WARSAW, Ind., Jan. 25, 2017 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported record net income of $52.1 million for 2016, versus $46.4 million for 2015, an increase of 12%. Diluted net income per common share increased 11% to $2.05 for 2016, versus $1.84 for 2015.This per share performance also represents a record for the company and its shareholders.
The company further reported record quarterly net income of $13.5 million for the fourth quarter of 2016, an increase of 10%, versus $12.3 million for the fourth quarter of 2015. Diluted net income per common share was $0.53 for the fourth quarter of 2016, an increase of 8%, versus $0.49 for the comparable period of 2015. On a linked quarter basis net income increased by $42,000 from the third quarter ended September 30, 2016. 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 is a direct result of the entire Lake City Bank team’s unwavering commitment to taking care of our clients and communities every day. For the seventh consecutive year, and for 27 out of the last 28 years, we have produced record net income for our shareholders.”
Highlights for the quarter are noted below:
4th Quarter 2016 versus 4th Quarter 2015 highlights:
- Organic average loan growth of $365 million or 12%
- Average deposit growth of $408 million or 13%
- Net interest income increase of $3.5 million or 13%
- Continued strong asset quality with nonperforming assets to total assets at 0.16% compared to 0.35%
- Tangible common equity[1] increase of 9%
4th Quarter 2016 versus 3rd Quarter 2016 highlights:
- Organic average loan growth of $129 million or 4%
- Net interest income increase of $1.2 million or 4%
- Noninterest expense decrease of $371,000 or 2%
Findlay added, “With total loan growth in 2016 of $390 million, or 13%, our focus remained on using our balance sheet to create economic impact in our Indiana markets. We believe that our reputation as a progressive lender focused on assisting our clients grow their businesses has been a key driver of our ability to grow our loan portfolio.”
As previously announced, the board of directors approved a cash dividend for the fourth quarter of $0.19 per share, payable on February 6, 2017, to shareholders of record as of January 25, 2017. The fourth 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.
“The strength of our capital structure, combined with our strong earnings performance, has allowed us to provide shareholders with this healthy dividend. Our shareholders have also clearly benefitted from our execution focused strategy as our stock price increased by 52% in 2016 compared to the SNL U.S. Bank index which increased by 23% during the year. We are very proud of the positive impact for shareholders of our strong dividend and stock price performance,” continued Findlay.
Return on average total equity for 2016 was 12.52% compared to 12.26% in 2015. Return on average assets for 2016 and 2015 was 1.29%. The company’s total capital as a percent of risk-weighted assets was 13.23% at December 31, 2016, compared to 13.73% at December 31, 2015 and 13.67% at September 30, 2016. The company’s tangible common equity[2] to tangible assets ratio was 9.89% at December 31, 2016, compared to 10.36% at December 31, 2015 and 10.11% at September 30, 2016.
Average total loans for 2016 were $3.23 billion, an increase of $340.1 million, or 12%, versus $2.89 billion for 2015. Total loans outstanding grew $390.0 million, or 13%, from $3.08 billion as of December 31, 2015 to $3.47 billion as of December 31, 2016. On a linked quarter basis, total loans grew $190.8 million, or 6%, from $3.28 billion at September 30, 2016. Average total loans for the fourth quarter of 2016 were $3.37 billion, an increase of $365.1 million, or 12% versus $3.01 billion for the comparable period of 2015. On a linked quarter basis, average total loans increased by $128.8 million, or 4%, from $3.24 billion for the third quarter of 2016 to $3.37 billion for the fourth quarter of 2016.
Average total deposits for 2016 were $3.48 billion, an increase of $389.2 million, or 13%, versus $3.09 billion for 2015. Total deposits grew $394.5 million, or 12%, from $3.18 billion as of December 31, 2015 to $3.58 billion as of December 31, 2016. In addition, total core deposits, which exclude brokered deposits, increased $444.4 million, or 15%, from $3.04 billion at December 31, 2015 to $3.48 billion at December 31, 2016. This increase in core deposits was driven by growth of public funds which increased by $292 million on a year over year basis.
The company’s net interest margin decreased one basis point to 3.18% for 2016 compared to 3.19% for 2015. The company’s net interest margin improved to 3.18% in the fourth quarter of 2016 versus 3.16% for the fourth quarter of 2015. The higher margin in the fourth quarter of 2016 was due to higher yields on both loans and securities, partially offset by a higher cost of funds. On a linked quarter basis, the net interest margin improved from 3.08% in the third quarter of 2016 due to lower average balances in low-yielding interest bearing deposits as well as the partial month impact of the Federal Reserve Bank increase in the target Federal Funds Rate in mid-December. Net interest income increased $12.6 million, or 12%, to $118.5 million in 2016 versus $105.9 million in 2015. Net interest income increased $3.5 million, or 13%, to $30.9 million for the fourth quarter of 2016, versus $27.5 million in the fourth quarter of 2015.
