for the current rate-easing cycle is 25% compared to the deposit beta of 31%. 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. 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.

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 December 31, 2024, the company had access to an aggregate of $3.7 billion in liquidity from these sources, compared to $3.4 billion at December 31, 2023 and $3.7 billion at September 30, 2024. Utilization from these sources totaled $41.6 million at December 31, 2024, compared to $185.4 million at December 31, 2023 and $96.5 million at September 30, 2024. Core deposits have historically represented, and currently represent, the primary funding resource of the bank at 99% of total deposits and purchased funds.

Investment Portfolio Overview

Total investment securities were $1.12 billion at December 31, 2024, reflecting a decrease of $58.7 million, or 5%, as compared to $1.18 billion at December 31, 2023. On a linked quarter basis, investment securities decreased $24.8 million, or 2%, due primarily to a decline in the fair market value of available-for-sale securities of $36.6 million, portfolio cash flows of $15.1 million and partially offset by investment security purchases of $30 million. Investment securities represented 17% of total assets on December 31, 2024, compared to 18% at December 31, 2023 and 17% at September 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 growth and for general liquidity purposes. Tax equivalent adjusted effective duration for the investment portfolio was 6.0 years at December 31, 2024, compared to 6.5 years and 6.3 years at December 31, 2023 and September 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 impact of the higher interest rate environment. The company anticipates receiving principal and interest cash flows of approximately $104.2 million during 2025 from the investment securities portfolio and plans to use that liquidity to fund loan growth and to fund new investment securities purchases.

Net interest income decreased by $356,000, or less than 1%, for the twelve months ended December 31, 2024, as compared to the twelve months ended December 31, 2023. Deposit interest expense increased by $35.0 million. Offsetting the increase in deposit interest expense was an increase in loan interest income of $29.8 million and a reduction in borrowings interest expense of $4.7 million. Net interest income was $51.7 million for the fourth quarter of 2024, representing an increase of $3.1 million, or 6%, as compared to the fourth quarter of 2023. Net interest income for the fourth quarter of 2024 benefited from an increase in loan interest income of $1.9 million and a reduction in interest expense of $667,000 compared to the prior year quarter. On a linked quarter basis, net interest income increased $2.4 million, or 5%, from $49.3 million for the third quarter of 2024. On a linked quarter basis, the increase to net interest income was driven by a $4.1 million reduction in interest expense and a $1.1 million increase in income from short-term investments. Offsetting the reduction in interest expense was a reduction in loan interest income of $2.9 million.

On a full year basis, revenue increased by $6.6 million, or 3%, to $253.5 million as compared to $246.9 million for 2023. Revenue was $63.6 million for the fourth quarter 2024 representing a decrease of $ 2.2 million or 3%, as compared to the fourth quarter of 2023. On a linked quarter basis, revenue increased by $2.4 million, or 4% from $61.2 million in the third quarter of 2024.

Asset Quality

Provision expense was $16.8 million for the year ended December 31, 2024, an increase of $10.9 million, or 186%, as compared to $5.9 million during 2023. The elevated provision recorded during 2024 as compared to the prior year was primarily driven by an increase in specific allocations from the downgrade of a $43.3 million credit to an industrial company in Northern Indiana. The relationship was placed on nonperforming status in conjunction with the downgrade, which occurred during the second quarter of 2024. Additional specific allocations of $5.5 million were reserved for this credit during the fourth quarter of 2024. The company recorded a provision expense of $3.7 million in the fourth quarter of 2024, compared to provision expense of $300,000 in the fourth quarter of 2023. On a linked quarter basis, provision expense increased by $632,000 from $3.1 million for the third quarter of 2024, or 21%.

The allowance for credit loss reserve to total loans was 1.68% at December 31, 2024, up from 1.46% at December 31, 2023, and 1.65% at September 30, 2024. Net charge offs were $2.8 million for the full year 2024 compared to $6.5 million for 2023. Net charge offs to total loans were 0.05% for 2024 compared to 0.13% for 2023. Net charge offs in the fourth quarter of 2024 were $1.4 million compared to $433,000 in the fourth quarter of 2023 and $143,000 during the linked third quarter of 2024. Annualized net charge offs to average loans were 0.11% for the fourth quarter of 2024, compared to 0.04% for the fourth quarter of 2023, and 0.01% for the linked third quarter of 2024.

Nonperforming assets increased $40.8 million, or 253%, to $56.9 million as of December 31, 2024, versus $16.1 million as of December 31, 2023. On a linked quarter basis, nonperforming assets decreased $1.2 million, or 2%, compared to $58.1 million as of September 30, 2024. The ratio of nonperforming assets to total assets at December 31, 2024 increased to 0.85% from 0.25% at December 31, 2023 and decreased from 0.87% at September 30, 2024. The full-year increase in nonperforming assets was primarily driven by the industrial borrower relationship referenced above.

Total individually analyzed and watch list loans increased by $28.1 million, or 15%, to $211.1 million as of December 31, 2024, versus $183.1 million as of December 31, 2023. On a linked quarter basis, total individually analyzed and watch list loans decreased by $56.4 million, or 21%, from $267.6 million at September 30, 2024. Watch list loans as a percentage of total loans increased by 41 basis points to 4.13% at December 31, 2024, compared to 3.72% at December 31, 2023, and decreased by 114 basis points from 5.27% at September 30, 2024. The linked quarter decrease in total individually analyzed and watch list loans was primarily driven by the removal of six relationships from the watch list with an aggregate balance of $63.7 million, offset by the addition of four downgraded credits with an aggregated balance of $8.4 million. Approximately $45.5 million of the watch list removals were attributable to credit upgrades, with the remaining $18.2 million in removals attributable to payoffs.

“We are encouraged by the $56 million decrease in watch list credits during the quarter and are cautiously optimistic following our fourth quarter, semi-annual portfolio reviews meetings during which we review every commercial banker’s portfolio,” stated Findlay. “Economic conditions in all of our markets remain stable and we continue to actively manage our loan portfolio challenges.”

Noninterest Income

Noninterest income increased by $7.0 million, or 14%, to $56.8 million for the twelve months ended December 31, 2024, compared to $49.9 million for the prior year. The increase in noninterest income for the twelve months ended December 31, 2024 was primarily driven by the net gain on sale of Visa shares of $9.0 million. Contributing further to the increase in noninterest income was an increase to wealth and advisory fees of $1.4 million, or 15%, driven by growth in customers and favorable market performance. Bank owned life insurance income increased $1.1 million, or 34%, due to favorable market performance of the company’s variable bank owned life insurance policies. Offsetting these increases was a $4.5 million, or 49%, decrease to other income. Other income was elevated during the twelve months ended December 31, 2023 from insurance and loss recoveries of $6.3 million that were related to the 2023 wire fraud loss. Offsetting the impact of these recoveries was increased investment income from the company’s limited partnership investments and the receipt of an additional $1.0 million in recoveries from the wire fraud loss. Adjusted core noninterest income, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $46.8 million for the twelve months ended December 31, 2024, an increase of $3.3 million, or 8%, compared to $43.6 million for twelve months ended December 31, 2023.

Findlay added, “It is very gratifying to report strong growth in core noninterest income for 2024. Our fee-based lines of business made significant contributions to revenue growth during the year. Notably, Wealth Advisory fees grew by 15% and treasury management fees grew by 5%. As we move into 2025, our teams continue to be focused on driving continued growth in these business lines.”

