Market Overview

Lakeland Financial Reports Record Performance

Share:

WARSAW, Ind., July 25, 2017 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (NASDAQ:LKFN), parent company of Lake City Bank, today reported record second quarter net income of $15.4 million for the three months ended June 30, an increase of 20% versus $12.8 million for the second quarter of 2016.  Diluted net income per common share also increased 20% to $0.60 for the second quarter of 2017, versus $0.50 for the second quarter of 2016, representing a record quarter for the company and its shareholders. On a linked quarter basis net income increased 6% or $850,000 from the first quarter ended March 31, 2017, which had net income of $14.5 million and $0.57 diluted net income per common share. 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.

The company further reported record net income of $29.9 million for the six months ended June 30, 2017 versus $25.1 million for the comparable period of 2016, an increase of 19%. Diluted net income per common share was also a record for the period and increased 18% to $1.17 for the six months ended June 30, 2017 versus $0.99 for the comparable period of 2016.

David M. Findlay, President and CEO commented, "The entire Lake City Bank team has contributed to these record results and we are very proud of the continued strength of the bank's overall performance. These strong results reflect the overall economic vitality of our Indiana footprint and the continued growth of our commercial and consumer loan businesses. The best way for Lake City Bank to contribute to our markets is through the business of lending, and we are very pleased with our overall growth."

Highlights for the quarter are noted below:

2nd Quarter 2017 versus 2nd Quarter 2016 highlights:

  • Organic average loan growth of $394 million or 12%
  • Average deposit growth of $245 million or 7%
  • Net interest income increase of $4.5 million or 16%
  • Net interest margin increase of 15 basis points to 3.34%
  • Revenue growth of $5.3 million or 14%
  • Continued strong asset quality with nonperforming assets to total assets at 0.23% compared to 0.24%
  • Tangible common equity1 increase of $31.6 million or 8%

2nd Quarter 2017 versus 1st Quarter 2017 highlights:

  • Organic average loan growth of $77 million or 2%
  • Average deposit growth of $45 million or 1%
  • Net interest income increase of $1.8 million or 5%
  • Net interest margin increase of 7 basis points to 3.34%
  • Revenue growth of $2.3 million or 6%
  • Continued strong asset quality with nonperforming assets to total assets at 0.23% compared to 0.28%
  • Tangible common equity1 increase of $13.3 million or 3%

As previously announced, the board of directors approved a cash dividend for the second quarter of $0.22 per share, payable on August 7, 2017, to shareholders of record as of July 25, 2017. The second quarter dividend per share represents a 16% increase over the dividend rate paid in the last three quarters of 2016 and in the first quarter of 2017 of $0.19 per share.

Findlay added, "Continued loan growth, stable asset quality and net interest margin expansion have positively impacted our profitability in the first half of 2017. As a result, our capital position remains solid and is supportive of this significant increase in our dividend and the continued growth in Lake City Bank."

Return on average total equity for the second quarter of 2017 was 13.84%, compared to 12.50% in the second quarter of 2016 and 13.63% in the linked first quarter of 2017. Return on average total equity for the first six months of 2017 was 13.74%, compared to 12.43% in the same period of 2016. Return on average assets for the second quarter of 2017 was 1.40%, compared to 1.29% in the second quarter of 2016 and 1.37% in the linked first quarter of 2017. Return on average assets for the first six months of 2017 was 1.38% compared to 1.29% in the same period of 2016. The company's total capital as a percent of risk-weighted assets was 13.30% at June 30, 2017, compared to 13.65% at June 30, 2016 and 13.16% at March 31, 2017. The company's tangible common equity to tangible assets ratio1 was 10.19% at June 30, 2017, compared to 10.57% at June 30, 2016 and 10.06% at March 31, 2017.