The company recorded a provision for loan losses of $1.2 million in the fourth quarter of 2016. This was the first provision recorded in four years, and was primarily driven by substantial growth in the loan portfolio. The company’s allowance for loan losses as of December 31, 2016 was $43.7 million compared to $43.6 million as of December 31, 2015 and $42.9 million as of September 30, 2016. The allowance for loan losses represented 1.26% of total loans as of December 31, 2016 versus 1.42% at December 31, 2015 and 1.31% as of September 30, 2016. The allowance for loan losses as a percentage of nonperforming loans was 653% as of December 31, 2016, versus 334% as of December 31, 2015, and 590% as of September 30, 2016.
Nonperforming assets decreased $6.4 million, or 48%, to $6.9 million as of December 31, 2016 versus $13.3 million as of December 31, 2015. On a linked quarter basis, nonperforming assets were $558,000 lower than the $7.4 million reported as of September 30, 2016. The ratio of nonperforming assets to total assets at December 31, 2016 declined to 0.16% from 0.35% at December 31, 2015 and 0.18% at September 30, 2016. Net charge-offs to average loans were 0.03% in 2016 compared to 0.09% in 2015 and represent $1.0 million and $2.7 million for each year, respectively. Net charge-offs totaled $285,000 in the fourth quarter of 2016 versus net charge-offs of $1.1 million during the fourth quarter of 2015 and net charge-offs of $394,000 during the linked third quarter of 2016.
Findlay added, “Asset quality remained very strong as we continued to experience stable economic conditions throughout our Indiana footprint. With continued loan growth in the fourth quarter, we made a decision to record our first loan loss provision since the fourth quarter of 2012.”
The company’s noninterest income increased $1.4 million, or 4%, to $32.9 million in 2016, compared to $31.5 million in 2015. The company’s noninterest income increased $667,000 or 8%, to $8.7 million for the fourth quarter of 2016 versus $8.1 million for the fourth quarter of 2015. During 2016, noninterest income was positively impacted by increases in recurring fee income for service charges on deposit accounts, mortgage banking income and wealth advisory fees. Offsetting these increases were decreases in other income driven by lower rental income on operating leases as well as a $226,000 write-down to a property formerly used as a Lake City Bank branch that was subsequently sold. In addition, investment brokerage fees declined driven by lower production volumes as well as changes to the product mix designed to provide a more consistent revenue stream. Increases in noninterest income in the fourth quarter of 2016 compared to the fourth quarter of 2015 resulted from service charges on deposit accounts as well as higher mortgage banking income.
The company’s noninterest expense increased $4.8 million, or 7%, to $73.0 million in 2016, compared to $68.2 million in 2015. The company’s noninterest expense increased by $1.0 million or 6% to $18.4 million in the fourth quarter of 2016 compared to $17.4 million in the fourth quarter of 2015. Salaries and employee benefits increased primarily due to higher performance incentive-based compensation costs, normal merit increases and staff additions. Data processing fees increased due to increased technology and software related expenditures with the company’s core processor which are volume and product driven and represent digital solutions and forward technology for clients. Both net occupancy and equipment costs increased due to higher depreciation expense related to branch expansion and upgrades. Professional fees increased primarily due to fees related to the issuance of chip-enabled debit cards, fees paid to a third-party investment manager of the company’s investment portfolio, as well as fees paid for deposit and asset/liability modeling consulting. The company’s efficiency ratio was 48% for 2016 compared to 50% for 2015. The company's efficiency ratio was 46% for the fourth quarter of 2016, compared to 49% for the fourth quarter of 2015 and was 48% for the linked third quarter of 2016.
Findlay added, “During 2016, we continued to expand our footprint with the addition of two new offices, one in downtown Fort Wayne and our fourth location in Indianapolis. Our continued investment in our market presence, as well as our ongoing commitment to our people and technology, positions us well for continued growth and the consistent delivery of great client service.”
