Lake City Bank Reports 3rd Quarter Results

Quarterly Net Income Increases 19 Percent Versus 2007


WARSAW, Ind., Oct. 27, 2008 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported quarterly net income of $5.2 million for the third quarter of 2008 versus $4.4 million for the third quarter of 2007, an increase of 19%. Diluted net income per share for the quarter was $0.42 versus $0.35 for the comparable period of 2007. In the second quarter of 2008, net income and diluted earnings per share were $4.8 million and $0.39, respectively.

The Company further reported net income of $15.3 million for the nine months ended September 30, 2008, an increase of 6% over the $14.4 million reported for the nine months ended September 30, 2007. Diluted net income per common share was $1.23 for the nine months ended September 30, 2008, versus $1.16 for the nine months ended September 30, 2007.

Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "Lake City Bank's stable performance in a turbulent environment is reflective of our disciplined and long-standing strategies in managing our balance sheet and business. While the economic conditions in our region are producing some real challenges, we've been able to work through them and achieve consistently stable results."

Kubacki further stated, "We are managing through an unprecedented series of issues that have impacted the banking industry. At Lake City Bank, we're in a great position to continue to serve our clients and build our business. We've had 20 consecutive years of record earnings performance, have a capital structure that defines us as 'well capitalized' and have experienced deposit growth during this challenging year."

The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.155 per share, payable on November 5, 2008 to shareholders of record as of October 25, 2008. The quarterly dividend represents an 11% increase over the quarterly dividends paid in 2007.

"We've consistently increased our dividends to shareholders for many years. Our ability to increase dividends has been a function of the strength and consistency of our earnings growth and our strong capital structure. As many of our peers have decreased or eliminated dividends, our performance and strong balance sheet have provided us with the ability to continue to share our financial success with shareholders through a healthy dividend", commented Kubacki.

The Company's non-interest income was $6.2 million for the third quarter of 2008, an increase of $1.1 million, or 21%, compared to $5.1 million for the same period in 2007. The improvement was driven by increases in every client-driven revenue category. The largest increase came from service charges on deposit accounts, which grew by $441,000, or 23%. On a linked quarter basis, noninterest income increased by $230,000, or 4%, versus the second quarter of 2008.

Kubacki added, "As a result of our strategy to develop fee-based services that we believe rival any offered by our local, regional and national competitors, we're experiencing great growth in our non-interest income categories. These revenues tend to represent the expansion of existing relationships and demonstrate the effectiveness and importance of our cross-selling efforts. They also reaffirm our belief that we can compete effectively with anyone in our footprint and provide services and products that handle our client's needs."

The Company's net interest margin was 3.35% in the third quarter versus 3.18% for the third quarter of 2007 and 3.15% in the second quarter of 2008. The margin improvement in the quarter resulted primarily from the recognition of $1.2 million in interest income from the payoff of a loan that had been on nonaccrual. The loan was paid in full and nonaccrual interest was therefore recognized. Excluding the impact of this event, the net interest margin would have been 3.12% for the third quarter. This higher margin, in conjunction with strong growth in earning assets, contributed to an increase of 26% in the Company's net interest income to $17.3 million in the third quarter of 2008 versus $13.7 million in the third quarter of 2007. On a linked quarter basis, net interest income increased by 11% versus the second quarter of 2008. The Company's provision for loan losses increased by $2.0 million, or 119%, to $3.7 million for the third quarter of 2008 versus $1.7 million in the same period of 2007. In the second quarter of 2008, the provision was $3.0 million. The provision increase was primarily driven by a higher level of charge offs and strong loan growth and the overall weaker economic conditions in the Company's markets.

The Company's noninterest expense was $11.9 million for the third quarter of 2008 compared to $10.9 million for the same period in 2007, an increase of 10%. This increase was driven primarily by increased payroll and benefit expenses, general increases in operating and technology expenses and increased regulatory expenses. Salaries and employee benefits increased by $379,000, or 6%, when compared to the same period in 2007 as a result of a combination of increases in health insurance and performance-based incentive expense, staff additions in administrative and commercial lending positions, normal merit increases and new office staff costs. Other expense increased by $423,000, or 18%, in the quarter driven primarily by higher regulatory expenses of $246,000 due to the Company's resumption of regular FDIC insurance premiums and $97,000 of legal expenses. The Company's efficiency ratio was 50.9% compared to 57.8% for the same period a year ago.

