WARSAW, Ind., Oct. 15, 2007 (PRIME NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported quarterly net income of $4.4 million for the third quarter of 2007 versus $4.7 million for the third quarter of 2006. Diluted net income per share for the quarter was $0.35 versus $0.38 for the comparable period of 2006. The Company further reported record net income of $14.4 million for the nine months ended September 30, 2007, an increase of 2% over the $14.2 million reported for the nine months ended September 30, 2006. Diluted net income per common share was $1.16 for the nine months ended September 30, 2007, versus $1.15 for the nine months ended September 30, 2006.
The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.14 per share, payable on November 5, 2007 to shareholders of record as of October 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, "Net income on a year-to-date basis continues to be ahead of last year, with every business unit contributing solidly to this performance. Further, we experienced good loan growth during the quarter with total loans increasing by $48 million, representing one of our strongest quarters ever for growth."
Kubacki continued, "We were pleased to celebrate the opening of our newest office in southwest Fort Wayne. This 12,000 square foot facility represents the largest facility that Lake City Bank has ever constructed and reinforces our commitment to the Fort Wayne market."
The office is home to the senior management of the Bank's Wealth Advisory Group and the Fort Wayne Commercial Banking Department. The market's Honors Private Banking and Lake City Bank Investment and Brokerage teams are also located in the office. In addition, experienced commercial banking staff in the office will provide direct access for clients to specialists in commercial cash management services, health savings accounts, corporate bond administration, retirement services and merchant credit card services.
"Our grand opening celebration was a joint effort of the Bank and the Board of Directors of Aboite New Trails and resulted in a $15,000 contribution from the Bank for the continued development of a multi-use trail system in Southwest Allen County and surrounding communities. This new office and our partnership with Aboite New Trails symbolize our success in Northern Indiana and our optimism for the business going forward," continued Kubacki.
The Company's net interest margin decreased to 3.18% in the third quarter versus 3.30% in the second quarter of 2007 as a result of a shift in funding mix and the Federal Reserve Bank's recent interest rate cut. Nonetheless, as a result of the loan growth during the quarter, the Company's net interest income increased to $13.7 million in the third quarter of 2007.
Kubacki further commented, "Despite market anticipation of the Federal Reserve Bank's rate cut late in the quarter, general deposit pricing was very competitive during the quarter and continues to provide a very challenging environment for reasonably priced core deposit growth."
Average total loans for the third quarter of 2007 were $1.41 billion versus $1.29 billion during the third quarter of 2006, an increase of 10%. Total gross loans as of September 30, 2007 were $1.45 billion, an increase of $94.5 million, or 7%, versus $1.35 billion as of December 31, 2006. Total loans as of September 30, 2006 were $1.33 billion.
Lakeland Financial's allowance for loan losses as of September 30, 2007 was $15.1 million, compared to $15.4 million as of June 30, 2007 and $14.3 million as of September 30, 2006. Nonperforming assets totaled $14.1 million as of September 30, 2007 versus $15.3 million as of June 30, 2007 and $15.5 million on September 30, 2006. The ratio of nonperforming assets to loans was 0.98% on September 30, 2007 compared to 1.09% at June 30, 2007 and 1.17% at September 30, 2006. The decrease in nonperforming assets for the third quarter of 2007 resulted primarily from loans charged off during the quarter. Net charge offs totaled $2.0 million in the third quarter of 2007, versus $313,000 during the second quarter of 2007, and $14,000 during the third quarter of 2006. $1.5 million of the charge offs in the quarter were related to a single commercial borrower, a residential and commercial real estate developer. As of September 30, 2007, total exposure to this borrower had been reduced to $5.3 million from $7.3 million at the end of the second quarter. Of that total, $4.7 million is held in other real estate owned and approximately $630,000 represented remaining loans. It is anticipated that the remaining loans will be transferred to other real estate owned during the fourth quarter. The Company is managing the other real estate owned to resolve the situation and believes that the carrying value is representative of true market value, although there can be no assurance that the ultimate sale of the assets will result in proceeds equal to or greater than the carrying value. Two residential home equity lines of credit totaling approximately $470,000 represent the majority of the remaining charge offs during the quarter. One of these charge offs, for approximately $190,000, was to a principal of the residential and commercial real estate developer discussed above.