Average total loans for the second quarter of 2017 were $3.59 billion, an increase of $393.9 million, or 12%, versus $3.19 billion for the second quarter of 2016. Total loans outstanding grew $379.0 million, or 12%, from $3.20 billion as of June 30, 2016 to $3.58 billion as of June 30, 2017. On a linked quarter basis, total loans grew $44.7 million, or 1%, from $3.53 billion at March 31, 2017.

Average total deposits for the second quarter of 2017 were $3.68 billion, an increase of $244.9 million, or 7%, versus $3.44 billion for the second quarter of 2016. Total deposits grew $212.5 million, or 6%, from $3.40 billion as of June 30, 2016 to $3.62 billion as of June 30, 2017. In addition, total core deposits, which exclude brokered deposits, increased $208.9 million, or 6%, from $3.29 billion at June 30, 2016 to $3.50 billion at June 30, 2017. The year over year core deposit growth was generated by retail deposit, public funds deposit, and commercial deposit growth in the amounts of $104.0 million, $75.4 million and $29.6 million, respectively. On a linked quarter basis, total average deposits grew $45.2 million, or 1%, from $3.64 billion at March 31, 2017.

The company's net interest margin increased 15 basis points to 3.34% for the second quarter of 2017 compared to 3.19% for the second quarter of 2016. The higher margin in the second quarter of 2017 was due to higher yields on loans and securities, partially offset by a higher cost of funds. On a linked quarter basis, the net interest margin improved by 7 basis points from 3.27% in the first quarter of 2017 due to the positive impact of the Federal Reserve Bank increases in the target Federal Funds Rate in mid-March 2017 and mid-June 2017. Net interest income increased $4.5 million, or 16%, to $33.8 million for the second quarter of 2017, versus $29.3 million in the second quarter of 2016. The company's net interest margin for the six months ended June 30, 2017 was 3.31% compared to 3.22% in the prior year six month period.

The company recorded a provision for loan losses of $500,000 in the second quarter of 2017, primarily driven by the growth in the loan portfolio. The company's allowance for loan losses as of June 30, 2017 was $44.6 million compared to $43.2 million as of June 30, 2016 and $43.8 million as of March 31, 2017. The allowance for loan losses represented 1.25% of total loans as of June 30, 2017 versus 1.35% at June 30, 2016 and 1.24% as of March 31, 2017.

Nonperforming assets increased $513,000, or 5%, to $10.1 million as of June 30, 2017 versus $9.6 million as of June 30, 2016. On a linked quarter basis, nonperforming assets were $1.9 million lower than the $12.0 million reported as of March 31, 2017. The ratio of nonperforming assets to total assets at June 30, 2017 decreased to 0.23% from 0.24% at June 30, 2016 and 0.28% at March 31, 2017. The $1.9 million decrease in nonperforming assets during the quarter was primarily due to payments received from an accruing commercial relationship which had become 90 days past due. Net recoveries totaled $289,000 in the second quarter of 2017 versus net charge-offs of $36,000 during the second quarter of 2016 and net charge-offs of $144,000 during the linked first quarter of 2017.

Findlay added, "We are pleased that our asset quality trends continue to be stable. During the second quarter, nonperforming assets to total assets improved as compared to last quarter and we recorded net recoveries. The economic conditions in our Indiana markets are reflected in our asset quality performance and we remain optimistic about the future."

The company's noninterest income increased $724,000 or 9% to $8.8 million for the second quarter of 2017 versus $8.1 million for the second quarter of 2016. Noninterest income was positively impacted by a $410,000 increase in service charges on deposit accounts primarily due to growth in fees from business accounts. In addition, wealth advisory fees increased $151,000 or 13%. 