Average total loans for the third quarter of 2008 were $1.69 billion versus $1.41 billion for the third quarter of 2007 and $1.64 billion for the linked second quarter of 2008. The year-over-year increase for the third quarter represented an increase of 19%, or $274 million. On a linked quarter basis, average loans increased by $46 million versus the second quarter of 2008. Total gross loans as of September 30, 2008 were $1.72 billion compared to $1.45 billion as of September 30, 2007 and $1.67 billion as of June 30, 2008.

Net charge offs totaled $3.6 million in the third quarter of 2008, versus $2.0 million during the third quarter of 2007 and $1.8 million during the second quarter of 2008. Two commercial relationships, both of which are involved in the recreational vehicle industry, accounted for $3.3 million of the net charge-offs. Lakeland Financial's allowance for loan losses as of September 30, 2008 was $18.1 million, compared to $15.1 million as of September 30, 2007 and $18.0 million as of June 30, 2008.

Kubacki observed, "The increased level of charge-offs, in conjunction with healthy loan growth, required an increased loan loss provision for the quarter. As we have historically done, we're realistically managing troubled relationships and appropriately recognizing losses. While the regional economy that we operate in is extremely diverse and we don't have any significant industry concentrations, traditional manufacturing and industrial customers are experiencing some weakness within our footprint. This environment will continue to require diligent loan oversight."

Kubacki continued, "We were pleased that total nonperforming assets decreased from $26.4 million at the end of the second quarter to $21.1 million. Our nonperforming loans to total loans ratio of 1.18% declined from 1.49% at June 30th and is at a manageable level."

Nonperforming assets totaled $21.1 million as of September 30, 2008 compared to $26.4 million as of June 30, 2008 and $14.1 million on September 30, 2007. The ratio of nonperforming assets to assets was 0.94% on September 30, 2008 compared to 1.17% at June 30, 2008 and 0.75% at September 30, 2007. The allowance for loan losses represented 90% of nonperforming loans as of September 30, 2008 versus 72% at June 30, 2008 and 162% at September 30, 2007.

The decrease in nonperforming assets versus the second quarter of 2008, resulted primarily from the payoff of a $3.8 million impaired nonaccrual commercial credit, a $3.2 million paydown in another impaired nonaccrual commercial credit and charge-offs.

For the three months ended September 30, 2008, Lakeland Financial's average equity to average assets ratio was 6.88% compared to 7.08% for the second quarter of 2008 and 7.49% for the third quarter of 2007. Average stockholders' equity for the quarter ended September 30, 2008 was $152.0 million versus $151.5 million for the second quarter of 2008 and $138.8 million for the third quarter of 2007. Average total deposits for the quarter ended September 30, 2008 were $1.64 billion versus $1.55 billion for the second quarter of 2008 and $1.48 billion for the third quarter of 2007.

Earnings for the nine months ended September 30, 2008 were positively impacted by the pre-tax benefit of $642,000, or $382,000 after tax, realized from the first quarter initial public offering of Visa, Inc. common shares. Excluding the effect of the Visa transaction, net income for the nine months would have been $14.9 million and diluted earnings per share would have been $1.20.

Lakeland Financial Corporation is a $2.3 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with 43 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, DeKalb, Fulton, Huntington, LaGrange, Marshall, Noble, Pulaski and Whitley. The Company also has a Loan Production Office in Indianapolis, Indiana.

Lakeland Financial Corporation may be accessed on its home page at www.lakecitybank.com. The Company's common stock is traded on the Nasdaq Global Select Market under "LKFN". Market makers in Lakeland Financial Corporation common shares include Automated Trading Desk Financial Services, LLC, B-Trade Services, LLC, Citadel Derivatives Group, LLC, Citigroup Global Markets Holdings, Inc., Domestic Securities, Inc., E*TRADE Capital Markets LLC, FTN Financial Securities Corp., FTN Midwest Securities Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Lehman Brothers Inc., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.

In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this press release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding Lakeland Financial's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible equity" which is "common stockholders' equity" 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.

