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 18th CONSECUTIVE YEAR OF RECORD EARNINGS REPORTED FOR LAKE CITY BANK Warsaw, Indiana (January 17, 2006) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported record net income of $18.0 million for the year ended December 31, 2005, an increase of 23% versus $14.5 million for 2004. Diluted net income per share for the year ended December 31, 2005 was $2.92 versus $2.40 for 2004, an increase of 22%. The Company also announced that the Board of Directors approved a cash dividend for the fourth quarter of $0.23 per share, payable on January 25, 2006 to shareholders of record on January 10, 2006. The quarterly dividend represents a 10% increase over the quarterly dividend of $0.21 paid in 2004. Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "For 18 consecutive years, Lake City Bank has posted record net income. This accomplishment is a result of the great efforts by the entire Lake City Bank team. When our record earnings streak began in 1988, we were a $207 million bank with 11 branches located primarily in the Warsaw market. Today, we have 43 offices located in 12 Northern Indiana Counties with total assets of $1.6 billion. While we've grown significantly, we remain committed to developing meaningful, long term relationships in every Lake City Bank community. Our business and retail clients recognize our role as partners in building their financial success." Net income for the fourth quarter of 2005 was $5.0 million versus $3.7 million for the comparable period of 2004, an increase of 33%. Diluted net income per share was $0.81 for the fourth quarter of 2005, an increase of 31% versus $0.62 in the comparable period of 2004. During the fourth quarter of 2005, the Company completed the sale of its retail credit card portfolio, which contributed to the increase in net income for the quarter and the year. The sale of the portfolio resulted in a pre-tax gain of $863,000, or $513,000 on an after-tax basis. Excluding the impact of the gain on sale, net income for the fourth quarter would have been $4.5 million, or diluted net income per share of $0.72 per share. For the twelve months ended December 31, 2005, net income excluding the impact of the gain on sale would have been $17.4 million, or diluted net income per share of $2.84, a 20% increase versus $14.5 million in 2004. Kubacki commented on the retail card portfolio sale, "In order to provide our retail and business clients with a fully featured credit card, we implemented a new card program during the quarter and sold the existing portfolio. Our new card initiative will give our clients a wide array of options when selecting a Lake City Bank Visa (R) card that will meet their specific interests, such as points and mileage programs. It's an exciting addition to our menu of retail and commercial services geared to ensuring that our customers have access to leading banking services focused on their financial needs." Driven by the highest volume of loan growth in the Bank's history, net interest income increased to $50.1 million in 2005 versus $43.2 million in 2004. The net interest margin of 3.70% for the year was an improvement over a margin of 3.60% in 2004. "We generated $196 million of loan growth in 2005, resulting in total loans of $1.2 billion at year end. The growth was distributed throughout the Bank's Northern Indiana footprint and represented a 20% increase in total loans during the year. This level of loan growth is a reflection of our successful penetration throughout all of our markets, including South Bend, Warsaw, Elkhart and Fort Wayne," added Kubacki. Average total loans for the fourth quarter of 2005 were $1.166 billion versus $1.116 billion during the third quarter of 2005, a linked-quarter increase of 5%. Total loans as of December 31, 2005 were $1.199 billion, an increase of $53.4 million, versus $1.145 billion as of September 30, 2005. Total loans as of December 31, 2004 were $1.003 billion. He continued, "The Bank's efficiency ratio, which demonstrates our ability to produce revenue in a cost effective manner, improved to 56% in 2005, an all-time low and a gratifying reduction from 61% for 2004." Noninterest expense increased only 4% during 2005 versus 2004, while total revenues increased 14% year-over-year. Lakeland Financial's allowance for loan losses as of December 31, 2005 was $12.8 million, compared to $12.2 million as of September 30, 2005 and $10.8 million as of December 31, 2004. Non-performing assets totaled $7.5 million as of December 31, 2005 versus $7.8 million as of September 30, 2005 and $10.3 million on December 31, 2004. The ratio of non-performing assets to loans was 0.63% on December 31, 2005 compared to 0.68% at September 30, 2005 and 1.02% at December 31, 2004. Net charge offs totaled $160,000 in the fourth quarter of 2005 versus $159,000 during the third quarter of 2005 and $562,000 in the fourth quarter of 2004. For the three months ended December 31, 2005, Lakeland Financial's average equity to average assets ratio was 7.09% compared to 7.21% for the third quarter of 2005 and 7.24% for the fourth quarter of 2004. Average stockholders' equity for the quarter ended December 31, 2005 was $112.5 million versus $110.1 million for the third quarter of 2005 and $100.8 million for the fourth quarter of 2004. Average total deposits were $1.304 billion for the fourth quarter of 2005 versus $1.193 billion for the third quarter of 2005 and $1.126 billion for the fourth quarter of 2004. Kubacki concluded, "We're excited by our plans for 2006 as we intend to expand our presence in every Lake City Bank market. We anticipate that we will begin development during 2006 of two additional offices in the Fort Wayne market and we've significantly expanded our trust and investment capabilities in that market. Furthermore, we're confident that the reputation we've established as the bank for business in Northern Indiana will continue as we grow." Lakeland Financial Corporation is a $1.6 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 Citadel Derivatives Group, LLC, Citigroup Global Market Holdings, Inc., E*Trade Capital Markets LLC, FTN Midwest Securities Corp., Goldman Sachs & Company, Hill, Thompson, Magid & Co., Howe Barnes Investments, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Lehman Brothers Inc., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group, UBS Capital Markets L.P., and UBS Securities LLC. 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 2005 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, 2005 2005 2004 2005 2004 ----------- ---------- ------------ ----------- ------------ END OF PERIOD BALANCES Assets $ 1,634,613 $ 1,557,713 $ 1,453,122 $ 1,634,613 $ 1,453,122 Deposits 1,266,245 1,250,970 1,115,399 1,266,245 1,115,399 Loans 1,198,730 1,145,366 1,003,219 1,198,730 1,003,219 Allowance for Loan Losses 12,774 12,233 10,754 12,774 10,754 Common Stockholders' Equity 113,334 110,471 101,765 113,334 101,765 AVERAGE BALANCES Assets Total Assets $ 1,585,317 $ 1,525,945 $ 1,391,171 $ 1,499,155 $ 1,332,713 Earning Assets 1,468,493 1,413,814 1,281,124 1,385,931 1,225,253 Investments 286,856 287,968 285,344 286,863 281,870 Loans 1,166,371 1,115,866 974,732 1,088,788 930,934 Liabilities and Stockholders' Equity Total Deposits 1,304,469 1,192,656 1,126,411 1,184,670 1,033,798 Interest Bearing Deposits 1,069,491 975,661 903,633 961,699 826,206 Interest Bearing Liabilities 1,225,277 1,188,964 1,057,924 1,157,539 1,021,152 Common Stockholders' Equity 112,468 110,060 100,779 108,218 95,436 INCOME STATEMENT DATA Net Interest Income $ 13,187 $ 12,534 $ 11,549 $ 50,076 $ 43,172 Net Interest Income-Fully Tax Equivalent 13,481 12,832 11,869 51,251 44,461 Provision for Loan Losses 701 659 575 2,480 1,223 Noninterest Income 5,181 4,380 4,044 17,898 16,558 Noninterest Expense 10,041 9,355 9,356 38,057 36,660 Net Income 4,977 4,522 3,748 17,958 14,545 PER SHARE DATA Basic Net Income Per Common Share $ 0.83 $ 0.76 $ 0.64 $ 3.01 $ 2.48 Diluted Net Income Per Common Share 0.81 0.73 0.62 2.92 2.40 Cash Dividends Per Common Share 0.23 0.23 0.21 0.92 0.84 Book Value Per Common Share (equity per share issued) 18.93 18.46 17.20 18.93 17.20 Market Value - High 45.19 43.88 40.90 45.19 40.90 Market Value - Low 38.01 38.60 33.80 35.00 28.31 Basic Weighted Average Common Shares Outstanding 5,985,751 5,978,865 5,893,060 5,963,878 5,867,705 Diluted Weighted Average Common Shares Outstanding 6,158,813 6,154,777 6,098,920 6,144,733 6,064,077 KEY RATIOS Return on Average Assets 1.25 % 1.18 % 1.07 % 1.20 % 1.09 % Return on Average Common Stockholders' Equity 17.56 16.30 14.80 16.59 15.30 Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income) 54.67 55.31 60.00 55.99 61.38 Average Equity to Average Assets 7.09 7.21 7.24 7.22 7.13 Net Interest Margin 3.63 3.59 3.66 3.70 3.60 Net Charge Offs to Average Loans 0.05 0.05 0.23 0.04 0.08 Loan Loss Reserve to Loans 1.07 1.07 1.07 1.07 1.07 Nonperforming Assets to Loans 0.63 0.68 1.02 0.63 1.02 Tier 1 Leverage 9.21 8.96 9.15 9.21 9.15 Tier 1 Risk-Based Capital 10.81 10.93 11.41 10.81 11.41 Total Capital 11.80 11.91 12.38 11.80 12.38 ASSET QUALITY Loans Past Due 90 Days or More $ 174 $ 218 $ 2,778 $ 174 $ 2,778 Non-accrual Loans 7,321 7,600 7,213 7,321 7,213 Net Charge Offs 160 159 562 460 703 Other Real Estate Owned 0 0 261 0 261 Other Nonperforming Assets 25 12 13 25 13 Total Nonperforming Assets 7,520 7,830 10,265 7,520 10,265
LAKELAND FINANCIAL CORPORATION CONSOLIDATED BALANCE SHEETS As of December 31, 2005 and 2004 (in thousands)