The company’s noninterest income decreased $5.3 million, or 31%, to $11.9 million for the fourth quarter of 2024, compared to $17.2 million for the fourth quarter of 2023. Wealth advisory fees increased $388,000, or 17%, and bank owned life insurance increased $476,000, or 64%. Other income decreased $6.5 million, or 89%. Other income was elevated during the fourth quarter of 2023 primarily due to insurance and loss recoveries of $6.3 million related to the wire fraud loss. Adjusted core noninterest income was $11.9 million for the fourth quarter of 2024, an increase of $968,000, or 9%, compared to $10.9 million for the fourth quarter of 2023.

On a linked quarter basis, noninterest income for the fourth quarter of 2024 decreased by $41,000, or less than 1%, from $11.9 million during the third quarter of 2024. The linked quarter decrease was driven by a decrease to other income of $261,000, or 25%, and was offset by an increase to bank owned life insurance income $148,000, or 14%.

Noninterest Expense

Noninterest expense decreased by $5.6 million, or 4%, from $130.7 million to $125.1 million for the twelve months ended December 31, 2023 and 2024, respectively. Noninterest expense during 2023 was elevated as compared to 2024 due to the wire fraud loss, which added a net $16.7 million to noninterest expense. Offsetting this impact on noninterest expense was a $7.6 million, or 13%, increase in salaries and employees benefits during the full year 2024. The increase to salaries and benefits expense resulted primarily from increases to salaries and wages of $3.2 million, performance-based incentive compensation of $2.3 million, health insurance expense of $918,000, and variable deferred compensation of $950,000, which relates to the company’s variable bank owned life insurance. Other expense increased $2.6 million, or 24%, primarily due to an accrued legal expense of $4.5 million. Data processing fees and supplies increased by $1.2 million, or 8%, from the continued investment in customer-facing and operational technology solutions. Adjusted core noninterest expense, a non-GAAP financial measure that excludes the effects of certain non-routine operating events, was $120.5 million for the twelve months ended December 31, 2024, an increase of $6.5 million, or 6%, compared to $114.0 million for the twelve months ended December 31, 2023.

Noninterest expense increased $1.2 million, or 4%, to $30.7 million for the fourth quarter of 2024, compared to $29.4 million during the fourth quarter of 2023. Driving the fourth quarter 2024 increase to noninterest expense was an increase to salaries and benefits expense of $1.5 million, or 10%, which was primarily attributable to increased salary expense of $825,000, deferred compensation of $414,000 and increased health insurance of $222,000. Other expense decreased by $595,000, or 20%, from lower legal accruals. Adjusted core noninterest expense increased by $1.7 million, or 6%, from $29.0 million during the fourth quarter of 2023.

On a linked quarter basis, noninterest expense increased by $260,000, or 1%, from $30.4 million during the third quarter of 2024. Driving the increase in noninterest expense was an increase in salaries and employee benefits of $785,000, or 5% primarily due to performance-based incentive compensation. Corporate and business development expense decreased by $419,000, or 31%, which was driven by a reduction in advertising expense during the quarter. Other expense decreased by $132,000, or 5%.

The company’s efficiency ratio for the twelve months ended December 31, 2024 was 49.3% compared to 52.9% for the twelve months ended December 31, 2023. The company’s adjusted core efficiency ratio, a non-GAAP financial measure that excludes the impact of certain non-routine operating events, was 49.5% for the twelve months ended December 31, 2024 as compared to 47.4% for the twelve months ended December 31, 2023.

The company’s efficiency ratio was 48.2% for the fourth quarter of 2024, compared to 44.7% for the fourth quarter of 2023 and 49.7% for the linked third quarter of 2024. The company’s adjusted core efficiency ratio was 48.7% for the fourth quarter of 2023 and unchanged when compared to the company’s efficiency ratio for the third and fourth quarters of 2024.

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 $6.7 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 FOURTH QUARTER 2024 FINANCIAL HIGHLIGHTS

	Three Months Ended									Twelve Months Ended
(Unaudited – Dollars in thousands, except per share data)	December 31,			September 30,			December 31,			December 31,			December 31,
END OF PERIOD BALANCES	2024			2024			2023			2024			2023
Assets	$	6,678,374		$	6,645,371		$	6,524,029		$	6,678,374		$	6,524,029
Investments		1,122,994			1,147,806			1,181,646			1,122,994			1,181,646
Loans		5,117,948			5,081,990			4,916,534			5,117,948			4,916,534
Allowance for Credit Losses		85,960			83,627			71,972			85,960			71,972
Deposits		5,900,966			5,837,313			5,720,525			5,900,966			5,720,525
Brokered Deposits		41,560			96,504			135,405			41,560			135,405
Core Deposits (1)		5,859,406			5,740,809			5,585,120			5,859,406			5,585,120
Total Equity		683,911			699,181			649,793			683,911			649,793
Goodwill Net of Deferred Tax Assets		3,803			3,803			3,803			3,803			3,803
Tangible Common Equity (2)		680,108			695,378			645,990			680,108			645,990
Adjusted Tangible Common Equity (2)		846,040			832,813			800,450			846,040			800,450
AVERAGE BALANCES
Total Assets	$	6,795,596		$	6,656,464		$	6,514,430		$	6,662,718		$	6,464,980
Earning Assets		6,470,920			6,329,287			6,145,937			6,328,498			6,114,225
Investments		1,134,011			1,128,705			1,107,862			1,134,979			1,184,659
Loans		5,086,614			5,064,348			4,879,695			5,039,406			4,813,678
Total Deposits		6,011,122			5,880,177			5,802,592			5,836,025			5,604,228
Interest Bearing Deposits		4,729,201			4,635,993			4,428,140			4,578,219			4,128,922
Interest Bearing Liabilities		4,729,206			4,649,745			4,441,425			4,644,553			4,295,743
Total Equity		693,744			670,160			572,653			662,087			588,667
INCOME STATEMENT DATA
Net Interest Income	$	51,694		$	49,273		$	48,599		$	196,679		$	197,035
Net Interest Income-Fully Tax Equivalent		52,804			50,383			49,914			201,363			202,347
Provision for Credit Losses		3,691			3,059			300			16,750			5,850
Noninterest Income		11,876			11,917			17,208			56,844			49,858
Noninterest Expense		30,653			30,393			29,445			125,084			130,710
Net Income		24,190			23,338			29,626			93,478			93,767
Pretax Pre-Provision Earnings (2)		32,917			30,797			36,362			128,439			116,183
PER SHARE DATA
Basic Net Income Per Common Share	$	0.94		$	0.91		$	1.16		$	3.64		$	3.67
Diluted Net Income Per Common Share		0.94			0.91			1.16			3.63			3.65
Cash Dividends Declared Per Common Share		0.48			0.48			0.46			1.92			1.84
Dividend Payout		51.06	%		52.75	%		39.66	%		52.89	%		50.41	%
Book Value Per Common Share (equity per share issued)	$	26.62		$	27.22		$	25.37		$	26.62		$	25.37
Tangible Book Value Per Common Share (2)		26.47			27.07			25.22			26.47			25.22
Market Value – High	$	78.61		$	72.25		$	67.88		$	78.61		$	77.07
Market Value – Low		61.10			57.45			45.59			57.45			43.05


