October 15, 2002
LAKELAND FINANCIAL REPORTS THIRD QUARTER PERFORMANCE AND CASH DIVIDEND
Warsaw, Indiana (October 15, 2002) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported net income of $3.0 million for the third quarter of 2002, an increase of 7%, versus $2.8 million for the comparable period in 2001. The results for the third quarter of 2001 included a gain of $753,000 related to the sale of five offices on September 21, 2001. Diluted net income per common share for the quarter was $0.49 versus $0.47 for the comparable period in 2001. Net income for the nine months ended September 30, 2002 was $8.8 million, or $1.48 per diluted share, an increase of 22% versus $7.3 million, or $1.25 per diluted share, in the first nine months of 2001.
The Company announced that the Board of Directors approved a cash dividend for the third quarter of $0.17 per share, payable on October 25, 2002 to shareholders of record on October 10, 2002. The quarterly dividend represents an increase of 13% over the quarterly dividend paid in 2001.
Michael L. Kubacki, President and Chief Executive Officer, commented on the results, "Our performance in the first nine months of 2002 resulted from a balanced increase in both net interest and noninterest income combined with diligent expense control. In an economic environment that has proven challenging for the overall banking industry, we are pleased with our accomplishments."
Kubacki continued, "The Company's year-to-date net interest margin of 4.11%, in conjunction with healthy loan growth, has led to a 15% increase in net interest income year-to-date. During the third quarter, net interest income increased 7%, as we experienced some pressure on the net interest margin. Noninterest income, excluding the gain on sale of branches in 2001, increased by 12% for the third quarter and 13% for the nine month period versus the comparable periods in 2001. This improvement was led by strong increases in service charges on deposit accounts of 29% for the third quarter and 23% for the nine months versus the comparable periods in 2001. In addition, net gains on the sale of real estate mortgages increased 42% for the third quarter and 52% for the nine months versus the comparable periods in 2001."
Kubacki added, "During the third quarter, our net interest margin was 4.05% versus 4.16% for the second quarter of 2002. This decline resulted from the low interest rate environment that has contributed to declining asset yields for both loans and investments. Yields in the investment portfolio have been pressured due to lower overall reinvestment yields. The interest rate environment has also led to slightly declining yields on both commercial and consumer loans due to refinancing activity and competitive pricing pressures."
Lakeland Financial's allowance for loan losses as of September 30, 2002 was $9.1 million, or 1.15% of gross loans, compared to $7.6 million, or 1.05% of gross loans, as of September 30, 2001 and $8.9 million, or 1.16% of gross loans, as of June 30, 2002. The ratio of non-performing assets to loans was 0.98% on September 30, 2002 compared to 0.56% on September 30, 2001 and 0.84% at June 30, 2002. Nonperforming assets increased from $6.5 million at June 30, 2002 to $7.7 million at September 30, 2002 as a result of the addition of one loan. The Company's loan loss allowance represented 117% of total nonperforming assets as of September 30, 2002 and increased by $1.5 million, or 20%, during the last twelve months.
Kubacki commented, "Our overall asset quality remains stable in a very challenging economic environment. Net charge offs through the first nine months of the year were $1.2 million versus $1.0 million for the same period in 2001. The ongoing weakness in the regional and national economy continues to warrant a cautious approach to managing asset quality issues."
For the nine months ended September 30, 2002, Lakeland Financial's average equity to average assets ratio was 6.89% compared to 6.57% at the same point in 2001. Average shareholders' equity for the period was $77.9 million versus $68.5 million for the nine months ended September 30, 2001, an increase of 14%. Average loans for the nine months ended September 30, 2002 were $757 million versus $728 million during the same period in 2001. Average total deposits for the nine months ended September 30, 2002 were $847 million versus $845 million for the comparable period in 2001. The average loans and average total deposits reported for the first nine months of 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 40 branches located in the following Indiana counties: Kosciusko, Elkhart, Allen, St. Joseph, Fulton, Huntington, LaGrange, Marshall, Noble, Pulaski and Whitley. The Company plans to open its' 41st office in Auburn, Indiana during the fourth quarter of 2002.
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. |
