Lake City Bank Reports 2nd Quarter Results
Quarterly Dividend Maintained
- Press Release
- Source: Lake City Bank
- On 8:00 am EDT, Monday July 27, 2009
WARSAW, Ind., July 27, 2009 (GLOBE NEWSWIRE) -- Lakeland Financial Corporation (Nasdaq:LKFN - News), parent company of Lake City Bank, today reported net income of $4.5 million for the second quarter of 2009 versus $4.8 million for the second quarter of 2008. Diluted net income per share for the quarter was $0.29 versus $0.39 for the comparable period of 2008. On a linked quarter basis, these results compared to net income of $3.9 million, or $0.29 per diluted share, for the first quarter of 2009.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| LKFN | 16.90 | -0.23 |
The Company further reported net income of $8.3 million for the six months ended June 30, 2009 versus $10.0 million for the comparable period of 2008. Diluted net income per common share was $0.58 for the six months ended June 30, 2009 versus $0.81 for the comparable period of 2008.
The Company also announced that the Board of Directors approved a cash dividend for the second quarter of $0.155 per share, payable on August 5, 2009 to shareholders of record as of July 25, 2009. The quarterly dividend is unchanged from the dividends paid in 2008 and in the first quarter of 2009.
Average total loans for the second quarter of 2009 were $1.89 billion versus $1.64 billion for the second quarter of 2008 and $1.84 billion for the linked first quarter of 2009. The year-over-year increase for the second quarter represented an increase of 15%, or $251 million. On a linked quarter basis, average loans increased by $47 million versus the first quarter of 2009. Total gross loans as of June 30, 2009 were $1.88 billion compared to $1.67 billion as of June 30, 2008 and $1.86 billion as of March 31, 2009.
Michael L. Kubacki, Chairman, President and Chief Executive Officer, commented, "Given the challenges in our regional and national economy, and the impact they have had on our client base, we are proud of our performance for the first six months of the year. At a time when many of our larger regional and national competitors appear to be refocusing away from our region and retrenching, we are moving forward and expanding our banking activities, particularly through increased lending in Indiana. We continue to focus our efforts on ensuring that Lake City Bank is positioned to serve our region as the leading bank for business. While we are certainly affected by the challenges our region faces today, we continue to build our business plan around future opportunities rather than dwelling only on today's issues."
The Company's net interest margin was 3.45% in the second quarter versus 3.12% in the first quarter and 3.15% for the second quarter of 2008. This margin improvement, in conjunction with strong growth in loans, contributed to an increase of 26% in the Company's net interest income to $19.5 million in the second quarter of 2009 versus $15.5 million in the second quarter of 2008. On a linked quarter basis, net interest income increased by 15% versus the first quarter of 2009.
The Company's provision for loan losses increased by $1.9 million, or 63%, to $4.9 million for the second quarter of 2009 versus $3.0 million in the same period of 2008. In the first quarter of 2009, the provision was $4.5 million. The provision increases in 2009 were primarily driven by continued loan growth, the difficult economic conditions in the Company's markets and an overall concern about borrowers' performance and prospects.
The Company's non-interest income was $6.0 million in both the second quarters of 2009 and 2008. Total revenue for the second quarter of 2009 was $25.6 million versus $21.5 million for the comparable period of 2008, an increase of 19%. On a linked quarter basis, total revenue increased by 13% versus the first quarter of 2009.
The Company's non-interest expense was $14.2 million for the second quarter of 2009 compared to $11.6 million for the same period in 2008, an increase of 22%. Driving the increase was a $1.5 million increase in regulatory expense, which resulted from higher FDIC insurance premiums that have been levied on all financial institutions. In addition, salaries and employee benefits increased by $640,000, or 10%, versus the second quarter of 2008, primarily as a result of staff additions in lending positions in the Indianapolis loan production office, normal merit increases system-wide and increased health insurance costs. The Company's efficiency ratio for the second quarter of 2009 was 55%, compared to 54% for the same period in 2008, and improved from the 56% reported for the first quarter of 2009.
Net charge-offs totaled $1.3 million in the second quarter of 2009, versus $1.8 million during the second quarter of 2008 and $2.0 million during the first quarter of 2009. Lakeland Financial's allowance for loan losses as of June 30, 2009 was $25.1 million, compared to $18.0 million as of June 30, 2008 and $21.4 million as of March 31, 2009. The allowance for loan losses increased to 1.33% of total loans as of June 30, 2009 versus 1.08% for the comparable period in 2008 and 1.15% as of March 31, 2009.
