WARSAW, Ind., Oct. 25, 2016 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported record quarterly net income of $13.5 million for the third quarter of 2016, an increase of 17%, versus $11.6 million for the third quarter of 2015. Diluted net income per common share of $0.53 for the third quarter of 2016 also represents a quarterly record and an increase of 15%, versus $0.46 for the comparable period of 2015. On a linked quarter basis net income increased by 5%, or $677,000 from $12.8 million for the second quarter ended June 30, 2016.
The company further reported record net income of $38.6 million for the nine months ended September 30, 2016 versus $34.1 million for the comparable period of 2015, an increase of 13%. Diluted net income per common share was also a record for the period and increased 13% to $1.52 for the nine months ended September 30, 2016 versus $1.35 for the comparable period of 2015. All share and per share data presented in this press release has been adjusted for a 3-for-2 stock split paid in the form of a stock dividend on August 5, 2016.
David M. Findlay, President and CEO, commented, “This strong performance reflects the continued growth of our balance sheet and our disciplined approach to operating the business. We are particularly proud of our consistent loan and deposit growth in 2016. This growth and the accompanying overall revenue increases were the drivers of this record income performance.”
Highlights for the quarter are noted below:
3rd Quarter 2016 versus 3rd Quarter 2015 highlights:
- Organic average loan growth of $322 million or 11%
- Average deposit growth of $485 million or 16%
- Net interest income increase of $3.0 million or 11%
- Continued strong asset quality with nonperforming assets to total assets at 0.18%
- Tangible common equity increase of 11%
3rd Quarter 2016 versus 2nd Quarter 2016 highlights:
- Organic average loan growth of $52 million or 2%
- Core deposit growth of $255 million or 8%
- Net interest income increase of $446,000 or 2%
- Noninterest income increase of $951,000 or 12%
Findlay added, “Our stable and controlled approach to managing the business, combined with a constant focus on taking care of our clients, leads to this type of results. As we continue to operate in a challenging interest rate environment, we’ve maintained our focus on the clients and communities we serve. The resulting balance sheet and income statement growth are very gratifying to the Lake City Bank team.”
As previously announced, the board of directors approved a cash dividend for the third quarter of $0.19 per share, payable on November 7, 2016, to shareholders of record as of October 25, 2016. The third quarter dividend per share represents a 16% increase over the dividend rate paid in the last three quarters of 2015 and in the first quarter of 2016 of $0.163 per share on a split adjusted basis.
Return on average total equity for the first nine months of 2016 was 12.51% compared to 12.18% in the prior year period. Return on average assets for the first nine months of 2016 and 2015 was 1.29%. The company’s total capital as a percent of risk-weighted assets was 13.52% at September 30, 2016, compared to 13.79% at September 30, 2015 and 13.65% at June 30, 2016. The company’s tangible common equity to tangible assets ratio was 10.11% at September 30, 2016, compared to 10.47% at September 30, 2015 and 10.57% at June 30, 2016.
Average total loans for the third quarter of 2016 were $3.24 billion, an increase of $321.8 million, or 11%, versus $2.92 billion for the comparable period of 2015. Total loans outstanding grew $307.9 million, or 10%, from $2.97 billion as of September 30, 2015 to $3.28 billion as of September 30, 2016. On a linked quarter basis, average total loans increased by $52.4 million, or 2%, from $3.19 billion for the second quarter of 2016 to $3.24 billion for the third quarter of 2016.
Average total deposits for the third quarter of 2016 were $3.61 billion, an increase of $484.6 million, or 16%, versus $3.13 billion for the corresponding period of 2015. Total deposits grew $504.4 million, or 16%, from $3.15 billion as of September 30, 2015 to $3.65 billion as of September 30, 2016. In addition, total core deposits, which exclude brokered deposits, increased $531.5 million, or 18%, from $3.01 billion at September 30, 2015 to $3.55 billion at September 30, 2016. This increase in core deposits was driven by growth of public funds which increased by $363 million on a year over year basis.
The company’s net interest margin was 3.20% in the third quarter of 2016, compared to 3.16% for the third quarter of 2015. The higher margin in the third quarter of 2016 was due to higher yields on both loans and securities, partially offset by a higher cost of funds. The net interest margin was 3.24% in the linked second quarter of 2016. On a linked quarter basis, earning asset yields decreased by 3 basis points and cost of funds, measured as interest expense divided by average earning assets, increased by one basis point. The company’s net interest margin for the nine months ended September 30, 2016 was 3.22% compared to 3.21% in the prior year nine month period.
Net interest income increased $3.0 million, or 11%, to $29.7 million for the third quarter of 2016, versus $26.7 million in the third quarter of 2015. Net interest income for the nine months ended September 30, 2016 increased $9.1 million, or 12%, to $87.6 million, versus $78.5 million for the nine months ended September 30, 2015.