	Three Months Ended									Twelve Months Ended
(Unaudited – Dollars in thousands, except per share data)	December 31,			September 30,			December 31,			December 31,			December 31,
PER SHARE DATA (continued)	2024			2024			2023			2024			2023
Basic Weighted Average Common Shares Outstanding		25,686,276			25,684,407			25,614,420			25,676,543			25,604,751
Diluted Weighted Average Common Shares Outstanding		25,792,460			25,767,739			25,732,870			25,769,018			25,723,165
KEY RATIOS
Return on Average Assets		1.42	%		1.39	%		1.80	%		1.40	%		1.45	%
Return on Average Total Equity		13.87			13.85			20.52			14.12			15.93
Average Equity to Average Assets		10.21			10.07			8.79			9.94			9.11
Net Interest Margin		3.25			3.16			3.23			3.18			3.31
Efficiency (Noninterest Expense/Net Interest Income plus Noninterest Income)		48.22			49.67			44.74			49.34			52.94
Loans to Deposits		86.73			87.06			85.95			86.73			85.95
Investment Securities to Total Assets		16.82			17.27			18.11			16.82			18.11
Tier 1 Leverage (3)		12.15			12.18			11.82			12.15			11.82
Tier 1 Risk-Based Capital (3)		14.64			14.50			14.21			14.64			14.21
Common Equity Tier 1 (CET1) (3)		14.64			14.50			14.21			14.64			14.21
Total Capital (3)		15.90			15.75			15.47			15.90			15.47
Tangible Capital (2)		10.19			10.47			9.91			10.19			9.91
Adjusted Tangible Capital (2)		12.37			12.29			11.99			12.37			11.99
ASSET QUALITY
Loans Past Due 30 – 89 Days	$	4,273		$	829		$	3,360		$	4,273		$	3,360
Loans Past Due 90 Days or More		28			95			27			28			27
Nonaccrual Loans		56,431			57,551			15,687			56,431			15,687
Nonperforming Loans		56,459			57,646			15,714			56,459			15,714
Other Real Estate Owned		284			384			384			284			384
Other Nonperforming Assets		143			21			8			143			8
Total Nonperforming Assets		56,886			58,051			16,106			56,886			16,106
Individually Analyzed Loans		78,647			77,654			16,124			78,647			16,124
Non-Individually Analyzed Watch List Loans		132,499			189,918			166,961			132,499			166,961
Total Individually Analyzed and Watch List Loans		211,146			267,572			183,085			211,146			183,085
Gross Charge Offs		1,657			231			566			3,468			7,332
Recoveries		299			88			133			706			848
Net Charge Offs/(Recoveries)		1,358			143			433			2,762			6,484
Net Charge Offs/(Recoveries) to Average Loans		0.11	%		0.01	%		0.04	%		0.05	%		0.13	%
Credit Loss Reserve to Loans		1.68			1.65			1.46			1.68			1.46
Credit Loss Reserve to Nonperforming Loans		152.25			145.07			458.01			152.25			458.01
Nonperforming Loans to Loans		1.10			1.13			0.32			1.10			0.32
Nonperforming Assets to Assets		0.85			0.87			0.25			0.85			0.25
Total Individually Analyzed and Watch List Loans to Total Loans		4.13	%		5.27	%		3.72	%		4.13	%		3.72	%


	Three Months Ended									Twelve Months Ended
(Unaudited – Dollars in thousands, except per share data)	December 31,			September 30,			December 31,			December 31,			December 31,
PER SHARE DATA (continued)	2024			2024			2023			2024			2023
OTHER DATA
Full Time Equivalent Employees		643			639			619			643			619
Offices		54			54			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 December 31, 2024 are preliminary until the Call Report is filed.


CONSOLIDATED BALANCE SHEETS (in thousands, except share data)

	December 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Cash and due from banks	$	71,733		$	70,451
Short-term investments		96,472			81,373
Total cash and cash equivalents		168,205			151,824

Securities available-for-sale, at fair value		991,426			1,051,728
Securities held-to-maturity, at amortized cost (fair value of $113,107 and $119,215, respectively)		131,568			129,918
Real estate mortgage loans held-for-sale		1,700			1,158

Loans, net of allowance for credit losses of $85,960 and $71,972		5,031,988			4,844,562

Land, premises and equipment, net		60,489			57,899
Bank owned life insurance		113,320			109,114
Federal Reserve and Federal Home Loan Bank stock		21,420			21,420
Accrued interest receivable		28,446			30,011
Goodwill		4,970			4,970
Other assets		124,842			121,425
Total assets	$	6,678,374		$	6,524,029


LIABILITIES
Noninterest bearing deposits	$	1,297,456		$	1,353,477
Interest bearing deposits		4,603,510			4,367,048
Total deposits		5,900,966			5,720,525

Borrowings – Federal Home Loan Bank advances		0			50,000
Accrued interest payable		15,117			20,893
Other liabilities		78,380			82,818
Total liabilities		5,994,463			5,874,236

STOCKHOLDERS’ EQUITY
Common stock: 90,000,000 shares authorized, no par value
25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024
25,903,686 shares issued and 25,430,566 outstanding as of December 31, 2023		129,664			127,692
Retained earnings		736,412			692,760
Accumulated other comprehensive income (loss)		(166,500	)		(155,195	)
Treasury stock, at cost (469,239 shares and 473,120 shares as of December 31, 2024 and December 31, 2023, respectively)		(15,754	)		(15,553	)
Total stockholders’ equity		683,822			649,704
Noncontrolling interest		89			89
Total equity		683,911			649,793
Total liabilities and equity	$	6,678,374		$	6,524,029


CONSOLIDATED STATEMENTS OF INCOME (unaudited – in thousands, except share and per share data)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2024		2023			2024			2023
NET INTEREST INCOME
Interest and fees on loans
Taxable	$	83,253	$	80,631		$	335,639		$	304,130
Tax exempt		296		1,016			2,126			3,885
Interest and dividends on securities
Taxable		2,997		3,187			12,048			13,153
Tax exempt		3,914		4,009			15,714			16,396
Other interest income		2,910		2,099			7,631			5,703
Total interest income		93,370		90,942			373,158			343,267

Interest on deposits		41,676		42,154			172,759			137,791
Interest on short-term borrowings		0		189			3,720			8,441
Total interest expense		41,676		42,343			176,479			146,232

NET INTEREST INCOME		51,694		48,599			196,679			197,035

Provision for credit losses		3,691		300			16,750			5,850

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		48,003		48,299			179,929			191,185

NONINTEREST INCOME
Wealth advisory fees		2,699		2,311			10,469			9,080
Investment brokerage fees		456		445			1,894			1,815
Service charges on deposit accounts		2,825		2,682			11,157			10,773
Loan and service fees		2,977		2,968			11,832			11,750
Merchant and interchange fee income		889		907			3,542			3,651
Bank owned life insurance income		1,216		740			4,210			3,133
Interest rate swap fee income		0		0			0			794
Mortgage banking income (loss)		48		(70	)		116			(254	)
Net securities gains (losses)		0		(9	)		(46	)		(25	)
Net gain on Visa shares		0		0			8,996			0
Other income		766		7,234			4,674			9,141
Total noninterest income		11,876		17,208			56,844			49,858

NONINTEREST EXPENSE
Salaries and employee benefits		17,261		15,733			66,728			59,147
Net occupancy expense		1,706		1,486			6,865			6,360
Equipment costs		1,405		1,443			5,612			5,632
Data processing fees and supplies		3,742		3,698			15,161			14,003
Corporate and business development		950		877			4,965			4,807
FDIC insurance and other regulatory fees		894		894			3,465			3,363
Professional fees		2,275		2,299			8,950			8,583
Wire fraud loss		0		0			0			18,058
Other expense		2,420		3,015			13,338			10,757
Total noninterest expense		30,653		29,445			125,084			130,710