The company's noninterest income increased 13% to $17.1 million for the six months ended June 30, 2017 compared to $15.1 million in the prior year period. Noninterest income was positively impacted by a $773,000 or 14% increase in service charges on deposit accounts. In addition, wealth advisory fees increased by $241,000 or 11% and investment brokerage fees increased by $120,000 or 24%. Bank owned life insurance income increased $211,000 or 32% from first six months of 2016 to the first six months of 2017 primarily due to increased revenue from variable life insurance contracts owned by the company. In addition, other income increased $653,000 or 127% compared to the first six months of 2016. During the first quarter of 2016, other income was negatively impacted by credit valuation adjustment losses related to the company's swap arrangements, which account for $295,000 of the increase in other income from the first six months of 2016 to the first six months of 2017. In addition, a write down in the first quarter of 2016 of $226,000 to a property formerly used as a Lake City Bank branch negatively impacted other income in 2016. Noninterest income during the first six months of 2017 was negatively impacted by a decrease of $202,000 or 28% in mortgage banking income resulting from lower mortgage loan originations as compared to the prior year period.

The company's noninterest expense increased by 5% to $19.4 million in the second quarter of 2017 compared to $18.4 million in the second quarter of 2016. Salaries and employee benefits increased by 4% or $473,000 primarily due to incentive-based compensation costs, increased health insurance cost, normal merit increases and staff additions related to the company's branch expansion. Corporate and business development expense increased by $433,000 or 57%, primarily due to an increase in the second quarter of 2017 of community support and donation expense. Equipment costs and net occupancy expense increased by $247,000 and $113,000 or 27% and 11%, respectively, driven by the company's branch expansion as well as remodeling of existing branches. Noninterest expense was positively impacted by decreases of $146,000 or 7% in data processing fees and supplies and $138,000 or 25% in FDIC insurance and other regulatory fees.

The company's noninterest expense increased by $3.6 million or 10% to $39.4 million in the first six months of 2017 compared to $35.8 million in the prior year period. The increase was driven by salaries and employee benefits, which increased by 11% or $2.3 million, primarily due to incentive-based compensation costs, increased health insurance cost, normal merit increases and staff additions related to the company's branch expansion. In addition, corporate and business development increased by 67%, or $1.1 million, primarily due to community support and donation expense of $750,000 and $283,000 of increased advertising expense. The company's efficiency ratio was 45.4% for the second quarter of 2017, compared to 49.4% for the second quarter of 2016 and 49.7% for the linked first quarter of 2017.

Lakeland Financial Corporation is a $4.4 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fourth 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 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. The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. 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.

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

   

 

