Market Overview

Lakeland Financial Reports Record Quarterly Performance

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WARSAW, Ind., July 25, 2019 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $21.7 million for the three months ended June 30, 2019, an increase of 8% versus $20.1 million for the second quarter of 2018. Diluted earnings per share increased 9% to $0.85 for the second quarter of 2019, versus $0.78 for the second quarter of 2018. On a linked quarter basis, net income increased $31,000 from the first quarter ended March 31, 2019, which had net income of $21.7 million and $0.84 diluted earnings per share.

The company further reported record net income of $43.4 million for the six months ended June 30, 2019 versus $38.5 million for the comparable period of 2018, an increase of 13%. Diluted net income per common share was also a record for the period and increased 13% to $1.69 for the six months ended June 30, 2019 versus $1.50 for the comparable period of 2018.

David M. Findlay, President and Chief Executive Officer, said, "Our record quarterly results were positively impacted by healthy loan and deposit growth. This balance sheet expansion reflects our continued growth throughout our Indiana footprint."

Highlights for the quarter are noted below.

2nd Quarter 2019 versus 2nd Quarter 2018 highlights:

  • Return on average equity of 15.8%, compared to 16.9%
  • Return on average assets of 1.76%, up from 1.70%
  • Organic loan growth of $140 million, or 4%
  • Core deposit growth of $288 million, or 8%
  • Net interest income increase of $878,000, or 2%
  • Net interest margin of 3.37% compared to 3.42%
  • Noninterest income increase of $1.9 million, or 19%
  • Revenue growth of $2.7 million, or 6%
  • Provision expense of $785,000 compared to $1.7 million
  • Nonperforming assets to total assets of 0.31% versus 0.27%
  • Total equity and tangible common equity1 increase of $79 million, or 16%

2nd Quarter 2019 versus 1st Quarter 2019 highlights:

  • Return on average equity of 15.8% compared to 16.6%
  • Return on average assets of 1.76%, compared to 1.80%
  • Organic loan growth of $60 million or 2%
  • Net interest income increase of $202,000, or 1%
  • Net interest margin decrease of 8 basis points to 3.37% from 3.45%
  • Noninterest income increase of $63,000, or 1%
  • Revenue growth of $265,000, or 1%
  • Provision expense of $785,000 compared to $1.2 million
  • Nonperforming assets to total assets of 0.31% versus 0.14%
  • Total equity and tangible common equity1 increase of $22 million,  or 4%

As announced on July 9, 2019, the board of directors approved a cash dividend for the second quarter of $0.30 per share, payable on August 5, 2019, to shareholders of record as of July 25, 2019. The 2019 dividend rate per share approved in July represents a 16% increase over the accumulated quarterly dividends paid in 2018.

Return on average total equity for the second quarter of 2019 was 15.76%, compared to 16.86% in the second quarter of 2018 and 16.59% in the linked first quarter of 2019. Return on average total equity for the first six months of 2019 was 16.17%, compared to 16.35% in the same period of 2018. Return on average assets for the second quarter of 2019 was 1.76%, compared to 1.70% in the second quarter of 2018 and 1.80% in the linked first quarter of 2019. Return on average assets for the first six months of 2019 was 1.78% compared to 1.64% in the same period of 2018. The company's total capital as a percentage of risk-weighted assets was 14.49% at June 30, 2019, compared to 13.76% at June 30, 2018 and 14.38% at March 31, 2019. The company's tangible common equity to tangible assets ratio2 was 11.30% at June 30, 2019, compared to 10.15% at June 30, 2018 and 11.04% at March 31, 2019.

Average total loans for the second quarter of 2019 were $3.96 billion, an increase of $121.9 million, or 3%, versus $3.84 billion for the second quarter 2018. On a linked quarter basis, total average loans grew $43.3 million from $3.92 billion at March 31, 2019. Total loans outstanding grew $139.9 million, or 4%, from $3.86 billion as of June 30, 2018 to $4.00 billion as of June 30, 2019.