Lakeland Financial Corporation is a $4.3 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fifth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 49 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 | ||||||||||||||||
| FOURTH QUARTER 2016 FINANCIAL HIGHLIGHTS | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| (Unaudited – Dollars in thousands) | Dec. 31, | Sep. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||
| END OF PERIOD BALANCES | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||
| Assets | $ | 4,290,025 | $ | 4,197,320 | $ | 3,766,286 | $ | 4,290,025 | $ | 3,766,286 | ||||||
| Deposits | 3,577,912 | 3,651,942 | 3,183,421 | 3,577,912 | 3,183,421 | |||||||||||
| Brokered Deposits | 98,177 | 106,752 | 148,040 | 98,177 | 148,040 | |||||||||||
| Core Deposits | 3,479,735 | 3,545,190 | 3,035,381 | 3,479,735 | 3,035,381 | |||||||||||
| Loans | 3,470,927 | 3,280,161 | 3,080,929 | 3,470,927 | 3,080,929 | |||||||||||
| Allowance for Loan Losses | 43,718 | 42,853 | 43,610 | 43,718 | 43,610 | |||||||||||
| Total Equity | 427,067 | 427,380 | 392,901 | 427,067 | 392,901 | |||||||||||
| Goodwill net of deferred tax assets | 3,134 | 3,138 | 3,168 | 3,134 | 3,168 | |||||||||||
| Tangible Common Equity (1) | 423,933 | 424,242 | 389,733 | 423,933 | 389,733 | |||||||||||
| AVERAGE BALANCES | ||||||||||||||||
| Total Assets | $ | 4,187,730 | $ | 4,152,333 | $ | 3,750,998 | $ | 4,039,719 | $ | 3,597,190 | ||||||
| Earning Assets | 3,933,136 | 3,900,651 | 3,510,084 | 3,799,963 | 3,384,178 | |||||||||||
| Investments | 506,722 | 500,384 | 479,942 | 493,656 | 476,153 | |||||||||||
| Loans | 3,373,814 | 3,244,994 | 3,008,681 | 3,225,635 | 2,885,568 | |||||||||||
| Total Deposits | 3,628,244 | 3,611,111 | 3,220,736 | 3,477,816 | 3,088,598 | |||||||||||
| Interest Bearing Deposits | 2,839,518 | 2,843,015 | 2,551,778 | 2,753,466 | 2,478,674 | |||||||||||
| Interest Bearing Liabilities | 2,941,281 | 2,933,109 | 2,670,605 | 2,872,691 | 2,589,915 | |||||||||||
| Total Equity | 428,665 | 423,358 | 390,241 | 416,034 | 378,106 | |||||||||||
| INCOME STATEMENT DATA | ||||||||||||||||
| Net Interest Income | $ | 30,907 | $ | 29,719 | $ | 27,452 | $ | 118,481 | $ | 105,927 | ||||||
| Net Interest Income-Fully Tax Equivalent | 31,526 | 30,274 | 27,948 | 120,477 | 107,902 | |||||||||||
| Provision for Loan Losses | 1,150 | 0 | 0 | 1,150 | 0 | |||||||||||
| Noninterest Income | 8,736 | 9,018 | 8,069 | 32,864 | 31,479 | |||||||||||
| Noninterest Expense | 18,389 | 18,759 | 17,357 | 72,978 | 68,206 | |||||||||||
| Net Income | 13,522 | 13,480 | 12,286 | 52,084 | 46,367 | |||||||||||
| PER SHARE DATA | ||||||||||||||||
| Basic Net Income Per Common Share * | $ | 0.54 | $ | 0.54 | $ | 0.49 | $ | 2.08 | $ | 1.86 | ||||||
| Diluted Net Income Per Common Share * | 0.53 | 0.53 | 0.49 | 2.05 | 1.84 | |||||||||||
| Cash Dividends Declared Per Common Share * | 0.19 | 0.19 | 0.16 | 0.73 | 0.63 | |||||||||||
| Dividend Payout | 35.85 | % | 35.85 | % | 33.56 | % | 35.61 | % | 34.36 | % | ||||||
| Book Value Per Common Share (equity per share issued) * | 17.01 | 17.04 | 15.74 | 17.01 | 15.74 | |||||||||||
| Tangible Book Value Per Common Share * (1) | 16.89 | 16.91 | 15.61 | 16.89 | 15.61 | |||||||||||
| Market Value – High * | 48.88 | 37.74 | 32.99 | 48.88 | 32.99 | |||||||||||
| Market Value – Low * | 33.98 | 30.21 | 28.92 | 26.53 | 24.95 | |||||||||||
| Basic Weighted Average Common Shares Outstanding * | 25,091,685 | 25,069,434 | 24,956,979 | 25,056,095 | 24,926,354 | |||||||||||
| Diluted Weighted Average Common Shares Outstanding * | 25,518,069 | 25,457,892 | 25,324,510 | 25,460,727 | 25,245,569 | |||||||||||
