Exhibit 99.1
NEWS FROM LAKELAND FINANCIAL CORPORATION
FOR IMMEDIATE RELEASE
Contact
Lisa M. O'Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
Lakeland Financial Reports Record Performance
Third Quarter Net Income Increases 17%
Warsaw, Indiana (October 25, 2017) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record third quarter net income of $15.8 million for the three months ended September 30, an increase of 17% versus $13.5 million for the third quarter of 2016. Diluted net income per common share also increased 17% to $0.62 for the third quarter of 2017, versus $0.53 for the third quarter of 2016, representing a record quarter for the company and its shareholders. On a linked quarter basis, net income increased 3% or $461,000 from the second quarter ended June 30, 2017, which had net income of $15.4 million and $0.60 diluted net income per common share.
The company further reported record net income of $45.7 million for the nine months ended September 30, 2017 versus $38.6 million for the comparable period of 2016, an increase of 19%. Diluted net income per common share was also a record for the period and increased 17% to $1.78 for the nine months ended September 30, 2017 versus $1.52 for the comparable period of 2016.
David M. Findlay, President and CEO commented, "The record quarter and year-to-date results reflect the continued geographic and balance sheet expansion of Lake City Bank. Healthy economic conditions in our Hoosier communities have provided a strong foundation for the Lake City Bank team to continue growing loans and deposits."
Highlights for the quarter are noted below:
3rd Quarter 2017 versus 3rd Quarter 2016 highlights:
|
·
|
Organic average loan growth of $373 million or 11%
|
|
·
|
Average deposit growth of $105 million or 3%
|
|
·
|
Net interest income increase of $4.9 million or 16%
|
|
·
|
Net interest margin increase of 27 basis points to 3.35%
|
|
·
|
Revenue growth of $5.4 million or 14%
|
|
·
|
Continued strong asset quality with nonperforming assets to total assets at 0.24% compared to 0.18%
|
|
·
|
Net recoveries of $484,000 versus net charge offs of $394,000 a year ago
|
|
·
|
Tangible common equity1 increase of $35.2 million or 8%
|
1 Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures."
1
3rd Quarter 2017 versus 2nd Quarter 2017 highlights:
|
·
|
Organic average loan growth of $31 million or 1%
|
|
·
|
Average deposit growth of $34 million or 1%
|
|
·
|
Net interest income increase of $801,000 or 2%
|
|
·
|
Net interest margin increase of 1 basis point to 3.35%
|
|
·
|
Revenue growth of $1.5 million or 4%
|
|
·
|
Continued strong asset quality with nonperforming assets to total assets at 0.24% compared to 0.23%
|
|
·
|
Net recoveries of $484,000 versus net recoveries of $289,000 in the prior quarter
|
|
·
|
Tangible common equity1 increase of $12.1 million or 3%
|
As previously announced, the board of directors approved a cash dividend for the third quarter of $0.22 per share, payable on November 6, 2017, to shareholders of record as of October 25, 2017. The third quarter dividend per share represents a 16% increase over the dividend rate paid in the last three quarters of 2016 and in the first quarter of 2017 of $0.19 per share.
Return on average total equity for the third quarter of 2017 was 13.71%, compared to 12.67% in the third quarter of 2016 and 13.84% in the linked second quarter of 2017. Return on average total equity for the first nine months of 2017 was 13.73%, compared to 12.51% in the same period of 2016. Return on average assets for the third quarter of 2017 was 1.41%, compared to 1.29% in the third quarter of 2016 and 1.40% in the linked second quarter of 2017. Return on average assets for the first nine months of 2017 was 1.39% compared to 1.29% in the same period of 2016. The company's total capital as a percent of risk-weighted assets was 13.58% at September 30, 2017, compared to 13.30% at June 30, 2017. The company's tangible common equity to tangible assets ratio was 10.32% at September 30, 2017, compared to 10.11% at September 30, 2016 and 10.19% at June 30, 2017.
Findlay noted, "Revenue growth is the greatest driver of our strong performance in 2017 as we have experienced strong loan demand, an expansion in our net interest margin and excellent growth in fee-based services throughout our business units. As a result of our strong income performance in 2017, our capital position has strengthened further and we continue to deploy our capital by reinvesting in our Indiana communities and through our recently increased common stock dividend to our shareholders."
Average total loans for the third quarter of 2017 were $3.62 billion, an increase of $372.6 million, or 11%, versus $3.24 billion for the third quarter of 2016. Total loans outstanding grew $355.1 million, or 11%, from $3.28 billion as of September 30, 2016 to $3.64 billion as of September 30, 2017. On a linked quarter basis, total loans grew $58.2 million, or 2%, from $3.58 billion at June 30, 2017.
Average total deposits for the third quarter of 2017 were $3.72 billion, an increase of $105.2 million, or 3%, versus $3.61 billion for the third quarter of 2016. On a linked quarter basis, total average deposits grew $34.0 million, or 1%, from $3.68 billion at June 30, 2017. Total deposits grew $222.0 million, or 6%, from $3.65 billion as of September 30, 2016 to $3.87 billion as of September 30, 2017. Core deposits, which exclude brokered deposits, increased $32.4 million, or 1%, from $3.55 billion at September 30, 2016 to $3.58 billion at September 30, 2017. Brokered deposits increased by $189.7 million, from $106.8 million to $296.4 million as of September 30, 2017.