INCOME BEFORE INCOME TAX EXPENSE		29,226		36,062			111,689			110,333
Income tax expense		5,036		6,436			18,211			16,566
NET INCOME	$	24,190	$	29,626		$	93,478		$	93,767

BASIC WEIGHTED AVERAGE COMMON SHARES		25,686,276		25,614,420			25,676,543			25,604,751

BASIC EARNINGS PER COMMON SHARE	$	0.94	$	1.16		$	3.64		$	3.67

DILUTED WEIGHTED AVERAGE COMMON SHARES		25,792,460		25,732,870			25,769,018			25,723,165

DILUTED EARNINGS PER COMMON SHARE	$	0.94	$	1.16		$	3.63		$	3.65


LAKELAND FINANCIAL CORPORATION LOAN DETAIL (unaudited, in thousands)

	December 31, 2024					September 30, 2024					December 31, 2023
Commercial and industrial loans:
Working capital lines of credit loans	$	649,609		12.7	%	$	678,079		13.3	%	$	604,893		12.3	%
Non-working capital loans		801,256		15.6			814,804		16.0			815,871		16.6
Total commercial and industrial loans		1,450,865		28.3			1,492,883		29.3			1,420,764		28.9

Commercial real estate and multi-family residential loans:
Construction and land development loans		567,781		11.1			729,293		14.3			634,435		12.9
Owner occupied loans		807,090		15.8			810,453		15.9			825,464		16.8
Nonowner occupied loans		872,671		17.0			766,821		15.1			724,101		14.7
Multifamily loans		344,978		6.7			243,283		4.8			253,534		5.1
Total commercial real estate and multi-family residential loans		2,592,520		50.6			2,549,850		50.1			2,437,534		49.5

Agri-business and agricultural loans:
Loans secured by farmland		156,609		3.1			157,413		3.1			162,890		3.3
Loans for agricultural production		230,787		4.5			200,971		4.0			225,874		4.6
Total agri-business and agricultural loans		387,396		7.6			358,384		7.1			388,764		7.9

Other commercial loans		95,584		1.9			94,309		1.9			120,726		2.5
Total commercial loans		4,526,365		88.4			4,495,426		88.4			4,367,788		88.8

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		259,286		5.1			261,462		5.1			258,103		5.2
Open end and junior lien loans		214,125		4.2			210,275		4.1			189,663		3.9
Residential construction and land development loans		16,818		0.3			14,200		0.3			8,421		0.2
Total consumer 1-4 family mortgage loans		490,229		9.6			485,937		9.5			456,187		9.3

Other consumer loans		104,041		2.0			103,547		2.1			96,022		1.9
Total consumer loans		594,270		11.6			589,484		11.6			552,209		11.2
Subtotal		5,120,635		100.0	%		5,084,910		100.0	%		4,919,997		100.0	%
Less: Allowance for credit losses		(85,960	)				(83,627	)				(71,972	)
Net deferred loan fees		(2,687	)				(2,920	)				(3,463	)
Loans, net	$	5,031,988				$	4,998,363				$	4,844,562


LAKELAND FINANCIAL CORPORATION DEPOSITS AND BORROWINGS (unaudited, in thousands)

	December 31, 2024		September 30, 2024		December 31, 2023
Noninterest bearing demand deposits	$	1,297,456	$	1,284,527	$	1,353,477
Savings and transaction accounts:
Savings deposits		276,179		276,468		301,168
Interest bearing demand deposits		3,471,455		3,273,405		3,049,059
Time deposits:
Deposits of $100,000 or more		642,776		787,095		792,738
Other time deposits		213,100		215,818		224,083
Total deposits	$	5,900,966	$	5,837,313	$	5,720,525
FHLB advances and other borrowings		0		30,000		50,000
Total funding sources	$	5,900,966	$	5,867,313	$	5,770,525


LAKELAND FINANCIAL CORPORATION AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS (UNAUDITED)

	Three Months Ended December 31, 2024							Three Months Ended September 30, 2024							Three Months Ended December 31, 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)	$	5,060,397		$	83,253	6.54	%	$	5,037,855		$	86,118	6.80	%	$	4,820,389		$	80,631	6.64	%
Tax exempt (1)		26,217			364	5.52			26,493			366	5.50			59,306			1,265	8.46
Investments: (1)
Securities		1,134,011			7,953	2.79			1,128,705			7,871	2.77			1,107,862			8,262	2.96
Short-term investments		2,765			29	4.17			2,841			35	4.90			2,610			32	4.86
Interest bearing deposits		247,530			2,881	4.63			133,393			1,738	5.18			155,770			2,067	5.26
Total earning assets	$	6,470,920		$	94,480	5.81	%	$	6,329,287		$	96,128	6.04	%	$	6,145,937		$	92,257	5.96	%
Less: Allowance for credit losses		(84,687	)						(81,353	)						(72,165	)
Nonearning Assets
Cash and due from banks		67,994							63,744							69,563
Premises and equipment		60,325							59,493							58,436
Other nonearning assets		281,044							285,293							312,659
Total assets	$	6,795,596						$	6,656,464						$	6,514,430

Interest Bearing Liabilities
Savings deposits	$	274,960		$	43	0.06	%	$	280,180		$	45	0.06	%	$	306,875		$	52	0.07	%
Interest bearing checking accounts		3,505,470			31,562	3.58			3,295,911			33,822	4.08			3,073,570			30,953	4.00
Time deposits:
In denominations under $100,000		214,429			1,921	3.56			215,020			1,914	3.54			220,678			1,810	3.25
In denominations over $100,000		734,342			8,150	4.42			844,882			9,775	4.60			827,017			9,339	4.48
Miscellaneous short-term borrowings		5			0	5.30			13,752			189	5.48			13,285			189	5.64
Total interest bearing liabilities	$	4,729,206		$	41,676	3.51	%	$	4,649,745		$	45,745	3.91	%	$	4,441,425		$	42,343	3.78	%
Noninterest Bearing Liabilities
Demand deposits		1,281,921							1,244,184							1,374,452
Other liabilities		90,725							92,375							125,900
Stockholders’ Equity		693,744							670,160							572,653
Total liabilities and stockholders’ equity	$	6,795,596						$	6,656,464						$	6,514,430
Interest Margin Recap
Interest income/average earning assets					94,480	5.81	%					96,128	6.04	%					92,257	5.96	%
Interest expense/average earning assets					41,676	2.56						45,745	2.88						42,343	2.73
Net interest income and margin				$	52,804	3.25	%				$	50,383	3.16	%				$	49,914	3.23	%

(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, $1.11 million and $1.32 million in the three-month periods ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.
(2)  Loan fees, which are immaterial in relation to total taxable loan interest income for the three months ended December 31, 2024, September 30, 2024, and December 31, 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									Twelve Months Ended
	Dec. 31, 2024			Sep. 30, 2024			Dec. 31, 2023			Dec. 31, 2024			Dec. 31, 2023
Total Equity	$	683,911		$	699,181		$	649,793		$	683,911		$	649,793
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		680,108			695,378			645,990			680,108			645,990
Market Value Adjustment in AOCI		165,932			137,435			154,460			165,932			154,460
Adjusted Tangible Common Equity		846,040			832,813			800,450			846,040			800,450