"We are pleased to report $60 million in loan growth on a linked quarter basis. Line utilization for commercial committed lines has increased as compared to the first quarter 2019, but is still lower than our normal run rate for periods prior to 2018. Further, loan originations are outpacing loan paydowns," commented Findlay.

Average total deposits for the second quarter of 2019 were $4.30 billion, an increase of $208.6 million, or 5%, versus $4.09 billion for the second quarter of 2018. Average total deposits increased by $210.4 million or 5% as compared to average deposits of $4.09 billion on a linked quarter basis. Total deposits grew $286.3 million, or 7%, from $3.93 billion as of June 30, 2018 to $4.22 billion as of June 30, 2019. In addition, total core deposits, which exclude brokered deposits, increased $288.3 million, or 8%, from $3.72 billion at June 30, 2018 to $4.00 billion at June 30, 2019 due to growth in commercial deposits of $230.2 million or 24%, increases in retail deposits of $29.5 million, or 2%, and increases in public fund deposits of $28.6 million or 2%. Brokered deposits were $218.0 million at June 30, 2019, a decrease of $1.9 million, or 1%, as compared to $219.9 million as of June 30, 2018.

Findlay added, "The double digit growth in commercial deposits on a year over year basis was strong and reflective of our focus on growing these relationship driven, low cost deposits. Consistent with our strategic focus on these accounts, we continue to see growth in the number of commercial checking accounts and the volume of commercial checking account balances."

The company's net interest margin decreased five basis points to 3.37% for the second quarter of 2019 compared to 3.42% for the second quarter of 2018. The year over year decline in net interest margin was due to a higher cost of funds and lower yields on investment securities, partially offset by a higher yield on the company's loan portfolio. The decline in the investment securities yield was due to the combined effect of the flattening, and at times, inverted, yield curve, the corresponding increase in the fair value of the investment securities portfolio, as well as increased premium bond amortization resulting from elevated prepayment speeds.  

Linked quarter net interest margin declined by eight basis points from 3.45% as of March 31, 2019 to 3.37% as of June 30, 2019 due to an increase of five basis points in the cost of funds as well as a decline of three basis points in the yield on earning assets. The decline in investment securities yields resulted primarily from a decline in yields for agency mortgage backed securities and collateralized mortgage obligations.

The company's net interest margin increased three basis points to 3.42% for the six months ended June 30, 2019 compared to 3.39% for the six months ended June 30, 2018. The increase in net interest margin for the six month period was primarily attributable to increases in loan yields partially offset by higher cost of funds, driven by the Federal Reserve Bank increasing the target Federal Funds Rate in June, September and December of 2018. Net interest income increased by $2.9 million or 4% for the six months ended June 30, 2019 as compared to the first half of 2018 due to both net interest margin expansion and loan and deposit growth.

The company recorded a provision for loan losses of $785,000 in the second quarter of 2019, compared to $1.7 million in the second quarter of 2018 and $1.2 million in the linked first quarter of 2019. Net recoveries in the second quarter of 2019 were $217,000 versus net recoveries of $379,000 in the second quarter of 2018 and net charge offs of $91,000 during the linked first quarter of 2019. Annualized net recoveries to average loans were 0.02% for the second quarter of 2019 versus 0.04% for the second quarter of 2018. Annualized net charge offs to average loans were 0.01% for the linked first quarter of 2019. On a year to date basis, net recoveries to average loans were 0.01% compared to net charge offs to average loans of 0.23% for the first six months of 2018.

Nonperforming assets increased $2.4 million, or 19%, to $15.3 million as of June 30, 2019 versus $12.9 million as of June 30, 2018 due to an increase in nonaccrual loans. On a linked quarter basis, nonperforming assets were $15.3 million versus $7.0 million reported as of March 31, 2019. The increase was primarily driven by a single commercial relationship being placed in nonaccrual status, which was past due as of the first quarter of 2019. The ratio of nonperforming assets to total assets at June 30, 2019 was 0.31% compared to 0.27% at June 30, 2018 and 0.14% at March 31, 2019. Loan loss reserve to total loans was 1.26% as of June 30, 2019 as compared with 1.24% as of June 30, 2018 and unchanged from 1.26% as of March 31, 2019.

