October 15, 2004
RECORD INCOME FOR LAKELAND FINANCIAL
Warsaw, Indiana (October 15, 2004) - Lakeland Financial Corporation (Nasdaq/LKFN), parent company of Lake City Bank, today reported record quarterly net income of $4.0 million for the third quarter of 2004. This record income performance represents an increase of 10% over the $3.6 million reported for the third quarter of 2003 and an increase of 18% versus $3.3 million in the second quarter of 2004. Diluted net income per share for the quarter was $0.65 versus $0.60 for the third quarter of 2003 and $0.55 for the second quarter of 2004. Net income for the nine months ended September 30, 2004 was $10.8 million, and diluted net income per share was $1.78 versus $10.9 million, or $1.81 per diluted share, for the first nine months of 2003.
Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "Our penetration has continued in 2004 in every market we serve as we have experienced loan growth of nearly 10% versus our year-end 2003 total loans. This loan growth of over $80 million in 2004 has contributed to a positive growth trend in net interest income during the third quarter versus the first two quarters of 2004."
"In addition, as a result of recent interest rate increases, we experienced an improved net interest margin during the quarter that should positively impact our performance for the balance of 2004. An improving net interest margin, in conjunction with healthy loan growth, should result in a continued improvement in net interest income performance," added Kubacki.
The Company also announced that the Board of Directors approved a cash dividend for the third quarter of $0.21 per share, payable on October 25, 2004 to shareholders of record on October 10, 2004. The quarterly dividend represents an 11% increase over the quarterly dividend of $0.19 paid in 2003.
Noninterest income excluding mortgage sales gains increased by 9% for the first nine months of 2004 versus the comparable period in 2003. Leading the improvement were a $517,000 increase in trust and brokerage fees, which increased 29%, and a $344,000 increase in credit card fees, which increased 26%. Net gains on the sale of mortgages held for sale were $724,000 in the first nine months versus $2.7 million during the comparable period in 2003.
Kubacki observed, "Our ongoing focus on increasing fee based services has continued to positively leverage infrastructure and create incremental income impact. As revenue from the mortgage business has declined due to higher mortgage rates and a general slowdown in the mortgage business, our noninterest income generation has improved in all other categories."
"We are particularly proud of the fact that noninterest expense was unchanged at $27.3 million year-to-date versus 2003, reflective of our focus on managing costs in a tight interest rate environment," continued Kubacki.
Total loans as of September 30, 2004 were $952.7 million versus $929.6 million as of June 30, 2004, and $870.9 million as of December 31, 2003. Average loans during the third quarter of 2004 were $939.9 million compared to $924.8 million in the second quarter of 2004 and $847.6 million for all of 2003.
Lakeland Financial's allowance for loan losses as of September 30, 2004 was $10.7 million compared to $10.6 million as of June 30, 2004 and $10.1 million as of September 30, 2003. Total non-performing assets were $10.9 million as of September 30, 2004 versus $4.7 million as of June 30, 2004 and $6.2 million as of September 30, 2003. The ratio of non-performing assets to loans was 1.14% on September 30, 2004 compared to 0.51% at June 30, 2004 and 0.73% as of September 30, 2003. Net charge offs totaled $141,000 for the first nine months of 2004 versus $1.2 million in the comparable period of 2003. For the nine months ended September 30, 2004, net charge offs were 0.02% of average loans compared to 0.20% in the same period in 2003.
Kubacki commented, "As a result of the addition of a single commercial credit of $6.1 million, we experienced an increase in total nonperforming assets. The borrower filed for chapter 11 bankruptcy late in the third quarter and is in the process of determining its future business strategy. Borrower collateral and the personal guarantees of its principals support the credit. While we are disappointed with this event, we believe that the borrower and guarantors are committed to working with us to resolve this situation."
For the nine months ended September 30, 2004, Lakeland Financial's average equity to average assets ratio was 7.23% versus 7.05% for the comparable period in 2003. Average stockholders' equity for the first nine months of 2004 was $95.1 million versus $87.4 million for the comparable period in 2003. Average total deposits for the nine months ended September 30, 2004 were $1.003 billion versus $961.8 million for the comparable 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. |
