EX-99 2 exhibit991.txt Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: David M. Findlay Executive Vice President - Administration and Chief Financial Officer (574) 267-9197 17th CONSECUTIVE YEAR OF RECORD EARNINGS REPORTED FOR LAKELAND FINANCIAL CORPORATION Warsaw, Indiana (January 18, 2005) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported record net income of $14.5 million for the year ended December 31, 2004, an increase of 5% versus $13.9 million for 2003. Diluted net income per share for the year ended December 31, 2004 was $2.40 versus $2.31 for 2003, an increase of 4%. Net income for the fourth quarter of 2004 was $3.7 million versus $3.0 million for the comparable period of 2003, an increase of 25%. Diluted net income per share was $0.62 for the fourth quarter of 2004, an increase of 24% versus $0.50 in the comparable period of 2003. Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "The Lake City Bank team has delivered record income performance for the 17th consecutive year. We are very pleased with the momentum our business built during the second half of 2004 and are excited by our prospects for 2005. Total loans exceeded $1 billion with new loan activity of $132 million during the year, an increase of 15% versus 2003." Kubacki continued, "We experienced strong loan growth in every region this year, reflecting the great job that our retail and commercial lending teams are doing in expanding our market penetration in both mature and emerging markets. Our performance in the Fort Wayne area, where total commercial loans grew by more than 30% in 2004, is reflective of our success. In every region we've worked hard to build on our reputation as a thoughtful, relationship oriented lender. We are proud that our clients view us as long-term partners in building their businesses, not just a source of capital." Driven by loan growth, net interest income increased to $42.8 million in 2004 versus $42.2 million in 2003. The net interest margin of 3.60% for the year was down from 3.82% in 2003. "Recent interest rate increases have resulted in an improved net interest margin during the second half of 2004. If this improving net interest margin continues and we maintain our healthy loan growth, we expect continued improvement in net interest income performance in 2005," added Kubacki. The Company also announced that the Board of Directors approved a cash dividend for the fourth quarter of $0.21 per share, payable on January 25, 2005 to shareholders of record on January 10, 2005. 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 4% during 2004 versus 2003. Leading the improvement were a $645,000 increase in trust and brokerage fees, which increased 27%, and a $472,000 increase in credit card fees, which increased 27%. Net gains on the sale of mortgages held for sale were $987,000 during 2004 versus $3.0 million 2003. Kubacki observed, "By building upon our reputation as a leading commercial and retail bank, we have successfully grown fee-based services. Lake City Bank has the technology platform to compete with regional and national competitors and we continue to leverage this infrastructure to grow our fee-based services. While revenue from our mortgage operations declined in 2004 due to a general slowdown in the mortgage business, our noninterest income generation improved in all other categories." "We were also proud of our ability to lower overhead expenses in 2004 while at the same time expanding our relationship management staff and continuing to reinvest in technology," added Kubacki. Noninterest expense decreased by 3%, or $1.0 million, in 2004 to $36.7 million. Excluding a one-time loss on extinguishment of debt of $804,000 incurred during 2003, noninterest expense declined by $215,000 during 2004 versus 2003. Total loans as of December 31, 2004 were $1.0 billion versus $952.7 million as of September 30, 2004, and $870.9 million as of December 31, 2003. Average loans for 2004 were $930.9 million versus $847.6 million in 2003, an increase of 10%. Average loans during the fourth quarter of 2004 were $974.7 million compared to $939.9 million in the third quarter of 2004, a linked-quarter increase of 4%. Lakeland Financial's allowance for loan losses as of December 31, 2004 was $10.8 million compared to $10.7 million as of September 30, 2004 and $10.2 million as of December 31, 2003. Total non-performing assets were $10.3 million as of December 31, 2004 versus $10.9 million as of September 30, 2004 and $4.3 million as of December 31, 2003. The ratio of non-performing assets to loans was 1.02% on December 31, 2004 compared to 1.14% at September 30, 2004 and 0.50% as of December 31, 2003. Net charge offs totaled $703,000 for the year ended December 31, 2004 versus $1.6 million in the comparable period of 2003. In 2004, net charge offs were 0.08% of average loans compared to 0.18% in 2003. Net charge offs totaled $562,000 in the fourth quarter versus $320,000 in the fourth quarter of 2003 and $52,000 during the