"We are proud of our asset quality performance during the first two quarters of 2019 with net recoveries year to date. While we encountered a slight shift in nonperforming loans, we don't believe that it is reflective of any broader concerns and our watch list loan totals are stable," commented Findlay.

The company's noninterest income increased $1.9 million, or 19%, to $11.6 million for the second quarter of 2019, compared to $9.7 million for the second quarter of 2018. Noninterest income was positively impacted by a 23% increase over the prior year second quarter in recurring fee income for service charges on deposit accounts, primarily due to growth in treasury management fees from business accounts. In addition, investment brokerage fees increased 40% and wealth advisory fees increased by 7% compared to the second quarter 2018 due to continued growth of client relationships. Noninterest income was $11.5 million in the linked first quarter of 2019.

The company's noninterest income increased $3.5 million, or 18%, to $23.1 million for the six months ended June 30, 2019 compared to $19.6 million in the prior year period. Noninterest income was positively impacted by $1.7 million increase in service charges on deposit accounts, as well as increases of $287,000 in loan and service fees, $247,000 in investment brokerage fees and $217,000 in wealth advisory fees.

During the second quarter, a single commercial treasury management relationship contributed $2.1 million in treasury management fees that are reported with service charges on deposit accounts. This relationship contributed $1.6 million in the first quarter of 2019, resulting in a total of $3.7 million of revenue on a year to date basis. As a result of the bank discovering potentially fraudulent activity by this client involving multiple banks, the related treasury management activity was terminated and the revenue will not recur in future periods. The bank has not incurred any loss related to this activity and we believe that an investigation is ongoing by authorities. In addition, the bank continues its review of its enterprise risk management policies and procedures.

The company's noninterest expense increased $1.8 million, or 9%, to $22.1 million in the second quarter of 2019, compared to $20.3 million in the second quarter of 2018 and decreased by $381,000 on a linked quarter basis. Salaries and employee benefits increased on a year over year basis primarily due to higher employee health insurance expense, staffing increases in revenue producing areas and normal merit increases. Other expense increased by $672,000 or 40% to $2.3 million from $1.7 million in the second quarter 2018.

The company's noninterest expense increased by $3.1 million, or 7%, to $44.6 million in the first six months of 2019 compared to $41.5 million in the prior year period. The increase was driven by salaries and employee benefits, which increased by 4%, or $882,000, primarily due to higher health insurance expense, staffing increases in revenue producing areas and normal merit increases. Other expense increased by $1.4 million or 44% to $4.6 million from $3.2 million in the six month period ended June 30, 2018.

The company's efficiency ratio was 44.2% for the second quarter of 2019, compared to 42.9% for the second quarter of 2018 and 45.2% for the linked first quarter of 2019. The company's efficiency ratio was 44.7% for the six months ended June 30, 2019 compared to 44.4% in the prior year period.

Lakeland Financial Corporation is a $5.0 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 50 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, this earnings release contains certain non-GAAP financial measures. The company 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 "total equity" excluding intangible assets, net of deferred tax, and "tangible assets" which is "total assets" excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalents is included in the attached financial tables where the non-GAAP measures are 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. Numerous factors could cause the company's actual results to differ from those reflected in forward-looking statements, including trade policy and those identified in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

                     
                     