Nonperforming assets declined to $20.5 million as of June 30, 2009 compared to $21.5 million as of March 31, 2009 and $26.4 million on June 30, 2008. The ratio of nonperforming assets to total assets declined to 0.85% on June 30, 2009 compared to 0.88% on March 31, 2009 and 1.17% at June 30, 2008. The allowance for loan losses represented 127% of nonperforming loans as of June 30, 2009 versus 104% at March 31, 2009 and 72% at June 30, 2008.
Kubacki continued, "Clearly, the economy of Northern Indiana continues to face significant stress, which has had a negative impact on our client base, particularly the commercial clients that represent our core borrowers. Yet, our clients have continued to demonstrate a resiliency reflective of the entrepreneurial spirit of the region. We're hopeful that an economic recovery is on the horizon as a prolonged recession could further weaken their businesses."
"Like many banks throughout the country, we have grown our allowance for loan losses in response to these difficult times. Our allowance for loan losses has grown by more than a third in 2009 as we have actively monitored our asset quality situation. This prudent increase is a reflection of the negative factors impacting our clients and their businesses and the clear risk of potential loan losses. While we are cautiously pleased that our total nonperforming assets decreased slightly during the quarter, we do not believe that it is an indication of any consequential economic rebound. Rather, it's more likely a sign of the ability of our clients to manage through a difficult period," Kubacki added.
For the three months ended June 30, 2009, Lakeland Financial's tangible capital to average assets ratio was 6.42% compared to 6.18% for the first quarter of 2009 and 6.53% for the second quarter of 2008. Average total capital to average assets for the quarter ended June 30, 2009 was 13.10% versus 12.86% for the first quarter of 2009 and 10.83% for the second quarter of 2008. Average total deposits for the quarter ended June 30, 2009 were $1.85 billion versus $1.91 billion for the first quarter of 2009 and $1.55 billion for the second quarter of 2008.
Lakeland Financial Corporation is a $2.4 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. The Company also has a Loan Production Office in Indianapolis, Indiana.
Lakeland Financial Corporation may be accessed on its home page at www.lakecitybank.com. The Company's common stock is traded on the Nasdaq Global Select Market under "LKFN". Market makers in Lakeland Financial Corporation common shares include Automated Trading Desk Financial Services, LLC, B-Trade Services, LLC, Citadel Derivatives Group, LLC, Citigroup Global Markets Holdings, Inc., Domestic Securities, Inc., E*TRADE Capital Markets LLC, FTN Financial Securities Corp., FTN Equity Capital Markets Corp., Goldman Sachs & Company, Howe Barnes Hoefer & Arnett, Inc., Keefe, Bruyette & Woods, Inc., Knight Equity Markets, L.P., Morgan Stanley & Co., Inc., Stifel Nicolaus & Company, Inc., Susquehanna Capital Group and UBS Securities LLC.
In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this press release contains certain non-GAAP financial measures. Lakeland Financial believes that providing non-GAAP financial measures provides investors with information useful to understanding Lakeland Financial's financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on "tangible equity" which is "common stockholders' equity" excluding intangible assets, net of deferred tax. A reconciliation of these non-GAAP measures to the most comparable GAAP equivalent is included in the attached financial tables where the non-GAAP measure is 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," "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. Additional information concerning the Company and its business, including factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on form 10-K.
