WARSAW, Ind., Jan. 25, 2008 (PRIME NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported that it has extended its streak of record income performance to 20 consecutive years with net income of $19.2 million for 2007.
"When Lake City Bank began this unrivaled streak in 1988, we had 10 offices, total assets of $207 million and reported net income of $808,000. During the 20 years of record income performance, we have more than quadrupled the number of offices to 43, our total assets have increased by nearly nine-fold to $2.0 billion and we have grown income by a multiple of more than 23 times. As we have for 135 years, the Lake City Bank Team again proved that a community-focused bank can continue to serve the best interests of our clients while at the same time creating long-term shareholder value," commented Michael L. Kubacki, Chairman, President and Chief Executive Officer.
Net income of $19.2 million for 2007 represented an increase of 3% versus $18.7 million for 2006. Diluted net income per share for the year was $1.55 versus $1.51 for 2006. The Company reported net income of $4.8 million for the fourth quarter of 2007, an increase of 6% over the $4.6 million reported for the fourth quarter of 2006. On a linked quarter basis, net income increased 10% versus the third quarter of 2007. Diluted net income per share for the quarter was $0.40 versus $0.38 for the comparable period of 2006 and $0.35 for the third quarter of 2007.
Kubacki observed, "Lake City Bank further reinforced its reputation as the bank for business with loan growth of 13%, or $170 million, for the year. This was driven by a $152 million increase in traditional commercial and industrial and agribusiness loans. Our focus on the commercial business lending has contributed to ongoing economic development in Indiana and helped our clients expand and grow their businesses and contribute to job creation in Indiana."
"Revenue growth in 2007 was strong with a 7% increase in noninterest income, led by robust growth in our Wealth Advisory and Investment business-lines. We also continued to expand fee-based services to our core commercial clients with an improved cash management platform, which is designed to ensure that our clients have the latest technology-based banking products."
The Company also announced that the Board of Directors approved a cash dividend for the fourth quarter of $0.14 per share, payable on February 5, 2008 to shareholders of record as of January 25, 2008. The quarterly dividend represents a 12% increase over the quarterly dividends paid in 2006.
The Company's net interest margin was relatively stable at 3.14% in the fourth quarter versus 3.18% in the third quarter of 2007. Despite a continued shift in funding mix and the Federal Reserve Bank's recent interest rate cuts, the margin declined only nominally. As a result of the loan growth during the year, the Company's net interest income increased by 4% to $54.6 million in 2007 versus $52.3 million in 2006.
Kubacki added, "Net interest margin compression is an industry-wide challenge that we have been working hard to address with an ongoing focus on incremental fee generation and reasonable expense control. Accompanied by good loan growth during the year, these strategies helped us overcome the impact of a tightening interest margin."
Average total loans for the fourth quarter of 2007 were $1.46 billion versus $1.33 billion during the fourth quarter of 2006, an increase of 10%. Total gross loans as of December 31, 2007 were $1.52 billion, an increase of $169.9 million, or 13%, versus $1.35 billion as of December 31, 2006.
Net charge offs totaled $327,000 in the fourth quarter of 2007, versus $2.0 million during the third quarter of 2007, and $867,000 during the fourth quarter of 2006. Lakeland Financial's allowance for loan losses as of December 31, 2007 was $15.8 million, compared to $15.1 million as of September 30, 2007 and $14.5 million as of December 31, 2006.
Nonperforming assets declined during the quarter by 30% since the conclusion of the third quarter of 2007 and totaled $9.9 million as of December 31, 2007 compared to $14.1 million as of September 30, 2007 and $14.2 million on December 31, 2006. The ratio of nonperforming assets to assets improved to 0.50% on December 31, 2007 compared to 0.75% at September 30, 2007 and 0.77% at December 31, 2006. The allowance for loan losses represented 212% of nonperforming loans at year end versus 162% at September 30, 2007 and 103% at December 31, 2006.
The decrease in nonperforming assets during the fourth quarter of 2007 resulted from a reduction on other real estate owned of $2.4 million and a reduction of $1.9 million in nonperforming loans. The decline in other real estate owned was driven by the sale of assets related to a single former commercial borrower, a residential and commercial real estate developer. As of December 31, 2007, total exposure related to this former borrower was $2.2 million versus $5.3 million at the end of the third quarter. All of the remaining exposure represents other real estate and the Bank has no additional exposure to this borrower or its principals. 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.
Kubacki commented, "While we are proud of our progress on the asset quality front during the fourth quarter, we are cognizant of the economic and housing challenges facing the country and Northern Indiana. We will continue to closely monitor our portfolio and will not compromise our disciplined approach to lending in both the consumer and commercial segments."