                     
LAKELAND FINANCIAL CORPORATION
SECOND QUARTER 2019 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   2019       2019     2018       2019       2018  
  Assets $    4,975,519     $   4,891,885   $   4,760,869     $    4,975,519     $   4,760,869  
  Deposits     4,221,299         4,147,437       3,934,953         4,221,299         3,934,953  
  Brokered Deposits     217,981         140,078       219,900         217,981         219,900  
  Core Deposits (3)     4,003,318         4,007,359       3,715,053         4,003,318         3,715,053  
  Loans     3,998,618         3,939,010       3,858,713         3,998,618         3,858,713  
  Allowance for Loan Losses     50,564         49,562       47,706         50,564         47,706  
  Total Equity     565,363         543,267       486,484         565,363         486,484  
  Goodwill net of deferred tax assets     3,779         3,779       3,793         3,779         3,793  
  Tangible Common Equity (1)     561,584         539,488       482,691         561,584         482,691  
AVERAGE BALANCES                  
  Total Assets $    4,961,453     $   4,881,572   $   4,739,163     $    4,921,733     $   4,723,034  
  Earning Assets     4,625,949         4,550,950       4,448,240         4,588,656         4,434,924  
  Investments - available for sale     601,178         587,026       560,484         594,141         553,303  
  Loans     3,961,322         3,918,024       3,839,441         3,939,792         3,815,813  
  Total Deposits     4,300,759         4,090,330       4,092,145         4,196,125         4,093,523  
  Interest Bearing Deposits     3,378,030         3,205,204       3,266,808         3,292,094         3,260,095  
  Interest Bearing Liabilities     3,444,382         3,426,250       3,409,138         3,435,366         3,388,236  
  Total Equity     552,536         529,989       479,291         541,325         474,670  
INCOME STATEMENT DATA                  
  Net Interest Income $    38,411     $   38,209   $   37,533     $    76,620     $   73,756  
  Net Interest Income-Fully Tax Equivalent     38,923         38,708       37,973         77,631         74,604  
  Provision for Loan Losses     785         1,200       1,700         1,985         5,000  
  Noninterest Income     11,588         11,525       9,722         23,113         19,601  
  Noninterest Expense     22,092         22,473       20,303         44,565         41,505  
  Net Income     21,713         21,682       20,142         43,395         38,478  
PER SHARE DATA                  
  Basic Net Income Per Common Share $    0.85     $   0.85   $   0.80     $    1.70     $   1.52  
  Diluted Net Income Per Common Share     0.85         0.84       0.78         1.69         1.50  
  Cash Dividends Declared Per Common Share     0.30         0.26       0.26         0.56         0.48  
  Dividend Payout     35.29   %     30.95 %     33.33   %     33.14   %     32.00 %
  Book Value Per Common Share (equity per share issued)     22.06         21.21       19.23         22.06         19.23  
  Tangible Book Value Per Common Share (1)     21.92         21.06       19.08         21.92         19.08  
  Market Value – High     49.20         48.99       51.15         49.20         51.76  
  Market Value – Low     43.76         39.78       45.15         39.78         45.01  
  Basic Weighted Average Common Shares Outstanding     25,614,701         25,491,093       25,293,329         25,553,254         25,275,471  
  Diluted Weighted Average Common Shares Outstanding     25,774,002         25,665,287       25,709,216         25,721,079         25,704,505  
KEY RATIOS                    
  Return on Average Assets     1.76   %     1.80 %     1.70   %     1.78   %     1.64 %
  Return on Average Total Equity     15.76         16.59       16.86         16.17         16.35  
  Average Equity to Average Assets     11.14         10.86       10.11         11.00         10.05  
  Net Interest Margin     3.37         3.45       3.42         3.42         3.39  
  Efficiency  (Noninterest Expense / Net Interest Income plus Noninterest Income)     44.19         45.19       42.93         44.68         44.44  
  Tier 1 Leverage (2)     11.72         11.59       11.01         11.72         11.01  
  Tier 1 Risk-Based Capital (2)     13.33         13.22       12.61         13.33         12.61  
  Common Equity Tier 1 (CET1) (2)     12.64         12.52       11.88         12.64         11.88  
  Total Capital (2)     14.49         14.38       13.76         14.49         13.76  
  Tangible Capital (1) (2)     11.30         11.04       10.15         11.30         10.15  
ASSET QUALITY                   
  Loans Past Due 30 - 89 Days $    2,451     $   9,694   $   1,612     $    2,451     $   1,612  
  Loans Past Due 90 Days or More     0         481       0         0         0  
  Non-accrual Loans     14,995         6,093       12,773         14,995         12,773  
  Nonperforming Loans (includes nonperforming TDRs)     14,995         6,574       12,773         14,995         12,773  
  Other Real Estate Owned     316         316       10         316         10  
  Other Nonperforming Assets     7         83       108         7         108  
  Total Nonperforming Assets     15,318         6,973       12,891         15,318         12,891  
  Performing Troubled Debt Restructurings     6,082         6,196       3,402         6,082         3,402  
  Nonperforming Troubled Debt Restructurings (included in nonperforming loans)     3,512         3,812       7,666         3,512         7,666  
  Total Troubled Debt Restructurings     9,594         10,008       11,068         9,594         11,068  
  Impaired Loans     24,271         24,501       16,931         24,271         16,931  
  Non-Impaired Watch List Loans     183,599         179,636       196,880         183,599         196,880  
  Total Impaired and Watch List Loans     207,870         204,137       213,811         207,870         213,811  
  Gross Charge Offs     84         284       128         368         5,105  
  Recoveries     301         193       507         494         690  
  Net Charge Offs/(Recoveries)     (217 )       91       (379 )       (126 )       4,415  
  Net Charge Offs/(Recoveries)  to Average Loans     (0.02 ) %     0.01 %     (0.04 ) %     (0.01 ) %     0.23 %
  Loan Loss Reserve to Loans     1.26   %     1.26 %     1.24   %     1.26   %     1.24 %
  Loan Loss Reserve to Nonperforming Loans     337.18   %     753.91 %     373.51   %     337.18   %     373.49 %
  Loan Loss Reserve to Nonperforming Loans and Performing TDRs     239.90   %     388.11 %     294.94   %     239.90   %     294.94 %
  Nonperforming Loans to Loans     0.38   %     0.17 %     0.33   %     0.38   %     0.33 %
  Nonperforming Assets to Assets     0.31   %     0.14 %     0.27   %     0.31   %     0.27 %
  Total Impaired and Watch List Loans to Total Loans     5.20   %     5.18 %     5.54   %     5.20   %     5.54 %
OTHER DATA                    
  Full Time Equivalent Employees     571         556       553         571         553  
  Offices     50         50       49         50         49  
                     
