Exhibit 99.1
NEWS FROM LAKELAND FINANCIAL CORPORATION
FOR IMMEDIATE RELEASE
Contact
Lisa M. O'Neill
Executive Vice President and Chief Financial Officer
(574) 267-9125
lisa.oneill@lakecitybank.com
Lakeland Financial Reports Record Performance
Net Income of $80.4 million, Increases 40% From a Year Ago
Warsaw, Indiana (January 25, 2019) – Lakeland Financial Corporation (Nasdaq Global Select/LKFN), parent company of Lake City Bank, today reported record net income of $80.4 million, which represents an increase of $23.1 million or 40% compared with net income of $57.3 million for 2017. Diluted earnings per share also increased 40% to $3.13 compared to $2.23 for 2017. This per share performance also represents a record for the company and its shareholders.
The company further reported record quarterly net income of $21.4 million for the three months ended December 31, 2018 versus $11.6 million for the comparable period of 2017, an increase of 84%. Diluted net income per common share was also a record for the quarter and increased 84% to $0.83 for the three months ended December 31, 2018 versus $0.45 for the comparable period of 2017. Excluding the $4.1 million 2017 income tax provision, net income increased 36% and diluted earnings per share increased 36% for the three months ended December 31, 2018 compared to the comparable period of 2017.
David M. Findlay, President and CEO commented, "2018 represents our ninth consecutive year of record income performance. Our long-term performance is especially gratifying as we have reported record net income in 29 of the last 30 years. We're particularly proud of our ability to consistently produce quality earnings over the last three decades for our shareholders."
Highlights for the year and quarter are noted below.
Full year 2018 versus 2017 highlights:
|
·
|
Return on average equity of 16.5%, up from 12.7%
|
|
·
|
Organic average loan growth of $233 million, or 6%
|
|
·
|
Average deposit growth of $337 million, or 9%
|
|
·
|
Net interest income increase of $15.4 million, or 11%
|
|
·
|
Net interest margin increase of 10 basis points to 3.43%
|
|
·
|
Noninterest income increase of $4.1 million, or 11%
|
|
·
|
Revenue growth of $19.5 million, or 11%
|
|
·
|
Pretax net income growth of $9.3 million, or 10%
|
|
·
|
Nonperforming assets to total assets of 0.16%, down from 0.20% a year ago
|
|
·
|
Total equity and tangible common equity1 increase of $53 million, or 11%
|
1 Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures."
1
4th Quarter 2018 versus 4th Quarter 2017 highlights:
|
·
|
Return on average equity of 16.8%, up from 9.9%
|
|
·
|
Organic average loan growth of $178 million, or 5%
|
|
·
|
Average deposit growth of $174 million, or 4%
|
|
·
|
Net interest income increase of $4.2 million, or 12%
|
|
·
|
Net interest margin increase of 19 basis points to 3.52%
|
|
·
|
Noninterest income increase of $643,000, or 7%
|
|
·
|
Pretax net income growth of $3.4 million, or 15%
|
|
·
|
Revenue growth of $4.8 million, or 11%
|
|
·
|
Total equity and tangible common equity1 increase of $53 million, or 11%
|
4th Quarter 2018 versus 3rd Quarter 2018 highlights:
|
·
|
Return on average equity of 16.8% up from 16.6%
|
|
·
|
Organic average loan growth of $68 million, or 2%
|
|
·
|
Net interest income growth of $1.7 million, or 4%
|
|
·
|
Revenue growth of $1.3 million, or 3%
|
|
·
|
Reduced nonperforming assets of $5.2 million, or 41%
|
|
·
|
Average equity increase of $12.4 million, or 3%
|
As announced on January 8, 2019, the board of directors approved a cash dividend for the fourth quarter of $0.26 per share, payable on February 5, 2019, to shareholders of record as of January 25, 2019. The fourth quarter dividend per share represents an 18% increase over the fourth quarter 2017 dividend of $0.22 per share.
In addition, on January 8, 2019, the Board of Directors authorized the purchase of up to $30,000,000 shares of the company's common stock, representing approximately 3.0% of the company's issued and outstanding shares of common stock as of December 31, 2018. The Board of Directors authorized this stock repurchase plan based on the strength of the company's balance sheet and capital position. The Board believes that a stock repurchase plan is an important tool that can be utilized to enhance long term shareholder value. Share repurchases may be made periodically as permitted by securities laws and other legal and regulatory requirements and will be subject to market conditions as well as other factors. The timing, price and quantity of purchases will be at the discretion of the corporation and the program may be discontinued or suspended at any time. Repurchases may be made in the open market, through block trades or otherwise, and in privately negotiated transactions. If any share purchases are made, they will be made on or prior to December 31, 2019.
Findlay continued, "Revenue growth was once again a critical driver of our ability to generate strong earnings growth. We experienced healthy double digit increases in fee-based services in all three of our core business units, commercial, retail, and wealth advisory. In addition, our asset sensitive balance sheet contributed to an expansion of our net interest margin."
1 Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures."
2
Return on average total equity for the year ended December 31, 2018 was 16.51%, compared to 12.72% in 2017. Return on average assets was 1.69% in 2018 compared to 1.29% in 2017. The company's total capital as a percent of risk-weighted assets was 14.20% at December 31, 2018, compared to 13.26% at December 31, 2017 and 14.14% at September 30, 2018. The company's tangible common equity1 to tangible assets ratio was 10.63% at December 31, 2018, compared to 9.93% at December 31, 2017 and 10.41% at September 30, 2018.