LAKELAND FINANCIAL CORPORATION
SECOND QUARTER 2017 FINANCIAL HIGHLIGHTS
                               
    Three Months Ended     Six Months Ended  
(Unaudited – Dollars in thousands, except per share data) Jun. 30,     Mar. 31,     Jun. 30,     Jun. 30,     Jun. 30,  
END OF PERIOD BALANCES   2017        2017      2016       2017        2016  
  Assets $   4,392,999       $   4,319,103     $   3,937,304     $   4,392,999       $   3,937,304  
  Deposits     3,615,939           3,679,397         3,403,455         3,615,939           3,403,455  
  Brokered Deposits     116,435           135,595         112,884         116,435           112,884  
  Core Deposits     3,499,504           3,543,802         3,290,571         3,499,504           3,290,571  
  Loans     3,577,004           3,532,279         3,197,997         3,577,004           3,197,997  
  Allowance for Loan Losses     44,563           43,774         43,247         44,563           43,247  
  Total Equity     450,460           437,202         418,893         450,460           418,893  
  Goodwill net of deferred tax assets     3,126           3,130         3,137         3,126           3,137  
  Tangible Common Equity (1)     447,334           434,072         415,756         447,334           415,756  
AVERAGE BALANCES                            
  Total Assets $   4,395,495       $   4,310,145     $   4,003,633     $   4,353,056       $   3,907,974  
  Earning Assets     4,150,234           4,059,885         3,763,022         4,105,309           3,681,747  
  Investments     531,262           515,283         488,762         523,317           483,650  
  Loans     3,586,408           3,509,155         3,192,545         3,547,995           3,140,947  
  Total Deposits     3,682,349           3,637,171         3,437,493         3,659,884           3,334,395  
  Interest Bearing Deposits     2,926,086           2,868,676         2,759,696         2,897,539           2,664,700  
  Interest Bearing Liabilities     3,171,565           3,084,584         2,887,534         3,128,315           2,807,478  
  Total Equity     445,287           431,895         411,986         438,628           405,953  
INCOME STATEMENT DATA                            
  Net Interest Income $   33,819       $   32,061     $   29,273     $   65,880       $   57,855  
  Net Interest Income-Fully Tax Equivalent     34,550           32,733         29,818         67,281           58,920  
  Provision for Loan Losses     500           200         0         700           0  
  Noninterest Income     8,791           8,259         8,067         17,050           15,110  
  Noninterest Expense     19,352           20,048         18,446         39,400           35,830  
  Net Income     15,364           14,514         12,803         29,878           25,082  
PER SHARE DATA                            
  Basic Net Income Per Common Share * $   0.61       $   0.58     $   0.51     $   1.19       $   1.00  
  Diluted Net Income Per Common Share *     0.60           0.57         0.51         1.17           0.99  
  Cash Dividends Declared Per Common Share *     0.22           0.19         0.19         0.41           0.35  
  Dividend Payout     36.67   %       33.33 %       36.84 %       35.04   %     35.47 %
  Book Value Per Common Share (equity per share issued) *     17.88           17.36         16.72         17.88           16.72  
  Tangible Book Value Per Common Share * (1)     17.76           17.24         16.60         17.76           16.60  
  Market Value – High *     48.70           48.32         33.27         48.70           33.27  
  Market Value – Low *     41.38           39.68         28.94         39.68           26.53  
  Basic Weighted Average Common Shares Outstanding *     25,183,186           25,152,242         25,045,251         25,167,799           25,032,502  
  Diluted Weighted Average Common Shares Outstanding *     25,619,977           25,596,136         25,395,770         25,618,552           25,370,607  
KEY RATIOS                            
  Return on Average Assets     1.40   %       1.37 %       1.29 %       1.38   %     1.29 %
  Return on Average Total Equity     13.84           13.63         12.50         13.74           12.43  
  Average Equity to Average Assets     10.13           10.02         10.29         10.08           10.39  
  Net Interest Margin     3.34           3.27         3.19         3.31           3.22  
  Efficiency  (Noninterest Expense / Net Interest Income plus Noninterest Income)     45.42           49.72         49.40         47.51           49.11  
  Tier 1 Leverage (2)     10.82           10.78         10.85         10.82           10.85  
  Tier 1 Risk-Based Capital (2)     12.15           12.02         12.41         12.15           12.41  
  Common Equity Tier 1 (CET1) (2)     11.39           11.25         11.55         11.39           11.55  
  Total Capital (2)     13.30           13.16         13.65         13.30           13.65  
  Tangible Capital (1) (2)     10.19           10.06         10.57         10.19           10.57  
ASSET QUALITY                            
  Loans Past Due 30 - 89 Days $   1,559       $   1,490     $   1,795     $   1,559       $   1,795  
  Loans Past Due 90 Days or More     0           1,633         0         0           0  
  Non-accrual Loans     9,886           10,188         9,329         9,886           9,329  
  Nonperforming Loans (includes nonperforming TDR's)     9,886           11,821         9,329         9,886           9,329  
  Other Real Estate Owned     194           115         238         194           238  
  Other Nonperforming Assets     0           15         0         0           0  
  Total Nonperforming Assets     10,080           11,951         9,567         10,080           9,567  
  Performing Troubled Debt Restructurings     8,425           10,234         8,647         8,425           8,647  
  Nonperforming Troubled Debt Restructurings (included in nonperforming loans)     6,852           7,180         6,040         6,852           6,040  
  Total Troubled Debt Restructurings     15,277           17,414         14,688         15,277           14,688  
  Impaired Loans     19,583           21,670         19,267         19,583           19,267  
  Non-Impaired Watch List Loans     133,526           130,551         139,706         133,526           139,706  
  Total Impaired and Watch List Loans     153,109           152,221         158,973         153,109           158,973  
  Gross Charge Offs     261           503         296         765           762  
  Recoveries     550           359         260         909           400  
  Net Charge Offs/(Recoveries)     (289 )         144         36         (145 )         362  
  Net Charge Offs/(Recoveries)  to Average Loans     (0.03 ) %       0.02 %       0.00 %       (0.01 ) %     0.02 %
  Loan Loss Reserve to Loans     1.25   %       1.24 %       1.35 %       1.25   %     1.35 %
  Loan Loss Reserve to Nonperforming Loans     450.75   %       370.31 %       463.58 %       450.75   %     463.58 %
  Loan Loss Reserve to Nonperforming Loans and Performing TDR's     243.37   %       198.48 %       240.58 %       243.37   %     240.58 %
  Nonperforming Loans to Loans     0.28   %       0.33 %       0.29 %       0.28   %     0.29 %
  Nonperforming Assets to Assets     0.23   %       0.28 %       0.24 %       0.23   %     0.24 %
  Total Impaired and Watch List Loans to Total Loans     4.28   %       4.31 %       4.97 %       4.28   %     4.97 %
OTHER DATA                            
  Full Time Equivalent Employees     540           528         531         540           531  
  Offices     49           49         48         49           48  
                               
