October 15, 2001
LAKELAND FINANCIAL REPORTS THIRD QUARTER PERFORMANCE AND CASH DIVIDEND
Warsaw, Indiana (October 15, 2001) - Lakeland Financial Corporation (NASDAQ/LKFN), parent company of Lake City Bank, today reported net income of $2.8 million for the third quarter of 2001 versus $2.3 million for the comparable period in 2000. Diluted net income per common share for the third quarter of 2001 was $0.47 versus $0.40 for the comparable period in 2000. Net income for the nine months ended September 30, 2001 was $7.3 million, or $1.25 per diluted share, versus $7.0 million, or $1.21 per diluted share, in the comparable period in 2000.
The Company announced that the Board of Directors approved a cash dividend for the third quarter of $0.15 per share, payable on October 25, 2001 to shareholders of record on October 10, 2001. This dividend represents an increase of 15% over the quarterly dividend that was paid in each quarter of 2000.
Michael L. Kubacki, President and Chief Executive Officer, commented on the performance, "We are pleased with our performance during the third quarter of 2001. In an extremely challenging environment, our quarterly earnings performance reflects the Company's focus throughout the year on revenue growth and interest margin management. Despite additional reductions of 0.75% in the Bank's prime rate during the quarter, the Company was able to improve its quarterly net interest margin for the first time this year on a year over year basis. Our margin for the third quarter was 3.81% versus 3.71% in 2000, and 3.63% for the first nine months of 2001 versus 3.75% for the same period in 2000."
The Company also announced that it had completed the sale of five non-strategic offices during the third quarter. Included in the sale were deposits and loans totaling approximately $70 million and $24 million, respectively. A gain of $753,000 was recorded as a result of the sale.
"With the sale of these offices, we are now positioned to focus exclusively on our existing core markets and the outstanding opportunities for future growth in our northern markets, which encompass the communities anchored by Warsaw, Fort Wayne, Elkhart and South Bend. We opened our third office in Fort Wayne during the quarter and continue to enjoy strong success there," added Kubacki.
Kubacki continued, "Our noninterest income, exclusive of the gain on sale of branches, increased 14% from $2.6 million in the third quarter of 2000 to $3.0 million in 2001. For the nine months ended September 30, 2001, total noninterest income, exclusive of the gain on sale of branches, increased 14% from $7.7 million to $8.8 million. Throughout the year we have experienced healthy increases in trust and brokerage fees, deposit service fees and mortgage sales gains."
The Company incurred non-cash charges in the third quarter and year-to-date of $175,000 and $471,000, respectively, against noninterest income related to the impairment of the Bank's mortgage servicing rights. These charges resulted directly from the decline in interest rates. Excluding these non-cash charges and the gain on sale of branches, noninterest income would have increased 20% in both the third quarter and nine months versus the same periods in 2000.
Lakeland Financial's allowance for loan losses as of September 30, 2001 was $7.6 million, or 1.05% of gross loans, compared to $6.9 million, or 1.00% of gross loans, as of September 30, 2000. The ratio of non-performing assets to loans was 0.56% on September 30, 2001 compared to 0.35% on September 30, 2000 and 0.61% at the conclusion of the second quarter of 2001.
Kubacki commented, "During the quarter, we incurred commercial loan charge offs of approximately $500,000, which represented the first commercial loan charge off activity of the year. In addition, we took action to increase our loan loss allowance during the quarter with a provision of $970,000. We remain cautiously optimistic regarding our overall asset quality despite economic weakness in most of our markets."
For the nine months ended September 30, 2001, Lakeland Financial's equity to average assets ratio was 6.57% compared to 5.72% for the same period in 2000. Shareholders' equity was $73.9 million versus $59.9 million as of September 30, 2000, an increase of 23%. Average loans for the nine months ended September 30, 2001 were $728 million versus $672 million during the comparable period in 2000, an increase of 8%. Average total deposits for the nine months ended September 30, 2001 increased 9% percent from $777 million to $845 million versus the comparable period in 2000.
Lakeland Financial Corporation is a $1.1 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank serves Northern Indiana with 40 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, 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 Stifel Nicolaus & Company, 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 release may contain forward-looking statements. Forward looking statements are identifiable by the inclusion of such qualifications as expects, intends, believes, may, likely or similar statements or variations of such terms which express views concerning trends and the future. These forward looking statements are not historical facts and instead they are expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. Actual events and results may differ significantly from those described in such forward looking statements, due to changes in general economic or market conditions, government regulation, competition or other factors. For additional information about these factors, please review our filings with the Securities and Exchange Commission. |