Kubacki commented, "We continue to manage our commercial loan business thoughtfully, and believe that our exposure to the soft residential real estate development sector is manageable and relatively limited. In addition, we believe that the Northern Indiana economy is holding up reasonably well and view our current exposure to the traditional commercial and industrial market and commercial real estate markets as reasonable. We have moved aggressively to get control of the assets related to our troubled real estate borrower and will move as quickly as possible to reach resolution."
For the three months ended September 30, 2007, Lakeland Financial's average equity to average assets ratio was 7.49% compared to 7.56% for the second quarter of 2007 and 7.18% for the third quarter of 2006. Average stockholders' equity for the quarter ended September 30, 2007 was $138.8 million versus $136.3 million for the second quarter of 2007 and $123.4 million for the third quarter of 2006. Average total deposits for the quarter ended September 30, 2007 were $1.48 billion versus $1.45 billion for the second quarter of 2007 and $1.43 billion for the third quarter of 2006.
Lakeland Financial Corporation is a $1.9 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
THIRD QUARTER 2007 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except share and Per Share Data)
Three Months Ended Nine Months Ended
----------------------------------- -----------------------
Sep. 30, Jun. 30, Sep. 30, Sep. 30, Sep. 30,
2007 2007 2006 2007 2006
----------- ----------- ----------- ----------- -----------
END OF
PERIOD
BALANCES
---------
Assets $ 1,884,680 $ 1,822,818 $ 1,799,666 $ 1,884,680 $ 1,799,666
Deposits 1,462,984 1,408,753 1,533,877 1,462,984 1,533,877
Loans 1,448,706 1,400,973 1,331,185 1,448,706 1,331,185
Allowance
for Loan
Losses 15,074 15,351 14,288 15,074 14,288
Common
Stockhold-
ers'
Equity 142,033 136,618 126,987 142,033 126,987
Tangible
Equity 137,285 131,773 121,879 137,285 121,879
AVERAGE
BALANCES
---------
Assets
Total
Assets $ 1,852,514 $ 1,803,071 $ 1,718,276 $ 1,809,342 $ 1,676,233
Earning
Assets 1,745,358 1,693,322 1,594,533 1,701,501 1,555,867
Investments 304,479 299,455 292,938 299,912 292,298
Loans 1,412,286 1,386,229 1,289,394 1,384,180 1,249,693
Liabilities
and
Stockhold-
ers'
Equity
Total
Deposits 1,484,965 1,446,833 1,426,355 1,462,073 1,361,868
Interest
Bearing
Deposits 1,255,881 1,219,574 1,206,566 1,237,733 1,141,943
Interest
Bearing
Liabili-
ties 1,467,701 1,423,894 1,360,792 1,433,549 1,323,349
Common
Stockhold-
ers'
Equity 138,807 136,264 123,367 135,685 119,618
INCOME
STATEMENT
DATA
----------
Net
Interest
Income $ 13,719 $ 13,681 $ 13,059 $ 40,498 $ 38,986
Net
Interest
Income-
Fully Tax
Equivalent 13,972 13,934 13,320 41,255 39,816
Provision
for Loan
Losses 1,697 906 510 3,244 1,602
Noninterest
Income 4,953 5,138 4,679 14,552 13,813
Noninterest
Expense 10,711 10,226 9,937 31,065 29,541
Net Income 4,374 5,255 4,730 14,387 14,162
PER SHARE
DATA
---------
Basic Net
Income
Per
Common
Share $ 0.36 $ 0.43 $ 0.39 $ 1.18 $ 1.17
Diluted
Net
Income
Per
Common
Share 0.35 0.42 0.38 1.16 1.15
Cash
Dividends
Declared
Per
Common
Share 0.14 0.14 0.125 0.405 0.25(a)
Book Value
Per Common
Share
(equity per
share
issued) 11.64 11.20 10.50 11.64 10.50
Market
Value
- High 25.98 23.81 24.97 25.98 24.97
Market
Value
- Low 20.05 20.71 21.84 20.05 19.90
Basic
Weighted
Average
Common