For the 15th consecutive quarter, the company did not record a provision for loan losses. The absence of a provision for loan losses was generally driven by continued stability in key loan quality metrics, including appropriate reserve coverage of nonperforming loans, a decrease in historical loss percentages and stable economic conditions in the company’s markets. The company’s allowance for loan losses as of September 30, 2016 was $42.9 million compared to $44.7 million as of September 30, 2015 and $43.2 million as of June 30, 2016. The allowance for loan losses represented 1.31% of total loans as of September 30, 2016 versus 1.50% at September 30, 2015 and 1.35% as of June 30, 2016. The allowance for loan losses as a percentage of nonperforming loans was 590% as of September 30, 2016, versus 312% as of September 30, 2015, and 464% as of June 30, 2016.
Nonperforming assets decreased $7.1 million, or 49%, to $7.4 million as of September 30, 2016 versus $14.5 million as of September 30, 2015. On a linked quarter basis, nonperforming assets were $2.2 million lower than the $9.6 million reported as of June 30, 2016. The decrease in nonperforming assets from the linked quarter was primarily due to the payoff of a $2.0 million impaired commercial credit. The ratio of nonperforming assets to total assets at September 30, 2016 declined to 0.18% from 0.40% at September 30, 2015 and 0.24% at June 30, 2016. Net charge-offs totaled $394,000 in the third quarter of 2016 versus net charge-offs of $122,000 during the third quarter of 2015 and net charge-offs of $36,000 during the linked second quarter of 2016.
Findlay observed, “Our organic loan and deposit growth focus has generated double digit revenue growth for the quarter and year-to-date periods. We are proud of our stable asset quality trends, as they make an important contribution to our ability to produce the consistent earnings performance we have posted over a long period of time.”
The company’s noninterest income increased $1.1 million or 14% to $9.0 million for the third quarter of 2016 versus $7.9 million for the third quarter of 2015. Noninterest income was positively impacted during the quarter by increases in recurring fee income for service charges on deposit accounts, wealth advisory fees and mortgage banking income. The company’s noninterest income increased 3% to $24.1 million for the nine months ended September 30, 2016 compared to $23.4 million in the prior year period. Noninterest income was positively impacted by increases in recurring fee income for service charges on deposit accounts, merchant card fee income, loan fees and wealth advisory fees. Other income decreased primarily due to market related fluctuations in the fair value of the company’s swap arrangements totaling $605,000, which are expected to recover upon maturity of the swaps., as well as a $226,000 write down to a property formerly used as a Lake City Bank branch that is held for sale.
The company’s noninterest expense increased by $1.6 million or 9% to $18.8 million in the third quarter of 2016 compared to $17.2 million in the third quarter of 2015. Salaries and employee benefits increased by $978,000 in the three month period ended September 30, 2016 versus the same period of 2015. These increases in salary and employee benefits were driven by higher performance incentive-based compensation costs and normal merit increases. Corporate and business development expense increased due to increased advertising expense. The company's efficiency ratio was 48% for the third quarter of 2016, compared to 50% for the third quarter of 2015 and 49% for the linked second quarter of 2016. The company’s noninterest expense increased by 7% to $54.6 million for the nine months ended September 30, 2016 compared to $50.8 million in the prior year period primarily due to increases in salaries and employee benefits, data processing fees, professional fees and corporate and business development.
Lakeland Financial Corporation is a $4.2 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fourth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 48 offices in Northern and Central Indiana, delivering technology driven and client-centric financial services solutions to individuals and businesses.
Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at www.lakecitybank.com. The company’s common stock is traded on the Nasdaq Global Select Market under “LKFN.” In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this earnings release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding the company’s financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on “tangible common equity” which is “common stockholders’ equity” excluding intangible assets, net of deferred tax and “tangible assets” which is “assets” excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is presented.
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. 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. Additional information concerning the company and its business, including factors that could materially affect the company’s financial results, is included in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K.