LAKELAND FINANCIAL CORPORATION
SECOND QUARTER 2009 FINANCIAL
HIGHLIGHTS (Unaudited - Dollars in thousands
except share and per share data)
Three Months Ended
-------------------------------------
Jun. 30, Mar. 31, Jun. 30,
2009 2009 2008
----------- ----------- -----------
END OF PERIOD BALANCES
----------------------
Assets $ 2,404,140 $ 2,446,664 $ 2,249,128
Deposits 1,735,136 1,956,787 1,605,035
Loans 1,882,106 1,864,387 1,674,742
Allowance for Loan Losses 25,090 21,418 18,014
Total Equity 212,193 209,066 151,071
Tangible Common Equity 154,144 151,018 146,525
AVERAGE BALANCES
----------------
Total Assets $ 2,426,602 $ 2,385,216 $ 2,140,275
Earning Assets 2,304,684 2,255,684 2,018,081
Investments 395,711 389,237 366,294
Loans 1,891,724 1,844,571 1,640,405
Total Deposits 1,852,776 1,908,665 1,552,889
Interest Bearing Deposits 1,630,532 1,690,949 1,334,415
Interest Bearing Liabilities 1,972,947 1,975,098 1,751,947
Total Equity 210,824 173,371 151,575
INCOME STATEMENT DATA
---------------------
Net Interest Income $ 19,538 $ 17,015 $ 15,498
Net Interest Income-Fully
Tax Equivalent 19,844 17,323 15,792
Provision for Loan Losses 4,936 4,516 3,021
Noninterest Income 6,022 5,570 5,972
Noninterest Expense 14,153 12,687 11,607
Net Income 4,460 3,870 4,802
Net Income Available to
Common Shareholders 3,660 3,580 4,802
PER SHARE DATA
--------------
Basic Net Income Per
Common Share $ 0.29 $ 0.29 $ 0.39
Diluted Net Income Per
Common Share 0.29 0.29 0.39
Cash Dividends Declared Per
Common Share 0.155 0.155 0.155
Book Value Per Common Share
(equity per share issued) 12.75 12.51 12.29
Market Value - High 21.04 23.87 25.00
Market Value - Low 17.10 14.14 19.00
Basic Weighted Average Common
Shares Outstanding 12,416,710 12,401,498 12,262,926
Diluted Weighted Average
Common Shares Outstanding 12,515,196 12,507,496 12,468,486
KEY RATIOS
----------
Return on Average Assets 0.74% 0.66% 0.90%
Return on Average Total Equity 8.49 9.05 12.75
Efficiency (Noninterest
Expense / Net Interest Income
plus Noninterest Income) 55.37 56.17 54.06
Average Equity to
Average Assets 8.69 7.27 7.08
Net Interest Margin 3.45 3.12 3.15
Net Charge Offs to
Average Loans 0.27 0.43 0.43
Loan Loss Reserve to Loans 1.33 1.15 1.08
Nonperforming Loans to Loans 1.05 1.11 1.49
Nonperforming Assets to Assets 0.85 0.88 1.17
Tier 1 Leverage 10.19 10.28 8.40
Tier 1 Risk-Based Capital 11.89 11.83 9.84
Total Capital 13.10 12.86 10.83
Tangible Capital 6.42 6.18 6.53
ASSET QUALITY
-------------
Loans Past Due 30 - 89 Days $ 13,805 $ 2,111 $ 6,170
Loans Past Due 90 Days or More 253 680 972
Non-accrual Loans 19,446 20,009 23,987
Nonperforming Loans 19,699 20,689 24,959
Other Real Estate Owned 711 748 1,357
Other Nonperforming Assets 59 103 45
Total Nonperforming Assets 20,469 21,540 26,361
Impaired Loans 18,967 19,624 23,718
Net Charge Offs/(Recoveries) 1,264 1,958 1,765
Six Months Ended
----------------------------
Jun. 30, Jun. 30,
2009 2008
----------- -----------
END OF PERIOD BALANCES
----------------------
Assets $ 2,404,140 $ 2,249,128
Deposits 1,735,136 1,605,035
Loans 1,882,106 1,674,742
Allowance for Loan Losses 25,090 18,014
Total Equity 212,193 151,071
Tangible Common Equity 154,144 146,525
AVERAGE BALANCES
----------------
Total Assets $ 2,406,024 $ 2,083,470
Earning Assets 2,280,319 1,964,580
Investments 392,492 349,997
Loans 1,868,277 1,602,479
Total Deposits 1,880,566 1,533,836
Interest Bearing Deposits 1,660,573 1,315,682
Interest Bearing Liabilities 1,974,016 1,697,278
Total Equity 192,201 150,554
INCOME STATEMENT DATA
---------------------
Net Interest Income $ 36,553 $ 30,004
Net Interest Income-Fully
Tax Equivalent 37,171 30,588
Provision for Loan Losses 9,452 4,174
Noninterest Income 11,592 11,741
Noninterest Expense 26,840 22,989
Net Income 8,330 10,043
Net Income Available to
Common Shareholders 7,240 10,043
PER SHARE DATA
--------------
Basic Net Income Per
Common Share $ 0.58 $ 0.82