  (1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"  
  (2) Capital ratios for June 30, 2017 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.  
                               

 

CONSOLIDATED BALANCE SHEETS (in thousands except share data)
  June 30,   December 31,
    2017       2016  
  (Unaudited)    
ASSETS      
Cash and due from banks $    111,406     $   142,408  
Short-term investments   25,930       24,872  
Total cash and cash equivalents   137,336       167,280  
       
Securities available for sale (carried at fair value)   530,312       504,191  
Real estate mortgage loans held for sale   4,221       5,915  
       
Loans, net of allowance for loan losses of $44,563 and $43,718   3,532,441       3,427,209  
       
Land, premises and equipment, net   56,492       52,092  
Bank owned life insurance   74,929       74,006  
Federal Reserve and Federal Home Loan Bank stock   11,522       11,522  
Accrued interest receivable   12,028       11,687  
Goodwill   4,970       4,970  
Other assets   28,748       31,153  
Total assets $    4,392,999     $   4,290,025  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
LIABILITIES      
Noninterest bearing deposits $    762,965     $   819,803  
Interest bearing deposits   2,852,974       2,758,109  
Total deposits   3,615,939       3,577,912  
       
Short-term borrowings      
Securities sold under agreements to repurchase   60,188       50,045  
Other short-term borrowings   215,000       180,000  
Total short-term borrowings   275,188       230,045  
       
Long-term borrowings   30       32  
Subordinated debentures   30,928       30,928  
Accrued interest payable   4,809       5,676  
Other liabilities   15,645       18,365  
Total liabilities   3,942,539       3,862,958  
       
STOCKHOLDERS' EQUITY      
Common stock:  90,000,000 shares authorized, no par value      
25,185,619 shares issued and 25,021,759 outstanding as of June 30, 2017      
25,096,087 shares issued and 24,937,865 outstanding as of December 31, 2016   105,744       104,405  
Retained earnings   347,427       327,873  
Accumulated other comprehensive income/(loss)   369       (2,387 )
Treasury stock, at cost (2017 - 163,860 shares, 2016 - 158,222 shares)   (3,169 )     (2,913 )
Total stockholders' equity   450,371       426,978  
Noncontrolling interest   89       89  
Total equity   450,460       427,067  
Total liabilities and equity $    4,392,999     $   4,290,025  
       

 

CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands except share and per share data)
                     