Shares
Outstand-
ing 12,197,790 12,189,997 12,084,244 12,182,658 12,054,663
Diluted
Weighted
Average
Common
Shares
Outstand-
ing 12,433,701 12,421,178 12,388,372 12,425,238 12,366,453
KEY RATIOS
----------
Return on
Average
Assets 0.94% 1.17% 1.09% 1.06% 1.13%
Return on
Average
Common
Stockhold-
ers'
Equity 12.50 15.47 15.21 14.18 15.83
Efficiency
(Noninterest
Expense /
Net
Interest
Income
plus
Noninterest
Income) 57.37 54.33 56.02 56.43 55.95
Average
Equity to
Average
Assets 7.49 7.56 7.18 7.50 7.14
Net Interest
Margin 3.18 3.30 3.32 3.24 3.42
Net Charge
Offs to
Average
Loans 0.55 0.09 0.00 0.25 0.01
Loan Loss
Reserve to
Loans 1.04 1.10 1.07 1.04 1.07
Nonper-
forming
Assets to
Loans 0.98 1.09 1.17 0.98 1.17
Tier 1
Leverage 9.04 9.12 8.93 9.04 8.93
Tier 1 Risk-
Based
Capital 10.83 11.06 10.72 10.83 10.72
Total
Capital 11.81 12.10 11.73 11.81 11.73
ASSET
QUALITY
--------
Loans
Past
Due 90
Days or
More $ 317 $ 214 $ 105 $ 317 $ 105
Non-accrual
Loans 9,001 15,053 15,308 9,001 15,308
Net Charge
Offs/
(Recoveries) 1,974 313 14 2,634 86
Other Real
Estate
Owned 4,771 71 71 4,771 71
Other
Nonper-
forming
Assets 51 0 43 51 43
Total
Nonperforming
Assets 14,140 15,338 15,527 14,140 15,527
(a) Cash dividend of $0.125 declared on April 11, July 11, and
October 10, 2006.
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of September 30, 2007 and December 31, 2006
(in thousands)
September 30, December 31,
2007 2006
----------- -----------
(Unaudited)
ASSETS
Cash and due from banks $ 36,680 $ 65,252
Short-term investments 5,524 54,447
----------- -----------
Total cash and cash equivalents 42,204 119,699
Securities available for sale (carried
at fair value) 321,163 296,191
Real estate mortgage loans held for sale 875 2,175
Loans, net of allowance for loan losses
of $15,074 and $14,463 1,433,632 1,339,374
Land, premises and equipment, net 26,586 25,177
Bank owned life insurance 21,305 20,570
Accrued income receivable 8,893 8,720
Goodwill 4,970 4,970
Other intangible assets 671 825
Other assets 24,381 19,005
----------- -----------
Total assets $ 1,884,680 $ 1,836,706
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest bearing deposits $ 218,743 $ 258,472
Interest bearing deposits 1,244,241 1,217,293
----------- -----------
Total deposits 1,462,984 1,475,765
Short-term borrowings
Federal funds purchased 13,000 0
Securities sold under agreements to
repurchase 128,629 106,670
U.S. Treasury demand notes 1,176 814
Other short-term borrowings 90,000 80,000
----------- -----------
Total short-term borrowings 232,805 187,484
Accrued expenses payable 15,489 11,959
Other liabilities 397 338
Long-term borrowings 44 45
Subordinated debentures 30,928 30,928
----------- -----------
Total liabilities 1,742,647 1,706,519
STOCKHOLDERS' EQUITY
Common stock: 180,000,000 shares
authorized, no par value
12,203,123 shares issued and 12,107,775
outstanding as of September 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 17,967 16,525
Retained earnings 125,974 116,516
Accumulated other comprehensive loss (2,033) (3,178)
Treasury stock, at cost (2007 - 95,348
shares, 2006 - 86,785 shares) (1,328) (1,129)
----------- -----------
Total stockholders' equity 142,033 130,187
----------- -----------
Total liabilities and stockholders'
equity $ 1,884,680 $ 1,836,706
=========== ===========
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months Ended
September 30, 2007 and 2006