  (1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"   
  (2) Capital ratios for June 30, 2019 are preliminary until the Call Report is filed.      
  (3) Core deposits equals deposits less brokered deposits          
           
           
           

 

CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
  June 30,   December 31,
    2019       2018  
  (Unaudited)    
ASSETS      
Cash and due from banks $    154,856     $   192,290  
Short-term investments   41,514       24,632  
  Total cash and cash equivalents   196,370       216,922  
       
Securities available-for-sale (carried at fair value)   609,826       585,549  
Real estate mortgage loans held-for-sale   5,929       2,293  
       
Loans, net of allowance for loan losses of $50,564 and $48,453   3,948,054       3,866,292  
       
Land, premises and equipment, net    58,719       58,097  
Bank owned life insurance   82,591       77,106  
Federal Reserve and Federal Home Loan Bank stock   13,772       13,772  
Accrued interest receivable   17,418       15,518  
Goodwill   4,970       4,970  
Other assets   37,870       34,735  
  Total assets $   4,975,519     $   4,875,254  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
LIABILITIES      
Noninterest bearing deposits $    946,471     $   946,838  
Interest bearing deposits    3,274,828       3,097,227  
  Total deposits   4,221,299       4,044,065  
       
Borrowings      
  Federal funds purchased   15,000       0  
  Securities sold under agreements to repurchase    0       75,555  
  Federal Home Loan Bank advances   100,000       170,000  
  Subordinated debentures   30,928       30,928  
    Total borrowings   145,928       276,483  
       
Accrued interest payable   12,454       10,404  
Other liabilities   30,475       22,598  
    Total liabilities   4,410,156       4,353,550  
       
STOCKHOLDERS' EQUITY      
Common stock:  90,000,000 shares authorized, no par value      
 25,615,216 shares issued and 25,442,300 outstanding as of June 30, 2019    
 25,301,732 shares issued and 25,128,773 outstanding as of December 31, 2018   112,689       112,383  
Retained earnings   446,969       419,179  
Accumulated other comprehensive income (loss)   9,500       (6,191 )
Treasury stock, at cost (2019 - 172,916 shares, 2018 - 172,959 shares)   (3,884 )     (3,756 )
  Total stockholders' equity   565,274       521,615  
  Noncontrolling interest   89       89  
  Total equity   565,363       521,704  
    Total liabilities and equity $   4,975,519     $   4,875,254  
       