Visa Initial Public Offering Adjustments

Lake City Bank, as a member bank of Visa U.S.A. Inc., holds shares of restricted common stock in Visa. In connection with Visa's initial public offering in March 2008, a portion of our Visa shares were redeemed pursuant to a mandatory redemption. The after-tax benefit to the year-to-date net income from these Visa adjustments totaled $382,000, or $0.03 per diluted common share. This adjustment represents the net impact of the gain from the proceeds of the sale of these shares and the Company's portion of the settlement expenses related to litigation involving Visa, which Lake City Bank was subject to as a member bank. Lake City Bank's remaining shares of Visa stock are recorded at their original cost basis of zero. These shares have restrictions as to their sale or transfer and the ultimate realization of their value is subject to future adjustments based on the resolution of outstanding indemnified litigation.

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," "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 2008 FINANCIAL HIGHLIGHTS
  (Unaudited - Dollars in thousands except share and Per Share Data) 
  
                                        Three Months Ended           
                            -----------------------------------------
                              Sep. 30,       Jun. 30,       Sep. 30, 
                               2008           2008           2007    
                            -----------    -----------    -----------
 END OF PERIOD BALANCES
   Assets                   $ 2,254,471    $ 2,249,128    $ 1,884,680
   Deposits                   1,707,930      1,605,035      1,462,984
   Loans                      1,717,345      1,674,742      1,448,706
   Allowance for
    Loan Losses                  18,124         18,014         15,074
   Common Stockholders'
    Equity                      153,358        150,982        142,033
   Tangible Equity              148,984        146,525        137,285
 AVERAGE BALANCES
 Assets
   Total Assets             $ 2,208,067    $ 2,140,275    $ 1,852,514
   Earning Assets             2,085,042      2,018,081      1,745,358
   Investments                  389,817        366,294        304,479
   Loans                      1,685,963      1,640,405      1,412,286
 Liabilities and
  Stockholders' Equity
   Total Deposits             1,641,525      1,552,889      1,484,965
   Interest Bearing
    Deposits                  1,420,367      1,334,415      1,255,881
   Interest Bearing
    Liabilities               1,817,981      1,751,947      1,467,701
   Common Stockholders'
    Equity                      151,992        151,486        138,807
 INCOME STATEMENT DATA
   Net Interest Income      $    17,272    $    15,498    $    13,719
   Net Interest
    Income-Fully
    Tax Equivalent               17,549         15,792         13,972
   Provision for
    Loan Losses                   3,710          3,021          1,697
   Noninterest Income             6,202          5,972          5,134
   Noninterest Expense           11,942         11,613         10,892
   Net Income                     5,225          4,796          4,374
 PER SHARE DATA
   Basic Net Income Per
    Common Share            $      0.43    $      0.39    $      0.36
   Diluted Net Income Per
    Common Share                   0.42           0.39           0.35
   Cash Dividends Declared
    Per Common Share              0.155          0.155           0.14
   Book Value Per Common
    Share (equity per
    share issued)                 12.47          12.29          11.64
   Market Value - High            30.09          25.00          25.98
   Market Value - Low             18.52          19.00          20.05
   Basic Weighted Average
    Common Shares
    Outstanding              12,290,055     12,262,926     12,197,790
   Diluted Weighted
    Average Common Shares
    Outstanding              12,468,446     12,468,486     12,433,701
 KEY RATIOS
   Return on Average
    Assets                         0.94%          0.90%          0.94%
   Return on Average
    Common Stockholders'
    Equity                        13.68          12.75          12.50
   Efficiency
    (Noninterest Expense /
    Net Interest Income
    plus Noninterest
    Income)                       50.88          54.06          57.78
   Average Equity to
    Average Assets                 6.88           7.08           7.49
   Net Interest Margin             3.35           3.15           3.18
   Net Charge Offs to
    Average Loans                  0.85           0.43           0.55
   Loan Loss Reserve
    to Loans                       1.06           1.08           1.04
   Nonperforming Loans
    to Loans                       1.18           1.49           0.64
   Nonperforming Assets
    to Assets                      0.94           1.17           0.75
   Tier 1 Leverage                 8.30           8.40           9.04
   Tier 1 Risk-Based
    Capital                        9.79           9.84          10.83
   Total Capital                  10.76          10.83          11.81
   Tangible Capital                6.62           6.53           7.30
 ASSET QUALITY
   Loans Past Due 90
    Days or More            $     1,669    $       972    $       317
   Non-accrual Loans             18,516         23,987          9,001
   Nonperforming Loans           20,185         24,959          9,318
   Other Real Estate Owned          879          1,357          4,771
   Other Nonperforming
    Assets                           30             45             51
   Total Nonperforming
    Assets                       21,094         26,361         14,140
   Impaired Loans                19,464         23,718          8,575
   Net Charge Offs/
    (Recoveries)                  3,600          1,765          1,974