| LAKELAND FINANCIAL CORPORATION | |||||||||||||||||||||
| THIRD QUARTER 2016 FINANCIAL HIGHLIGHTS | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| (Unaudited – Dollars in thousands) | Sep. 30, | Jun. 30, | Sep. 30, | Sep. 30, | Sep. 30, | ||||||||||||||||
| END OF PERIOD BALANCES | 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Assets | $ | 4,197,320 | $ | 3,937,304 | $ | 3,666,250 | $ | 4,197,320 | $ | 3,666,250 | |||||||||||
| Deposits | 3,651,942 | 3,403,455 | 3,147,534 | 3,651,942 | 3,147,534 | ||||||||||||||||
| Brokered Deposits | 106,752 | 112,884 | 133,836 | 106,752 | 133,836 | ||||||||||||||||
| Core Deposits | 3,545,190 | 3,290,571 | 3,013,698 | 3,545,190 | 3,013,698 | ||||||||||||||||
| Loans | 3,280,161 | 3,197,997 | 2,972,280 | 3,280,161 | 2,972,280 | ||||||||||||||||
| Allowance for Loan Losses | 42,853 | 43,247 | 44,694 | 42,853 | 44,694 | ||||||||||||||||
| Total Equity | 427,380 | 418,893 | 386,700 | 427,380 | 386,700 | ||||||||||||||||
| Goodwill net of deferred tax assets | 3,138 | 3,137 | 3,171 | 3,138 | 3,171 | ||||||||||||||||
| Tangible Common Equity | 424,242 | 415,756 | 383,529 | 424,242 | 383,529 | ||||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Total Assets | $ | 4,152,333 | $ | 4,003,633 | $ | 3,640,769 | $ | 3,990,022 | $ | 3,545,357 | |||||||||||
| Earning Assets | 3,773,650 | 3,705,666 | 3,409,445 | 3,690,351 | 3,333,410 | ||||||||||||||||
| Investments | 500,384 | 488,762 | 471,641 | 489,269 | 474,876 | ||||||||||||||||
| Loans | 3,244,994 | 3,192,545 | 2,923,159 | 3,175,882 | 2,844,079 | ||||||||||||||||
| Total Deposits | 3,611,111 | 3,437,493 | 3,126,472 | 3,427,307 | 3,044,069 | ||||||||||||||||
| Interest Bearing Deposits | 2,843,015 | 2,759,696 | 2,491,490 | 2,724,572 | 2,454,039 | ||||||||||||||||
| Interest Bearing Liabilities | 2,933,109 | 2,887,534 | 2,605,467 | 2,849,661 | 2,562,723 | ||||||||||||||||
| Total Equity | 423,358 | 411,986 | 380,865 | 411,797 | 374,017 | ||||||||||||||||
| INCOME STATEMENT DATA | |||||||||||||||||||||
| Net Interest Income | $ | 29,719 | $ | 29,273 | $ | 26,711 | $ | 87,574 | $ | 78,475 | |||||||||||
| Net Interest Income-Fully Tax Equivalent | 30,274 | 29,818 | 27,181 | 89,194 | 79,926 | ||||||||||||||||
| Provision for Loan Losses | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||
| Noninterest Income | 9,018 | 8,067 | 7,902 | 24,128 | 23,410 | ||||||||||||||||
| Noninterest Expense | 18,759 | 18,446 | 17,207 | 54,589 | 50,849 | ||||||||||||||||
| Net Income | 13,480 | 12,803 | 11,565 | 38,562 | 34,081 | ||||||||||||||||
| PER SHARE DATA | |||||||||||||||||||||
| Basic Net Income Per Common Share * | $ | 0.54 | $ | 0.51 | $ | 0.46 | $ | 1.54 | $ | 1.37 | |||||||||||
| Diluted Net Income Per Common Share * | 0.53 | 0.50 | 0.46 | 1.52 | 1.35 | ||||||||||||||||
| Cash Dividends Declared Per Common Share * | 0.19 | 0.19 | 0.16 | 0.54 | 0.47 | ||||||||||||||||
| Dividend Payout | 35.85 | % | 36.84 | % | 35.51 | % | 35.53 | % | 34.48 | % | |||||||||||
| Book Value Per Common Share (equity per share issued) * | 17.04 | 16.72 | 15.49 | 17.04 | 15.49 | ||||||||||||||||
| Tangible Book Value Per Common Share * | 16.91 | 16.60 | 15.37 | 16.91 | 15.37 | ||||||||||||||||
| Market Value – High * | 37.74 | 33.27 | 30.27 | 37.74 | 30.27 | ||||||||||||||||
| Market Value – Low * | 30.21 | 28.94 | 26.01 | 26.53 | 24.95 | ||||||||||||||||
| Basic Weighted Average Common Shares Outstanding * | 25,069,434 | 25,045,251 | 24,944,067 | 25,044,596 | 24,916,033 | ||||||||||||||||
| Diluted Weighted Average Common Shares Outstanding * | 25,457,892 | 25,395,770 | 25,271,975 | 25,418,884 | 25,213,249 | ||||||||||||||||
