WARSAW, Ind., July 27, 2009 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN), parent company of Lake City Bank, today reported net income of $4.5 million for the second quarter of 2009 versus $4.8 million for the second quarter of 2008. Diluted net income per share for the quarter was $0.29 versus $0.39 for the comparable period of 2008. On a linked quarter basis, these results compared to net income of $3.9 million, or $0.29 per diluted share, for the first quarter of 2009.
The Company further reported net income of $8.3 million for the six months ended June 30, 2009 versus $10.0 million for the comparable period of 2008. Diluted net income per common share was $0.58 for the six months ended June 30, 2009 versus $0.81 for the comparable period of 2008.
The Company also announced that the Board of Directors approved a cash dividend for the second quarter of $0.155 per share, payable on August 5, 2009 to shareholders of record as of July 25, 2009. The quarterly dividend is unchanged from the dividends paid in 2008 and in the first quarter of 2009.
Average total loans for the second quarter of 2009 were $1.89 billion versus $1.64 billion for the second quarter of 2008 and $1.84 billion for the linked first quarter of 2009. The year-over-year increase for the second quarter represented an increase of 15%, or $251 million. On a linked quarter basis, average loans increased by $47 million versus the first quarter of 2009. Total gross loans as of June 30, 2009 were $1.88 billion compared to $1.67 billion as of June 30, 2008 and $1.86 billion as of March 31, 2009.
Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "Given the challenges in our regional and national economy, and the impact they have had on our client base, we are proud of our performance for the first six months of the year. At a time when many of our larger regional and national competitors appear to be refocusing away from our region and retrenching, we are moving forward and expanding our banking activities, particularly through increased lending in Indiana. We continue to focus our efforts on ensuring that Lake City Bank is positioned to serve our region as the leading bank for business. While we are certainly affected by the challenges our region faces today, we continue to build our business plan around future opportunities rather than dwelling only on today's issues."
The Company's net interest margin was 3.45% in the second quarter versus 3.12% in the first quarter and 3.15% for the second quarter of 2008. This margin improvement, in conjunction with strong growth in loans, contributed to an increase of 26% in the Company's net interest income to $19.5 million in the second quarter of 2009 versus $15.5 million in the second quarter of 2008. On a linked quarter basis, net interest income increased by 15% versus the first quarter of 2009.
The Company's provision for loan losses increased by $1.9 million, or 63%, to $4.9 million for the second quarter of 2009 versus $3.0 million in the same period of 2008. In the first quarter of 2009, the provision was $4.5 million. The provision increases in 2009 were primarily driven by continued loan growth, the difficult economic conditions in the Company's markets and an overall concern about borrowers' performance and prospects.
The Company's non-interest income was $6.0 million in both the second quarters of 2009 and 2008. Total revenue for the second quarter of 2009 was $25.6 million versus $21.5 million for the comparable period of 2008, an increase of 19%. On a linked quarter basis, total revenue increased by 13% versus the first quarter of 2009.
The Company's non-interest expense was $14.2 million for the second quarter of 2009 compared to $11.6 million for the same period in 2008, an increase of 22%. Driving the increase was a $1.5 million increase in regulatory expense, which resulted from higher FDIC insurance premiums that have been levied on all financial institutions. In addition, salaries and employee benefits increased by $640,000, or 10%, versus the second quarter of 2008, primarily as a result of staff additions in lending positions in the Indianapolis loan production office, normal merit increases system-wide and increased health insurance costs. The Company's efficiency ratio for the second quarter of 2009 was 55%, compared to 54% for the same period in 2008, and improved from the 56% reported for the first quarter of 2009.
Net charge-offs totaled $1.3 million in the second quarter of 2009, versus $1.8 million during the second quarter of 2008 and $2.0 million during the first quarter of 2009. Lakeland Financial's allowance for loan losses as of June 30, 2009 was $25.1 million, compared to $18.0 million as of June 30, 2008 and $21.4 million as of March 31, 2009. The allowance for loan losses increased to 1.33% of total loans as of June 30, 2009 versus 1.08% for the comparable period in 2008 and 1.15% as of March 31, 2009.
