April 15, 2004
LAKELAND FINANCIAL REPORTS FIRST QUARTER PERFORMANCE AND CASH DIVIDEND
Warsaw, Indiana (April 15, 2004) – Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported net income of $3.5 million for the first quarter of 2004, which is unchanged versus the comparable period of 2003 and represents a 16% increase versus net income of $3.0 million in the fourth quarter of 2003. Diluted net income per common share for the quarter was $0.58 versus $0.59 for the comparable period of 2003 and $0.50 for the fourth quarter of 2003.
The Company also announced that the Board of Directors approved a cash dividend for the first quarter of $0.21 per share, payable on April 26, 2004 to shareholders of record on April 10, 2004. The quarterly dividend represents an 11% increase over the quarterly dividend of $0.19 paid in 2003.
Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, “We are proud of our performance in the first quarter of 2004. As a result of the challenging interest rate environment that we have been operating in for the past twelve months, our focus has been on growth in key noninterest income categories and prudent expense management. The combination of our balance sheet structure and historically low interest rates has significantly affected our net interest income through a decline in our net interest margin, which was 3.60% versus 3.93% in the first quarter of 2003. As a result, our net interest income after provision for loan losses has increased by only 1% when compared to the same period in 2003 despite good earning asset growth.”
Kubacki continued, “We continued to experience good revenue growth in key noninterest income areas during the quarter. Excluding mortgage sales gains, noninterest income grew by 16% versus the comparable period in 2003.” Comparing the first quarter of 2004 to the comparable period in 2003, other income increased by 40%, or $271,000, credit card fees increased 39%, or $140,000, and trust and brokerage fees increased 21%, or $129,000. Overall, total noninterest income decreased by $226,000, driven by a $759,000 reduction in mortgage sales gains versus the comparable period in 2003.
Kubacki added, “The mortgage environment during the first quarter had a negative impact on earnings as we experienced a dramatic reduction in mortgage sales gains and incurred an impairment of mortgage servicing rights of $159,000 for the quarter versus $141,000 in the first quarter of 2003. In the fourth quarter of 2003, we had a benefit of $117,000 compared to the loss in the first quarter. While we have recently seen some rebound in mortgage origination activity, we do not anticipate that it will have a significant impact in future quarters.”
Total loans as of March 31, 2004 were $884.5 million versus $870.9 million as of December 31, 2003 and $826.9 million as of March 31, 2003. Average loans during the first quarter of 2004 were $883.7 million compared to $860.3 million in the fourth quarter of 2003, an increase of 3%.
Lakeland Financial’s allowance for loan losses as of March 31, 2004 was $10.5 million, compared to $10.2 million as of December 31, 2003 and $9.7 million as of March 31, 2003. Non-performing assets totaled $4.5 million as of March 31, 2004 versus $4.3 million as of December 31, 2003 and $8.8 million on March 31, 2003. The ratio of non-performing assets to loans was 0.51% on March 31, 2004 compared to 0.50% at December 31, 2003 and 1.06% at March 31, 2003. Net charge offs totaled $9,000 in the first quarter versus $320,000 during the fourth quarter of 2003 and $458,000 in the first quarter of 2003. For the quarter ended March 31, 2004, net charge offs were less than 0.01% of average loans compared to 0.23% in the same period in 2003.
Kubacki commented, “We are extremely pleased with the overall quality of our loan portfolio and the resulting low level of charge offs during the quarter. Clearly, there is a direct relationship between our earnings power in this low margin environment and our asset quality. As a result of our moderate level of charge offs and overall asset quality, we have not been required to increase the loan loss allocations significantly, thus reducing our loan loss provision.”
For the three months ended March 31, 2004, Lakeland Financial’s average equity to average assets ratio was 7.21% compared to 7.06% for the fourth quarter of 2003 and 7.07% for the first quarter of 2003. Average stockholders' equity for the quarter ended March 31, 2004 was $92.4 million versus $89.0 million for the fourth quarter of 2003 and $85.6 million for the comparable period in 2003. Average total deposits for the quarter ended March 31, 2004 were $968.7 million compared to $993.3 million for the fourth quarter of 2003 and $934.1 million for the same 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. |