| KEY RATIOS | |||||||||||||||||||||
| Return on Average Assets | 1.29 | % | 1.29 | % | 1.26 | % | 1.29 | % | 1.29 | % | |||||||||||
| Return on Average Total Equity | 12.67 | 12.50 | 12.05 | 12.51 | 12.18 | ||||||||||||||||
| Average Equity to Average Assets | 10.20 | 10.29 | 10.46 | 10.32 | 10.55 | ||||||||||||||||
| Net Interest Margin | 3.20 | 3.24 | 3.16 | 3.22 | 3.21 | ||||||||||||||||
| Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) | 48.43 | 49.40 | 49.71 | 48.87 | 49.91 | ||||||||||||||||
| Tier 1 Leverage (1) | 10.71 | 10.85 | 11.18 | 10.71 | 11.18 | ||||||||||||||||
| Tier 1 Risk-Based Capital (1) | 12.33 | 12.41 | 12.53 | 12.33 | 12.53 | ||||||||||||||||
| Common Equity Tier 1 (CET1) (1) | 11.50 | 11.55 | 11.61 | 11.50 | 11.61 | ||||||||||||||||
| Total Capital (1) | 13.52 | 13.65 | 13.79 | 13.52 | 13.79 | ||||||||||||||||
| Tangible Capital (1) | 10.11 | 10.57 | 10.47 | 10.11 | 10.47 | ||||||||||||||||
| ASSET QUALITY | |||||||||||||||||||||
| Loans Past Due 30 - 89 Days | $ | 1,734 | $ | 1,795 | $ | 1,984 | $ | 1,734 | $ | 1,984 | |||||||||||
| Loans Past Due 90 Days or More | 6 | 0 | 0 | 6 | 0 | ||||||||||||||||
| Non-accrual Loans | 7,256 | 9,329 | 14,308 | 7,256 | 14,308 | ||||||||||||||||
| Nonperforming Loans (includes nonperforming TDR's) | 7,262 | 9,329 | 14,308 | 7,262 | 14,308 | ||||||||||||||||
| Other Real Estate Owned | 146 | 238 | 231 | 146 | 231 | ||||||||||||||||
| Other Nonperforming Assets | 7 | 0 | 0 | 7 | 0 | ||||||||||||||||
| Total Nonperforming Assets | 7,414 | 9,567 | 14,539 | 7,414 | 14,539 | ||||||||||||||||
| Performing Troubled Debt Restructurings | 10,579 | 8,647 | 7,605 | 10,579 | 7,605 | ||||||||||||||||
| Nonperforming Troubled Debt Restructurings (included in nonperforming loans) | 5,885 | 6,040 | 10,934 | 5,885 | 10,934 | ||||||||||||||||
| Total Troubled Debt Restructurings | 16,464 | 14,688 | 18,539 | 16,464 | 18,539 | ||||||||||||||||
| Impaired Loans | 18,605 | 19,267 | 22,660 | 18,605 | 22,660 | ||||||||||||||||
| Non-Impaired Watch List Loans | 134,330 | 139,706 | 122,116 | 134,330 | 122,116 | ||||||||||||||||
| Total Impaired and Watch List Loans | 152,935 | 158,973 | 144,776 | 152,935 | 144,776 | ||||||||||||||||
| Gross Charge Offs | 773 | 296 | 228 | 1,535 | 1,931 | ||||||||||||||||
| Recoveries | 379 | 260 | 106 | 778 | 364 | ||||||||||||||||
| Net Charge Offs/(Recoveries) | 394 | 36 | 122 | 757 | 1,567 | ||||||||||||||||
| Net Charge Offs/(Recoveries) to Average Loans | 0.05 | % | 0.00 | % | 0.02 | % | 0.03 | % | 0.07 | % | |||||||||||
| Loan Loss Reserve to Loans | 1.31 | % | 1.35 | % | 1.50 | % | 1.31 | % | 1.50 | % | |||||||||||
| Loan Loss Reserve to Nonperforming Loans | 590.10 | % | 463.58 | % | 312.36 | % | 590.10 | % | 312.36 | % | |||||||||||
| Loan Loss Reserve to Nonperforming Loans and Performing TDR's | 240.20 | % | 240.58 | % | 203.96 | % | 240.20 | % | 203.96 | % | |||||||||||
| Nonperforming Loans to Loans | 0.22 | % | 0.29 | % | 0.48 | % | 0.22 | % | 0.48 | % | |||||||||||
| Nonperforming Assets to Assets | 0.18 | % | 0.24 | % | 0.40 | % | 0.18 | % | 0.40 | % | |||||||||||
| Total Impaired and Watch List Loans to Total Loans | 4.66 | % | 4.97 | % | 4.87 | % | 4.66 | % | 4.87 | % | |||||||||||
| OTHER DATA | |||||||||||||||||||||
| Full Time Equivalent Employees | 518 | 531 | 518 | 518 | 518 | ||||||||||||||||
| Offices | 48 | 48 | 46 | 48 | 46 | ||||||||||||||||
| (1) Capital ratios for September 30, 2016 are preliminary until the Call Report is filed. | |||||||||||||||||||||
| * Share and per share data has been adjusted for a 3-for-2 stock split in the form of a stock dividend on August 5, 2016. | |||||||||||||||||||||
