Market Overview

Lakeland Financial Reports Record Quarterly and Annual Net Income

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WARSAW, Ind., Jan. 25, 2017 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq: LKFN), parent company of Lake City Bank, today reported record net income of $52.1 million for 2016, versus $46.4 million for 2015, an increase of 12%. Diluted net income per common share increased 11% to $2.05 for 2016, versus $1.84 for 2015.This per share performance also represents a record for the company and its shareholders.

The company further reported record quarterly net income of $13.5 million for the fourth quarter of 2016, an increase of 10%, versus $12.3 million for the fourth quarter of 2015. Diluted net income per common share was $0.53 for the fourth quarter of 2016, an increase of 8%, versus $0.49 for the comparable period of 2015. On a linked quarter basis net income increased by $42,000 from the third quarter ended September 30, 2016. All share and per share data presented in this press release has been adjusted for a 3-for-2 stock split paid in the form of a stock dividend on August 5, 2016.

David M. Findlay, President and CEO commented, "This strong performance is a direct result of the entire Lake City Bank team's unwavering commitment to taking care of our clients and communities every day. For the seventh consecutive year, and for 27 out of the last 28 years, we have produced record net income for our shareholders."

Highlights for the quarter are noted below:

4th Quarter 2016 versus 4th Quarter 2015 highlights:

  • Organic average loan growth of $365 million or 12%
  • Average deposit growth of $408 million or 13%
  • Net interest income increase of $3.5 million or 13%
  • Continued strong asset quality with nonperforming assets to total assets at 0.16% compared to 0.35%
  • Tangible common equity[1] increase of 9%

4th Quarter 2016 versus 3rd Quarter 2016 highlights:

  • Organic average loan growth of $129 million or 4%
  • Net interest income increase of $1.2 million or 4%
  • Noninterest expense decrease of $371,000 or 2%

Findlay added, "With total loan growth in 2016 of $390 million, or 13%, our focus remained on using our balance sheet to create economic impact in our Indiana markets. We believe that our reputation as a progressive lender focused on assisting our clients grow their businesses has been a key driver of our ability to grow our loan portfolio."   

As previously announced, the board of directors approved a cash dividend for the fourth quarter of $0.19 per share, payable on February 6, 2017, to shareholders of record as of January 25, 2017. The fourth quarter dividend per share represents a 16% increase over the dividend rate paid in the last three quarters of 2015 and in the first quarter of 2016 of $0.163 per share on a split adjusted basis.

"The strength of our capital structure, combined with our strong earnings performance, has allowed us to provide shareholders with this healthy dividend. Our shareholders have also clearly benefitted from our execution focused strategy as our stock price increased by 52% in 2016 compared to the SNL U.S. Bank index which increased by 23% during the year. We are very proud of the positive impact for shareholders of our strong dividend and stock price performance," continued Findlay. 

Return on average total equity for 2016 was 12.52% compared to 12.26% in 2015. Return on average assets for 2016 and 2015 was 1.29%. The company's total capital as a percent of risk-weighted assets was 13.23% at December 31, 2016, compared to 13.73% at December 31, 2015 and 13.67% at September 30, 2016. The company's tangible common equity[2] to tangible assets ratio was 9.89% at December 31, 2016, compared to 10.36% at December 31, 2015 and 10.11% at September 30, 2016.

Average total loans for 2016 were $3.23 billion, an increase of $340.1 million, or 12%, versus $2.89 billion for 2015. Total loans outstanding grew $390.0 million, or 13%, from $3.08 billion as of December 31, 2015 to $3.47 billion as of December 31, 2016. On a linked quarter basis, total loans grew $190.8 million, or 6%, from $3.28 billion at September 30, 2016.  Average total loans for the fourth quarter of 2016 were $3.37 billion, an increase of $365.1 million, or 12% versus $3.01 billion for the comparable period of 2015. On a linked quarter basis, average total loans increased by $128.8 million, or 4%, from $3.24 billion for the third quarter of 2016 to $3.37 billion for the fourth quarter of 2016.

Average total deposits for 2016 were $3.48 billion, an increase of $389.2 million, or 13%, versus $3.09 billion for 2015. Total deposits grew $394.5 million, or 12%, from $3.18 billion as of December 31, 2015 to $3.58 billion as of December 31, 2016. In addition, total core deposits, which exclude brokered deposits, increased $444.4 million, or 15%, from $3.04 billion at December 31, 2015 to $3.48 billion at December 31, 2016. This increase in core deposits was driven by growth of public funds which increased by $292 million on a year over year basis.