Diluted Net Income Per
Common Share 0.58 0.81
Cash Dividends Declared Per
Common Share 0.310 0.295
Book Value Per Common Share
(equity per share issued) 12.75 12.29
Market Value - High 23.87 25.00
Market Value - Low 14.14 16.87
Basic Weighted Average Common
Shares Outstanding 12,409,146 12,239,372
Diluted Weighted Average
Common Shares Outstanding 12,512,890 12,447,473
KEY RATIOS
----------
Return on Average Assets 0.70% 0.97%
Return on Average Total Equity 8.74 13.42
Efficiency (Noninterest
Expense / Net Interest Income
plus Noninterest Income) 55.75 55.07
Average Equity to
Average Assets 7.99 7.22
Net Interest Margin 3.29 3.13
Net Charge Offs to
Average Loans 0.35 0.25
Loan Loss Reserve to Loans 1.33 1.08
Nonperforming Loans to Loans 1.05 1.49
Nonperforming Assets to Assets 0.85 1.17
Tier 1 Leverage 10.19 8.40
Tier 1 Risk-Based Capital 11.89 9.84
Total Capital 13.10 10.83
Tangible Capital 6.42 6.53
ASSET QUALITY
-------------
Loans Past Due 30 - 89 Days $ 13,805 $ 6,170
Loans Past Due 90 Days or More 253 972
Non-accrual Loans 19,446 23,987
Nonperforming Loans 19,699 24,959
Other Real Estate Owned 711 1,357
Other Nonperforming Assets 59 45
Total Nonperforming Assets 20,469 26,361
Impaired Loans 18,967 23,718
Net Charge Offs/(Recoveries) 3,222 1,961
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
As of June 30, 2009 and December 31, 2008
(in thousands, except share data)
June 30, Dec. 31,
2009 2008
---------- ----------
(Unaudited)
ASSETS
Cash and due from banks $ 34,454 $ 57,149
Short-term investments 7,329 6,858
---------- ----------
Total cash and cash equivalents 41,783 64,007
Securities available for sale (carried
at fair value) 390,092 387,030
Real estate mortgage loans held for sale 5,742 401
Loans, net of allowance for loan losses of
$25,090 and $18,860 1,857,016 1,814,474
Land, premises and equipment, net 30,335 30,519
Bank owned life insurance 34,377 33,966
Accrued income receivable 8,714 8,599
Goodwill 4,970 4,970
Other intangible assets 310 413
Other assets 30,801 33,066
---------- ----------
Total assets $2,404,140 $2,377,445
========== ==========
LIABILITIES AND EQUITY
LIABILITIES
Noninterest bearing deposits $ 226,270 $ 230,716
Interest bearing deposits 1,508,866 1,654,583
---------- ----------
Total deposits 1,735,136 1,885,299
Short-term borrowings
Federal funds purchased 14,500 19,000
Securities sold under agreements
to repurchase 127,778 137,769
U.S. Treasury demand notes 3,286 840
Other short-term borrowings 220,000 45,000
---------- ----------
Total short-term borrowings 365,564 202,609
Accrued expenses payable 19,069 17,163
Other liabilities 1,208 1,434
Long-term borrowings 40,042 90,043
Subordinated debentures 30,928 30,928
---------- ----------
Total liabilities 2,191,947 2,227,476
EQUITY
Cumulative perpetual preferred stock:
1,000,000 shares authorized, no par value,
$1 liquidation value
56,044 shares issued and outstanding as of
June 30, 2009 53,891 0
Common stock: 90,000,000 shares authorized,
no par value
12,417,330 shares issued and 12,321,977
outstanding as of June 30, 2009
12,373,080 shares issued and 12,266,849
outstanding as of December 31, 2008 1,453 1,453
Additional paid-in capital 23,398 20,632
Retained earnings 144,753 141,371
Accumulated other comprehensive loss (9,959) (12,024)
Treasury stock, at cost (2009 - 95,353
shares, 2008 - 106,231 shares) (1,432) (1,552)
---------- ----------
Total stockholders' equity 212,104 149,880
---------- ----------
Noncontrolling interest 89 89
---------- ----------
Total equity 212,193 149,969
---------- ----------
Total liabilities and equity $2,404,140 $2,377,445
========== ==========
LAKELAND FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Six Months Ended
June 30, 2009 and 2008 (in thousands
except for share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
NET INTEREST INCOME
Interest and fees
on loans
Taxable $ 23,751 $ 24,326 $ 46,540 $ 49,801