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 2016 and December 31, 2015
(in thousands, except share data)
| CONSOLIDATED BALANCE SHEETS (in thousands except share data) | |||||||
| September 30, | December 31, | ||||||
| 2016 | 2015 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 252,978 | $ | 67,484 | |||
| Short-term investments | 25,400 | 13,190 | |||||
| Total cash and cash equivalents | 278,378 | 80,674 | |||||
| Securities available for sale (carried at fair value) | 502,223 | 478,071 | |||||
| Real estate mortgage loans held for sale | 5,447 | 3,294 | |||||
| Loans, net of allowance for loan losses of $42,853 and $43,610 | 3,237,308 | 3,037,319 | |||||
| Land, premises and equipment, net | 52,167 | 46,684 | |||||
| Bank owned life insurance | 70,712 | 69,698 | |||||
| Federal Reserve and Federal Home Loan Bank stock | 8,373 | 7,668 | |||||
| Accrued interest receivable | 10,548 | 9,462 | |||||
| Goodwill | 4,970 | 4,970 | |||||
| Other assets | 27,194 | 28,446 | |||||
| Total assets | $ | 4,197,320 | $ | 3,766,286 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| LIABILITIES | |||||||
| Noninterest bearing deposits | $ | 770,079 | $ | 715,093 | |||
| Interest bearing deposits | 2,881,863 | 2,468,328 | |||||
| Total deposits | 3,651,942 | 3,183,421 | |||||
| Short-term borrowings | |||||||
| Securities sold under agreements to repurchase | 60,198 | 69,622 | |||||
| Other short-term borrowings | 0 | 70,000 | |||||
| Total short-term borrowings | 60,198 | 139,622 | |||||
| Long-term borrowings | 32 | 34 | |||||
| Subordinated debentures | 30,928 | 30,928 | |||||
| Accrued interest payable | 5,142 | 3,773 | |||||
| Other liabilities | 21,698 | 15,607 | |||||
| Total liabilities | 3,769,940 | 3,373,385 | |||||
| STOCKHOLDERS' EQUITY | |||||||
| Common stock: 90,000,000 shares authorized, no par value | |||||||
| 25,081,087 shares issued and 24,923,694 outstanding as of September 30, 2016 | |||||||
| 24,962,477 shares issued and 24,819,066 outstanding as of December 31, 2015 | 103,064 | 99,123 | |||||
| Retained earnings | 319,118 | 294,002 | |||||
| Accumulated other comprehensive income | 7,992 | 2,142 | |||||
| Treasury stock, at cost (2016 - 157,393 shares, 2015 - 143,411 shares) | (2,883 | ) | (2,455 | ) | |||
| Total stockholders' equity | 427,291 | 392,812 | |||||
| Noncontrolling interest | 89 | 89 | |||||
| Total equity | 427,380 | 392,901 | |||||
| Total liabilities and equity | $ | 4,197,320 | $ | 3,766,286 | |||
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months Ended September 30, 2016 and 2015
(unaudited in thousands except for share and per share data)
| CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands except share and per share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| NET INTEREST INCOME | |||||||||||||||
| Interest and fees on loans | |||||||||||||||
| Taxable | $ | 31,538 | $ | 27,981 | $ | 92,086 | $ | 81,553 | |||||||
| Tax exempt | 110 | 116 | 332 | 350 | |||||||||||
| Interest and dividends on securities | |||||||||||||||
| Taxable | 2,277 | 2,009 | 7,120 | 6,459 | |||||||||||
| Tax exempt | 969 | 844 | 2,811 | 2,515 | |||||||||||
| Interest on short-term investments | 185 | 16 | 295 | 43 | |||||||||||
| Total interest income | 35,079 | 30,966 | 102,644 | 90,920 | |||||||||||
| Interest on deposits | 5,032 | 3,973 | 13,921 | 11,551 | |||||||||||
| Interest on borrowings | |||||||||||||||
| Short-term | 37 | 43 | 283 | 138 | |||||||||||
| Long-term | 291 | 239 | 866 | 756 | |||||||||||
| Total interest expense | 5,360 | 4,255 | 15,070 | 12,445 | |||||||||||
| NET INTEREST INCOME | 29,719 | 26,711 | 87,574 | 78,475 | |||||||||||