1 Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures."
2
On a linked quarter basis, total deposits increased by $258.1 million to $3.87 billion. During the third quarter of 2017, core deposits increased $78.1 million or 2% from $3.50 billion as of June 30, 2017 to $3.58 billion as of September 30, 2017. The increase in core deposits on a linked quarter basis was generated from commercial deposit growth of $99.9 million, retail deposit growth of $70.4 million and public fund deposit contraction of $92.3 million. During the third quarter of 2017, brokered deposits increased by $180.0 million from $116.4 million at June 30, 2017 and the proceeds were used to reduce short-term borrowings.
The company's net interest margin increased 27 basis points to 3.35% for the third quarter of 2017 compared to 3.08% for the third quarter of 2016. The higher margin in the third quarter of 2017 was due to higher yields on loans and securities, partially offset by a higher cost of funds. On a linked quarter basis, the net interest margin improved by one basis point from 3.34% in the second quarter of 2017. During the quarter asset yields improved by eight basis points and were offset by an increase in cost of funds of seven basis points. Net interest income increased $4.9 million, or 16%, to $34.6 million for the third quarter of 2017, versus $29.7 million in the third quarter of 2016. The company's net interest margin for the nine months ended September 30, 2017 was 3.32% compared to 3.17% in the prior year nine-month period.
The company recorded a provision for loan losses of $450,000 in the third quarter of 2017, primarily driven by growth in the loan portfolio. The company's allowance for loan losses as of September 30, 2017 was $45.5 million compared to $42.9 million as of September 30, 2016 and $44.6 million as of June 30, 2017. The allowance for loan losses represented 1.25% of total loans as of September 30, 2017 versus 1.31% at September 30, 2016 and 1.25% as of June 30, 2017.
Nonperforming assets increased $3.1 million, or 42%, to $10.5 million as of September 30, 2017 versus $7.4 million as of September 30, 2016 due to an increase in nonaccrual loans. On a linked quarter basis, nonperforming assets were $429,000 higher than the $10.1 million reported as of June 30, 2017. The ratio of nonperforming assets to total assets at September 30, 2017 increased to 0.24% from 0.18% at September 30, 2016 and 0.23% at June 30, 2017. The $429,000 increase in nonperforming assets during the quarter was primarily due to placing two commercial relationships in nonaccrual status. Net recoveries totaled $484,000 in the third quarter of 2017 versus net charge-offs of $394,000 during the third quarter of 2016 and net recoveries of $289,000 during the linked second quarter of 2017.
Findlay added, "The stable economic landscape in our Indiana markets continues to sustain the overall quality of our loan portfolio. We continue to be cautiously optimistic and the loan portfolio growth is carefully managed. Economic conditions are as strong as they have been since the recovery began in much of our footprint."
The company's noninterest income increased $479,000 or 5% to $9.5 million for the third quarter of 2017 versus $9.0 million for the third quarter of 2016. Noninterest income was positively impacted by a $478,000 increase in service charges on deposit accounts primarily due to growth in fees from business accounts. In addition, wealth advisory fees increased $164,000 or 13%.
The company's noninterest income increased 10% to $26.5 million for the nine months ended September 30, 2017 compared to $24.1 million in the prior year period. Noninterest income was positively impacted by a $1.3 million or 14% increase in service charges on deposit accounts primarily due to growth in fees from business accounts. In addition, wealth advisory fees increased by $405,000 or 11% and investment brokerage fees increased by $198,000 or 26%. Bank owned life insurance income increased $216,000 or 20% from the first nine months of 2016 to the first nine months of 2017 primarily due to increased revenue from variable life insurance contracts owned by the company. In addition, other income increased $608,000 or 48% compared to the first nine months of 2016. During the first quarter of 2016, other income was negatively impacted by $295,000 of credit valuation adjustment losses related to the company's swap arrangements and a $226,000 write down in the first quarter of 2016 to a property formerly used as a Lake City Bank branch, which together account for $521,000 of the increase in other income from the first nine months of 2016 to the first nine months of 2017. Noninterest income during the first nine months of 2017 was negatively impacted by a decrease of $394,000, or 33%, in mortgage banking income resulting from lower mortgage loan originations as compared to the prior year period.
3
The company's noninterest expense increased by 8% to $20.3 million in the third quarter of 2017 compared to $18.8 million in the third quarter of 2016. Salaries and employee benefits increased by 8% or $896,000 primarily due to incentive-based compensation costs, increased health insurance cost, normal merit increases and staff additions related to the company's continued growth and expansion. Corporate and business development expense increased by $224,000 or 22%, primarily due to an increase in the third quarter of 2017 of advertising expense. Equipment costs increased by $164,000 or 16%, driven by the company's branch expansion as well as remodeling of existing branches. Professional fees increased by $143,000, or 17%, primarily due to fees related to the company's advertising campaign.
The company's noninterest expense increased by $5.1 million or 9% to $59.7 million in the first nine months of 2017 compared to $54.6 million in the prior year period. The increase was driven by salaries and employee benefits, which increased by 10% or $3.2 million, primarily due to incentive-based compensation costs, increased health insurance cost, normal merit increases and staff additions related to the company's continued growth and expansion. In addition, corporate and business development increased by 49%, or $1.3 million, primarily due to community support and donation expense of $850,000 and $499,000 of increased advertising expense. The company's efficiency ratio was 45.9% for the third quarter of 2017, compared to 48.4% for the third quarter of 2016 and 45.4% for the linked second quarter of 2017.