third quarter of 2004. Kubacki commented, "Charge offs, when measured as a percentage of average loans, were at five-year lows in 2004. The year over year increase in non-performing assets was attributable to the addition of a single commercial credit of $6.1 million during the third quarter. We continue to work with the borrower and guarantors, who have made a commitment to working with us to resolve this situation. The borrower filed for chapter 11 bankruptcy and continues the process of determining its future business strategy. Borrower collateral and the personal guarantees of its principals support the credit." For the year ended December 31, 2004, Lakeland Financial's average equity to average assets ratio was 7.13% versus 7.05% in 2003. Average stockholders' equity for 2004 was $95.1 million versus $86.6 million in 2003. Average total deposits for the year ended December 31, 2004 were $1.0 billion versus $969.7 million for the comparable period in 2003. Lakeland Financial Corporation is a $1.4 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with 43 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, DeKalb, Fulton, Huntington, LaGrange, Marshall, Noble, Pulaski and Whitley. 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". Market makers 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 FOURTH QUARTER 2004 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands except Share and Per Share Data)
Three Months Ended Twelve Months Ended -------------------------------------------- ---------------------------- Dec. 31, Sep. 30, Dec. 31, Dec. 31, Dec. 31, 2004 2004 2003 2004 2003 ----------- ---------- ------------ ----------- ------------ END OF PERIOD BALANCES Assets $ 1,453,122 $ 1,349,534 $ 1,271,414 $ 1,453,122 $ 1,271,414 Deposits 1,115,399 1,043,513 926,391 1,115,399 926,391 Loans 1,003,219 952,671 870,882 1,003,219 870,882 Allowance for Loan Losses 10,754 10,741 10,234 10,754 10,234 Common Stockholders' Equity 101,765 98,737 90,022 101,765 90,022 AVERAGE BALANCES Assets Total Assets $ 1,391,171 $ 1,338,968 $ 1,261,157 $ 1,332,713 $ 1,239,546 Earning Assets 1,281,124 1,229,356 1,153,994 1,225,253 1,136,732 Investments 285,344 279,907 271,815 281,870 271,161 Loans 974,732 939,914 860,265 930,934 847,554 Liabilities and Stockholders' Equity Total Deposits 1,126,411 1,022,216 993,267 1,033,798 969,709 Interest Bearing Deposits 903,633 809,971 805,586 826,206 795,993 Interest Bearing Liabilities 1,057,924 1,020,926 977,189 1,021,152 969,306 Common Stockholders' Equity 100,779 97,490 88,045 95,086 86,613 INCOME STATEMENT DATA Net Interest Income $ 11,465 $ 10,814 $ 10,500 $ 42,765 $ 42,199 Net Interest Income-Fully Tax Equivalent 11,784 11,130 10,836 44,054 43,373 Provision for Loan Losses 575 150 490 1,223 2,254 Noninterest Income 4,128 4,531 4,621 16,965 18,427 Noninterest Expense 9,356 9,201 10,345 36,660 37,679 Net Income 3,748 3,951 3,010 14,545 13,865 PER SHARE DATA Basic Net Income Per Common Share $ 0.64 $ 0.67 $ 0.52 $ 2.48 $ 2.38 Diluted Net Income Per Common Share 0.62 0.65 0.50 2.40 2.31 Cash Dividends Per Common Share 0.21 0.21 0.19 0.84 0.76 Book Value Per Common Share (equity per share issued) 17.20 16.80 15.43 17.20 15.43 Market Value - High 40.90 34.46 37.47 40.90 37.47 Market Value - Low 33.80 30.74 33.51 28.31 23.00 Basic Weighted Average Common Shares Outstanding 5,893,060 5,874,981 5,829,072 5,867,705 5,819,916 Diluted Weighted Average Common Shares Outstanding 6,098,920 6,058,608 6,046,778 6,064,077 6,001,449 KEY RATIOS Return on Average Assets 1.07 % 1.17 % 0.95 % 1.09 % 1.12 % Return on Average Common Stockholders' Equity 14.80 16.12 13.42 15.30 15.88 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 60.00 59.96 68.41 61.38 62.10 Average Equity to Average Assets 7.24 7.28 7.06 7.13 7.05 Net Interest Margin 3.66 3.60 3.73 3.60 3.82 Net Charge Offs to Average Loans 0.23 0.02 0.15 0.08 0.18 Loan Loss Reserve to Loans 1.07 1.13 1.18 1.07 1.18 Nonperforming Assets to Loans 1.02 1.14 0.50 1.02 0.50 Tier 1 Leverage 9.15 9.24 9.15 9.15 9.15 Tier 1 Risk-Based Capital 11.41 11.72 11.78 11.41 11.78 Total Capital 12.38 12.74 12.83 12.38 11.92 ASSET QUALITY Loans Past Due 90 Days or More $ 2,778 $ 2,821 $ 3,191 $ 2,778 $ 3,191 Non-accrual Loans 7,213 7,779 553 7,213 553 Net Charge Offs 562 52 320 703 1,553 Other Real Estate Owned 261 277 557 261 557 Other Nonperforming Assets 13 28 27 13 27 Total Nonperforming Assets 10,265 10,905 4,328 10,265 4,328
LAKELAND FINANCIAL CORPORATION CONSOLIDATED BALANCE SHEETS As of December 31, 2004 and 2003 (in thousands)