                                          Nine Months Ended      
                                   -------------------------------
                                    Sep. 30,              Sep.30,  
                                      2008                 2007    
                                   -----------         -----------
 END OF PERIOD BALANCES                                  
   Assets                          $ 2,254,471         $ 1,884,680 
   Deposits                          1,707,930           1,462,984 
   Loans                             1,717,345           1,448,706 
   Allowance for Loan Losses            18,124              15,074 
   Common Stockholders' Equity         153,358             142,033 
   Tangible Equity                     148,984             137,285 
 AVERAGE BALANCES                                                  
 Assets                                                            
   Total Assets                    $ 2,125,305         $ 1,809,342 
   Earning Assets                    2,005,027           1,701,501 
   Investments                         363,367             299,912 
   Loans                             1,630,510           1,384,180 
 Liabilities and                                                   
  Stockholders' Equity                                             
   Total Deposits                    1,569,995           1,462,073 
   Interest Bearing Deposits         1,350,832           1,237,733 
   Interest Bearing Liabilities      1,737,806           1,433,549 
   Common Stockholders' Equity         150,984             135,685 
 INCOME STATEMENT DATA                                             
   Net Interest Income             $    47,276         $    40,498 
   Net Interest Income-Fully                                       
    Tax Equivalent                      48,141              41,255 
   Provision for Loan Losses             7,884               3,244 
   Noninterest Income                   17,943              15,041 
   Noninterest Expense                  34,937              31,554 
   Net Income                           15,262              14,387 
 PER SHARE DATA                                                    
   Basic Net Income Per                                            
    Common Share                   $      1.25         $      1.18 
   Diluted Net Income Per                                          
    Common Share                          1.23                1.16 
   Cash Dividends Declared                                         
    Per Common Share                      0.45               0.405 
   Book Value Per Common Share 
    (equity per share issued)            12.47               11.64 
   Market Value - High                   30.09               25.98 
   Market Value - Low                    16.87               20.05 
   Basic Weighted Average                                          
    Common Shares Outstanding       12,256,389          12,182,658 
   Diluted Weighted Average Common 
    Shares Outstanding              12,454,426          12,425,238 
 KEY RATIOS                                                        
   Return on Average Assets               0.96%               1.06%
   Return on Average Common 
    Stockholders' Equity                 13.50               14.18 
   Efficiency                                                      
    (Noninterest Expense / Net 
    Interest Income plus 
    Noninterest Income)                  53.57               56.81 
   Average Equity to 
    Average Assets                        7.10                7.50 
   Net Interest Margin                    3.20                3.24 
   Net Charge Offs to                                              
    Average Loans                         0.46                0.25 
   Loan Loss Reserve to Loans             1.06                1.04 
   Nonperforming Loans to Loans           1.18                0.64 
   Nonperforming Assets to Assets         0.94                0.75 
   Tier 1 Leverage                        8.30                9.04 
   Tier 1 Risk-Based Capital              9.79               10.83 
   Total Capital                         10.76               11.81 
   Tangible Capital                       6.62                7.30 
 ASSET QUALITY                                                     
   Loans Past Due 90                                               
    Days or More                   $     1,669         $       317 
   Non-accrual Loans                    18,516               9,001 
   Nonperforming Loans                  20,185               9,318 
   Other Real Estate Owned                 879               4,771 
   Other Nonperforming Assets               30                  51 
   Total Nonperforming Assets           21,094              14,140 
   Impaired Loans                       19,464               8,575 
   Net Charge Offs/(Recoveries)          5,561               2,634 
                                 
                                 
                               
                    LAKELAND FINANCIAL CORPORATION
                      CONSOLIDATED BALANCE SHEETS
            As of September 30, 2008 and December 31, 2007
                 (in thousands, except per share data)