| Provision for loan losses | 0 | 0 | 0 | 0 | |||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 29,719 | 26,711 | 87,574 | 78,475 | |||||||||||
| NONINTEREST INCOME | |||||||||||||||
| Wealth advisory fees | 1,307 | 1,103 | 3,600 | 3,393 | |||||||||||
| Investment brokerage fees | 252 | 405 | 752 | 1,208 | |||||||||||
| Service charges on deposit accounts | 3,153 | 2,806 | 8,776 | 7,753 | |||||||||||
| Loan, insurance and service fees | 2,105 | 2,147 | 5,835 | 5,616 | |||||||||||
| Merchant card fee income | 552 | 485 | 1,576 | 1,332 | |||||||||||
| Bank owned life insurance income | 392 | 221 | 1,054 | 956 | |||||||||||
| Other income | 763 | 455 | 1,278 | 2,090 | |||||||||||
| Mortgage banking income | 494 | 280 | 1,205 | 1,020 | |||||||||||
| Net securities gains/(losses) | 0 | 0 | 52 | 42 | |||||||||||
| Total noninterest income | 9,018 | 7,902 | 24,128 | 23,410 | |||||||||||
| NONINTEREST EXPENSE | |||||||||||||||
| Salaries and employee benefits | 10,832 | 9,854 | 31,029 | 29,021 | |||||||||||
| Net occupancy expense | 1,068 | 919 | 3,205 | 2,918 | |||||||||||
| Equipment costs | 1,018 | 870 | 2,828 | 2,699 | |||||||||||
| Data processing fees and supplies | 1,983 | 1,950 | 6,135 | 5,655 | |||||||||||
| Corporate and business development | 1,021 | 780 | 2,641 | 2,284 | |||||||||||
| FDIC insurance and other regulatory fees | 458 | 521 | 1,538 | 1,518 | |||||||||||
| Professional fees | 819 | 694 | 2,505 | 2,111 | |||||||||||
| Other expense | 1,560 | 1,619 | 4,708 | 4,643 | |||||||||||
| Total noninterest expense | 18,759 | 17,207 | 54,589 | 50,849 | |||||||||||
| INCOME BEFORE INCOME TAX EXPENSE | 19,978 | 17,406 | 57,113 | 51,036 | |||||||||||
| Income tax expense | 6,498 | 5,841 | 18,551 | 16,955 | |||||||||||
| NET INCOME | $ | 13,480 | $ | 11,565 | $ | 38,562 | $ | 34,081 | |||||||
| BASIC WEIGHTED AVERAGE COMMON SHARES | 25,069,434 | 24,944,067 | 25,044,596 | 24,916,033 | |||||||||||
| BASIC EARNINGS PER COMMON SHARE | $ | 0.54 | $ | 0.46 | $ | 1.54 | $ | 1.37 | |||||||
| DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,457,892 | 25,271,975 | 25,418,884 | 25,213,249 | |||||||||||
| DILUTED EARNINGS PER COMMON SHARE | $ | 0.53 | $ | 0.46 | $ | 1.52 | $ | 1.35 | |||||||
| LAKELAND FINANCIAL CORPORATION | ||||||||||||||||||||
| LOAN DETAIL | ||||||||||||||||||||
| THIRD QUARTER 2016 | ||||||||||||||||||||
| (unaudited in thousands) | ||||||||||||||||||||
| September 30, | June 30, | December 31, | September 30, | |||||||||||||||||
| 2016 | 2016 | 2015 | 2015 | |||||||||||||||||
| Commercial and industrial loans: | ||||||||||||||||||||
| Working capital lines of credit loans | $ | 609,382 | 18.6 | % | $ | 598,531 | 18.7 | % | $ | 581,025 | 18.9 | % | $ | 593,780 | 20.0 | % | ||||
| Non-working capital loans | 641,599 | 19.6 | 628,119 | 19.6 | 598,487 | 19.4 | 577,536 | 19.4 | ||||||||||||
| Total commercial and industrial loans | 1,250,981 | 38.1 | 1,226,650 | 38.4 | 1,179,512 | 38.3 | 1,171,316 | 39.4 | ||||||||||||
| Commercial real estate and multi-family residential loans: | ||||||||||||||||||||
| Construction and land development loans | 221,436 | 6.7 | 221,027 | 6.9 | 230,719 | 7.5 | 176,945 | 6.0 | ||||||||||||
| Owner occupied loans | 468,582 | 14.3 | 457,461 | 14.3 | 412,026 | 13.4 | 409,004 | 13.8 | ||||||||||||
| Nonowner occupied loans | 408,620 | 12.5 | 395,597 | 12.4 | 407,883 | 13.2 | 417,790 | 14.1 | ||||||||||||
| Multifamily loans | 127,784 | 3.9 | 114,618 | 3.6 | 79,425 | 2.6 | 93,075 | 3.1 | ||||||||||||
| Total commercial real estate and multi-family residential loans | 1,226,422 | 37.4 | 1,188,703 | 37.2 | 1,130,053 | 36.7 | 1,096,814 | 36.9 | ||||||||||||
