EX-99 2 exhibit991.txt Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: David M. Findlay Executive Vice President and Chief Financial Officer (574) 267-9197 RECORD INCOME FOR LAKELAND FINANCIAL Third Quarter Performance and Cash Dividend Announced Warsaw, Indiana (October 15, 2004) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $4.0 million for the third quarter of 2004. This record income performance represents an increase of 10% over the $3.6 million reported for the third quarter of 2003 and an increase of 18% versus $3.3 million in the second quarter of 2004. Diluted net income per share for the quarter was $0.65 versus $0.60 for the third quarter of 2003 and $0.55 for the second quarter of 2004. Net income for the nine months ended September 30, 2004 was $10.8 million, and diluted net income per share was $1.78 versus $10.9 million, or $1.81 per diluted share, for the first nine months of 2003. Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "Our penetration has continued in 2004 in every market we serve as we have experienced loan growth of nearly 10% versus our year-end 2003 total loans. This loan growth of over $80 million in 2004 has contributed to a positive growth trend in net interest income during the third quarter versus the first two quarters of 2004." "In addition, as a result of recent interest rate increases, we experienced an improved net interest margin during the quarter that should positively impact our performance for the balance of 2004. An improving net interest margin, in conjunction with healthy loan growth, should result in a continued improvement in net interest income performance," added Kubacki. The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.21 per share, payable on October 25, 2004 to shareholders of record on October 10, 2004. The quarterly dividend represents an 11% increase over the quarterly dividend of $0.19 paid in 2003. Noninterest income excluding mortgage sales gains increased by 9% for the first nine months of 2004 versus the comparable period in 2003. Leading the improvement were a $517,000 increase in trust and brokerage fees, which increased 29%, and a $344,000 increase in credit card fees, which increased 26%. Net gains on the sale of mortgages held for sale were $724,000 in the first nine months versus $2.7 million during the comparable period in 2003. Kubacki observed, "Our ongoing focus on increasing fee based services has continued to positively leverage infrastructure and create incremental income impact. As revenue from the mortgage business has declined due to higher mortgage rates and a general slowdown in the mortgage business, our noninterest income generation has improved in all other categories." "We are particularly proud of the fact that noninterest expense was unchanged at $27.3 million year-to-date versus 2003, reflective of our focus on managing costs in a tight interest rate environment," continued Kubacki. Total loans as of September 30, 2004 were $952.7 million versus $929.6 million as of June 30, 2004, and $870.9 million as of December 31, 2003. Average loans during the third quarter of 2004 were $939.9 million compared to $924.8 million in the second quarter of 2004 and $847.6 million for all of 2003. Lakeland Financial's allowance for loan losses as of September 30, 2004 was $10.7 million compared to $10.6 million as of June 30, 2004 and $10.1 million as of September 30, 2003. Total non-performing assets were $10.9 million as of September 30, 2004 versus $4.7 million as of June 30, 2004 and $6.2 million as of September 30, 2003. The ratio of non-performing assets to loans was 1.14% on September 30, 2004 compared to 0.51% at June 30, 2004 and 0.73% as of September 30, 2003. Net charge offs totaled $141,000 for the first nine months of 2004 versus $1.2 million in the comparable period of 2003. For the nine months ended September 30, 2004, net charge offs were 0.02% of average loans compared to 0.20% in the same period in 2003. Kubacki commented, "As a result of the addition of a single commercial credit of $6.1 million, we experienced an increase in total nonperforming assets. The borrower filed for chapter 11 bankruptcy late in the third quarter and is in the process of determining its future business strategy. Borrower collateral and the personal guarantees of its principals support the credit. While we are disappointed with this event, we believe that the borrower and guarantors are committed to working with us to resolve this situation." For the nine months ended September 30, 2004, Lakeland Financial's average equity to average assets ratio was 7.23% versus 7.05% for the comparable period in 2003. Average stockholders' equity for the first nine months of 2004 was $95.1 million versus $87.4 million for the comparable period in 2003. Average total deposits