The company's net interest margin decreased one basis point to 3.18% for 2016 compared to 3.19% for 2015. The company's net interest margin improved to 3.18% in the fourth quarter of 2016 versus 3.16% for the fourth quarter of 2015. The higher margin in the fourth quarter of 2016 was due to higher yields on both loans and securities, partially offset by a higher cost of funds. On a linked quarter basis, the net interest margin improved from 3.08% in the third quarter of 2016 due to lower average balances in low-yielding interest bearing deposits as well as the partial month impact of the Federal Reserve Bank increase in the target Federal Funds Rate in mid-December. Net interest income increased $12.6 million, or 12%, to $118.5 million in 2016 versus $105.9 million in 2015. Net interest income increased $3.5 million, or 13%, to $30.9 million for the fourth quarter of 2016, versus $27.5 million in the fourth quarter of 2015.

The company recorded a provision for loan losses of $1.2 million in the fourth quarter of 2016.  This was the first provision recorded in four years, and was primarily driven by substantial growth in the loan portfolio. The company's allowance for loan losses as of December 31, 2016 was $43.7 million compared to $43.6 million as of December 31, 2015 and $42.9 million as of September 30, 2016. The allowance for loan losses represented 1.26% of total loans as of December 31, 2016 versus 1.42% at December 31, 2015 and 1.31% as of September 30, 2016. The allowance for loan losses as a percentage of nonperforming loans was 653% as of December 31, 2016, versus 334% as of December 31, 2015, and 590% as of September 30, 2016.

Nonperforming assets decreased $6.4 million, or 48%, to $6.9 million as of December 31, 2016 versus $13.3 million as of December 31, 2015. On a linked quarter basis, nonperforming assets were $558,000 lower than the $7.4 million reported as of September 30, 2016. The ratio of nonperforming assets to total assets at December 31, 2016 declined to 0.16% from 0.35% at December 31, 2015 and 0.18% at September 30, 2016. Net charge-offs to average loans were 0.03% in 2016 compared to 0.09% in 2015 and represent $1.0 million and $2.7 million for each year, respectively. Net charge-offs totaled $285,000 in the fourth quarter of 2016 versus net charge-offs of $1.1 million during the fourth quarter of 2015 and net charge-offs of $394,000 during the linked third quarter of 2016.

Findlay added, "Asset quality remained very strong as we continued to experience stable economic conditions throughout our Indiana footprint. With continued loan growth in the fourth quarter, we made a decision to record our first loan loss provision since the fourth quarter of 2012."    

The company's noninterest income increased $1.4 million, or 4%, to $32.9 million in 2016, compared to $31.5 million in 2015. The company's noninterest income increased $667,000 or 8%, to $8.7 million for the fourth quarter of 2016 versus $8.1 million for the fourth quarter of 2015. During 2016, noninterest income was positively impacted by increases in recurring fee income for service charges on deposit accounts, mortgage banking income and wealth advisory fees. Offsetting these increases were decreases in other income driven by lower rental income on operating leases as well as a $226,000 write-down to a property formerly used as a Lake City Bank branch that was subsequently sold. In addition, investment brokerage fees declined driven by lower production volumes as well as changes to the product mix designed to provide a more consistent revenue stream. Increases in noninterest income in the fourth quarter of 2016 compared to the fourth quarter of 2015 resulted from service charges on deposit accounts as well as higher mortgage banking income.

The company's noninterest expense increased $4.8 million, or 7%, to $73.0 million in 2016, compared to $68.2 million in 2015. The company's noninterest expense increased by $1.0 million or 6% to $18.4 million in the fourth quarter of 2016 compared to $17.4 million in the fourth quarter of 2015. Salaries and employee benefits increased primarily due to higher performance incentive-based compensation costs, normal merit increases and staff additions. Data processing fees increased due to increased technology and software related expenditures with the company's core processor which are volume and product driven and represent digital solutions and forward technology for clients. Both net occupancy and equipment costs increased due to higher depreciation expense related to branch expansion and upgrades. Professional fees increased primarily due to fees related to the issuance of chip-enabled debit cards, fees paid to a third-party investment manager of the company's investment portfolio, as well as fees paid for deposit and asset/liability modeling consulting. The company's efficiency ratio was 48% for 2016 compared to 50% for 2015.  The company's efficiency ratio was 46% for the fourth quarter of 2016, compared to 49% for the fourth quarter of 2015 and was 48% for the linked third quarter of 2016.