Assets	$	6,678,374		$	6,645,371		$	6,524,029		$	6,678,374		$	6,524,029
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		6,674,571			6,641,568			6,520,226			6,674,571			6,520,226
Market Value Adjustment in AOCI		165,932			137,435			154,460			165,932			154,460
Adjusted Tangible Assets		6,840,503			6,779,003			6,674,686			6,840,503			6,674,686

Ending Common Shares Issued		25,689,730			25,684,916			25,614,585			25,689,730			25,614,585

Tangible Book Value Per Common Share	$	26.47		$	27.07		$	25.22		$	26.47		$	25.22

Tangible Common Equity/Tangible Assets		10.19	%		10.47	%		9.91	%		10.19	%		9.91	%
Adjusted Tangible Common Equity/Adjusted Tangible Assets		12.37	%		12.29	%		11.99	%		12.37	%		11.99	%

Net Interest Income	$	51,694		$	49,273		$	48,599		$	196,679		$	197,035
Plus: Noninterest Income		11,876			11,917			17,208			56,844			49,858
Minus: Noninterest Expense		(30,653	)		(30,393	)		(29,445	)		(125,084	)		(130,710	)

Pretax Pre-Provision Earnings	$	32,917		$	30,797		$	36,362		$	128,439		$	116,183

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									Twelve Months Ended
	Dec. 31, 2024			Sep. 30, 2024			Dec. 31, 2023			Dec. 31, 2024			Dec. 31, 2023
Noninterest Income	$	11,876		$	11,917		$	17,208		$	56,844		$	49,858
Less: Net (Gain) Loss on Visa Shares		0			15			0			(8,996	)		0
Less: Insurance and Loss Recoveries		0			0			(6,300	)		(1,000	)		(6,300	)
Adjusted Core Noninterest Income	$	11,876		$	11,932		$	10,908		$	46,848		$	43,558

Noninterest Expense	$	30,653		$	30,393		$	29,445		$	125,084		$	130,710
Less: Legal Accrual		0			0			0			(4,537	)		0
Less: Wire Fraud Loss		0			0			0			0			(18,058	)
Plus: Salaries and Employee Benefits (1)		0			0			(453	)		0			1,397
Adjusted Core Noninterest Expense	$	30,653		$	30,393		$	28,992		$	120,547		$	114,049

Earnings Before Income Taxes	$	29,226		$	27,738		$	36,062		$	111,689		$	110,333
Adjusted Core Impact:
Noninterest Income		0			15			(6,300	)		(9,996	)		(6,300	)
Noninterest Expense		0			0			453			4,537			16,661
Total Adjusted Core Impact		0			15			(5,847	)		(5,459	)		10,361
Adjusted Earnings Before Income Taxes		29,226			27,753			30,215			106,230			120,694
Tax Effect		(5,036	)		(4,404	)		(4,996	)		(16,853	)		(19,119	)
Core Operational Profitability (2)	$	24,190		$	23,349		$	25,219		$	89,377		$	101,575

Diluted Earnings Per Common Share	$	0.94		$	0.91		$	1.16		$	3.63		$	3.65
Impact of Adjusted Core Items		0.00			0.00			(0.18	)		(0.16	)		0.30
Core Operational Diluted Earnings Per Common Share	$	0.94		$	0.91		$	0.98		$	3.47		$	3.95

Adjusted Core Efficiency Ratio		48.22	%		49.66	%		48.72	%		49.49	%		47.40	%

(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 $4.4 million lower than reported net income for the three months ended September 30, 2024 and December 31, 2023, respectively. Core operational profitability was $4.1 million lower and $7.8 million higher than reported net income for the twelve months ended December 31, 2024 and 2023, respectively.

Contact
Lisa M. O’Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com

The MIL Network –

January 25, 2025

MIL-OSI: Apollo Commercial Real Estate Finance, Inc. Announces 2024 Dividend Income Tax Treatment

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Jan. 24, 2025 (GLOBE NEWSWIRE) — Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today announced the estimated federal income tax treatment of the Company’s 2024 distributions on its common stock (CUSIP #03762U105) and its 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock.

The federal income tax classification of the 2024 distributions on the Company’s common stock as it is expected to be reported on Form 1099-DIV is set forth in the following table ($ per share):

Record Date	Payable Date	Total Distribution Per Share	Ordinary Dividend	Qualified Dividend	Non-dividend Distribution	Section 199A Dividend⁽¹⁾
12/29/2023	01/12/2024	$0.35000	$0.151978	$0.009218	$0.198022	$0.142760
03/28/2024	04/15/2024	$0.35000	$0.151978	$0.009218	$0.198022	$0.142760
06/28/2024	07/15/2024	$0.35000	$0.151978	$0.009218	$0.198022	$0.142760
09/30/2024	10/15/2024	$0.25000	$0.108555	$0.006584	$0.141445	$0.101971

⁽¹⁾ May be eligible for a 20% deduction under Section 199A of the Internal Revenue Code of 1986, as amended (the “IRC”). Stockholders are encouraged to consult with their own tax advisors as to their specific tax treatment of the Company’s distributions.

The federal income tax classification of the 2024 distributions on the Company’s 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock as it is expected to be reported on Form 1099-DIV is set forth in the following table ($ per share):

Record Date	Payable Date	Total Distribution Per Share	Ordinary Dividend	Qualified Dividend	Non-dividend Distribution	Section 199A Dividend
03/28/2024	04/15/2024	$0.453125	$0.453125	$0.027483	–	$0.425642
06/28/2024	07/15/2024	$0.453125	$0.453125	$0.027483	–	$0.425642
09/30/2024	10/15/2024	$0.453125	$0.453125	$0.027483	–	$0.425642

Pursuant to Section 857(b)(9) of the IRC, cash distributions made on January 15, 2025, with a record date of December 31, 2024, are treated as received by stockholders on December 31, 2024 to the extent of 2024 earnings and profits. As the Company’s aggregate 2024 cash distributions exceeded its 2024 earnings and profits, the January 2025 cash distributions declared in December 2024 are treated as 2025 distributions for federal income tax purposes and are not included on the 2024 Form 1099-DIV.

Stockholders are encouraged to consult with their own tax advisors as to their specific tax treatment of the Company’s distributions.

About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $733 billion of assets under management as of September 30, 2024.

Additional information can be found on the Company’s website at http://www.apollocref.com. Please note that our URL address has changed.

Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: high interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raises or acquire its target assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CONTACT:		Hilary Ginsberg Investor Relations (212) 822-0767

The MIL Network –

January 25, 2025

MIL-OSI: The Drone Market Size Continues to Rise Steeply Generating Lucrative Revenue Opportunity

Source: GlobeNewswire (MIL-OSI)

PALM BEACH, Fla., Jan. 24, 2025 (GLOBE NEWSWIRE) — FN Media Group News Commentary – The drone platform services segment dominated the global drone services market share in recent years and is estimated to be the fastest growing through 2032. This is due to the growing use of drones for emergency response and public safety. Drone platform services refer to a range of software and hardware solutions that enable the safe and efficient operation of drones. Drone MRO services comprise maintenance, repair, and overhaul services for items such as wind turbine blades, solar plates, and oil & gas pipelines, especially in hard-to-reach locations. The drone MRO services segment is expected to register significant growth during the forecast period due to increasing demand for low cost and effective inspection services across various sectors. Autonomous drones are UAVs that can operate without human intervention, using advanced software, sensors, and cameras. These drones have been playing an essential role in various industries such as agriculture, construction, mining, and logistics. The introduction of artificial intelligence (AI) software improves the overall performance of unmanned aerial systems, enabling drones to recognize objects, examine information, and provide real-time analytical feedback. A report from Fortune Business Insights said that: “The increase in precision farming needs, aiming to boost crop productivity, drives market growth. Drone OEMs are investing in R&D for thermal cameras, multispectral sensors, and LiDAR, improving drone efficacy in monitoring fields, creating vegetation maps, and detecting issues such as disease and irrigation irregularities. Thus, it drives the market growth during the forecast period.” Active Companies in the markets today include ZenaTech, Inc. (NASDAQ: ZENA), AgEagle Aerial Systems Inc. (NYSE: UAVS), Palladyne AI Corp. (NASDAQ: PDYN), Red Cat Holdings, Inc. (NASDAQ: RCAT), Ambarella, Inc. (NASDAQ: AMBA).