Nonperforming assets declined to $20.5 million as of June 30, 2009 compared to $21.5 million as of March 31, 2009 and $26.4 million on June 30, 2008. The ratio of nonperforming assets to total assets declined to 0.85% on June 30, 2009 compared to 0.88% on March 31, 2009 and 1.17% at June 30, 2008. The allowance for loan losses represented 127% of nonperforming loans as of June 30, 2009 versus 104% at March 31, 2009 and 72% at June 30, 2008.
Kubacki continued, "Clearly, the economy of Northern Indiana continues to face significant stress, which has had a negative impact on our client base, particularly the commercial clients that represent our core borrowers. Yet, our clients have continued to demonstrate a resiliency reflective of the entrepreneurial spirit of the region. We're hopeful that an economic recovery is on the horizon as a prolonged recession could further weaken their businesses."
"Like many banks throughout the country, we have grown our allowance for loan losses in response to these difficult times. Our allowance for loan losses has grown by more than a third in 2009 as we have actively monitored our asset quality situation. This prudent increase is a reflection of the negative factors impacting our clients and their businesses and the clear risk of potential loan losses. While we are cautiously pleased that our total nonperforming assets decreased slightly during the quarter, we do not believe that it is an indication of any consequential economic rebound. Rather, it's more likely a sign of the ability of our clients to manage through a difficult period," Kubacki added.
For the three months ended June 30, 2009, Lakeland Financial's tangible capital to average assets ratio was 6.42% compared to 6.18% for the first quarter of 2009 and 6.53% for the second quarter of 2008. Average total capital to average assets for the quarter ended June 30, 2009 was 13.10% versus 12.86% for the first quarter of 2009 and 10.83% for the second quarter of 2008. Average total deposits for the quarter ended June 30, 2009 were $1.85 billion versus $1.91 billion for the first quarter of 2009 and $1.55 billion for the second quarter of 2008.
Lakeland Financial Corporation is a $2.4 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.
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 Equity Capital Markets Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.
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.
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 2009 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands except share and per share data) Three Months Ended ------------------------------------- Jun. 30, Mar. 31, Jun. 30, 2009 2009 2008 ----------- ----------- ----------- END OF PERIOD BALANCES ---------------------- Assets $ 2,404,140 $ 2,446,664 $ 2,249,128 Deposits 1,735,136 1,956,787 1,605,035 Loans 1,882,106 1,864,387 1,674,742 Allowance for Loan Losses 25,090 21,418 18,014 Total Equity 212,193 209,066 151,071 Tangible Common Equity 154,144 151,018 146,525 AVERAGE BALANCES ---------------- Total Assets $ 2,426,602 $ 2,385,216 $ 2,140,275 Earning Assets 2,304,684 2,255,684 2,018,081 Investments 395,711 389,237 366,294 Loans 1,891,724 1,844,571 1,640,405 Total Deposits 1,852,776 1,908,665 1,552,889 Interest Bearing Deposits 1,630,532 1,690,949 1,334,415 Interest Bearing Liabilities 1,972,947 1,975,098 1,751,947 Total Equity 210,824 173,371 151,575 INCOME STATEMENT DATA --------------------- Net Interest Income $ 19,538 $ 