Findlay added, "During 2016, we continued to expand our footprint with the addition of two new offices, one in downtown Fort Wayne and our fourth location in Indianapolis. Our continued investment in our market presence, as well as our ongoing commitment to our people and technology, positions us well for continued growth and the consistent delivery of great client service."  

Lakeland Financial Corporation is a $4.3 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fifth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 49 offices in Northern and Central Indiana, delivering technology driven and client-centric financial services solutions to individuals and businesses.

Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at www.lakecitybank.com. The company's common stock is traded on the Nasdaq Global Select Market under "LKFN." In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this earnings release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding the company's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible common equity" which is "common stockholders' equity" excluding intangible assets, net of deferred tax and "tangible assets" which is "assets" 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," "continue," "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 2016 FINANCIAL HIGHLIGHTS    
  Three Months Ended   Twelve Months Ended    
(Unaudited – Dollars in thousands) Dec. 31,   Sep. 30,   Dec. 31,   Dec. 31,   Dec. 31,    
END OF PERIOD BALANCES  2016    2016    2015    2016    2015    
Assets $   4,290,025   $   4,197,320   $   3,766,286   $   4,290,025   $   3,766,286    
Deposits     3,577,912       3,651,942       3,183,421       3,577,912       3,183,421    
Brokered Deposits     98,177       106,752       148,040       98,177       148,040    
Core Deposits     3,479,735       3,545,190       3,035,381       3,479,735       3,035,381    
Loans     3,470,927       3,280,161       3,080,929       3,470,927       3,080,929    
Allowance for Loan Losses     43,718       42,853       43,610       43,718       43,610    
Total Equity     427,067       427,380       392,901       427,067       392,901    
Goodwill net of deferred tax assets     3,134       3,138       3,168       3,134       3,168    
Tangible Common Equity (1)     423,933       424,242       389,733       423,933       389,733    
AVERAGE BALANCES                      
Total Assets $   4,187,730   $   4,152,333   $   3,750,998   $   4,039,719   $   3,597,190    
Earning Assets     3,933,136       3,900,651       3,510,084       3,799,963       3,384,178    
Investments     506,722       500,384       479,942       493,656       476,153    
Loans     3,373,814       3,244,994       3,008,681       3,225,635       2,885,568    
Total Deposits     3,628,244       3,611,111       3,220,736       3,477,816       3,088,598    
Interest Bearing Deposits     2,839,518       2,843,015       2,551,778       2,753,466       2,478,674    
Interest Bearing Liabilities     2,941,281       2,933,109       2,670,605       2,872,691       2,589,915    
Total Equity     428,665       423,358       390,241       416,034       378,106    
INCOME STATEMENT DATA                      
Net Interest Income $   30,907   $   29,719   $   27,452   $   118,481   $   105,927    
Net Interest Income-Fully Tax Equivalent     31,526       30,274       27,948       120,477       107,902    
Provision for Loan Losses     1,150       0       0       1,150       0    
Noninterest Income     8,736       9,018       8,069       32,864       31,479    
Noninterest Expense     18,389       18,759       17,357       72,978       68,206    
Net Income     13,522       13,480       12,286       52,084       46,367    
PER SHARE DATA                      
Basic Net Income Per Common Share * $   0.54   $   0.54   $   0.49   $   2.08   $   1.86    
Diluted Net Income Per Common Share *     0.53       0.53       0.49       2.05       1.84    
Cash Dividends Declared Per Common Share *     0.19       0.19       0.16       0.73       0.63    