Lakeland Financial Corporation is a $4.5 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fourth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 49 offices in Northern and Central Indiana, delivering technology-driven and client-centric financial services solutions to individuals and businesses.
Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company's common stock is traded on the Nasdaq Global Select Market under "LKFN." In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this earnings release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding the company's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible common equity" which is "common stockholders' equity" excluding intangible assets, net of deferred tax and "tangible assets" which is "assets" excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is presented.
4
This document contains, and future oral and written statements of the company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "continue," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the company undertakes no obligation to update any statement in light of new information or future events. Additional information concerning the company and its business, including factors that could materially affect the company's financial results, is included in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K.
5
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||
|
THIRD QUARTER 2017 FINANCIAL HIGHLIGHTS
|
||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||
|
(Unaudited – Dollars in thousands, except per share data)
|
Sep. 30,
|
Jun. 30,
|
Sep. 30,
|
Sep. 30,
|
Sep. 30,
|
|||||
|
END OF PERIOD BALANCES
|
2017
|
2017
|
2016
|
2017
|
2016
|
|||||
|
Assets
|
$ 4,454,236
|
$ 4,392,999
|
$ 4,197,320
|
$ 4,454,236
|
$ 4,197,320
|
|||||
|
Deposits
|
3,873,990
|
3,615,939
|
3,651,942
|
3,873,990
|
3,651,942
|
|||||
|
Brokered Deposits
|
296,431
|
116,435
|
106,752
|
296,431
|
106,752
|
|||||
|
Core Deposits
|
3,577,559
|
3,499,504
|
3,545,190
|
3,577,559
|
3,545,190
|
|||||
|
Loans
|
3,635,252
|
3,577,004
|
3,280,161
|
3,635,252
|
3,280,161
|
|||||
|
Allowance for Loan Losses
|
45,497
|
44,563
|
42,853
|
45,497
|
42,853
|
|||||
|
Total Equity
|
462,516
|
450,460
|
427,380
|
462,516
|
427,380
|
|||||
|
Goodwill net of deferred tax assets
|
3,110
|
3,126
|
3,138
|
3,110
|
3,138
|
|||||
|
Tangible Common Equity (1)
|
459,406
|
447,334
|
424,242
|
459,406
|
424,242
|
|||||
|
AVERAGE BALANCES
|
||||||||||
|
Total Assets
|
$ 4,464,568
|
$ 4,395,495
|
$ 4,152,333
|
$ 4,390,635
|
$ 3,990,022
|
|||||
|
Earning Assets
|
4,196,041
|
4,150,234
|
3,900,651
|
4,135,885
|
3,755,248
|
|||||
|
Investments
|
536,444
|
531,262
|
500,384
|
527,740
|
489,269
|
|||||
|
Loans
|
3,617,624
|
3,586,407
|
3,244,994
|
3,571,459
|
3,175,882
|
|||||
|
Total Deposits
|
3,716,303
|
3,682,348
|
3,611,110
|
3,678,897
|
3,427,308
|
|||||
|
Interest Bearing Deposits
|
2,923,118
|
2,926,086
|
2,843,015
|
2,906,159
|
2,724,573
|
|||||
|
Interest Bearing Liabilities
|
3,189,288
|
3,171,565
|
2,933,108
|
3,148,862
|
2,849,661
|
|||||
|
Total Equity
|
458,074
|
445,287
|
423,358
|
445,181
|
411,797
|
|||||
|
INCOME STATEMENT DATA
|
||||||||||
|
Net Interest Income
|
$ 34,620
|
$ 33,819
|
$ 29,719
|
$ 100,500
|
$ 87,574
|
|||||
|
Net Interest Income-Fully Tax Equivalent
|
35,433
|
34,550
|
30,274
|
102,785
|
89,193
|
|||||
|
Provision for Loan Losses
|
450
|
500
|
0
|
1,150
|
0
|
|||||
|
Noninterest Income
|
9,497
|
8,791
|
9,018
|
26,547
|
24,128
|
|||||
|
Noninterest Expense
|
20,269
|
19,352
|
18,759
|
59,669
|
54,589
|
|||||
|
Net Income
|
15,825
|
15,364
|
13,480
|
45,703
|
38,562
|
|||||
|
PER SHARE DATA
|
||||||||||
|
Basic Net Income Per Common Share
|
$ 0.63
|
$ 0.61
|
$ 0.54
|
$ 1.82
|
$ 1.54
|
|||||
|
Diluted Net Income Per Common Share
|
0.62
|
0.60
|
0.53
|
1.78
|
1.52
|
|||||
|
Cash Dividends Declared Per Common Share