| Agri-business and agricultural loans: | ||||||||||||||||||||
| Loans secured by farmland | 152,719 | 4.7 | 146,519 | 4.6 | 164,375 | 5.3 | 155,106 | 5.2 | ||||||||||||
| Loans for agricultural production | 156,770 | 4.8 | 162,240 | 5.1 | 141,719 | 4.6 | 93,964 | 3.2 | ||||||||||||
| Total agri-business and agricultural loans | 309,489 | 9.4 | 308,759 | 9.7 | 306,094 | 9.9 | 249,070 | 8.4 | ||||||||||||
| Other commercial loans | 89,850 | 2.7 | 82,786 | 2.6 | 85,075 | 2.8 | 82,976 | 2.8 | ||||||||||||
| Total commercial loans | 2,876,742 | 87.7 | 2,806,898 | 87.8 | 2,700,734 | 87.7 | 2,600,176 | 87.5 | ||||||||||||
| Consumer 1-4 family mortgage loans: | ||||||||||||||||||||
| Closed end first mortgage loans | 161,907 | 4.9 | 164,564 | 5.1 | 158,062 | 5.1 | 154,019 | 5.2 | ||||||||||||
| Open end and junior lien loans | 170,140 | 5.2 | 164,645 | 5.1 | 163,700 | 5.3 | 160,485 | 5.4 | ||||||||||||
| Residential construction and land development loans | 12,801 | 0.4 | 9,570 | 0.3 | 9,341 | 0.3 | 8,445 | 0.3 | ||||||||||||
| Total consumer 1-4 family mortgage loans | 344,848 | 10.5 | 338,779 | 10.6 | 331,103 | 10.7 | 322,949 | 10.9 | ||||||||||||
| Other consumer loans | 58,957 | 1.8 | 52,492 | 1.6 | 49,113 | 1.6 | 49,169 | 1.7 | ||||||||||||
| Total consumer loans | 403,805 | 12.3 | 391,271 | 12.2 | 380,216 | 12.3 | 372,118 | 12.5 | ||||||||||||
| Subtotal | 3,280,547 | 100.0 | % | 3,198,169 | 100.0 | % | 3,080,950 | 100.0 | % | 2,972,294 | 100.0 | % | ||||||||
| Less: Allowance for loan losses | (42,853 | ) | (43,247 | ) | (43,610 | ) | (44,694 | ) | ||||||||||||
| Net deferred loan fees | (386 | ) | (172 | ) | (21 | ) | (14 | ) | ||||||||||||
| Loans, net | $ | 3,237,308 | $ | 3,154,750 | $ | 3,037,319 | $ | 2,927,586 | ||||||||||||
| LAKELAND FINANCIAL CORPORATION | ||||||||||||||||||||
| DEPOSITS AND BORROWINGS | ||||||||||||||||||||
| THIRD QUARTER 2016 | ||||||||||||||||||||
| (unaudited in thousands) | ||||||||||||||||||||
| September 30, | June 30, | December 31, | September 30, | |||||||||||||||||
| 2016 | 2016 | 2015 | 2015 | |||||||||||||||||
| Non-interest bearing demand deposits | $ | 770,079 | $ | 727,308 | $ | 715,093 | $ | 630,789 | ||||||||||||
| Interest bearing demand, savings & money market accounts | 1,562,252 | 1,500,720 | 1,470,814 | 1,460,261 | ||||||||||||||||
| Time deposits under $100,000 | 241,527 | 247,271 | 259,260 | 273,378 | ||||||||||||||||
| Time deposits of $100,000 or more | 1,078,084 | 928,156 | 738,254 | 783,106 | ||||||||||||||||
| Total deposits | 3,651,942 | 3,403,455 | 3,183,421 | 3,147,534 | ||||||||||||||||
| Short-term borrowings | 60,198 | 56,368 | 139,622 | 80,414 | ||||||||||||||||
| Long-term borrowings | 32 | 32 | 34 | 34 | ||||||||||||||||
| Subordinated debentures | 30,928 | 30,928 | 30,928 | 30,928 | ||||||||||||||||
| Total borrowings | 91,158 | 87,328 | 170,584 | 111,376 | ||||||||||||||||
| Total funding sources | $ | 3,743,100 | $ | 3,490,783 | $ | 3,354,005 | $ | 3,258,910 | ||||||||||||
LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||||||||||
| Average | Interest | Yield (1)/ | Average | Interest | Yield (1)/ | Average | Interest | Yield (1)/ | ||||||||||||||||||||||||||
| (fully tax equivalent basis, dollars in thousands) | Balance | Income | Rate | Balance | Income | Rate | Balance | Income | Rate | |||||||||||||||||||||||||
| Earning Assets | ||||||||||||||||||||||||||||||||||
| Loans: | ||||||||||||||||||||||||||||||||||
| Taxable (2)(3) | $ | 3,233,394 | $ | 31,538 | 3.88 | % | $ | 3,180,783 | $ | 30,918 | 3.91 | % | $ | 2,910,663 | $ | 27,981 | 3.81 | % | ||||||||||||||||
