January 15, 2003
LAKELAND FINANCIAL CORPORATION REPORTS RECORD 2003 PERFORMANCE
Warsaw, Indiana (January 15, 2003) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported net income of $3.3 million for the fourth quarter of 2002, an increase of 17%, versus $2.8 million for the comparable period in 2001. Diluted net income per common share for the quarter was $0.57 versus $0.48 for the comparable period in 2001. Net income for the year ended December 31, 2002 was a record $12.4 million versus $10.1 million in 2001, an increase of 22%. Diluted net income per share for the year was $2.08 versus $1.73 in 2001. During the fourth quarter of 2002, the Company adopted a new accounting standard, FASB 147, which resulted in the reversal of 2002 goodwill amortization totaling $378,000 for the year. Excluding the impact of the adoption of FASB 147, net income for 2002 would have been $12.1 million, or $2.04 per diluted share, an increase of 20% versus 2001. The results for 2001 included a gain of $753,000 related to the sale of five offices on September 21, 2001.
The Company announced that the Board of Directors approved a cash dividend for the fourth quarter of $0.17 per share, payable on January 25, 2003 to shareholders of record on January 10, 2003. The total dividends paid in 2002 represents an increase of 13% over the total dividends paid in 2001.
Michael L. Kubacki, President and Chief Executive Officer, commented on the results, "Our performance in 2002 represents the culmination of an outstanding team effort at every level of Lake City Bank. Despite a very challenging environment, we were able to achieve strong results and post our 15th consecutive year of improved earnings. With balanced growth in each of our core businesses, we achieved our goal of providing broad based, sophisticated services with a local flavor to our customers located throughout Northern Indiana."
Kubacki continued, "While the Company's 2002 net interest margin of 4.03% represents a significant improvement versus 3.70% in 2001, margin pressures continued to impact earnings in the fourth quarter. Our net interest margin of 3.78% in the fourth quarter resulted from a .50% reduction in the Bank's prime rate in early November and overall lower asset yields. Reduced yields in the investment portfolio resulted from overall lower reinvestment rates in the market. Furthermore, the reduction in the prime rate reduced yields on both commercial and consumer loans. While lower rates are good for our customers and are expected to have a positive long-term impact on the economy, the short-term result is a compression of our profit margin."
"Despite the margin challenges in the second half of 2002, net interest income increased 12% in 2002 as a result of overall loan growth and the improved net interest margin on a year over year basis. In addition, we have achieved terrific success in our focus on growing noninterest income with respect to our traditional banking services. Noninterest income increased 16% in 2002 versus 2001 to $14.8 million, excluding the gain on sale of branches in 2001. This improvement was led by a strong 26% increase in service charges on deposit accounts for the year. In addition, net gains on the origination and resulting sale of real estate mortgages increased 55% for 2002 versus 2001," added Kubacki.
Lakeland Financial's allowance for loan losses as of December 31, 2002 was $9.5 million, or 1.16% of gross loans, compared to $7.9 million, or 1.08% of gross loans, as of December 31, 2001 and $9.1 million, or 1.15% of gross loans, as of September 30, 2002. The ratio of non-performing assets to loans was 0.94% on December 31, 2002 compared to 0.56% on December 31, 2001 and 0.98% on September 30, 2002. Nonperforming assets were $7.7 million at December 31, 2002 versus $4.1 million on December 31, 2001 and $7.7 million on September 30, 2002. The Company's loan loss allowance represented 123% of total nonperforming assets as of December 31, 2002 versus 117% as of September 30, 2002 and increased by $1.6 million, or 20%, during the last twelve months.
Kubacki commented, "Loan losses were essentially flat for the year with net charge offs totaling $1.5 million in 2002 versus $1.4 million in 2001. We are generally satisfied with this performance, but remain cautiously optimistic about the overall strength of our regional economy. We are therefore maintaining a careful approach to managing our lending practices and related asset quality issues."
For the year ended December 31, 2002, Lakeland Financial's average equity to average assets ratio was 6.89% compared to 6.56% in 2001. Average shareholders' equity for the year was $79.1 million versus $70.0 million in 2001, an increase of 13%. Average loans for the year were $768 million versus $728 million in 2001, an increase of 6%. Average total deposits for the year were $864 million versus $833 million for the comparable period in 2001. The average loans and average total deposits reported for 2001 included approximately $24 million of loans and $70 million of deposits which were included in the September 21, 2001 sale of five offices.
Lakeland Financial Corporation is a $1.2 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with 41 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, DeKalb, 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 Stifel Nicolaus & Company, Howe Barnes Investments, Inc., Raymond James & Associates, Inc., McDonald Investments, Inc. and First Tennessee Capital Markets.
The Company's fixed rate cumulative trust preferred securities are traded on the Nasdaq Stock Market under the symbols "LKFNP". The annual rate on the fixed rate securities is 9.0%.
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. |