| KEY RATIOS | ||||||||||||||||
| Return on Average Assets | 1.28 | % | 1.29 | % | 1.30 | % | 1.29 | % | 1.29 | % | ||||||
| Return on Average Total Equity | 12.55 | 12.67 | 12.49 | 12.52 | 12.26 | |||||||||||
| Average Equity to Average Assets | 10.24 | 10.20 | 10.40 | 10.30 | 10.51 | |||||||||||
| Net Interest Margin | 3.18 | 3.08 | 3.16 | 3.18 | 3.19 | |||||||||||
| Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) | 46.38 | 48.43 | 48.86 | 48.22 | 49.64 | |||||||||||
| Tier 1 Leverage (2) | 10.86 | 10.71 | 11.10 | 10.86 | 11.10 | |||||||||||
| Tier 1 Risk-Based Capital (2) | 12.07 | 12.47 | 12.48 | 12.07 | 12.48 | |||||||||||
| Common Equity Tier 1 (CET1) (2) | 11.27 | 11.63 | 11.58 | 11.27 | 11.58 | |||||||||||
| Total Capital (2) | 13.23 | 13.67 | 13.73 | 13.23 | 13.73 | |||||||||||
| Tangible Capital (1) (2) | 9.89 | 10.11 | 10.36 | 9.89 | 10.36 | |||||||||||
| ASSET QUALITY | ||||||||||||||||
| Loans Past Due 30 - 89 Days | $ | 1,588 | $ | 1,734 | $ | 2,766 | $ | 1,588 | $ | 2,766 | ||||||
| Loans Past Due 90 Days or More | 53 | 6 | 0 | 53 | 0 | |||||||||||
| Non-accrual Loans | 6,639 | 7,256 | 13,055 | 6,639 | 13,055 | |||||||||||
| Nonperforming Loans (includes nonperforming TDR's) | 6,692 | 7,262 | 13,055 | 6,692 | 13,055 | |||||||||||
| Other Real Estate Owned | 153 | 146 | 210 | 153 | 210 | |||||||||||
| Other Nonperforming Assets | 11 | 7 | 15 | 11 | 15 | |||||||||||
| Total Nonperforming Assets | 6,856 | 7,414 | 13,280 | 6,856 | 13,280 | |||||||||||
| Performing Troubled Debt Restructurings | 10,351 | 10,579 | 6,260 | 10,351 | 6,260 | |||||||||||
| Nonperforming Troubled Debt Restructurings (included in nonperforming loans) | 5,633 | 5,885 | 10,914 | 5,633 | 10,914 | |||||||||||
| Total Troubled Debt Restructurings | 15,984 | 16,464 | 17,174 | 15,984 | 17,174 | |||||||||||
| Impaired Loans | 20,698 | 18,605 | 20,576 | 20,698 | 20,576 | |||||||||||
| Non-Impaired Watch List Loans | 127,933 | 134,330 | 122,332 | 127,933 | 122,332 | |||||||||||
| Total Impaired and Watch List Loans | 148,631 | 152,935 | 142,908 | 148,631 | 142,908 | |||||||||||
| Gross Charge Offs | 520 | 773 | 1,242 | 2,055 | 3,173 | |||||||||||
| Recoveries | 235 | 379 | 158 | 1,013 | 520 | |||||||||||
| Net Charge Offs/(Recoveries) | 285 | 394 | 1,084 | 1,042 | 2,652 | |||||||||||
| Net Charge Offs/(Recoveries) to Average Loans | 0.03 | % | 0.05 | % | 0.14 | % | 0.03 | % | 0.09 | % | ||||||
| Loan Loss Reserve to Loans | 1.26 | % | 1.31 | % | 1.42 | % | 1.26 | % | 1.42 | % | ||||||
| Loan Loss Reserve to Nonperforming Loans | 653.31 | % | 590.10 | % | 334.04 | % | 653.31 | % | 334.04 | % | ||||||
| Loan Loss Reserve to Nonperforming Loans and Performing TDR's | 256.52 | % | 240.20 | % | 225.78 | % | 256.52 | % | 225.78 | % | ||||||
| Nonperforming Loans to Loans | 0.19 | % | 0.22 | % | 0.42 | % | 0.19 | % | 0.42 | % | ||||||
| Nonperforming Assets to Assets | 0.16 | % | 0.18 | % | 0.35 | % | 0.16 | % | 0.35 | % | ||||||
| Total Impaired and Watch List Loans to Total Loans | 4.28 | % | 4.66 | % | 4.64 | % | 4.28 | % | 4.64 | % | ||||||
| OTHER DATA | ||||||||||||||||
| Full Time Equivalent Employees | 524 | 518 | 518 | 524 | 518 | |||||||||||
| Offices | 48 | 48 | 47 | 48 | 47 | |||||||||||
| (1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures" | ||||||||||||||||
| (2) Capital ratios for December 31, 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 | |||||||
| December 31, 2016 and 2015 | |||||||
| (in thousands, except share data) | |||||||
| December 31, | December 31, | ||||||
| 2016 | 2015 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 142,408 | $ | 67,484 | |||