| Tax exempt (1) | 11,600 | 164 | 5.62 | 11,763 | 164 | 5.62 | 12,496 | 170 | 5.40 | |||||||||||||||||||||||||
| Investments: (1) | ||||||||||||||||||||||||||||||||||
| Available for sale | 500,384 | 3,746 | 2.98 | 488,762 | 3,736 | 3.07 | 471,641 | 3,269 | 2.75 | |||||||||||||||||||||||||
| Short-term investments | 6,885 | 4 | 0.23 | 5,805 | 3 | 0.21 | 5,836 | 1 | 0.07 | |||||||||||||||||||||||||
| Interest bearing deposits | 21,387 | 181 | 3.37 | 18,553 | 79 | 1.71 | 8,809 | 15 | 0.68 | |||||||||||||||||||||||||
| Total earning assets | $ | 3,773,650 | $ | 35,633 | 3.76 | % | $ | 3,705,666 | $ | 34,900 | 3.79 | % | $ | 3,409,445 | $ | 31,436 | 3.66 | % | ||||||||||||||||
| Less: Allowance for loan losses | (43,402 | ) | (43,228 | ) | (44,751 | ) | ||||||||||||||||||||||||||||
| Nonearning Assets | ||||||||||||||||||||||||||||||||||
| Cash and due from banks | 249,812 | 167,099 | 117,986 | |||||||||||||||||||||||||||||||
| Premises and equipment | 50,921 | 48,921 | 44,240 | |||||||||||||||||||||||||||||||
| Other nonearning assets | 121,352 | 125,175 | 113,849 | |||||||||||||||||||||||||||||||
| Total assets | $ | 4,152,333 | $ | 4,003,633 | $ | 3,640,769 | ||||||||||||||||||||||||||||
| Interest Bearing Liabilities | ||||||||||||||||||||||||||||||||||
| Savings deposits | $ | 270,136 | $ | 103 | 0.15 | % | $ | 263,331 | $ | 115 | 0.18 | % | $ | 234,360 | $ | 115 | 0.19 | % | ||||||||||||||||
| Interest bearing checking accounts | 1,261,390 | 1,362 | 0.43 | 1,309,443 | 1,455 | 0.45 | 1,221,190 | 1,225 | 0.40 | |||||||||||||||||||||||||
| Time deposits: | ||||||||||||||||||||||||||||||||||
| In denominations under $100,000 | 243,148 | 696 | 1.14 | 249,452 | 719 | 1.16 | 279,734 | 846 | 1.20 | |||||||||||||||||||||||||
| In denominations over $100,000 | 1,068,341 | 2,870 | 1.07 | 937,470 | 2,405 | 1.03 | 756,206 | 1,787 | 0.94 | |||||||||||||||||||||||||
| Miscellaneous short-term borrowings | 59,133 | 37 | 0.25 | 96,878 | 99 | 0.41 | 83,015 | 43 | 0.21 | |||||||||||||||||||||||||
| Long-term borrowings and subordinated debentures (4) | 30,960 | 291 | 3.74 | 30,960 | 289 | 3.75 | 30,962 | 239 | 3.06 | |||||||||||||||||||||||||
| Total interest bearing liabilities | $ | 2,933,108 | $ | 5,359 | 0.73 | % | $ | 2,887,534 | $ | 5,082 | 0.71 | % | $ | 2,605,467 | $ | 4,255 | 0.65 | % | ||||||||||||||||
| Noninterest Bearing Liabilities | ||||||||||||||||||||||||||||||||||
| Demand deposits | 768,095 | 677,797 | 634,982 | |||||||||||||||||||||||||||||||
| Other liabilities | 27,772 | 26,316 | 19,455 | |||||||||||||||||||||||||||||||
| Stockholders' Equity | 423,358 | 411,986 | 380,865 | |||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,152,333 | $ | 4,003,633 | $ | 3,640,769 | ||||||||||||||||||||||||||||
| Interest Margin Recap | ||||||||||||||||||||||||||||||||||
| Interest income/average earning assets | 35,633 | 3.76 | 34,900 | 3.79 | 31,436 | 3.66 | ||||||||||||||||||||||||||||
| Interest expense/average earning assets | 5,359 | 0.56 | 5,082 | 0.55 | 4,255 | 0.50 | ||||||||||||||||||||||||||||
| Net interest income and margin | $ | 30,274 | 3.20 | % | $ | 29,818 | 3.24 | % | $ | 27,181 | 3.16 | % | ||||||||||||||||||||||
| (1 | ) | Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2016 and 2015. 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. | |
| (2 | ) | Loan fees, which are immaterial in relation to total taxable loan interest income for 2016 and 2015, are included as taxable loan interest income. | |
| (3 | ) | Nonaccrual loans are included in the average balance of taxable loans. | |
| (4 | ) | Long-term borrowings and subordinated debentures interest expense was reduced by interest capitalized on construction in process for 2015. |