for the nine months ended September 30, 2004 were $1.003 billion versus $961.8 million for the comparable period in 2003. Lakeland Financial Corporation is a $1.3 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with 43 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, DeKalb, Fulton, Huntington, LaGrange, Marshall, Noble, Pulaski and Whitley. Lakeland Financial Corporation may be accessed on its home page at www.lakecitybank.com. The Company's common stock is traded on the Nasdaq Stock Market under "LKFN". Marketmakers in Lakeland Financial Corporation common shares include FTN Financial Securities Corp., Goldman, Sachs & Co., Hill, Thompson, Magid & Co., Howe Barnes Investments, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Securities, L.P., Merrill Lynch & Co., Morgan Stanley & Co., Inc., Sandler O'Neill & Partners, Schwab Capital Markets, Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and Trident Securities. This document contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the United States to any such attacks and threats; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission. LAKELAND FINANCIAL CORPORATION THIRD QUARTER 2004 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands except Share and Per Share Data)
Three Months Ended Nine Months Ended ------------------------------------------ ------------------------- Sep. 30, Jun. 30, Sep. 30, Sep. 30, Sep. 30, 2004 2004 2003 2004 2003 ----------- ---------- ------------ ----------- ------------ END OF PERIOD BALANCES Assets $ 1,349,534 $ 1,338,100 $ 1,249,417 $ 1,349,534 $ 1,249,417 Deposits 1,043,513 1,022,335 1,002,037 1,043,513 1,002,037 Loans 952,671 929,565 847,714 952,671 847,714 Allowance for Loan Losses 10,741 10,643 10,064 10,741 10,064 Common Stockholders' Equity 98,737 92,930 88,799 98,737 88,799 AVERAGE BALANCES Assets Total Assets $ 1,338,968 $ 1,323,015 $ 1,245,753 $ 1,314,524 $ 1,232,252 Earning Assets 1,229,356 1,212,945 1,141,973 1,206,493 1,130,915 Investments 279,907 280,159 267,756 280,704 270,941 Loans 939,914 924,817 853,425 916,228 843,271 Liabilities and Stockholders' Equity Total Deposits 1,022,216 1,016,951 982,617 1,002,702 961,770 Interest Bearing Deposits 809,971 808,726 804,096 800,209 792,761 Interest Bearing Liabilities 1,020,926 1,013,015 971,005 1,008,805 965,374 Common Stockholders' Equity 97,490 93,808 87,899 95,081 87,395 INCOME STATEMENT DATA Net Interest Income $ 10,814 $ 10,278 $ 10,405 $ 31,300 $ 31,699 Net Interest Income-Fully Tax Equivalent 11,130 10,609 10,682 32,273 31,927 Provision for Loan Losses 150 246 380 648 1,764 Noninterest Income 4,531 4,146 4,481 12,837 13,806 Noninterest Expense 9,201 9,195 9,096 27,304 27,334 Net Income 3,951 3,344 3,591 10,797 10,855 PER SHARE DATA Basic Net Income Per Common Share $ 0.67 $ 0.57 $ 0.62 $ 1.84 $ 1.87 Diluted Net Income Per Common Share 0.65 0.55 0.60 1.78 1.81 Cash Dividends Per Common Share 0.21 0.21 0.19 0.63 0.57 Book Value Per Common Share (equity per share issued) 16.80 15.82 15.25 16.80 15.25 Market Value - High 34.46 34.49 34.40 38.05 34.40 Market Value - Low 30.74 28.31 29.51 28.31 23.00 Basic Weighted Average Common Shares Outstanding 5,874,981 5,859,474 5,819,671 5,859,191 5,816,830 Diluted Weighted Average Common Shares Outstanding 6,058,608 6,048,256 6,017,241 6,053,125 5,982,283 KEY RATIOS Return on Average Assets 1.17 % 1.02 % 1.15 % 1.10 % 1.18 % Return on Average Common Stockholders' Equity 16.12 14.34 16.33 15.17 16.73 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 59.96 65.19 61.08 61.86 60.05 Average Equity to Average Assets 7.28 7.10 7.01 7.23 7.05 Net Interest Margin 3.60 3.52 3.71 3.57 3.84 Net Charge Offs to Average Loans 0.02 0.04 0.05 0.02 0.20 Loan Loss Reserve to Loans 1.13 1.14 1.19 1.13 1.19 Nonperforming Assets to Loans 1.14 0.51 0.73 1.14 0.73 Tier 1 Leverage 9.24 9.14 8.31 9.24 8.31 Tier 1 Risk-Based Capital 11.72 11.60 10.77 11.72 10.77 Total Capital 12.74 12.63 11.82 12.74 11.82 ASSET QUALITY Loans Past Due 90 Days or More $ 2,821 $ 2,855 $ 3,226 $ 2,821 $ 3,226 Non-accrual Loans 7,779 1,575 1,291 7,779 1,291 Net Charge Offs 52 80 102 141 1,232 Other Real Estate Owned 277 277 1,530 277 1,530 Other Nonperforming Assets 28 30 120 28 120 Total Nonperforming Assets 10,905 4,737 6,167 10,905 6,167
LAKELAND FINANCIAL CORPORATION CONSOLIDATED BALANCE SHEETS As of September 30, 2004 and December 31, 2003 (in thousands)
