WARSAW, Ind., July 16, 2007 (PRIME NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported record quarterly net income of $5.3 million for the second quarter of 2007, an increase of 10% over the $4.8 million reported for the second quarter of 2006. On a linked quarter basis, net income also increased 10% versus the first quarter of 2007. Diluted net income per share for the quarter was $0.42 versus $0.39 for the comparable period of 2006 and $0.38 for the first quarter of 2007. Net income of $10.0 million for the six months ended June 30, 2007 also established a record for the period and represented an increase of 6% versus $9.4 million for the six months ended June 30, 2006. Diluted net income per common share was $0.81 for the six months ended June 30, 2007, versus $0.76 for the six months ended June 30, 2006.
The Company also announced that the Board of Directors approved a cash dividend for the second quarter of $0.14 per share, payable on August 6, 2007 to shareholders of record as of July 25, 2007. The quarterly dividend represents a 12% increase over the quarterly dividends paid in 2006.
Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "We are proud of our record performance for the quarter and year-to-date. During the first half of 2007 we continued to experience healthy loan and noninterest fee revenue growth, both of which have contributed to our earnings strength. In particular, we saw strong revenue growth in our Wealth Advisory and investment brokerage fees, which combined for a 36% increase in the quarter versus the comparable period in 2006. In addition, the entire Lake City Bank team has maintained a balanced focus on expense control as we continue to grow our market presence."
Average total loans for the second quarter of 2007 were $1.39 billion versus $1.25 billion during the second quarter of 2006, an increase of 11%. Total gross loans as of June 30, 2007 were $1.40 billion, an increase of $46.8 million, versus $1.35 billion as of December 31, 2006. Total loans as of June 30, 2006 were $1.28 billion.
Kubacki added, "Our net interest margin expanded slightly in the quarter versus the first quarter of 2007 and the fourth quarter of 2006 and further contributed to our earnings performance, yet our margin continues to be below historical levels. While it is true that our margin has benefited from overall deposit rate stabilization during 2007, general deposit pricing continues to provide a very challenging environment for core retail deposit growth."
Lakeland Financial's allowance for loan losses as of June 30, 2007 was $15.4 million, compared to $14.8 million as of March 31, 2007 and $13.8 million as of June 30, 2006. Nonperforming assets totaled $15.3 million as of June 30, 2007 versus $13.9 million as of March 31, 2007 and $6.7 million on June 30, 2006. The ratio of nonperforming assets to loans was 1.09% on June 30, 2007 compared to 1.01% at March 31, 2007 and 0.52% at June 30, 2006. The increase in nonperforming assets for the second quarter of 2007 resulted primarily from the addition of a single borrowing relationship. The long-time borrower is engaged in mobile home financing and rental activities in Northern Indiana. Borrower collateral, including receivables, real estate and certain mobile home units support this credit. There can be no assurances that full repayment of the loans will result. Net charge offs totaled $313,000 in the second quarter of 2007, versus $346,000 during the first quarter of 2007, and $81,000 during the second quarter of 2006. The majority of the charge off activity in the quarter resulted from charge offs related to the nonperforming borrower discussed above.
Kubacki concluded, "The community banking environment in the Midwest has been particularly challenging over the past several years, driven by net interest margin compression and negative trends in asset quality. With respect to net interest margin, we are pleased with the recent stabilization in our margin. On the asset quality front, recent increases in our nonperforming loan totals are concerning, but are being aggressively managed. While our nonperforming levels have increased, our charge off levels were consistent with our recent history. As always, we continue to diligently manage our credit exposure."
For the three months ended June 30, 2007, Lakeland Financial's average equity to average assets ratio was 7.56% compared to 7.45% for the first quarter of 2007 and 7.07% for the second quarter of 2006. Average stockholders' equity for the quarter ended June 30, 2007 was $136.3 million versus $131.9 million for the first quarter of 2007 and $119.4 million for the second quarter of 2006. Average total deposits were $1.45 billion for the second and first quarters of 2007, versus $1.38 billion for the second quarter of 2006.