For the three months ended December 31, 2007, Lakeland Financial's average equity to average assets ratio was 7.47% compared to 7.49% for the third quarter of 2007 and 7.30% for the fourth quarter of 2006. Average stockholders' equity for the quarter ended December 31, 2007 was $143.9 million versus $138.8 million for the third quarter of 2007 and $128.9 million for the fourth quarter of 2006. Average total deposits for the quarter ended December 31, 2007 were $1.52 billion versus $1.48 billion for the third quarter of 2007 and $1.46 billion for the fourth quarter of 2006.
Lakeland Financial Corporation is a $2.0 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 FOURTH QUARTER 2007 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands except share and Per Share Data) Three Months Ended --------------------------------------- Dec. 31, Sep. 30, Dec. 31, 2007 2007 2006 ----------- ----------- ----------- END OF PERIOD BALANCES Assets $ 1,989,133 $ 1,884,680 $ 1,836,706 Deposits 1,478,918 1,462,984 1,475,765 Loans 1,523,720 1,448,706 1,353,837 Allowance for Loan Losses 15,801 15,074 14,463 Common Stockholders' Equity 146,270 142,033 130,187 Tangible Equity 141,619 137,285 125,149 AVERAGE BALANCES Assets Total Assets $ 1,927,172 $ 1,852,514 $ 1,764,427 Earning Assets 1,811,630 1,745,358 1,653,882 Investments 325,226 304,479 298,780 Loans 1,463,085 1,412,286 1,332,145 Liabilities and Stockholders' Equity Total Deposits 1,520,201 1,484,965 1,463,519 Interest Bearing Deposits 1,287,356 1,255,881 1,243,308 Interest Bearing Liabilities 1,532,760 1,467,701 1,401,715 Common Stockholders' Equity 143,948 138,807 128,852 INCOME STATEMENT DATA Net Interest Income $ 14,058 $ 13,719 $ 13,341 Net Interest Income-Fully Tax Equivalent 14,340 13,972 13,611 Provision for Loan Losses 1,054 1,697 1,042 Noninterest Income 5,028 4,953 4,451 Noninterest Expense 11,196 10,711 10,171 Net Income 4,824 4,374 4,559 PER SHARE DATA Basic Net Income Per Common Share $ 0.40 $ 0.36 $ 0.38 Diluted Net Income Per Common Share 0.40 0.35 0.37 Cash Dividends Declared Per Common Share 0.14 0.14 0.125 Book Value Per Common Share (equity per share issued) 11.98 11.64 10.74 Market Value - High 25.00 25.98 26.40 Market Value - Low 18.25 20.05 23.47 Basic Weighted Average Common Shares Outstanding 12,206,210 12,197,790 12,112,734 Diluted Weighted Average Common Shares Outstanding 12,420,827 12,433,701 12,404,768 KEY RATIOS Return on Average Assets 0.99% 0.94% 1.03% Return on Average Common Stockholders' Equity 13.30 12.50 14.04 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 58.66 57.37 57.11 Average Equity to Average Assets 7.47 7.49 7.30 Net Interest Margin 3.14 3.18 3.27 Net Charge Offs to Average Loans 0.09 0.55 0.26 Loan Loss Reserve to Loans 1.04 1.04 1.07 Nonperforming Loans to Loans 0.49 0.64 1.04 Nonperforming Assets to Assets 0.50 0.75 0.77 Tier 1 Leverage 8.93 9.04 8.87 Tier 1 Risk-Based Capital 10.54 10.83 10.76 Total Capital 11.51 11.81 11.76 Tangible Capital 7.14 7.30 6.83 ASSET QUALITY Loans Past Due 90 Days or More $ 409 $ 317 $ 299 Non-accrual Loans 7,039 9,001 13,820 Nonperforming Loans 7,448 9,318 14,119 Other Real Estate Owned 2,387 4,771 71 Other Nonperforming Assets 24 51 35 Total Nonperforming Assets 9,859 14,140 14,225 Impaired Loans 6,748 8,575 13,333 Net Charge Offs/ (Recoveries) 327 1,974 867 Twelve Months Ended ------------------------- Dec. 31, Dec. 31, 2007 2006 ----------- ----------- END OF PERIOD BALANCES Assets $ 1,989,133 $ 1,836,706 Deposits 1,478,918 1,475,765 Loans 1,523,720 1,353,837 Allowance for Loan Losses 15,801 14,463 Common Stockholders' Equity 146,270 130,187 Tangible Equity 141,619 125,149 AVERAGE BALANCES Assets Total Assets $ 1,839,041 $ 1,698,471 Earning Assets 1,729,259 1,580,581 Investments 306,293 293,931 Loans 1,404,068 1,270,484 Liabilities and Stockholders' Equity