       
       

 

CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands, except share and per share data)      
  Three Months Ended   Six Months Ended
  June 30,   June 30,
    2019     2018     2019     2018  
NET INTEREST INCOME              
Interest and fees on loans              
  Taxable $    50,089   $   44,439   $    98,955   $   86,233  
  Tax exempt     235       202       486       419  
Interest and dividends on securities              
  Taxable     2,250       2,492       4,747       4,926  
  Tax exempt     1,710       1,466       3,352       2,797  
Other interest income     351       196       589       488  
    Total interest income     54,635       48,795       108,129       94,863  
               
Interest on deposits     15,556       10,648       29,439       20,015  
Interest on borrowings              
  Short-term     232       195       1,182       306  
  Long-term     436       419       888       786  
    Total interest expense     16,224       11,262       31,509       21,107  
               
NET INTEREST INCOME     38,411       37,533       76,620       73,756  
               
Provision for loan losses     785       1,700       1,985       5,000  
               
NET INTEREST INCOME AFTER PROVISION FOR              
  LOAN LOSSES     37,626       35,833       74,635       68,756  
               
NONINTEREST INCOME              
Wealth advisory fees     1,646       1,544       3,266       3,049  
Investment brokerage fees     528       377       914       667  
Service charges on deposit accounts     4,850       3,800       9,137       7,428  
Loan and service fees     2,481       2,421       4,885       4,598  
Merchant card fee income     670       549       1,292       1,191  
Bank owned life insurance income     287       348       731       711  
Mortgage banking income     398       438       620       679  
Net securities gains (losses)     65       0       88       (6 )
Other income     663       245       2,180       1,284  
  Total noninterest income     11,588       9,722       23,113       19,601  
               
NONINTEREST EXPENSE              
Salaries and employee benefits     11,835       11,493       24,394       23,512  
Net occupancy expense     1,283       1,237       2,649       2,663  
Equipment costs     1,409       1,250       2,758       2,524  
Data processing fees and supplies     2,574       2,290       4,999       4,803  
Corporate and business development     1,171       1,046       2,377       2,179  
FDIC insurance and other regulatory fees     409       409       815       870  
Professional fees     1,071       910       2,008       1,782  
Other expense      2,340       1,668       4,565       3,172  
  Total noninterest expense     22,092       20,303       44,565       41,505  
               
INCOME BEFORE INCOME TAX EXPENSE     27,122       25,252       53,183       46,852  
Income tax expense      5,409       5,110       9,788       8,374  
NET INCOME $    21,713   $   20,142   $    43,395   $   38,478  
               
BASIC WEIGHTED AVERAGE COMMON SHARES     25,614,701       25,293,329       25,553,254       25,275,471  
BASIC EARNINGS PER COMMON SHARE $    0.85   $   0.80   $    1.70   $   1.52  
DILUTED WEIGHTED AVERAGE COMMON SHARES     25,774,002       25,709,216       25,721,079       25,704,505  
DILUTED EARNINGS PER COMMON SHARE $    0.85   $   0.78   $    1.69   $   1.50  
               

 

 
 
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
SECOND QUARTER 2019
(unaudited, in thousands)
                         
  June 30, March 31, December 31, June 30,
    2019   2019   2018   2018
Commercial and industrial loans:                        
  Working capital lines of credit loans $   755,090     18.9  %  $   726,895     18.4  %  $   690,620     17.6  %  $   780,910     20.2  % 
  Non-working capital loans     695,235     17.3       700,447     17.8       714,759     18.3       691,118     17.9  
    Total commercial and industrial loans     1,450,325     36.2       1,427,342     36.2       1,405,379     35.9       1,472,028     38.1  
                         