17,015 $ 15,498 Net Interest Income-Fully Tax Equivalent 19,844 17,323 15,792 Provision for Loan Losses 4,936 4,516 3,021 Noninterest Income 6,022 5,570 5,972 Noninterest Expense 14,153 12,687 11,607 Net Income 4,460 3,870 4,802 Net Income Available to Common Shareholders 3,660 3,580 4,802 PER SHARE DATA -------------- Basic Net Income Per Common Share $ 0.29 $ 0.29 $ 0.39 Diluted Net Income Per Common Share 0.29 0.29 0.39 Cash Dividends Declared Per Common Share 0.155 0.155 0.155 Book Value Per Common Share (equity per share issued) 12.75 12.51 12.29 Market Value - High 21.04 23.87 25.00 Market Value - Low 17.10 14.14 19.00 Basic Weighted Average Common Shares Outstanding 12,416,710 12,401,498 12,262,926 Diluted Weighted Average Common Shares Outstanding 12,515,196 12,507,496 12,468,486 KEY RATIOS ---------- Return on Average Assets 0.74% 0.66% 0.90% Return on Average Total Equity 8.49 9.05 12.75 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 55.37 56.17 54.06 Average Equity to Average Assets 8.69 7.27 7.08 Net Interest Margin 3.45 3.12 3.15 Net Charge Offs to Average Loans 0.27 0.43 0.43 Loan Loss Reserve to Loans 1.33 1.15 1.08 Nonperforming Loans to Loans 1.05 1.11 1.49 Nonperforming Assets to Assets 0.85 0.88 1.17 Tier 1 Leverage 10.19 10.28 8.40 Tier 1 Risk-Based Capital 11.89 11.83 9.84 Total Capital 13.10 12.86 10.83 Tangible Capital 6.42 6.18 6.53 ASSET QUALITY ------------- Loans Past Due 30 - 89 Days $ 13,805 $ 2,111 $ 6,170 Loans Past Due 90 Days or More 253 680 972 Non-accrual Loans 19,446 20,009 23,987 Nonperforming Loans 19,699 20,689 24,959 Other Real Estate Owned 711 748 1,357 Other Nonperforming Assets 59 103 45 Total Nonperforming Assets 20,469 21,540 26,361 Impaired Loans 18,967 19,624 23,718 Net Charge Offs/(Recoveries) 1,264 1,958 1,765
Six Months Ended ---------------------------- Jun. 30, Jun. 30, 2009 2008 ----------- ----------- END OF PERIOD BALANCES ---------------------- Assets $ 2,404,140 $ 2,249,128 Deposits 1,735,136 1,605,035 Loans 1,882,106 1,674,742 Allowance for Loan Losses 25,090 18,014 Total Equity 212,193 151,071 Tangible Common Equity 154,144 146,525 AVERAGE BALANCES ---------------- Total Assets $ 2,406,024 $ 2,083,470 Earning Assets 2,280,319 1,964,580 Investments 392,492 349,997 Loans 1,868,277 1,602,479 Total Deposits 1,880,566 1,533,836 Interest Bearing Deposits 1,660,573 1,315,682 Interest Bearing Liabilities 1,974,016 1,697,278 Total Equity 192,201 150,554 INCOME STATEMENT DATA --------------------- Net Interest Income $ 36,553 $ 30,004 Net Interest Income-Fully Tax Equivalent 37,171 30,588 Provision for Loan Losses 9,452 4,174 Noninterest Income 11,592 11,741 Noninterest Expense 26,840 22,989 Net Income 8,330 10,043 Net Income Available to Common Shareholders 7,240 10,043 PER SHARE DATA -------------- Basic Net Income Per Common Share $ 0.58 $ 0.82 Diluted Net Income Per Common Share 0.58 0.81 Cash Dividends Declared Per Common Share 0.310 0.295 Book Value Per Common Share (equity per share issued) 12.75 12.29 Market Value - High 23.87 25.00 Market Value - Low 14.14 16.87 Basic Weighted Average Common Shares Outstanding 12,409,146 12,239,372 Diluted Weighted Average Common Shares Outstanding 12,512,890 12,447,473 KEY RATIOS ---------- Return on Average Assets 0.70% 0.97% Return on Average Total Equity 8.74 13.42 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 55.75 55.07 Average Equity to Average Assets 7.99 7.22 Net Interest Margin 3.29 3.13 Net Charge Offs to Average Loans 0.35 0.25 