Average total loans for 2018 were $3.84 billion, an increase of $233.0 million, or 6%, versus $3.61 billion for 2017. Total loans outstanding grew $96.3 million, or 3%, from $3.82 billion as of December 31, 2017 to $3.91 billion as of December 31, 2018. On a linked quarter basis, total loans grew $71.6 million, or 2%, from $3.84 billion at September 30, 2018. Average total loans for the fourth quarter of 2018 was $3.91 billion, an increase of $177.5 million, or 5%, versus $3.73 billion for the comparable period of 2017. On a linked quarter basis, total average loans increased by $67.9 million, or 2%, from $3.84 billion for the third quarter of 2018 to $3.91 billion for the fourth quarter of 2018.
Average total deposits for 2018 were $4.09 billion, an increase of $336.7 million, or 9%, versus $3.76 billion for 2017. Total deposits grew $35.4 million, or 1%, from $4.01 billion as of December 31, 2017 to $4.04 billion as of December 31, 2018. In addition, total core deposits, which exclude brokered deposits, increased $135.5 million, or 4%, from $3.74 billion at December 31, 2017 to $3.88 billion at December 31, 2018 due to growth in commercial deposits of $112.4, million or 12%, growth in retail deposits of $57.8 million, or 4%, offset by declines in public fund deposits of $34.7 million or 3%.
Findlay added, "Our commercial and retail banking teams delivered good core deposit growth in 2018, which provided deposit-driven funding for our loan growth. We are pleased that net loan growth returned to the balance sheet in the fourth quarter. We continued to experience strong organic growth in the quarter and did not incur the elevated level of loan pay downs that occurred in the second and third quarters."
The company's net interest margin increased 10 basis points to 3.43% for 2018 compared to 3.33% for 2017. The company's net interest margin was 3.52% in the fourth quarter of 2018 versus 3.33% for the fourth quarter of 2017 and 3.42% during the third quarter 2018. The higher margin in 2018 was due to higher yields and growth in loans, and was partially offset by a higher cost of funds, which was driven by the Federal Reserve Bank increasing the target Federal Funds Rate in March, June, September and December of 2018. The company estimates that net interest margin benefited by four basis points during the fourth quarter 2018 from the payoff of a nonaccrual loan and other nonaccrual adjustments.
Net interest income increased $15.4 million, or 11%, to $151.3 million in 2018, versus $135.9 million in 2017 due to net interest margin expansion and growth in loans and deposits during the year. Net interest income increased $4.2 million, or 12%, to $39.6 million in the fourth quarter of 2018, versus $35.4 million in the fourth quarter of 2017. On a linked quarter basis, net interest income increased by $1.7 million from $37.9 million or 4%.
The company recorded a provision for loan losses of $6.4 million in 2018 compared to $3.0 million in 2017, primarily resulting from a charge off of $5.1 million from a single commercial loan relationship in addition to growth in the loan portfolio. The company recorded a provision for loan losses of $300,000 in the fourth quarter of 2018, versus $1.9 million in the fourth quarter of 2017 and $1.1 million in the third quarter of 2018. The company's allowance for loan losses as of December 31, 2018 was $48.5 million compared to $47.1 million as of December 31, 2017 and $48.3 million as of September 30, 2018. The allowance for loan losses represented 1.24% of total loans as of December 31, 2018 versus 1.23% at December 31, 2017 and 1.26% as of September 30, 2018.
1 Non-GAAP financial measure – see "Reconciliation of Non-GAAP Financial Measures."
3
Net charge offs were $5.1 million in 2018 versus net recoveries of $403,000 in 2017. Net charge offs for the fourth quarter of 2018 were $189,000 versus net charge offs of $226,000 in the fourth quarter of 2017 and net charge offs of $463,000 during the linked third quarter 2018. Net charge offs to average loans were 0.13% in 2018 compared to net recoveries of 0.01% for 2017. Annualized net charge offs to average loans were 0.02% for the fourth quarters of 2018 and 2017. Annualized net charge offs to average loans were 0.05% for the linked third quarter of 2018.
Nonperforming assets decreased $1.9 million, or 20%, to $7.6 million as of December 31, 2018 versus $9.5 million as of December 31, 2017 due to a decrease in nonaccrual loans. On a linked quarter basis, nonperforming assets were $5.2 million lower than the $12.8 million reported as of September 30, 2018. The ratio of nonperforming assets to total assets at December 31, 2018 decreased to 0.16% from 0.20% at December 31, 2017 and 0.27% at September 30, 2018.
Findlay stated, "We ended 2018 with stable asset quality and believe it's reflective of broader economic conditions in our markets."
The company's noninterest income increased $4.1 million, or 11%, to $40.1 million in 2018, compared to $36.0 million in 2017. The company's noninterest income increased by $643,000, or 7%, to $10.1 million for the fourth quarter of 2018, compared to $9.5 million for the fourth quarter of 2017. Noninterest income decreased by $328,000 from $10.4 million during the third quarter due to reduced mortgage banking income and reduced bank owned life equity based income. During 2018, noninterest income was positively impacted by increases in service charges on deposit accounts primarily related to business accounts, loan and service fees, and wealth advisory and brokerage fees due to continued growth of client relationships.
The company's noninterest expense increased $6.8 million, or 9%, to $86.0 million in 2018 compared to $79.3 million in 2017. The company's noninterest expense increased $3.0 million, or 15%, to $22.6 million in the fourth quarter of 2018, compared to $19.6 million in the fourth quarter of 2017 and was higher by $543,000, or 2% on a linked quarter basis. Salaries and employee benefits increased during 2018 primarily due to an increase to the company's minimum hiring wage, normal merit increases and increased health insurance cost. Data processing fees also increased during 2018 primarily due to the company's continued investment in technology-based solutions and ongoing transition to cloud-based technology. In addition, corporate and business development expense increased primarily due to higher community support and donation expense.