Dividend Payout     35.85 %     35.85 %     33.56 %     35.61 %     34.36 %  
Book Value Per Common Share (equity per share issued) *     17.01       17.04       15.74       17.01       15.74    
Tangible Book Value Per Common Share * (1)     16.89       16.91       15.61       16.89       15.61    
Market Value – High *     48.88       37.74       32.99       48.88       32.99    
Market Value – Low *     33.98       30.21       28.92       26.53       24.95    
Basic Weighted Average Common Shares Outstanding *     25,091,685       25,069,434       24,956,979       25,056,095       24,926,354    
Diluted Weighted Average Common Shares Outstanding *     25,518,069       25,457,892       25,324,510       25,460,727       25,245,569    
KEY RATIOS                      
Return on Average Assets     1.28 %     1.29 %     1.30 %     1.29 %     1.29 %  
Return on Average Total Equity     12.55       12.67       12.49       12.52       12.26    
Average Equity to Average Assets     10.24       10.20       10.40       10.30       10.51    
Net Interest Margin     3.18       3.08       3.16       3.18       3.19    
Efficiency  (Noninterest Expense / Net Interest Income plus Noninterest Income)     46.38       48.43       48.86       48.22       49.64    
Tier 1 Leverage (2)     10.86       10.71       11.10       10.86       11.10    
Tier 1 Risk-Based Capital (2)     12.07       12.47       12.48       12.07       12.48    
Common Equity Tier 1 (CET1) (2)     11.27       11.63       11.58       11.27       11.58    
Total Capital (2)     13.23       13.67       13.73       13.23       13.73    
Tangible Capital (1) (2)     9.89       10.11       10.36       9.89       10.36    
ASSET QUALITY                       
Loans Past Due 30 - 89 Days $   1,588   $   1,734   $   2,766   $   1,588   $   2,766    
Loans Past Due 90 Days or More     53       6       0       53       0    
Non-accrual Loans     6,639       7,256       13,055       6,639       13,055    
Nonperforming Loans (includes nonperforming TDR's)     6,692       7,262       13,055       6,692       13,055    
Other Real Estate Owned     153       146       210       153       210    
Other Nonperforming Assets     11       7       15       11       15    
Total Nonperforming Assets     6,856       7,414       13,280       6,856       13,280    
Performing Troubled Debt Restructurings     10,351       10,579       6,260       10,351       6,260    
Nonperforming Troubled Debt Restructurings (included in nonperforming loans)     5,633       5,885       10,914       5,633       10,914    
Total Troubled Debt Restructurings     15,984       16,464       17,174       15,984       17,174    
Impaired Loans     20,698       18,605       20,576       20,698       20,576    
Non-Impaired Watch List Loans     127,933       134,330       122,332       127,933       122,332    
Total Impaired and Watch List Loans     148,631       152,935       142,908       148,631       142,908    
Gross Charge Offs     520       773       1,242       2,055       3,173    
Recoveries     235       379       158       1,013       520    
Net Charge Offs/(Recoveries)     285       394       1,084       1,042       2,652    
Net Charge Offs/(Recoveries)  to Average Loans     0.03 %     0.05 %     0.14 %     0.03 %     0.09 %  
Loan Loss Reserve to Loans     1.26 %     1.31 %     1.42 %     1.26 %     1.42 %  
Loan Loss Reserve to Nonperforming Loans     653.31 %     590.10 %     334.04 %     653.31 %     334.04 %  
Loan Loss Reserve to Nonperforming Loans and Performing TDR's     256.52 %     240.20 %     225.78 %     256.52 %     225.78 %  
Nonperforming Loans to Loans     0.19 %     0.22 %     0.42 %     0.19 %     0.42 %  
Nonperforming Assets to Assets     0.16 %     0.18 %     0.35 %     0.16 %     0.35 %  
Total Impaired and Watch List Loans to Total Loans     4.28 %     4.66 %     4.64 %     4.28 %     4.64 %  
OTHER DATA                      
Full Time Equivalent Employees   524       518       518       524       518    
Offices   48       48       47       48       47    
                       