| Short-term investments | 24,872 | 13,190 | |||||
| Total cash and cash equivalents | 167,280 | 80,674 | |||||
| Securities available for sale (carried at fair value) | 504,191 | 478,071 | |||||
| Real estate mortgage loans held for sale | 5,915 | 3,294 | |||||
| Loans, net of allowance for loan losses of $43,718 and $43,610 | 3,427,209 | 3,037,319 | |||||
| Land, premises and equipment, net | 52,092 | 46,684 | |||||
| Bank owned life insurance | 74,006 | 69,698 | |||||
| Federal Reserve and Federal Home Loan Bank stock | 11,522 | 7,668 | |||||
| Accrued interest receivable | 11,687 | 9,462 | |||||
| Goodwill | 4,970 | 4,970 | |||||
| Other assets | 31,153 | 28,446 | |||||
| Total assets | $ | 4,290,025 | $ | 3,766,286 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| LIABILITIES | |||||||
| Noninterest bearing deposits | $ | 819,803 | $ | 715,093 | |||
| Interest bearing deposits | 2,758,109 | 2,468,328 | |||||
| Total deposits | 3,577,912 | 3,183,421 | |||||
| Short-term borrowings | |||||||
| Securities sold under agreements to repurchase | 50,045 | 69,622 | |||||
| Other short-term borrowings | 180,000 | 70,000 | |||||
| Total short-term borrowings | 230,045 | 139,622 | |||||
| Long-term borrowings | 32 | 34 | |||||
| Subordinated debentures | 30,928 | 30,928 | |||||
| Accrued interest payable | 5,676 | 3,773 | |||||
| Other liabilities | 18,365 | 15,607 | |||||
| Total liabilities | 3,862,958 | 3,373,385 | |||||
| STOCKHOLDERS' EQUITY | |||||||
| Common stock: 90,000,000 shares authorized, no par value | |||||||
| 25,096,087 shares issued and 24,937,865 outstanding as of December 31, 2016 | |||||||
| 24,962,477 shares issued and 24,819,066 outstanding as of December 31, 2015 | 104,405 | 99,123 | |||||
| Retained earnings | 327,873 | 294,002 | |||||
| Accumulated other comprehensive income | (2,387 | ) | 2,142 | ||||
| Treasury stock, at cost (2016 - 158,222 shares, 2015 - 143,411 shares) | (2,913 | ) | (2,455 | ) | |||
| Total stockholders' equity | 426,978 | 392,812 | |||||
| Noncontrolling interest | 89 | 89 | |||||
| Total equity | 427,067 | 392,901 | |||||
| Total liabilities and equity | $ | 4,290,025 | $ | 3,766,286 | |||
| LAKELAND FINANCIAL CORPORATION | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| For the Three Months and Twelve Months Ended December 31, 2016 and 2015 | |||||||||||
| (unaudited in thousands except for share and per share data) | |||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||
| NET INTEREST INCOME | |||||||||||
| Interest and fees on loans | |||||||||||
| Taxable | $ | 32,744 | $ | 28,544 | $ | 124,830 | $ | 110,097 | |||
| Tax exempt | 130 | 114 | 462 | 464 | |||||||
| Interest and dividends on securities | |||||||||||
| Taxable | 2,301 | 2,105 | 9,421 | 8,564 | |||||||
| Tax exempt | 1,074 | 840 | 3,885 | 3,355 | |||||||
| Interest on short-term investments | 58 | 16 | 353 | 59 | |||||||
| Total interest income | 36,307 | 31,619 | 138,951 | 122,539 | |||||||
| Interest on deposits | 5,023 | 3,864 | 18,944 | 15,415 | |||||||
| Interest on borrowings | |||||||||||
| Short-term | 69 | 50 | 352 | 188 | |||||||
| Long-term | 308 | 253 | 1,174 | 1,009 | |||||||
| Total interest expense | 5,400 | 4,167 | 20,470 | 16,612 | |||||||
| NET INTEREST INCOME | 30,907 | 27,452 | 118,481 | 105,927 | |||||||
| Provision for loan losses | 1,150 | 0 | 1,150 | 0 | |||||||
| NET INTEREST INCOME AFTER PROVISION FOR | |||||||||||
| LOAN LOSSES | 29,757 | 27,452 | 117,331 | 105,927 | |||||||
| NONINTEREST INCOME | |||||||||||
| Wealth advisory fees | 1,205 | 1,138 | 4,805 | 4,531 | |||||||