Total Deposits 1,476,725 1,387,489 Interest Bearing Deposits 1,250,241 1,167,492 Interest Bearing Liabilities 1,458,556 1,343,102 Common Stockholders' Equity 137,767 121,954 INCOME STATEMENT DATA Net Interest Income $ 54,556 $ 52,327 Net Interest Income-Fully Tax Equivalent 55,597 53,420 Provision for Loan Losses 4,298 2,644 Noninterest Income 19,580 18,264 Noninterest Expense 42,261 39,712 Net Income 19,211 18,721 PER SHARE DATA Basic Net Income Per Common Share $ 1.58 $ 1.55 Diluted Net Income Per Common Share 1.55 1.51 Cash Dividends Declared Per Common Share 0.545 0.375(1) Book Value Per Common Share (equity per share issued) 11.98 10.74 Market Value - High 25.98 26.40 Market Value - Low 18.25 19.90 Basic Weighted Average Common Shares Outstanding 12,188,594 12,069,300 Diluted Weighted Average Common Shares Outstanding 12,424,137 12,375,467 KEY RATIOS Return on Average Assets 1.04% 1.10% Return on Average Common Stockholders' Equity 13.94 15.35 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 57.01 56.26 Average Equity to Average Assets 7.49 7.18 Net Interest Margin 3.22 3.38 Net Charge Offs to Average Loans 0.21 0.08 Loan Loss Reserve to Loans 1.04 1.07 Nonperforming Loans to Loans 0.49 1.04 Nonperforming Assets to Assets 0.50 0.77 Tier 1 Leverage 8.93 8.87 Tier 1 Risk-Based Capital 10.54 10.76 Total Capital 11.51 11.76 Tangible Capital 7.14 6.83 ASSET QUALITY Loans Past Due 90 Days or More $ 409 $ 299 Non-accrual Loans 7,039 13,820 Nonperforming Loans 7,448 14,119 Other Real Estate Owned 2,387 71 Other Nonperforming Assets 24 35 Total Nonperforming Assets 9,859 14,225 Impaired Loans 6,748 13,333 Net Charge Offs/ (Recoveries) 2,960 955 (1) Cash dividend of $0.125 declared on April 11, July 11, and October 10, 2006. LAKELAND FINANCIAL CORPORATION CONSOLIDATED BALANCE SHEETS As of December 31, 2007 and December 31, 2006 (in thousands) December 31, December 31, 2007 2006 ------------- ------------ (Unaudited) ASSETS Cash and due from banks $ 56,278 $ 65,252 Short-term investments 11,413 54,447 ----------- ----------- Total cash and cash equivalents 67,691 119,699 Securities available for sale (carried at fair value) 327,757 296,191 Real estate mortgage loans held for sale 537 2,175 Loans, net of allowance for loan losses of $15,801 and $14,463 1,507,919 1,339,374 Land, premises and equipment, net 27,525 25,177 Bank owned life insurance 21,543 20,570 Accrued income receivable 9,126 8,720 Goodwill 4,970 4,970 Other intangible assets 619 825 Other assets 21,446 19,005 ----------- ----------- Total assets $ 1,989,133 $ 1,836,706 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Noninterest bearing deposits $ 255,348 $ 258,472 Interest bearing deposits 1,223,570 1,217,293 ----------- ----------- Total deposits 1,478,918 1,475,765 Short-term borrowings Federal funds purchased 70,010 0 Securities sold under agreements to repurchase 154,913 106,670 U.S. Treasury demand notes 1,242 814 Other short-term borrowings 90,000 80,000 ----------- ----------- Total short-term borrowings 316,165 187,484 Accrued expenses payable 15,497 11,959 Other liabilities 1,311 338 Long-term borrowings 44 45 Subordinated debentures 30,928 30,928 ----------- ----------- Total liabilities 1,842,863 1,706,519 STOCKHOLDERS' EQUITY Common stock: 180,000,000 shares authorized, no par value 12,207,723 shares issued and 12,111,703 outstanding as of December 31, 2007 12,117,808 shares issued and 12,031,023 outstanding as of December 31, 2006 1,453 1,453 Additional paid-in capital 18,078 16,525 Retained earnings 129,090 116,516 Accumulated other comprehensive loss (1,010) (3,178) Treasury stock, at cost (2007 - 96,020 shares, 2006 - 86,785 shares) (1,341) (1,129) ----------- ----------- Total stockholders' equity 146,270 130,187 ----------- ----------- Total liabilities and stockholders' equity $ 1,989,133 $ 