Fortune Business Insights continued: “Agricultural drones, flying at a specific altitude with sensors, provide crucial analytical data for controls crop health, treatment, exploration, field soil analysis, and yield assessments, aiding farmers in making informed decisions and reducing time and costs. The surveillance & inspection segment dominates the market. It is estimated to be the fastest growing segment during the forecast period, owing to rising demand for surveillance and inspection operations from agriculture, oil & gas, mining, and other sectors. The product delivery segment held the second-largest share in the application segment. It refers to the use of drones to deliver goods to customers. This entails specialized drones equipped with sensors and GPS technology to navigate and deliver packages to their intended destinations. The rising demand for fast and efficient delivery services is anticipated to boost the product delivery segment.”

ZenaTech (NASDAQ:ZENA) Announces Listing of its Common Shares on the Mexican Stock Exchange – ZenaTech, Inc. (FSE: 49Q) (BMV: ZENA) (“ZenaTech”), a technology company specializing in AI (Artificial Intelligence) drone, Drone-as-a-Service (DaaS), enterprise SaaS and Quantum Computing solutions, announces that it its common shares are approved for listing and trading on the BMV: Bolsa Mexicana de Valores (Mexican Stock Exchange). The shares trade under the symbol “ZENA” on its International Quotation System (SIC), effective January 23, 2025.

“As we continue to expand our business into new geographical markets, this additional listing on the Mexican Stock Exchange not only broadens our international exposure but provides increased liquidity for our shareholders. We look forward to sharing our story with Mexican investors as we continue to drive value for our shareholders,” said CEO Shaun Passley, Ph.D.

In Additional ZENA News – ZenaTech Inc.’s (NASDAQ:ZENA) Acquires KJM Land Surveying LLC, a Second Acquisition to Accelerate Drone Innovation in Land Surveys and Establish a Southeast Base for its Drone as a Service Business – ZenaTech, a technology company specializing in AI (Artificial Intelligence) drone, Drone-as-a-Service (DaaS), enterprise SaaS and Quantum Computing solutions, announces that it has acquired KJM Land Surveying LLC, a well-established Pensacola Florida land survey engineering company with a long history and roster of repeat customers. This is ZenaTech’s second acquisition as part of a larger roll-up strategy to disrupt the land survey industry by accelerating the use of drones for speed, accuracy and innovation benefits. The acquisition will also form the base of the Southeast US region of its national Drone as a Service or DaaS business which utilizes drone solutions from its subsidiary company ZenaDrone.

“Closing this second acquisition is another step in our Drone as a Service or DaaS strategy, establishing a Southeast base with an experienced team and customer relationships, which adds to our Northwest base and national rollout. We have the opportunity to significantly disrupt the land survey business at scale using drone technologies. We view our DaaS business model as similar as to how Uber disrupted the taxi industry,” said CEO Shaun Passley, Ph.D. “This acquisition, as well as the 20 others we have identified, have the potential to add accretive revenue over the short term as well as the long term.”

The US Surveying and Mapping Services industry is estimated at $10.3 billion according to Business Research Insights, growing at least 3% annually. Remotely piloted drones with an array of sensors and cameras, LiDAR (Light Detection and Ranging), and GPS systems for capturing high-resolution pictures and data are revolutionizing the land survey industry gathering aerial data across expansive terrains in a matter of hours instead of weeks or months using traditional methods. Continued… Read this full release by visiting: https://www.financialnewsmedia.com/news-zena/

Other recent developments in the technology industry include:

Ambarella, Inc. (NASDAQ: AMBA) recently announced during CES the N1-655 edge GenAI system-on-chip (SoC), which provides on-chip decode of 12x simultaneous 1080p30 video streams, while concurrently processing that video and running a hybrid of multiple, multimodal vision-language models (VLMs) and traditional CNNs. This SoC’s high AI processing performance supports most of the popular multimodal VLMs and large-language models (LLMs), while consuming only 20 watts of power—10-100x lower than cloud processors. For example, the N1-655 reliably runs the Phi, Gemma, LLaVA-OneVision and Llama models, without the need for an internet connection, on data inputs like visuals and speech in applications such as on-premise AI boxes, autonomous mobile robots (AMRs), and smart-city security video recorders.

Following its initial N1 SoC introduced last year, Ambarella is building up a family of edge GenAI SoCs for tasks that go beyond what can be done on-camera. Both of the current family members process GenAI models locally to improve privacy with state-of-the-art performance per watt, significantly reducing power consumption as well as the total cost of ownership compared to cloud-based inference processing.

AgEagle Aerial Systems Inc. (NYSE: UAVS) recently announced the completion of its previously announced historic order of eBee VISION systems to its reseller for French Army surveillance operations. Each system consists of an eBee VISION UAV, ground control systems, comms and antenna package, and a tactical backpack unit. The final 15 units have been delivered pursuant to this purchase order, with the total order valued at $3.4M, which represents the largest single order since the Company was founded.

Bill Irby, AgEagle President, stated, “As AgEagle embarks on what we anticipate being a promising new year in the expanding drone market, closing out this historic requisition serves as a strong indicator of what we believe will be our most successful year to date. In conjunction with our reseller partner we have conducted multiple training events with the French Army which provided invaluable real-time feedback we are leveraging to accelerate the evolution of our eBee VISION. We believe these insights, in addition to our recent significant milestone achievements, will be essential to the scaling of our high-value intelligence, surveillance, and reconnaissance product offerings to military and commercial operations worldwide. We look forward to driving ongoing sustainable revenue growth and remain committed to building long-term value for all our stakeholders.”

Palladyne AI Corp. (NASDAQ: PDYN) and Red Cat Holdings, Inc. (NASDAQ: RCAT), a drone technology company integrating robotic hardware and software for military, government, and commercial operations, recently announced the completion of the first successful flight in which multiple Teal drones equipped with Palladyne™ Pilot AI software autonomously collaborated to identify, prioritize, and track objects of interest on the ground. The flight demonstrates how the Palladyne Pilot AI software leverages sensor management and platform collaboration to enable a flight of two or more drones to autonomously collaborate and share multi-modal sensor information under constrained communication between drones. This follows Palladyne AI’s announcement in December 2024 that it had successfully demonstrated a single drone’s ability to interface with a small drone’s autopilot system using Palladyne Pilot to autonomously identify, prioritize, and track terrestrial targets.

“Enabling multiple Teal and Black Widow drones to synthesize and share multi-modal sensor fusion information in real-time will dramatically improve situational awareness in the field,” said Geoff Hitchcock, Chief Revenue Officer, Red Cat Holdings, Inc. “Even more compelling is the ability to translate that shared information into autonomous navigation, enabling a single operator to manage multiple drones with a substantially reduced cognitive load and in operational environments with limited connectivity. We look forward to engaging with our customers to showcase the value of this groundbreaking joint-solution.”