(in thousands except for share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
NET INTEREST INCOME
Interest and fees
on loans
Taxable $ 26,176 $ 24,000 $ 76,623 $ 67,137
Tax exempt 30 74 110 206
Interest and
dividends on
securities
Taxable 2,902 2,463 8,366 7,461
Tax exempt 618 591 1,838 1,793
Interest on short-
term investments 365 157 671 504
----------- ----------- ----------- -----------
Total interest
income 30,091 27,285 87,608 77,101
Interest on deposits 13,773 12,398 40,071 31,875
Interest on
borrowings
Short-term 1,956 1,167 5,130 4,363
Long-term 643 661 1,909 1,877
----------- ----------- ----------- -----------
Total interest
expense 16,372 14,226 47,110 38,115
----------- ----------- ----------- -----------
NET INTEREST INCOME 13,719 13,059 40,498 38,986
Provision for loan
losses 1,697 510 3,244 1,602
----------- ----------- ----------- -----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 12,022 12,549 37,254 37,384
NONINTEREST INCOME
Wealth advisory fees 761 608 2,306 1,891
Investment brokerage
fees 386 344 1,145 973
Service charges on
deposit accounts 1,890 1,919 5,355 5,499
Loan, insurance and
service fees 620 548 1,864 1,746
Merchant card fee
income 725 661 1,973 1,809
Other income 455 476 1,393 1,496
Net gains on sales of
real estate mortgage
loans held for sale 116 137 480 467
Net securities gains
(losses) 0 (14) 36 (68)
----------- ----------- ----------- -----------
Total noninterest
income 4,953 4,679 14,552 13,813
NONINTEREST EXPENSE
Salaries and employee
benefits 6,032 5,595 17,706 16,609
Net occupancy expense 680 680 1,992 1,901
Equipment costs 459 430 1,372 1,345
Data processing fees
and supplies 719 611 2,101 1,754
Credit card
interchange 485 465 1,299 1,211
Other expense 2,336 2,156 6,595 6,721
----------- ----------- ----------- -----------
Total noninterest
expense 10,711 9,937 31,065 29,541
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAX EXPENSE 6,264 7,291 20,741 21,656
Income tax expense 1,890 2,561 6,354 7,494
----------- ----------- ----------- -----------
NET INCOME $ 4,374 $ 4,730 $ 14,387 $ 14,162
=========== =========== =========== ===========
BASIC WEIGHTED
AVERAGE COMMON
SHARES 12,197,790 12,084,244 12,182,658 12,054,663
=========== =========== =========== ===========
BASIC EARNINGS PER
COMMON SHARE $ 0.36 $ 0.39 $ 1.18 $ 1.17
=========== =========== =========== ===========
DILUTED WEIGHTED
AVERAGE COMMON
SHARES 12,433,701 12,388,372 12,425,238 12,366,453
=========== =========== =========== ===========
DILUTED EARNINGS PER
COMMON SHARE $ 0.35 $ 0.38 $ 1.16 $ 1.15
=========== =========== =========== ===========
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
September 30, December 31,
2007 2006
----------- -----------
Commercial and industrial loans $ 923,168 $ 847,233
Commercial real estate - multifamily loans 15,385 17,351
Commercial real estate construction loans 75,765 82,183
Agri-business and agricultural loans 149,976 139,644
Residential real estate mortgage loans 122,063 109,176
Home equity loans 109,096 104,506
Installment loans and other consumer loans 53,075 53,804
----------- -----------
Subtotal 1,448,528 1,353,897
Less: Allowance for loan losses (15,074) (14,463)
Net deferred loan (fees)/costs 178 (60)
----------- -----------
Loans, net $ 1,433,632 $ 1,339,374
=========== ===========
Impaired loans $ 8,575 $ 13,333
Non-performing loans $ 9,318 $ 14,119
Allowance for loan losses to total loans 1.04% 1.07%