Tax exempt 30 27 100 59
Interest and
dividends on
securities
Taxable 4,433 3,976 8,896 7,356
Tax exempt 604 623 1,207 1,237
Interest on
short-term
investments 12 60 28 151
---------- ---------- ---------- ----------
Total interest
income 28,830 29,012 56,771 58,604
Interest on deposits 8,278 10,691 18,033 22,738
Interest on
borrowings
Short-term 265 1,305 573 3,729
Long-term 749 1,518 1,612 2,133
---------- ---------- ---------- ----------
Total interest
expense 9,292 13,514 20,218 28,600
---------- ---------- ---------- ----------
NET INTEREST INCOME 19,538 15,498 36,553 30,004
Provision for
loan losses 4,936 3,021 9,452 4,174
---------- ---------- ---------- ----------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 14,602 12,477 27,101 25,830
NONINTEREST INCOME
Wealth advisory fees 727 863 1,466 1,672
Investment brokerage
fees 432 614 890 897
Service charges on
deposit accounts 2,110 2,255 4,020 4,024
Loan, insurance and
service fees 894 738 1,230 1,393
Merchant card fee
income 840 887 1,643 1,697
Other income 437 410 953 868
Mortgage banking
income 582 205 1,390 520
Net securities gains
(losses) 0 0 0 28
Gain on redemption
of Visa shares 0 0 0 642
---------- ---------- ---------- ----------
Total noninterest
income 6,022 5,972 11,592 11,741
NONINTEREST EXPENSE
Salaries and
employee benefits 7,089 6,449 13,189 12,702
Net occupancy expense 720 689 1,641 1,485
Equipment costs 517 477 1,017 918
Data processing fees
and supplies 1,005 867 1,984 1,707
Credit card
interchange 523 579 1,051 1,114
Other expense 4,299 2,546 7,958 5,063
---------- ---------- ---------- ----------
Total noninterest
expense 14,153 11,607 26,840 22,989
---------- ---------- ---------- ----------
INCOME BEFORE INCOME
TAX EXPENSE 6,471 6,842 11,853 14,582
Income tax expense 2,011 2,040 3,523 4,539
---------- ---------- ---------- ----------
NET INCOME $ 4,460 $ 4,802 $ 8,330 $ 10,043
========== ========== ========== ==========
Dividends and
accretion of
discount on
preferred stock 800 0 1,090 0
---------- ---------- ---------- ----------
NET INCOME AVAILABLE
TO COMMON
SHAREHOLDERS $ 3,660 $ 4,802 $ 7,240 $ 10,043
========== ========== ========== ==========
BASIC WEIGHTED
AVERAGE COMMON
SHARES 12,416,710 12,262,926 12,409,146 12,239,372
========== ========== ========== ==========
BASIC EARNINGS PER
COMMON SHARE $ 0.29 $ 0.39 $ 0.58 $ 0.82
========== ========== ========== ==========
DILUTED WEIGHTED
AVERAGE COMMON
SHARES 12,515,196 12,468,486 12,512,890 12,447,473
========== ========== ========== ==========
DILUTED EARNINGS
PER COMMON SHARE $ 0.29 $ 0.39 $ 0.58 $ 0.81
========== ========== ========== ==========
LAKELAND FINANCIAL CORPORATION
LOAN DETAIL
SECOND QUARTER 2009
(unaudited in thousands)
June 30, December 31, June 30,
2009 2008 2008
------------------ ------------------ ------------------
Commercial
and
industrial
loans $ 1,243,095 66.0% $ 1,201,611 65.5% $ 1,087,457 64.9%
Commercial
real
estate -
multi-
family
loans 26,623 1.4 25,428 1.4 23,282 1.4
Commercial
real
estate
con-
struction
loans 136,440 7.2 116,970 6.4 94,403 5.6
Agri-
business
and
agri-
cultural
loans 167,614 8.9 189,007 10.3 188,107 11.2
Residential
real
estate
mortgage
loans 98,814 5.3 117,230 6.4 116,520 7.0
Home
equity
loans 152,804 8.1 128,219 7.0 115,040 6.9
Installment
loans and
other
consumer
loans 57,720 3.1 55,102 3.0 50,189 3.0
------------------ ------------------ ------------------
Subtotal 1,883,110 100.0% 1,833,567 100.0% 1,674,998 100.0%
Less:
Allowance
for loan
losses (25,090) (18,860) (18,014)
Net
deferred
loan
(fees)/
costs (1,004) (233) (256)
----------- ----------- -----------
Loans, net $ 1,857,016 $ 1,814,474 $ 1,656,728
=========== =========== ===========
Contact:
Lakeland Financial Corporation
David M. Findlay, Executive Vice President-Administration
and Chief Financial Officer
(574) 267-9197
david.findlay@lakecitybank.com
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