Findlay noted, "We continue to invest in our growing branch presence in our Indiana footprint with the opening of our 50th office in downtown Indianapolis. Importantly, we will stay focused on providing innovative and technology-based solutions for our customers. It is critical that we maintain and increase our investment in our technology platform as we continue to work with key technology and Fintech partners in this long-term strategy."
The company's efficiency ratio was 45.0% for 2018 compared to 46.1% for 2017. The company's efficiency ratio was 45.4% for the fourth quarter of 2018, compared to 43.7% for the fourth quarter of 2017 and 45.5% for the linked third quarter of 2018.
The effective tax rate for 2018 was 18.7%, compared to 36.0% for 2017, and reflects the effect of the Tax Cuts and Jobs Act, which lowered the company's federal tax rate to 21% from 35% effective January 1, 2018. Results for 2017 included a non-cash, non-operating and non-recurring income tax provision of $4.1 million or $0.16 per diluted share. Excluding this tax item, and calculating both periods at the 2017 effective tax rate of 31.3%, net income increased 10.4% for 2018 compared to 2017.
4
Lakeland Financial Corporation is a $4.9 billion bank holding company headquartered in Warsaw, Indiana. Lake City Bank, its single bank subsidiary, is the fourth largest bank headquartered in the state, and the largest bank 100% invested in Indiana. Lake City Bank operates 50 offices in Northern and Central Indiana, delivering technology-driven and client-centric financial services solutions to individuals and businesses.
Information regarding Lakeland Financial Corporation may be accessed on the home page of its subsidiary, Lake City Bank, at lakecitybank.com. The company's common stock is traded on the Nasdaq Global Select Market under "LKFN." In addition to the results presented in accordance with generally accepted accounting principles in the United States, this earnings release contains certain non-GAAP financial measures. The company believes that providing non-GAAP financial measures provides investors with information useful to understanding the company's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible common equity" which is "common stockholders' equity" excluding intangible assets, net of deferred tax and "tangible assets" which is "assets" excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent are included in the attached financial tables where the non-GAAP measures are presented.
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," "continue," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. The company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain and, accordingly, the reader is cautioned not to place undue reliance on any forward-looking statements made by the company. 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. Numerous factors could cause the company's actual results to differ from those reflected in forward-looking statements, including trade policy and those identified in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K.
5
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||
|
FOURTH QUARTER 2018 FINANCIAL HIGHLIGHTS
|
||||||||||
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||
|
(Unaudited – Dollars in thousands, except per share data)
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
|||||
|
END OF PERIOD BALANCES
|
2018
|
2018
|
2017
|
2018
|
2017
|
|||||
|
Assets
|
$4,875,254
|
$4,757,619
|
$4,682,976
|
$4,875,254
|
$4,682,976
|
|||||
|
Deposits
|
4,044,065
|
4,015,924
|
4,008,655
|
4,044,065
|
4,008,655
|
|||||
|
Brokered Deposits
|
164,888
|
176,927
|
264,980
|
164,888
|
264,980
|
|||||
|
Core Deposits
|
3,879,177
|
3,838,997
|
3,743,675
|
3,879,177
|
3,743,675
|
|||||
|
Loans
|
3,914,745
|
3,843,125
|
3,818,459
|
3,914,745
|
3,818,459
|
|||||
|
Allowance for Loan Losses
|
48,453
|
48,343
|
47,121
|
48,453
|
47,121
|
|||||
|
Total Equity
|
521,704
|
498,541
|
468,667
|
521,704
|
468,667
|
|||||
|
Goodwill net of deferred tax assets
|
3,779
|
3,790
|
3,799
|
3,779
|
3,799
|
|||||
|
Tangible Common Equity (1)
|
517,925
|
494,751
|
464,868
|
517,925
|
464,868
|
|||||
|
AVERAGE BALANCES
|
||||||||||
|
Total Assets
|
$4,837,604
|
$4,748,953
|
$4,598,809
|
$4,758,392
|
$4,443,106
|
|||||
|
Earning Assets
|
4,523,304
|
4,451,449
|
4,323,249
|
4,461,366
|
4,183,112
|
|||||
|
Investments
|
573,073
|
569,567
|
537,796
|
562,385
|
530,275
|
|||||
|
Loans
|
3,905,511
|
3,837,595
|
3,727,967
|
3,843,912
|
3,610,908
|
|||||
|
Total Deposits
|
4,163,118
|
4,025,398
|
3,989,592
|
4,093,894
|
3,757,209
|
|||||
|
Interest Bearing Deposits
|
3,256,930
|
3,167,135
|
3,151,116
|
3,235,867
|
2,967,902
|
|||||
|
Interest Bearing Liabilities
|
3,390,159