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The MIL Network –

January 25, 2025

MIL-OSI Security: Maryland Man Convicted in $20M Insurance Fraud Scheme

Source: United States Attorneys General 1

A federal jury convicted a Maryland man yesterday for conspiracy to commit insurance fraud, money laundering, filing false tax returns and identity theft.

According to court documents and evidence presented at trial, James Wilson, of Owings Mills, conspired with others to defraud insurance companies by obtaining over 30 life insurance policies for applicants by mispresenting their health, wealth and existing life insurance coverage. The total death benefits from these policies exceeded $20 million.

Wilson also conspired to defraud individual investors to obtain funds that he then used to pay premiums on fraudulently-obtained life insurance policies. To conceal the fraud, Wilson transferred the fraud through multiple bank accounts, including accounts in the name of trusts. Wilson filed false individual income tax returns for 2018 and 2019, which concealed approximately $5.7 million and $2 million respectively of fraud proceeds.

Wilson is scheduled to be sentenced on May 1. He faces a maximum penalty of 20 years in prison for each count of conspiracy, wire fraud, mail fraud and money laundering; and a maximum penalty of three years in prison for each count of filing a false tax return. Wilson also faces a maximum penalty of two years in prison for each count of aggravated identity theft. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, U.S. Attorney Erek L. Barron for the District of Maryland and Special Agent in Charge Kareem A. Carter of IRS Criminal Investigation (IRS-CI)’s Washington, D.C. Field Office made the announcement.

IRS-CI investigated the case, with assistance from the Maryland Insurance Administration and Maryland Attorney General.

Trial Attorneys Shawn Noud and Richard Kelley of the Tax Division and Assistant U.S. Attorneys Matthew Phelps and Philip Motsay for the District of Maryland are prosecuting the case.

MIL Security OSI –

January 25, 2025

MIL-OSI Security: Security News: Maryland Man Convicted in $20M Insurance Fraud Scheme

Source: United States Department of Justice 2

A federal jury convicted a Maryland man yesterday for conspiracy to commit insurance fraud, money laundering, filing false tax returns and identity theft.

According to court documents and evidence presented at trial, James Wilson, of Owings Mills, conspired with others to defraud insurance companies by obtaining over 30 life insurance policies for applicants by mispresenting their health, wealth and existing life insurance coverage. The total death benefits from these policies exceeded $20 million.

Wilson also conspired to defraud individual investors to obtain funds that he then used to pay premiums on fraudulently-obtained life insurance policies. To conceal the fraud, Wilson transferred the fraud through multiple bank accounts, including accounts in the name of trusts. Wilson filed false individual income tax returns for 2018 and 2019, which concealed approximately $5.7 million and $2 million respectively of fraud proceeds.

Wilson is scheduled to be sentenced on May 1. He faces a maximum penalty of 20 years in prison for each count of conspiracy, wire fraud, mail fraud and money laundering; and a maximum penalty of three years in prison for each count of filing a false tax return. Wilson also faces a maximum penalty of two years in prison for each count of aggravated identity theft. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, U.S. Attorney Erek L. Barron for the District of Maryland and Special Agent in Charge Kareem A. Carter of IRS Criminal Investigation (IRS-CI)’s Washington, D.C. Field Office made the announcement.

IRS-CI investigated the case, with assistance from the Maryland Insurance Administration and Maryland Attorney General.

Trial Attorneys Shawn Noud and Richard Kelley of the Tax Division and Assistant U.S. Attorneys Matthew Phelps and Philip Motsay for the District of Maryland are prosecuting the case.

MIL Security OSI –

January 25, 2025

MIL-OSI USA: Former CEO of Startup Software Company Sentenced for Payroll Tax Fraud Crimes

Source: US State of North Dakota

A New Hampshire man was sentenced yesterday to two-and-a-half years in prison for willfully failing to pay more than $14 million in payroll taxes and not filing personal tax returns.

According to court documents and statements made in court, Andrew Park, 49, of Bedford, was the co-founder and CEO of a startup technology company. Park was responsible for all financial matters related to the company, including for filing the company’s quarterly employment tax returns and collecting and paying over Social Security, Medicare and income taxes withheld from the employees’ wages to the IRS, as well as the matching Social Security and Medicare taxes the company owed.

From the company’s founding in 2014 through the third quarter of 2021, Park withheld federal taxes from the wages of the company’s employees but did not pay them over as required by law. He also did not pay over the portion of the employment taxes that the company owed. Park willfully failed to do so even though a payroll service company that he hired to process the employees’ payroll regularly notified him that the taxes were due, and in more than one instance was notified by an employee that the amount paid to Social Security listed on her W-2 did not match what was reported by the Social Security Administration.

From 2013 through 2020, Park also did not file individual tax returns as required by law, despite the fact that he paid himself a salary of approximately $250,000 each year.

In total, Park caused a tax loss to the IRS exceeding $14 million.

In addition to the term of imprisonment, U.S. District Chief Judge Landya B. McCafferty for the District of New Hampshire ordered Park to serve three years of supervised release and to pay $639,821.78 in restitution to the United States and a fine of $15,000.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney John J. McCormack for the District of New Hampshire made the announcement.

IRS Criminal Investigation investigated the case.

Assistant Chief Eric Powers of the Tax Division and Assistant U.S. Attorney Matthew Hunter for the District of New Hampshire prosecuted the case.

MIL OSI USA News –

January 25, 2025

MIL-OSI Security: Former CEO of Startup Software Company Sentenced for Payroll Tax Fraud Crimes

Source: United States Attorneys General 1

A New Hampshire man was sentenced yesterday to two-and-a-half years in prison for willfully failing to pay more than $14 million in payroll taxes and not filing personal tax returns.

According to court documents and statements made in court, Andrew Park, 49, of Bedford, was the co-founder and CEO of a startup technology company. Park was responsible for all financial matters related to the company, including for filing the company’s quarterly employment tax returns and collecting and paying over Social Security, Medicare and income taxes withheld from the employees’ wages to the IRS, as well as the matching Social Security and Medicare taxes the company owed.

From the company’s founding in 2014 through the third quarter of 2021, Park withheld federal taxes from the wages of the company’s employees but did not pay them over as required by law. He also did not pay over the portion of the employment taxes that the company owed. Park willfully failed to do so even though a payroll service company that he hired to process the employees’ payroll regularly notified him that the taxes were due, and in more than one instance was notified by an employee that the amount paid to Social Security listed on her W-2 did not match what was reported by the Social Security Administration.

From 2013 through 2020, Park also did not file individual tax returns as required by law, despite the fact that he paid himself a salary of approximately $250,000 each year.

In total, Park caused a tax loss to the IRS exceeding $14 million.

In addition to the term of imprisonment, U.S. District Chief Judge Landya B. McCafferty for the District of New Hampshire ordered Park to serve three years of supervised release and to pay $639,821.78 in restitution to the United States and a fine of $15,000.

Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and Acting U.S. Attorney John J. McCormack for the District of New Hampshire made the announcement.

IRS Criminal Investigation investigated the case.

Assistant Chief Eric Powers of the Tax Division and Assistant U.S. Attorney Matthew Hunter for the District of New Hampshire prosecuted the case.