| Investment brokerage fees | 258 | 299 | 1,010 | 1,507 | |||||||
| Service charges on deposit accounts | 3,237 | 2,855 | 12,013 | 10,608 | |||||||
| Loan, insurance and service fees | 1,846 | 1,844 | 7,681 | 7,460 | |||||||
| Merchant card fee income | 522 | 511 | 2,098 | 1,843 | |||||||
| Bank owned life insurance income | 338 | 382 | 1,392 | 1,338 | |||||||
| Other income | 935 | 884 | 2,213 | 2,974 | |||||||
| Mortgage banking income | 381 | 156 | 1,586 | 1,176 | |||||||
| Net securities gains/(losses) | 14 | 0 | 66 | 42 | |||||||
| Total noninterest income | 8,736 | 8,069 | 32,864 | 31,479 | |||||||
| NONINTEREST EXPENSE | |||||||||||
| Salaries and employee benefits | 10,905 | 9,902 | 41,934 | 38,923 | |||||||
| Net occupancy expense | 1,061 | 902 | 4,266 | 3,820 | |||||||
| Equipment costs | 1,022 | 899 | 3,850 | 3,598 | |||||||
| Data processing fees and supplies | 2,013 | 1,937 | 8,148 | 7,592 | |||||||
| Corporate and business development | 687 | 889 | 3,328 | 3,173 | |||||||
| FDIC insurance and other regulatory fees | 463 | 526 | 2,001 | 2,044 | |||||||
| Professional fees | 703 | 683 | 3,208 | 2,794 | |||||||
| Other expense | 1,535 | 1,619 | 6,243 | 6,262 | |||||||
| Total noninterest expense | 18,389 | 17,357 | 72,978 | 68,206 | |||||||
| INCOME BEFORE INCOME TAX EXPENSE | 20,104 | 18,164 | 77,217 | 69,200 | |||||||
| Income tax expense | 6,582 | 5,878 | 25,133 | 22,833 | |||||||
| NET INCOME | $ | 13,522 | $ | 12,286 | $ | 52,084 | $ | 46,367 | |||
| BASIC WEIGHTED AVERAGE COMMON SHARES | 25,091,685 | 24,956,979 | 25,056,095 | 24,926,354 | |||||||
| BASIC EARNINGS PER COMMON SHARE | $ | 0.54 | $ | 0.49 | $ | 2.08 | $ | 1.86 | |||
| DILUTED WEIGHTED AVERAGE COMMON SHARES | 25,518,069 | 25,324,510 | 25,460,727 | 25,245,569 | |||||||
| DILUTED EARNINGS PER COMMON SHARE | $ | 0.53 | $ | 0.49 | $ | 2.05 | $ | 1.84 | |||
| LAKELAND FINANCIAL CORPORATION | |||||||||||||||
| LOAN DETAIL | |||||||||||||||
| FOURTH QUARTER 2016 | |||||||||||||||
| (unaudited in thousands) | |||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| 2016 | 2016 | 2015 | |||||||||||||
| Commercial and industrial loans: | |||||||||||||||
| Working capital lines of credit loans | $ | 624,404 | 18.0 | % | $ | 609,382 | 18.6 | % | $ | 581,025 | 18.9 | % | |||
| Non-working capital loans | 644,086 | 18.6 | 641,599 | 19.6 | 598,487 | 19.4 | |||||||||
| Total commercial and industrial loans | 1,268,490 | 36.5 | 1,250,981 | 38.1 | 1,179,512 | 38.3 | |||||||||
| Commercial real estate and multi-family residential loans: | |||||||||||||||
| Construction and land development loans | 245,182 | 7.1 | 221,436 | 6.7 | 230,719 | 7.5 | |||||||||
| Owner occupied loans | 469,705 | 13.5 | 468,582 | 14.3 | 412,026 | 13.4 | |||||||||
| Nonowner occupied loans | 458,404 | 13.2 | 408,620 | 12.5 | 407,883 | 13.2 | |||||||||
| Multifamily loans | 127,632 | 3.7 | 127,784 | 3.9 | 79,425 | 2.6 | |||||||||
| Total commercial real estate and multi-family residential loans | 1,300,923 | 37.5 | 1,226,422 | 37.4 | 1,130,053 | 36.7 | |||||||||
| Agri-business and agricultural loans: | |||||||||||||||
| Loans secured by farmland | 172,633 | 5.0 | 152,719 | 4.7 | 164,375 | 5.3 | |||||||||
| Loans for agricultural production | 222,210 | 6.4 | 156,770 | 4.8 | 141,719 | 4.6 | |||||||||
| Total agri-business and agricultural loans | 394,843 | 11.4 | 309,489 | 9.4 | 306,094 | 9.9 | |||||||||
| Other commercial loans | 98,270 | 2.8 | 89,850 | 2.7 | 85,075 | 2.8 | |||||||||
| Total commercial loans | 3,062,526 | 88.2 | 2,876,742 | 87.7 | 2,700,734 | 87.7 | |||||||||
| Consumer 1-4 family mortgage loans: | |||||||||||||||