  
                                  September 30,        December 31,
                                      2008                 2007
                                   -----------         -----------
                                   (Unaudited)
 ASSETS
 Cash and due from banks           $    44,751         $    56,278
 Short-term investments                 17,710              11,413
                                   -----------         -----------
   Total cash and cash equivalents      62,461              67,691
                                                       
 Securities available for sale                         
  (carried at fair value)              386,671             327,757
 Real estate mortgage loans held                       
  for sale                               2,591                 537
                                                       
 Loans, net of allowance for loan                      
  losses of $18,124 and $15,801      1,699,221           1,507,919
                                                       
 Land, premises and equipment, net      27,498              27,525
 Bank owned life insurance              33,860              21,543
 Accrued income receivable               8,597               9,126
 Goodwill                                4,970               4,970
 Other intangible assets                   465                 619
 Other assets                           28,137              21,446
                                   -----------         -----------
   Total assets                    $ 2,254,471         $ 1,989,133
                                   ===========         ===========
                                                       
 LIABILITIES AND                                       
  STOCKHOLDERS' EQUITY                                 
                                                       
 LIABILITIES                                           
 Noninterest bearing deposits      $   235,808         $   255,348
 Interest bearing deposits           1,472,122           1,223,570
                                   -----------         -----------
   Total deposits                    1,707,930           1,478,918
                                                       
 Short-term borrowings                                 
   Federal funds purchased                   0              70,010
   Securities sold under                               
    agreements to repurchase           175,427             154,913
   U.S. Treasury demand notes            1,864               1,242
   Other short-term borrowings          80,000              90,000
                                   -----------         -----------
   Total short-term borrowings         257,291             316,165
                                                       
 Accrued expenses payable               13,592              15,497
 Other liabilities                       1,329               1,311
 Long-term borrowings                   90,043                  44
 Subordinated debentures                30,928              30,928
                                   -----------         -----------
   Total liabilities                 2,101,113           1,842,863
                                                       
 STOCKHOLDERS' EQUITY                                  
 Common stock:  180,000,000 shares                     
  authorized, no par value                             
  12,302,648 shares issued and                         
  12,197,175 outstanding as of                         
  September 30, 2008                                   
  12,207,723 shares issued and                         
  12,111,703 outstanding as of                         
  December 31, 2007                      1,453               1,453
 Additional paid-in capital             19,760              18,078
 Retained earnings                     138,842             129,090
 Accumulated other                                     
  comprehensive loss                    (5,162)             (1,010)
 Treasury stock, at cost                               
  (2008 - 105,473 shares,                              
  2007 - 96,020 shares)                 (1,535)             (1,341)
                                   -----------         -----------
   Total stockholders' equity          153,358             146,270
                                   -----------         -----------
     Total liabilities and                             
      stockholders' equity         $ 2,254,471         $ 1,989,133
                                   ===========         ===========
                                                     


                    LAKELAND FINANCIAL CORPORATION
                   CONSOLIDATED STATEMENTS OF INCOME
                 For the Three Months and Nine Months
                   Ended September 30, 2008 and 2007
                  (in thousands except for share and
                            per share data)
                              (unaudited)


                         Three Months Ended       Nine Months Ended
                           September 30,            September 30,
                       ----------------------  ----------------------
                          2008        2007        2008        2007
                       ----------  ----------  ----------  ----------
 NET INTEREST INCOME
 Interest and fees
  on loans
   Taxable             $   25,872  $   26,176  $   75,673  $   76,623
   Tax exempt                  28          30          87         110
 Interest and
  dividends on
  securities
   Taxable                  4,437       2,902      11,793       8,366
   Tax exempt                 583         618       1,820       1,838
 Interest on
  short-term
  investments                  46         365         197         671
                       ----------  ----------  ----------  ----------
     Total interest
      income               30,966      30,091      89,570      87,608

 Interest on deposits      10,854      13,773      33,592      40,071
 Interest on
  borrowings
   Short-term               1,435       1,956       5,164       5,130
   Long-term                1,405         643       3,538       1,909
                       ----------  ----------  ----------  ----------
     Total interest
      expense              13,694      16,372      42,294      47,110
                       ----------  ----------  ----------  ----------