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"                     
(2) Capital ratios for December 31, 2016 are preliminary until the Call Report is filed.                    
* Share and per share data has been adjusted for a 3-for-2 stock split in the form of a stock dividend on August 5, 2016.              
                       



LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 2016 and 2015
(in thousands, except share data)
 
  December 31,   December 31,
    2016       2015  
  (Unaudited)    
ASSETS      
Cash and due from banks $   142,408     $   67,484  
Short-term investments   24,872       13,190  
Total cash and cash equivalents   167,280       80,674  
       
Securities available for sale (carried at fair value)   504,191       478,071  
Real estate mortgage loans held for sale   5,915       3,294  
       
Loans, net of allowance for loan losses of $43,718 and $43,610   3,427,209       3,037,319  
       
Land, premises and equipment, net   52,092       46,684  
Bank owned life insurance   74,006       69,698  
Federal Reserve and Federal Home Loan Bank stock   11,522       7,668  
Accrued interest receivable   11,687       9,462  
Goodwill   4,970       4,970  
Other assets   31,153       28,446  
Total assets $   4,290,025     $   3,766,286  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
LIABILITIES      
Noninterest bearing deposits $   819,803     $   715,093  
Interest bearing deposits   2,758,109       2,468,328  
Total deposits   3,577,912       3,183,421  
       
Short-term borrowings      
Securities sold under agreements to repurchase   50,045       69,622  
Other short-term borrowings   180,000       70,000  
Total short-term borrowings   230,045       139,622  
       
Long-term borrowings   32       34  
Subordinated debentures   30,928       30,928  
Accrued interest payable   5,676       3,773  
Other liabilities   18,365       15,607  
Total liabilities   3,862,958       3,373,385  
       
STOCKHOLDERS' EQUITY      
Common stock:  90,000,000 shares authorized, no par value      
 25,096,087 shares issued and 24,937,865 outstanding as of December 31, 2016      
 24,962,477 shares issued and 24,819,066 outstanding as of December 31, 2015   104,405       99,123  
Retained earnings   327,873       294,002  
Accumulated other comprehensive income   (2,387 )     2,142  
Treasury stock, at cost (2016 - 158,222 shares, 2015 - 143,411 shares)   (2,913 )     (2,455 )
Total stockholders' equity   426,978       392,812  
Noncontrolling interest   89       89  
Total equity   427,067       392,901  
Total liabilities and equity $   4,290,025     $   3,766,286  
       

 

 

LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Twelve Months Ended December 31, 2016 and 2015
(unaudited in thousands except for share and per share data)
 
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
    2016     2015     2016     2015
NET INTEREST INCOME              
Interest and fees on loans              
Taxable $   32,744   $   28,544   $   124,830   $   110,097
Tax exempt     130        114       462       464
Interest and dividends on securities              
Taxable     2,301       2,105       9,421       8,564
Tax exempt      1,074       840       3,885       3,355
Interest on short-term investments     58       16       353       59
Total interest income     36,307       31,619       138,951       122,539
               
Interest on deposits     5,023       3,864       18,944       15,415
Interest on borrowings              
Short-term     69       50       352       188
Long-term     308       253       1,174       1,009
Total interest expense     5,400       4,167       20,470       16,612
               
NET INTEREST INCOME     30,907       27,452       118,481       105,927
               
Provision for loan losses     1,150       0       1,150       0
               
NET INTEREST INCOME AFTER PROVISION FOR              
LOAN LOSSES      29,757       27,452       117,331       105,927
               
NONINTEREST INCOME              
Wealth advisory fees     1,205       1,138       4,805       4,531
Investment brokerage fees     258       299       1,010       1,507
Service charges on deposit accounts     3,237       2,855       12,013        10,608
Loan, insurance and service fees     1,846       1,844       7,681       7,460
Merchant card fee income     522       511       2,098       1,843
Bank owned life insurance income     338       382       1,392       1,338
Other income     935       884       2,213       2,974
Mortgage banking income     381       156       1,586       1,176
Net securities gains/(losses)     14       0        66       42
Total noninterest income     8,736       8,069       32,864       31,479
               
NONINTEREST EXPENSE              
Salaries and employee benefits      10,905       9,902       41,934       38,923
Net occupancy expense     1,061       902       4,266       3,820
Equipment costs      1,022       899       3,850       3,598
Data processing fees and supplies     2,013       1,937       8,148       7,592
Corporate and business development     687       889       3,328       3,173
FDIC insurance and other regulatory fees     463       526       2,001       2,044
Professional fees     703       683       3,208       2,794
Other expense     1,535       1,619       6,243       6,262
Total noninterest expense     18,389       17,357       72,978       68,206
               
INCOME BEFORE INCOME TAX EXPENSE     20,104       18,164       77,217       69,200
Income tax expense     6,582       5,878       25,133       22,833
NET INCOME $   13,522   $   12,286   $   52,084   $   46,367
               
BASIC WEIGHTED AVERAGE COMMON SHARES     25,091,685       24,956,979       25,056,095       24,926,354
BASIC EARNINGS PER COMMON SHARE $   0.54   $   0.49   $   2.08   $   1.86
DILUTED WEIGHTED AVERAGE COMMON SHARES     25,518,069       25,324,510       25,460,727       25,245,569
DILUTED EARNINGS PER COMMON SHARE $   0.53   $   0.49   $   2.05   $   1.84
               



LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
FOURTH QUARTER 2016
(unaudited in thousands)
                   
  December 31, September 30, December 31,
   2016  2016  2015
Commercial and industrial loans:                  
Working capital lines of credit loans $   624,404     18.0  % $   609,382     18.6  % $   581,025     18.9  %
Non-working capital loans     644,086     18.6       641,599     19.6       598,487     19.4  
Total commercial and industrial loans     1,268,490     36.5       1,250,981     38.1       1,179,512     38.3  
                   
Commercial real estate and multi-family residential loans:                  
Construction and land development loans     245,182     7.1       221,436     6.7       230,719     7.5  
Owner occupied loans     469,705     13.5       468,582     14.3       412,026     13.4  
Nonowner occupied loans     458,404     13.2       408,620     12.5       407,883     13.2  
Multifamily loans     127,632     3.7       127,784      3.9       79,425     2.6  
Total commercial real estate and multi-family residential loans     1,300,923     37.5       1,226,422     37.4       1,130,053     36.7  
                   
Agri-business and agricultural loans:                  
Loans secured by farmland   172,633     5.0     152,719     4.7     164,375     5.3  
Loans for agricultural production   222,210     6.4     156,770     4.8     141,719     4.6  
Total agri-business and agricultural loans   394,843     11.4     309,489     9.4     306,094     9.9  
                   
Other commercial loans     98,270     2.8       89,850     2.7       85,075     2.8  
Total commercial loans     3,062,526     88.2       2,876,742     87.7       2,700,734     87.7  
                   
Consumer 1-4 family mortgage loans:                  
Closed end first mortgage loans     163,155     4.7       161,907     4.9       158,062     5.1  
Open end and junior lien loans     169,664     4.9       170,140     5.2       163,700     5.3  
Residential construction and land development loans     15,015     0.4       12,801     0.4       9,341     0.3  
Total consumer 1-4 family mortgage loans     347,834     10.0       344,848     10.5       331,103     10.7  
                   
Other consumer loans     61,308     1.8       58,957     1.8       49,113     1.6  
Total consumer loans     409,142     11.8       403,805     12.3       380,216     12.3  
Subtotal     3,471,668    100.0  %     3,280,547    100.0  %     3,080,950    100.0  %
Less:  Allowance for loan losses     (43,718 )         (42,853 )         (43,610 )    
Net deferred loan fees     (741 )         (386 )         (21 )    
Loans, net $  3,427,209       $  3,237,308       $  3,037,319      
                   
                   
                   
LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
FOURTH QUARTER 2016
(unaudited in thousands)
                   
  December 31,     September 30,     December 31,    
    2016         2016         2015      
Non-interest bearing demand deposits $   819,803       $   770,079       $   715,093      
Interest bearing demand, savings & money market accounts     1,594,290           1,562,252           1,470,814      
Time deposits under $100,000     238,994           241,527           259,260      
Time deposits of $100,000 or more     924,825           1,078,084           738,254      
Total deposits     3,577,912           3,651,942           3,183,421      
Short-term borrowings     230,045           60,198           139,622      
Long-term borrowings      32           32           34      
Subordinated debentures     30,928           30,928           30,928      
Total borrowings     261,005           91,158           170,584      
Total funding sources $  3,838,917       $  3,743,100       $  3,354,005      
                   

 


LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
                                         
  Three Months Ended     Three Months Ended     Three Months Ended  
  December 31, 2016     September 30, 2016     December 31, 2015  
  Average   Interest   Yield (1)/     Average   Interest   Yield (1)/     Average   Interest   Yield (1)/  
(fully tax equivalent basis, dollars in thousands) Balance   Income   Rate     Balance   Income   Rate     Balance   Income   Rate  
Earning Assets                                        
Loans:                                        
Taxable (2)(3) $   3,359,305     $   32,744     3.87 %   $   3,233,394     $   31,538     3.88 %   $   2,996,373     $   28,544     3.78 %
Tax exempt (1)     14,508         194     5.30         11,600         164     5.62         12,308         170     5.49  
Investments: (1)                                        
Available for sale     506,722         3,940     3.09         500,384         3,747     2.98         479,942         3,385     2.80  
Short-term investments     5,128         17     1.32         6,885         17     0.98         5,331         9     0.67  
Interest bearing deposits     47,473         41     0.34         148,388         168     0.45         16,130         7     0.17  
Total earning assets $   3,933,136     $   36,936     3.73 %   $   3,900,651     $   35,634     3.63 %   $   3,510,084     $   32,115     3.63 %
Less:  Allowance for loan losses     (43,072 )                 (43,402 )                 (44,562 )          
Nonearning Assets                                        
Cash and due from banks     120,170                   122,811                   124,290            
Premises and equipment     52,013                   50,921                   44,753            
Other nonearning assets     125,483                   121,352                   116,433            
Total assets $   4,187,730               $   4,152,333               $   3,750,998            
                                         