Commercial real estate and multi-family residential loans:                        
  Construction and land development loans     321,550     8.0       293,818     7.5       266,805     6.8       200,438     5.2  
  Owner occupied loans     557,115     13.9       557,296     14.1       586,325     15.0       569,453     14.8  
  Nonowner occupied loans     533,880     13.4       537,569     13.7       520,901     13.3       518,840     13.4  
  Multifamily loans     242,966     6.1       240,939     6.1       195,604     5.0       221,579     5.7  
    Total commercial real estate and multi-family residential loans     1,655,511     41.4       1,629,622     41.4       1,569,635     40.1       1,510,310     39.1  
                         
Agri-business and agricultural loans:                        
  Loans secured by farmland   148,883     3.7     139,645     3.6     177,503     4.6     148,396     3.9  
  Loans for agricultural production   165,595     4.2     162,662     4.1     193,010     4.9     155,826     4.0  
    Total agri-business and agricultural loans   314,478     7.9     302,307     7.7     370,513     9.5     304,222     7.9  
                         
Other commercial loans     104,084     2.6       112,021     2.8       95,657     2.4       120,541     3.1  
  Total commercial loans     3,524,398     88.1       3,471,292     88.1       3,441,184     87.9       3,407,101     88.2  
                         
Consumer 1-4 family mortgage loans:                        
  Closed end first mortgage loans     187,863     4.7       188,777     4.8       185,822     4.7       180,099     4.7  
  Open end and junior lien loans     188,558     4.7       182,791     4.7       187,030     4.8       179,622     4.7  
  Residential construction and land development loans     12,270     0.3       13,142     0.3       16,226     0.4       13,226     0.3  
  Total consumer 1-4 family mortgage loans     388,691     9.7       384,710     9.8       389,078     9.9       372,947     9.7  
                         
Other consumer loans     86,996     2.2       84,650     2.1       86,064     2.2       80,097     2.1  
  Total consumer loans     475,687     11.9       469,360     11.9       475,142     12.1       453,044     11.8  
  Subtotal     4,000,085     100.0  %      3,940,652     100.0  %      3,916,326     100.0  %      3,860,145     100.0  % 
Less:  Allowance for loan losses     (50,564 )         (49,562 )         (48,453 )         (47,706 )    
          Net deferred loan fees     (1,467 )         (1,642 )         (1,581 )         (1,432 )    
Loans, net $   3,948,054       $   3,889,448       $   3,866,292       $   3,811,007      
                         
                         
                         
LAKELAND FINANCIAL CORPORATION 
DEPOSITS AND BORROWINGS 
SECOND QUARTER 2019 
(unaudited, in thousands) 
 
  June 30,     March 31,     December 31,     June 30,    
    2019         2019         2018         2018      
Non-interest bearing demand deposits $   946,471       $   931,832       $   946,838       $   839,784      
Savings and transaction accounts:                        
  Savings deposits     238,369           246,936           247,903           255,594      
  Interest bearing demand deposits     1,708,397           1,562,089           1,429,570           1,422,840      
Time deposits:                        
  Deposits of $100,000 or more     1,053,619           1,131,326           1,146,221           1,149,197      
  Other time deposits     274,443           275,254           273,533           267,538      
Total deposits $   4,221,299       $   4,147,437       $   4,044,065       $   3,934,953      
FHLB advances and other borrowings     145,928           152,928           276,483           312,167      
Total funding sources $   4,367,227       $   4,300,365       $   4,320,548       $   4,247,120      
                         

 

 
 
 LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
  Three Months Ended     Three Months Ended     Three Months Ended  
  June 30, 2019     March 31, 2019     June 30, 2018  
  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) $    3,936,747     $    50,089     5.10 %   $   3,893,035     $   48,866     5.09 %   $   3,816,879     $   44,439     4.67 %
    Tax exempt (1)     24,575         292     4.77         24,989         314     5.10         22,562         253     4.50  
  Investments: (1)                                        
    Available for sale     601,178         4,415     2.95         587,026         4,575     3.16         560,484         4,347     3.11  
  Short-term investments     12,092         97     3.22         4,696         26     2.25         4,079         11     1.08  
  Interest bearing deposits     51,357         254     1.98         41,204         212     2.09         44,236         185     1.68  
Total earning assets $    4,625,949     $    55,147     4.78 %   $   4,550,950     $   53,993     4.81 %   $   4,448,240     $   49,235     4.44 %
Less:  Allowance for loan losses     (49,965 )                 (48,768 )                 (46,494 )          
Nonearning Assets                                        
  Cash and due from banks     171,313                   164,820                   139,677            
  Premises and equipment     58,857                   58,599                   56,093            
  Other nonearning assets     155,299                   155,971                   141,647            
Total assets $    4,961,453               $   4,881,572               $   4,739,163            
                                         