Loan Loss Reserve to Loans 1.33 1.08 Nonperforming Loans to Loans 1.05 1.49 Nonperforming Assets to Assets 0.85 1.17 Tier 1 Leverage 10.19 8.40 Tier 1 Risk-Based Capital 11.89 9.84 Total Capital 13.10 10.83 Tangible Capital 6.42 6.53 ASSET QUALITY ------------- Loans Past Due 30 - 89 Days $ 13,805 $ 6,170 Loans Past Due 90 Days or More 253 972 Non-accrual Loans 19,446 23,987 Nonperforming Loans 19,699 24,959 Other Real Estate Owned 711 1,357 Other Nonperforming Assets 59 45 Total Nonperforming Assets 20,469 26,361 Impaired Loans 18,967 23,718 Net Charge Offs/(Recoveries) 3,222 1,961
LAKELAND FINANCIAL CORPORATION CONSOLIDATED BALANCE SHEETS As of June 30, 2009 and December 31, 2008 (in thousands, except share data) June 30, Dec. 31, 2009 2008 ---------- ---------- (Unaudited) ASSETS Cash and due from banks $ 34,454 $ 57,149 Short-term investments 7,329 6,858 ---------- ---------- Total cash and cash equivalents 41,783 64,007 Securities available for sale (carried at fair value) 390,092 387,030 Real estate mortgage loans held for sale 5,742 401 Loans, net of allowance for loan losses of $25,090 and $18,860 1,857,016 1,814,474 Land, premises and equipment, net 30,335 30,519 Bank owned life insurance 34,377 33,966 Accrued income receivable 8,714 8,599 Goodwill 4,970 4,970 Other intangible assets 310 413 Other assets 30,801 33,066 ---------- ---------- Total assets $2,404,140 $2,377,445 ========== ========== LIABILITIES AND EQUITY LIABILITIES Noninterest bearing deposits $ 226,270 $ 230,716 Interest bearing deposits 1,508,866 1,654,583 ---------- ---------- Total deposits 1,735,136 1,885,299 Short-term borrowings Federal funds purchased 14,500 19,000 Securities sold under agreements to repurchase 127,778 137,769 U.S. Treasury demand notes 3,286 840 Other short-term borrowings 220,000 45,000 ---------- ---------- Total short-term borrowings 365,564 202,609 Accrued expenses payable 19,069 17,163 Other liabilities 1,208 1,434 Long-term borrowings 40,042 90,043 Subordinated debentures 30,928 30,928 ---------- ---------- Total liabilities 2,191,947 2,227,476 EQUITY Cumulative perpetual preferred stock: 1,000,000 shares authorized, no par value, $1 liquidation value 56,044 shares issued and outstanding as of June 30, 2009 53,891 0 Common stock: 90,000,000 shares authorized, no par value 12,417,330 shares issued and 12,321,977 outstanding as of June 30, 2009 12,373,080 shares issued and 12,266,849 outstanding as of December 31, 2008 1,453 1,453 Additional paid-in capital 23,398 20,632 Retained earnings 144,753 141,371 Accumulated other comprehensive loss (9,959) (12,024) Treasury stock, at cost (2009 - 95,353 shares, 2008 - 106,231 shares) (1,432) (1,552) ---------- ---------- Total stockholders' equity 212,104 149,880 ---------- ---------- Noncontrolling interest 89 89 ---------- ---------- Total equity 212,193 149,969 ---------- ---------- Total liabilities and equity $2,404,140 $2,377,445 ========== ==========
LAKELAND FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME For the Three Months and Six Months Ended June 30, 2009 and 2008 (in thousands except for share and per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, ---------------------- ---------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ---------- NET INTEREST INCOME Interest and fees on loans Taxable $ 23,751 $ 24,326 $ 46,540 $ 49,801 Tax exempt 30 27 100 59 Interest and dividends on securities Taxable 4,433 3,976 8,896 7,356 Tax exempt 604 623 1,207 1,237 Interest on