December 31, December 31, 2004 2003 ------------ ------------ (Unaudited) ASSETS Cash and cash equivalents: Cash and due from banks $ 81,144 $ 52,297 Short-term investments 22,714 5,144 ------------ ------------ Total cash and cash equivalents 103,858 57,441 Securities available-for-sale: U. S. Treasury and government agency securities 23,874 17,280 Mortgage-backed securities 208,961 211,142 State and municipal securities 53,747 52,945 ------------ ----------- Total securities available-for-sale 286,582 281,367 Real estate mortgages held-for-sale 2,991 3,431 Loans: Total loans 1,003,219 870,882 Less: Allowance for loan losses 10,754 10,234 ------------ ------------ Net loans 992,465 860,648 Land, premises and equipment, net 25,057 26,157 Accrued income receivable 5,765 5,010 Goodwill 4,970 4,970 Other intangible assets 1,245 1,460 Other assets 30,189 30,930 ------------ ------------ Total assets $ 1,453,122 $ 1,271,414 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest bearing deposits $ 237,261 $ 185,734 Interest bearing deposits 878,138 740,657 ------------ ------------ Total deposits 1,115,399 926,391 Short-term borrowings: Federal funds purchased 20,000 24,000 Securities sold under agreements to repurchase 88,057 102,601 U.S. Treasury demand notes 2,593 3,160 Other borrowings 75,000 55,000 ------------ ------------ Total short-term borrowings 185,650 184,761 Accrued expenses payable 7,445 7,804 Other liabilities 1,889 1,461 Long-term borrowings 10,046 30,047 Subordinated debentures 30,928 30,928 ------------ ------------ Total liabilities 1,351,357 1,181,392 STOCKHOLDERS' EQUITY Common stock: No par value, 90,000,000 shares authorized, 5,915,854 shares issued and 5,881,283 outstanding as of December 31, 2004, and 5,834,744 shares issued and 5,788,263 outstanding at December 31, 2003 1,453 1,453 Additional paid-in capital 12,463 10,509 Retained earnings 89,864 80,260 Accumulated other comprehensive income/(loss) (1,267) (1,282) Treasury stock, at cost (748) (918) ------------ ------------ Total stockholders' equity 101,765 90,022 ------------ ------------ Total liabilities and stockholders' equity $ 1,453,122 $ 1,271,414 ============ ============
LAKELAND FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME For the Three Months and Twelve Months Ended December 31, 2004 and 2003 (in thousands except for share data) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, --------------------------- --------------------------- 2004 2003 2004 2003 ------------ ------------ ------------ ------------ INTEREST AND DIVIDEND INCOME ---------------------------- Interest and fees on loans: Taxable $ 13,425 $ 11,408 $ 48,680 $ 46,861 Tax exempt 81 77 287 280 ------------ ------------ ------------ ------------ Total loan income 13,506 11,485 48,967 47,141 Short-term investments 102 55 184 188 Securities: U.S. Treasury and government agency securities 206 133 740 593 Mortgage-backed securities 1,879 2,254 7,363 10,353 State and municipal securities 587 586 2,344 2,061 ------------ ------------ ------------ ------------ Total interest and dividend income 16,280 14,513 59,598 60,336 INTEREST EXPENSE ---------------- Interest on deposits 4,016 3,170 13,397 14,079 Interest on short-term borrowings 341 213 1,556 1,110 Interest on long-term debt 458 630 1,880 2,948 ------------ ------------ ------------ ------------ Total interest expense 4,815 4,013 16,833 18,137 ------------ ------------ ------------ ------------ NET INTEREST INCOME 11,465 10,500 42,765 42,199 ------------------- Provision for loan losses 575 490 1,223 2,254 ------------ ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,890 10,010 41,542 39,945 ------------------------- ------------ ------------ ------------ ------------ NONINTEREST INCOME ------------------ Trust and brokerage fees 696 568 3,015 2,370 Service charges on deposit accounts 1,723 1,724 6,917 6,860 Loan, insurance and service fees 562 535 2,352 2,296 Merchant card fee income 562 435 2,219 1,747 Other income (net) 322 488 1,475 1,636 Net gains on sale of real estate mortgages held for sale 263 363 987 3,018 Net securities gains 0 508 0 500 ------------ ------------ ------------ ------------ Total noninterest income 4,128 4,621 16,965 18,427 NONINTEREST EXPENSE ------------------- Salaries and employee benefits 4,968 5,040 19,673 19,829 Net occupancy expense 694 634 2,496 2,444 Equipment Costs 574 569 2,106 2,538 Data processing fees and supplies 645 598 2,546 2,433 Credit card interchange 360 227 1,397 954 Loss on extinguishment of debt 0 804 0 804 Other expense 2,115 2,466 8,442 8,677 ------------ ------------ ------------ ------------ Total noninterest expense 9,356 10,345 36,660 37,679 INCOME BEFORE INCOME TAX EXPENSE 5,662 4,286 21,847 20,693 -------------------------------- Income tax expense 1,914 1,276 7,302 6,828 ------------ ------------ ------------ ------------ NET INCOME $ 3,748 $ 3,010 $ 14,545 $ 13,865 ---------- ============ ============ ============ ============ BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,893,060 5,829,072 5,867,705 5,819,916 BASIC EARNINGS PER COMMON SHARE $ 0.64 $ 0.52 $ 2.48 $ 2.38 ------------------------------- ============ ============ ============ ============ DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,098,920 6,046,778 6,064,077 6,001,449 DILUTED EARNINGS PER COMMON SHARE $ 0.62 $ 0.50 $ 2.40 $ 2.31 --------------------------------- ============ ============ ============ ============