|
0.22
|
0.22
|
0.19
|
0.63
|
0.54
|
|||||
|
Dividend Payout
|
35.48
|
%
|
36.67
|
%
|
35.85
|
%
|
35.39
|
%
|
35.53
|
%
|
|
Book Value Per Common Share (equity per share issued)
|
18.36
|
17.88
|
17.04
|
18.36
|
17.04
|
|||||
|
Tangible Book Value Per Common Share (1)
|
18.23
|
17.76
|
16.91
|
18.23
|
16.91
|
|||||
|
Market Value – High
|
49.22
|
48.70
|
37.74
|
49.22
|
37.74
|
|||||
|
Market Value – Low
|
41.30
|
41.38
|
30.21
|
39.68
|
26.53
|
|||||
|
Basic Weighted Average Common Shares Outstanding
|
25,193,894
|
25,183,186
|
25,069,434
|
25,176,593
|
25,044,596
|
|||||
|
Diluted Weighted Average Common Shares Outstanding
|
25,656,403
|
25,619,977
|
25,457,892
|
25,640,742
|
25,418,884
|
|||||
|
KEY RATIOS
|
||||||||||
|
Return on Average Assets
|
1.41
|
%
|
1.40
|
%
|
1.29
|
%
|
1.39
|
%
|
1.29
|
%
|
|
Return on Average Total Equity
|
13.71
|
13.84
|
12.67
|
13.73
|
12.51
|
|||||
|
Average Equity to Average Assets
|
10.26
|
10.13
|
10.20
|
10.14
|
10.32
|
|||||
|
Net Interest Margin
|
3.35
|
3.34
|
3.08
|
3.32
|
3.17
|
|||||
|
Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income)
|
45.94
|
45.42
|
48.43
|
46.97
|
48.87
|
|||||
|
Tier 1 Leverage (2)
|
10.92
|
10.82
|
10.71
|
10.92
|
10.71
|
|||||
|
Tier 1 Risk-Based Capital (2)
|
12.42
|
12.15
|
12.33
|
12.42
|
12.33
|
|||||
|
Common Equity Tier 1 (CET1) (2)
|
11.65
|
11.39
|
11.50
|
11.65
|
11.50
|
|||||
|
Total Capital (2)
|
13.58
|
13.30
|
13.52
|
13.58
|
13.52
|
|||||
|
Tangible Capital (1) (2)
|
10.32
|
10.19
|
10.11
|
10.32
|
10.11
|
|||||
|
ASSET QUALITY
|
||||||||||
|
Loans Past Due 30 - 89 Days
|
$ 1,935
|
$ 1,562
|
$ 1,734
|
$ 1,935
|
$ 1,734
|
|||||
|
Loans Past Due 90 Days or More
|
73
|
0
|
6
|
73
|
6
|
|||||
|
Non-accrual Loans
|
10,279
|
9,884
|
7,256
|
10,279
|
7,256
|
|||||
|
Nonperforming Loans (includes nonperforming TDR's)
|
10,352
|
9,884
|
7,262
|
10,352
|
7,262
|
|||||
|
Other Real Estate Owned
|
115
|
194
|
146
|
115
|
146
|
|||||
|
Other Nonperforming Assets
|
40
|
0
|
6
|
40
|
6
|
|||||
|
Total Nonperforming Assets
|
10,507
|
10,078
|
7,414
|
10,507
|
7,414
|
|||||
|
Performing Troubled Debt Restructurings
|
5,601
|
8,425
|
10,579
|
5,601
|
10,579
|
|||||
|
Nonperforming Troubled Debt Restructurings (included in nonperforming loans)
|
7,946
|
6,852
|
5,885
|
7,946
|
5,885
|
|||||
|
Total Troubled Debt Restructurings
|
13,547
|
15,277
|
16,464
|
13,547
|
16,464
|
|||||
|
Impaired Loans
|
16,679
|
19,580
|
18,605
|
16,679
|
18,605
|
|||||
|
Non-Impaired Watch List Loans
|
145,655
|
133,526
|
134,330
|
145,655
|
134,330
|
|||||
|
Total Impaired and Watch List Loans
|
162,334
|
153,109
|
152,935
|
162,334
|
152,935
|
|||||
|
Gross Charge Offs
|
170
|
261
|
773
|
935
|
1,535
|
|||||
|
Recoveries
|
654
|
550
|
379
|
1,564
|
778
|
|||||
|
Net Charge Offs/(Recoveries)
|
(484)
|
(289)
|
394
|
(629)
|
757
|
|||||
|
Net Charge Offs/(Recoveries) to Average Loans
|
(0.05)
|
%
|
(0.03)
|
%
|
0.05
|
%
|
(0.02)
|
%
|
0.03
|
%
|
|
Loan Loss Reserve to Loans
|
1.25
|
%
|
1.25
|
%
|
1.31
|
%
|
1.25
|
%
|
1.31
|
%
|
|
Loan Loss Reserve to Nonperforming Loans
|
439.51
|
%
|
450.75
|
%
|
590.10
|
%
|
439.51
|
%
|
590.10
|
%
|
|
Loan Loss Reserve to Nonperforming Loans and Performing TDR's
|
285.20
|
%
|
243.37
|
%
|
240.20
|
%
|
285.20
|
%
|
240.20
|
%
|
|
Nonperforming Loans to Loans
|
0.28
|
%
|
0.28
|
%
|
0.22
|
%
|
0.28
|
%
|
0.22
|
%
|
|
Nonperforming Assets to Assets
|
0.24
|
%
|
0.23
|
%
|
0.18
|
%
|
0.24
|
%
|
0.18
|
%
|
|
Total Impaired and Watch List Loans to Total Loans
|
4.47
|
%
|
4.28
|
%
|
4.66
|
%
|
4.47
|
%
|
4.66
|
%
|
|
OTHER DATA
|
||||||||||
|
Full Time Equivalent Employees
|
537
|
540
|
518
|
537
|
518
|
|||||
|
Offices
|
49
|
49
|
48
|
49
|
48
|
|||||
|
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"
|
||||||||||
|
(2) Capital ratios for September 30, 2017 are preliminary until the Call Report is filed.