Interest Bearing Liabilities                                        
Savings deposits $   271,758     $   101     0.15 %   $   270,136     $   103     0.15 %   $   242,587     $   119     0.19 %
Interest bearing checking accounts     1,317,805         1,512     0.46         1,261,390         1,362     0.43         1,247,645         1,132     0.36  
Time deposits:                                        
In denominations under $100,000     240,790         681     1.12         243,148         696     1.14         265,788         788     1.18  
In denominations over $100,000     1,009,166         2,729     1.07         1,068,341         2,871     1.07         795,758         1,825     0.91  
Miscellaneous short-term borrowings     70,802         69     0.39         59,133         37     0.25         87,865         49     0.23  
Long-term borrowings and                                        
subordinated debentures (4)     30,960         308     3.95         30,960         291     3.74         30,962         254     2.90  
Total interest bearing liabilities $   2,941,281     $   5,400     0.73 %   $   2,933,108     $   5,360     0.73 %   $   2,670,605     $   4,167     0.62 %
Noninterest Bearing Liabilities                                        
Demand deposits     788,726                   768,095                   668,957            
Other liabilities     29,058                   27,772                   21,197            
Stockholders' Equity     428,665                   423,358                   390,239            
Total liabilities and stockholders' equity $   4,187,730               $   4,152,333               $   3,750,998            
                                         
Interest Margin Recap                                        
Interest income/average earning assets       36,936     3.73           35,634     3.63           32,115     3.63  
Interest expense/average earning assets       5,400     0.55           5,360     0.55           4,167     0.47  
Net interest income and margin     $   31,536     3.18 %       $   30,274     3.08 %       $   27,948     3.16 %
                                         


(1 ) Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2016 and 2015. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 included the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") adjustment applicable to nondeductible interest expenses.  Taxable equivalent basis adjustments were $619,000, $555,000 and $524,000 in the three-month periods ended December 31, 2016, September 30, 2016 and December 31, 2015, respectively.
(2 ) Loan fees, which are immaterial in relation to total taxable loan interest income for 2016 and 2015, are included as taxable loan interest income.
(3 ) Nonaccrual loans are included in the average balance of taxable loans.
(4 ) Long-term borrowings and subordinated debentures interest expense was reduced by interest capitalized on construction in process for 2015.


(1) Reconciliation of Non-GAAP Financial Measures

      Tangible common equity, tangible assets and tangible book value per share are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of stockholders' equity. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding.  Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company's value including only earning assets as meaningful to an understanding of the company's financial information.  A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).


                       
  Three Months Ended   Twelve Months Ended    
  Dec. 31,   Sep. 30,   Dec. 31,   Dec. 31,   Dec. 31,    
   2016    2016    2015    2016    2015    
  Total Equity $   427,067   $   427,380   $   392,901   $   427,067   $   392,901    
  Less: Goodwill net of deferred tax assets     3,134       3,138       3,168       3,134       3,168    
  Tangible Common Equity     423,933       424,242       389,733       423,933       389,733    
                       
  Assets $   4,290,025   $   4,197,320   $   3,766,286   $   4,290,025   $   3,766,286    
  Less: Goodwill net of deferred tax assets     3,134       3,138       3,168       3,134       3,168    
  Tangible Assets     4,286,891       4,194,182       3,763,118       4,286,891       3,763,118    
                       
  Ending common shares issued     25,096,087       25,081,087       24,962,477       25,096,087       24,962,477    
                       
  Tangible Book Value Per Common Share * $   16.89   $   16.91   $   15.61   $   16.89   $   15.61    
                       
  Tangible Common Equity/Tangible Assets     9.89 %     10.11 %     10.36 %     9.89 %     10.36 %  


[1] Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures"

[2] Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures"

Contact:

Lisa M. O'Neill
Executive Vice President and 
Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com 

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