 NET INTEREST INCOME       17,272      13,719      47,276      40,498

 Provision for
  loan losses               3,710       1,697       7,884       3,244
                       ----------  ----------  ----------  ----------

 NET INTEREST INCOME
  AFTER PROVISION FOR
  LOAN LOSSES              13,562      12,022      39,392      37,254

 NONINTEREST INCOME
 Wealth advisory fees         869         761       2,541       2,306
 Investment brokerage
  fees                        582         386       1,479       1,145
 Service charges on
  deposit accounts          2,331       1,890       6,355       5,355
 Loan, insurance and
  service fees                729         620       2,122       1,864
 Merchant card
  fee income                  949         906       2,646       2,462
 Other income                 585         455       1,453       1,393
 Net gains on sales
  of real estate
  mortgage loans held
  for sale                    146         116         666         480
 Net securities
  gains (losses)               11           0          39          36
 Gain on redemption
  of Visa shares                0           0         642           0
                       ----------  ----------  ----------  ----------
   Total noninterest
    income                  6,202       5,134      17,943      15,041

 NONINTEREST EXPENSE
 Salaries and
  employee benefits         6,411       6,032      19,113      17,706
 Net occupancy expense        741         680       2,226       1,992
 Equipment costs              426         459       1,344       1,372
 Data processing
  fees and supplies           954         772       2,662       2,246
 Credit card
  interchange                 651         613       1,765       1,643
 Other expense              2,759       2,336       7,827       6,595
                       ----------  ----------  ----------  ----------
   Total noninterest
    expense                11,942      10,892      34,937      31,554
                       ----------  ----------  ----------  ----------

 INCOME BEFORE INCOME
  TAX EXPENSE               7,822       6,264      22,398      20,741
 Income tax expense         2,597       1,890       7,136       6,354
                       ----------  ----------  ----------  ----------
 NET INCOME            $    5,225  $    4,374  $   15,262  $   14,387
                       ==========  ==========  ==========  ==========
 BASIC WEIGHTED
  AVERAGE COMMON
  SHARES               12,290,055  12,197,790  12,256,389  12,182,658
                       ==========  ==========  ==========  ==========
 BASIC EARNINGS PER
  COMMON SHARE         $     0.43  $     0.36  $     1.25  $     1.18
                       ==========  ==========  ==========  ==========
 DILUTED WEIGHTED
  AVERAGE COMMON       12,468,446  12,433,701  12,454,426  12,425,238
                       ==========  ==========  ==========  ==========
 DILUTED EARNINGS PER
  COMMON SHARE         $     0.42  $     0.35  $     1.23  $     1.16
                       ==========  ==========  ==========  ==========


                    LAKELAND FINANCIAL CORPORATION
                              LOAN DETAIL
                          THIRD QUARTER 2008
                       (unaudited in thousands)

                 September 30,        June 30,         September 30,
                     2008              2008                2007
                ----------------  ----------------  ----------------
 Commercial and 
  industrial 
  loans         $1,129,960  65.8% $1,087,457  63.3%  $ 923,168  63.7%
 Commercial                                                     
  real estate -                                                 
  multifamily                                                   
  loans             23,674   1.4      23,282   1.4      15,385   1.1
 Commercial                                                     
  real estate                                                   
  construction                                                  
  loans             96,004   5.6      94,403   5.5      75,765   5.2
 Agri-business                                                  
  and                                                           
  agricultural                                                  
  loans            174,462  10.2     188,107  11.0     149,976  10.4
 Residential                                                    
  real estate                                                   
  mortgage                                                      
  loans            114,900   6.7     116,520   6.8     122,063   8.4
 Home equity                                                    
  loans            124,016   7.2     115,040   6.7     109,096   7.5
 Installment                                                    
  loans and                                                     
  other                                                         
  consumer                                                      
  loans             54,504   3.1      50,189   2.9      53,075   3.7
                ----------------  ----------------  ----------------
   Subtotal      1,717,520 100.0%  1,674,998  97.6%  1,448,528 100.0%
 Less: Allowance 
        for 
        loan 
        losses     (18,124)          (18,014)          (15,074)
       Net 
        deferred 
        loan 
        (fees)/
        costs         (175)             (256)              178
                ----------        ----------        ----------
 Loans, net     $1,699,221        $1,656,728        $1,433,632
                ==========        ==========        ==========


            

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