Lakeland Financial Corporation is a $1.8 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.
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.
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.
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
SECOND QUARTER 2007 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except share and Per Share Data)
Three Months Ended
-------------------------------------
Jun. 30, Mar. 31, Jun. 30,
2007 2007 2006
----------- ----------- -----------
END OF PERIOD BALANCES
----------------------
Assets $ 1,822,818 $ 1,818,260 $ 1,727,561
Deposits 1,408,753 1,498,002 1,408,080
Loans 1,400,973 1,377,926 1,276,310
Allowance for Loan Losses 15,351 14,758 13,792
Common Stockholders' Equity 136,618 134,944 120,344
Tangible Equity 131,773 130,003 115,142
AVERAGE BALANCES
----------------
Assets
Total Assets $ 1,803,071 $ 1,771,551 $ 1,688,679
Earning Assets 1,693,322 1,664,938 1,567,698
Investments 299,455 295,706 292,305
Loans 1,386,229 1,353,378 1,252,919
Liabilities and Stockholders'
Equity
Total Deposits 1,446,833 1,454,083 1,382,497
Interest Bearing Deposits 1,219,574 1,237,542 1,159,398
Interest Bearing Liabilities 1,423,894 1,408,401 1,333,186
Common Stockholders' Equity 136,264 131,907 119,400
INCOME STATEMENT DATA
---------------------
Net Interest Income $ 13,681 $ 13,098 $ 13,067
Net Interest Income-Fully Tax
Equivalent 13,934 13,349 13,353
Provision for Loan Losses 906 641 639
Noninterest Income 5,138 4,461 4,736
Noninterest Expense 10,226 10,128 9,854
Net Income 5,255 4,758 4,782
PER SHARE DATA
--------------
Basic Net Income Per Common
Share $ 0.43 $ 0.39 $ 0.40
Diluted Net Income Per Common
Share 0.42 0.38 0.39
Cash Dividends Declared Per
Common Share 0.140 0.125 0.125
Book Value Per Common Share
(equity per share issued) 11.20 11.07 9.96
Market Value - High 23.81 25.92 24.29
Market Value - Low 20.71 21.85 20.47
Basic Weighted Average Common
Shares Outstanding 12,189,997 12,159,768 12,065,143
Diluted Weighted Average
Common Shares Outstanding 12,421,178 12,419,975 12,365,933
KEY RATIOS
----------
Return on Average Assets 1.17% 1.09% 1.14%
Return on Average Common
Stockholders' Equity 15.47 14.63 16.06
Efficiency (Noninterest
Expense / Net Interest Income
plus Noninterest Income) 54.33 57.68 55.35
Average Equity to Average
Assets 7.56 7.45 7.07
Net Interest Margin 3.30 3.25 3.41
Net Charge Offs to Average
Loans 0.09 0.10 0.03
Loan Loss Reserve to Loans 1.10 1.07 1.08
Nonperforming Assets to Loans 1.09 1.01 0.52
Tier 1 Leverage 9.12 9.07 8.87
Tier 1 Risk-Based Capital 11.06 10.97 10.90
Total Capital 12.10 11.98 11.91
ASSET QUALITY
-------------
Loans Past Due 90 Days or
More $ 214 $ 334 $ 46
Non-accrual Loans 15,053 13,438 6,614
Net Charge Offs/(Recoveries) 313 346 81
Other Real Estate Owned 71 71 0
Other Nonperforming Assets 0 35 0
Total Nonperforming Assets 15,338 13,878 6,660
Six Months Ended
-------------------------
Jun. 30, Jun. 30,
2007 2006
----------- -----------
END OF PERIOD BALANCES
----------------------
Assets $ 1,822,818 $ 1,727,561
Deposits 1,408,753 1,408,080
Loans 1,400,973 1,276,310
Allowance for Loan Losses 15,351 13,792
Common Stockholders' Equity 136,618 120,344
Tangible Equity 131,773 115,142
AVERAGE BALANCES
----------------
Assets
Total Assets $ 1,787,398 $ 1,654,862
