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
========== ========== ==========