MIL Security OSI –

January 25, 2025

MIL-OSI Security: Corporation and Former Chief Executive Officer Plead Guilty to Health Care Fraud and Tax Conspiracy

Source: United States Attorneys General 9

The Justice Department announced today that KBWB Operations LLC, which did business as Atrium Health and Senior Living (KBWB-Atrium), and former Chief Executive Officer and Managing Member Kevin Breslin of KBWB-Atrium, both pleaded guilty to one count of health care fraud and one count of tax conspiracy related to the operation of numerous skilled nursing facilities.

“Americans rely on skilled nursing facilities to care for themselves, family members and other loved ones, and the operators of these institutions must live up to their obligations and the law,” said Acting Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department of Justice will continue to work closely with its law enforcement partners to help ensure the safety and dignity of our must vulnerable citizens.”

Breslin, 58, of Hoboken, New Jersey, pleaded guilty in the U.S. District Court for the Western District of Wisconsin on Dec. 17, 2024. KBWB-Atrium pleaded guilty in the same court on Jan. 21. Breslin is one of six owners of KBWB-Atrium. KBWB-Atrium’s corporate headquarters was located in Little Falls, New Jersey, and its Midwest corporate office was located in Appleton, Wisconsin. KBWB-Atrium operated and owned nursing facilities in New Jersey, Wisconsin, and Michigan.

On Feb. 1, 2023, a Wisconsin grand jury returned a 12-count indictment against defendants Breslin and KBWB-Atrium (collectively the defendants) charging health care fraud and tax conspiracy, among other charges. According to court documents, from approximately Jan. 1, 2015, to in or about September 2018, KBWB-Atrium operated and owned 23 skilled nursing facilities in Wisconsin, and Breslin was responsible for overseeing all of KBWB-Atrium’s operations. The primary source of income for the KBWB-Atrium Wisconsin skilled nursing facilities was federal Medicare and Medicaid funds from the Centers for Medicare and Medicaid Services (CMS).

According to court documents, the defendants’ alleged health care fraud scheme involved unlawfully diverting CMS funds intended for the operation, management, maintenance, and care of the residents of the KBWB-Atrium Wisconsin skilled nursing facilities for other purposes and personal expenses. The defendants allegedly prioritized distributions and guaranteed payments to KBWB-Atrium’s owners regardless of KBWB-Atrium’s financial situation. The defendants’ alleged actions resulted in failing to meet the required federal regulations governing skilled nursing facilities, including not operating the KBWB-Atrium Wisconsin skilled nursing facilities in a manner that would enhance residents’ quality of life. According to court documents, the defendants also knew that vendors were not being paid for extended periods of time or some were not paid at all for their services. Additionally, defendants allegedly failed to pay third-party administrators monies deducted from KBWB-Atrium employees’ paychecks for insurance premiums and 401(k) plan contributions.

As a part of the tax conspiracy alleged in court documents, Breslin, acting on behalf of KBWB-Atrium, directed that income taxes and employment taxes withheld from KBWB-Atrium Wisconsin employees’ paychecks not be paid over to the IRS. This caused employees to prepare tax returns listing those withholdings as having been paid to the IRS, which was false.

The defendants are scheduled to be sentenced on May 7 before U.S. District Judge William M. Conleyfor the Western District of Wisconsin. Breslin faces a maximum penalty of up to 10 years in prison for the health care fraud count and five years in prison for the conspiracy to commit an offense against the United States count, along with a period of supervised release. Both defendants face restitution and other monetary penalties. A federal district court judge will determine the sentence of each defendant after considering the U.S. Sentencing Guidelines and other statutory factors.

“Healthcare fraud affects every American,” said U.S. Attorney Timothy M. O’Shea for the Western District of Wisconsin. “My office was proud to partner with the Justice Department’s Civil Division to help prosecute these individuals who harmed seniors and exploited our health care benefits programs for personal gain.”

“This guilty plea demonstrates our unwavering commitment to holding individuals accountable who exploit vulnerable populations and defraud the healthcare system for personal gain,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “Breslin’s actions not only eroded public trust but endangered the well-being of patients who rely on our health care system. The FBI will continue to work tirelessly with our partners to investigate and bring to justice those who abuse positions of trust.”

“The guilty pleas of Kevin Breslin and KBWB Operations LLC serve as a reminder that healthcare fraud is not only a direct violation of patient care, but also an attack on the financial systems that underpin public and private trust,” said Acting Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation (IRS-CI) Chicago Field Office. “IRS-CI and its law enforcement partners remain dedicated to investigating and prosecuting individuals and businesses who seek to exploit public and private institutions for personal gain.”

“HHS-OIG is dedicated to protecting Medicare and Medicaid funds and ensuring that health care providers uphold their responsibility to serve vulnerable populations with integrity,” said Special Agent in Charge Mario M. Pinto of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “The actions of those involved in this scheme erode the trust placed in our nation’s health care system, and we will continue working with our law enforcement partners to hold accountable those who misuse public funds for personal gain.”

“Employers placing profit over upholding their legal fiduciary responsibilities when managing health benefit plans will not be tolerated,” said Regional Director Ruben R. Chapa of the Employee Benefits Security Administration in Chicago. “The Employee Benefits Security Administration remains committed to ensuring that those who knowingly break the law are held fully accountable.”

The IRS-CI Chicago Field Office; HHS-OIG – Office of Investigations, Milwaukee Field Office; U.S. Department of Labor, Employee Benefits Security Administration, New York and Chicago Regional Offices; FBI Milwaukee Field Office; and the State of Wisconsin Department of Justice, Division of Criminal Investigation, Medicaid Fraud Control and Elder Abuse Unit investigated the case.

Trial Attorneys with the Civil Division’s Consumer Protection Branch are prosecuting the case with assistance from the U.S. Attorney’s Office for the Western District of Wisconsin.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Western District of Wisconsin, visit its website at http://www.justice.gov/usao-wdwi.

MIL Security OSI –

January 25, 2025

MIL-OSI USA: Tuberville, Sheehy, Hagerty Introduce No Tax Dollars for Terrorists Act

US Senate News:

Source: United States Senator Tommy Tuberville (Alabama)
WASHINGTON – Yesterday, U.S. Senator Tommy Tuberville (R-AL) joined U.S. Senators Tim Sheehy (R-MT) and Bill Hagerty (R-TN) in introducing the No Tax Dollars for Terrorists Act to keep American taxpayer dollars out of the hands of the Taliban. The legislation clarifies that it is the United States’ policy to oppose financial or material support to the Taliban by foreign governments and non-government organizations (NGOs). It also requires the State Department to develop and implement astrategy to prevent foreign countries from providing support to the Taliban.
“Under Joe Biden, terrorists around the globe have been given way too much breathing room, making our world a more dangerous place,” said Senator Tuberville. “I’m excited to see a return to the ‘Peace through Strength’ agenda under President Trump, and proud to join this commonsense legislation to ensure American taxpayer dollars never fund terrorism again.”
Since 2021, the United Nations has flown more than $2.9 billion in cash to Afghanistan to stabilize the economy. The State Department has insisted that no U.S. taxpayer funds have been received by the Taliban, but a report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) showed that United States taxpayer dollars have indeed been deposited in the Taliban-controlled Afghan central bank.
After Joe Biden’s disastrous withdrawal from Afghanistan returned the Taliban to power, his administration further insulted the countless men and women in uniform who fought in the region by funneling U.S. taxpayer dollars to these anti-American terrorists.
Read the bill here.
Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

MIL OSI USA News –

January 25, 2025

MIL-OSI USA: Corporation and Former Chief Executive Officer Plead Guilty to Health Care Fraud and Tax Conspiracy

Source: US State of California