|
3,363,583
|
3,266,206
|
3,382,507
|
3,178,439
|
|||||
|
Total Equity
|
505,570
|
493,145
|
467,459
|
487,062
|
450,796
|
|||||
|
INCOME STATEMENT DATA
|
||||||||||
|
Net Interest Income
|
$39,590
|
$37,925
|
$35,392
|
$151,271
|
$135,892
|
|||||
|
Net Interest Income-Fully Tax Equivalent
|
40,089
|
38,392
|
36,231
|
153,088
|
139,015
|
|||||
|
Provision for Loan Losses
|
300
|
1,100
|
1,850
|
6,400
|
3,000
|
|||||
|
Noninterest Income
|
10,105
|
10,433
|
9,462
|
40,110
|
36,009
|
|||||
|
Noninterest Expense
|
22,552
|
22,009
|
19,598
|
86,037
|
79,267
|
|||||
|
Net Income
|
21,363
|
20,570
|
11,627
|
80,411
|
57,330
|
|||||
|
PER SHARE DATA
|
||||||||||
|
Basic Net Income Per Common Share
|
$0.84
|
$0.81
|
$0.46
|
$3.18
|
$2.28
|
|||||
|
Diluted Net Income Per Common Share
|
0.83
|
0.80
|
0.45
|
3.13
|
2.23
|
|||||
|
Cash Dividends Declared Per Common Share
|
0.26
|
0.26
|
0.22
|
1.00
|
0.85
|
|||||
|
Dividend Payout
|
31.33
|
%
|
32.50
|
%
|
48.89
|
%
|
31.95
|
%
|
38.12
|
%
|
|
Book Value Per Common Share (equity per share issued)
|
20.62
|
19.70
|
18.60
|
20.62
|
18.60
|
|||||
|
Tangible Book Value Per Common Share (1)
|
20.47
|
19.55
|
18.45
|
20.47
|
18.45
|
|||||
|
Market Value – High
|
47.41
|
51.25
|
52.43
|
51.76
|
52.43
|
|||||
|
Market Value – Low
|
37.79
|
46.35
|
45.26
|
37.79
|
39.68
|
|||||
|
Basic Weighted Average Common Shares Outstanding
|
25,301,732
|
25,301,033
|
25,194,903
|
25,288,533
|
25,181,208
|
|||||
|
Diluted Weighted Average Common Shares Outstanding
|
25,746,490
|
25,745,151
|
25,701,337
|
25,727,831
|
25,663,381
|
|||||
|
KEY RATIOS
|
||||||||||
|
Return on Average Assets
|
1.75
|
%
|
1.72
|
%
|
1.00
|
%
|
1.69
|
%
|
1.29
|
%
|
|
Return on Average Total Equity
|
16.76
|
16.55
|
9.87
|
16.51
|
12.72
|
|||||
|
Average Equity to Average Assets
|
10.45
|
10.38
|
10.16
|
10.24
|
10.15
|
|||||
|
Net Interest Margin
|
3.52
|
3.42
|
3.33
|
3.43
|
3.33
|
|||||
|
Efficiency (Noninterest Expense / Net Interest Income plus Noninterest Income)
|
45.38
|
45.51
|
43.69
|
44.96
|
46.11
|
|||||
|
Tier 1 Leverage (2)
|
11.44
|
11.31
|
10.76
|
11.44
|
10.76
|
|||||
|
Tier 1 Risk-Based Capital (2)
|
13.05
|
12.97
|
12.10
|
13.05
|
12.10
|
|||||
|
Common Equity Tier 1 (CET1) (2)
|
12.35
|
12.24
|
11.37
|
12.35
|
11.37
|
|||||
|
Total Capital (2)
|
14.20
|
14.14
|
13.26
|
14.20
|
13.26
|
|||||
|
Tangible Capital (1) (2)
|
10.63
|
10.41
|
9.93
|
10.63
|
9.93
|
|||||
|
ASSET QUALITY
|
||||||||||
|
Loans Past Due 30 - 89 Days
|
$10,020
|
$13,476
|
$9,613
|
$10,020
|
$9,613
|
|||||
|
Loans Past Due 90 Days or More
|
0
|
0
|
6
|
0
|
6
|
|||||
|
Non-accrual Loans
|
7,260
|
12,337
|
9,401
|
7,260
|
9,401
|
|||||
|
Nonperforming Loans (includes nonperforming TDR's)
|
7,260
|
12,337
|
9,407
|
7,260
|
9,407
|
|||||
|
Other Real Estate Owned
|
316
|
316
|
40
|
316
|
40
|
|||||
|
Other Nonperforming Assets
|
0
|
111
|
55
|
0
|
55
|
|||||
|
Total Nonperforming Assets
|
7,577
|
12,764
|
9,502
|
7,577
|
9,502
|
|||||
|
Performing Troubled Debt Restructurings
|
8,016
|
3,512
|
2,893
|
8,016
|
2,893
|
|||||
|
Nonperforming Troubled Debt Restructurings (included in nonperforming loans)
|
4,384
|
7,313
|
7,750
|
4,384
|
7,750
|
|||||
|
Total Troubled Debt Restructurings
|
12,400
|
10,825
|
10,643
|
12,400
|
10,643
|
|||||
|
Impaired Loans
|
26,661
|
20,906
|
13,869
|
26,661
|
13,869
|
|||||
|
Non-Impaired Watch List Loans
|
159,938
|
175,400
|
157,834
|
159,938
|
157,834
|
|||||
|
Total Impaired and Watch List Loans
|
186,599
|
196,306
|
171,703
|
186,599
|
171,703
|
|||||
|
Gross Charge Offs
|
424
|
581
|
625
|
6,110
|
1,560
|
|||||
|
Recoveries
|
235
|
118
|
399
|
1,043
|
1,963
|
|||||
|
Net Charge Offs/(Recoveries)
|
189
|
463
|
226
|
5,067
|
(403)
|
|||||
|
Net Charge Offs/(Recoveries) to Average Loans
|
0.02
|
%
|
0.05
|
%
|
0.02
|
%
|
0.13
|
%
|
(0.01)
|
%
|
|
Loan Loss Reserve to Loans
|
1.24
|
%
|
1.26
|
%
|
1.23
|
%
|
1.24
|
%
|
1.23
|
%
|
|
Loan Loss Reserve to Nonperforming Loans
|
667.40
|
%
|
391.92
|
%
|
500.91
|
%
|
667.40
|
%
|
500.91
|
%
|
|
Loan Loss Reserve to Nonperforming Loans and Performing TDR's
|
317.17
|
%
|
305.03
|
%
|
383.10
|
%
|
317.17
|
%
|
383.10
|
%
|
|
Nonperforming Loans to Loans
|
0.19
|
%
|
0.32
|
%
|
0.25
|
%
|
0.19
|
%
|
0.25
|
%
|
|
Nonperforming Assets to Assets
|
0.16
|
%
|
0.27
|
%
|
0.20
|
%
|
0.16
|
%
|
0.20
|
%
|
|
Total Impaired and Watch List Loans to Total Loans
|
4.77
|
%
|
5.11
|
%
|
4.50
|
%
|
4.77
|
%
|
4.50
|
%
|
|
OTHER DATA
|
||||||||||
|
Full Time Equivalent Employees
|
553
|
549
|
539
|
553
|
539
|
|||||
|
Offices
|
49
|
49
|
49
|
49
|
49
|
|||||
|
(1) Non-GAAP financial measure - see "Reconciliation of Non-GAAP Financial Measures"
|
||||||||||
|
(2) Capital ratios for December 31, 2018 are preliminary until the Call Report is filed.