|
||||||||||
6
|
CONSOLIDATED BALANCE SHEETS (in thousands except share data)
|
|||
|
September 30,
|
December 31,
|
||
|
2017
|
2016
|
||
|
(Unaudited)
|
|||
|
ASSETS
|
|||
|
Cash and due from banks
|
$ 109,647
|
$ 142,408
|
|
|
Short-term investments
|
20,186
|
24,872
|
|
|
Total cash and cash equivalents
|
129,833
|
167,280
|
|
|
Securities available for sale (carried at fair value)
|
536,547
|
504,191
|
|
|
Real estate mortgage loans held for sale
|
4,456
|
5,915
|
|
|
Loans, net of allowance for loan losses of $45,497 and $43,718
|
3,589,755
|
3,427,209
|
|
|
Land, premises and equipment, net
|
56,389
|
52,092
|
|
|
Bank owned life insurance
|
75,350
|
74,006
|
|
|
Federal Reserve and Federal Home Loan Bank stock
|
13,772
|
11,522
|
|
|
Accrued interest receivable
|
13,123
|
11,687
|
|
|
Goodwill
|
4,970
|
4,970
|
|
|
Other assets
|
30,041
|
31,153
|
|
|
Total assets
|
$ 4,454,236
|
$ 4,290,025
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||
|
LIABILITIES
|
|||
|
Noninterest bearing deposits
|
$ 821,589
|
$ 819,803
|
|
|
Interest bearing deposits
|
3,052,401
|
2,758,109
|
|
|
Total deposits
|
3,873,990
|
3,577,912
|
|
|
Short-term borrowings
|
|||
|
Securities sold under agreements to repurchase
|
63,888
|
50,045
|
|
|
Other short-term borrowings
|
0
|
180,000
|
|
|
Total short-term borrowings
|
63,888
|
230,045
|
|
|
Long-term borrowings
|
30
|
32
|
|
|
Subordinated debentures
|
30,928
|
30,928
|
|
|
Accrued interest payable
|
5,439
|
5,676
|
|
|
Other liabilities
|
17,445
|
18,365
|
|
|
Total liabilities
|
3,991,720
|
3,862,958
|
|
|
STOCKHOLDERS' EQUITY
|
|||
|
Common stock: 90,000,000 shares authorized, no par value
|
|||
|
25,194,903 shares issued and 25,026,689 outstanding as of September 30, 2017
|
|||
|
25,096,087 shares issued and 24,937,865 outstanding as of December 31, 2016
|
107,636
|
104,405
|
|
|
Retained earnings
|
357,710
|
327,873
|
|
|
Accumulated other comprehensive income/(loss)
|
452
|
(2,387)
|
|
|
Treasury stock, at cost (2017 - 168,214 shares, 2016 - 158,222 shares)
|
(3,371)
|
(2,913)
|
|
|
Total stockholders' equity
|
462,427
|
426,978
|
|
|
Noncontrolling interest
|
89
|
89
|
|
|
Total equity
|
462,516
|
427,067
|
|
|
Total liabilities and equity
|
$ 4,454,236
|
$ 4,290,025
|
|
7
|
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands except share and per share data)
|
|||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||
|
September 30,
|
September 30,
|
||||||
|
2017
|
2016
|
2017
|
2016
|
||||
|
NET INTEREST INCOME
|
|||||||
|
Interest and fees on loans
|
|||||||
|
Taxable
|
$ 38,630
|
$ 31,538
|
$ 110,044
|
$ 92,086
|
|||
|
Tax exempt
|
205
|
110
|
517
|
332
|
|||
|
Interest and dividends on securities
|
|||||||
|
Taxable
|
2,349
|
2,277
|
7,033
|
7,120
|
|||
|
Tax exempt
|
1,309
|
969
|
3,745
|
2,811
|
|||
|
Interest on short-term investments
|
96
|
185
|
198
|
295
|
|||
|
Total interest income
|
42,589
|
35,079
|
121,537
|
102,644
|
|||
|
Interest on deposits
|
7,037
|
5,032
|
18,722
|
13,921
|
|||
|
Interest on borrowings
|
|||||||
|
Short-term
|
588
|
37
|
1,329
|
283
|
|||
|
Long-term
|
344
|
291
|
986
|
866
|
|||
|
Total interest expense
|
7,969
|
5,360
|
21,037
|
15,070
|
|||
|
NET INTEREST INCOME
|
34,620
|
29,719
|
100,500
|
87,574
|
|||
|
Provision for loan losses
|
450
|
0
|
1,150
|
0
|
|||
|
NET INTEREST INCOME AFTER PROVISION FOR
|
|||||||
|
LOAN LOSSES
|
34,170
|
29,719
|
99,350
|
87,574
|
|||
|
NONINTEREST INCOME
|
|||||||
|
Wealth advisory fees
|
1,471
|
1,307
|
4,005
|
3,600
|
|||
|
Investment brokerage fees
|
330
|
252
|
950
|
752
|
|||
|
Service charges on deposit accounts
|
3,631
|
3,153
|
10,027
|
8,776
|
|||
|
Loan, insurance and service fees
|
2,060
|
2,105
|
5,850
|