| Closed end first mortgage loans | 163,155 | 4.7 | 161,907 | 4.9 | 158,062 | 5.1 | |||||||||
| Open end and junior lien loans | 169,664 | 4.9 | 170,140 | 5.2 | 163,700 | 5.3 | |||||||||
| Residential construction and land development loans | 15,015 | 0.4 | 12,801 | 0.4 | 9,341 | 0.3 | |||||||||
| Total consumer 1-4 family mortgage loans | 347,834 | 10.0 | 344,848 | 10.5 | 331,103 | 10.7 | |||||||||
| Other consumer loans | 61,308 | 1.8 | 58,957 | 1.8 | 49,113 | 1.6 | |||||||||
| Total consumer loans | 409,142 | 11.8 | 403,805 | 12.3 | 380,216 | 12.3 | |||||||||
| Subtotal | 3,471,668 | 100.0 | % | 3,280,547 | 100.0 | % | 3,080,950 | 100.0 | % | ||||||
| Less: Allowance for loan losses | (43,718 | ) | (42,853 | ) | (43,610 | ) | |||||||||
| Net deferred loan fees | (741 | ) | (386 | ) | (21 | ) | |||||||||
| Loans, net | $ | 3,427,209 | $ | 3,237,308 | $ | 3,037,319 | |||||||||
| LAKELAND FINANCIAL CORPORATION | |||||||||||||||
| DEPOSITS AND BORROWINGS | |||||||||||||||
| FOURTH QUARTER 2016 | |||||||||||||||
| (unaudited in thousands) | |||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| 2016 | 2016 | 2015 | |||||||||||||
| Non-interest bearing demand deposits | $ | 819,803 | $ | 770,079 | $ | 715,093 | |||||||||
| Interest bearing demand, savings & money market accounts | 1,594,290 | 1,562,252 | 1,470,814 | ||||||||||||
| Time deposits under $100,000 | 238,994 | 241,527 | 259,260 | ||||||||||||
| Time deposits of $100,000 or more | 924,825 | 1,078,084 | 738,254 | ||||||||||||
| Total deposits | 3,577,912 | 3,651,942 | 3,183,421 | ||||||||||||
| Short-term borrowings | 230,045 | 60,198 | 139,622 | ||||||||||||
| Long-term borrowings | 32 | 32 | 34 | ||||||||||||
| Subordinated debentures | 30,928 | 30,928 | 30,928 | ||||||||||||
| Total borrowings | 261,005 | 91,158 | 170,584 | ||||||||||||
| Total funding sources | $ | 3,838,917 | $ | 3,743,100 | $ | 3,354,005 | |||||||||
| LAKELAND FINANCIAL CORPORATION | |||||||||||||||||||||||||||||
| AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS | |||||||||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | December 31, 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) | $ | 3,359,305 | $ | 32,744 | 3.87 | % | $ | 3,233,394 | $ | 31,538 | 3.88 | % | $ | 2,996,373 | $ | 28,544 | 3.78 | % | |||||||||||
| Tax exempt (1) | 14,508 | 194 | 5.30 | 11,600 | 164 | 5.62 | 12,308 | 170 | 5.49 | ||||||||||||||||||||
| Investments: (1) | |||||||||||||||||||||||||||||
| Available for sale | 506,722 | 3,940 | 3.09 | 500,384 | 3,747 | 2.98 | 479,942 | 3,385 | 2.80 | ||||||||||||||||||||
| Short-term investments | 5,128 | 17 | 1.32 | 6,885 | 17 | 0.98 | 5,331 | 9 | 0.67 | ||||||||||||||||||||
| Interest bearing deposits | 47,473 | 41 | 0.34 | 148,388 | 168 | 0.45 | 16,130 | 7 | 0.17 | ||||||||||||||||||||
| Total earning assets | $ | 3,933,136 | $ | 36,936 | 3.73 | % | $ | 3,900,651 | $ | 35,634 | 3.63 | % | $ | 3,510,084 | $ | 32,115 | 3.63 | % | |||||||||||
| Less: Allowance for loan losses | (43,072 | ) | (43,402 | ) | (44,562 | ) | |||||||||||||||||||||||
| Nonearning Assets | |||||||||||||||||||||||||||||
| Cash and due from banks | 120,170 | 122,811 | 124,290 | ||||||||||||||||||||||||||
| Premises and equipment | 52,013 | 50,921 | 44,753 | ||||||||||||||||||||||||||
| Other nonearning assets | 125,483 | 121,352 | 116,433 | ||||||||||||||||||||||||||
| Total assets | $ | 4,187,730 | $ | 4,152,333 | $ | 3,750,998 | |||||||||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||||||||||
| Savings deposits | $ | 271,758 | $ | 101 | 0.15 | % | $ | 270,136 | $ | 103 | 0.15 | % | $ | 242,587 | $ | 119 | 0.19 | % | |||||||||||