  Three Months Ended   Six Months Ended
  June 30,   June 30,
   2017    2016    2017    2016
NET INTEREST INCOME              
Interest and fees on loans              
Taxable $    36,967   $   30,918   $    71,414   $   60,548
Tax exempt     162       111       312       222
Interest and dividends on securities              
Taxable     2,364       2,297       4,684       4,843
Tax exempt     1,274       947       2,436       1,842
Interest on short-term investments     54       82       102       110
Total interest income     40,821       34,355       78,948       67,565
               
Interest on deposits     6,243       4,694       11,685       8,889
Interest on borrowings              
Short-term     431       99       741       246
Long-term     328       289       642       575
Total interest expense     7,002       5,082       13,068       9,710
               
NET INTEREST INCOME     33,819       29,273       65,880       57,855
               
Provision for loan losses     500       0       700       0
               
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES     33,319       29,273       65,180       57,855
               
NONINTEREST INCOME              
Wealth advisory fees     1,284       1,133       2,534       2,293
Investment brokerage fees     299       212       620       500
Service charges on deposit accounts     3,253       2,843       6,396       5,623
Loan, insurance and service fees     1,897       1,892       3,790       3,730
Merchant card fee income     570       527       1,108       1,024
Bank owned life insurance income     402       489       873       662
Other income     659       587       1,168       515
Mortgage banking income     378       384       509       711
Net securities gains     49       0       52       52
Total noninterest income     8,791       8,067       17,050       15,110
               
NONINTEREST EXPENSE              
Salaries and employee benefits     11,065       10,592       22,486       20,197
Net occupancy expense     1,154       1,041       2,274       2,137
Equipment costs     1,156       909       2,231       1,810
Data processing fees and supplies     1,974       2,120       3,990       4,152
Corporate and business development     1,196       763       2,698       1,620
FDIC insurance and other regulatory fees     419       557       853       1,080
Professional fees     801       859       1,755       1,686
Other expense     1,587       1,605       3,113       3,148
Total noninterest expense     19,352       18,446       39,400       35,830
               
INCOME BEFORE INCOME TAX EXPENSE     22,758       18,894       42,830       37,135
Income tax expense     7,394       6,091       12,952       12,053
NET INCOME $    15,364   $   12,803   $    29,878   $   25,082
               
BASIC WEIGHTED AVERAGE COMMON SHARES     25,183,186       25,045,251       25,167,799       25,032,502
BASIC EARNINGS PER COMMON SHARE $    0.61   $   0.51   $    1.19   $   1.00
DILUTED WEIGHTED AVERAGE COMMON SHARES     25,619,977       25,395,770       25,618,552       25,370,607
DILUTED EARNINGS PER COMMON SHARE $    0.60   $   0.50   $    1.17   $   0.99
               

 

LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
SECOND QUARTER 2017
(unaudited in thousands)
                                       
  June 30,   March 31,   December 31,   June 30,
   2017    2017    2016    2016
Commercial and industrial loans:                                      
Working capital lines of credit loans $   717,875       20.0   $   650,691       18.4   $   624,404       18.0   $   598,531       18.7
Non-working capital loans     646,517       18.1         673,374       19.1         644,086       18.6         628,119       19.7  
Total commercial and industrial loans     1,364,392       38.1         1,324,065       37.5         1,268,490       36.5         1,226,650       38.4  
                                       
Commercial real estate and multi-family residential loans:                                      
Construction and land development loans     209,772       5.8         238,018       6.7         245,182       7.1         221,027       6.9  
Owner occupied loans     511,425       14.3         468,621       13.3         469,705       13.5         457,461       14.3  
Nonowner occupied loans     450,907       12.6         463,186       13.1         458,404       13.2         395,597       12.4  
Multifamily loans     170,902       4.8         201,147       5.7         127,632       3.7         114,618       3.6  
Total commercial real estate and multi-family residential loans     1,343,006       37.5         1,370,972       38.8         1,300,923       37.5         1,188,703       37.2  
                                       