5,835
|
|||
|
Merchant card fee income
|
588
|
552
|
1,696
|
1,576
|
|||
|
Bank owned life insurance income
|
397
|
392
|
1,270
|
1,054
|
|||
|
Other income
|
718
|
763
|
1,886
|
1,278
|
|||
|
Mortgage banking income
|
302
|
494
|
811
|
1,205
|
|||
|
Net securities gains
|
0
|
0
|
52
|
52
|
|||
|
Total noninterest income
|
9,497
|
9,018
|
26,547
|
24,128
|
|||
|
NONINTEREST EXPENSE
|
|||||||
|
Salaries and employee benefits
|
11,728
|
10,832
|
34,214
|
31,029
|
|||
|
Net occupancy expense
|
1,131
|
1,068
|
3,405
|
3,205
|
|||
|
Equipment costs
|
1,182
|
1,018
|
3,413
|
2,828
|
|||
|
Data processing fees and supplies
|
2,032
|
1,983
|
6,022
|
6,135
|
|||
|
Corporate and business development
|
1,245
|
1,021
|
3,943
|
2,641
|
|||
|
FDIC insurance and other regulatory fees
|
443
|
458
|
1,296
|
1,538
|
|||
|
Professional fees
|
962
|
819
|
2,717
|
2,505
|
|||
|
Other expense
|
1,546
|
1,560
|
4,659
|
4,708
|
|||
|
Total noninterest expense
|
20,269
|
18,759
|
59,669
|
54,589
|
|||
|
INCOME BEFORE INCOME TAX EXPENSE
|
23,398
|
19,978
|
66,228
|
57,113
|
|||
|
Income tax expense
|
7,573
|
6,498
|
20,525
|
18,551
|
|||
|
NET INCOME
|
$ 15,825
|
$ 13,480
|
$ 45,703
|
$ 38,562
|
|||
|
BASIC WEIGHTED AVERAGE COMMON SHARES
|
25,193,894
|
25,069,434
|
25,176,593
|
25,044,596
|
|||
|
BASIC EARNINGS PER COMMON SHARE
|
$ 0.63
|
$ 0.54
|
$ 1.82
|
$ 1.54
|
|||
|
DILUTED WEIGHTED AVERAGE COMMON SHARES
|
25,656,403
|
25,457,892
|
25,640,742
|
25,418,884
|
|||
|
DILUTED EARNINGS PER COMMON SHARE
|
$ 0.62
|
$ 0.53
|
$ 1.78
|
$ 1.52
|
|||
8
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||||
|
LOAN DETAIL
|
||||||||||||
|
THIRD QUARTER 2017
|
||||||||||||
|
(unaudited in thousands)
|
||||||||||||
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
|||||||||
|
2017
|
2017
|
2016
|
2016
|
|||||||||
|
Commercial and industrial loans:
|
||||||||||||
|
Working capital lines of credit loans
|
$ 703,953
|
19.4
|
%
|
$ 717,875
|
20.0
|
%
|
$ 624,404
|
18.0
|
%
|
$ 609,382
|
18.6
|
%
|
|
Non-working capital loans
|
658,167
|
18.1
|
646,517
|
18.1
|
644,086
|
18.5
|
641,599
|
19.5
|
||||
|
Total commercial and industrial loans
|
1,362,120
|
37.5
|
1,364,392
|
38.1
|
1,268,490
|
36.5
|
1,250,981
|
38.1
|
||||
|
Commercial real estate and multi-family residential loans:
|
||||||||||||
|
Construction and land development loans
|
287,778
|
7.9
|
209,772
|
5.8
|
245,182
|
7.1
|
221,436
|
6.7
|
||||
|
Owner occupied loans
|
499,651
|
13.7
|
511,425
|
14.3
|
469,705
|
13.5
|
468,582
|
14.3
|
||||
|
Nonowner occupied loans
|
456,930
|
12.6
|
450,907
|
12.6
|
458,404
|
13.2
|
408,620
|
12.5
|
||||
|
Multifamily loans
|
165,855
|
4.6
|
170,902
|
4.8
|
127,632
|
3.7
|
127,784
|
3.9
|
||||
|
Total commercial real estate and multi-family residential loans
|
1,410,214
|
38.8
|
1,343,006
|
37.5
|
1,300,923
|
37.5
|
1,226,422
|
37.4
|
||||
|
Agri-business and agricultural loans:
|
||||||||||||
|
Loans secured by farmland
|
161,553
|
4.4
|
156,053
|
4.4
|
172,633
|
5.0
|
152,719
|
4.6
|
||||
|
Loans for agricultural production
|
156,327
|
4.3
|
175,334
|
4.9
|
222,210
|
6.4
|
156,770
|
4.8
|
||||
|
Total agri-business and agricultural loans
|
317,880
|
8.7
|
331,387
|
9.3
|
394,843
|
11.4
|
309,489
|
9.4
|
||||
|
Other commercial loans
|
114,858
|
3.1
|
116,651
|
3.3
|
98,270
|
2.8
|
89,850
|
2.8
|
||||
|
Total commercial loans
|
3,205,072
|
88.1
|
3,155,436
|
88.2
|
3,062,526
|
88.2
|
2,876,742
|
87.7
|
||||
|
Consumer 1-4 family mortgage loans:
|
||||||||||||
|
Closed end first mortgage loans
|
171,946
|
4.7
|
171,495
|
4.8
|
163,155
|
4.7
|
161,907
|
4.9
|
||||
|
Open end and junior lien loans
|
181,338
|
5.0
|
172,530
|
4.8
|
169,664
|
4.9
|
170,140
|
5.2
|
||||
|