|
||||||||||
6
|
CONSOLIDATED BALANCE SHEETS (in thousands except share data)
|
|||
|
|
December 31,
|
|
December 31,
|
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Cash and due from banks
|
$192,290
|
|
$140,402
|
|
Short-term investments
|
24,632
|
|
35,778
|
|
Total cash and cash equivalents
|
216,922
|
|
176,180
|
|
|
|
|
|
|
Securities available for sale (carried at fair value)
|
585,549
|
|
538,493
|
|
Real estate mortgage loans held for sale
|
2,293
|
|
3,346
|
|
|
|
|
|
|
Loans, net of allowance for loan losses of $48,453 and $47,121
|
3,866,292
|
|
3,771,338
|
|
|
|
|
|
|
Land, premises and equipment, net
|
58,097
|
|
56,466
|
|
Bank owned life insurance
|
77,106
|
|
75,879
|
|
Federal Reserve and Federal Home Loan Bank stock
|
13,772
|
|
13,772
|
|
Accrued interest receivable
|
15,518
|
|
14,093
|
|
Goodwill
|
4,970
|
|
4,970
|
|
Other assets
|
34,735
|
|
28,439
|
|
Total assets
|
$4,875,254
|
|
$4,682,976
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Noninterest bearing deposits
|
$946,838
|
|
$885,622
|
|
Interest bearing deposits
|
3,097,227
|
|
3,123,033
|
|
Total deposits
|
4,044,065
|
|
4,008,655
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
Securities sold under agreements to repurchase
|
75,555
|
|
70,652
|
|
Federal Home Loan Bank advances
|
170,000
|
|
80,030
|
|
Subordinated debentures
|
30,928
|
|
30,928
|
|
Total borrowings
|
276,483
|
|
181,610
|
|
|
|
|
|
|
Accrued interest payable
|
10,404
|
|
6,311
|
|
Other liabilities
|
22,598
|
|
17,733
|
|
Total liabilities
|
4,353,550
|
|
4,214,309
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
Common stock: 90,000,000 shares authorized, no par value
|
|
|
|
|
25,301,732 shares issued and 25,128,773 outstanding as of December 31, 2018
|
|
|
|
|
25,194,903 shares issued and 25,025,933 outstanding as of December 31, 2017
|
112,383
|
|
108,862
|
|
Retained earnings
|
419,179
|
|
363,794
|
|
Accumulated other comprehensive loss
|
(6,191)
|
|
(670)
|
|
Treasury stock, at cost (2018 - 172,959 shares, 2017 - 168,970 shares)
|
(3,756)
|
|
(3,408)
|
|
Total stockholders' equity
|
521,615
|
|
468,578
|
|
Noncontrolling interest
|
89
|
|
89
|
|
Total equity
|
521,704
|
|
468,667
|
|
Total liabilities and equity
|
$4,875,254
|
|
$4,682,976
|
7
|
CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands except share and per share data)
|
|
|
|||||
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||
|
|
December 31,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
NET INTEREST INCOME
|
|
|
|
|
|
|
|
|
Interest and fees on loans
|
|
|
|
|
|
|
|
|
Taxable
|
$49,091
|
|
$40,251
|
|
$181,451
|
|
$150,295
|
|
Tax exempt
|
187
|
|
212
|
|
814
|
|
729
|
|
Interest and dividends on securities
|
|
|
|
|
|
|
|
|
Taxable
|
2,516
|
|
2,185
|
|
9,717
|
|
9,218
|
|
Tax exempt
|
1,712
|
|
1,357
|
|
6,079
|
|
5,102
|
|
Other interest income
|
222
|
|
156
|
|
909
|
|
354
|
|
Total interest income
|
53,728
|
|
44,161
|
|
198,970
|
|
165,698
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits
|
13,425
|
|
8,304
|
|
44,913
|
|
27,026
|
|
Interest on borrowings
|
|
|
|
|
|
|
|
|
Short-term
|
282
|
|
117
|
|
1,143
|
|
1,446
|
|
Long-term
|
431
|
|
348
|
|
1,643
|
|
1,334
|
|
Total interest expense
|
14,138
|
|
8,769
|
|
47,699
|
|
29,806
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME
|
39,590
|
|
35,392
|
|
151,271
|
|
135,892
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
300
|
|
1,850
|
|
6,400
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME AFTER PROVISION FOR
|
|
|
|
|
|
|
|
|
LOAN LOSSES
|
39,290
|
|
33,542
|
|
144,871
|
|
132,892
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME
|
|
|
|
|
|
|
|
|
Wealth advisory fees
|
1,668
|
|
1,476
|
|
6,344
|
|
5,481
|
|
Investment brokerage fees
|
415
|
|
323
|
|
1,458
|
|
1,273
|
|
Service charges on deposit accounts
|
4,289
|
|
3,669
|
|
15,831
|
|
13,696
|
|
Loan and service fees
|
2,366
|
|
2,050
|
|
9,291
|
|
7,900
|
|
Merchant card fee income
|
627
|
|
583
|
|
2,461
|
|
2,279
|
|
Bank owned life insurance income