Agri-business and agricultural loans:                                      
Loans secured by farmland   156,053       4.4       138,071       3.9       172,633       5.0       146,519       4.6  
Loans for agricultural production   175,334       4.9       189,516       5.4       222,210       6.4       162,240       5.1  
Total agri-business and agricultural loans   331,387       9.3       327,587       9.3       394,843       11.4       308,759       9.7  
                                       
Other commercial loans     116,651       3.3         105,684       3.0         98,270       2.8         82,786       2.5  
Total commercial loans     3,155,436       88.2         3,128,308       88.6         3,062,526       88.2         2,806,898       87.8  
                                       
Consumer 1-4 family mortgage loans:                                      
Closed end first mortgage loans     171,495       4.8         166,158       4.7         163,155       4.7         164,564       5.1  
Open end and junior lien loans     172,530       4.8         167,517       4.7         169,664       4.9         164,645       5.2  
Residential construction and land development loans     10,118       0.3         10,274       0.3         15,015       0.4         9,570       0.3  
Total consumer 1-4 family mortgage loans     354,143       9.9         343,949       9.7         347,834       10.0         338,779       10.6  
                                       
Other consumer loans     68,646       1.9         60,881       1.7         61,308       1.8         52,492       1.6  
Total consumer loans     422,789       11.8         404,830       11.4         409,142       11.8         391,271       12.2  
Subtotal     3,578,225       100.0       3,533,138       100.0       3,471,668       100.0       3,198,169       100.0
Less:  Allowance for loan losses     (44,563 )             (43,774 )             (43,718 )             (43,247 )      
 Net deferred loan fees     (1,221 )             (859 )             (741 )             (172 )      
Loans, net $   3,532,441           $   3,488,505           $   3,427,209           $   3,154,750        
                                       
                                       
                                       
LAKELAND FINANCIAL CORPORATION
DEPOSITS AND BORROWINGS
SECOND QUARTER 2017
(unaudited in thousands)
                     
  June 30,         March 31,         December 31,         June 30,      
    2017             2017             2016             2016        
Non-interest bearing demand deposits $   762,965           $   762,575           $   819,803           $   727,308        
Savings and transaction accounts:                                      
Savings deposits     275,151               277,148               268,970               265,415        
Interest bearing demand deposits     1,322,847               1,346,651               1,325,320               1,235,305        
Time deposits:                                      
Deposits of $100,000 or more     1,015,741               1,056,025               924,825               928,156        
Other time deposits     239,235               236,998               238,994               247,271        
Total deposits $   3,615,939           $   3,679,397           $   3,577,912           $   3,403,455        
FHLB advances and other borrowings     275,188               175,734               261,005               87,328        
Total funding sources $   3,891,127           $   3,855,131           $   3,838,917           $   3,490,783        
                                       

 

  LAKELAND FINANCIAL CORPORATION  
  AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS  
  (UNAUDITED)  
                                           
    Three Months Ended     Three Months Ended     Three Months Ended  
    June 30, 2017     March 31, 2017     June 30, 2016  
    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) $ 3,566,504     $ 36,967   4.16 %   $ 3,491,018     $ 34,447   4.00 %   $ 3,180,783     $ 30,918   3.91 %
  Tax exempt (1)   19,903       240   4.82       18,137       221   4.94       11,763       164   5.62  
  Investments: (1)                                        
  Available for sale   531,262       4,291   3.24       515,283       4,083   3.21       488,762       3,736   3.07  
  Short-term investments   6,124       8   0.52       5,121       5   0.40       5,805       3   0.21  
  Interest bearing deposits   26,441       46   0.70       30,326       43   0.58       75,908       79   0.42  
  Total earning assets $ 4,150,234     $ 41,552   4.02 %   $ 4,059,885     $ 38,799   3.88 %   $ 3,763,021     $ 34,900   3.73 %
  Less:  Allowance for loan losses   (44,090 )               (43,981 )               (43,228 )          
  Nonearning Assets                                        
  Cash and due from banks   101,446                 108,682                 109,744            
  Premises and equipment   54,341                 52,729                 48,921            
  Other nonearning assets   133,564                 132,830                 125,175            
  Total assets $ 4,395,495               $ 4,310,145               $ 4,003,633            
                                           