September 30, December 31, 2004 2003 ------------ ------------ (Unaudited) ASSETS Cash and cash equivalents: Cash and due from banks $ 47,134 $ 52,297 Short-term investments 6,696 5,144 ------------ ------------ Total cash and cash equivalents 53,830 57,441 Securities available-for-sale: U. S. Treasury and government agency securities 21,950 17,280 Mortgage-backed securities 208,902 211,142 State and municipal securities 54,131 52,945 ------------ ----------- Total securities available-for-sale 284,983 281,367 Real estate mortgages held-for-sale 2,298 3,431 Loans: Total loans 952,671 870,882 Less: Allowance for loan losses 10,741 10,234 ------------ ------------ Net loans 941,930 860,648 Land, premises and equipment, net 25,372 26,157 Accrued income receivable 5,254 5,010 Goodwill 4,970 4,970 Other intangible assets 1,299 1,460 Other assets 29,598 30,930 ------------ ------------ Total assets $ 1,349,534 $ 1,271,414 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest bearing deposits $ 211,262 $ 185,734 Interest bearing deposits 832,251 740,657 ------------ ------------ Total deposits 1,043,513 926,391 Short-term borrowings: Federal funds purchased 22,500 24,000 Securities sold under agreements to repurchase 71,794 102,601 U.S. Treasury demand notes 2,792 3,160 Other borrowings 60,000 55,000 ------------ ------------ Total short-term borrowings 157,086 184,761 Accrued expenses payable 7,548 7,804 Other liabilities 1,676 1,461 Long-term borrowings 10,046 30,047 Subordinated debentures 30,928 30,928 ------------ ------------ Total liabilities 1,250,797 1,181,392 STOCKHOLDERS' EQUITY Common stock: No par value, 90,000,000 shares authorized, 5,876,744 shares issued and 5,842,377 outstanding as of September 30, 2004, and 5,834,744 shares issued and 5,788,263 outstanding at December 31, 2003 1,453 1,453 Additional paid-in capital 11,461 10,509 Retained earnings 87,359 80,260 Accumulated other comprehensive income/(loss) (796) (1,282) Treasury stock, at cost (740) (918) ------------ ------------ Total stockholders' equity 98,737 90,022 ------------ ------------ Total liabilities and stockholders' equity $ 1,349,534 $ 1,271,414 ============ ============
LAKELAND FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME For the Three Months and Nine Months Ended September 30, 2004 and 2003 (in thousands except for share data) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------- --------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ INTEREST AND DIVIDEND INCOME ---------------------------- Interest and fees on loans: Taxable $ 12,352 $ 11,543 $ 35,255 $ 35,453 Tax exempt 67 74 206 203 ------------ ------------ ------------ ------------ Total loan income 12,419 11,617 35,461 35,656 Short-term investments 33 48 82 133 Securities: U.S. Treasury and government agency securities 191 145 534 460 Mortgage-backed securities 1,780 2,473 5,484 8,099 State and municipal securities 585 550 1,757 1,475 ------------ ------------ ------------ ------------ Total interest and dividend income 15,008 14,833 43,318 45,823 INTEREST EXPENSE ---------------- Interest on deposits 3,249 3,421 9,381 10,909 Interest on short-term borrowings 517 244 1,215 897 Interest on long-term debt 428 763 1,422 2,318 ------------ ------------ ------------ ------------ Total interest expense 4,194 4,428 12,018 14,124 ------------ ------------ ------------ ------------ NET INTEREST INCOME 10,814 10,405 31,300 31,699 ------------------- Provision for loan losses 150 380 648 1,764 ------------ ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,664 10,025 30,652 29,935 ------------------------- ------------ ------------ ------------ ------------ NONINTEREST INCOME ------------------ Trust and brokerage fees 800 627 2,319 1,802 Service charges on deposit accounts 1,840 1,736 5,194 5,136 Credit card fee income 576 487 1,657 1,313 Other income (net) 884 1,256 2,943 2,908 Net gains on sale of real estate mortgages held for sale 431 383 724 2,655 Net securities losses 0 (8) 0 (8) ------------ ------------ ------------ ------------ Total noninterest income 4,531 4,481 12,837 13,806 NONINTEREST EXPENSE ------------------- Salaries and employee benefits 4,921 5,076 14,705 14,789 Occupancy and equipment expense 1,203 1,192 3,334 3,772 Data processing expense 656 562 1,901 1,835 Credit card interchange 404 285 1,037 728 Other expense 2,017 1,981 6,327 6,210 ------------ ------------ ------------ ------------ Total noninterest expense 9,201 9,096 27,304 27,334 INCOME BEFORE INCOME TAX EXPENSE 5,994 5,410 16,185 16,407 -------------------------------- Income tax expense 2,043 1,819 5,388 5,552 ------------ ------------ ------------ ------------ NET INCOME $ 3,951 $ 3,591 $ 10,797 $ 10,855 ---------- ============ ============ ============ ============ BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,874,981 5,819,671 5,859,191 5,816,830 BASIC EARNINGS PER COMMON SHARE $ 0.67 $ 0.62 $ 1.84 $ 1.87 ------------------------------- ============ ============ ============ ============ DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,058,608 6,017,241 6,053,125 5,982,283 DILUTED EARNINGS PER COMMON SHARE $ 0.65 $ 0.60 $ 1.78 $ 1.81 --------------------------------- ============ ============ ============ ============