Earning Assets 1,679,208 1,536,214
Investments 297,591 291,972
Loans 1,369,894 1,229,514
Liabilities and Stockholders' Equity
Total Deposits 1,450,438 1,329,090
Interest Bearing Deposits 1,228,508 1,109,096
Interest Bearing Liabilities 1,416,190 1,304,318
Common Stockholders' Equity 134,097 117,712
INCOME STATEMENT DATA
---------------------
Net Interest Income $ 26,779 $ 25,927
Net Interest Income-Fully Tax
Equivalent 27,283 26,503
Provision for Loan Losses 1,547 1,092
Noninterest Income 9,599 9,134
Noninterest Expense 20,354 19,604
Net Income 10,013 9,432
PER SHARE DATA
--------------
Basic Net Income Per Common Share $ 0.82 $ 0.78
Diluted Net Income Per Common Share 0.81 0.76
Cash Dividends Declared Per Common Share 0.265 0.125(a)
Book Value Per Common Share (equity
per share issued) 11.20 9.96
Market Value - High 25.92 24.29
Market Value - Low 20.71 19.90
Basic Weighted Average Common Shares
Outstanding 12,174,966 12,039,628
Diluted Weighted Average Common Shares
Outstanding 12,420,834 12,353,954
KEY RATIOS
----------
Return on Average Assets 1.13% 1.15%
Return on Average Common Stockholders'
Equity 15.06 16.16
Efficiency (Noninterest Expense / Net
Interest Income plus Noninterest Income) 55.95 55.91
Average Equity to Average Assets 7.50 7.11
Net Interest Margin 3.27 3.47
Net Charge Offs to Average Loans 0.10 0.01
Loan Loss Reserve to Loans 1.10 1.08
Nonperforming Assets to Loans 1.09 0.52
Tier 1 Leverage 9.12 8.87
Tier 1 Risk-Based Capital 11.06 10.90
Total Capital 12.10 11.91
ASSET QUALITY
-------------
Loans Past Due 90 Days or More $ 214 $ 46
Non-accrual Loans 15,053 6,614
Net Charge Offs/(Recoveries) 659 72
Other Real Estate Owned 71 0
Other Nonperforming Assets 0 0
Total Nonperforming Assets 15,338 6,660
(a) Cash dividend of $0.125 declared on April 11, 2006 and
July 11, 2006.
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of June 30, 2007 December 31, 2006
(in thousands)
June 30, December 31,
2007 2006
----------- -----------
(Unaudited)
ASSETS
Cash and due from banks $ 51,517 $ 65,252
Short-term investments 6,048 54,447
----------- -----------
Total cash and cash equivalents 57,565 119,699
Securities available for sale (carried at
fair value) 297,076 296,191
Real estate mortgage loans held for sale 647 2,175
Loans, net of allowance for loan losses
of $15,351 and $14,463 1,385,622 1,339,374
Land, premises and equipment, net 25,988 25,177
Bank owned life insurance 21,106 20,570
Accrued income receivable 8,585 8,720
Goodwill 4,970 4,970
Other intangible assets 722 825
Other assets 20,537 19,005
----------- -----------
Total assets $ 1,822,818 $ 1,836,706
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest bearing deposits $ 240,370 $ 258,472
Interest bearing deposits 1,168,383 1,217,293
----------- -----------
Total deposits 1,408,753 1,475,765
Short-term borrowings
Federal funds purchased 32,000 0
Securities sold under agreements to
repurchase 108,990 106,670
U.S. Treasury demand notes 884 814
Other short-term borrowings 90,000 80,000
----------- -----------
Total short-term borrowings 231,874 187,484
Accrued expenses payable 14,125 11,959
Other liabilities 476 338
Long-term borrowings 44 45
Subordinated debentures 30,928 30,928
----------- -----------
Total liabilities 1,686,200 1,706,519
STOCKHOLDERS' EQUITY
