Lake City Bank profit impacted by fraud loss
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Warsaw-based Lakeland Financial Corp. announced Friday it is the victim of international wire fraud that cost the company more than $18 million. The parent of Lake City Bank said in its quarterly earnings report that the incident did not result in any client information being compromised.
The bank said it discovered the fraud on June 30. The incident involved a “foreign threat actor” targeting a specific general ledger at the bank through a single employee email account outside of the company’s network.
The perpetrator used a forged wire transfer form to steal the funds from the bank.
“A third-party forensic investigation determined that no client accounts were threatened by this activity, nor was there any attempt to access any client information or funds,” Lake City said in its earnings report. “Additionally, the investigation concluded that the company’s network was never penetrated and that the foreign threat actor made no attempt to penetrate the network.”
On the same day the fraud was discovered, the bank notified its insurance carriers and hired a forensice technology investigation firm to conduct an investigation. The U.S. Secret Service, the FBI and the Financial Crimes Enforcement Network were also notified.
In its earnings report, Lakeland Financial reported second quarter net income of $14.6 million, a 43% decrease from the same period last year.
Despite the drop, CEO David Findlay said there were still some bright spots for the bank.
“We are particularly pleased that loan growth of $438 million represented 10% annual growth and occurred throughout the Lake City Bank footprint,” Findlay said. “This organic expansion was driven by strong growth in the Indianapolis market, where we continue to grow our market share and where we opened our sixth office in the market during the second quarter.”
You can connect to the full earnings report by clicking here.