1,836,706 =========== =========== LAKELAND FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME For the Three Months and Twelve Months Ended December 31, 2007 and 2006 (in thousands except for share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2007 2006 2007 2006 ----------- ----------- ----------- ----------- NET INTEREST INCOME Interest and fees on loans Taxable $ 26,217 $ 24,809 $ 102,840 $ 91,946 Tax exempt 27 73 137 279 Interest and dividends on securities Taxable 3,225 2,662 11,591 10,123 Tax exempt 636 612 2,474 2,405 Interest on short-term investments 260 294 931 798 ----------- ----------- ----------- ----------- Total interest income 30,365 28,450 117,973 105,551 Interest on deposits 13,543 13,226 53,614 45,101 Interest on borrowings Short-term 2,109 1,231 7,239 5,594 Long-term 655 652 2,564 2,529 ----------- ----------- ----------- ----------- Total interest expense 16,307 15,109 63,417 53,224 ----------- ----------- ----------- ----------- NET INTEREST INCOME 14,058 13,341 54,556 52,327 Provision for loan losses 1,054 1,042 4,298 2,644 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 13,004 12,299 50,258 49,683 NONINTEREST INCOME Wealth advisory fees 836 659 3,142 2,550 Investment brokerage fees 346 317 1,491 1,290 Service charges on deposit accounts 1,883 1,761 7,238 7,260 Loan, insurance and service fees 619 546 2,483 2,292 Merchant card fee income 651 604 2,624 2,413 Other income 444 450 1,837 1,946 Net gains on sales of real estate mortgage loans held for sale 196 114 676 581 Net securities gains (losses) 53 0 89 (68) ----------- ----------- ----------- ----------- Total noninterest income 5,028 4,451 19,580 18,264 NONINTEREST EXPENSE Salaries and employee benefits 6,111 5,769 23,817 22,378 Net occupancy expense 742 609 2,734 2,510 Equipment costs 534 454 1,906 1,799 Data processing fees and supplies 805 703 2,906 2,457 Credit card interchange 433 416 1,732 1,627 Other expense 2,571 2,220 9,166 8,941 ----------- ----------- ----------- ----------- Total noninterest expense 11,196 10,171 42,261 39,712 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAX EXPENSE 6,836 6,579 27,577 28,235 Income tax expense 2,012 2,020 8,366 9,514 ----------- ----------- ----------- ----------- NET INCOME $ 4,824 $ 4,559 $ 19,211 $ 18,721 =========== =========== =========== =========== BASIC WEIGHTED AVERAGE COMMON SHARES 12,206,210 12,112,734 12,188,594 12,069,300 =========== =========== =========== =========== BASIC EARNINGS PER COMMON SHARE $ 0.40 $ 0.38 $ 1.58 $ 1.55 =========== =========== =========== =========== DILUTED WEIGHTED AVERAGE COMMON SHARES 12,420,827 12,404,768 12,424,137 12,375,467 =========== =========== =========== =========== DILUTED EARNINGS PER COMMON SHARE $ 0.40 $ 0.37 $ 1.55 $ 1.51 =========== =========== =========== =========== LAKELAND FINANCIAL CORPORATION LOAN DETAIL FOURTH QUARTER 2007 (unaudited in thousands) December 31, September 30, December 31, 2007 2007 2006 ---------------- ---------------- ----------------- Commercial and industrial loans $ 968,336 63.6% $ 923,168 63.7% $ 847,233 62.6% Commercial real estate - multifamily loans 16,839 1.1 15,385 1.1 17,351 1.3 Commercial real estate construction loans 84,498 5.6 75,765 5.2 82,183 6.1 Agri-business and agricultural loans 170,921 11.2 149,976 10.4 139,644 10.3 Residential real estate mortgage loans 124,107 8.1 122,063 8.4 109,176 8.0 Home equity loans 108,429 7.1 109,096 7.5 104,506 7.7 Installment loans and other consumer loans 50,516 3.3 53,075 3.7 53,804 4.0 ----------------- ----------------- ------------------ Subtotal 1,523,646 100.0% 1,448,528 100.0% 1,353,897 100.0% Less: Allowance for loan losses (15,801) (15,074) (14,463) Net deferred loan (fees)/ costs 74 178 (60) ---------- ---------- ---------- Loans, net $1,507,919 $1,433,632 $1,339,374 ========== ========== ==========