|
67
|
|
498
|
|
1,244
|
|
1,768
|
|
Other income
|
565
|
|
712
|
|
2,381
|
|
2,598
|
|
Mortgage banking income
|
152
|
|
171
|
|
1,150
|
|
982
|
|
Net securities gains/(losses)
|
(44)
|
|
(20)
|
|
(50)
|
|
32
|
|
Total noninterest income
|
10,105
|
|
9,462
|
|
40,110
|
|
36,009
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
12,086
|
|
11,244
|
|
48,353
|
|
45,306
|
|
Net occupancy expense
|
1,257
|
|
1,190
|
|
5,149
|
|
4,595
|
|
Equipment costs
|
1,403
|
|
1,216
|
|
5,243
|
|
4,629
|
|
Data processing fees and supplies
|
2,393
|
|
2,211
|
|
9,685
|
|
8,233
|
|
Corporate and business development
|
1,996
|
|
801
|
|
5,066
|
|
4,744
|
|
FDIC insurance and other regulatory fees
|
419
|
|
502
|
|
1,701
|
|
1,798
|
|
Professional fees
|
1,082
|
|
857
|
|
3,798
|
|
3,574
|
|
Other expense
|
1,916
|
|
1,577
|
|
7,042
|
|
6,388
|
|
Total noninterest expense
|
22,552
|
|
19,598
|
|
86,037
|
|
79,267
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX EXPENSE
|
26,843
|
|
23,406
|
|
98,944
|
|
89,634
|
|
Income tax expense
|
5,480
|
|
11,779
|
|
18,533
|
|
32,304
|
|
NET INCOME
|
$21,363
|
|
$11,627
|
|
$80,411
|
|
$57,330
|
|
|
|
|
|
|
|
|
|
|
BASIC WEIGHTED AVERAGE COMMON SHARES
|
25,301,732
|
|
25,194,903
|
|
25,288,533
|
|
25,181,208
|
|
BASIC EARNINGS PER COMMON SHARE
|
$0.84
|
|
$0.46
|
|
$3.18
|
|
$2.28
|
|
DILUTED WEIGHTED AVERAGE COMMON SHARES
|
25,746,490
|
|
25,701,337
|
|
25,727,831
|
|
25,663,381
|
|
DILUTED EARNINGS PER COMMON SHARE
|
$0.83
|
|
$0.45
|
|
$3.13
|
|
$2.23
|
8
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||
|
LOAN DETAIL
|
||||||||||
|
FOURTH QUARTER 2018
|
||||||||||
|
(unaudited in thousands)
|
||||||||||
|
December 31,
|
September 30,
|
December 31,
|
||||||||
|
2018
|
2018
|
2017
|
||||||||
|
Commercial and industrial loans:
|
||||||||||
|
Working capital lines of credit loans
|
$690,620
|
17.6
|
%
|
$757,004
|
19.7
|
%
|
$743,609
|
19.4
|
%
|
|
|
Non-working capital loans
|
714,759
|
18.3
|
693,402
|
18.0
|
675,072
|
17.7
|
||||
|
Total commercial and industrial loans
|
1,405,379
|
35.9
|
1,450,406
|
37.7
|
1,418,681
|
37.1
|
||||
|
Commercial real estate and multi-family residential loans:
|
||||||||||
|
Construction and land development loans
|
266,805
|
6.8
|
231,795
|
6.0
|
224,474
|
5.9
|
||||
|
Owner occupied loans
|
586,325
|
15.0
|
571,998
|
14.9
|
538,603
|
14.1
|
||||
|
Nonowner occupied loans
|
520,901
|
13.3
|
520,414
|
13.5
|
508,121
|
13.3
|
||||
|
Multifamily loans
|
195,604
|
5.0
|
192,218
|
5.0
|
173,715
|
4.5
|
||||
|
Total commercial real estate and multi-family residential loans
|
1,569,635
|
40.1
|
1,516,425
|
39.4
|
1,444,913
|
37.8
|
||||
|
Agri-business and agricultural loans:
|
||||||||||
|
Loans secured by farmland
|
177,503
|
4.6
|
159,256
|
4.2
|
186,437
|
4.9
|
||||
|
Loans for agricultural production
|
193,010
|
4.9
|
134,773
|
3.5
|
196,404
|
5.1
|
||||
|
Total agri-business and agricultural loans
|
370,513
|
9.5
|
294,029
|
7.7
|
382,841
|
10.0
|
||||
|
Other commercial loans
|
95,657
|
2.4
|
114,350
|
3.0
|
124,076
|
3.3
|
||||
|
Total commercial loans
|
3,441,184
|
87.9
|
3,375,210
|
87.8
|
3,370,511
|
88.2
|
||||
|
Consumer 1-4 family mortgage loans:
|
||||||||||
|
Closed end first mortgage loans
|
185,822
|
4.7
|
185,212
|
4.8
|
179,302
|
4.7
|
||||
|
Open end and junior lien loans
|
187,030
|
4.8
|
185,869
|
4.8
|
181,865
|
4.8
|
||||
|
Residential construction and land development loans
|
16,226
|
0.4
|
15,128
|
0.4
|
13,478
|
0.3
|
||||
|
Total consumer 1-4 family mortgage loans
|
389,078
|
9.9
|
386,209
|
10.0
|
374,645
|
9.8
|
||||
|
Other consumer loans
|
86,064
|
2.2
|
83,203
|
2.2
|
74,369
|
2.0
|
||||
|
Total consumer loans
|
475,142
|
12.1
|
469,412
|
12.2
|
449,014
|
11.8
|
||||
|
Subtotal
|
3,916,326
|
100.0
|
%
|
3,844,622
|
100.0
|
%
|
3,819,525
|
100.0
|
%
|
|
|
Less: Allowance for loan losses
|
(48,453)
|
(48,343)
|
(47,121)
|
|||||||
|
Net deferred loan fees
|
(1,581)
|
(1,497)
|
(1,066)
|
|||||||
|
Loans, net
|
$3,866,292
|
$3,794,782
|
$3,771,338
|
|||||||