Interest Bearing Liabilities                                        
  Savings deposits $    240,824     $    71     0.12 %   $   247,309     $   71     0.12 %   $   259,989     $   86     0.13 %
  Interest bearing checking accounts     1,743,813         7,576     1.74         1,496,893         5,954     1.61         1,528,733         4,412     1.16  
  Time deposits:                                        
    In denominations under $100,000     274,217         1,300     1.90         276,006         1,232     1.81         264,294         946     1.44  
    In denominations over $100,000     1,119,176         6,609     2.37         1,184,996         6,626     2.27         1,213,792         5,204     1.72  
  Miscellaneous short-term borrowings     35,424         232     2.63         190,118         950     2.03         111,402         195     0.70  
  Long-term borrowings and                                        
   subordinated debentures     30,928         436     5.65         30,928         452     5.93         30,928         419     5.43  
Total interest bearing liabilities $    3,444,382     $    16,224     1.89 %   $   3,426,250     $   15,285     1.81 %   $   3,409,138     $   11,262     1.33 %
Noninterest Bearing Liabilities                                        
  Demand deposits     922,729                   885,126                   825,337            
  Other liabilities     41,806                   40,207                   25,397            
Stockholders' Equity     552,536                   529,989                   479,291            
Total liabilities and stockholders' equity $    4,961,453               $   4,881,572               $   4,739,163            
                                         
Interest Margin Recap                                        
Interest income/average earning assets       55,147     4.78           53,993     4.81           49,235     4.44  
Interest expense/average earning assets       16,224     1.41           15,285     1.36           11,262     1.02  
Net interest income and margin     $    38,923     3.37 %       $   38,708     3.45 %       $   37,973     3.42 %
                                         


(1)   Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate. 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 $512,000, $499,000 and $440,000 in the three-month periods ended June 30, 2019, March 31, 2019 and June 30, 2018, respectively.
(2)   Loan fees, which are immaterial in relation to total taxable loan interest income for 2019 and 2018, are included as taxable loan interest income.
(3)   Nonaccrual loans are included in the average balance of taxable loans.
     
     

Reconciliation of Non-GAAP Financial Measures

Tangible common equity, tangible assets, tangible book value per share and the tangible common equity to tangible assets ratio 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, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. 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,  
    2019       2019       2018       2019       2018    
  Total Equity $   565,363     $   543,267     $   486,484     $   565,363     $   486,484    
  Less: Goodwill     (4,970 )       (4,970 )       (4,970 )       (4,970 )       (4,970 )  
  Plus: Deferred tax assets related to goodwill     1,191         1,191         1,177         1,191         1,177    
  Tangible Common Equity     561,584         539,488         482,691         561,584         482,691    
                     
  Assets $   4,975,519     $   4,891,885     $   4,760,869     $   4,975,519     $   4,760,869    
  Less: Goodwill     (4,970 )       (4,970 )       (4,970 )       (4,970 )       (4,970 )  
  Plus: Deferred tax assets related to goodwill     1,191         1,191         1,177         1,191         1,177    
  Tangible Assets     4,971,740         4,888,106         4,757,076         4,971,740         4,757,076    
                     
  Ending common shares issued     25,615,216         25,614,665         25,294,582         25,615,216         25,294,582    
                     
  Tangible Book Value Per Common Share $   21.92     $   21.06     $   19.08     $   21.92     $   19.08    
                     
  Tangible Common Equity/Tangible Assets     11.30   %     11.04   %     10.15   %     11.30   %     10.15   %
                     

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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