Residential construction and land development loans
|
10,530
|
0.3
|
10,118
|
0.3
|
15,015
|
0.4
|
12,801
|
0.4
|
||||
|
Total consumer 1-4 family mortgage loans
|
363,814
|
10.0
|
354,143
|
9.9
|
347,834
|
10.0
|
344,848
|
10.5
|
||||
|
Other consumer loans
|
67,545
|
1.9
|
68,646
|
1.9
|
61,308
|
1.8
|
58,957
|
1.8
|
||||
|
Total consumer loans
|
431,359
|
11.9
|
422,789
|
11.8
|
409,142
|
11.8
|
403,805
|
12.3
|
||||
|
Subtotal
|
3,636,431
|
100.0
|
%
|
3,578,225
|
100.0
|
%
|
3,471,668
|
100.0
|
%
|
3,280,547
|
100.0
|
%
|
|
Less: Allowance for loan losses
|
(45,497)
|
(44,563)
|
(43,718)
|
(42,853)
|
||||||||
|
Net deferred loan fees
|
(1,179)
|
(1,221)
|
(741)
|
(386)
|
||||||||
|
Loans, net
|
$ 3,589,755
|
$ 3,532,441
|
$ 3,427,209
|
$ 3,237,308
|
||||||||
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||||
|
DEPOSITS AND BORROWINGS
|
||||||||||||
|
THIRD QUARTER 2017
|
||||||||||||
|
(unaudited in thousands)
|
||||||||||||
|
September 30,
|
June 30,
|
December 31,
|
September 30,
|
|||||||||
|
2017
|
2017
|
2016
|
2016
|
|||||||||
|
Non-interest bearing demand deposits
|
$ 821,589
|
$ 762,965
|
$ 819,803
|
$ 770,079
|
||||||||
|
Savings and transaction accounts:
|
||||||||||||
|
Savings deposits
|
269,977
|
275,151
|
268,970
|
272,704
|
||||||||
|
Interest bearing demand deposits
|
1,390,335
|
1,322,847
|
1,325,320
|
1,289,548
|
||||||||
|
Time deposits:
|
||||||||||||
|
Deposits of $100,000 or more
|
1,149,152
|
1,015,741
|
924,825
|
1,078,084
|
||||||||
|
Other time deposits
|
242,937
|
239,235
|
238,994
|
241,527
|
||||||||
|
Total deposits
|
$ 3,873,990
|
$ 3,615,939
|
$ 3,577,912
|
$ 3,651,942
|
||||||||
|
FHLB advances and other borrowings
|
94,846
|
306,146
|
261,005
|
91,158
|
||||||||
|
Total funding sources
|
$ 3,968,836
|
$ 3,922,085
|
$ 3,838,917
|
$ 3,743,100
|
||||||||
9
LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
|
Three Months Ended
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||
|
September 30, 2017
|
June 30, 2017
|
September 30, 2016
|
||||||||||||||||||
|
Average
|
Interest
|
Yield (1)/
|
Average
|
Interest
|
Yield (1)/
|
Average
|
Interest
|
Yield (1)/
|
||||||||||||
|
(fully tax equivalent basis, dollars in thousands)
|
Balance
|
Income
|
Rate
|
Balance
|
Income
|
Rate
|
Balance
|
Income
|
Rate
|
|||||||||||
|
Earning Assets
|
||||||||||||||||||||
|
Loans:
|
||||||||||||||||||||
|
Taxable (2)(3)
|
$ 3,595,753
|
$ 38,630
|
4.26
|
%
|
$ 3,566,504
|
$ 36,967
|
4.16
|
%
|
$ 3,233,394
|
$ 31,538
|
3.88
|
%
|
||||||||
|
Tax exempt (1)
|
21,871
|
312
|
5.66
|
19,903
|
240
|
4.82
|
11,600
|
164
|
5.62
|
|||||||||||
|
Investments: (1)
|
||||||||||||||||||||
|
Available for sale
|
536,444
|
4,364
|
3.23
|
531,262
|
4,291
|
3.24
|
500,384
|
3,747
|
2.98
|
|||||||||||
|
Short-term investments
|
6,633
|
8
|
0.48
|
6,124
|
8
|
0.52
|
6,885
|
4
|
0.23
|
|||||||||||
|
Interest bearing deposits
|
35,340
|
88
|
0.99
|
26,441
|
46
|
0.70
|
148,388
|
181
|
0.49
|
|||||||||||
|
Total earning assets
|
$ 4,196,041
|
$ 43,402
|
4.10
|
%
|
$ 4,150,234
|
$ 41,552
|
4.02
|
%
|
$ 3,900,651
|
$ 35,634
|
3.63
|
%
|
||||||||
|
Less: Allowance for loan losses
|
(45,018)
|
(44,090)
|
(43,402)
|
|||||||||||||||||
|
Nonearning Assets
|
||||||||||||||||||||
|
Cash and due from banks
|
122,429
|
101,446
|
122,811
|
|||||||||||||||||
|
Premises and equipment
|
56,716
|
54,341
|
50,921
|
|||||||||||||||||
|
Other nonearning assets
|
134,400
|
133,564
|
121,352
|
|||||||||||||||||
|
Total assets
|
$ 4,464,568
|
$ 4,395,495
|
$ 4,152,333
|
|||||||||||||||||
|
Interest Bearing Liabilities
|
||||||||||||||||||||
|
Savings deposits
|
$ 274,514
|
$ 103
|
0.15
|
%
|
$ 274,645
|
$ 105
|
0.15
|
%
|
$ 270,136
|
$ 103
|
0.15
|
%
|
||||||||
|