Common stock: 180,000,000 shares
authorized, no par value
12,192,898 shares issued and 12,100,995
outstanding as of June 30, 2007
12,117,808 shares issued and 12,031,023
outstanding as of December 31, 2006 1,453 1,453
Additional paid-in capital 17,698 16,525
Retained earnings 123,307 116,516
Accumulated other comprehensive loss (4,585) (3,178)
Treasury stock, at cost (2007 - 91,903
shares, 2006 - 86,785 shares) (1,255) (1,129)
----------- -----------
Total stockholders' equity 136,618 130,187
----------- -----------
Total liabilities and stockholders'
equity $ 1,822,818 $ 1,836,706
=========== ===========
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Six Months Ended June 30, 2007 and 2006
(in thousands except for share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
NET INTEREST
INCOME
Interest and
fees on loans
Taxable $ 25,727 $ 22,463 $ 50,447 $ 43,137
Tax exempt 30 74 80 132
Interest and
dividends on
securities
Taxable 2,786 2,437 5,464 4,998
Tax exempt 618 595 1,220 1,202
Interest on
short-term
investments 98 274 306 347
----------- ----------- ----------- -----------
Total interest
income 29,259 25,843 57,517 49,816
Interest on deposits 13,200 10,753 26,298 19,477
Interest on borrowings
Short-term 1,744 1,394 3,174 3,196
Long-term 634 629 1,266 1,216
----------- ----------- ----------- -----------
Total interest
expense 15,578 12,776 30,738 23,889
----------- ----------- ----------- -----------
NET INTEREST INCOME 13,681 13,067 26,779 25,927
Provision for loan
losses 906 639 1,547 1,092
----------- ----------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 12,775 12,428 25,232 24,835
NONINTEREST INCOME
Wealth advisory and
investment brokerage
fees 1,372 1,007 2,304 1,912
Service charges on
deposit accounts 1,833 1,907 3,465 3,580
Loan, insurance and
service fees 663 625 1,244 1,198
Merchant card fee
income 626 568 1,248 1,148
Other income 445 507 938 1,020
Net gains on sales of
real estate mortgage
loans held for sale 199 178 364 330
Net securities gains
(losses) 0 (56) 36 (54)
----------- ----------- ----------- -----------
Total
noninterest
income 5,138 4,736 9,599 9,134
NONINTEREST EXPENSE
Salaries and employee
benefits 5,819 5,525 11,674 11,014
Net occupancy expense 638 612 1,312 1,221
Equipment costs 468 460 913 915
Data processing fees
and supplies 723 593 1,382 1,143
Credit card
interchange 425 388 814 746
Other expense 2,153 2,276 4,259 4,565
----------- ----------- ----------- -----------
Total
noninterest
expense 10,226 9,854 20,354 19,604
----------- ----------- ----------- -----------
INCOME BEFORE
INCOME
TAX EXPENSE 7,687 7,310 14,477 14,365
Income tax
expense 2,432 2,528 4,464 4,933
----------- ----------- ----------- -----------
NET INCOME $ 5,255 $ 4,782 $ 10,013 $ 9,432
=========== =========== =========== ===========
BASIC WEIGHTED
AVERAGE
COMMON SHARES 12,189,997 12,065,143 12,174,966 12,039,628
=========== =========== =========== ===========
BASIC EARNINGS PER
COMMON SHARE $ 0.43 $ 0.40 $ 0.82 $ 0.78
=========== =========== =========== ===========
DILUTED WEIGHTED
AVERAGE COMMON
SHARES 12,421,178 12,365,933 12,420,834 12,353,954
=========== =========== =========== ===========
DILUTED EARNINGS
PER COMMON
SHARE $ 0.42 $ 0.39 $ 0.81 $ 0.76
=========== =========== =========== ===========