short-term investments 12 60 28 151 ---------- ---------- ---------- ---------- Total interest income 28,830 29,012 56,771 58,604 Interest on deposits 8,278 10,691 18,033 22,738 Interest on borrowings Short-term 265 1,305 573 3,729 Long-term 749 1,518 1,612 2,133 ---------- ---------- ---------- ---------- Total interest expense 9,292 13,514 20,218 28,600 ---------- ---------- ---------- ---------- NET INTEREST INCOME 19,538 15,498 36,553 30,004 Provision for loan losses 4,936 3,021 9,452 4,174 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,602 12,477 27,101 25,830 NONINTEREST INCOME Wealth advisory fees 727 863 1,466 1,672 Investment brokerage fees 432 614 890 897 Service charges on deposit accounts 2,110 2,255 4,020 4,024 Loan, insurance and service fees 894 738 1,230 1,393 Merchant card fee income 840 887 1,643 1,697 Other income 437 410 953 868 Mortgage banking income 582 205 1,390 520 Net securities gains (losses) 0 0 0 28 Gain on redemption of Visa shares 0 0 0 642 ---------- ---------- ---------- ---------- Total noninterest income 6,022 5,972 11,592 11,741 NONINTEREST EXPENSE Salaries and employee benefits 7,089 6,449 13,189 12,702 Net occupancy expense 720 689 1,641 1,485 Equipment costs 517 477 1,017 918 Data processing fees and supplies 1,005 867 1,984 1,707 Credit card interchange 523 579 1,051 1,114 Other expense 4,299 2,546 7,958 5,063 ---------- ---------- ---------- ---------- Total noninterest expense 14,153 11,607 26,840 22,989 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAX EXPENSE 6,471 6,842 11,853 14,582 Income tax expense 2,011 2,040 3,523 4,539 ---------- ---------- ---------- ---------- NET INCOME $ 4,460 $ 4,802 $ 8,330 $ 10,043 ========== ========== ========== ========== Dividends and accretion of discount on preferred stock 800 0 1,090 0 ---------- ---------- ---------- ---------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 3,660 $ 4,802 $ 7,240 $ 10,043 ========== ========== ========== ========== BASIC WEIGHTED AVERAGE COMMON SHARES 12,416,710 12,262,926 12,409,146 12,239,372 ========== ========== ========== ========== BASIC EARNINGS PER COMMON SHARE $ 0.29 $ 0.39 $ 0.58 $ 0.82 ========== ========== ========== ========== DILUTED WEIGHTED AVERAGE COMMON SHARES 12,515,196 12,468,486 12,512,890 12,447,473 ========== ========== ========== ========== DILUTED EARNINGS PER COMMON SHARE $ 0.29 $ 0.39 $ 0.58 $ 0.81 ========== ========== ========== ==========
LAKELAND FINANCIAL CORPORATION LOAN DETAIL SECOND QUARTER 2009 (unaudited in thousands) June 30, December 31, June 30, 2009 2008 2008 ------------------ ------------------ ------------------ Commercial and industrial loans $ 1,243,095 66.0% $ 1,201,611 65.5% $ 1,087,457 64.9% Commercial real estate - multi- family loans 26,623 1.4 25,428 1.4 23,282 1.4 Commercial real estate con- struction loans 136,440 7.2 116,970 6.4 94,403 5.6 Agri- business and agri- cultural loans 167,614 8.9 189,007 10.3 188,107 11.2 Residential real estate mortgage loans 98,814 5.3 117,230 6.4 116,520 7.0 Home equity loans 152,804 8.1 128,219 7.0 115,040 6.9 Installment loans and other consumer loans 57,720 3.1 55,102 3.0 50,189 3.0 ------------------ ------------------ ------------------ Subtotal 1,883,110 100.0% 1,833,567 100.0% 1,674,998 100.0% Less: Allowance for loan losses (25,090) (18,860) (18,014) Net deferred loan (fees)/ costs (1,004) (233) (256) ----------- ----------- ----------- Loans, net $ 1,857,016 $ 1,814,474 $ 1,656,728 =========== =========== ===========