|
LAKELAND FINANCIAL CORPORATION
|
||||||||||
|
DEPOSITS AND BORROWINGS
|
||||||||||
|
FOURTH QUARTER 2018
|
||||||||||
|
(unaudited in thousands)
|
||||||||||
|
December 31,
|
September 30,
|
December 31,
|
||||||||
|
2018
|
2018
|
2017
|
||||||||
|
Non-interest bearing demand deposits
|
$946,838
|
$880,363
|
$885,622
|
|||||||
|
Savings and transaction accounts:
|
||||||||||
|
Savings deposits
|
247,903
|
251,748
|
263,570
|
|||||||
|
Interest bearing demand deposits
|
1,429,570
|
1,388,934
|
1,446,880
|
|||||||
|
Time deposits:
|
||||||||||
|
Deposits of $100,000 or more
|
1,146,221
|
1,223,457
|
1,161,365
|
|||||||
|
Other time deposits
|
273,533
|
271,422
|
251,218
|
|||||||
|
Total deposits
|
$4,044,065
|
$4,015,924
|
$4,008,655
|
|||||||
|
FHLB advances and other borrowings
|
276,483
|
208,280
|
181,610
|
|||||||
|
Total funding sources
|
$4,320,548
|
$4,224,204
|
$4,190,265
|
|||||||
9
LAKELAND FINANCIAL CORPORATION
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(UNAUDITED)
|
Three Months Ended
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||
|
December 31, 2018
|
September 30, 2018
|
December 31, 2017
|
||||||||||||||||||
|
Average
|
Interest
|
Yield (1)/
|
Average
|
Interest
|
Yield (1)/
|
Average
|
Interest
|
Yield (1)/
|
||||||||||||
|
(fully tax equivalent basis, dollars in thousands)
|
Balance
|
Income
|
Rate
|
Balance
|
Income
|
Rate
|
Balance
|
Income
|
Rate
|
|||||||||||
|
Earning Assets
|
||||||||||||||||||||
|
Loans:
|
||||||||||||||||||||
|
Taxable (2)(3)
|
$3,884,500
|
$49,091
|
5.01
|
%
|
$3,814,831
|
$46,127
|
4.80
|
%
|
$3,703,260
|
$40,251
|
4.31
|
%
|
||||||||
|
Tax exempt (1)
|
21,011
|
234
|
4.42
|
22,764
|
257
|
4.48
|
24,707
|
321
|
5.15
|
|||||||||||
|
Investments: (1)
|
||||||||||||||||||||
|
Available for sale
|
573,073
|
4,682
|
3.24
|
569,567
|
4,263
|
2.97
|
537,796
|
4,272
|
3.15
|
|||||||||||
|
Short-term investments
|
3,350
|
15
|
1.78
|
3,480
|
14
|
1.60
|
4,377
|
7
|
0.63
|
|||||||||||
|
Interest bearing deposits
|
41,370
|
207
|
1.99
|
40,807
|
185
|
1.80
|
53,109
|
149
|
1.11
|
|||||||||||
|
Total earning assets
|
$4,523,304
|
$54,229
|
4.76
|
%
|
$4,451,449
|
$50,846
|
4.53
|
%
|
$4,323,249
|
$45,000
|
4.13
|
%
|
||||||||
|
Less: Allowance for loan losses
|
(49,045)
|
(48,137)
|
(46,281)
|
|||||||||||||||||
|
Nonearning Assets
|
||||||||||||||||||||
|
Cash and due from banks
|
156,681
|
144,605
|
127,028
|
|||||||||||||||||
|
Premises and equipment
|
57,516
|
57,545
|
56,719
|
|||||||||||||||||
|
Other nonearning assets
|
149,148
|
143,491
|
138,094
|
|||||||||||||||||
|
Total assets
|
$4,837,604
|
$4,748,953
|
$4,598,809
|
|||||||||||||||||
|
Interest Bearing Liabilities
|
||||||||||||||||||||
|
Savings deposits
|
$250,755
|
$76
|
0.12
|
%
|
$253,244
|
$79
|
0.12
|
%
|
$270,978
|
$95
|
0.14
|
%
|
||||||||
|
Interest bearing checking accounts
|
1,476,013
|
5,498
|
1.48
|
1,407,460
|
4,455
|
1.26
|
1,451,544
|
3,024
|
0.83
|
|||||||||||
|
Time deposits:
|
||||||||||||||||||||
|
In denominations under $100,000
|
272,192
|
1,168
|
1.70
|
270,480
|
1,055
|
1.55
|
247,875
|
811
|
1.30
|
|||||||||||
|
In denominations over $100,000
|
1,257,970
|
6,683
|
2.11
|
1,235,951
|
5,884
|
1.89
|
1,180,719
|
4,374
|
1.47
|
|||||||||||
|
Miscellaneous short-term borrowings
|
102,301
|
282
|
1.09
|
165,520
|
555
|
1.33
|
84,132
|
118
|
0.56
|
|||||||||||
|
Long-term borrowings and
|
||||||||||||||||||||
|
subordinated debentures
|
30,928
|
431
|
5.53
|
30,928
|
426
|
5.46
|
30,958
|
347
|
4.45
|
|||||||||||
|
Total interest bearing liabilities
|
$3,390,159
|
$14,138
|
1.65
|
%
|
$3,363,583
|
$12,454
|
1.47
|
%
|
$3,266,206
|
$8,769
|
1.07
|
%
|
||||||||
|
Noninterest Bearing Liabilities
|
||||||||||||||||||||
|
Demand deposits
|
906,188
|
858,263
|
838,476
|
|||||||||||||||||
|
Other liabilities
|
35,687
|
33,962
|
26,668
|
|||||||||||||||||
|
Stockholders' Equity
|
505,570
|
493,145
|
467,459
|
|||||||||||||||||
|
Total liabilities and stockholders' equity
|
$4,837,604
|
$4,748,953
|
$4,598,809
|
|||||||||||||||||