| Interest bearing checking accounts | 1,317,805 | 1,512 | 0.46 | 1,261,390 | 1,362 | 0.43 | 1,247,645 | 1,132 | 0.36 | ||||||||||||||||||||
| Time deposits: | |||||||||||||||||||||||||||||
| In denominations under $100,000 | 240,790 | 681 | 1.12 | 243,148 | 696 | 1.14 | 265,788 | 788 | 1.18 | ||||||||||||||||||||
| In denominations over $100,000 | 1,009,166 | 2,729 | 1.07 | 1,068,341 | 2,871 | 1.07 | 795,758 | 1,825 | 0.91 | ||||||||||||||||||||
| Miscellaneous short-term borrowings | 70,802 | 69 | 0.39 | 59,133 | 37 | 0.25 | 87,865 | 49 | 0.23 | ||||||||||||||||||||
| Long-term borrowings and | |||||||||||||||||||||||||||||
| subordinated debentures (4) | 30,960 | 308 | 3.95 | 30,960 | 291 | 3.74 | 30,962 | 254 | 2.90 | ||||||||||||||||||||
| Total interest bearing liabilities | $ | 2,941,281 | $ | 5,400 | 0.73 | % | $ | 2,933,108 | $ | 5,360 | 0.73 | % | $ | 2,670,605 | $ | 4,167 | 0.62 | % | |||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||||||||||
| Demand deposits | 788,726 | 768,095 | 668,957 | ||||||||||||||||||||||||||
| Other liabilities | 29,058 | 27,772 | 21,197 | ||||||||||||||||||||||||||
| Stockholders' Equity | 428,665 | 423,358 | 390,239 | ||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 4,187,730 | $ | 4,152,333 | $ | 3,750,998 | |||||||||||||||||||||||
| Interest Margin Recap | |||||||||||||||||||||||||||||
| Interest income/average earning assets | 36,936 | 3.73 | 35,634 | 3.63 | 32,115 | 3.63 | |||||||||||||||||||||||
| Interest expense/average earning assets | 5,400 | 0.55 | 5,360 | 0.55 | 4,167 | 0.47 | |||||||||||||||||||||||
| Net interest income and margin | $ | 31,536 | 3.18 | % | $ | 30,274 | 3.08 | % | $ | 27,948 | 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. Taxable equivalent basis adjustments were $619,000, $555,000 and $524,000 in the three-month periods ended December 31, 2016, September 30, 2016 and December 31, 2015, respectively. |
| (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. |
(1) Reconciliation of Non-GAAP Financial Measures
| Tangible common equity, tangible assets and tangible book value per share are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of stockholders’ equity. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. 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 including only earning assets as meaningful to an understanding of the company’s financial information. 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, | Sep. 30, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||
| 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Total Equity | $ | 427,067 | $ | 427,380 | $ | 392,901 | $ | 427,067 | $ | 392,901 | ||||||
| Less: Goodwill net of deferred tax assets | 3,134 | 3,138 | 3,168 | 3,134 | 3,168 | |||||||||||
| Tangible Common Equity | 423,933 | 424,242 | 389,733 | 423,933 | 389,733 | |||||||||||
| Assets | $ | 4,290,025 | $ | 4,197,320 | $ | 3,766,286 | $ | 4,290,025 | $ | 3,766,286 | ||||||
| Less: Goodwill net of deferred tax assets | 3,134 | 3,138 | 3,168 | 3,134 | 3,168 | |||||||||||
| Tangible Assets | 4,286,891 | 4,194,182 | 3,763,118 | 4,286,891 | 3,763,118 | |||||||||||
| Ending common shares issued | 25,096,087 | 25,081,087 | 24,962,477 | 25,096,087 | 24,962,477 | |||||||||||
| Tangible Book Value Per Common Share * | $ | 16.89 | $ | 16.91 | $ | 15.61 | $ | 16.89 | $ | 15.61 | ||||||
| Tangible Common Equity/Tangible Assets | 9.89 | % | 10.11 | % | 10.36 | % | 9.89 | % | 10.36 | % | ||||||
[1] Non-GAAP financial measure – see ”Reconciliation of Non-GAAP Financial Measures”
[2] Non-GAAP financial measure – see “Reconciliation of Non-GAAP Financial Measures”