December 31, December 31, 2005 2004 ------------ ------------ (Unaudited) ASSETS Cash and due from banks $ 77,387 $ 81,144 Short-term investments 5,292 22,714 ------------ ------------ Total cash and cash equivalents 82,679 103,858 Securities available-for-sale (carried at fair value) 290,935 286,582 Real estate mortgages held-for-sale 960 2,991 Loans: Total loans 1,198,730 1,003,219 Less: Allowance for loan losses 12,774 10,754 ------------ ------------ Net loans 1,185,956 992,465 Land, premises and equipment, net 24,563 25,057 Bank owned life insurance 19,654 16,896 Accrued income receivable 7,416 5,765 Goodwill 4,970 4,970 Other intangible assets 1,034 1,245 Other assets 16,446 13,293 ------------ ------------ Total assets $ 1,634,613 $ 1,453,122 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Noninterest bearing deposits $ 247,605 $ 237,261 Interest bearing deposits 1,018,640 878,138 ------------ ------------ Total deposits 1,266,245 1,115,399 Short-term borrowings: Federal funds purchased 43,000 20,000 Securities sold under agreements to repurchase 91,071 88,057 U.S. Treasury demand notes 2,471 2,593 Other borrowings 75,000 75,000 ------------ ------------ Total short-term borrowings 211,542 185,650 Accrued expenses payable 10,423 7,445 Other liabilities 2,095 1,889 Long-term borrowings 46 10,046 Subordinated debentures 30,928 30,928 ------------ ------------ Total liabilities 1,521,279 1,351,357 STOCKHOLDERS' EQUITY Common stock: No par value, 90,000,000 shares authorized, 5,986,054 shares issued and 5,947,342 outstanding as of December 31 2005, and 5,915,854 shares issued and 5,881,283 outstanding at December 31, 2004 1,453 1,453 Additional paid-in capital 14,287 12,463 Retained earnings 102,327 89,864 Accumulated other comprehensive income/(loss) (3,814) (1,267) Treasury stock, at cost (919) (748) ------------ ------------ Total stockholders' equity 113,334 101,765 ------------ ------------ Total liabilities and stockholders' equity $ 1,634,613 $ 1,453,122 ============ ============
LAKELAND FINANCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME For the Three Months and Twelve Months Ended December 31, 2005 and 2004 (in thousands except for share data) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ NET INTEREST INCOME ---------------------------- Interest and fees on loans: Taxable $ 19,669 $ 13,509 $ 68,230 $ 49,087 Tax exempt 50 81 182 287 Interest and dividends on securities: Taxable 2,394 2,085 9,343 8,103 Tax exempt 582 587 2,341 2,344 Short-term investments 149 102 333 184 ------------ ------------ ------------ ------------ Total interest and dividend income 22,844 16,364 80,429 60,005 Interest on deposits 8,192 4,016 24,331 13,397 Interest on short-term borrowings 841 341 3,790 1,556 Interest on long-term borrowings 624 458 2,232 1,880 ------------ ------------ ------------ ------------ Total interest expense 9,657 4,815 30,353 16,833 ------------ ------------ ------------ ------------ NET INTEREST INCOME 13,187 14,549 50,076 43,172 ------------------- Provision for loan losses 701 575 2,480 1,223 ------------ ------------ ------------ ------------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 12,486 10,974 47,596 41,949 ------------------------- ------------ ------------ ------------ ------------ NONINTEREST INCOME ------------------ Trust and brokerage fees 852 696 3,113 3,015 Service charges on deposit accounts 1,817 1,723 6,929 6,917 Loan, insurance and service fees 542 562 1,984 1,945 Merchant card fee income 578 562 2,435 2,219 Other income 390 238 1,709 1,475 Net gain on sale of credit card portfolio 863 0 863 0 Net gains on sale of real estate mortgages held for sale 208 263 934 987 Net securities losses (69) 0 (69) 0 ------------ ------------ ------------ ------------ Total noninterest income 5,181 4,044 17,898 16,558 NONINTEREST EXPENSE ------------------- Salaries and employee benefits 5,319 4,968 20,543 19,673 Net occupancy expense 715 694 2,774 2,496 Equipment costs 466 574 1,942 2,106 Data processing fees and supplies 681 645 2,396 2,546 Credit card interchange 369 360 1,527 1,397 Other expense 2,491 2,115 8,875 8,442 ----------- ------------ ------------ ------------ Total noninterest expense 10,041 9,356 38,057 36,660 INCOME BEFORE INCOME TAX EXPENSE 7,626 5,662 27,437 21,847 -------------------------------- Income tax expense 2,649 1,914 9,479 7,302 ------------ ------------ ------------ ------------ NET INCOME $ 4,977 $ 3,748 $ 17,958 $ 14,545 ---------- ============ ============ ============ ============ BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,985,751 5,893,060 5,963,878 5,867,705 BASIC EARNINGS PER COMMON SHARE $ 0.83 $ 0.64 $ 3.01 $ 2.48 ------------------------------- ============ ============ ============ ============ DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 6,158,813 6,098,920 6,144,733 6,064,077 DILUTED EARNINGS PER COMMON SHARE $ 0.81 $ 0.62 $ 2.92 $ 2.40 --------------------------------- ============ ============ ============ ============