|
Interest Margin Recap
|
||||||||||||||||||||
|
Interest income/average earning assets
|
54,229
|
4.76
|
50,846
|
4.53
|
45,000
|
4.13
|
||||||||||||||
|
Interest expense/average earning assets
|
14,138
|
1.24
|
12,454
|
1.11
|
8,769
|
0.80
|
||||||||||||||
|
Net interest income and margin
|
$40,091
|
3.52
|
%
|
$38,392
|
3.42
|
%
|
$36,231
|
3.33
|
%
|
|||||||||||
|
(1)
|
Tax exempt income was converted to a fully taxable equivalent basis at a 21 percent tax rate for 2018 and a 35 percent tax rate for 2017. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 included the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") adjustment applicable to nondeductible interest expenses. Taxable equivalent basis adjustments were $501,000, $467,000 and $839,000 in the three-month periods ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively.
|
|
(2)
|
Loan fees, which are immaterial in relation to total taxable loan interest income for 2018 and 2017, are included as taxable loan interest income.
|
|
(3)
|
Nonaccrual loans are included in the average balance of taxable loans.
|
10
(1) Reconciliation of Non-GAAP Financial Measures
|
Tangible common equity, tangible assets, tangible book value per share and the tangible common equity to tangible assets ratio are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of stockholders' equity, net of deferred tax. Tangible assets are calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets, net of deferred tax. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. However, management considers these measures of the company's value including only earning assets as meaningful to an understanding of the company's financial information.
Net income applicable to Lakeland Financial Corporation and earnings per diluted share, excluding the income tax expense adjustment for the deferred tax asset revaluation, are non-GAAP financial measures that the company considers useful for investors to allow better comparability of operating performance. The income tax expense adjustment for 2017 consists of a $4.1 million, or $0.16 per diluted common share, revaluation of the company's net deferred tax asset as a result of the enactment of the Tax Cuts and Jobs Act in 2017.
A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
|
|
Three Months Ended
|
Twelve Months Ended
|
|||||||||
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
||||||
|
2018
|
2018
|
2017
|
2018
|
2017
|
||||||
|
Total Equity
|
$ 521,704
|
$ 498,541
|
$ 468,667
|
$ 521,704
|
$ 468,667
|
|||||
|
Less: Goodwill
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
|||||
|
Plus: Deferred tax assets related to goodwill
|
1,191
|
1,180
|
1,171
|
1,191
|
1,171
|
|||||
|
Tangible Common Equity
|
517,925
|
494,751
|
464,868
|
517,925
|
464,868
|
|||||
|
Assets
|
$ 4,875,254
|
$ 4,757,619
|
$ 4,682,976
|
$ 4,875,254
|
$ 4,682,976
|
|||||
|
Less: Goodwill
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
(4,970)
|
|||||
|
Plus: Deferred tax assets related to goodwill
|
1,191
|
1,180
|
1,171
|
1,191
|
1,171
|
|||||
|
Tangible Assets
|
4,871,475
|
4,753,829
|
4,679,177
|
4,871,475
|
4,679,177
|
|||||
|
Ending common shares issued
|
25,301,732
|
25,301,732
|
25,194,903
|
25,301,732
|
25,194,903
|
|||||
|
Tangible Book Value Per Common Share
|
$ 20.47
|
$ 19.55
|
$ 18.45
|
$ 20.47
|
$ 18.45
|
|||||
|
Tangible Common Equity/Tangible Assets
|
10.63
|
%
|
10.41
|
%
|
9.93
|
%
|
10.63
|
%
|
9.93
|
%
|
|
Net Income
|
$ 21,363
|
$ 20,570
|
$ 11,627
|
$ 80,411
|
$ 57,330
|
|||||
|
Plus: Additional tax expense due to adjusting deferred tax asset
|
0
|
0
|
4,137
|
0
|
4,137
|
|||||
|
Net income excluding effect of deferred tax adjustment
|
$ 21,363
|
$ 20,570
|
$ 15,764
|
$ 80,411
|
$ 61,467
|
|||||
|
Diluted Weighted Average Common Shares Outstanding
|
25,746,490
|
25,745,151
|
25,701,337
|
25,727,831
|
25,663,381
|
|||||
|
Diluted net income per share excluding effect of
|
||||||||||
|
of deferred tax adjustment
|
$ 0.83
|
$ 0.80
|
$ 0.61
|
$ 3.13
|
$ 2.40
|
|||||
###
11