Interest bearing checking accounts
|
1,365,617
|
2,636
|
0.77
|
1,403,560
|
2,387
|
0.68
|
1,261,390
|
1,362
|
0.43
|
|||||||||||
|
Time deposits:
|
||||||||||||||||||||
|
In denominations under $100,000
|
240,444
|
746
|
1.23
|
237,917
|
700
|
1.18
|
243,148
|
696
|
1.14
|
|||||||||||
|
In denominations over $100,000
|
1,042,543
|
3,552
|
1.35
|
1,009,964
|
3,051
|
1.21
|
1,068,341
|
2,871
|
1.07
|
|||||||||||
|
Miscellaneous short-term borrowings
|
235,212
|
588
|
0.99
|
214,520
|
431
|
0.81
|
59,133
|
37
|
0.25
|
|||||||||||
|
Long-term borrowings and
|
||||||||||||||||||||
|
subordinated debentures (4)
|
30,958
|
344
|
4.41
|
30,959
|
328
|
4.25
|
30,960
|
291
|
3.74
|
|||||||||||
|
Total interest bearing liabilities
|
$ 3,189,288
|
$ 7,969
|
0.99
|
%
|
$ 3,171,565
|
$ 7,002
|
0.89
|
%
|
$ 2,933,108
|
$ 5,360
|
0.73
|
%
|
||||||||
|
Noninterest Bearing Liabilities
|
||||||||||||||||||||
|
Demand deposits
|
793,185
|
756,262
|
768,095
|
|||||||||||||||||
|
Other liabilities
|
24,021
|
22,381
|
27,772
|
|||||||||||||||||
|
Stockholders' Equity
|
458,074
|
445,287
|
423,358
|
|||||||||||||||||
|
Total liabilities and stockholders' equity
|
$ 4,464,568
|
$ 4,395,495
|
$ 4,152,333
|
|||||||||||||||||
|
Interest Margin Recap
|
||||||||||||||||||||
|
Interest income/average earning assets
|
43,402
|
4.10
|
41,552
|
4.02
|
35,634
|
3.63
|
||||||||||||||
|
Interest expense/average earning assets
|
7,969
|
0.75
|
7,002
|
0.68
|
5,360
|
0.55
|
||||||||||||||
|
Net interest income and margin
|
$ 35,433
|
3.35
|
%
|
$ 34,550
|
3.34
|
%
|
$ 30,274
|
3.08
|
%
|
|||||||||||
|
(1)
|
Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2017 and 2016. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 included the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $813,000, $731,000 and $555,000 in the three-month periods ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
|
|
(2)
|
Loan fees, which are immaterial in relation to total taxable loan interest income for 2017 and 2016, are included as taxable loan interest income.
|
|
(3)
|
Nonaccrual loans are included in the average balance of taxable loans.
|
10
(1) Reconciliation of Non-GAAP Financial Measures
|
Tangible common equity, tangible assets and tangible book value per share are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of stockholders' equity. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company's value including only earning assets as meaningful to an understanding of the company's financial information. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
|
|
Three Months Ended
|
Nine Months Ended
|
|||||||||
|
Sep. 30,
|
Jun. 30,
|
Sep. 30,
|
Sep. 30,
|
Sep. 30,
|
||||||
|
2017
|
2017
|
2016
|
2017
|
2016
|
||||||
|
Total Equity
|
$ 462,516
|
$ 450,460
|
$ 427,380
|
$ 462,516
|
$ 427,380
|
|||||
|
Less: Goodwill
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
|||||
|
Plus: Deferred tax assets related to goodwill
|
1,860
|
1,844
|
1,832
|
1,860
|
1,832
|
|||||
|
Tangible Common Equity
|
459,406
|
447,334
|
424,242
|
459,406
|
424,242
|
|||||
|
Assets
|
$ 4,454,236
|
$ 4,392,999
|
$ 4,197,320
|
$ 4,454,236
|
$ 4,197,320
|
|||||
|
Less: Goodwill
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
|||||
|
Plus: Deferred tax assets related to goodwill
|
1,860
|
1,844
|
1,832
|
1,860
|
1,832
|
|||||
|
Tangible Assets
|
4,451,126
|
4,389,873
|
4,194,182
|
4,451,126
|
4,194,182
|
|||||
|
Ending common shares issued
|
25,194,903
|
25,185,619
|
25,081,087
|
25,194,903
|
25,081,087
|
|||||
|
Tangible Book Value Per Common Share
|
$ 18.23
|
$ 17.76
|
$ 16.91
|
$ 18.23
|
$ 16.91
|
|||||
|
Tangible Common Equity/Tangible Assets
|
10.32
|
%
|
10.19
|
%
|
10.11
|
%
|
10.32
|
%
|
10.11
|
%
|
###
11