  Interest Bearing Liabilities                                        
  Savings deposits $ 274,645     $ 105   0.15 %   $ 271,087     $ 99   0.15 %   $ 263,331     $ 115   0.18 %
  Interest bearing checking accounts   1,403,560       2,387   0.68       1,383,791       1,952   0.57       1,309,443       1,455   0.45  
  Time deposits:                                        
  In denominations under $100,000   237,917       700   1.18       238,347       670   1.14       249,452       719   1.16  
  In denominations over $100,000   1,009,964       3,051   1.21       975,450       2,721   1.13       937,470       2,405   1.03  
  Miscellaneous short-term borrowings   214,520       431   0.81       184,950       310   0.68       96,878       99   0.41  
  Long-term borrowings and subordinated debentures (4)   30,959       328   4.25       30,959       314   4.11       30,960       289   3.75  
  Total interest bearing liabilities $ 3,171,565     $ 7,002   0.89 %   $ 3,084,584     $ 6,066   0.80 %   $ 2,887,534     $ 5,082   0.71 %
  Noninterest Bearing Liabilities                                        
  Demand deposits   756,262                 768,495                 677,797            
  Other liabilities   22,381                 25,172                 26,316            
  Stockholders' Equity   445,287                 431,894                 411,986            
  Total liabilities and stockholders' equity $ 4,395,495               $ 4,310,145               $ 4,003,633            
                                           
  Interest Margin Recap                                        
  Interest income/average earning assets       41,552   4.02           38,799   3.88           34,900   3.73  
  Interest expense/average earning assets       7,002   0.68           6,066   0.61           5,082   0.54  
  Net interest income and margin     $ 34,550   3.34 %       $ 32,733   3.27 %       $ 29,818   3.19 %
                                           
 (1 ) Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2017 and 2016. 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 $731,000, $672,000 and $545,000 in the three-month periods ended June 30, 2017, March 31, 2017 and June 30, 2016, respectively.
 (2 ) Loan fees, which are immaterial in relation to total taxable loan interest income for 2017 and 2016, are included as taxable loan interest income.
 (3 ) Nonaccrual loans are included in the average balance of taxable loans.
   

(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   Six Months Ended  
  Jun. 30,   Mar. 31,   Jun. 30,   Jun. 30,   Jun. 30,  
    2017       2017       2016       2017       2016    
  Total Equity $   450,460     $   437,202     $   418,893     $   450,460     $   418,893    
  Less: Goodwill     (4,970 )       (4,970 )       (4,970 )       (4,970 )       (4,970 )  
  Plus: Deferred tax assets related to goodwill     1,844         1,840         1,833         1,844         1,833    
  Tangible Common Equity     447,334         434,072         415,756         447,334         415,756    
                     
  Assets $   4,392,999     $   4,319,103     $   3,937,304     $   4,392,999     $   3,937,304    
  Less: Goodwill     (4,970 )       (4,970 )       (4,970 )       (4,970 )       (4,970 )  
  Plus: Deferred tax assets related to goodwill     1,844         1,840         1,833         1,844         1,833    
  Tangible Assets     4,389,873         4,315,973         3,934,167          4,389,873         3,934,167    
                     
  Ending common shares issued     25,185,619         25,180,759         25,045,251         25,185,619         25,045,251    
                     
  Tangible Book Value Per Common Share * $   17.76     $   17.24     $   16.60     $   17.76     $   16.60    
                     
  Tangible Common Equity/Tangible Assets     10.19 %       10.06 %       10.57 %       10.19 %       10.57 %  
                     
*Share and per share data has been adjusted for a 3-for-2stock split in the form of a stock dividend on August 5, 2016.


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

Primary Logo

View Comments and Join the Discussion!